[Federal Register: June 13, 2003 (Volume 68, Number 114)]
[Proposed Rules]
[Page 35321-35334]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr13jn03-25]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 35321]]
DEPARTMENT OF AGRICULTURE
Rural Business-Cooperative Service
Rural Housing Service
Rural Utilities Service
Farm Service Agency
7 CFR Parts 1951 and 4284
RIN 0570-AA40
Value-Added Producer Grants and Agriculture Innovation Centers
AGENCY: Rural Business-Cooperative Service, USDA.
ACTION: Proposed rule.
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SUMMARY: The Rural Business-Cooperative Service proposes to implement
new regulations for value-added producer grants (Value-Added Producer
Grants) and a new demonstration program whereby agriculture innovation
centers provide technical and other assistance to agricultural
producers to help them establish businesses that produce and sell
value-added agricultural commodities or products (Agriculture
Innovation Centers). The Agricultural Innovation Center program is
authorized under the Farm Security and Rural Investment Act of 2002
(2002 Farm Bill). The 2002 Farm Bill also modified and extended the
authority of the Secretary of the U.S. Department of Agriculture
(Secretary) (USDA) to make Value-Added Producer Grants.
This proposed rule also implements regulations in one central
location to consolidate requirements that are common to all grant
programs administered by Cooperative Services within the Rural
Business-Cooperative Service (RBS), thereby avoiding the necessity of
repeating elements shared in common.
This proposed rule also amends the regulations to reduce the
matching requirement required of certain institutions of higher
education with respect to Rural Cooperative Development Grants from 25
percent to 5 percent and to adjust the scoring criteria to reflect this
change.
Finally, this proposed rule amends the regulations to add Value-
Added Producer Grants and Agriculture Innovation Center Grants to the
list of RBS programs covered by the servicing regulation.
DATES: Written or email comments on this proposed rule must be
submitted on or before August 12, 2003. The comment period for
information collections under the Paperwork Reduction Act of 1995
continues through August 12, 2003.
ADDRESSES: Submit written comments, in duplicate, via either the U.S.
Postal Service or express courier. Comments sent via the U.S. Postal
Service should be addressed to the Branch Chief, Regulations and
Paperwork Management Branch, Rural Development, U.S. Department of
Agriculture, STOP 0742, 1400 Independence Ave., SW., Washington, DC
20250-0742. Written comments via Federal Express Mail, or via another
mail courier service requiring a street address, should be addressed to
the same attention at 300 7th Street, SW., 3rd Floor, Room 701,
Washington, DC 20024. Also, comments may be submitted via the Internet
by addressing them to comments@rus.usda.gov and must contain the word
``Value-Added'' in the subject line. All written comments will be
available for public inspection during regular work hours at the 300
7th Street, SW., address listed above.
FOR FURTHER INFORMATION CONTACT: Jim Haskell, Assistant Deputy
Administrator, Rural Business-Cooperative Service, USDA, Stop 3250,
Room 4016, 1400 Independence Ave., SW., Washington, DC 20250-3250,
telephone (202) 720-8460, or Internet e-mail james.haskell@usda.gov.
SUPPLEMENTARY INFORMATION:
Classification
This rule has been reviewed under Executive Order 12866 and has
been determined to be a significant regulatory action by the Office of
Management and Budget.
Programs Affected
The Catalog of Federal Domestic Assistance Program numbers assigned
to these programs are 10.352 (Value-Added Grants), 10.771 (Rural
Cooperative Development Grants) and 10.776 (Agriculture Innovation
Centers).
Program Administration
These programs are administered through the Cooperative Services
Program of the Rural Business-Cooperative Services Agency within the
Rural Development mission area of USDA and delivered via the USDA Rural
Development state directors.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995 the Agency
will seek OMB approval of the collection requirements contained in
these proposed regulations for the Agriculture Innovation Center Grant
program.
The information collection requirements associated with Value-Added
Producer Grants and Rural Development Cooperative Grants were granted
standard OMB approval under control numbers 0570-0039 and 0570-0006.
Title: Agriculture Innovation Centers.
OMB No.: New Collection.
Abstract: This program will be administered by Cooperative Services
within the Rural Business-Cooperative Service. The Farm Security and
Rural Investment Act of 2002 (Pub. L. 107-171, signed May 13, 2002)
authorized the Secretary of the U.S. Department of Agriculture (USDA)
to award grant funds for a demonstration program under which
agricultural producers are provided technical and business development
assistance enabling them to produce and market value-added products.
This is a competitive grant program with a matching funds
requirement. The rulemaking sets forth the policies and procedures
associated with the grant application and evaluation procedures and
ongoing administration requirements for the program. The paperwork
burden associated with the application process and ongoing reporting is
included in this collection.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 10 hours per response.
Respondents: Public and private entities engaged in research and
technical assistance for developing value added agricultural products.
Estimated Number of Respondents: 25.
[[Page 35322]]
Estimated Number of Responses per Respondent: 2.
Estimated Number of Responses: 43.
Estimate of Total Annual Burden on Respondents: 416.
Copies of this information collection can be obtained from Cheryl
Thompson, Regulations and Paperwork Management Branch, Support Services
Division at (202) 692-0043.
Comments
Comments are invited on: (a) Whether the proposed collection of
information is necessary for the proper performance of the functions of
RBS, including whether the information will have practical utility; (b)
the accuracy of RBS' estimate of the burden of the proposed collection
of information including the validity of the methodology and
assumptions used; (c) ways to enhance the quality, utility and clarity
of the information to be collected; and (d) ways to minimize the burden
of the collection of information on those who are to respond, including
through the use of appropriate automated, electronic, mechanical, or
other technological collection techniques or other forms of information
technology. Comments may be sent to Cheryl Thompson, Regulations and
Paperwork Management Branch, Support Services Division, U.S. Department
of Agriculture, Rural Development, STOP 0742, 1400 Independence Ave.,
SW., Washington, DC 20250. All responses to this notice will be
summarized and included in the request for OMB approval. All comments
will also become a matter of public record.
Environmental Impact Statement
It is the determination of the Secretary that this action is not a
major Federal action significantly affecting the environment.
Therefore, in accordance with the National Environmental Policy Act of
1969, an Environmental Impact Statement is not required.
Executive Order 12988
This rule has been reviewed in accordance with E.O. 12988, Civil
Justice Reform. In accordance with this rule: (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 this rule; and
(3) administrative proceedings in accordance with 7 CFR part 11 must be
exhausted before bringing suit in court challenging action taken under
this rule unless those regulations specifically allow bringing suit at
an earlier time.
The Unfunded Mandates Reform Act of 1995
Title II of the Unfunded Mandates Reform Act of 1995 (UMRA)
establishes requirements for Federal agencies to assess the effects of
their regulatory actions on state, local, and tribal governments and
the private sector. Under section 202 of the UMRA, USDA must prepare a
written statement, including a cost benefit analysis, for proposed and
final rules with ``Federal mandates'' that may result in expenditures
to state, local or tribal governments, in the aggregate, or to the
private sector, of $100 million or more in any one year. When such a
statement is needed for a rule, section 205 of UMRA generally requires
USDA to identify and consider a reasonable number of regulatory
alternatives and adopt the least costly, more cost effective or least
burdensome alternative that achieves the objectives of the rule.
This rule contains no Federal mandates (under the regulatory
provisions of title II of the UMRA) for state, local, and tribal
governments or the private sector. Therefore this rule is not subject
to the requirements of sections 202 and 205 of UMRA.
Regulatory Flexibility Act
In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-
612), the undersigned has determined and certified by signature of this
document that this rule will not have a significant economic impact on
a substantial number of small entities. The Regulatory Flexibility Act
is intended to encourage Federal agencies to utilize innovative
administrative procedures in dealing with individuals, small
businesses, small organizations, and small governmental bodies that
would otherwise be unnecessarily adversely affected by Federal
regulations. The provisions included in this rule will not impact a
substantial number of small entities to a greater extent than large
entities. Therefore, no regulatory flexibility analysis under the
Regulatory Flexibility Act is necessary.
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
rule impose substantial direct compliance costs on state and local
governments. This rule is intended to foster cooperation between the
Federal Government and the states and local governments, and reduces,
where possible, any regulatory burden imposed by the Federal Government
that impedes the ability of states and local governments to solve
pressing economic, social and physical problems in their state.
I. Background
Section 6402 of the Farm Security and Rural Investment Act of 2002
(Pub. L. 107-171) (2002 Farm Bill) authorized a new grant initiative to
establish up to 15 agriculture innovation demonstration centers
(Agriculture Innovation Centers or AICs) with the intent of fostering
the ability of agricultural producers to reap the benefits of producing
and marketing value-added products. Section 6401 of the 2002 Farm Bill
expanded a value-added producer grant program initially established by
section 231 of the Agricultural Risk Protection Act of 2000 (Pub. L.
106-224). These two provisions of the 2002 Farm Bill are the subject of
this proposed rulemaking.
