CFR 2022 Title7 Vol13

Title 7
Agriculture
Parts 1940 to 1949
Revised as of January 1, 2021
Containing a codification of documents

of general applicability and future effect
As of January 1, 2021
Published by the Office of the Federal Register

National Archives and Records Administration
as a Special Edition of the Federal Register
VerDate Sep<11>2014 13:33 Aug 05, 2021 Jkt 253024 PO 00000 Frm 00001 Fmt 8091 Sfmt 8091 Y:\SGML\253024.XXX 253024
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Table of Contents
Page
Explanation ................................................................................................ v
Title 7:
SUBTITLE B—REGULATIONS OF THE DEPARTMENT OF AGRICULTURE

(CONTINUED)
Chapter XVIII—Rural Housing Service, Rural Business-Coopera-

tive Service, Rural Utilities Service, and Farm Service Agency,
Department of Agriculture (Continued) ...................................... 5
Finding Aids:
Table of CFR Titles and Chapters ....................................................... 241
Alphabetical List of Agencies Appearing in the CFR ......................... 261
List of CFR Sections Affected ............................................................. 271
iii
Cite this Code: CFR
To cite the regulations in

this volume use title,
part and section num-
ber. Thus, 7 CFR
1940.551 refers to title 7,
part 1940, section 551.
iv
Explanation
The Code of Federal Regulations is a codification of the general and permanent
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cies of the Federal Government. The Code is divided into 50 titles which represent
broad areas subject to Federal regulation. Each title is divided into chapters
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divided into parts covering specific regulatory areas.
Each volume of the Code is revised at least once each calendar year and issued
on a quarterly basis approximately as follows:
Title 1 through Title 16..............................................................as of January 1
Title 17 through Title 27 .................................................................as of April 1
Title 28 through Title 41 ..................................................................as of July 1
Title 42 through Title 50 .............................................................as of October 1
The appropriate revision date is printed on the cover of each volume.
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vi
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OLIVER A. POTTS,
Director,
Office of the Federal Register
January 1, 2021
vii
THIS TITLE
Title 7—AGRICULTURE is composed of fifteen volumes. The parts in these vol-

umes are arranged in the following order: parts 1–26, 27–52, 53–209, 210–299, 300–
399, 400–699, 700–899, 900–999, 1000–1199, 1200–1599, 1600–1759, 1760–1939, 1940–1949, 1950–
1999, and part 2000 to end. The contents of these volumes represent all current
regulations codified under this title of the CFR as of January 1, 2021.
The Food and Nutrition Service current regulations in the volume containing
parts 210–299, include the Child Nutrition Programs and the Food Stamp Program.
The regulations of the Federal Crop Insurance Corporation are found in the vol-
ume containing parts 400–699.
All marketing agreements and orders for fruits, vegetables and nuts appear
in the one volume containing parts 900–999. All marketing agreements and orders
for milk appear in the volume containing parts 1000–1199.
For this volume, Cheryl E. Sirofchuck was Chief Editor. The Code of Federal
Regulations publication program is under the direction of John Hyrum Martinez,
assisted by Stephen J. Frattini.
ix
Title 7—Agriculture
(This book contains parts 1940 to 1949)

(CONTINUED)
Part
CHAPTER XVIII—Rural Housing Service, Rural Business-Co-

operative Service, Rural Utilities Service, and Farm
Service Agency, Department of Agriculture (Continued) .. 1940
Subtitle B—Regulations of
the Department of
Agriculture (Continued)
CHAPTER XVIII—RURAL HOUSING SERVICE,
RURAL BUSINESS-COOPERATIVE SERVICE,
RURAL UTILITIES SERVICE, AND FARM SERVICE
AGENCY, DEPARTMENT OF AGRICULTURE
(CONTINUED)
EDITORIAL NOTE: Nomenclature changes to chapter XVIII appear at 61 FR 1109, Jan. 16, 1996,
and at 61 FR 2899, Jan. 30, 1996.
SUBCHAPTER H—PROGRAM REGULATIONS (CONTINUED)
Part Page
1940 General .................................................................... 7
1941 [Reserved]
1942 Associations ............................................................ 38
1943 [Reserved]
1944 Housing ................................................................... 111
1946 [Reserved]
1948 Rural development .................................................. 211
1949 [Reserved]
SUBCHAPTER H—PROGRAM REGULATIONS (CONTINUED)
PART 1940—GENERAL Subpart T—System for Delivery of Certain

Rural Development Programs
Subparts A–K [Reserved] 1940.951 General.
1940.952 [Reserved]
Subpart L—Methodology and Formulas for 1940.953 Definitions.
Allocation of Loan and Grant Program 1940.954 State participation.
Funds 1940.955 Distribution of program funds to
designated States.
Sec. 1940.956 State rural economic development
1940.551 Purpose and general policy. review panel.
1940.552 Definitions. 1940.957 State coordinator.
1940.553–1940.559 [Reserved] 1940.958 Designated agency.
1940.560 Guarantee Rural Rental Housing 1940.959 Area plan.
Program. 1940.960 Federal employee panel members.
1940.961 Allocation of appropriated funds.
1940.561–1940.562 [Reserved]
1940.962 Authority to transfer direct loan
1940.563 Section 502 non-subsidized guaran-
amounts.
teed Rural Housing (RH) loans. 1940.963 Authority to transfer guaranteed
1940.564 Section 502 subsidized guaranteed loan amounts.
Rural Housing loans. 1940.964 [Reserved]
1940.565 Section 502 subsidized Rural Hous- 1940.965 Processing project preapplications/
ing loans. applications.
1940.566 Section 504 Housing Repair loans. 1940.966–1940.967 [Reserved]
1940.567 Section 504 Housing Repair grants. 1940.968 Rural Economic Development Re-
1940.568 Single Family Housing programs view Panel Grant (Panel Grant).
appropriations not allocated by State. 1940.969 Forms, exhibits, and subparts.
1940.569–1940.574 [Reserved] 1940.970 [Reserved]
1940.575 Section 515 Rural Rental Housing 1940.971 Delegation of authority.
(RRH) loans. 1940.972–1940.999 [Reserved]
1940.576 Rental Assistance (RA) for new con- 1940.1000 OMB control number.
struction. AUTHORITY: 5 U.S.C. 301; 7 U.S.C. 1989; and
1940.577 Rental Assistance (RA) for existing 42 U.S.C. 1480.
projects.
EDITORIAL NOTE: Nomenclature changes to
1940.578 Housing Preservation Grant (HPG)
part 1940 appear at 80 FR 9876, Feb. 24, 2015.
program.
1940.579 Multiple Family Housing appropria-
tions not allocated by State. Subparts A–K [Reserved]
1940.580–1940.584 [Reserved]
1940.585 Community Facility loans. Subpart L—Methodology and For-
1940.586–1940.587 [Reserved]
mulas for Allocation of Loan
1940.588 Business and Industry Guaranteed
and Direct Loans, Rural Business Devel- and Grant Program Funds
opment Grants, and Intermediary Re-
lending Program. SOURCE: 50 FR 24180, June 10, 1985, unless
1940.589 Rural Energy for America Program. otherwise noted.
1940.590 [Reserved]
1940.591 Community Program Guaranteed § 1940.551 Purpose and general policy.
loans. (a) The purpose of this subpart is to
1940.592 Community facilities grants.
set forth the methodology and for-
1940.593 Other Rural Business-Cooperative
mulas by which the Administrator for
Service programs.
1940.594–1940.600 [Reserved]
the Rural Business-Cooperative Service
or the Administrator for the Rural
EXHIBIT A TO SUBPART L OF PART 1940 [RE-
Housing Service, as applicable, allo-
SERVED]
EXHIBIT B TO SUBPART L OF PART 1940—SEC-
cates program funds to the States.
TION 515 NONPROFIT SET ASIDE (NPSA) (The term State means any of the
EXHIBIT C TO SUBPART L OF PART 1940—HOUS- States of the United States, the Com-
ING IN UNDERSERVED AREAS monwealth of Puerto Rico, any terri-
tory or possession of the United States,
Subparts M–S [Reserved] or the Western Pacific Areas.) This
§ 1940.552 7 CFR Ch. XVIII (1–1–21 Edition)
subpart is inapplicable to Farm Service calculate a basic state factor as a part

Agency, Farm Loan Programs. of the methodology for allocating funds
(b) The formulas in this subpart are to the States. The formulas take a
used to allocate program loan and number of criteria that reflect the
grant funds to State Offices so that the funding needs for a particular program
overall mission of the Agency can be and through a normalization and
carried out. Considerations used when weighting process for each of the cri-
developing the formulas include ena- teria calculate the basic State Factor
bling legislation, congressional direc-
(SF). The data sources used for each
tion, and administration policies. Allo-
criteria is believed to be the most cur-
cation formulas ensure that program
resources are available on an equal rent and reliable information that ade-
basis to all eligible individuals and or- quately quantifies the criterion. The
ganizations. weight, expressed as a percentage,
(c) The actual amounts of funds, as gives a relative value to the impor-
computed by the methodology and for- tance of each of the criteria.
mulas contained herein, allocated to a (c) Basic formula allocation. The result
State for a funding period are distrib- of multiplying the amount available
uted to each State Office by an exhibit for allocation less the total of any
to this subpart. The exhibit is available amounts held in reserve or distributed
for review in any Rural Development by base or administrative allocation
State Office. The exhibit also contains times the basic State factor for each
clarifications of allocation policies and State. The basic formula allocation
provides further guidance to the State (BFA) for an individual State is equal
Directors on any suballocation within to:
the State. Rural Development will pub-
lish a Notice of Availability of Rural BFA = (Amount available for allocation ¥
Housing funds in the FEDERAL REG- NO reserve ¥ Total base and administra-
ISTER each year. tive allocations) × SF.
[49 FR 3727, Jan. 30, 1984, as amended at 53 (d) Transition formula. A formula
FR 26229, July 12, 1988; 55 FR 29560, July 20, based on a proportional amount of pre-
1990; 56 FR 66960, Dec. 27, 1991; 72 FR 64122, vious year allocation used to maintain
Nov. 15, 2007]
program continuity by preventing
§ 1940.552 Definitions. large fluctuations in individual State
allocations. The transition formula
(a) Amount available for allocation.
limits allocation shifts to any par-
Funds appropriated or otherwise made
ticular State in the event of changes
availiable to the Agency for use in au-
thorized programs. On occasion, the al- from year to year of the basic formula,
location of funds to States may not be the basic criteria, or the weights given
practical for a particular program due the criteria. The transition formula
to funding or administrative con- first checks whether the current year’s
straints. In these cases, funds will be basic formula allocation is within the
controlled by the National Office. transition range (+ or ¥percentage
(b) Basic formula criteria, data source points of the proportional amount of
and weight. Basic formulas are used to the previous year’s BFA).
Amount available
for allocation
Maximum 20% this year
Transition range = 1.0 ± × × State previous year BFA
100 Amount available
for allocation
previous year
8
EC14NO91.000</MATH>
RHS, RBS, RUS, FSA, USDA § 1940.560
If the current year’s State BFA is not the fiscal year or portion of the fiscal
within this transition range, the State year, depending on the type of pooling,
formula allocation is changed to the that have not been obligatedf by the
amount of the transition range limit State are placed in the National Office
closest to the BFA amount. After hav- reserve. The Administrator will estab-
ing performed this transition adjust- lish the pooling dates for each affected
ment for each State, the sum of the program.
funds allocated to all States will differ (1) Mid-year: This pooling addresses
from the amount of funds available for the need to partially redistribute funds
BFA. This difference, whether a posi- based on use/demand. Mid-year pooling
tive or negative amount, is distributed occurs near the midpoint of the fiscal
to all States receiving a formula allo- year.
cation by multiplying the difference by (2) Year-end: This pooling is used to
the SF. The end result is the transition ensure maximum use of program funds
formula allocation. The transition on a national basis. Year-end pooling
range will not exceed 40% (±20%), but usually occurs near the first of August.
when a smaller range is used it will be (3) Emergency: The Administrator
stated in the individual program sec- may pool funds at any time that it is
tion. determined the conditions upon which
(e) Base allocation. An amount that the initial allocation was based have
may be allocated to each State depend- changed to such a degree that it is nec-
ent upon the particular program to essary to pool funds in order to effi-
provide the opportunity for funding at ciently carry out the Agency mission.
least one typical loan or grant in each (i) Availability of the allocation. Pro-
Rural Development State, District, or gram funds are made available to the
County Office. The amount of the base Agency on a quarterly basis. In the
allocation may be determined by cri- high demand programs, it is necessary
teria other than that used in the basic that specific instructions by given to
formula allocation such as agency his- the State Offices regarding the amount
toric data. which is available for obligation during
(f) Administrative allocations. Alloca- each quarter.
tions made by the Administrator in
(j) Suballocation by the State Director.
cases where basic formula criteria in-
Dependent upon the individual pro-
formation is not available. This form of
gram for which funds are being allo-
allocation may be used when the Ad-
cated, the State Director may be di-
ministrator determines the program
rected or given the option of suballo-
objectives cannot be adequately met cating the State allocation to District
with a formula allocation. or County Offices. When suballocating
(g) Reserve. An amount retained the State Director may retain a por-
under the National Office control for tion of the funds in a State Office re-
each loan and grant program to provide serve to provide flexibility in situa-
flexibility in meeting situations of un- tions of unexpected or justified need.
expected or justifiable need occurring When performing a suballocation the
during the fiscal year. The Adminis- State Director will use the same for-
trator may make distributions from mula, criteria and weights as used by
this reserve to any State when it deter- the National Office.
mined necessary to meet a program
(k) Other documentation. Additional
need or agency objective. The Adminis-
instructions given to field offices re-
trator may retain additional amounts
garding allocations.
to fund authorized demonstration pro-
grams. When such demonstration pro- [49 FR 3727, Jan. 30, 1984, as amended at 53
grams exist, the information is out- FR 26229, July 12, 1988]
lined in exhibit A of this subpart
(available in any FmFA State Office). §§ 1940.553–1940.559 [Reserved]
(h) Pooling of funds. A technique used
to ensure that available funds are used § 1940.560 Guarantee Rural Rental
in an effective, timely and efficient Housing Program.
manner. At the time of pooling those When funding levels are under
funds within a State’s allocation for $100,000,000, all funds will be held in a
§§ 1940.561–1940.562 7 CFR Ch. XVIII (1–1–21 Edition)
National Office reserve and made avail- mula allocations do not receive admin-
able administratively in accordance istrative allocations.
with the Notice of Funding Avail- (g) Reserve. See § 1940.552(g).
ability (NOFA) and program regula- (h) Pooling of funds. See § 1940.552(h).
tions. When program levels are suffi- (i) Availability of the allocation. See
cient for a nationwide program, funds § 1940.552(i).
are allocated based upon the following (j) Suballocation by the State Director.
criteria and weights. See § 1940.552(j).
(a) Amount available for allocations. (k) Other documentation. Not applica-
See § 1940.552(a) of this subpart. ble.
(b) Basic formula criteria, data source [63 FR 39458, July 22, 1998, as amended at 80
and weight. See § 1940.552(b) of this sub- FR 9876, Feb. 24, 2015]
part .
Each factor will receive a weight re- §§ 1940.561–1940.562 [Reserved]
spectively of 40%, 40% and 20%. The
criteria used in the basic formula are: § 1940.563 Section 502 non-subsidized
guaranteed Rural Housing (RH)
(1) State’s percentage of National loans.
rural population,
(2) State’s percentage of the National (a) Amount available for allocations.
number of rural households between 50 See § 1940.552(a) of this subpart.
and 115 percent of the area median in- (b) Basic formula criteria, data source
come, and and weight. See § 1940.552 (b) of this sub-
part. The criteria used in the basic for-
(3) State’s percentage of National av-
mula are:
erage cost per unit. The data source for
(1) State’s percentage of the National
the criterion specified in paragraph
number of rural occupied substandard
(b)(1) of this section is the most recent
units,
decennial Census of the United States
(decennial Census). The data source for
rural population in places of less than
2,500 population,
(b)(2) of this section is 5-year income
(3) State’s percentage of the national
data from the American Community
number of rural households between 80
Survey (ACS) or, if needed, other Cen-
and 100 percent of the area median in-
sus Bureau data. The data source for
come, and
(4) State’s percentage of the national
(b)(3) of this section is the cost per unit
number of rural renter households pay-
data using the applicable maximum per
ing more than 35 percent of income for
unit dollar amount limitations under
rent. The data source for each criterion
section 207(c) of the National Housing
is specified in paragraph (b)(5) of this
Act, which can be obtained from the
section. Each criterion is assigned a
Department of Housing and Urban De-
specific weight according to its rel-
velopment. The percentage rep-
evance in determining need. The per-
resenting each criterion is multiplied
centage representing each criterion is
by the weight assigned and totaled to
multiplied by the weight factor and
arrive at a State factor.
summed to arrive at a basic State fac-
State Factor = (criterion No. 1 ×
tor (SF) as follows:
weight of 40%) + (criterion No. 1 ×
SF = (criterion 1 × weight of 30%) +
weight of 40%) + (criterion No. 1 ×
(criterion 2 × weight of 10%) + (cri-
weight of 20%)
terion 3 × weight of 30%) + (criterion 4
(c) Basic formula allocation. See × weight of 30%)
§ 1940.552(c). (5) The data source for the criteria
(d) Transition formula. See specified in paragraphs (b)(1) and (b)(2)
§ 1940.552(d). of this section is the most recent de-
(e) Base allocation. See § 1940.552(e). cennial Census. The data source for the
Jurisdictions receiving administrative criteria specified in paragraph (b)(3)
allocations do not receive base alloca- and (b)(4) of this section is 5-year in-
tions. come data from the American Commu-
(f) Administrative allocations. See nity Survey (ACS) or, if needed, other
§ 1940.552(f). Jurisdictions receiving for- Census Bureau data.
10
(c) Basic formula allocation. See (4) State’s percentage of the national
§ 1940.552(c) of this subpart. number of rural renter households pay-
(d) Transition formula. See § 1940.552(d) ing more than 35 percent of income for
of this subpart. The percentage range rent. The data source for each criterion
used for Section 502 guaranteed RH is specified in paragraph (b)(5) of this
loans is plus or minus 15. section. Each criterion is assigned a
(e) Base allocation. See § 1940.552(e) of specific weight according to its rel-
this subpart. Jurisdictions receiving evance in determining need. The per-
administrative allocations do not re- centage representing each criterion is
ceive base allocations. multiplied by the weight factor and
(f) Administrative allocations. See summed to arrive at a basic State fac-
§ 1940.552(f) of this subpart. Jurisdic- tor (SF) as follows:
tions receiving formula allocations do SF = (criterion 1 × weight of 30%) +
not receive administrative allocations. (criterion 2 × weight of 10%) + (cri-
(g) Reserve. See § 1940.552(g) of this terion 3 × weight of 30%) + (criterion 4
subpart. × weight of 30%)
(h) Pooling of funds. See § 1940.552(h) (5) The data source for the criteria
of this subpart. specified in paragraphs (b)(1), (b)(2),
(1) Mid-year: If used in a particular and (b)(4) of this section is the most re-
fiscal year, available funds unobligated cent decennial Census. The data source
as of the pooling date are pooled and for the criterion specified in paragraph
redistributed based on the formula (b)(3) of this section is 5-year income
used to allocate funds initially. data from the American Community
(2) Year-end: Pooled funds are placed Survey (ACS) or, if needed, other Cen-
in a National Office reserve and are sus Bureau data.
available as determined administra- (c) Basic formula allocation. See
tively.
§ 1940.552(c) of this subpart.
(i) Availability of the allocation. See
(d) Transition formula. See § 1940.552(d)
§ 1940.552(i) of this subpart.
of this subpart. The percentage range
used for section 502 guaranteed RH
See § 1940.552(j) of this subpart. Annu-
loans is plus or minus 15.
ally, the Administrator will advise
State Director’s whether or not sub- (e) Base allocation. See § 1940.552(e) of
allocation within the State Office ju- this subpart. Jurisdictions receiving
risdiction will be required for the guar- administrative allocations do not re-
anteed Housing program. ceive base allocations.
(k) Other documentation. Not applica- (f) Administration allocations. See
ble. § 1940.552(f) of this subpart. Jurisdic-
tions receiving formula allocations do
[56 FR 10509, Mar. 13, 1991, as amended at 80 not receive administrative allocations.
FR 9876, Feb. 24, 2015]
(g) Reserve. See § 1940.552(g) of this
§ 1940.564 Section 502 subsidized guar- subpart.
anteed Rural Housing loans. (h) Pooling of funds. See § 1940.552(h)
(a) Amount available for allocations. of this subpart.
See § 1940.552(a) of this subpart. (1) Mid-year: If used in a particular
(b) Basic formula criteria, data source fiscal year, available funds unobligated
and weight. See § 1940.552(b) of this sub- as of the pooling date are pooled and
part. The criteria used in the basic for- redistributed based on the formula
mula are: used to allocate funds initially.
(1) State’s percentage of the National (2) Year-end: Pooled funds are placed
number of rural occupied substandard in a National Office reserve and are
units, available as determined administra-
(2) State’s percentage of the National tively.
rural population in places of less than (i) Availability of the allocation. See
2,500 population, § 1940.552(i) of this subpart.
(3) State’s percentage of the national (j) Suballocation by the State Director.
number of rural households below 80 See § 1940.552(j) of this subpart. Annu-
percent of the area median income, and ally, the Administrator will advise
11
State Director’s whether or not sub- tions receiving formula allocations do