The Value-Added Producer Grant program was authorized in 2000. Over
$57,000,000 in value-added producer grants have been awarded since this
program was first authorized. This proposed rule incorporates the
broader standards for eligibility for future producer grants and
reflects some of the lessons learned from the experiences of the U.S.
Department of Agriculture in implementing this program over the past
two years. For example, we have clarified that two separate types of
grants are available, i.e., planning and working capital grants, with
slight differences in the respective application requirements and
evaluation criteria.
The grant purposes for Value-Added Producer grants are primarily to
support the development and implementation of business plans and
marketing strategies for value-added products and are made directly to
agricultural producers. The 2002 Farm Bill added a new dimension to
value-added efforts with the authorization of grants for a third value-
added program, namely a demonstration program whereby the grant
recipients are to be centers that provide technical assistance and
marketing and development assistance to producers. The proposed rule
contemplates that the centers in question are not new buildings, per
se, but may be research and resource centers operating under the
umbrella of an established entity.
The eligibility requirements for the Agriculture Innovation Centers
authorized in section 6402 of the 2002 Farm Bill place an emphasis on
the recipients' capabilities and a plan and board management that
reflect the needs of the agricultural community in their
[[Page 35323]]
state. Their mandate is to provide technical assistance for marketing
and business development assistance to enable agricultural producers to
produce value-added agricultural products.
II. Program Descriptions
A. Value-Added Producer Grants
Value-Added Agricultural Product
The term value-added agricultural product means any agricultural
commodity or product that has been changed, produced, or segregated
such that the market for the product has expanded and where the greater
portion of the revenue derived from the value-added activity accrues to
the producer of the commodity or product.
Use of Grant Funds
The purpose of this program is to enable producers of agricultural
commodities to participate in the economic returns to be found in the
value-added market. Grants are to be used to develop business plans and
develop strategies for creating marketing opportunities. Grants may
also be used for feasibility studies and to provide capital to
establish alliances or business ventures that allow the producers of
the value-added agricultural product to better compete in domestic and
international markets.
Grant funds may not be used for planning, repair, rehabilitation,
acquisition, or construction of a building or a facility (including a
processing facility), or for the purchase, rental, or installation of
fixed equipment.
Eligibility
Grants will be awarded only to independent producers, eligible
agricultural producer groups, farmer or rancher cooperatives or
majority-controlled producer based business ventures. Independent
producers include agricultural producers, steering committees of
producers and producer-owned corporations and associations who do not
produce the agricultural product under contract or joint ownership with
any other organization.
Matching Funds
Grant recipients will provide matching non-Federal funds equal to
the amount of the grant received. These matching funds must be provided
in advance of grant funding, such that for every dollar of grant that
is advanced, an equal amount of match funds shall have been funded
prior to submitting the request for reimbursement.
B. Agriculture Innovation Centers
Use of Grant Funds
Grant funds are to be used for a demonstration program whereby
centers are established to provide agricultural producers with
technical and business development assistance for establishing
businesses producing and selling value-added agricultural products,
assistance in marketing, market development and business planning and
organizational and development assistance to increase the viability,
growth and sustainability of value-added businesses.
Grants may be used for the following purposes: applied research,
consulting services, hiring of employees, the making of matching
grants, legal services and other related costs of conducting the above
activities. Funds for these purposes may not be used to plan, repair,
rehabilitate, acquire, or construct a building or a facility (including
a processing facility) or to purchase, rent, or install fixed
equipment.
Eligibility
A grant may be made to an entity that demonstrates the capacity and
technical expertise to conduct the activities described above. In
addition to the capacity factor, the entity must provide a plan with
specific goals to be met and support for the entity in the agricultural
community. Also, the entity must demonstrate that adequate resources
(in cash or in kind) are available, or have been committed for this
purpose which will allow the grant recipient to achieve the goals
established. Finally, the entity must have a board of directors such
that there are representatives of each of the following groups on the
board: (a) The two general agricultural organizations with the greatest
number of members in the State in which the entity is located, (b) the
applicable State department of agriculture and (c) entities
representing the four highest grossing commodities produced in the
State, determined on the basis of annual gross cash sales. Trade
associations are eligible to apply.
III. Rural Cooperative Development Grants and Conforming Amendments
Section 6015 of the 2002 Farm Bill reduced the match funding
requirements for rural cooperative development grants imposed on
certain institutions of higher learning from 25 percent to 5 percent.
These institutions are defined as ``1994 Institutions'' and are listed
by name in the Equity in Educational Land-Grant Status Act of 1994 (7
U.S.C. 301 note). This rulemaking proposes to amend the regulation
applicable to this grant program to provide for this targeted reduced
match funding requirement.
The amendments proposed for subpart F within 7 CFR part 4284
conform the regulations for the rural cooperative development grant
program with the newly implemented subpart A that consolidates
provisions common to all grant programs administered by Cooperative
Services within RBS.
List of Subjects
7 CFR Part 1951
Grant programs--Housing and community development, Reporting
requirements, Rural development.
7 CFR Part 4284
Agricultural commodities, Agriculture innovation centers,
Agricultural marketing research, Business and industry, Grant
programs--housing and community development, Rural areas, Rural
development, Value-added.
Accordingly, RBS proposes to amend Chapters XVIII and XLII, title
7, of the Code of Federal Regulations as follows:
PART 4284--GRANTS
1. The authority citation for part 4284 is revised to read as
follows:
Authority: 5 U.S.C. 301 and 7 U.S.C. 1989.
Subpart F also issued under 7 U.S.C 1932(e)
Subpart G also issued under 7 U.S.C 1926(a)(11)
Subpart J also issued under 7 U.S.C 1621 note
Subpart K also issued under 7 U.S.C. 1621 note
2. Subpart A of part 4284, consisting of Sec. Sec. 4284.1 through
4284.100 is added to read as follows:
Subparts B Through E--[Reserved]
Subpart A--General Requirements for Cooperative Services Grant
Programs
Sec.
4284.1 Purpose.
4284.2 Policy.
4284.3 Definitions.
4284.4 Appeals.
4284.5 [Reserved]
4284.6 Applicant eligibility.
4284.7 Electronic submission.
4284.8 Grant approval and obligation of funds.
4284.9 Grant disbursement.
4284.10 Ineligible grant purposes.
4284.11 Award requirements.
4284.12 Reporting requirements.
4284.13 Confidentiality of reports.
4284.14 Grant servicing.
4284.15 Performance reviews.
4284.16 Other considerations.
4284.17 Member delegate clause.
4284.18 Audit requirements.
4284.19 Programmatic changes.
4284.20-4284.100 [Reserved]
[[Page 35324]]
Sec. 4284.1 Purpose.
The purpose of this subpart is to set forth definitions and
requirements which are common to all grant programs set forth in this
part administered by Cooperative Services within the Rural Business-
Cooperative Service (RBS). Programs administered by the Business
Programs within RBS are not affected by this subpart.
Sec. 4284.2 Policy.
It is the policy of Cooperative Services to administer grant
programs as uniformly as possible to minimize unnecessary
inconsistencies in the administration of the grant programs provided
for in this part. The specific provisions or definitions provided in
the subparts that are specific to Cooperative Services are supplemental
to these general provisions. Where a specific program provision is
expressly different from what is provided in this subpart, the program
specific subpart shall prevail.
Sec. 4284.3 Definitions.
Agency--Rural Business-Cooperative Service (RBS), an agency of the
United States Department of Agriculture (USDA), or a successor agency.
Agriculture Producer Group--An organization that represents
Independent Producers, whose mission includes working on behalf of
Independent Producers and the majority of whose membership and board of
directors is comprised of Independent Producers.
Agricultural Product--Plant and animal products and their by-
products to include forestry products, fish and seafood products.
Cooperative--A user-owned and controlled business from which
benefits are derived and distributed equitably on the basis of use.
Cooperative Services`` The office within RBS, and its successor
organization, that administers programs authorized by the Cooperative
Marketing Act of 1926 (7 U.S.C. 451 et seq.) and such other programs so
identified in USDA regulations.
Economic development--The economic growth of an area as evidenced
by increase in total income, employment opportunities, decreased out-
migration of population, value of production, increased diversification
of industry, higher labor force participation rates, increased duration
of employment, higher wage levels, or gains in other measurements of
economic activity, such as land values.
Emerging Market--A new or developing market for the applicant,
which the applicant has not traditionally supplied.
Farmer or Rancher Cooperative--A duly recognized farmer or rancher
cooperative in good standing under State law.
Fixed equipment--Tangible personal property used in trade or
business that would ordinarily be subject to depreciation under the
Internal Revenue Code, including processing equipment, but not
including property for equipping and furnishing offices such as
computers, office equipment, desks or file cabinets.
Independent Producers--Agricultural producers, to include
individuals, for profit and not for profit corporations, LLCs,
partnerships or LLPs, solely owned or controlled by producers who do
not produce the agricultural product under contract or joint ownership
with any other organization. An independent producer can also be a
steering committee composed of independent agricultural producers in
the process of organizing an association to operate a value-added
venture that will be owned and controlled by the independent producers
supplying agricultural product to the market.
Majority-Controlled Producer-Based Business Venture--A venture
where more than 50% of the ownership and control is held by Independent
Producers and or partnerships, LLCs, LLPs, corporations or cooperatives
that are themselves 100 percent owned and controlled by Independent
Producers.
Matching Funds--Cash or confirmed funding commitments from non-
Federal sources unless otherwise provided by law. Unless otherwise
provided, matching funds must be at least equal to the grant amount.
Unless otherwise provided, in-kind contributions that conform to the
provisions of 7 CFR 3015.50 and 7 CFR 3019.23, as applicable, can be
used as matching funds. Examples of in-kind contributions include
volunteer services furnished by professional and technical personnel,
donated supplies and equipment, and donated office space. Matching
funds must be provided in advance of grant funding, such that for every
dollar of grant that is advanced, not less than an equal amount of
match funds shall have been funded prior to submitting the request for
reimbursement. Matching funds are subject to the same use restrictions
as grant funds. Funds used for an ineligible purpose will not be
considered matching funds.
National Office--USDA RBS headquarters in Washington, D.C.
Nonprofit institution--Any organization or institution, including
an accredited institution of higher education, no part of the net
earnings of which may inure, to the benefit of any private shareholder
or individual.
Product segregation--Physical separation of a product or commodity
from similar products. Physical separation requires a barrier to
prevent mixing with the similar product.
Public body--Any state, county, city, township, incorporated town
or village, borough, authority, district, economic development
authority, or Indian tribe on federal or state reservations or other
federally recognized Indian tribe in rural areas.
RFP--Request for Proposals.
Rural and rural area--includes all the territory of a state that is
not within the outer boundary of any city or town having a population
of 50,000 or more and the urbanized area contiguous and adjacent to
such city or town, as defined by the U.S. Bureau of the Census using
the latest decennial census of the United States.
Rural Development--A mission area within the USDA consisting of the
Office of Under Secretary for Rural Development, Office of Community
Development, Rural Business-Cooperative Service, Rural Housing Service
and Rural Utilities Service and their successors.
State--includes each of the several States, the Commonwealth of
Puerto Rico, the Virgin Islands of the United States, Guam, American
Samoa, the Commonwealth of the Northern Mariana Islands, and, as may be
determined by the Secretary to be feasible, appropriate and lawful, the
Freely Associated States and the Federated States of Micronesia.
State Office--USDA Rural Development offices located in each state.
Value-Added--The incremental value that is realized by the producer
from an agricultural commodity or product as the result of a change in
its physical state, differentiated production or marketing, as
demonstrated in a business plan, or product segregation. Also, the
economic benefit realized from the production of farm or ranch-based
renewable energy. Incremental value may be realized by the producer as
a result of either an increase in value to buyers or the expansion of
the overall market for the product. Examples include milling wheat into
flour, slaughtering livestock or poultry, making strawberries into jam,
the marketing of organic products, an identity-preserved marketing
system, and collecting and converting methane from animal waste to
generate energy. Identity-preserved marketing systems
[[Page 35325]]
include labeling that identifies how the product was produced and by
whom.
Sec. 4284.4 Appeals.
Any appealable adverse decision made by the Agency may be appealed
in accordance with USDA appeal regulations found at 7 CFR part 11 and
subpart B of part 1900. If the Agency makes a determination that a
decision is not appealable, a participant may request that it be
reviewed by the Director of the National Appeals Division.
Sec. 4284.5 [Reserved]
Sec. 4284.6 Applicant eligibility.
An outstanding judgment obtained against an applicant by the United
States in a Federal Court (other than in the United States Tax Court),
which has been recorded, shall cause the applicant to be ineligible to
receive any assistance until the judgment is paid in full or otherwise
satisfied. RBS grant funds may not be used to satisfy the judgment.
Sec. 4284.7 Electronic submission.
Applicants and grant awardees are encouraged, but not required, to
submit applications and reports in electronic form as prescribed in
requests for proposals issued by USDA and in the applicable grant
agreements.
Sec. 4284.8 Grant approval and obligation of funds.
(a) The following statement will be entered in the comment section
of the Request for Obligation of Funds, which must be signed by the
grantee:
The grantee certifies that it is in compliance with and will
continue to comply with all applicable laws, regulations, Executive
Orders and other generally applicable requirements, including those
contained in 7 CFR part 4284 and 7 CFR parts 3015, 3016, 3017, 3018,
3019 and 3052 in effect on the date of grant approval, and the
approved Letter of Conditions.
(b) [Reserved]
Sec. 4284.9 Grant disbursement.
The Agency will determine, based on 7 CFR parts 3015, 3016 and
3019, as applicable, whether disbursement of a grant will be by advance
or reimbursement. The Agency may limit the frequency in which a Request
for Advance or Reimbursement may be submitted.
Sec. 4284.10 Ineligible grant purposes.
Grant funds may not be used to:
(a) Duplicate current services or replace or substitute support
previously provided. If the current service is inadequate, however,
grant funds may be used to expand the level of effort or services
beyond what is currently being provided;
(b) Pay costs of preparing the application package for funding
under this program;
(c) Pay costs of the project incurred prior to the date of grant
approval;
(d) Fund political activities;
(e) Pay for assistance to any private business enterprise which
does not have a least 51 percent ownership by those who are either
citizens of the United States or reside in the United States after
being legally admitted for permanent residence;
(f) Pay any judgment or debt owed to the United States;
(g) Plan, repair, rehabilitate, acquire, or construct a building or
facility (including a processing facility);
(h) Purchase, rent or install Fixed Equipment; or
(i) Pay for the repair of privately owned vehicles.
Sec. 4284.11 Award requirements.
In addition to specific grant requirements, all approved applicants
will be required to do the following:
(a) Enter into a grant agreement with USDA in form and substance
similar to the form of agreement as may be published within or as an
appendix to the applicable RFP;
(b) Submit a feasibility study and business plan showing the
viability of the venture, if any Federal grant and matching funds are
to be used as working capital;
(c) Use ``Request for Advance or Reimbursement'' to request
advances or reimbursements, as applicable, but not more frequently than
once a month;
(d) Maintain a financial management system that is acceptable to
the Agency; and
(e) Collect and maintain data on race, sex and national origin of
the beneficiaries of the project.
Sec. 4284.12 Reporting requirements.
Grantees must submit the following to USDA:
(a) A ``Financial Status Report'' listing expenditures according to
agreed upon budget categories, on a semi-annual basis. Reporting
periods end each March 31 and September 30. Reports are due 30 days
after the reporting period ends.
(b) Semi-annual performance reports that compare accomplishments to
the objectives stated in the proposal. Identify all tasks completed to
date and provide documentation supporting the reported results. If the
original schedule provided in the work plan is not being met, the
report should discuss the problems or delays that may affect completion
of the project. Objectives for the next reporting period should be
listed. Compliance with any special condition on the use of award funds
should be discussed. Reports are due as provided in paragraph (a) of
this section. The supporting documentation for completed tasks include,
but are not limited to, feasibility studies, marketing plans, business
plans, articles of incorporation and bylaws and an accounting of how
working capital funds were spent.
(c) Final project performance reports, inclusive of supporting
documentation. The final performance report is due within 30 days of
the completion of the project.
Sec. 4284.13 Confidentiality of reports.
All reports submitted to the Agency will be held in confidence to
the extent permitted by law.
Sec. 4284.14 Grant servicing.
Grants will be serviced in accordance with 7 CFR part 1951,
subparts E and O. Grantees will permit periodic inspection of the
program operations by a representative of the Agency. All non-
confidential information resulting from the Grantee's activities shall
be made available to the general public on an equal basis.
Sec. 4284.15 Performance reviews.
(a) USDA will incorporate performance criteria in grant award
documentation and will regularly evaluate the progress and performance
of grant awardees.
(b) USDA may elect to suspend or terminate a grant in all or part,
or funding of a particular workplan activity, but nevertheless fund the
remainder of a request for advance or reimbursement, as applicable,
where USDA has determined:
(1) That the grantee or subrecipient of grant funds has
demonstrated insufficient progress in complying with the terms of the
grant agreement;
(2) There is reason to believe that other sources of joint funding
have not been or will not be forthcoming on a timely basis; or
(3) Such other cause as USDA identifies in writing to the grantee
(including but not limited to the use of federal grant funds for
ineligible purposes).
Sec. 4284.16 Other considerations.
(a) Environmental review. All grants made under this subpart are
subject to the requirements of 7 CFR part 1940, subpart G. Applications
for technical assistance or planning projects are generally excluded
from the environmental review process by
[[Page 35326]]
Sec. 1940.333, provided the assistance it not related to the
development of a specific site. Applicants for grant funds must
consider and document within their plans the important environmental
factors within the planning area and the potential environmental
impacts of the plan on the planning area, as well as the alternative
planning strategies that were reviewed.