allocation within the State Office ju- not receive administrative allocations.
risdiction will be required for the guar- (g) Reserve. See § 1940.552(g) of this
anteed Housing program. subpart.
(k) Other documentation. Not applica- (h) Pooling of funds. See § 1940.552(h)
ble. of this subpart.
(1) Mid-year: If used in a particular
[56 FR 10509, Mar. 13, 1991, as amended at 80
FR 9877, Feb. 24, 2015]
fiscal year, available funds unobligated
as of the pooling date are pooled and
§ 1940.565 Section 502 subsidized redistributed based on the formula
Rural Housing loans. used to allocate funds initially.
(2) Year-end: Pooled funds are placed
(a) Amount available for allocations.
in a National Office reserve and are
See § 1940.552(a) of this subpart.
available as determined administra-
(b) Basic formula criteria, data source
tively.
and weight. See § 1940.552(b) of this sub-
part. The criteria used in the basic for-
§ 1940.552(i) of this subpart.
mula are:
See § 1940.552(j) of this subpart. The
number of rural occupied substandard
State Director will suballocate funds
units,
to the District Offices and may, at his/
(2) State’s percentage of the National her option, suballocate to the County
rural population, Offices. The State Director will use the
(3) State’s percentage of the National same basic formula criteria, data
rural population in places of less than source and weight for suballocating
2,500 population, funds within the State as used by the
(4) State’s percentage of the National National Office in allocating to the
number of rural households between 50 States as described in § 1940.565 (b) and
and 80 percent of the area median in- (c) of this section. The suballocations
come, and to District or County Offices will not
(5) State’s percentage of the National be reduced or restricted unless written
number of rural households below 50 approval is received from the National
percent of the area median income. Office in response to a written request
Data source for each of these criteria is from the State Director. The State Di-
based on the latest census data avail- rector’s request must include the rea-
able. Each criterion is assigned a spe- sons for the requested action (e.g., high
cific weight according to its relevance housing inventory and/or high housing
in determining need. The percentage delinquency).
representing each criterion is multi- (k) Other documentation. The percent-
plied by the weight factor and summed age distribution of funds to the States
to arrive at a basic State factor (SF) by income levels is based on prevailing
SF = (criterion 1 × weight of 25%) + legislation.
(criterion 2 × weight of 10%) + (cri- § 1940.566 Section 504 Housing Repair
terion 3 × weight of 15%) + (cri- loans.
terion 4 × weight of 30%) + (cri-
terion 5 × weight of 20%) (a) Amount available for allocations.
See § 1940.552(a) of this subpart.
(c) Basic formula allocation. See (b) Basic formula criteria, data source
§ 1940.552(c) of this subpart. and weight. See § 1940.552(b). The cri-
(d) Transition formula. See § 1940.552(d) teria used in the basic formula are:
of this subpart. The percentage range (1) State’s percentage of the National
used for Section 502 subsidized RH number of rural occupied substandard
loans is plus or minus 15. units, and
(e) Base allocation. See § 1940.552(e) of (2) State’s percentage of the National
this subpart. Jurisdictions receiving number of rural households below 50
administrative allocations do not re- percent of area median income. The
ceive base allocations. data source for the first criterion is the
(f) Administrative allocations. See most recent decennial Census data. The
§ 1940.552(f) of this subpart. Jurisdic- data source for the second criterion is
12
5-year income data from the American (b) Basic formula criteria, data source
Community Survey (ACS) or, if needed, and weight. See § 1940.552(b) of this sub-
other Census Bureau data. Each cri- part. The criteria used in the basic for-
terion is assigned a specific weight ac- mula are:
cording to its relevance in determining (1) State’s percentage of the National
need. The percentage representing each number of rural occupied substandard
criterion is multiplied by the weight units,
factor and summed to arrive at a basic (2) State’s percentage of the National
State factor (SF). rural population 62 years and older,
SF = (criterion No. 1 × weight of 50%) and
+ (criterion No. 2 × weight of 50%) (3) State’s percentage of the National
(c) Basic formula allocation. See number of rural households below 50
§ 1940.552(c) of this subpart. percent of area median income. The
(d) Transition formula. See § 1940.552(d) data source for the first two of these
of this subpart. The percentage range criteria is the most recent decennial
used for section 504 Housing Repair Census data. The data source for the
Loans is plus or minus 15. third criterion is the 5-year data from
(e) Base allocation. Not used. the American Community Survey
(f) Administrative allocations. See (ACS) or, if needed, other Census Bu-
§ 1940.552(f) of this subpart. Jurisdic- reau data. Each criterion is assigned a
tions receiving formula allocations do specific weight according to its rel-
not receive administrative allocations. evance in determining need. The per-
(g) Reserve. See § 1940.552(g) of this centage representing each criterion is
subpart. multiplied by the weight factor and
(h) Pooling of funds. See § 1940.552(h) summed to arrive at a basic State fac-
of this subpart. tor (SF).
(1) Mid-year: If used in a particular SF = (criterion No. 1 × weight of 33 1/
fiscal year, available funds unobligated 3%) + (criterion No. 2 × weight of 33 1/
as of the pooling date are pooled and 3%) + (criterion No. 3 × weight of 33 1/
redistributed based on the formula 3%)
used to allocate funds initially. (c) Basic formula allocation. See
(2) Year-end: Pooled funds are placed § 1940.552(c) of this subpart.
in a National Office reserve and are (d) Transition formula. See § 1940.552(d)
available as determined administra- of this subpart. The percentage range
tively. used for section 504 Housing Repair
(i) Availability of the allocation. See grants is plus or minus 15.
§ 1940.552(i) of this subpart. (e) Base allocation. Not used.
(f) Administrative allocations. See
§ 1940.552(f) of this subpart. Jurisdic-
See § 1940.552(j) of this subpart. At the
tions receiving formula allocations do
option of the State Director, section
not receive administrative allocations.
504 loan funds may be suballocated to
the District Offices. When performing a
subpart.
suballocation, the State Director will
(h) Pooling of funds. See § 1940.552(h)
use the same basic formula criteria,
of this subpart.
data source and weight for suballo-
(1) Mid-year: If used in a particular
cating funds within the State as used
fiscal year, available funds unobligated
by the National Office in allocating to
as of the pooling date are pooled and
the States as described in § 1940.566 (b)
redistributed based on the formula
and (c) of this section.
used to allocate funds initially.
(k) Other documentation. Not applica-
(2) Year-end: Pooled funds are placed
ble.
in a National Office reserve and are
[50 FR 24180, June 10, 1985, as amended at 80 available as determined administra-
FR 9877, Feb. 24, 2015] tively.
§ 1940.567 Section 504 Housing Repair § 1940.552(i) of this subpart.
grants. (j) Suballocation by the State Director.
(a) Amount available for allocations. See § 1940.552(j) of this subpart. At the
See § 1940.552(a) of this subpart. option of the State Director, section
13
504 grant funds may be suballocated to is multiplied by the weight assigned

the District Offices. When performing a and summed to arrive at a State factor
suballocation, the State Director will (SF).
use the same basic formula criteria, SF = (criterion No. 1 × weight of 33 1/
data source and weight for suballo- 3%) + (criterion No. 2 × weight of 33 1/
cating funds within the State as used 3%) + (criterion No. 3 × weight of 33 1/
by the National Office in allocating to 3%)
the States as described in § 1940.567 (b) (c) Basic formula allocation. See
and (c) of this section. § 1940.552(c) of this subpart.
(k) Other documentation. Not applica- (d) Transition formula. See § 1940.522(d)
ble. of this subpart.
[50 FR 24180, June 10, 1985, as amended at 80 (e) Base allocation. See § 1940.552(e) of
FR 9877, Feb. 24, 2015] this subpart. Jurisdictions receiving
administrative allocations do not re-
§ 1940.568 Single Family Housing pro- ceive base allocations.
grams appropriations not allocated (f) Administrative allocations. See
by State.
§ 1940.552(f) of this subpart. Jurisdic-
The following program funds are kept tions receiving formula allocations do
in a National Office reserve and are not receive administrative allocations.
available as determined administra- (g) Reserve. See § 1940.552(g) of this
tively: subpart.
(a) Section 523 Self-Help Technical (h) Pooling of funds. See § 1940.552(h)
Assistance Grants. of this subpart.
(b) Section 523 Land Development (i) Availability of the allocation. See
Fund. § 1940.552(i) of this subpart.
(c) Section 524 Rural Housing Site
Loans.
See § 1940.552(j) of this subpart.
(d) Section 509 Compensation for Con-
(k) Other documentation. Not applica-
struction Defects.
ble.
(e) Section 502 Nonsubsidized Funds.
[53 FR 26229, July 12, 1988, as amended at 80
§§ 1940.569–1940.574 [Reserved] FR 9877, Feb. 24, 2015]
§ 1940.575 Section 515 Rural Rental § 1940.576 Rental Assistance (RA) for
Housing (RRH) loans. new construction.
(a) Amount available for allocations. (a) Amount available for allocations.
See § 1940.552(a) of this subpart. See § 1940.552(a) of this subpart.
(b) Basic formula criteria, data source (b) Basic formula criteria, data source
and weight. See § 1940.552(b) of this sub- and weight. See § 1940.575(b) of this sub-
part. part.
The criteria used in the basic for-
(c) Basic formula allocation. See
mula area:
(1) State’s percentage of National
rural population, (d) Transition formula. See § 1940.552(d)
(2) State’s percentage of National of this subpart.
number of rural occupied substandard (e) Base allocation. See § 1940.552(e) of
units, and this subpart.
(3) State’s percentage of National (f) Administrative allocations. See
rural families with incomes below the § 1940.552(f) of this subpart. Jurisdic-
poverty level. The data source for the tions receiving formula allocations do
first two of these criterion is the most not receive administrative allocations.
recent decennial Census data. The data (g) Reserve. See § 1940.552(g) of this
source for the third criterion is the 5- subpart.
year data from the American Commu- (h) Pooling of funds. See § 1940.552(h)
nity Survey (ACS) or, if needed, other of this subpart.
Census Bureau data. Each criterion is (i) Availability of the allocation. See
assigned a specific weight according to § 1940.552(i) of this subpart.
its relevance in determining need. The (j) Suballocation by the State Director.
percentage representing each criterion See § 1940.552(j) of this subpart.
14
(k) Other documentation. Not applica- (j) Suballocation by the State Director.
ble. See § 1940.552(j) of this subpart.
[53 FR 26229, July 12, 1988] (k) Other documentation. Not applica-
ble.
§ 1940.577 Rental Assistance (RA) for [49 FR 3727, Jan. 30, 1984, as amended at 53
existing projects. FR 26229, July 12, 1988]
See § 1940.552(a) of this subpart. RA ap- § 1940.578 Housing Preservation Grant
propriated for existing projects will (HPG) program.
first be used to replace contracts expir- (a) Amount available for allocations.
ing each fiscal year and for the first See § 1940.552(a) of this subpart.
few months of the following fiscal year. (b) Basic formula criteria, data source
This is done to assure continued RA and weight. See § 1940.575(b) of this sub-
funding. RA units not needed for re- part.
placement purposes will be used for ex-
(c) Basic formula allocation. See
isting multiple family housing projects
experiencing servicing problems.
(d) Transition formula. See § 1940.552(d)
and weight. No formula or weighted cri- of this subpart.
teria is used to allocate replacement (e) Base allocation. See § 1940.552(e) of
RA. The basic allocation for replace- this subpart.
ment RA will be made based on the fol- (f) Administrative allocations. See
lowing: § 1940.552(f) of this subpart.
(1) Criteria. This allocation is based (g) Reserve. See § 1940.552(g) of this
on the estimated need to replace RA subpart.
contracts expiring from the depletion (h) Pooling of funds. See § 1940.552(h)
of funds. of this subpart. Funds may be pooled
(2) Date source. The most accurate after all HPG applications have been
and current information available from received and HPG fund demand by
Rural Development computerized data State has been determined. Pooled
sources. funds will be combined with the Na-
(c) Basic formula allocation. While no tional Office reserve to fund eligible
formula will be used, the basic alloca- projects. Remaining HPG funds will be
tion will be made to each State accord- available for distribution for use under
ing to the need determined using the the Section 504 program.
basic criteria. (i) Availability of the allocation. See
(d) Transition formula. Not applicable. § 1940.552(i) of this subpart.
(e) Base allocation. Not applicable. (j) Suballocation by the State Director.
(f) Administrative allocation. Not appli- Not applicable.
cable. (k) Other documentation. Funds for
(g) Reserve. See § 1940.552(g) of this the HPG program will be available for
subpart. The National Office maintains a limited period each fiscal year. Due
a reserve adequate to compensate for to the requirements by law to allocate
the differences between actual and pro- funds on a formula basis to all States
jected replacement activity. Units will and to have a competitive selection
be administratively distributed for ex- process for HPG project selection,
isting housing to either satisfy pre- Rural Development will announce
viously unidentified replacement needs opening and closing dates for receipt of
or address servicing situations. Units HPG applications. After the closing
will be distributed to any State when date, Rural Development will review
the Administrator determines that ad- and evaluate the proposals, adjust
ditional allocations are necessary and State allocations as necessary to com-
appropriate.
ply with the law and program demand,
(h) Pooling of funds. See § 1940.552(h)
and redistribute remaining unused
of this subpart. Units will be pooled at
HPG resources for use under Section
the Administrator’s discretion.
504 (as required by statute).
(i) Obligation of the allocation. See
§ 1940.552(i) of this subpart. [53 FR 26229, July 12, 1988]
15
§ 1940.579 Multiple Family Housing ap- trative allocations do not receive base
propriations not allocated by State. allocations.
Funds are not allocated to States. (f) Administrative allocation. See
The following program funds are kept § 1940.552(f) of this subpart. States par-
in a National Office reserve and are ticipating in the formula base alloca-
available as determined administration procedures do not receive adminis-
tively: trative allocations.
(a) Section 514 Farm Labor Housing (g) Reserve. See § 1940.552(g) of this
Loans. subpart. States may request funds by
(b) Section 516 Farm Labor Housing forwarding a completed copy of guide
Grants. 26 of subpart A of part 1942 of this chap-
ter (available in any Rural Develop-
[64 FR 24480, May 6, 1999] ment office), to the National Office.
Generally, a request for additional
§§ 1940.580–1940.584 [Reserved]
funds will not be honored unless the
§ 1940.585 Community Facility loans. State has insufficient funds to obligate
the loan requested.
(a) Amount available for allocations. (h) Pooling of funds. See § 1940.552(h)
See § 1940.552(a) of this subpart. of this subpart. Funds are generally
(b) Basic formula criteria, data source pooled at mid-year and year-end.
and weight. See § 1940.552(b) of this sub- Pooled funds will be placed in the Na-
part. tional Office reserve and will be made
(1) The criteria used in the basic for- available administratively.
mula are: (i) Availability of the allocation. See
(i) State’s percentage of national § 1940.552(i) of this subpart. The alloca-
rural population—50 percent. tion of funds is made available for
(ii) State’s percentage of national States to obligate on an annual basis
rural population with incomes below although the Office of Management and
the poverty level—25 percent. Budget apportions it to the Agency on
(iii) State’s percentage of national a quarterly basis.
nonmetropolitan unemployment—25 (j) Suballocation by the State Director.
percent. See § 1940.552(j) of this subpart. State
(2) The data source for the first cri- Director has the option to suballocate
terion is the most recent decennial to District Offices.
Census data. The data source for the (k) Other documentation. Not applica-
second criterion is the 5-year data from ble.
the American Community Survey
(ACS) or, if needed, other Census Bu- [50 FR 24180, June 10, 1985, as amended at 58
reau data. The data source for the FR 54485, Oct. 22, 1993; 80 FR 9877, Feb. 24,
2015]
third criterion is the most recent Bu-
reau of Labor Statistics data. Each cri- §§ 1940.586–1940.587 [Reserved]
terion is assigned a specific weight ac-
cording to its relevance in determining § 1940.588 Business and Industry
need. The percentage representing each Guaranteed and Direct Loans,
criterion is multiplied by the weight Rural Business Development
factor and summed to arrive at a State Grants, and Intermediary Re-
factor (SF). The SF cannot exceed 0.05. lending Program.
SF = (criterion (b)(1)(i) × 50 percent) The Agency will allocate funds to the
+ (criterion (b)(1)(ii) × 25 percent) + States each Federal fiscal year for the
(criterion (b)(1)(iii) × 25 percent) programs identified in this section
(c) Basic formula allocation. See using the procedures specified in para-
§ 1940.552(c) of this subpart. States re- graph (a) of this section. If the Agency
ceiving administrative allocations do determines that it will not allocate
not receive formula allocations. funds to the States for a program iden-
(d) Transition formula. See § 1940.552(d) tified in this section in a particular
of this subpart. The percentage range Federal fiscal year, the Agency will an-
for the transition formula equals 30 nounce this decision in a notice pub-
percent (±15%). lished in the FEDERAL REGISTER. The
(e) Base allocation. See § 1940.552(e) of conditions under which the Agency will
this subpart. States receiving adminis- not allocate a program’s funds to the
16
States are identified in paragraph (b) of the Agency will use the most recent
this section. data available to the Agency as of Oc-
(a) Procedures for allocating funds to tober 1 of the fiscal year for which the
the States. Each Federal fiscal year, the Agency is making State allocations.
Agency will use the amount available Each criterion’s value determined at
to the program and the procedures the beginning of a fiscal year for a pro-
identified in paragraphs (a)(2) through gram will be used for that entire fiscal
(10) of this section to determine the year, regardless of when that fiscal
amount of program funds to allocate to year’s funding becomes available for
each of the States. The Agency will the program.
make the allocation calculation each (3) Basic formula allocation. See
Federal fiscal year. § 1940.552(c) of this subpart.
(1) Amount available for allocations. (4) Transition formula. The transition
See § 1940.552(a) of this subpart. provisions specified in § 1940.552(d) of
(2) Basic formula criteria, data source this subpart apply to the programs
and weight. See § 1940.552(b) of this sub- identified in this section except as fol-
part. lows:
(i) The criteria used in the basic for- (i) The transition formula will be
mula are: used only when the weight factors
(A) State’s percentage of national identified in paragraph (a)(2)(iii) of this
rural population. section are modified; and
(B) State’s percentage of national (ii) When the transition formula is
rural population with incomes below used, there will be no upper limitation
the poverty level. on the amount that a State’s alloca-
(C) State’s percentage of national tion can increase over its previous
nonmetropolitan unemployment. year’s allocation and the maximum
(ii) The data sources for each of the percentage that funding will be allowed
criteria identified in paragraph (a) of to decrease for a State will be 10 per-
this section are: cent from its previous year’s alloca-
(A) For the criterion specified in tion.
paragraph (a)(2)(i)(A), the most recent (5) Base allocations. See § 1940.552(e) of
decennial Census data. this subpart.
(B) For the criterion specified in (6) Administrative allocations. See
paragraph (a)(2)(i)(B), 5-year income § 1940.552(f) of this subpart. Jurisdic-
data from the American Community tions receiving formula allocations do
Survey (ACS) or, if needed, other Cen- not receive administrative allocations.
sus Bureau data. (7) Reserve. See § 1940.552(g) of this
(C) For the criterion specified in subpart.
paragraph (a)(2)(i)(C), the most recent (8) Pooling of funds. See § 1940.552(h) of
Bureau of Labor Statistics data. this subpart.
(iii) Each criterion is assigned a spe- (9) Availability of allocation. See
cific weight factor according to its rel- § 1940.552(i) of this subpart.
evance in determining need. The per- (10) Suballocation by the State Director.
centage representing each criterion is Suballocation by the State Director is
multiplied by the weight factor and authorized for each program covered by
summed to arrive at State Factor (SF). this section.
The SF cannot exceed 0.05. The Agency (b) Conditions for not allocating pro-
may elect to use different weight fac- gram funds to the States. The Agency
tors than those identified in this para- may elect to not allocate program
graph by publishing a timely notice in funds to the States whenever one of the
the FEDERAL REGISTER. conditions identified in paragraphs
(b)(1) or (b)(2) of this section occurs.
SF = (criterion (a)(2)(i)(A) × 25 percent) (1) Funds allocated in a fiscal year to
+ (criterion (a)(2)(i)(B) × 50 percent) a program identified in this section are
+ (criterion (a)(2)(i)(C) × 25 percent) insufficient, as provided for in
(iv) The Agency will recalculate, as § 1940.552(a) of this subpart.
necessary, each criterion specified in (2) The Agency determines that it is
paragraph (a)(2)(i) of this section each in the best financial interest of the
year. In making these recalculations, Federal Government not to make a
17
State allocation for any program iden- data from the American Community
tified in this section and that the exer- Survey (ACS) or, if needed, other Cen-
cise of this determination is not in con- sus Bureau data.
flict with applicable law. (C) For the criterion specified in
[79 FR 56218, Sept. 19, 2014] paragraph (a)(2)(i)(C), the most recent
U.S. Energy Information Administra-
EDITORIAL NOTE: At 79 FR 55967, September
18, 2014, § 1940.588 was amended by revising tion data.
paragraph (i); however, paragraph (i) was not (iii) Each criterion is assigned a spe-
found in the section. cific weight factor according to its rel-
evance in determining need. The per-
§ 1940.589 Rural Energy for America centage representing each criterion is
Program. multiplied by the weight factor and
The Agency will allocate funds to the summed to arrive at State Factor (SF).
States each Federal fiscal year for re- The SF cannot exceed 0.05. The Agency
newable energy system and energy effi- may elect to use different weight fac-
ciency improvement projects under the tors than those identified in this para-
Rural Energy for America Program graph by publishing a timely notice in
(REAP) using the procedures specified the FEDERAL REGISTER.
in paragraph (a) of this section. If the
Agency determines that it will not al- SF = (criterion (a)(2)(i)(A) × 25 percent)
locate funds to the States for REAP in + (criterion (a)(2)(i)(B) × 50 percent)
a particular Federal fiscal year, the + (criterion (a)(2)(i)(C) × 25 percent)
Agency will announce this decision in a (iv) The Agency will recalculate, as
notice published in the FEDERAL REG- necessary, each criterion specified in
ISTER. The conditions under which the paragraph (a)(2)(i) of this section each
Agency will not allocate the program’s year. In making these recalculations,
funds to the States are identified in the Agency will use the most recent
paragraph (b) of this section. data available to the Agency as of Oc-
(a) Procedures for allocating funds to tober 1 of the fiscal year for which the
the States. Each Federal fiscal year, the Agency is making State allocations.
Agency will use the amount available Each criterion’s value determined at
to the program and the procedures the beginning of a fiscal year for a pro-
identified in paragraphs (a)(2) through gram will be used for that entire fiscal
(10) of this section to determine the year, regardless of when that fiscal
amount of program funds to allocate to year’s funding becomes available for
each of the States. The Agency will the program.
make this calculation each Federal fis- (3) Basic formula allocation. See
cal year. § 1940.552(c) of this subpart.
(1) Amount available for allocations. (4) Transition formula. The transition
See § 1940.552(a) of this subpart. provisions specified in § 1940.552(d) of
(2) Basic formula criteria, data source, this subpart apply to the program(s)
and weight. See § 1940.552(b) of this sub- identified in this section except as fol-
part. lows:
(i) The criteria used in the basic for-
(i) The transition formula will be
mula are:
(A) State’s percentage of national used only when the weight factors
rural population. identified in paragraph (a)(2)(iii) of this
(B) State’s percentage of national section are modified; and
rural population with incomes below (ii) When the transition formula is
the poverty level. used, there will be no upper limitation
(C) State’s percentage of energy cost. on the amount that a State’s alloca-
(ii) The data sources for each of the tion can increase over its previous
criteria identified in paragraph (a)(2)(i) year’s allocation and the maximum
of this section are: percentage that funding will be allowed
(A) For the criterion specified in to decrease for a State will be 10 per-
paragraph (a)(2)(i)(A), the most recent cent from its previous year’s alloca-
decennial Census data. tion.
(B) For the criterion specified in (5) Base allocations. See § 1940.552(e) of
paragraph (a)(2)(i)(B), 5-year income this subpart.
18
(6) Administrative allocations. See reau of Labor Statistics data. Each cri-
§ 1940.552(f) of this subpart. Jurisdic- terion is assigned a specific weight ac-
tions receiving formula allocations do cording to its relevance in determining
not receive initial administrative allo- need. The percentage representing each
cations. criterion is multiplied by the weight
(7) Reserve. See § 1940.552(g) of this factor and summed to arrive at a State
subpart. factor (SF). The SF cannot exceed 0.05.
(8) Pooling of funds. See § 1940.552(h) of SF = (criterion (b)(1)(i) × 50 percent)
this subpart. + (criterion (b)(1)(ii) × 25 percent) +
(9) Availability of the allocation. See (criterion (b)(1)(iii) × 25 percent)
§ 1940.552(i) of this subpart. (c) Basic formula allocation. See
(10) Suballocation by the State Director. § 1940.552(c) of this subpart. States re-
Suballocation by the State Director is ceiving administrative allocations do
authorized for this program. not receive formula allocations.
(b) Conditions for not allocating pro- (d) Transition formula. The transition
gram funds to the States. The Agency formula for Community Program Guar-
may elect to not allocate REAP pro- anteed loans is not used.
gram funds to the States whenever one (e) Base allocation. See § 1940.552(e) of
of the conditions identified in para- this subpart. States receiving adminis-
graphs (b)(1) or (b)(2) of this section oc- trative allocations do not receive base
curs. allocations.
(1) Funds allocated in a fiscal year to
(f) Administrative allocation. See
REAP are insufficient, as provided for
1940.552(f) of this subpart. States par-
in § 1940.552(a) of this subpart.
ticipating in the formula base alloca-
(2) The Agency determines that it is
tion procedures do not receive adminis-
in the best financial interest of the
trative allocations.
Federal Government not to make a
State allocation for REAP and that the
subpart. States may request funds by
exercise of this determination is not in
forwarding a request following the for-
conflict with applicable law.
mat found in guide 26 of subpart A of
[79 FR 56219, Sept. 19, 2014] part 1942 of this chapter to the Na-
tional Office. Generally, a request for
§ 1940.590 [Reserved] additional funds will not be honored
§ 1940.591 Community Program Guar- unless the State has insufficient funds
anteed loans. from the State’s allocation to obligate
the loan requested.
(a) Amount available for allocations. (h) Pooling of funds. See § 1940.522(h)
See § 1940.552(a) of this subpart. of this subpart. Funds are generally
pooled at mid-year and year-end.
and weight. See § 1940.552(b) of this sub-
Pooled funds will be placed in the Na-
part.
tional Office reserve and will be made
(1) The criteria used in the basic for-
available administratively.
mula are:
(i) State’s percentage of national
§ 1940.552(i) of this subpart. The alloca-
rural population—50 percent.
tion of funds is made available for
(ii) State’s percentage of national
States to obligate on an annual basis
rural population with incomes below
although the Office of Management and
the poverty level—25 percent.
(iii) State’s percentage of national Budget apportions it to the Agency on
nonmetropolitan unemployment—25 a quarterly basis.
percent. (j) Suballocation by State Director. See
(2) The data source for the first cri- § 1940.552(j) of this subpart. State Direc-
terion is the most recent decennial tor has the option to suballocate to
Census data. The data source for the District Offices.
second criterion is the 5-year data from (k) Other documentation. Not applica-
the American Community Survey ble.
(ACS) or, if needed, other Census Bu- [55 FR 11134, Mar. 27, 1990, as amended at 58
reau data. The data source for the FR 54486, Oct. 22, 1993; 80 FR 9877, Feb. 24,
third criterion is the most recent Bu- 2015]
19
§ 1940.592 Community facilities grants. § 1940.593 Other Rural Business-Coop-