(b) Civil rights. All grants made under this subpart are subject to
the requirements of title VI of the Civil Rights Act of 1964, which
prohibits discrimination on the basis of race, color and national
origin as outlined in 7 CFR part 1901, subpart E. In addition, the
grants made under this subpart are subject to the requirements of
section 504 of the Rehabilitation Act of 1973, as amended, which
prohibits discrimination on the basis of disability; the requirements
of the Age Discrimination Act of 1975, which prohibits discrimination
on the basis of age; and title III of the Americans with Disabilities
Act, which prohibits discrimination on the basis of disability by
private entities in places of public accommodations. This program will
also be administered in accordance with all other applicable Civil
Rights Law.
(c) Other USDA regulations. The grant programs under this part are
subject to the provisions of the following regulations, as applicable:
(1) 7 CFR part 3015, Uniform Federal Assistance Regulations;
(2) 7 CFR part 3016, Uniform Administrative Requirements for Grants
and Cooperative Agreements to State and Local Governments;
(3) 7 CFR part 3017, Governmentwide Debarment and Suspension
(nonprocurement) and Governmentwide Requirements for Drug-Free
Workplace (Grants);
(4) 7 CFR part 3018, New Restrictions on Lobbying;
(5) 7 CFR part 3019, Uniform Administrative Requirements for Grants
and Agreements with Institutions of Higher Education, Hospitals and
Other Non-profit Organizations; and
(6) 7 CFR part 3052, Audits of States, Local Governments and Non-
profit Organizations.
Sec. 4284.17 Member delegate clause.
No member of Congress shall be admitted to any share or part of a
grant program or any benefit that may arise there from, but this
provision shall not be construed to bar as a contractor under a grant a
publicly held corporation whose ownership might include a member of
Congress.
Sec. 4284.18 Audit requirements.
Grantees must comply with the audit requirements of 7 CFR part
3052. The audit requirements apply to the years in which grant funds
are received and years in which work is accomplished using grant funds.
Sec. 4284.19 Programmatic changes.
The Grantee shall obtain prior approval for any change to the scope
or objectives of the approved project. Failure to obtain prior approval
of changes to the scope of work or budget may result in suspension,
termination and recovery of grant funds.
Sec. Sec. 4284.204-284.100 [Reserved]
3. Subpart J of part 4284, consisting of Sec. Sec. 4284.901
through 4284.1000 is added to read as follows:
Subpart J--Value-Added Producer Grants
Sec.
4284.901 Purpose.
4284.902 Policy.
4284.903 Program administration.
4284.904 Definitions.
4284.905-906 [Reserved]
4284.907 Eligibility for grant assistance.
4284.908 Use of grant and matching funds.
4284.909 Limitations on use of funds.
4284.910 Application processing.
4284.911 Evaluation screening.
4284.912 Evaluation process.
4284.913 Evaluation criteria and weights.
4284.914 Grant closing.
4284.915-4284.999 [Reserved]
4284.1000 OMB control number.
Sec. 4284.901 Purpose.
This subpart implements the value-added agricultural product market
development grant program (Value-Added Producer Grants) administered by
the Rural Business-Cooperative Service whereby grants are made to
enable producers to develop businesses that produce and market value-
added agricultural products.
Sec. 4284.902 Policy.
It is the policy of the Secretary of Agriculture to fund a broad
diversity of projects that help increase the agricultural producers'
customer base and share of the food and agricultural system profit,
including projects likely to increase the profitability and viability
of small and medium-sized farms and ranches.
Sec. 4284.903 Program Administration.
The Value-Added Producer Grant program is administered by
Cooperative Services within the Agency.
Sec. 4284.904 Definitions.
Planning Grants. Grants to facilitate the development of a defined
program of economic activities to determine the viability of a
potential value-added venture, including feasibility studies, marketing
strategies, business plans and legal evaluations.
Working Capital Grants. Grants to provide funds to operate ventures
and pay the normal expenses of the venture that are eligible uses of
grant funds.
Sec. Sec. 4284.905-906 [Reserved]
Sec. 4284.907 Eligibility for grant assistance.
(a) The proposed project must generate Value-Added for an
Agricultural Product.
(b) Independent Producers, Agricultural producer groups, Farmer or
Rancher cooperatives and Majority-Controlled Producer-Based Business
Ventures, are eligible for grants under this subpart.
(c) Applicants that are a Farmer or Rancher cooperative, an
Agriculture producer group or a Majority-Controlled Producer-Based
Business Venture must be entering into an Emerging Market as a result
of the proposed project. Independent Producers do not have to be
entering into an Emerging Market.
(d) No project may be the subject of more than one Planning Grant
or more than one Working Capital Grant. The same project may, however,
be awarded one Planning Grant and subsequently apply for and receive a
Working Capital Grant.
(e) Not more than one project per applicant may receive grant
funding under this subpart.
(f) The total amount provided to any grant recipient shall not
exceed $500,000.
Sec. 4284.908 Use of grant and matching funds.
(a) An application may be for either a Planning Grant or a Working
Capital Grant, but not both.
(b) Grant funds may be used to pay up to 50 percent of the costs
for carrying out relevant projects. Matching funds must be provided for
the balance of costs.
(c) Matching funds may only be used for the same purposes allowed
for grant funds.
(d) Planning Grant funds may be used to develop a business plan or
perform a feasibility study to establish a viable marketing opportunity
for a value-added producer. These uses include, but are not limited to,
the following:
(1) Conduct, or hire a qualified consultant to conduct, a
feasibility analysis of the proposed value added project to help
determine the potential success of the project;
(2) Develop, or hire a qualified consultant to develop, a business
[[Page 35327]]
operations plan that provides comprehensive detail on the management,
planning and other operational aspects of the proposed project; and
(3) Develop, or hire a qualified consultant to develop, a marketing
plan for the proposed value-added product(s) including the
identification of a market window, potential buyers, a description of
the distribution system and possible promotional campaigns;
(e) Working Capital Grant funds may be used to provide capital to
establish alliances or business ventures that allow the producer of the
value-added agricultural product to better compete in domestic or
international markets. These uses include, but are not limited to, the
following:
(1) Establish a working capital account to fund operations prior to
obtaining sufficient cash flow from operations;
(2) Hire counsel to provide legal advice and to draft
organizational and other legal documents related to the proposed
venture;
(3) Hire a Certified Public Accountant or other qualified
individual to design an accounting system for the proposed venture; and
(4) Pay salaries, utilities and other operating costs such as
inventory financing, the purchase of office equipment, computers and
supplies and finance other related activities.
Sec. 4284.909 Limitations on use of funds.
In addition to the limitations provided in 7 CFR subpart A, neither
grant nor matching funds may be used to fund architectural or
engineering design work, or other planning work, for a physical
facility.
Sec. 4284.910 Application processing.
(a) Applications. USDA will solicit applications on a competitive
basis by publication of one or more RFPs. Unless otherwise specified in
the applicable RFP, applicants must file an original and one copy of
the required forms and a proposal.
(b) Required forms. The following forms must be completed, signed
and submitted as part of the application package. Other forms may be
required. This will be published in the applicable RFP.
(1) ``Application for Federal Assistance.''
(2) ``Budget Information--Non-Construction Programs.''
(3) ``Assurances--Non-Construction Programs.''
(c) Proposal. Each proposal must contain the following elements.
Additional elements may be published in the applicable RFP.
(1) Title page.
(2) Table of contents.
(3) Executive summary. A summary of the proposal should briefly
describe the project including goals, tasks to be completed and other
relevant information that provides a general overview of the project.
In this section the applicant must clearly state whether the
application is for a Planning Grant or a Working Capital Grant and the
amount requested.
(4) Eligibility. The narrative must include a detailed discussion
of how the applicant meets the eligibility requirements.
(5) Proposal narrative. The narrative portion of the proposal must
include, but is not limited to, the following:
(i) Project title. The title of the proposed project must be brief,
not to exceed 75 characters, yet describe the essentials of the
project.
(ii) Information sheet. A separate one page information sheet
listing each of the evaluation criteria referenced in the RFP followed
by the page numbers of all relevant material and documentation
contained in the proposal that address or support the criteria.
(iii) Goals of the project. A clear statement of the ultimate goals
of the project. There must be an explanation of how a market will be
expanded and the degree to which incremental revenue will accrue to the
benefit of the agricultural producer(s).
(iv) Work plan. The narrative must contain a description of the
project and set forth the tasks involved in reasonable detail.
(v) Performance evaluation criteria. Performance criteria suggested
by the applicant for incorporation in the grant award in the event the
proposal receives grant funding under this subpart. These suggested
criteria are not binding on USDA.
(vi) Proposal evaluation criteria. Each of the proposal evaluation
criteria referenced in the RFP must be addressed, specifically and
individually, in narrative form.
(6) Verification of matching funds. Applicants must provide a
budget to support the work plan showing all sources and uses of funds
during the project period. Applicants will be required to verify
matching funds, both cash and in-kind. Sufficient information should be
included such that USDA can verify all representations.
(7) Certification. Applicants must certify that matching funds will
be available at the same time grant funds are anticipated to be spent
and that matching funds will be spent in advance of grant funding, such
that for every dollar of grant that is advanced, not less than an equal
amount of match funds will have been funded prior to submitting the
request for reimbursement.
Sec. 4284.911 Evaluation screening.
The Agency will conduct an initial screening of all proposals to
determine whether the applicant is eligible and whether the application
is complete and sufficiently responsive to the requirements set forth
in the RFP to allow for an informed review. Failure to address any of
the required evaluation criteria will disqualify the proposal.
Submissions which do not pass the initial screening may be returned to
the Applicant. If the submission deadline has not expired and time
permits, returned applications may be revised and re-submitted.
Sec. 4284.912 Evaluation process.
(a) Applications will be evaluated by agricultural economists or
other technical experts appointed by the Agency.
(b) After all proposals have been evaluated and scored in
accordance with the point allocation specified in the applicable RFP,
Agency officials will present to the Administrator of RBS a list of all
applications in rank order, together with funding level
recommendations.
(c) The Administrator reserves the right to award additional
points, as specified in the applicable RFP, to accomplish agency
objectives (e.g. to ensure geographic distribution, distribution of a
commodity or accomplish presidential initiatives.) The maximum number
of points that can be added to an application cannot exceed ten percent
of the total points of the original score.
(d) After giving effect to the Administrator's point awards,
applications will be funded in rank order until all available funds
have been obligated.
(e) In the event an insufficient number of eligible applications
are received in response to a given RFP, time permitting, subsequent
rounds of competition will be initiated by publishing subsequent RFPs.
(f) Unless a proposal is withdrawn, eligible but unfunded proposals
from preceding competitions in a given fiscal year will be considered
for funding in subsequent competitions in the same fiscal year.
Sec. 4284.913 Evaluation criteria and weights.
Unless supplemented in a RFP, the criteria listed in this section
will be used to evaluate proposals submitted under this subpart. The
distribution of
[[Page 35328]]
points to be awarded per criterion will be identified in the applicable
RFP.
(a) Planning grants. (1) Nature of the proposed venture. Projects
will be evaluated for technological feasibility, operational
efficiency, profitability, sustainability and the likely improvement to
the local rural economy. Points will be awarded based on the greatest
expansion of markets and increased returns to producers. Evaluators may
rely on their own knowledge and examples of similar ventures described
in the proposal to form conclusions regarding this criterion.
(2) Qualifications of those doing work. Proposals will be reviewed
for whether the personnel who are responsible for doing proposed tasks,
including those hired to do studies, have the necessary qualifications.
If a consultant or others are to be hired, more points may be awarded
if the proposal includes evidence of their availability and commitment
as well.
(3) Project leadership. The leadership abilities of individuals who
are proposing the venture will be evaluated as to whether they are
sufficient to support a conclusion of likely project success. Credit
may be given for leadership evidenced in community or volunteer
efforts.
(4) Commitments and support. Producer commitments will be evaluated
on the basis of the number of Independent Producers currently involved
as well as how many may potentially be involved, and the nature, level
and quality of their contributions. End user commitments will be
evaluated on the basis of potential markets and the potential amount of
output to be purchased. Proposals will be reviewed for evidence that
the project enjoys third party support and endorsement, with emphasis
placed on financial and in kind support as well as technical
assistance.
(5) Work plan/Budget. The work plan will be reviewed for to whether
it provides specific and detailed planning task descriptions that will
accomplish the project's goals and the budget will be reviewed for a
detailed breakdown of estimated costs associated with the planning
activities. The budget must present a detailed breakdown of all
estimated costs associated with the planning activities and allocate
these costs among the listed tasks. Points may not be awarded unless
sufficient detail is provided to determine whether or not funds are
being used for qualified purposes. Matching funds as well as grant
funds must be accounted for in the budget to receive points.
(6) Amount requested. Points will be awarded based on the size of
the grant request. Generally, requests for lower amounts will receive a
higher score for this criterion than higher requests. The points to be
awarded and request ranges will be established in the applicable RFP.
(7) Project cost per owner-producer. This is calculated by dividing
the amount of Federal funds requested by the total number of producers
that are owners of the venture. Points to be awarded will be
established in the applicable RFP.
(8) Presidential initiatives. Points may be awarded for proposals
that focus on Presidential initiatives. Descriptions of these
initiatives and the points to be awarded will be established in the
applicable RFP.
(b) Working capital grants. (1) Business viability. Proposals will
be evaluated on the basis of the technical and economic feasibility and
sustainability of the venture and the efficiency of operations.
(2) Customer base/increased returns. Proposals that demonstrate
strong growth in a market or customer base and greater value-added
revenue accruing to producer-owners will receive more points than those
that demonstrate less growth in markets and realized Value-Added
returns.
(3) Commitments and support. Producer commitments will be evaluated
on the basis of the number of Independent Producers currently involved
as well as how many may potentially be involved, and the nature and
level and quality of their contributions. End user commitments will be
evaluated on the basis of identified markets, letters of intent or
contracts from potential buyers and the amount of output to be
purchased. Proposals will be reviewed for evidence that the project
enjoys third party support and endorsement, with emphasis placed on
financial and in kind support as well as technical assistance.
(4) Management team/work force. The education and capabilities of
project managers and those who will operate the venture must reflect
the skills and experience necessary to effect project success. The
availability and quality of the labor force needed to operate the
venture will also be evaluated. Proposals that reflect successful track
records managing similar projects will receive higher points for this
criterion than those that do not reflect successful track records.
(5) Work plan/Budget. The work plan will be reviewed for whether it
provides specific and detailed planning task descriptions that will
accomplish the project's goals and the budget will be reviewed for a
detailed breakdown of estimated costs associated with the planning
activities. The budget must present a detailed breakdown of all
estimated costs associated with the venture's operations and allocate
these costs among the listed tasks. Points may not be awarded unless
sufficient detail is provided to determine whether or not funds are
being used for qualified purposes. Matching funds as well as grant
funds must be accounted for in the budget to receive points.
(6) Amount requested. Points will be awarded based on the size of
the grant request. Requests for lower amounts will receive a higher
score for this criterion than higher requests. The points to be awarded
and request ranges will be established in the applicable RFP.
(7) Project cost per owner-producer. This is calculated by dividing
the amount of Federal funds requested by the total number of producers
that are owners of the venture. Points to be awarded will be
established in the applicable RFP.
(8) Presidential initiatives. Points may be awarded for proposals
that focus on Presidential initiatives. Descriptions of these
initiatives and the points to be awarded will be established in the
applicable RFP.
Sec. 4284.914 Grant closing.
(a) Letter of conditions. The Agency will notify an approved
applicant in writing, setting out the conditions under which the grant
will be made.
(b) Applicant's intent to meet conditions. Upon reviewing the
conditions and requirements in the letter of conditions, the applicant
must complete, sign and return the Agency's ``Letter of Intent to Meet
Conditions,'' or, if certain conditions cannot be met, the applicant
may propose alternate conditions to the Agency. The Agency must concur
with any changes proposed to the letter of conditions by the applicant
before the application will be further processed.
(c) Grant agreement. The Agency and the grantee must sign the
Agency's ``Value-Added Producer Grant Agreement'' prior to the advance
of funds.
Sec. Sec. 4284.915-999 [Reserved]
Sec. 4284.1000 OMB control number.
The reporting and recordkeeping requirements contained in this
subpart have been approved by the Office of Management and have been
assigned OMB control number 0570-0039 in
[[Page 35329]]
accordance with the Paperwork Reduction Act of 1995.
4. Subpart K of part 4284, consisting of Sec. Sec. 4284.1001
through 4284.1100 is added to read as follows:
Subpart K--Agriculture Innovation Demonstration Centers
Sec.
4284.1001 Purpose.
4284.1002 Policy.
4284.1003 Program administration.
4284.1004 Definitions.
4284.1005-1006 [Reserved]
4284.1007 Eligibility for grant assistance.
4284.1008 Use of grant funds.
4284.1009 Application processing.
4284.1010 Evaluation screening.
4284.1011 Evaluation process.
4284.1012 Evaluation criteria and weights.
4284.1013 Grant closing.
4284.1014--4284.1100 [Reserved]
Sec. 4284.1001 Purpose.
This subpart implements a demonstration program administered by the
Rural Business-Cooperative Service whereby grants are made to
innovation centers responsible for providing technical and business
development assistance to agricultural producers seeking to engage in
the marketing or the production of value-added products.
Sec. 4284.1002 Policy.
It is the policy of the Secretary of Agriculture to fund centers
which evidence broad support from the agricultural community in the
state or region, significant coordination with end users (processing
and distribution companies and regional grocers), strategic alliances
with entities having technical research capabilities and a focused
delivery plan for reaching out to the producer community. It is also
the policy of the Secretary, using the research and technical services
of the U.S. Department of Agriculture, to assist the grantees in
establishing Centers. This program is not intended to fund scientific
research.