erative Service programs.
See § 1940.552(a). If the Agency determines that it is in
(b) Basic formula criteria, data source, the best interest of the Federal govern-
and weight. See § 1940.552(b). ment to allocate funds to States for ex-
(1) The criteria used in the basic for- isting RBS programs other than those
mula are: identified in §§ 1940.588 and 1940.589 of
(i) State’s percentage of National this subpart and for programs new to
rural population—50 percent. RBS (e.g., through new legislation), the
(ii) State’s percentage of National Agency will use the process identified
rural population with income below the in paragraph (a) or (b) of this section.
poverty level—50 percent. (a) If the Agency determines that one
(2) The data source for the first cri- of the State allocation procedures in
terion is the most recent decennial § 1940.588 and § 1940.589 is appropriate for
Census data. The data source for the the program, the Agency will publish a
second criterion is the 5-year data from FEDERAL REGISTER notice identifying
the American Community Survey the program and which State alloca-
(ACS) or, if needed, other Census Bu- tion procedure will be used for the pro-
reau data. Each criterion is assigned a gram.
specific weight according to its rel- (b) If the Agency determines that
evance in determining need. The per- none of the procedures specified in
centage representing each criterion is § 1940.588 and § 1940.589 is appropriate for
multiplied by the weight factor and the program, the Agency will imple-
summed to arrive at a State factor ment the following steps:
(SF). (1) The Agency will either develop a
SF (criterion (b)(1)(i) × 50 percent) + preliminary state allocation formula
(criterion (b)(1)(ii) × 50 percent) and administrative procedures specific
(c) Basic formula allocation. See to the requirements of the new pro-
§ 1940.552(c). States receiving adminis- gram or use whichever of the proce-
trative allocations do not receive for- dures in § 1940.588 and § 1940.589 the
mula allocations. Agency determines most closely
(d) Transition formula. The transition matches the purpose of the program.
formula for Community Facilities The Agency will publish in the FED-
Grants is not used. ERAL REGISTER the State allocation
(e) Base allocation. See § 1940.552(e). formula and adminstrative procedures
States receiving administrative alloca- that it will use initially for the new
tions do not receive base allocations. program.
(f) Administrative allocation. See (2) The Agency will develop a State
§ 1940.552(f). States participating in the allocation formula and administrative
formula base allocation procedures do provisions specific to the new program
not receive administrative allocations. and publish them as a proposed rule
(g) Reserve. See § 1940.552(g). change to this part in the FEDERAL
REGISTER for public comment.
(h) Pooling of funds. See § 1940.522(h).
Funds will be pooled at midyear and (3) Until the program’s State alloca-
yearend. Pooled funds will be placed in tion formula and administrative re-
the National Office reserve and will be quirements are finalized, the Agency
made available administratively. will use the preliminary State alloca-
tion formula established under para-
graph (b)(1) of this section to make
§ 1940.552(i).
State allocations and administer the
(j) Suballocation by State Director. See
new program.
§ 1940.552(j).
(k) Other documentation. Not applica- [79 FR 56220, Sept. 19, 2014]
ble.
[62 FR 16468, Apr. 7, 1997, as amended at 80
FR 9877, Feb. 24, 2015]
20
RHS, RBS, RUS, FSA, USDA Pt. 1940, Subpt. L, Exh. B
§§ 1940.594–1940.600 [Reserved] 1 of this exhibit (available in any FmHA or

its successor agency under Public Law 103–
EXHIBIT A TO SUBPART L OF PART 1940 354 State Office). The definition of large
[RESERVED] State is included in Attachment 1 of this ex-
hibit (available in any FmHA or its suc-
EXHIBIT B TO SUBPART L OF PART 1940— cessor agency under Public Law 103–354 State
Office).
SECTION 515 NONPROFIT SET ASIDE C. NPSA Rental Assistance (RA). NPSA RA
(NPSA) has been reserved in the National Office as
shown in Attachment 1 of this exhibit (avail-
I. Objective: To provide eligible nonprofit
able in any FmHA or its successor agency
entities with a reasonable opportunity to
under Public Law 103–354 State Office).
utilize section 515 funds.
VI. Access to NPSA funds and RA. RA is
II. Background: The Cranston-Gonzalez Na-
available and may be requested, as needed,
tional Affordable Housing Act of 1990 estab- with eligible loan requests. NPSA funds and
lished the statutory authority for the sec- RA should be requested by the State Direc-
tion 515 NPSA funds. tor using a format similar to Attachment 2
III. Eligible entities. Amounts set aside shall of this exhibit (available in any FmHA or its
be available only for nonprofit entities in the successor agency under Public Law 103–354
State, which may not be wholly or partially State Office). Funds are available as follows:
owned or controlled by a for-profit entity. A. SSASA: The SSASA is available to any
An eligible entity may include a partnership, SSASA State on a first-come-first-served
including a limited partnership, that has as basis until pooling. See Attachment 3 of this
its general partner a nonprofit entity or the exhibit (available in any FmHA or its suc-
nonprofit entity’s for-profit subsidiary which cessor agency under Public Law 103–354 State
will be receiving low-income housing tax Office) for information regarding pooling.
credits authorized under section 42 of the In- B. LSASA: LSASA states may request
ternal Revenue Code of 1986. For the pur- LSASA funds up to the amount the state
poses of this exhibit, a nonprofit entity is an contributed to LSASA until pooling. See At-
organization that: tachment 3 of this exhibit (available in any
A. Will own an interest in a project to be FmHA or its successor agency under Public
financed under this section and will materi- Law 103–354 State Office) for information re-
ally participate in the development and the garding pooling.
operations of the project; and VII. General Information on priority/proc-
B. Is a private organization that has non- essing of Preapplications.
profit, tax exempt status under section A. Preapplications/applications for assist-
501(c)(3) or section 501(c)(4) of the Internal ance from eligible nonprofit entities under
Revenue Code of 1986; and this subpart must continue to meet all loan
C. Has among its purposes the planning, making requirements of 7 CFR part 3560, sub-
development, or management of low-income part B.
housing or community development projects; B. A separate processing list will be main-
and tained for NPSA loan requests.
D. Is not affiliated with or controlled by a C. The State Director may issue Form AD–
for-profit organization; and 622, ‘‘Notice of Preapplication Review Ac-
E. May be a consumer cooperative, Indian tion’’, requesting a formal application to the
tribe or tribal housing authority. highest ranking preapplication(s) from eligi-
IV. Nondiscrimination. Rural Development ble nonprofit entities defined in paragraph
reemphasizes the nondiscrimination in use III of this exhibit as follows:
and occupancy and location requirements of 1. LSASA. In LSASA States, AD–622s may
7 CFR 3560.104. not exceed 150 percent of the amount the
V. Amount of Set Aside. See Attachment 1 of State contributed to the LSASA. No single
this exhibit (available in any FmHA or its Form AD–622 may exceed the amount of
successor agency under Public Law 103–354 funds the State contributed to LSASA.
State Office): 2. SSASA. In SSASA States, AD–622s should
A. Small State Allocation Set Aside (SSASA). not exceed the greater of $750,000 or 150 per-
The allocation for small States has been recent of the amount the State contributed to
served and combined to form the SSASA, as the SSASA; except that the State Director
shown in Attachment 1 of this exhibit (avail- in a SSASA State may request authorization
able in any FmHA or its successor agency to issue a Form AD–622, in an amount in ex-
under Public Law 103–354 State Office). The cess of $750,000 if additional funds are nec-
definition of small State is included in At- essary to finance an average-size proposal
tachment 1 of this exhibit (available in any based upon average construction costs in the
FmHA or its successor agency under Public state. For example, if the average size pro-
Law 103–354 State Office). posal currently being funded in the state is
B. Large State Allocation Set Aside (LSASA). 24 units, and the average construction cost
The allocation for large States has been re- in the state is $35,000 per unit, the state may
served in the amounts shown in Attachment request authorization to issue an AD–622 for
21
Pt. 1940, Subpt. L, Exh. C 7 CFR Ch. XVIII (1–1–21 Edition)
$840,000. The State Director will submit such II. BACKGROUND
requests to the National Office including
data reflecting average size/cost projects in The Cranston-Gonzalez National Afford-
able Housing Act of 1990 (herein referred to
the State. No single Form AD–622 may ex-
as the ‘‘Act’’) requires that Farmers Home
ceed the amount of funds the State may re-
Administration (FmHA) or its successor
ceive from SSASA.
agency under Public Law 103–354 set aside
D. All AD–622s issued for proposals to be section 502, 504, 514, 515, and 524 funds for as-
funded from NPSA will be subject to the sistance in targeted, underserved areas. An
availability of NPSA funds. Form AD–622 appropriate amount of section 521 new con-
should contain the following or similar lan- struction rental assistance (RA) is set aside
guage: ‘‘This Form AD–622 is issued subject for use with section 514 and 515 loan pro-
to the availability of Nonprofit Set-Aside grams. Under the Act, certain colonias are
(NPSA) funds.’’ now eligible for FmHA or its successor agen-
E. If a preapplication requesting NPSA cy under Public Law 103–354 housing assist-
funds has sufficient priority points to com- ance.
pete with non-NPSA loan requests based
upon the District or State allocation (as ap- III. COLONIAS
plicable), the preapplication will be main-
tained on both the NPSA and non-NPSA rat- A. Colonia is defined as any identifiable
ing/ranking lists. community that:
F. Provisions for providing preference to 1. Is in the State of Arizona, California,
loan requests from nonprofit organizations is New Mexico or Texas;
contained in 7 CFR 3560.56. Limited partner- 2. Is in the area of the United States within
ships, with a nonprofit general partner, do 150 miles of the border between the United
not qualify for nonprofit preference. States and Mexico, except that the term does
VIII. Exception authority. The Adminis- not include any standard metropolitan sta-
trator, or his/her designee, may, in indi- tistical area that has a population exceeding
vidual cases, make an exception to any re- 1 million;
quirements of this exhibit which are not in- 3. Is designated by the State or county in
consistent with the authorizing statute, if which it is located as a colonia;
he/she finds that application of such require- 4. Is determined to be a colonia on the
ment would adversely affect the interest of basis of objective criteria, including lack of
the Government or adversely affect the in- potable water supply, lack of adequate sew-
tent of the authorizing statute and/or Rural age systems, and lack of decent, safe, and
Rental Housing program or result in an sanitary housing; and
undue hardship by applying the requirement. 5. Was in existence and generally recog-
The Administrator, or his/her designee, may nized as a colonia before November 28, 1990.
exercise this authority upon the request of B. Requests for housing assistance in
the State Director, Assistant Administrator colonias have priority as follows:
for Housing, or Director of the Multi-Family 1. When the State did not obligate its allo-
Housing Processing Division. The request cation in one or more of its housing pro-
must be supported by information that dem- grams during the previous 2 fiscal years
onstrates the adverse impact or effect on the (FYs), priority will be given to requests for
program. The Administrator, or his/her des- assistance, in the affected program(s), from
ignee, also reserves the right to change pool- regularly allocated funds, until an amount
ing dates, establish/change minimum and equal to 5 percent of the current FY pro-
maximum fund usage from NPSA, or restrict gram(s) allocation is obligated in colonias.
participation in the set aside. This priority takes precedence over other
processing priority methods.
[58 FR 38950, July 21, 1993, as amended at 69 2. When the State did obligate its alloca-
FR 69104, Nov. 26, 2004] tion in one or more of its housing programs
during the previous 2 FYs, priority will be
EXHIBIT C TO SUBPART L OF PART 1940— given to requests for assistance, in the af-
HOUSING IN UNDERSERVED AREAS fected program(s), from RHTSA funds, until
an amount equal to 5 percent of the current
I. OBJECTIVE FY program(s) allocation is obligated in
A. To improve the quality of affordable colonias. This priority takes precedence over
housing by targeting funds under Rural other processing priority methods.
Housing Targeting Set Aside (RHTSA) to C. Colonias may access pooled RHTSA
designated areas that have extremely high funds as provided in paragraph IV G of this
concentrations of poverty and substandard exhibit.
housing and have severe, unmet rural hous-
IV. RHTSA
ing needs.
B. To provide for the eligibility of certain A. Amount of Set Aside. Set asides for
colonias for rural housing funds. RHTSA, from the current FY allocations,
22
RHS, RBS, RUS, FSA, USDA Pt. 1940, Subpt. L, Exh. C
are established in attachment 1 of this ex- the date it can be accessed and any condi-
hibit (available in any FmHA or its suc- tions thereof, if applicable, are contained in
cessor agency under Public Law 103–354 State attachment 1 of this exhibit (available in
Office). any FmHA or its successor agency under
B. Selection of Targeted Counties—1. Eligi- Public Law 103–354 State Office).
bility. Eligible counties met the following F. Requests for Funds and RA. All RHTSA
criteria: (1) 20 percent or more of the county funds are reserved in the National Office and
population is at, or below, poverty level; (2) requests for these funds and/or RA units
10 percent or more of the occupied housing must be submitted by the State Director,
units are substandard; and (3) the average using the applicable format shown on attach-
funds received on a per capita basis in the ment 4 or 5 of this exhibit (available in any
county, during the previous 5 FYs, were FmHA or its successor agency under Public
more than 40 percent below the State per Law 103–354 State Office). The State Director
capita average during the same period. Data is responsible for notifying the Director of
from the most recent available Census was
Single Family Housing Processing Division
used for all three criteria, with criteria (2)
(SFHPD) or Multi-Family Housing Proc-
and (3) based on the FmHA or its successor
essing Division (MFHPD) of any RHTSA
agency under Public Law 103–354 rural area
funds and RA units authorized, but not obli-
definition.
2. Selection. The Act requires that 100 of the gated, by RHTSA pooling date.
most underserved counties be initially tar- G. Pooling. Unused RHTSA funds and RA
geted for RHTSA funds. In establishing the will be pooled. Pooling dates and any perti-
100 counties, those with 28 percent or more of nent information thereof are available on at-
their population at, or below, poverty level tachment 1 of this exhibit (available in any
and 13 percent or more of their occupied FmHA or its successor agency under Public
housing units substandard, have preference. Law 103–354 State Office). Pooled funds will
If less than 100 counties meet this criteria, be available on a first-come, first-served
the remaining counties meeting the criteria basis to all eligible colonias and all counties
in paragraph IV B 1 of this exhibit will be listed on attachments 2 and 3 of this exhibit
ranked, based upon a total of their sub- (available in any FmHA or its successor
standard housing and poverty level percent- agency under Public Law 103–354 State Of-
ages. The highest-ranking counties are then fice). Pooled RHTSA funds will remain avail-
selected until the list reaches 100. The re- able until the year-end pooling date.
maining counties are eligible for pool funds H.–I. [Reserved]
only. J. Requests for Assistance. Requests for as-
C. State RHTSA Levels. In the section 502, sistance in targeted counties must meet all
504, and 515 programs, each State’s RHTSA loan making requirements of the applicable
level will be based on its number of eligible program Instructions, except as modified for
counties, with each county receiving a pro colonias in paragraph III of this exhibit. For
rata share of the total funds available. In section 515, States may:
order to ensure that a meaningful amount of 1. Issue Form AD–622, ‘‘Notice of
assistance is available to each State, min- Preapplication Review Action,’’ up to 150
imum funding levels may be established. percent of the amount shown in attachment
When minimum levels are established, they 1 of this exhibit (available in any FmHA or
are set forth on Attachment 1 of this exhibit its successor agency under Public Law 103–
(available in any FmHA or its successor 354 State Office).
agency under Public Law 103–354 State Of- 2. All AD–622s issued for applicants in tar-
fice). geted counties will be annotated, in Item 7,
D. Use of Funds. To maximize the assist- under ‘‘Other Remarks,’’ with the following:
ance to targeted counties, allocated program ‘‘Issuance of this AD–622 is contingent upon
funds should be used in addition to RHTSA receiving funds from the Rural Housing Tar-
funds, where possible. The State Director has geting Set Aside (RHTSA). Should RHTSA
the discretion to determine the most effec- funds be unavailable, or the county in which
tive delivery of RHTSA funds among the tar- this project will be located is no longer con-
geted counties within his/her jurisdiction. sidered a targeted county, this AD–622 will
The 100 counties listed in attachment 2 of no longer be valid. In these cases, the re-
this exhibit (available in any FmHA or its quest for assistance will need to compete
successor agency under Public Law 103–354 with other preapplications in non-targeted
State Office) are eligible for RHTSA funding counties, based upon its priority point
consideration immediately. Colonias are also score.’’
eligible for RHTSA funds as described in
paragraph III of this exhibit. V. [RESERVED]
E. National Office RHTSA Reserve. A limited
National Office reserve is available on an in- [57 FR 3924, Feb. 3, 1992]
dividual case basis when the State is unable
to fund a request from its regular or RHTSA
allocation. The amount of the reserve, and Subparts M–S [Reserved]
23
Subpart T—System for Delivery of provided to eligible designated States