Sec. 4284.1003 Program administration.
The Agriculture Innovation Demonstration Center program is
administered by Cooperative Services within the Agency.
Sec. 4284.1004 Definitions.
Board of Directors--The group of individuals that govern the
Center.
Center--The Agriculture Innovation Center to be established and
operated by the grantees. It may or may not be an independent legal
entity, but it must be independently governed in accordance with the
requirements of this subpart.
Qualified Board of Directors--A Board of Directors that includes
representatives from each of the following groups:
(1) The two general agricultural organizations with the greatest
number of members in the State in which the Center is located,
(2) The State department of agriculture, or equivalent, of the
State in which the Center is located and
(3) Entities representing the four highest grossing commodities
produced in the State in which the Center is located, as determined on
the basis of annual gross cash sales.
Producer Services--are those services to be provided by the Centers
to agricultural producers. Producer services consist of the following
types of services:
(1) Technical assistance, consisting of engineering services,
applied research, scale production, and similar services, to enable the
agricultural producers to establish businesses to produce value-added
agricultural commodities or products;
(2) Assistance in marketing, market development and business
planning, including advisory services with respect to leveraging
capital assets; and
(3) Organizational, outreach and development assistance to increase
the viability, growth and sustainability of businesses that produce
value-added agricultural commodities or products.
Sec. Sec. 4284.1005-1006 [Reserved]
Sec. 4284.1007 Eligibility for grant assistance.
Non-profit and for-profit corporations, institutions of higher
learning and other entities, including a consortium where a lead entity
has been designated and agrees to act as funding agent, that meet the
following requirements are eligible for grant assistance:
(a) The entity--
(1) Has provided services similar to those listed for Producer
Services; or
(2) Demonstrates the capability of providing Producer Services;
(b) The application includes a plan that meets the requirements of
Sec. 4284.1009(c)(5)(iv) that also outlines--
(1) The support for the entity in the agricultural community;
(2) The technical and other expertise of the entity;
(3) The goals of the entity for increasing and improving the
ability of local agricultural producers to develop markets and
processes for value-added agricultural commodities or products;
(c) The entity demonstrates that adequate resources (in cash or in
kind) are available, or have been committed to be made available to the
entity, to increase and improve the ability of local agricultural
producers to develop markets and processes for value-added agricultural
commodities or products; and
(d) The proposed Center has a Qualified Board of Directors.
Sec. 4284.1008 Use of grant funds.
Grant funds may be used to assist eligible recipients in
establishing Centers that provide Producer Services and may only be
used to support operations of the Center that directly relate to
providing Producer Services. Grant funds may be used for the following
purposes, subject to the limitations set forth in Sec. 4284.10:
(a) Consulting services for legal, accounting and technical
services to be used by the grantee in establishing and operating a
Center;
(b) Hiring of employees, at the discretion of the Qualified Board
of Directors;
(c) The making of matching grants to agricultural producers,
individually not to exceed $5,000, where the aggregate amount of all
such matching grants made by the grantee does not exceed $50,000;
(d) Applied research;
(e) Legal services; and
(f) Such other related purposes as the Agency may announce in the
RFP.
Sec. 4284.1009 Application processing.
(a) Applications. USDA will solicit applications on a competitive
basis by publication of one or more Requests for Proposals (RFPs).
Unless otherwise specified in the applicable RFP, applicants must file
an original and one copy of the required forms and a proposal.
(b) Required forms. The following forms must be completed, signed
and submitted as part of the application package. Other OMB approved
forms may be required. This will be published in the applicable RFP.
(1) ``Application for Federal Assistance.''
(2) ``Budget Information--Non-Construction Programs.''
(3) ``Assurances--Non-Construction Programs.''
(c) Proposal. Each proposal must contain the following elements.
Additional elements may be published in the applicable RFP.
(1) Title page.
(2) Table of contents.
(3) Executive summary. A summary of the proposal should briefly
describe the project including goals, tasks to be completed and other
relevant information that provides a general overview of the project
and the amount requested.
[[Page 35330]]
(4) Eligibility. A detailed discussion describing how the applicant
meets the eligibility requirements.
(5) Proposal narrative. The narrative portion of the proposal must
include, but is not limited to, the following:
(i) Project title. The title of the proposed project must be brief,
not to exceed 75 characters, yet describe the essentials of the
project.
(ii) Information sheet. A separate one page information sheet
listing each of the evaluation criteria referenced in the RFP followed
by the page numbers of all relevant material and documentation
contained in the proposal that address or support the criteria.
(iii) Goals of the project. The first part of this section should
list each Provider Service to be offered by the Center. The second part
of this section should list one or more specific goals relating to
increasing and improving the ability of identified local agricultural
producers to develop a market or process for value-added agricultural
commodities or products.
(iv) Work plan. Actions that must be taken in order for the
Provider Services to be available from the Center. Each action listed
should include a target date by which it will be completed. General
start up tasks should be listed, followed by specific tasks listed for
each Provider Service to be offered, as well as tasks associated with
the start of operations. The tasks associated with the start of
operations should include a focused marketing and delivery plan
directed to the local agricultural producers that were identified in
paragraph (c)(5)(iii) of this section. The actions to be taken should
include steps for identifying customers, acquiring personnel and
contracting for services to the Center, including arrangements for
strategic alliances.
(v) Performance evaluation criteria. Performance criteria suggested
by the applicant for incorporation in the grant award in the event the
proposal receives grant funding under this subpart. These suggested
criteria are not binding on USDA.
(vi) Agricultural community support. Evidence of support from the
local agricultural community should be included in this section.
Letters in support should reflect that the writer is familiar with the
provisions of the Plan for the Center, including the stated goals.
Evidence of support can take the form of making employees available to
the Center, service as a board member and other in-kind contributions.
(vii) Strategic coordination and alliances. Describe arrangements
in place or planned with end users (processing and distribution
companies and regional grocers) as well as arrangements with entities
having technical research capabilities, broad support from the
agricultural community in the State or region, significant coordination
with end users (processing and distribution companies and regional
grocers), strategic alliances with entities having technical research
capabilities and a focused delivery plan for reaching out to the
producer community.
(viii) Capacity. Evidence of the ability of the grantee(s) to
successfully establish and operate a Center. A description of the
grantee's track record in providing services similar to those listed
for Producer Services or evidence that the entity has the capability to
provide Producer Services. Resumes of key personnel should be included
in this section. Past successes should be described in detail, with a
focus on lessons learned, best practices, familiarity with producer
problems in value-added ventures, and how these barriers are best
overcome should be elaborated on in this section. For every challenge
identified, the applicant should demonstrate how they are addressed in
the Work Plan (see paragraph (c)(5)(iv) of this section). All successes
should include a monetary estimate of the value-added achieved.
(ix) Legal structure. Provide a description of the legal
relationship between the grantee(s) and the proposed Center. If the
Center is to be an independent corporate entity, provide copies of the
corporate charter, bylaws and other relevant organizational documents.
Describe how funds for the Center will be handled and include copies of
the agreements documenting the legal relationships between the Center
and related parties. If the Center is not to be an independent legal
entity, provide copies of the corporate governance documents that
describe how members of the Board of Directors for the Center are to be
determined.
(x) Evaluation criteria. Each of the evaluation criteria referenced
in the RFP must be specifically and individually addressed in narrative
form. Supporting documentation, as applicable, should be included in
this section, or a cross reference to other sections in the application
should be provided, as applicable.
(xi) Verification of adequate resources. Present a budget to
support the work plan showing sources and uses of funds during the
start up period prior to the start of operations and for the first year
of full operations. Present a copy of a bank statement evidencing
sources of funds equal to amounts required in excess of the grant
requested, or, in the alternative, a copy of confirmed funding
commitments from credible sources such that USDA is satisfied that the
Center has adequate resources to complete a full year of operation.
Include information sufficient to facilitate verification by USDA of
all representations.
(xii) Certification of adequate resources. Applicants must certify
that non-Federal funds identified in the budget pursuant to paragraph
(c)(5)(xi) of this section will be available and funded commensurately
with grant funds.
Sec. 4284.1010 Evaluation screening.
The Agency will conduct an initial screening of all proposals to
determine whether the applicant is eligible and whether the application
is complete and sufficiently responsive to the requirements set forth
in the applicable RFP so as to allow for an informed review. Incomplete
or non-responsive applications will not be evaluated further, and may
be returned to the applicant. Applicants may revise their applications
and re-submit them prior to the published deadline if there is
sufficient time to do so.
Sec. 4284.1011 Evaluation process.
(a) Applications will be evaluated by qualified reviewers appointed
by the Agency.
(b) After all proposals have been evaluated using the evaluation
criteria and scored in accordance with the point allocation specified
in the applicable RFP, Agency officials will present to the
Administrator of RBS a list of all applications in rank order, together
with funding level recommendations.
(c) The Administrator reserves the right to award additional
points, as specified in the applicable RFP, to accomplish agency
objectives (e.g., to ensure geographic distribution, put emphasis on a
specific commodity, or to accomplish presidential initiatives.) The
maximum number of points that can be added to an application under this
paragraph cannot exceed ten percent of the total points the application
originally scored.