Certain Rural Development for qualified projects in accordance
with this subpart.
Programs
(d) Federal statutes provide for ex-
tending Rural Development financially
SOURCE: 57 FR 11559, Apr. 6, 1992, unless supported programs without regard to
otherwise noted.
race, color, religion, sex, national ori-
§ 1940.951 General. gin, marital status, age, familial sta-
tus, or physical/mental handicap (pro-
This subpart sets forth Rural Devel- vided the participant possesses the ca-
opment policies and procedures for the pacity to enter into legal contracts.)
delivery of certain rural development
programs under a rural economic de- § 1940.952 [Reserved]
velopment review panel established in
eligible States authorized under sec- § 1940.953 Definitions.
tions 365, 366, 367, and 368 of the Con- For the purpose of this subpart:
solidated Farm and Rural Development
Administrator. The Administrator of
Act (7 U.S.C. 1921 et seq.), as amended.
Rural Business—Cooperative Service,
(a) If a State desires to participate in
Rural Housing Service, or Rural Utili-
this pilot program, the Governor of the
ties Service.
State may submit an application to the
Area plan. The long-range develop-
Under Secretary for Small Community
ment plan developed for a local or re-
and Rural Development, U.S. Depart-
gional area in a State.
ment of Agriculture, room 219–A, Ad-
ministration Building, Washington, DC Designated agency. An agency se-
20250 in accordance with § 1940.954 of lected by the Governor of the State to
this subpart. provide the panel and the State Coordi-
(b) The Under Secretary shall des- nator with support for the daily oper-
ignate not more than five States in ation of the panel.
which to make rural economic develop- Designated rural development program.
ment review panels applicable during A program carried out under sections
any established time period for the 304(b), 306(a), or subsections (a) through
purpose of reviewing and ranking appli- (f) and (h) of section 310B of the Con-
cations submitted for funding under solidated Farm and Rural Development
certain rural development programs. Act (7 U.S.C. 1926(a)), as amended, or
The following time periods have been under section 1323 of the Food Security
established for participation in this Act of 1985, for which funds are avail-
pilot program: able at any time during the FY under
such section, including, but not limited
First period—Balance of fiscal year (FY) 1992 to, the following:
to September 30, 1993; (1) Water and Waste Disposal Insured
Second period—October 1, 1993 to September
or Guaranteed Loans;
30, 1994;
Third period—October 1, 1994 to September (2) Development Grants for Commu-
30, 1995; and nity Domestic Water and Waste Dis-
Fourth period—October 1, 1995 to September posal Systems;
30, 1996. (3) Technical Assistance and Training
The State will be bound by the provi- Grants;
sions of this pilot program only during (4) Emergency Community Water As-
the established time period(s) for sistance Grants;
which the State is designated. If a des- (5) Community Facilities Insured and
ignated State does not remain an eligi- Guaranteed Loans;
ble State during the established time (6) Business and Industry Guaranteed
period(s) for which the State was des- Loans;
ignated, the State will not be eligible (7) Industrial Development Grants;
to participate in this program and can- (8) Intermediary Relending Program;
not revert to the old ranking and appli- (9) Drought and Disaster Relief Guar-
cant selection process. anteed Loans;
(c) Assistance under each designated (10) Disaster Assistance for Rural
rural development program shall be Business Enterprises;
24
(11) Nonprofit National Rural Devel- dence of eligibility requirements each

opment and Finance Corporations. FY in accordance with § 1940.954 (e)(2)
Designated State. A State selected by of this subpart. Beginning in FY 1993,
the Under Secretary, in accordance applications must be submitted to the
with § 1940.954 of this subpart, to par- Under Secretary no later than July 31
ticipate in this program. if a State desires to be selected to fill
Eligible State. With respect to a FY, a vacancies that occur when designated
State that has been determined eligible States do not roll over into another es-
in accordance with § 1940.954 (e) of this tablished time period. States should in-
subpart. clude the following information with
Nondesignated State. A State that has SF 424.1:
not been selected to participate in this (1) A narrative signed by the Gov-
pilot program. ernor including reasons for State par-
Qualified project. Any project: (1) For ticipation in this program and reasons
which the designated agency has iden- why a project review and ranking proc-
tified alternative Federal, State, local ess by a State panel will improve the
or private sources of assistance and has economic and social conditions of rural
identified related activities in the areas in the State. The narrative will
State; and also include the time period(s) for
(2) To which the Administrator is re- which the State wishes to participate.
quired to provide assistance. (2) A proposal outlining the method
State. Any of the fifty States. for meeting all the following eligibility
State coordinator. The officer or em-
requirements and the timeframes es-
ployee of the State appointed by the
tablished for meeting each require-
Governor to carry out the activities de-
ment:
scribed in § 1940.957 of this subpart.
(i) Establishing a rural economic de-
State Director. The head of Rural De-
velopment review panel in accordance
velopment at the local level charged
with § 1940.956 of this subpart. When es-
with administering designated rural
tablished, the name, title, and address
development programs.
State rural economic development re- of each proposed member should be in-
view panel or ‘‘panel’’. An advisory cluded and the chairperson and vice
panel that meets the requirements of chairperson should be identified.
§ 1940.956 of this subpart. (ii) Governor’s proposed designation
Under Secretary. In the U.S. Depart- of a State agency to support the State
ment of Agriculture, the Under Sec- coordinator and the panel. The name,
retary for Small Community and Rural address, and telephone number of the
Development. proposed agency’s contact person
should be included.
§ 1940.954 State participation. (iii) Governor’s proposed selection of
(a) Application. If a State desires to a State coordinator in accordance with
participate in this pilot program, the § 1940.957 of this subpart, including the
Governor may submit an original and title, address, and telephone number.
one copy of Standard Form (SF) 424.1, (iv) Development of area develop-
‘‘Application for Federal Assistance ment plans for all areas of the State
(For Non-construction),’’ to the Under that are eligible to receive assistance
Secretary. The five States designated from designated rural development
by the Under Secretary to participate programs.
in the first established time period will (v) The review and evaluation of area
be selected from among applications development plans by the panel in ac-
received not later than 60 calendar cordance with § 1940.956 of this subpart.
days from the effective date of this (vi) Development of written policy
subpart. If a designated State desires and criteria used by the panel to re-
to participate in additional time peri- view and evaluate area plans in accord-
ods, applications are not required to be ance with § 1940.956 of this subpart.
resubmitted; however, the Governor (vii) Development of written policy
must notify the Under Secretary, in and criteria the panel will use to evalu-
writing, no later than July 31 of each ate and rank applications in accord-
FY, and the State must submit evi- ance with § 1940.956 of this subpart.
25
(3) Preparation of a proposed budget the Under Secretary that the State has
that includes 3 years projections of in- been determined eligible and is des-
come and expenses associated with ignated to participate in this program.
panel operations. If funds from other A copy of the notification will be sent
sources are anticipated, sources and to the Administrator. The Under Sec-
amounts should be identified. retary’s decision is not appealable.
(4) Development of a financial man- (e) Eligibility requirements. (1) With re-
agement system that will provide for spect to this subpart, the Under Sec-
effective control and accountability of retary may determine a State to be an
all funds and assets associated with the eligible State provided all of the fol-
panel. lowing apply not later than October 1
(5) A schedule to coordinate the sub- of each FY:
mission, review, and ranking process of (i) The State has established a rural
preapplications/applications in accord- economic development review panel
ance with § 1940.956(a) of this subpart. that meets the requirements of
(6) Other information provided by the § 1940.956 of this subpart;
State in support of its application. (ii) The Governor has appointed an
(b) Selecting States. The Under Sec- officer or employee of the State gov-
retary will review the application and ernment to serve as State coordinator
other information submitted by the to carry out the responsibilities set
State and designate not more than five
forth in § 1940.957 of this subpart; and
States to participate during any estab-
(iii) The Governor has designated an
lished time period.
agency of the State government to pro-
(c) Notification of selection. (1) The
Under Secretary will notify the Gov- vide the panel and State coordinator
ernor of each State whether or not the with support for the daily operation of
State has been selected for further con- the panel.
sideration in this program. If a State (2) If a State is determined eligible
has been selected, the notification will initially and desires to participate in
include the additional information that additional time periods established for
the Governor must submit to the this program, the Governor will submit
Under Secretary in order for the State documents and information not later
to meet eligibility requirements in ac- than September 1 of each subsequent
cordance with paragraph (d) of this sec- FY in sufficient detail for the Under
tion. Secretary to determine, prior to the
(2) A copy of the notification to the beginning of the additional time pe-
Governor will be submitted to the Ad- riod, that the State is still in compli-
ministrator along with a copy of the ance with all eligibility requirements
State’s application and other material of this subpart.
submitted in support of the applica-
tion. § 1940.955 Distribution of program
funds to designated States.
(d) Determining State eligibility. (1) The
Governor will provide the Under Sec- (a) States selected to participate in
retary with evidence that the State has the first established time period will
complied with the eligibility require- receive funds from designated rural de-
ments of paragraph (a)(2) of this sec- velopment programs according to ap-
tion not later than September 1, 1992, plicable program regulations until the
for the first established time period end of FY 1992, if necessary for States
and not later than September 1 for to have sufficient time to meet the eli-
each of the remaining established time gibility requirements of this subpart,
periods. and to be designated to participate in
(2) The Under Secretary will review this program. No funds will be adminis-
the material submitted by the Gov- tered under this subpart to an ineli-
ernor in sufficient detail to determine gible State.
if a State has complied with all eligi- (b) If a State becomes an eligible
bility requirements of this subpart. State any time prior to the end of FY
The panel will not begin reviewing and 1992, any funds remaining unobligated
ranking applications until the Gov- from a State’s FY 1992 allocation, may
ernor has been notified in writing by be administered under this subpart.
26
(c) Beginning in FY 1993 and for each of the FY that have not been funded;
established time period thereafter, all and
designated rural development program (8) How to consider requests for addi-
funds received by a designated State tional funds needed by an applicant to
will be administered in accordance complete a project that already has
with §§ 1940.961 through 1940.965 of this funds approved; i.e., construction bid
subpart, provided the State is deter- cost overrun.
mined eligible prior to the beginning of (b) Duties and responsibilities. The
each FY in accordance with § 1940.954 of panel is required to advise the State
this subpart. No assistance will be pro- Director on the desirability of funding
vided under any designated rural devel- applications from funds available to
opment program in any designated
the State from designated rural devel-
State that is not an eligible State.
opment programs. In relation to this
§ 1940.956 State rural economic devel- advice, the panel will have the fol-
opment review panel. lowing duties and responsibilities:
(1) Establish policy and criteria to re-
(a) General. In order for a State to be-
view and evaluate area plans and to re-
come or remain an eligible State, the
view and rank preapplications/applica-
State must have a rural economic de-
velopment panel that meets all re- tions. (i) Area plan. The panel will de-
quirements of this subpart. Each des- velop a written policy and criteria to
ignated State will establish a schedule use when evaluating area plans. The
whereby the panel and Rural Develop- criteria to be used when evaluating
ment will coordinate the submission, area plans will assure that the plan in-
review, and ranking process of cludes, as a minimum, the technical in-
preapplications/applications. The formation included in § 1940.959 of this
schedule will be submitted to the subpart. The criteria will be in suffi-
Under Secretary for concurrence and cient detail for the panel to determine
should consider the following: that the plan is technically and eco-
(1) Timeframes should assure that ap- nomically adequate, feasible, and like-
plications selected for funding from the ly to succeed in meeting the stated
current FY’s allocation of funds can be goals of the plan. The panel will give
processed by Rural Development and weight to area-wide or regional plans
funds obligated prior to the July 15 and comments submitted by intergov-
pooling established in § 1940.961(c) of ernmental development councils or
this subpart; similar organizations made up of local
(2) Initial submission of elected officials charged with the re-
preapplications/applications from sponsibility for rural area or regional
Rural Development to the panel and development. A copy of the policy and
any subsequent submissions during the evaluating criteria will be provided to
first year; Rural Development.
(3) How often during each FY there- (ii) Applications. The panel will annu-
after should Rural Development submit ally review the policy and criteria used
preapplications/applications to the by the panel to evaluate and rank
panel for review and ranking; preapplications/applications in accord-
(4) Number of working days needed ance with this subpart. The panel will
by the panel to review and rank assure that the policy and criteria are
preapplications/applications;
consistent with current rural develop-
(5) Number of times during the FY ment needs, and that the public has an
the panel will submit a list of ranked
opportunity to provide input during
preapplications/applications to Rural
the development of the initial policy
Development for funding consider-
ation; and criteria. The Governor will provide
a copy of the initial policy and criteria
(6) Consider the matching of avail-
able loan and grant funds to assure established by the panel when submit-
that all allocated funds will be used; ting evidence of eligibility in accord-
(7) How to consider ranked ance with § 1940.954 of this subpart. An-
preapplications/applications at the end nually, thereafter, and not later than
27
September 1 of each FY, the State co- proving the quality of life for local or
ordinator will send the Under Sec- regional residents.
retary evidence that the panel has re- (2) The extent to which the project
viewed the established policy and cri- will affect the health and safety of
teria. The State coordinator will also local or regional area residents.
send the Under Secretary a copy of all (3) The extent to which the project
revisions. will improve or enhance cultural ac-
(A) The policy and criteria used to tivities, public service, education, or
rank applications for business related transportation.
projects will include the following, (4) The extent to which the project
which are not necessarily in rank will affect business productivity and
order: efficiency.
(1) The extent to which a project (5) The extent to which the project
stimulate rural development by cre- will enhance commercial business ac-
ating new jobs of a permanent nature tivity.
or retaining existing jobs by enabling (6) The extent to which the project
new small businesses to be started, or will address a severe loss or lack of
existing businesses to be expanded by water quality or quantity.
local or regional area residents who (7) The extent to which the project
own and operate the businesses. will correct a waste collection or dis-
(2) The extent to which a project will posal problem.
contribute to the enhancement and the (8) The extent to which the project
diversification of the local or regional will bring a community into compli-
area economy. ance with Federal or State water or
(3) The extent to which a project will waste water standards.
generate or retain jobs for local or re- (9) The extent to which the project
gional area residents. will consolidate water and waste sys-
(4) The extent to which a project will tems and utilize management effi-
be carried out by persons with suffi- ciencies in the new system.
cient management capabilities. (2) Review and evaluate area plans.
(5) The extent to which a project is Each area plan submitted for a local or
likely to become successful. regional area will be reviewed and eval-
(6) The extent to which a project will uated by the panel. After an area plan
assist a local or regional area over- has been reviewed and evaluated in ac-
come severe economic distress. cordance with established policy and
(7) The distribution of assistance to criteria:
projects in as many areas as possible in (i) The panel will accept any area
the State with sensitivity to geo- plan that meets established criteria
graphic distribution. unless the plan is incompatible with
(8) The technical aspects of the any other area plan for that area that
project. has been accepted by the panel; or
(9) The market potential and mar- (ii) The panel will return any area
keting arrangement for the projects. plan that is technically or economi-
(10) The potential of such project to cally inadequate, not feasible, is un-
promote the growth of a rural commu- likely to be successful, or is not com-
nity by improving the ability of the patible with other panel-accepted area
community to increase the number of plans for that area. When an area plan
persons residing in the community and is returned, the panel will include an
by improving the quality of life for explanation of the reasons for the re-
these persons. turn and suggest alternative proposals.
(B) The policy and criteria used to (iii) The State coordinator will no-
rank preapplications/applications for tify the State Director, in writing, of
infrastructure and all other commu- the panel’s decision on each area plan
nity facility-type projects will include reviewed.
the following which are not necessarily (3) Review and rank preapplications/ap-
in rank order: plications. The panel will review, rank,
(1) The extent to which the project and transmit a ranked list of
will have the potential to promote the preapplications/applications according
growth of a rural community by im- to the schedule prepared in accordance
28
with paragraph (a) of this section, and ranked, the panel will submit a list of
the following: all preapplications/applications re-
(i) Review preapplications/applications. ceived to the State coordinator. The
The panel will review each list will clearly indicate each
preapplication/application for assist- preapplication/application accepted for
ance to determine if the project to be funding and will list preapplications/
carried out is compatible with the area applications in the order established
plan in which the project described in for funding according to priority rank-
the preapplication/application is pro- ing by the panel. The list will not in-
posed, and either: clude a preapplication/application that
(A) Accept any preapplication/appli- is to be returned to the applicant in ac-
cation determined to be compatible cordance with paragraph (b)(3)(i)(B) of
with such area plan; or this section. The State coordinator will
(B) Return to the State Director any send a copy of the list to the State Di-
preapplication/application determined rector for further processing of the
not to be compatible with such area preapplication/application in accord-
plan. The panel will notify the appliance with § 1940.965 of this subpart.
cant when preapplication/applications Once the panel has ranked and sub-
are returned to the State Director. mitted the list to Rural Development
(ii) Rank preapplications/applications. and the State Director has selected a
The panel will rank only those preapplication/application for funding,
preapplications/applications that have the preapplication/application selected
been accepted in accordance with para- will not be replaced with a
graph (b)(3)(i)(A) of this section. The preapplication/application received at
panel will consider the sources of as- a later date that may have a higher
sistance and related activities in the ranking.
State identified by the designated (4) Public availability of list. If re-
agency. Applications will be ranked in quested, the State coordinator will
accordance with the written policy and make the list of ranked
criteria established in accordance with preapplications/applications available
paragraph (b)(1)(ii) of this section and to the public and will include a brief
the following: explanation and justification of why
(A) Priority ranking for projects ad- the project preapplications/applica-
dressing health emergencies. In additions received their priority ranking.
tion to the criteria established in para-
(c) Membership—(1) Voting members.
graph (b)(1)(ii) of this section,
The panel will be composed of not more
preapplications/applications for
than 16 voting members who are rep-
projects designed to address a health
resentatives of rural areas. The 16 vot-
emergency declared so by the appro-
ing members will include the following:
priate Federal or State agency, will be
given priority by the panel. (i) One of whom is the Governor of
(B) Priority based on need. If two or the State or the person designated by
more preapplications/applications the Governor to serve on the panel, on
ranked in accordance with this subpart behalf of the Governor, for that year;
are determined to have comparable (ii) One of whom is the director of the
strengths in their feasibility and po- State agency responsible for economic
tential for growth, the panel will give and community development or the
priority to the applications for projects person designated by the director to
with the greatest need. serve on the panel, on behalf of the di-
(C) If additional ranking criteria for rector, for that year:
use by a panel are required in any des- (iii) One of whom is appointed by a
ignated rural development program statewide association of banking orga-
regulation, the panel will give consid- nizations;
eration to the criteria when ranking (iv) One of whom is appointed by a
preapplications/applications submitted statewide association of investor-
under that program. owned utilities;
(iii) Transmit list of ranked (v) One of whom is appointed by a
preapplications/applications. After the statewide association of rural tele-
preapplications/applications have been phone cooperatives;
29
(vi) One of whom is appointed by a (iii) One from names submitted by

statewide association of noncoopera- the dean or the equivalent official, of
tive telephone companies; each school or college of agriculture,
(vii) One of whom is appointed by a from colleges and universities in the
statewide association of rural electric State; and
cooperatives; (iv) The director of the State agency
(viii) One of whom is appointed by a responsible for extension services in
statewide association of health care or- the State.
ganizations; (3) Qualifications of panel members ap-
(ix) One of whom is appointed by a pointed by the Governor. Each individual
statewide association of existing local appointed to the panel by the Governor
government-based planning and devel- will be specially qualified to serve on
opment organizations; the panel by virtue of the individual’s
(x) One of whom is appointed by the technical expertise in business and
Governor of the State from either a community development.
statewide rural development organiza- (4) Notification of selection. Each
tion or a statewide association of pub- statewide organization that selects an
licly-owned electric utilities, neither of individual to represent the organiza-
which is described in any of paragraphs tion on the panel must notify the Gov-
(c)(1)(iii) through (ix); ernor of the selection.
(xi) One of whom is appointed by a
(5) Appointment of members representa-
statewide association of counties;
tive of statewide organization in certain
(xii) One of whom is appointed by a
cases. (i) If there is no statewide asso-
statewide association of towns and
townships, or by a statewide associa- ciation or organization of the entities
tion of municipal leagues, as deter- described in paragraph (c)(1) of this
mined by the Governor; section, the Governor of the State will
(xiii) One of whom is appointed by a appoint an individual to fill the posi-
statewide association of rural water tion or positions, as the case may be,
districts; from among nominations submitted by
(xiv) The State director of the Fed- local groups of such entities.
eral small business development center (ii) If a State has more than one of
or, if there is no small business devel- any of the statewide associations or or-
opment center in place with respect to ganizations of the entities described in
the State, the director of the State of- paragraph (c)(1) of this section, the
fice of the Small Business Administra- Governor will select one of the like or-
tion; ganizations to name a member to serve
(xv) The State representative of the during no more than one established
Economic Development Administra- time period. Thereafter, the Governor
tion of the Department of Commerce; will rotate selection from among the
and remaining like organizations to name a
(xvi) One of whom is appointed by the member.
State Director from among the officers (d) Failure to appoint panel members.
and employees of Rural Development. The failure of the Governor, a Federal
(2) Nonvoting members. The panel will agency, or an association or organiza-
have not more than four nonvoting tion described in paragraph (c) of this
members who will serve in an advisory section, to appoint a member to the
capacity and who are representatives panel as required under this subpart,
of rural areas. The four nonvoting shall not prevent a State from being
members will be appointed by the Gov- determined an eligible State.
ernor and include: (e) Panel vacancies. A vacancy on the
(i) One from names submitted by the panel will be filled in the manner in
dean or the equivalent official of each which the original appointment was
school or college of business, from col- made. Vacancies should be filled prior
leges and universities in the State; to the third panel meeting held after
(ii) One from names submitted by the the vacany occurred. The State coordi-
dean or the equivalent official of each nator will notify the State Director, in
school or college of engineering, from writing, when the vacancy is filled or if
colleges and universities in the State; the vacancy will not be filled.
30
(f) Chairperson and vice chairperson. to become and remain an eligible State
The panel will select two members of under this subpart. The State coordi-
the panel who are not officers or em- nator will have the following duties
ployees of the United States to serve as and responsibilities:
the chairperson and vice chairperson of (a) Manage, operate, and carry out
the panel. The term shall be for 1 year. the instructions of the panel;
(g) Compensation to panel members—(1) (b) Serve as liaison between the panel
Federal members. Except as provided in and the Federal and State agencies in-
§ 1940.960 of this subpart, each member volved in rural development;
of the panel who is an officer or em- (c) Coordinate the efforts of inter-
ployee of the Federal Government may ested rural residents with the panel
not receive any compensation or bene- and ensure that all rural residents in
fits by reason of service on the panel, the State are informed about the man-
in addition to that which is received ner in which assistance under des-
for performance of such officer or em- ignated rural development programs is
ployee’s regular employment. provided to the State pursuant to this
(2) NonFederal members. Each non- subpart, and if requested, provide infor-
federal member may be compensated mation to State residents; and
by the State and/or from grant funds (d) Coordinate panel activities with
established in § 1940.968 of this subpart. Rural Development.
(h) Rules governing panel meetings—(1)
Quorum. A majority of voting members § 1940.958 Designated agency.
of the panel will constitute a quorum The Governor will appoint a State
for the purpose of conducting business agency to provide the panel and the
of the panel. State coordinator with support for the
(2) Frequency of meetings. The panel daily operation of the panel. In addi-
will meet not less frequently than tion to providing support, the des-
quarterly. Frequency of meetings ignated agency is responsible for iden-
should be often enough to assure that tifying:
applications are reviewed and ranked (a) Alternative sources of financial
for funding in a timely manner. assistance for project preapplications/
(3) First meeting. The State coordi- applications reviewed and ranked by
nator will schedule the first panel the panel, and
meeting and will notify all panel mem- (b) Related activities within the
bers of the location, date, and time at State.
least seven days prior to the meeting.
Subsequent meetings will be scheduled § 1940.959 Area plan.
by vote of the panel. Each area plan submitted to the
(4) Records of meetings. The panel will panel for review in accordance with
keep records of the minutes of the § 1940.956 of this subpart shall identify
meetings, deliberations, and evalua- the geographic boundaries of the area
tions of the panel in sufficient detail to and shall include the following infor-
enable the panel to provide interested mation:
agencies or persons the reasons for its (a) An overall development plan for
actions. the area with goals, including business
(i) Federal Advisory Committee Act. development and infrastructure devel-
The Federal Advisory Committee Act opment goals, and time lines based on
shall not apply to any State rural eco- a realistic assessment of the area, in-
nomic development review panel. cluding, but not limited to, the fol-
(j) Liability of members. The members lowing:
of a State rural economic development (1) The number and types of busi-
review panel shall not be liable to any nesses in the area that are growing or
person with respect to any determina- declining;
tion made by the panel. (2) A list of the types of businesses
that the area could potentially sup-
§ 1940.957 State coordinator. port;
The Governor will appoint an officer (3) The outstanding need for water
or employee of State government as and waste disposal and other public
State coordinator in order for a State services or facilities in the area;
31
(4) The realistic possibilities for in- to achieve the economic development
dustrial recruitment in the area; and quality of life goals of the plan. At
(5) The potential for development of a minimum, the following items will be
tourism in the area; considered:
(6) The potential to generate employ- (1) Law enforcement;
ment in the area through creation of (2) Fire protection;
small businesses and the expansion of (3) Water, sewer, and solid waste
existing businesses; and management;
(7) The potential to produce value- (4) Education;
added agricultural products in the (5) Health care;
area. (6) Transportation;
(b) An inventory and assessment of
(7) Housing;
the human resources of the area, in-
(8) Communications; and
cluding, but not limited to, the fol-
lowing: (9) The availability of and capability
(1) A current list of organizations in to generate electric power.
the area and their special interests; (g) Existing area or regional plans
(2) The current level of participation are acceptable provided the plan in-
of area residents in rural development cludes statements that indicate the de-
activities and the level of participation gree to which the plan has met or is
required for successful implementation meeting all the requirements in para-
of the plan; graphs (a) through (f) of this section.
(3) The availability of general and
§ 1940.960 Federal employee panel
specialized job training in the area and members.
the extent to which the training needs
of the area are not being met; (a) The State Director will appoint
(4) A list of area residents with spe- one Rural Development employee to
cial skills which could be useful in de- serve as a voting member of the panel
veloping and implementing the plan; established in § 1940.956(c)(1) of this sub-
and part.
(5) An analysis of the human needs of (b) The Administrator may appoint,
the area, the resources in the area temporarily and for specific purposes,
available to meet those needs, and the personnel from any department or
manner in which the plan, if imple- agency of the Federal Government as
mented, would increase the resources nonvoting panel members, with the
available to meet those needs. consent of the head of such department
(c) The current degree of intergovern- or agency, to provide official informa-
mental cooperation in the area and the tion to the panel. The member(s) ap-
degree of such cooperation needed for pointed shall have expertise to perform
the successful implementation of the a duty described in § 1940.956(b) of this
plan. subpart that is not available among
(d) The ability and willingness of panel members.
governments and citizens in the area to (c) Federal panel members will be
become involved in developing and im- paid per diem or otherwise reimbursed
plementing the plan. by the Federal Government for ex-
(e) A description of how the govern- penses incurred each day the employee
ments in the area apply budget and fis- is engaged in the actual performance of
cal control processes to the plan. This a duty of the panel. Reimbursement
process is directed toward costs associ- will be in accordance with Federal
ated with carrying out the planned de- travel regulations.
velopment. When plans are developed,
the financial condition of all areas cov- § 1940.961 Allocation of appropriated
ered under the plan should be fully rec- funds.
ognized and planned development (a) Initial allocations. (1) Each FY,
should realistically reflect the area’s from sums appropriated for direct
immediate and long-range financial ca- loans, loan guarantees, or grants for
pabilities. any designated rural development pro-
(f) The extent to which public serv- gram, funds will be allocated to des-
ices and facilities need to be improved ignated States in accordance with RD
32
Instruction subpart L of part 1940, ex- (2) Designated States may request
hibit A, attachment 4, of this chapter funds from the nondesignated reserve
(available in any RD State or District account when:
Office). (i) All allocated and reserve funds to
(2) Each FY, and normally within 30 designated states have been used, or
days after the date Rural Development (ii) Sufficient funds do not remain in
receives an appropriation of designated any designated State allocation and in
rural development program funds, the the designated States’ reserve account
Governor of each designated State will to fund a project.
be notified of the amounts allocated to
the State under each designated pro- § 1940.962 Authority to transfer direct
loan amounts.
gram for such FY. The Governor will
also be notified of the total amounts (a) Transfer of funds. If the amounts
appropriated for the FY for each des- allocated to a designated State for di-
ignated rural development program. rect Water and Waste Disposal or Com-
(3) The State Director will fund munity Facility loans for a FY are not
projects from a designated State’s allo- sufficient to provide the full amount
cation of funds, according to appro- requested for a project in accordance
priate program regulations giving with this subpart, the State Director
great weight to the order in which the may transfer part or all of the funds al-
preapplications/applications for located to the State, from one program
projects are ranked and listed by the to another, subject to paragraphs (b)
panel in accordance with § 1940.956(b)(3) and (c) of this section.
of this subpart. (b) Limitation on amounts transferred.
(1) Amounts transferred within a des-
(b) Reserve. A percentage of the Na-
ignated State. The amount of direct
tional Office reserve established in sub-
loan funds transferred from a program
part L of part 1940 of this chapter will
under this section shall not exceed the
be used to establish a reserve for des-
amount left unobligated after obli-
ignated States that is separate and
gating the full amount of assistance re-
apart from that of nondesignated
quested for each project that ranked
States. The percent reserved will be higher in priority on the panel’s list.
based upon the same criteria used in (2) Amounts transferred on a Na-
subpart L of part 1940 of this chapter to tional basis. The amount of direct loan
allocate program funds. funds transferred in a FY, among the
(c) Pooling. (1) On July 15 of each FY, designated States, from a program
and from time to time thereafter dur- under this subpart (after accounting
ing the FY, as determined appropriate, for any offsetting transfers into such
unobligated funds will be pooled from program) shall not exceed $9 million, or
among the designated States. Pooled an amount otherwise authorized by
funds will be made a part of the reserve law.
established for designated States and (c) National Office concurrence. The
will revert to National Office control. State Director may transfer direct loan
(2) Funds pooled from designated funds authorized in this section, after
States can be requested by designated requesting and receiving concurrence
States, pursuant to subsection (d) of from the National Office. If permitted
this section. The designated States’ by law, the National Office will concur
pool; however, will not be available to in requests on a first-come-first-served
nondesignated States until September basis.
1 of each year.
(d) Request for funds. (1) Designated § 1940.963 Authority to transfer guar-
States may request designated States’ anteed loan amounts.
reserve funds, and funds for other des- (a) Transfer of funds. If the amounts
ignated rural development programs allocated to a designated State for
controlled by the National Office, as guaranteed Water and Waste Disposal,
shown in RD Instruction subpart L of Community Facility, or Business and
part 1940, exhibit A, attachment 4, of Industry loans for a FY are not suffi-
this chapter, in accordance with appli- cient to provide the full amount re-
cable program regulations. quested for a project in accordance
33
with this subpart, the State Director (b) Rural Development review.
may transfer part or all of the funds al- Preapplications/applications will be re-
located to the State, from one program viewed in sufficient detail to determine
to another, subject to paragraphs (b) eligibility and, if applicable, determine
and (c) of this section. if the applicant is able to obtain credit
(b) Limitation on amounts transferred. from other sources at reasonable rates
The amount of guaranteed loan funds and terms. Normally, within 45 days
transferred from a program under this after receiving a complete
section shall not exceed the amount preapplication/application, Rural De-
left unobligated after obligating the velopment will notify the applicant of
full amount of assistance requested for the eligibility determination. A copy of
each project that ranked higher in pri- all notifications will be sent to the
State coordinator.
ority on the panel’s list.
(c) Applicant notification. The notifi-
(c) National Office concurrence. The cation to eligible applicants will con-
State Director may transfer guaran- tain the following statements:
teed loan funds authorized in this sec-
tion, after requesting and receiving Your application has been submitted to the
concurrence from the National Office. State coordinator for review and ranking by
the State rural economic development re-
If permitted by law, the National Office view panel. If you have questions regarding
will concur in requests on a first-come- this review process, you should contact the
first-served basis. State coordinator. The address and tele-
phone number are: (insert).
§ 1940.964 [Reserved] You will be notified at a later date of the
decision reached by the panel and whether or
§ 1940.965 Processing project not you can proceed with the proposed
preapplications/applications. project.
You are advised against incurring obliga-
Except for the project review and tions which cannot be fulfilled without Rural
ranking process established in this sub- Development funds.
part, all requests for funds from des-
ignated rural development programs These statements should be included in
will be processed, closed, and serviced notifications to applicants with
according to applicable Rural Develop- preapplications/applications on hand
ment regulations, available in any that had not been selected for further
Rural Development office. processing prior to the time a State
was selected to participate in this pro-
(a) Preapplications/applications. All
gram.
preapplications/applications on hand (d) Information to State coordinator.
that have not been selected for further Rural Development will forward a copy
processing will be submitted initially of the preapplication/application and
to the panel for review and ranking. other information received from the
Preapplications/applications on hand applicant to the State coordinator ac-
that had been selected for further proc- cording to a schedule prepared in ac-
essing prior to the time a State was se- cordance with § 1940.956(a) of this sub-
lected to participate in this program part. The State coordinator will be ad-
may be funded by Rural Development vised that no further action will be
without review by the panel. taken on preapplications/applications
Preapplications/applications selected until they have been received and
for further processing by Rural Devel- ranked by the panel, and a priority
opment will not exceed the State’s pre- funding list has been received from the
vious year’s funding level. The State State. Applications forwarded to the
Director will provide the State coordi- State coordinator will be reviewed and
nator a list of preapplications/applica- ranked for funding in accordance with
tions that are in process and will be § 1940.956 of this subpart.
considered for funding without review (e) The Rural Development review of
by the panel. This list will be provided priority funding list. Rural
at the same time preapplications/appli- Developmentwill review the list of
cations are initially submitted to the ranked applications received from the
State coordinator in accordance with State coordinator and determine if
paragraph (d) of this section. projects meet the requirements of the
34
designated rural development program costs associated with the State rural
under which the applicant seeks assist- economic development review panels
ance. Any project that does not meet meeting requirements of § 1940.956 of
program regulations will be removed this subpart.
from the list. Applicants will be noti- (c) Authorities, delegations, and redele-
fied of the decision reached by the gations. The State Director is respon-
panel and whether or not the applicant sible for implementing the authorities
should proceed with the project. Rural in this section and to issue State sup-
Development will provide a copy of all plements redelegating these authori-
notifications to the State coordinator. ties to appropriate Rural Development
The decisions of the panel are not ap- employees. Grant approval authorities
pealable. are contained in subpart A of part 1901
(f) Obligation of funds. Rural Develop- of this chapter.
ment will provide funds for projects (d) Joint funds. Rural Development
whose application remains on the list, grant funds may be used jointly with
subject to available funds. Consider- funds furnished by the grantee or
ation will be given to the order in grants from other sources.
which the applications were ranked (e) Eligibility. A State designated by
and prioritized by the panel. If Rural the Under Secretary to participate in
Development proposes to provide as- this program is eligible to receive not
sistance to any project without pro- more than $100,000 annually under this
viding assistance to all projects ranked section. A State must become and re-
higher in priority by the panel than main an eligible State in order to re-
the project to be funded, 10 days prior ceive funds under this section.
to requesting an obligation of funds, (f) Purpose. Panel Grant funds may be
the State Director will submit a report used to pay for reasonable administra-
stating reasons for funding such lower tive costs associated with the panel, in-
ranked project to the following: cluding, but not limited to, the fol-
(1) Panel. lowing:
(2) National Office. The National Of- (1) Travel and lodging expenses;
fice will submit a copy of the notifica- (2) Salaries for State coordinator and
tion to: support staff;
(i) Committee on Agriculture of the (3) Reasonable fees and charges for
House of Representatives, Washington, professional services necessary for es-
DC. tablishing or organizing the panel.
(ii) Committee on Agriculture, Nutri- Services must be provided by individ-
tion, and Forestry of the Senate, Wash-
uals licensed in accordance with appro-
ington, DC.
priate State accreditation associa-
§§ 1940.966–1940.967 [Reserved] tions;
(4) Office supplies, and
§ 1940.968 Rural Economic Develop- (5) Other costs that may be necessary
ment Review Panel Grant (Panel for panel operations.
Grant). (g) Limitations. Grant funds will not
(a) General. Panel Grants awarded be used to:
will be made from amounts appro- (1) Pay costs incurred prior to the ef-
priated for grants under any provision fective date of the grant authorized
of section 306(a) of the CONACT (7 under this subpart;
U.S.C 1926(a)), not to exceed $100,000 an- (2) Recruit preapplications/applica-
nually to each eligible State. This sections for any designated rural develop-
tion outlines Rural Development’s poli- ment loan or grant program or any
cies and authorizations and sets forth loan or grant program;
procedures for making grants to des- (3) Duplicate activities associated
ignated States for administrative costs with normal execution of any panel
associated with a State rural economic member’s occupation;
development review panel. (4) Fund political activities;
(b) Objective. The objective of the (5) Pay costs associated with pre-
Panel Grant program is to make grant paring area development plans;
funds available annually to each des- (6) Pay for capital assets; purchase
ignated State to use for administrative real estate, equipment or vehicles;
35
rent, improve, or renovate office space; used, if sufficient, for all panel income
or repair and maintain State or pri- and expense categories;
vately owned property; (iii) Estimated breakdown of costs,
(7) Pay salaries to panel members; or including costs to be funded by the
(8) Pay per diem or otherwise reim- grantee or from other sources;
burse panel members unless distance (iv) Financial management system in
traveled exceed 50 miles. place or proposed. The system will ac-
(h) Other considerations—(1) Equal op- count for grant funds in accordance
portunity requirements. Grants made with State laws and procedures for ex-
under this subpart are subject to title pending and accounting for its own
VI of the Civil Rights Act of 1964 as funds. Fiscal control and accounting
outlined in subpart E of part 1901 of procedures of the State must be suffi-
this chapter. cient to permit preparation of reports
(2) Environmental review requirements. required by Federal regulations and
Grants made under this subpart must permit the tracing of funds to a level of
comply with the environmental review expenditures adequate to establish that
requirements in accordance with 7 CFR grant funds are used solely for author-
part 1970. ized purposes;
(3) Management assistance. Grantees (v) Method to evaluate panel activi-
will be provided management assist- ties and determine if objectives are
ance as necessary to assure that grant met;
funds are used for eligible purposes for (vi) Proposed Scope-of-Work detail-
the successful operation of the panel. ing activities associated with the panel
Grants made under this subpart will be and time frames for completion of each
administered under and are subject to task, and
the U.S. Department of Agriculture (vii) Other information that may be
regulations in 2 CFR parts 416 and 417, needed by Rural Development to make
as appropriate. a grant award determination.
(4) Drug-free work place. The State
(3) The applicable provisions of
must provide for a drug-free workplace
§ 1942.5 of subpart A of part 1942 of this
in accordance with the requirements of
chapter relating to preparation of loan
RD Instruction 1940–M (available in
dockets will be followed in preparing
any Rural Development office). Just
grant dockets. The docket will include
prior to grant approval, the State must
at least the following:
prepare and sign Form AD–1049, ‘‘Cer-
tification Regarding Drug-Free Work- (i) Form RD 400–4, ‘‘Assurance Agree-
place Requirements (Grants) Alter- ment;’’
native I—For Grantees Other Than In- (ii) Scope-of-work prepared by the
dividuals.’’ applicant and approved by Rural Devel-
(i) Application processing. (1) The opment;
State Director shall assist the State in (iii) Form RD 1940–1, ‘‘Request for
application assembly and processing. Obligation of Funds,’’ with exhibit A,
Processing requirements should be dis- and
cussed during an application con- (iv) Certification regarding a drug-
ference. free workplace in accordance with RD
(2) After the Governor has been noti- Instruction 1940–M (available in any
fied that the State has been designated Rural Development office).
to participate in this program and the (j) Grant approval, obligation of funds,
State has met all eligibility require- and grant closing. (1) The State Director
ments of this subpart, the State may will review the application and other
file an original and one copy of SF 424.1 documents to determine whether the
with the State Director. The following proposal complies with this subpart.
information will be included with the (2) Exhibit A of this subpart (avail-
application: able from any Rural Development
(i) State’s financial or in-kind re- State Office) shall be attached to and
sources, if applicable, that will maxi- become a permanent part of Form RD
mize the use of Panel Grant funds; 1940–1 and the following paragraphs
(ii) Proposed budget. The financial will appear in the comment section of
budget that is part of SF 424.1 may be that form:
36
The Grantee understands the requirements days after receipt of a properly pre-
for receipt of funds under the Panel Grant pared request for reimbursement.
program. The Grantee assures and certifies
(3) States are encouraged to use mi-
that it is in compliance with all applicable
laws, regulations, Executive Orders, and nority banks (a bank which is owned
other generally applicable requirements, in- by at least 50 percent minority group
cluding those set out in 7 CFR, part 1940, members) for the deposit and disburse-
subpart T, and 7 CFR, parts 3016 and 3017, in- ment of funds. A list of minority owned
cluding revisions through lll (date of banks can be obtained from the Office
grant approval). The Grantee further agrees of Minority Business Enterprises, De-
to use grant funds for the purposes outlined
partment of Commerce, Washington,
in the Scope-of-Work approved by Rural De-
velopment. Exhibit A is incorporated as a DC 20230.
part hereof. (l) Title. Title to supplies acquired
under this grant will vest, upon acqui-
(3) Grants will be approved and obli- sition, in the State. If there is a resid-
gated in accordance with the applica- ual inventory of unused supplies ex-
ble parts of § 1942.5(d) of subpart A of ceeding $5,000 in total aggregate fair
part 1942 of this chapter. market value upon termination or
(4) An executed copy of the Scope-of- completion of the grant awarded, and if
Work will be sent to the State coordi- the supplies are not needed for any
nator on the obligation date, along other federally sponsored programs,
with a copy of Form RD 1940–1 and the
the State shall compensate Rural De-
required exhibit. Rural Development
velopment for its share.
will retain the original of Form RD
(m) Costs. Costs incurred under this
1940–1 and the exhibit.
grant program are subject to cost prin-
(5) Grants will be closed in accord-
ciples established in 2 CFR part 200,
ance with the applicable parts of sub-
part A of part 1942 of this chapter, in- subpart E.
cluding § 1942.7. The grant is considered (n) Budget changes. Rebudgeting
closed on the obligation date. within the approval direct cost cat-
(6) A copy of Form RD 1940–1, with egories to meet unanticipated require-
the required exhibit, and the Scope-of- ments which do not exceed 10 percent
Work will be submitted to the National of the current total approved budget
Office when funds are obligated. shall be permitted. The State shall ob-
(7) If the grant is not approved, the tain prior approval from the State Di-
State coordinator will be notified in rector for any revisions which result in
writing of the reason(s) for rejection. the need for additional funding.
The notification will state that a re- (o) Programmatic changes. The State
view of the decision by Rural Develop- shall obtain prior written approval
ment may be requested by the State from the State Director for any change
under subpart B of part 1900 of this to the scope or objectives for which the
chapter. grant was approved or for contracting
(k) Fund disbursement. Grant funds out or otherwise obtaining services of a
will be disbursed on a reimbursement third party to perform activities which
basis. Requests for funds should not ex- are central to the purposes of the
ceed one advance every 30 days. The fi- grant. Failure to obtain prior approval
nancial management system of the of changes to the scope can result in
State shall provide for effective control suspension or termination of grant
and accountability of all funds, prop- funds.
erty, and assets. (p) Financial reporting. SF 269, ‘‘Fi-
(1) SF 270, ‘‘Request for Advance or nancial Status Report,’’ and a Project
Reimbursement,’’ will be completed by Performance Report are required on a
the State coordinator and submitted to quarterly basis. The reports will be
the State Director not more frequently submitted to the State Director not
than monthly. later than 30 days after the end of each
(2) Upon receipt of a properly com- quarter. A final SF 269 and Project Per-
pleted SF 270, the State Director will formance Report shall be due 90 days
request funds through the Automated after the expiration or termination of
Discrepancy Processing System. Ordi- grant support. The final report may
narily, payment will be made within 30 serve as the last quarterly report. The
37
State coordinator will constantly mon- § 1940.969 Forms, exhibits, and sub-
itor performance to ensure that time parts.
schedules are met, projected work by Forms, exhibits, and subparts of this
time periods is accomplished, and chapter (all available in any Rural De-
other performance objectives are velopment office) referenced in this
achieved. Program outlays and income subpart, are for use in establishing a
will be reported on an accrual basis. State economic development review
Project Performance Reports shall in- panel and for administering the Panel
clude, but not be limited to, the fol- Grant program associated with the
lowing: panel.
(1) A comparison of actual accom-
§ 1940.970 [Reserved]
plishments to the objectives estab-
lished for that period; § 1940.971 Delegation of authority.
(2) Reasons why established objec-
The authority authorized to the
tives were not met; State Director in this subpart may be
(3) Problems, delays, or adverse con- redelegated.
ditions which will affect the ability to
meet the objectives of the grant during §§ 1940.972–1940.999 [Reserved]
established time periods. This disclo-
sure must include a statement of the § 1940.1000 OMB control number.
action taken or planned to resolve the The collection of information re-
situation; and quirements contained in this regula-
(4) Objectives and timetable estab- tion has been approved by the Office of
lished for the next reporting period. Management and Budget and assigned
(q) Audit requirements. Audit reports OMB control number 0575–0145. Public
will be prepared and submitted in ac- reporting burden for this collection of
cordance with § 1942.17(q)(4) of subpart information is estimated to vary from
30 minutes to 48 hours per response
A of part 1942 of this chapter. The audit
with an average of 4 hours per re-
requirements only apply to the year(s)
sponse, including the time for review-
in which grant funds are received. Au- ing instructions, searching existing
dits must be prepared in accordance data sources, gathering and maintain-
with generally accepted government ing the data needed, and completing
auditing standards using publication, and reviewing the collection of infor-
‘‘Standards for Audits of Governmental mation. Send comments regarding this
Organizations, Programs, Activities burden estimate or any other aspect of
and Functions.’’ this collection of information, includ-
(r) Grant cancellation. Grants which ing suggestions for reducing this bur-
have been approved and funds obligated den, to Department of Agriculture,
may be cancelled by the grant approval Clearance Officer, OIRM, Room 404–W,
official in accordance with § 1942.12 of Washington, DC 20250; and to the Office
subpart A of part 1942 of this chapter. of Information and Regulatory Affairs,
The State Director will notify the Office of Management and Budget,
State coordinator that the grant has Washington, DC 20503.
been cancelled.
(s) Grant servicing. Grants will be PART 1941 [RESERVED]
serviced in accordance with subparts E
and O of part 1951 of this chapter. PART 1942—ASSOCIATIONS
(t) Subsequent grants. Subsequent
grants will be processed in accordance Subpart A—Community Facility Loans
with the requirements of this subpart Sec.
for each additional time period a State 1942.1 General.
is designated to participate in this pro- 1942.2 Processing applications.
gram. 1942.3 Preparation of appraisal reports.
1942.4 Borrower contracts.
[57 FR 11559, Apr. 6, 1992, as amended at 81 1942.5 Application review and approval.
FR 11030, Mar. 2, 2016; 85 FR 31938, May 28, 1942.6 Preparation for loan closing.
2020] 1942.7 Loan closing.
38
1942.8 Actions subsequent to loan closing. 1942.129 Borrower supervision and servicing.
1942.9 Planning, bidding, contracting, and 1942.130–1942.131 [Reserved]
constructing. 1942.132 Subsequent loans.
1942.10 Strategic economic and community 1942.133 Delegation and redelegation of au-
development. thority.
1942.11 [Reserved]
1942.134 State supplements and guides.
1942.12 Loan cancellation.
1942.13 Loan servicing. 1942.135–1942.149 [Reserved]
1942.14 Subsequent loans. 1942.150 OMB control number.
1942.15 Delegation and redelegation of au-
thority. Subparts D–H [Reserved]
1942.17 Community facilities. AUTHORITY: 5 U.S.C. 301; 7 U.S.C. 1989.
1942.18 Community facilities—Planning,
bidding, contracting, constructing. EDITORIAL NOTES: Nomenclature changes
1942.19 Information pertaining to prepara- to part 1942 appear at 80 FR 9878, Feb. 24,
tion of notes or bonds and bond tran- 2015.
script documents for public body appli-
cants. Subpart A—Community Facility
1942.20 Community Facility Guides.
1942.21 Statewide nonmetropolitan median Loans
household income.
1942.22–1942.29 [Reserved] SOURCE: 50 FR 7296, Feb. 22, 1985, unless
1942.30 Re-lending. otherwise noted.
1942.31–1942.49 [Reserved]
1942.50 OMB control number.
§ 1942.1 General.
Subpart B [Reserved] (a) This subpart outlines the policies
and procedures for making and proc-
Subpart C—Fire and Rescue and Other essing direct loans for Community Fa-
Small Community Facilities Projects cilities except fire and rescue and other
1942.101 General. small essential community facility
1942.102 Nondiscrimination. loans and water and waste disposal fa-
1942.103 Definitions. cilities. This subpart applies to Com-
1942.104 Application processing. munity Facilities loans for fire and res-
1942.105 Environmental review require- cue and other small essential commu-
ments.
nity facility loans only as specifically
1942.106 Intergovernmental review.
1942.107 Priorities. provided for in subpart C of this part.
1942.108 Application docket preparation and Water and waste loans are provided for
review. in part 1780 of this title.
1942.109 [Reserved] (1) The policies and procedures in
1942.110 Strategic economic and community this subpart address both loans be-
development. tween the Agency and the applicant
1942.111 Applicant eligibility.
1942.112 Eligible loan purposes.
and between the Agency and an ap-
1942.113 Rates and terms. proved eligible re-lender who then
1942.114 Security. relends the funds to eligible applicants
1942.115 Reasonable project costs. for eligible projects under this subpart.
1942.116 Economic feasibility requirements. (2) The Agency shall cooperate fully
1942.117 General requirements. with State, Tribal and local agencies in
1942.118 Other Federal, State, and local re-
making loans to assure maximum sup-
quirements.
1942.119 Professional services and borrower port to the State and Tribal strategies
contracts. for rural development. State Directors
1942.120–1942.121 [Reserved] and their staffs shall maintain coordi-
1942.122 Actions prior to loan closing and nation and liaison with State agency
start of construction. and substate planning districts. Funds
1942.123 Loan closing. allocated for use under this subpart are
1942.124–1942.125 [Reserved] also for the use of Indian tribes within
1942.126 Planning, bidding, contracting, con-
the State, regardless of whether State
structing, procuring.
1942.127 Project monitoring and fund deliv- development strategies include Indian
ery. reservations within the State’s bound-
1942.128 Borrower accounting methods, aries. Indians residing on such reserva-
management reports and audits. tions must have equal opportunity to
39
participate in the benefits of these pro- or agents. The State Office staff will
grams as compared with other resi- monitor community programs
dents of the State. loanmaking and servicing, and will
(3) Federal statutes provide for ex- provide assistance to District Office
tending Agency financial programs personnel to the extent necessary to
without regard to race, color, religion, assure that the activities are being ac-
sex, national origin, marital status, complished in an orderly manner con-
age, or physical/mental handicap. The sistent with Agency regulations.
participants must possess the capacity (e) The Office of Management and
to enter into legal contracts under Budget (OMB) issued guidance on Uni-
State and local statutes. form Administrative Requirements,
(4) Any processing or servicing activ- Cost Principles, and Audit Require-
ity conducted pursuant to this subpart ments for Federal Awards at 2 CFR
involving authorized assistance to part 200 on December 26, 2013. In 2 CFR
Agency employees, members of their 400.1, the Department adopted OMB’s
families, known close relatives, or guidance in subparts A through F of 2
business or close personal associates, is CFR part 200 as the Department’s poli-
subject to the provisions of subpart D cies and procedures for uniform admin-
of part 1900 of this chapter. Applicants istrative requirements, cost principles,
for this assistance are required to iden- and audit requirements for federal
tify any known relationship or associa- awards. As a result, this regulation
tion with an Agency employee. contains references to 2 CFR part 200
(b) Indian tribes on Federal and State as it has regulatory effect for the De-
reservations and other Federally recog- partment’s programs and activities.
nized Indian tribes are eligible to apply
[50 FR 7296, Feb. 22, 1985, as amended at 52
for and are encouraged to participate FR 38908, Oct. 20, 1987; 52 FR 43725, Nov. 16,
in this program. Such tribes might not 1987; 52 FR 47097, Dec. 11, 1987; 57 FR 21193,
be subject to State and local laws or May 19, 1992; 58 FR 226, Jan. 5, 1993; 62 FR
jurisdiction. However, any require- 33510, June 19, 1997; 68 FR 65830, Nov. 24, 2003;
ments of this subpart that affect appli- 79 FR 76007, Dec. 19, 2014; 81 FR 43935, July 6,
cant eligibility, the adequacy of Agen- 2016]
cy’s security or the adequacy of service
to users of the facility and all other re- § 1942.2 Processing applications.
quirements of this subpart must be (a) Preapplications. (1) The District
met. Office may handle initial inquiries and
(c) Loans sold without insurance by provide basic information about the
RD to the private sector will be serv- program. They are to provide the
iced in the private sector and will not preappllcation, SF 424.2, ‘‘Application
be serviced under this subpart. The for Federal Assistance (For Construc-
provisions of this subpart are not appli- tion).’’ The District Director will assist
cable to such loans. Future changes to applicants as needed in completing SF
this subpart will not be made applica- 424.2, and in filing written notice of in-
ble to such loans. tent and priority recommendation with
(d) The District Office will normally the appropriate clearinghouse. The Dis-
be the entry point for preapplications trict Director will inform the applicant
and serve as a local point. Applications that it may be necessary to apply for
will be filed with the District Office credit from commercial sources. It will
and loans will be processed to the be explained that if credit for the
maxium extent possible by the District project is available from commercial
Office staff. The applicant’s governing sources at reasonable rates and terms
body should designate one person to co- the applicant is not eligible for RD fi-
ordinate the activities of its engineer, nancing. The District Director will
architect, attorney, and any other pro- meet with the applicant, whenever ap-
fessional employees and to act as con- propriate to discuss RD preapplication
tact person during loan processing. processing. Guidance and assistance
Agency personnel should make every will be provided by the State Director,
effort to involve the applicant’s con- as needed, for orderly application proc-
tact person when meeting with the ap- essing. The District Director will de-
plicant’s professional consultants and/ termine that the preapplication is
40
property completed and fully reviewed. tact for the intergovernmental review
The District Director will then forward process and give full consideration to
to the State Director: their comments when selecting
(i) Eligibility determination and rec- preapplications to be processed.
ommendations. (iii) The State Director will review
(ii) One copy of SF 424.2. the District Director’s eligibility de-
(iii) State intergovernmental review termination and recommendations in
comments and recommendations sufficient time for the District Direc-
(clearinghouse comments), as outlined tor’s use in preparing and issuing Form
in 2 CFR part 400, if applicable. AD–622.
(iv) Priority recommendations. (iv) Form AD–622 will be prepared by
(v) Supporting documentation nec- the District Director within forty-five
essary to make an eligibility deter- (45) calendar days from receipt of the
mination such as financial statements, preapplication by RD, stating the re-
audits, or copies of organizational doc- sults of the review action. The original
uments or existing debt instruments. will be signed and delivered to the ap-
The District Director will advise appli- plicant with a copy to the State Direc-
cants on what documents are nec- tor.
essary. Applicants should not be re- (3) For preapplications eligible for
quired to expend significant amounts Agency funding which have the nec-
of money or time developing sup- essary priority to compete with similar
porting documentation at the preapplications, the Agency will issue
preapplication stage. Form AD–622 inviting an application
(2) The State Director will review containing the following statement:
each SF 424.2 along with other informa- You are advised against taking any actions
tion that is deemed necessary to deter- or incurring any obligations which would ei-
mine whether financing from commer- ther limit the range of alternatives to be
cial sources at reasonable rates and considered, or which would have an adverse
terms is available. If credit elsewhere effect on the environment. Satisfactory com-
pletion of the environmental review process
is indicated, the State Director will in- must occur prior to the issuance of the letter
struct the District Director to so in- of conditions.
form the applicant and recommend the
applicant apply to commercial sources (4) The following statement must be
for financing. Projects may be funded added to Form AD–622 when notifying
jointly with other lenders provided the preapplicants who are eligible, but do
requirements of § 1942.17 (g) of this sub- not have the priority necessary for fur-
part are met. Joint financing occurs ther consideration at this time:
when two or more lenders make sepa- You are advised against incurring obliga-
rate loans to supply the funds required tions which would limit the range of alter-
by one applicant for a project. natives to be considered, or which cannot be
(i) In order to provide a basis for re- fulfilled without Rural Development funds
until the funds are actually made available.
ferral of preapplications of only those
Therefore, you should refrain from such ac-
applicants who may be able to finance tions as initiating engineering and legal
projects through commercial sources, work, taking actions which would have an
State Directors should maintain liai- adverse effect on the environment, taking
son with representatives of banks, in- options on land rights, developing detailed
vestment bankers, financial advisors, plans and specifications, or inviting con-
and other lender representatives in the struction bids until notified by Rural Devel-
State. State Directors with their as- opment to proceed.
sistance, should maintain criteria for (b) Environmental review requirements.
determining preapplications which Loans made under this subpart must
should be referred to commercial lend- comply with the environmental review
ers. A list of lender representatives in- requirements in accordance with 7 CFR
terested in receiving such referrals part 1970. Starting with the earliest
should be maintained. discussions with prospective applicants
(ii) The State Director shall main- or review of pre-applications and con-
tain a working relationship with the tinuing through application processing,
State Office or official that has been environmental issues must be consid-
designated as the single point of con- ered.
41
(c) Applications. The District Director by the applicant under subpart B of