(d) After giving effect to the Administrator's point awards,
applications will be funded in rank order until all available funds
have been obligated.
Sec. 4284.1012 Evaluation criteria and weights.
Unless supplemented in a RFP, the criteria listed in this section
will be used to evaluate grants under this subpart. The distribution of
points to be awarded per criterion will be identified in the applicable
RFP.
[[Page 35331]]
(a) Ability to deliver. The application will be evaluated as to
whether it evidences unique abilities to deliver Producer Services so
as to create sustainable value-added ventures. Abilities that are
transferable to a wide range of agricultural value-added commodities
are preferred over highly specialized skills. Strong skills must be
accompanied by a credible and thoughtful plan.
(b) Successful track record. The applicant's track record in
achieving value-added successes.
(c) Work plan/Budget. The work plan will be reviewed for detailed
actions and an accompanying timetable for implementing the proposal.
Clear, logical, realistic and efficient plans will result in a higher
score. Budgets will be reviewed for completeness and the strength of
non Federal funding commitments.
(d) Qualifications of personnel. Proposals will be reviewed for
whether the key personnel who are to be responsible for performing the
proposed tasks have the necessary qualifications and whether they have
a track record of performing activities similar to those being
proposed. If a consultant or others are to be hired, points may be
awarded for consultants only if the proposal includes evidence of their
availability and commitment as well. Proposals using in-house employees
with strong track records in innovative activities will receive higher
points relative to proposals that out-source expertise.
(e) Local support. Proposed Centers must show local support and
coordination with other developmental organizations in the proposed
service area and with state and local institutions. Support
documentation should include recognition of rural values that balance
employment opportunities with environmental stewardship and other rural
amenities. Proposed Centers that show strong support from potential
beneficiaries and coordination with other developmental organizations
will receive more points than those not evidencing such support.
(f) Future support. Applicants that can demonstrate financial
independence in future years will receive more points for this
criterion. Points will be awarded only where future funding sources are
documented by letters of commitment.
Sec. 4284.1013 Grant closing.
(a) Letter of conditions. The Agency will notify an approved
applicant in writing, setting out the conditions under which the grant
will be made.
(b) Applicant's intent to meet conditions. Upon reviewing the
conditions and requirements in the letter of conditions, the applicant
must complete, sign and return the Agency's ``Letter of Intent to Meet
Conditions,'' or, if certain conditions cannot be met, the applicant
may propose alternate conditions to the Agency. The Agency must concur
with any changes proposed to the letter of conditions by the applicant
before the application will be further processed.
(c) Grant agreement. The Agency and the grantee must enter into an
``Agriculture Innovation Center Grant Agreement'' prior to the advance
of funds.
Sec. Sec. 4284.1014-4284.1100 [Reserved]
5. Subpart F of part 4284, consisting of Sec. Sec. 4284.501
through 4284.600 is revised to read as follows:
Subpart F--Rural Cooperative Development Grants
Sec.
4284.501 Purpose.
4284.502 Policy.
4284.503 Program administration
4284.504 Definitions.
4284.505-506 [Reserved]
4284.507 Eligibility for grant assistance.
4284.508 Use of grant funds.
4284.509 Limitations on grants.
4284.510 Application processing.
4284.511 Evaluation screening.
4284.512 Evaluation process.
4284.513 Evaluation criteria and weights.
4284.514 Grant closing.
4284.515-4284.599 [Reserved]
4284.600 OMB control number.
Sec. 4284.501 Purpose.
This subpart outlines the Agency's polices and procedures for
making grants for cooperative development in rural areas.
Sec. 4284.502 Policy.
Rural cooperative development grants will be used to facilitate the
creation or retention of jobs in rural areas through the development of
new rural cooperatives, Value-Added processing and rural businesses.
Sec. 4284.503 Program administration.
The rural cooperative development grant program is administered by
Cooperative Services within the Agency.
Sec. 4284.504 Definitions.
Center--The entity established or operated by the grantee for rural
cooperative development. It may or may not be an independent legal
entity separate from the grantee.
Cooperative development--The startup, expansion or operational
improvement of a cooperative to promote development in rural areas of
services and products, processes that can be used in the marketing of
products, or enterprises that create value-added to farm products
through processing or marketing activities. Development activities may
include, but are not limited to, technical assistance, research
services, educational services and advisory services. Operational
improvement includes making the cooperative more efficient or better
managed.
1994 Institutions--means those colleges identified as such for
purposes of the Equity in Educational Land-Grant Status Act of 1994 (7
U.S.C. 301 note). Contact the Agency for a list of currently eligible
colleges.
Project--A planned undertaking by a Center that utilizes the funds
provided to it to promote economic development in rural areas through
the creation and enhancement of cooperatives.
Sec. 4284.505-506 [Reserved]
Sec. 4284.507 Eligibility for grant assistance.
Grants may be made to Nonprofit corporations and institutions of
higher education. Grants may not be made to Public bodies.
Sec. 4284.508 Use of grant funds.
Grant funds may be used to pay up to 75 percent (95 percent where
the grantee is a 1994 Institution) of the cost of establishing and
operating centers for rural cooperative development. Matching funds
contributed by the applicant may include a loan from another federal
source. Grant funds may be used for, but are not limited to, providing
the following to individuals, cooperatives, small businesses and other
similar entities in Rural areas served by the Center:
(a) Applied research, feasibility, environmental and other studies
that may be useful for the purpose of cooperative development.
(b) Collection, interpretation and dissemination of principles,
facts, technical knowledge, or other information for the purpose of
cooperative development.
(c) Providing training and instruction for the purpose of
cooperative development.
(d) Providing loans and grants for the purpose of cooperative
development in accordance with the subpart.
(e) Providing technical assistance, research services and advisory
services for the purpose of cooperative development.
Sec. 4284.509 Limitations on grants.
Grants made pursuant to this subpart shall be for one year or less.
[[Page 35332]]
Sec. 4284.510 Application processing.
(a) Applications. USDA will solicit applications on a competitive
basis by publication of one or more Requests for Proposals (RFPs).
Unless otherwise specified in the applicable RFP, applicants must file
an original and one hard copy of the required forms and a proposal.
(b) Required forms. The following forms must be completed, signed
and submitted as part of the application package. Other forms may be
required. This will be published in the applicable RFP.
(1) ``Application for Federal Assistance''
(2) ``Budget Information--Non-Construction Programs''
(3) ``Assurances--Non-Construction Programs''
(c) Proposal. Each proposal must contain the following elements.
Additional elements may be published in the applicable RFP.
(1) Title page.
(2) Table of contents.
(3) Executive summary. A summary of the proposal should briefly
describe the Center, including goals and tasks to be accomplished, the
amount requested, how the work will be performed and whether
organizational staff, consultants or contractors will be used.
(4) Eligibility. A detailed discussion describing how the applicant
meets the eligibility requirements.
(5) Proposal narrative. The narrative portion of the proposal must
include, but is not limited to, the following:
(i) Project title. The title of the proposed project must be brief,
not to exceed 75 characters, yet describe the essentials of the
project.
(ii) Information sheet. A separate one-page information sheet
listing each of the evaluation criteria referenced in the RFP, followed
by the page numbers of all relevant material and documentation
contained in the proposal that address or support the criteria.
(iii) Goals of the project. This section must include the
following:
(A) A provision that substantiates that the Center will effectively
serve rural areas in the United States;
(B) A provision that the primary objective of the Center will be to
improve the economic condition of rural areas through cooperative
development;
(C) A description of the contributions that the proposed activities
are likely to make to the improvement of the economic conditions of the
rural areas for which the Center will provide services.
(D) Provisions that the Center, in carrying out the activities,
will seek, where appropriate, the advice, participation, expertise, and
assistance of representatives of business, industry, educational
institutions, the Federal Government, and State and local governments.
(iv) Work plan. Applicants must discuss the specific tasks to be
completed using grant and matching funds. The work plan should show how
customers will be identified, key personnel to be involved, and the
evaluation methods to be used to determine the success of specific
tasks and overall objectives of Center operations. The budget must
present a breakdown of the estimated costs associated with cooperative
development activities as well as the operation of the Center and
allocate these costs to each of the tasks to be undertaken. Matching
funds as well as grant funds must be accounted for in the budget.
(v) Performance evaluation criteria. Performance criteria suggested
by the applicant for incorporation in the grant award in the event the
proposal receives grant funding under this subpart. These suggested
criteria are not binding on USDA.
(vi) Undertakings. The applicant should expressly undertake to do
the following:
(A) Take all practicable steps to develop continuing sources of
financial support for the Center, particularly from sources in the
private sectors;
(B) Make arrangements for the activities by the nonprofit
institution operating the Center to be monitored and evaluated; and
(C) Provide an accounting for the money received by the grantee
under this subpart.