should assist the applicant in applica- part 1900 of this chapter. The following
tion assembly and processing. statement will also be made on all no-
(1) State Directors should have appli- tifications of adverse action.
cations in process representing ap- The Federal Equal Credit Opportunity Act
proximately 150 percent of the current prohibits creditors from discriminating
State allocation. against credit applicants on the basis of
(2) The application docket will in- race, color, religion, national origin, sex,
clude SF 424.2, and related forms, ma- marital status, age (provided that the appli-
terials, and information. The applica- cant has the capacity to enter into a binding
tion will be assembled in accordance contract); because all or part of the appli-
cant’s income is derived from any public as-
with guide 15 of this subpart or State sistance program; or because the applicant
guides developed under § 1942.16 of this has in good faith exercised any right under
subpart. the Consumer Credit Protection Act. The
(3) When an applicant is notified to Federal agency that administers compliance
proceed with an application, the Dis- with this law is the Federal Trade Commis-
trict Director should arrange for a con- sion, Equal Credit Opportunity, Washington,
ference with the applicant to provide DC 20580.
copies of appropriate appendices and (e) Joint funding. Rural Development
forms; furnish guidance necessary for may finance projects jointly with funds
orderly application processing; and to from other sources, such as, commer-
initiate a processing checklist for es- cial/private lenders, Federal agencies,
tablishing a time schedule for com- State and local Governments, etc.
pleting items using Form RD 1942–39, Other departments, agencies, and exec-
‘‘Processing Check List (Other Than utive establishments of the Federal
Public Bodies),’’ or Form RD 1942–40, Government may participate and pro-
‘‘Processing Check List (Public Bod- vide financial and technical assistance
ies),’’ or other checklist adopted for jointly with Rural Development to any
use in the State. The District Director applicant to whom Rural Development
will confirm decisions made at this is providing assistance. The amount of
conference by letter to the applicant participation by the other department,
and by a copy of the processing check- agency, or executive establishment
list. The original and a copy of the shall only be limited by its authorities
processing checklist will be retained in except that any limitation on joint
the District Office and a copy will be participation itself is superseded by
forwarded to the State Office. The section 125 of Pub. L. 95–334 (Section
original and copy of the checklist re- 347, Consolidated Farm and Rural De-
tained in the District Office will be velopment Act, as amended).
kept current as application processing
actions are taken. The copy will be
FR 6786, Mar. 3, 1988; 54 FR 47197, Nov. 13,
sent to the State Office to use in up- 1989; 55 FR 13503, 15304, Apr. 11, 1990; 57 FR
dating its copy of this form. The State 21194, May 19, 1992; 61 FR 6309, Feb. 20, 1996;
Office will then return the District Of- 79 FR 76007, Dec. 19, 2014; 81 FR 11030, Mar. 2,
fice’s copy. As the application is being 2016]
processed, and the need develops for ad-
ditional conferences, the District Di- § 1942.3 Preparation of appraisal re-
rector will arrange with the applicant ports.
for such conference to extend and up- When the loan approval official re-
date the processing checklist. quires an appraisal, Form RD 442–10,
(d) Review of decision. If at any time ‘‘Appraisal Report—Water and Waste
prior to loan approval it is decided that Disposal Systems,’’ may be used with
favorable action will not be taken on a appropriate supplements. Form RD 442–
preapplication or application, the Dis- 10 may be modified as appropriate or
trict Director will notify the applicant other appropriate format may be used
in writing of the reasons why the re- for facilities other than water and
quest was not favorably considered. waste disposal. Appraisal reports pre-
The notification to the applicant will pared for use in connection with the
state that a review of this decision by purchase of existing essential commu-
Rural Development may be requested nity facilities or when required by
42
§ 1942.17 (g)(2)(iii)(B)(2), (g)(3)(iii)(B)(2), mandering of specific communities or