(vii) Delivery of Cooperative development assistance. The applicant
must describe its previous accomplishments and outcomes in Cooperative
development activities and/or its potential for effective delivery of
Cooperative development services to rural areas. The applicant should
also describe the type(s) of assistance to be provided, the expected
impacts of that assistance, the sustainability of cooperative
organizations receiving the assistance, and the transferability of its
Cooperative development strategy and focus to other areas of the U.S.
(viii) Qualifications of personnel. Applicants must describe the
qualifications of personnel expected to perform key center tasks, and
whether these personnel are to be full/part-time center employees or
contract personnel. Those personnel having a track record of positive
solutions for complex Cooperative development or marketing problems, or
those with a record of conducting feasibility studies that later proved
to be accurate, business planning, marketing analysis, or other
activities relevant to the Center's success should be highlighted.
(ix) Support and commitments. Applicants must describe the level of
support and commitment in the community for the proposed Center and the
services it would provide. Plans for coordinating with other
developmental organizations in the proposed service area, or with state
and local government institutions should be included. Letters
supporting cooperation and coordination from potential local customers
should be provided.
(x) Future support. Applicants should describe their vision for
Center operations beyond the first year, including issues such as
sources and uses of alternative funding; reliance on Federal, state,
and local grants; and the use of in-house personnel for providing
services versus contracting out for that expertise. To the extent
possible, applicants should document future funding sources that will
help achieve long-term sustainability of the Center.
(xi) Evaluation criteria. Each of the evaluation criteria
referenced in the RFP must be specifically and individually addressed
in narrative form.
(6) Verification of matching funds. Applicants must provide a
budget to support the work plan showing all sources and uses of funds
during the project period. Applicants will be required to verify
matching funds, both cash and in-kind. Sufficient information should be
included such that USDA can verify all representations.
(7) Certification. Applicants must certify that matching funds will
be available at the same time grant funds are anticipated to be spent
and that matching funds will be spent in advance of grant funding, such
that for every dollar of grant that is advanced, not less than an equal
amount of match funds will have been funded prior to submitting the
request for advance.
Sec. 4284.511 Evaluation screening.
The Agency will conduct an initial screening of all proposals to
determine whether the applicant is eligible and whether the application
is complete and sufficiently responsive to the requirements set forth
in the applicable RFP so as to allow for an informed review. Incomplete
or non-responsive applications will not be evaluated further.
Applicants may revise their applications and re-submit them prior to
the published deadline if there is sufficient time to do so.
[[Page 35333]]
Sec. 4284.512 Evaluation process.
(a) Applications will be evaluated by qualified reviewers appointed
by the Agency.
(b) After all proposals have been evaluated using the evaluation
criteria and scored in accordance with the point allocation specified
in the applicable RFP, the Agency will present to the Administrator of
RBS a list of all applications in rank order, together with funding
level recommendations.
Sec. 4284.513 Evaluation criteria and weights.
Unless supplemented in a RFP, the criteria listed in this section
will be used to evaluate grants under this subpart. Preference will be
given to items in paragraphs (a) through (f). The distribution of
points to be awarded per criterion will be identified in the applicable
RFP.
(a) Administrative capabilities. The application will be evaluated
to determine whether the subject Center has a track record of
administering a nationally coordinated, regional or state-wide operated
project. Centers that have capable financial systems and audit
controls, personnel and program administration performance measures and
clear rules of governance will receive more points than those not
evidencing this capacity.
(b) Technical assistance and other services. The Agency will
evaluate the applicant's demonstrated expertise in providing technical
assistance in Rural areas.
(c) Economic development. The Agency will evaluate the applicant's
demonstrated ability to assist in the retention of businesses,
facilitate the establishment of cooperatives and new cooperative
approaches and generate employment opportunities that will improve the
economic conditions of Rural areas.
(d) Linkages. The Agency will evaluate the applicant's demonstrated
ability to create horizontal linkages among businesses within and among
various sectors in rural areas of the United States and vertical
linkages to domestic and international markets.
(e) Commitment. The Agency will evaluate the applicant's commitment
to providing technical assistance and other services to underserved and
economically distressed areas in Rural areas of the United States.
(f) Matching Funds. All applicants must demonstrate Matching Funds
equal to at least 25 percent (5 percent for 1994 Institutions) of the
grant amount requested. Applications exceeding these minimum commitment
levels will receive more points.
(g) Delivery. The Agency will evaluate whether the Center has a
track record in providing technical assistance in Rural areas and
accomplishing effective outcomes in Cooperative development. The
Center's potential for delivering effective Cooperative development
assistance, the expected effects of that assistance, the sustainability
of cooperative organizations receiving the assistance, and the
transferability of the Center's Cooperative development strategy and
focus to other States will also be assessed.
(h) Work plan/Budget. The work plan will be reviewed for detailed
actions and an accompanying timetable for implementing the proposal.
Clear, logical, realistic and efficient plans will result in a higher
score. Budgets will be reviewed for completeness and the quality of non
Federal funding commitments.
(i) Qualifications of those performing the tasks. The application
will be evaluated to determine if the personnel expected to perform key
center tasks have a track record of positive solutions for complex
Cooperative development or marketing problems, or a successful record
of conducting accurate feasibility studies, business plans, marketing
analysis, or other activities relevant to Cooperative development
center success.
(j) Local support. Applications will be reviewed for previous and
expected local support for the Center, plans for coordinating with
other developmental organizations in the proposed service area and
coordination with state and local institutions. Support documentation
should include recognition of rural values that balance employment
opportunities with environmental stewardship and other positive rural
amenities. Centers that demonstrate strong support from potential
beneficiaries and formal evidence of the Center's intent to coordinate
with other developmental organizations will receive more points than
those not evidencing such support and formal intent.
(k) Future support. Applications that demonstrate financial
independence beyond the year for which grant funding is sought will
receive more points for this criterion. Points will be awarded only
where future funding sources are documented by letters of commitment.
(l) Amount requested. Points may be awarded based on the size of
the grant request. Lower requested amounts will receive more points.
The points to be awarded and request ranges will be established in the
applicable RFP.
Sec. 4284.514 Grant closing.
(a) Letter of Conditions. The Agency will notify an approved
applicant in writing, setting out the conditions under which the grant
will be made.
(b) Applicant's intent to meet conditions. Upon reviewing the
conditions and requirements in the letter of conditions, the applicant
must complete, sign and return the Agency's ``Letter of Intent to Meet
Conditions,'' or, if certain conditions cannot be met, the applicant
may propose alternate conditions to the Agency. The Agency must concur
with any changes proposed to the letter of conditions by the applicant
before the application will be further processed.
(c) Grant agreement. The Agency and the grantee must enter into the
Agency's ``Agriculture Innovation Center Grant Agreement'' prior to the
advance of funds.
Sec. Sec. 4284.515-4284.599 [Reserved]
Sec. 4284.600 OMB control number.
The reporting and recordkeeping requirements contained in this
subpart have been approved by the Office of Management and Budget and
have been assigned OMB control number 0570-0006 in accordance with the
Paperwork Reduction Act of 1995.
PART 1951--SERVICING AND COLLECTIONS
6. The authority citation for part 1951 continues to read as
follows:
Authority: 5 U.S.C. 301; 7 U.S.C. 1932 Note; 7 U.S.C. 1989; 31
U.S.C. 3716; 42 U.S.C. 1480.
7. Revise Sec. 1951.201 to read as follows:
Subpart E--Servicing of Community and Direct Business Programs
Loans and Grants
Sec. 1951.201 Purposes.
This subpart prescribes the Rural Development mission area
policies, authorizations and procedures for servicing the following
programs: Water and Waste Disposal System loans and grants, Community
Facility loans and grants, Rural Business Enterprise/Television
Demonstration grants; loans for Grazing and other shift-in-land-use
projects; Association Recreation loans; Association Irrigation and
Drainage loans; Watershed loans and advances; Resource Conservation and
Development loans; Direct Business loans; Economic Opportunity
Cooperative loans; Rural Renewal loans; Energy Impacted Area
Development Assistance Program grants; National Nonprofit Corporation
grants; Water and
[[Page 35334]]
Waste Disposal Technical Assistance and Training grants; Emergency
Community Water Assistance grants; System for Delivery of Certain Rural
Development Programs panel grants; section 306C WWD loans and grants;
and, in part 4284 of this title, Rural and Cooperative Development
Grants, Value-Added Producer Grants and Agriculture Innovation Center
Grants. Rural Development State Offices act on behalf of the Rural
Utilities Service, the Rural Business-Cooperative Service and the Farm
Service Agency as to loan and grant programs formerly administered by
the Farmers Home Administration and the Rural Development
Administration. Loans sold without insurance to the private sector will
be serviced in the private sector and will not be serviced under this
subpart. The provisions of this subpart are not applicable to such
loans. Future changes to this subpart will not be made applicable to
such loans.
Dated: June 5, 2003.
Thomas C. Dorr,
Under Secretary, Rural Development.
[FR Doc. 03-14840 Filed 6-12-03; 8:45 am]