and (j)(4) of this subpart, may be pre- areas has not occurred. The findings
pared by the RD engineer/architect or, should be documented in the running
if desired by the State Director, some record. Prior to presenting the assem-
other qualified appraiser. The loan ap- bled application to the approval offi-
proval official may require an appli- cial, the assembled application ordi-
cant to provide an appraisal prepared narily will be processed in the fol-
by an independent qualified appraiser; lowing sequence:
however, the loan approval official (1) The Rural Development manager
must determine that the appraised will complete the project summary, in-
value shown in such reports reflects cluding written analysis and rec-
the present market value. ommendations, and will prepare a draft
[50 FR 7296, Feb. 22, 1985, as amended at 53 letter of conditions listing all the re-
FR 6786, Mar. 3, 1988] quirements that the applicant must
agree to meet within a specific time.
§ 1942.4 Borrower contracts. (i) Requirements listed in letters of
The State Director will, with assist- conditions will include the following
ance as necessary by the Office of the unless inappropriate due to the par-
General Counsel (OGC), concur in ticular type of funding or entity in-
agreements between borrowers and volved: Maximum amount of loan and/
third parties such as contracts for pro- or grant which may be considered,
fessional and technical services and scheduling of payments, term of loan
contracts for the purchase of water or and any deferment of principal which
treatment of waste. State Directors are may be allowed, reserve requirements,
expected to work closely with rep- compliance with section 504 of the Re-
resentatives of engineering and archi- habilitation Act of 1973, number of
tectural societies, bar associations, users (members) and verification re-
commercial lenders, accountant asso- quired, contributions rates and
ciations, and others in developing charges, interim financing, disburse-
standard forms of agreements, where ment of funds, security requirements,
needed, and other such matters in graduation requirements, debt collec-
order to expedite application proc- tion policies execution of Form RD
essing, minimize referrals to OGC, and 1910–11, ‘‘Application Certification,
resolve problems which may arise. Federal Collection Policies for Con-
sumer or Commercial Debts,’’ organiza-
§ 1942.5 Application review and ap-
proval. tion, business operations, insurance
and bonding (including applicant/bor-
(a) Procedures for review. The Rural rower and contractor), construction
Development staff review will proceed contract documents and bidding, ac-
as applications are being developed. An counts, records, and audit reports re-
overall review of the applicant’s finan- quired (including requirements of OMB
cial status, including a review of all as- Circulars A–128 and A–110), adoption of
sets and liabilities, will be a part of the Form RD 1942–47, ‘‘Loan Resolution
docket review process by the staff and (Public Bodies),’’ for public bodies or
approval officials. The engineering/ar- Form RD 1942–9, ‘‘Loan Resolution (Se-
chitect reports and associated data are curity Agreement),’’ for other than
to be reviewed by the Rural Develop- public bodies, closing instructions, and
ment staff engineer or architect, as ap- other requirements.
propriate, as soon as available but (ii) Each letter of conditions will
prior to the District Director’s comple- contain the following paragraphs:
tion of the project summary. During
the review the District Director in all This letter establishes conditions which
cases will make certain that no low in- must be understood and agreed to by you be-
come or minority community within fore further consideration may be given to
the application. Any changes in the project
the service area has been omitted or
cost, source of funds, scope of services, or
discouraged from participating in the any other significant changes in the project
proposed project. The District Director or applicant must be reported to and ap-
will also determine how the service proved by RD written amendment to this let-
area was defined to assure that gerry- ter. Any changes not approved by RD shall
43
be cause for discontinuing processing of the (A) Recommendation.
application. (B) Date of expected obligation.
This letter is not to be considered as loan (C) Any unusual circumstances.
approval or as representation to the avail-
ability of funds. The docket may be com-
(ii) Copies of the following:
pleted on the basis of a loan not to exceed (A) Proposed letter of conditions.
$lll. (B) Applicable State Intergovern-
If (insert agency name) makes the loan, mental Review comments, if the pro-
you may make a written request that the in- gram or activity has been selected
terest rate be the lower of the rate in effect under the State. RD Instruction 1970–I,
at the time of loan approval or the time of available in any Rural Development of-
loan closing. If you do not request the lower
of the two interest rates, the interest rate
fice.
charged will be the rate in effect at the time (C) Community Facilities Project
of loan approval. The loan will be considered Summary.
approved on the date a signed copy of Form (D) Preliminary architectural or en-
RD 1940–1, ‘‘Request for Obligation of gineering report.
Funds,’’ is mailed to you. If you want the (E) Form RD 442–3, ‘‘Balance Sheet,’’
lower of the two rates, your written request or a financial statement or audit that
should be submitted to RD as soon as prac-
tical. In order to avoid possible delays in
includes a balance sheet.
loan closing such a request should ordinarily (F) For other essential community
be submitted at least 30 calendar days before facility loan applicants whose pro-
loan closing. posals do not meet the assured income
Please complete and return the attached or tax based security requirements of
Form RD 1942–46, ‘‘Letter of Intent to Meet § 1942.17 (g)(2)(iii) and (g)(3)(iii) of this
Conditions,’’ if you desire that further con- subpart, financial information for the
sideration be given your application.
last five years of operation will be sub-
(iii) Rural Development Managers mitted if available. The type of finan-
may add the following: cial information to be submitted
If the conditions set forth in this letter are should be determined based on what is
not met within lll days from the date available and the following order of
hereof, FmHA or its successor agency under preference:
Public Law 103–354 reserves the right to dis- (1) Complete audits;
continue the processing of the application. (2) Unaudited financial statements
(2) The State staff engineer or archi- including balance sheets and state-
tect, as appropriate, will include a ments of income and expenses;
written analysis and recommendations (3) Lists of income and expenses.
on the project summary. (G) For other essential community
(3) The Chief, Community Programs facility loans secured under paragraph
or Community and Business Programs, (b)(1)(ii)(F) of this section, submit a de-
will review the assembled application tailed explanation of the proposed se-
and include in the project summary a curity; evidence that the application
written analysis and recommendations, cannot be processed and the loan se-
including the availability of other cured under paragraph (b)(1)(ii)(F) of
credit and other eligibility determina- this section; evidence supporting the
tions. The draft letter of conditions efforts by the applicant in persuading
will be reviewed and any necessary appropriate public bodies to provide
modifications made. the proposed facility and services and
(b) Project requiring National Office re- the results, and comments of the Re-
view. Prior National Office review is regional Attorney concurring in the ap-
quired for certain proposals (See sub- plicants’ legal authority to give the
part A of part 1901 of this chapter). proposed security.
(1) The Rural Development Manager (H) Financial Feasibility Report
should assemble applications for the when required by § 1942.17 (h)(1).
National Office review in the following (I) Proposed lease agreements, man-
order from top to bottom and forward agement agreements, or other agree-
them to the State Director for review ments when facility management will
and recommedation prior to submis- be provided by other than the appli-
sion to the National Office: cant.
(i) Transmittal memorandum includ- (J) Other forms and documents on
ing: which there are specific questions.
44
(K) Environmental impact analysis (1) Form RD 1940–1, authorizing funds

and documentation. to be reserved, may be executed by the
(2) For applications to be reviewed in loan approval official providing the ap-
the State or field, at least those items plicant has the legal authority to con-
in paragraph (b)(1)(ii) of this section, tract for a loan and to enter into re-
should be available. quired agreements and has signed
(c) For all applications. All letters of Form RD 1940–1.
conditions will be addressed to the ap- (2) If approval was concurred in by
plicant, signed by the Rural Develop- the National Office, a copy of the con-
ment Manager or other Agency rep- curring memorandum will be attached
resentative designated by the State Di- to the original of Form RD 1940–1.
rector, and delivered to the applicant. (3) The State Director or designee
Upon signing the letter of conditions, will request an obligation of loan and/
the Rural Development Manager will or grant funds via the automated ter-
send two copies of the letter of condi- minal system after signing Form RD
tions and two copies of the project 1940–1. The requesting official will fur-
summary to the State Director. The nish security identification as nec-
State Director will immediately send essary. The requesting official will
one copy of the project summary and a record the date, time of request, and
copy of the letter of conditions to the their initials on the original Form RD
National Office, Attention: Community 1940–1.
Programs. The Rural Development (4) The date the applicant is notified
Manager, with assistance as needed of loan and/or grant approval is six
from the State Office, will discuss the working days from the date funds are
requirements of the letter of conditions reserved unless an exception is granted
with the applicant’s representatives by the National Office.
and afford them an opportunity to exe- (5) Immediately after verifying that
cute Form RD 1942–46. funds have been reserved, utilizing the
(1) The letter of conditions should Rural Development Field Office ter-
not ordinarily be issued unless the minal system status inquiry function,
State Director expects to have ade- the State Director or designee will no-
quate funds in the State allocation to tify by telephone, the Legislative and
fund the project within the next 12 Public Affairs Staff in the Rural Devel-
months based on historic allocations or opment National Office as required by
other reliable projections. RD Instruction 2015–C, ‘‘Announcement
(2) If the applicant declines to exe- of Approval of Loans, Grants, or Guar-
cute Form RD 1942–46, the Rural Devel- anteed Loans for Rural Project,’’
opment Manager will immediately no- (available in any FmHA or its suc-
tify the State Director and provide cessor agency under Public Law 103–354
complete information as to the reasons State Office).
for such declination. (6) Loan approval and applicant noti-
(3) If the applicant accepts the letter fication will be accomplished by the
of conditions, the Rural Development State Director or designee by mailing
Manager will forward the executed to the applicant, 6 working days from
Form RD 1942–46 and a signed and an the obligation date, a copy of Form RD
unsigned copy of Form RD 1940–1 to the 1940–1 which has been previously signed
State Director. by the applicant and loan approval offi-
(d) Loan approval and obligating funds. cial. The date the applicant is notified
Loans will be approved under this sub- is also the date the interest rate at
part and subpart A of part 1901 of this loan approval is established. The State
chapter (available in any Rural Devel- Director or designee will record the
opment office). The loan will be consid- date of applicant notification and the
ered approved on the date the signed interest rate in effect at that time on
copy of Form RD 1940–1 is mailed to the original of Form RD 1940–1 and in-
the applicant. The State Director or clude it as a permanent part of the Dis-
designee may request an obligation of trict Director project file with a copy
funds when available within their placed in the State Office file.
State allocation and according to the (7) If a transfer of obligation of funds
following: is necessary, complete Form RD 450–10,
45
‘‘Advice of Borrower’s Change of Ad- the commencement of construction,

dress, Name, Case Number, or Loan whichever occurs first. Such individual
Number,’’ and process via the Rural will review each signed user agreement
Development Field Office terminal sys- and check evidence of cash contribu-
tem. An obligation of funds established tions. If during the review any indica-
for an applicant may be transferred to tion is received that all signed users
a different (substituted) applicant pro- may not connect to the system, there
vided: will be such additional investigation
(i) The substituted applicant is eligi- made as deemed necessary to deter-
ble to receive the assistance approved mine the number of users who will con-
for the original applicant; and nect to the system. The District Direc-
(ii) The substituted applicant bears a tor will record the determination in a
close and genuine relationship to the memorandum to the State Director.
original applicant (such as two organi- (2) In all cases the availability and
zations that are controlled by the same amounts of other funds to be used in
individuals); and the project will be verified by Rural
(iii) The need for and scope of the Development.
project and the purpose(s) for which (c) Initial compliance review. An initial
Rural Development funds will be used compliance review should be completed
remain substantially unchanged. under subpart E of part 1901 of this
[50 FR 7296, Feb. 22, 1985, as amended at 50 chapter.
FR 33332, Aug. 19, 1985; 50 FR 43378, Oct. 25, (d) Ordering loan checks. Checks will
1985; 53 FR 6787, Mar. 3, 1988; 54 FR 47196, not be ordered until:
Nov. 13, 1989; 63 FR 16089, Apr. 2, 1998; 67 FR (1) The applicant has complied with
60584, Sept. 27, 2002; 67 FR 63019, Oct. 9, 2002; approval conditions and closing in-
76 FR 80730, Dec. 27, 2011; 79 FR 76007, Dec. 19,
structions, except for those actions
2014; 79 FR 55967, Sept. 18, 2014]
which are to be completed on the date
EDITORIAL NOTE: At 80 FR 9879, Feb. 24, of loan closing or subsequent thereto;
2015, § 1942.5 was amended in paragraph and
(a)(1)(ii) by removing ‘‘FmHA or its suc-
cessor agency under Public Law 103–354 re-
(2) The applicant is ready to start
serves’’ and adding ‘‘Rural Development reconstruction or funds are needed to pay
serves’’ in its place; however, the amend- interim financing obligations.
ment could not be incorporated because the (e) Multiple advances of Rural Develop-
phrase did not exist in the paragraph. ment funds. When Rural Development
provides loan funds during the con-
§ 1942.6 Preparation for loan closing. struction period using interim (tem-
(a) Obtaining closing instructions. porary) instruments described in
Completed dockets will be reviewed by § 1942.19(g) of this subpart, the fol-
the State Director. The information re- lowing action will be taken prior to the
quired by OGC will be transmitted to issuance of the permanent instru-
OGC with a request for closing instruc- ments:
tions. Upon receipt of the closing in- (1) The Finance Office will be notified
structions from OGC, the State Direc- of the anticipated date for retirement
tor will forward them along with any of the interim instruments and
appropriate instructions to the District issuance of permanent instruments of
Director. Upon receipt of closing indebt.
structions, the District Director will (2) The Finance Office will prepare a
discuss with the applicant and its ar- statement of account including ac-
chitect or engineer, attorney, and crued interest through the proposed
other appropriate representatives, the date of retirement and also show the
requirements contained therein and daily interest accrual. The statement
any actions necessary to proceed with of account and the interim financing
closing. instruments will be forwarded to the
(b) Verification of users and other District Director.
funds. (1) In connection with a loan for (3) The District Director will collect
a utility type project to be secured by interest through the actual date of the
a pledge of user fees or revenues, the retirement and obtain the permanent
District Director will authenticate the instrument(s) of debt in exchange for
number of users prior to loan closing or the interim financing instruments. The
46
permanent instruments and the cash § 1942.8 Actions subsequent to loan

collection will be forwarded to the Fi- closing.
nance Office immediately, except that
(a) Mortgages. Real estate or chattel
for promissory notes and single instru-
mortages or security instruments will
ment bonds fully registered as to prin-
be delivered to the recording office for
cipal and interest, the original will be
retained in the District Office and a recordation or filing, as appropriate. A
copy will be forwarded to the Finance copy of such instruments will be deliv-
Office. In developing the permanent in- ered to the borrower. The original in-
struments, the sequence of preference strument, if returnable after recording
set out in § 1942.19(e) of this subpart or filing, will be retained in the bor-
will be followed. rower’s case folder.
(b) Notes and bonds. When the debt in-
FR 6787, Mar. 3, 1988; 53 FR 26589, July 14,
strument is a promissory note or single
1988] instrument bond fully registered as to
principal and interest, a conformed
§ 1942.7 Loan closing. copy will be sent to the Finance Office
Loans will be closed in accordance immediately after loan closing and the
with the closing instructions issued by original instrument will be stored in
the OGC and § 1942.17(o) of this subpart the District Office. When other types of
and as soon as possible after receiving bonds are used, the original bond(s)
the check. will be forwarded to the Finance Office
(a) Authority to execute, file, and immediately after loan closing.
record legal instruments. Area Office em- (c) Multiple advances—bond(s). When
ployees are authorized to execute and temporary paper, such as bond antici-
file or record any legal instruments pation notes or interim receipts, is
necessary to obtain or preserve secu- used to conform with the multiple ad-
rity for loans. vance requirement, the original tem-
(b) Preparation of mortgages. Unless porary paper will be forwarded to the
otherwise required by State law or un- Finance Office after each advance is
less an exception is approved by the made to the borrower. The borrower’s
State Director with advice of the OGC, case number will be entered in the
only one mortgage will be taken even upper righthand corner of such paper
though the indebtedness is to be evi- by the District Office. The permanent
denced by more than one instrument. debt instrument(s) should be forwarded
(c) Source of funds for insured loans. to the Finance Office as soon as pos-
All loans will be made from the Rural sible after the last advance is made ex-
Development Insurance Fund (RDIF). cept that for promissory notes and sin-
(d) Unused funds. Obligated funds gle instrument bonds fully registered
planned for project development which as to principal and interest, the origi-
remain after all authorized costs have
nal will be retained in the District Of-
been provided for will be disposed of in
fice and a copy will be forwarded to the
accordance with § 1942.17(p)(6) of this
subpart. Finance Office.
(e) Loan disbursements. Whenever a (d) Bond registration record. Form RD
loan disbursement is received, lost, or 442–28, ‘‘Bond Registration Book,’’ may
destroyed, the Rural Development be used as a guide to assist borrowers
Manager will take appropriate actions in the preparation of a bond registra-
outlined in Rural Development Instruc- tion book in those cases where a reg-
tion 2018–D. istration book is required and a book is
(f) Supervised bank accounts. Super- not provided in connection with the
vised bank accounts will be handled printing of the bonds.
under subpart A of part 1902 of this (e) Disposition of title evidence. All
chapter. title evidence other than the opinion of
title, mortgage title insurance policy,
FR 6787, Mar. 3, 1988; 59 FR 54788, Nov. 2, 1994; and water stock certificates will be re-
68 FR 61331, Oct. 28, 2003; 70 FR 19253, Apr. 13, turned to the borrower when the loan
2005] has been closed.
47
(f) Material for State Office. When the ever, the amendment could not be incor-
loan has been closed, the District Di- porated because the phrase did not occur in
rector will submit to the State Direc- the paragraph.
tor:
(1) The complete docket; and § 1942.9 Planning, bidding, con-
tracting, and constructing.
(2) A statement covering information
other than the completion of legal doc- (a) Review of construction plans and
uments showing what was done in car- specifications. All plans and specifica-
rying out loan closing instructions. tions will be submitted as soon as
(g) State Office review of loan closing. available to the State Office for review
The State Director will review the Dis- and comments.
trict Director’s statement concerning (b) Contract approval. The State Di-
loan closing, the security instruments, rector or designee is responsible for ap-
and other documents used in closing to proving all construction contracts
determine whether the transaction was using legal advice and guidance of OGC
closed properly. All material submitted as necessary. The National Office must
by the District Director, including the concur with the use of a contracting
executed contract documents (if re- method under § 1942.18(l) of this subpart
quired by OGC) with the certification exceeding $250,000. When an applicant
of the borrower’s attorney, along with requests such concurrence, the State
a statement by the State Director that Director will submit the following to
all administrative requirements have the National Office:
been met, will be referred to OGC for (1) State Director’s and Rural Devel-
post-closing review. OGC will review opment engineer/architect’s comments
the submitted material to determine and recommendations, and if non-
whether all legal requirements have competitive negotiation per
been met. OGC’s review of Rural Devel- § 1942.18(k)(4) is accepted by the Agen-
opment’s standard forms will be only cy, submit an evaluation of previous
for proper execution thereof, unless the work of the proposed construction
State Director brings specific questions firm.
or deviations to the attention of OGC.
(2) Regional attorney’s opinion and
It is not expected that facility develop-
comments regarding the legal ade-
ment including construction will be
quacy of the proposed procurement
held up pending receipt of the opinion
method and proposed contract docu-
from OGC. When the opinion from OGC
ments.
is received, the State Director will ad-
(3) Copy of owner’s written request
vise the District Director of any defi-
ciencies that must be corrected and re- and description of the procurement
method proposed.
turn all material that was submitted
for review. (4) Copy of the proposed contract.
(h) Safeguarding bond shipments. (c) Bid irregularities. Any irregular-
Rural Development’s personnel will ities in the bids received or other mat-
follow the procedures for safeguarding ters pertaining to the contract award
mailings and deliveries of bonds and having legal implications will be
coupons outlined in FmHA Instruction cleared with OGC before the State Di-
2018–E (available in any FmHA or its rector consents to the contract award.
successor agency under Public Law 103– (d) Noncompliance. State Directors,
354 office), whenever they mail or de- upon receipt of information indicating
liver these items. borrowers or their officers, employees,
(i) Water stock certificates. Water or agents are not performing in compli-
stock certificates will be filed in the ance with § 1942.18(j)(1) of this subpart,
loan docket in the District Office. may request the Regional Office of the
Inspector General (OIG) to investigate
the matter and provide a report. The
FR 6787, Mar. 3, 1988]
State Director is responsible for resolv-
EDITORIAL NOTE: At 80 FR 9879, Feb. 24, ing the issue.
2015, § 1942.8 was amended in paragraph (h) by
removing ‘‘FmHA or its successor agency [50 FR 7296, Feb. 22, 1985, as amended at 53
under Public Law 103–354 Instruction’’ and FR 6787, Mar. 3, 1988; 77 FR 29539, May 18,
adding ‘‘RD Instruction’’ in its place; how- 2012]
48
§ 1942.10 Strategic economic and com- § 1942.13 Loan servicing.

munity development. Loans will be serviced under subpart
Applicants with projects that support E of part 1951 of this chapter.
the implementation of Strategic Com-
munity Investment Plans are encour- § 1942.14 Subsequent loans.
aged to review and consider 7 CFR part Subsequent loans will be processed
1980, subpart K, which contains provi- under this subpart.
sions for providing priority to projects
that support the implementation of § 1942.15 Delegation and redelegation
of authority.
Strategic Community Investment
Plans on a multi-jurisdictional and The State Director is responsible for
multi-sectoral basis. implementing the authorities in this
subpart and for issuing State supple-
[85 FR 59393, Sept. 22, 2020] ments redelegating authorities. Loan
and grant approval authority is in Sub-
§ 1942.11 [Reserved] part A of Part 1901 of this chapter. Ex-
cept for loan and grant approval au-
§ 1942.12 Loan cancellation.
thority, Rural Development Manager
Loans which have been approved and may redelegate their duties to quali-
obligations which have been estab- fied staff members.
lished may be canceled before closing [70 FR 19254, Apr. 13, 2005]
as follows:
(a) Form Rural Development 1940–10, § 1942.16 State supplements and
‘‘Cancellation of U.S. Treasury Check guides.
and/or Obligation.’’ The Rural Develop- State Directors will obtain National
ment Manager or State Director may Office clearance for all State supple-
prepare and execute Form Rural Devel- ments and guides under RD Instruction
opment 1940–10, Cancellation of U.S. 2006–B (available in any Rural Develop-
Treasury Check and/or Obligation, in ment office).
accordance with the Forms Manual In- (a) State supplements. State Directors
sert (FMI). If the disbursement has may supplement this subpart to meet
been received or is subsequently re- State and local laws and regulations
ceived in the Area Office, the Rural De- and to provide for orderly application
velopment Manager will return it as processing and efficient service to ap-
prescribed in Rural Development In- plicants. State supplements shall not
struction 2018–D. contain any requirements pertaining to
(b) Notice of cancellation. If the docket bids, contract awards, and materials
has been forwarded to Office of General more restrictive than those in § 1942.18
Counsel that office will be notified of of this subpart.
the cancellation by copy of Form Rural (b) State guides. State Directors may
Development 1940–10. Any application develop guides for use by applicants if
the guides to this subpart are not ade-
for title insurance, if ordered, will be
quate. State Directors may prepare
cancelled. The borrower’s attorney and
guides for items needed for the applica-
engineer/architect, if any, should be
tion; items necessary for the docket;
notified of the cancellation. The Rural
and items required prior to loan clos-
Development Manager may provide the ing or start of construction.
borrower’s attorney and engineer/ar-
chitect with a copy of the notification § 1942.17 Community facilities.
to the applicant. The State Director (a) General. This section includes in-
will notify the Director of Legislative formation and procedures specifically
Affairs and Public Information by tele- designed for use by applicants, includ-
phone or electronic mail and give the ing their professional consultants and/
reasons for such cancellation. or agents who provide such assistance
[50 FR 7296, Feb. 22, 1985, as amended at 53 and services as architectural, engineer-
FR 26589, July 14, 1988; 54 FR 39727, Sept. 28, ing, financial, legal, or other services
1989; 59 FR 54788, Nov. 2, 1994; 70 FR 19254, related to application processing and
Apr. 13, 2005] facility planning and development.
49
This section is made available as need- ly based ownership and controlled by

ed for such use. It includes Rural De- members of the community.
velopment policies and requirements (B) Substantial public funding
pertaining to loans for community fa- through taxes, revenue bonds, or other
cilities. It provides applicants with local Government sources, and/or sub-
guidance for use in proceeding with stantial voluntary community funding,
their application. Rural Development such as would be obtained through a
shall cooperate fully with appropriate community-wide funding campaign.
State agencies to give maximum sup- (iii) Indian tribes on Federal and
port of the State’s strategies for devel- State reservations and other Federally
opment of rural areas. recognized Indian tribes.
(b) Eligibility. Financial assistance to (2) Facility. (i) Facilities must be lo-
areas or communities adjacent to, or cated in rural areas, except for utility-
closely associated with, nonrural areas type services such as water, sewer, nat-
is limited by § 1942.17(c) of this subpart. ural gas, or hydroelectric, serving both
(1) Applicant. (i) A public body, such rural and non-rural areas. In such
as a municipality, county, district, au- cases, Rural Development funds may be
thority, or other political subdivision used to finance only that portion serv-
of a state. ing rural areas, regardless of facility
(A) Loans for water or waste disposal location.
(ii) Essential community facilities
facilities will not be made to a city or
must primarily serve rural areas.
town with a population in excess of
(iii) For water or waste disposal fa-
10,000 inhabitants. The population fig-
cilities, the terms rural and rural area
ure is obtained from the most recent
will not include any area in any city or
decennial Census of the United States
town with a population in excess of
(decennial Census). If the applicable
10,000 inhabitants. The population fig-
population figure cannot be obtained
ure is obtained from the most recent
from the most recent decennial Census,
decennial Census. If the applicable pop-
RD will determine the applicable popu-
ulation figure cannot be obtained from
lation figure based on available popu-
the most recent decennial Census, RD
lation data. will determine the applicable popu-
(B) Loans for essential community lation figure based on available popu-
facilities will not be made to a city or lation data.
town with a population in excess of (iv) For essential community facili-
20,000 inhabitants according to the ties, the terms rural and rural area will
most recent decennial Census. not include any area in any city or
(ii) An organization operated on a town with a population in excess of
not-for-profit basis, such as an associa- 20,000 inhabitants. The population fig-
tion, cooperative, and private corpora- ure is obtained from the most recent
tion. Applicants organized under the decennial Census. If the applicable pop-
general profit corporation laws may be ulation figure cannot be obtained from
eligible if they actually will be oper- the most recent decennial Census, RD
ated on a not-for-profit basis under will determine the applicable popu-
their charter, bylaws, mortgage, or lation figure based on available popu-
supplemental agreement provisions as lation data.
may be required as a condition of loan (3) Credit elsewhere. Applicants must
approval. Essential community facility certify in writing and Rural Develop-
applicants other than utility-type ment shall determine and document
must have significant ties with the that the applicant is unable to finance
local rural community. Such ties are the proposed project from their own re-
necessary to ensure to the greatest ex- sources or through commercial credit
tent possible that a facility under pri- at reasonable rates and terms.
vate control will carry out a public (4) Legal authority and responsibility.
purpose and continue to primarily Each applicant must have or will ob-
serve rural areas. Ties may be evi- tain the legal authority necessary for
denced by items such as: constructing, operating, and maintain-
(A) Association with or controlled by ing the proposed facility or service and
a local public body or bodies, or broad- for obtaining, giving security for, and
50
repaying the proposed loan. The appli- and proprietor income is derived from
cant shall be responsible for operating, forestry, wood products, or forest-re-
maintaining, and managing the facil- lated industries such as recreation and
ity, and providing for its continued tourism.
availability and use at reasonable rates (c) Priorities—(1) Truly rural areas.
and terms. This responsibility shall be Rural Development program assistance
exercised by the applicant even though will be directed toward truly rural
the facility may be operated, main- areas and rural communities. Nor-
tained, or managed by a third party mally, priority will not be given to
under contract, management agree- preapplications for projects that will
ment, or written lease. Leases may be serve other than truly rural areas.
used when this is the only feasible way Truly rural areas are areas other than
to provide the service and is the cus- densely settled areas or communities
tomary practice. Management agree- adjacent to, or closely associated with,
ments should provide for at least those a city or town with a population ex-
items listed in guide 24 of this subpart ceeding 10,000 residents for water or
(available in any Rural Development waste disposal assistance, or 20,000 resi-
office). Such contracts, management dents for essential community facility
agreements, or leases must not contain assistance. When determining whether
options or other provisions for transfer a rural area or rural community is ad-
of ownership. jacent to, or closely associated with, a
(5) Refinancing debt. The Government city or town with a population exceed-
shall require an agreement that if at ing 10,000 residents for water and waste
any time it shall appear to the Govern- disposal, or 20,000 residents for essen-
ment that the borrower is able to refi- tial community facility assistance,
nance the amount of the indebtedness minor open spaces such as those cre-
then outstanding, in whole or in part, ated by physical or legal barriers, com-
by obtaining a loan for such purposes mercial or industrial development,
from responsible cooperative or private parks, areas reserved for convenience
credit sources, at reasonable rates and or appearance, or narrow strips of cul-
terms for loans for similar purposes tivated land, will be disregarded. An
and periods of time, the borrower will, area or community shall be considered
upon request of the Government, apply adjacent to or closely related with a
for and accept such loan in sufficient nonrural area when it constitutes for
amount to repay the Government and general, social, and economic purposes
will take all such actions as may be re- a single community having a contig-
quired in connection with such loan. uous boundary.
(6) Expanded eligibility for timber- (2) Project selection process. The fol-
dependent communities in Pacific lowing paragraphs indicate items and
Northwest. In the Pacific Northwest, conditions which must be considered in
defined as an area containing national selecting preapplications for further
forest covered by the Federal document development. When ranking eligible
entitled, ‘‘Forest Plan for a Sustain- preapplications for consideration for
able Economy and a Sustainable Envi- limited funds, Rural Development offi-
ronment,’’ dated July 1, 1993; the popu- cials must consider the priority items
lation limits contained § 1942.17(b) are met by each preapplication and the de-
expanded to include communities with gree to which those priorities are met,
not more than 25,000 inhabitants until and apply good judgement.
September 30, 1998, if: (i) Preapplications. The preapplication
(i) Part or all of the community lies and supporting information submitted
within 100 miles of the boundary of a with it will be used to determine the
national forest covered by the Federal proposed project’s priority for avail-
document entitled, ‘‘Forest Plan for a able funds.
Sustainable Economy and a Sustain- (ii) State Office review. All
able Environment,’’ dated July 1, 1993; preapplications will be reviewed and
and scored and Form AD–622, ‘‘Notice of
(ii) The community is located in a Preapplication Review Action,’’ issued
county in which at least 15 percent of within the time limits in
the total primary and secondary labor § 1942.2(a)(2)(iv) of this subpart. When
51
considering authorizing the develop- (1) Water and Waste Disposal

ment of an application for funding, the preapplications only. The proposed
State Director should consider the re- project is:
maining funds in the State allocation, (i) Needed to alleviate the sudden un-
and the anticipated allocation of funds expected diminution or deterioration
for the next fiscal year as well as the of a water supply, or to meet health or
amount of time necessary to complete sanitary standards which pertain to a
that application. Applicants whose community’s water supply—25 points.
preapplications are found to be ineli- (ii) Required to correct an inadequate
gible will be so advised. These appli- waste disposal system due to unex-
cants will be given adverse notice pected occurrences, or to meet health
through Form AD–622 and advised of or sanitary standards which pertain to
their appeal rights under subpart B of a community’s waste disposal system—
part 1900 of this chapter. Those appli- 25 points.
cants with eligible lower scoring (2) Community Facility
preapplications which obviously cannot preapplication only. The proposed
be funded within an eighteen month pe- project is required either to correct a
riod of time, and are not within 150 per- health or sanitary problem, or to meet
cent of the State’s allocation, should a health or sanitary standard—25
be notified that funds are not avail- points.
able; and requested to advise whether (C) Income priorities. The following
they wish to have their preapplication priorities apply to both Water and
maintained in an active file for future Waste Disposal and Community Facili-
consideration. The State Director may ties preapplications. Points will be dis-
request an additional allocation of tributed as indicated. The median in-
funds from the National Office for such come of the population to be served by
preapplications. Such requests will be the proposed facility is:
considered along with all others on (1) Less than the poverty line for a
hand. family of four, as defined in Section
(iii) Selection priorities. The priorities 673(2) of the Community Services Block
described below will be used by the Grant Act (42 U.S.C. 9902(2)), or less
State Director to rate preapplications. than 80 percent of the statewide non-
The priorities should be applied to metropolitan median household in-
water and waste disposal or commu- come—25 points.
nity facilities preapplications as di- (2) Equal to or more than the poverty
rected. The format found in part I of line and between 80% and 100%, inclu-
guide 26 of this subpart should be fol- sive, of the State’s nonmetropolitan
lowed in scoring each preapplication. A median household income—20 points.
copy of the score sheet should be (D) Other factors. Points will be dis-
placed in the case file for future ref- tributed as indicated.
erence. (1) Water and Waste Disposal
(A) Population priorities. The fol- preapplications only. The proposed
lowing priorities apply to both Water project will: merge ownership, manage-
and Waste Disposal and Community ment, and operation of smaller facili-
Facilities preapplications. Points will ties providing for more efficient man-
be distributed as indicated. agement and economical service; and/
(1) The proposed project is located in or enlarge, extend, or otherwise modify
a rural community having a population existing facilities to provide service to
not in excess of 2,500—25 points. additional rural residents—10 points.
(2) The proposed project is located in (2) Community Facilities
a rural community having a population preapplications only. The purpose of
not in excess of 5,500—20 points. (Points the proposed project is to construct,
under this priority should not be as- enlarge, extend or otherwise improve
signed to a preapplication if points the following types of facilities. (Select
were assigned under paragraph only the factor most applicable to the
(c)(2)(iii) (A)(1) of this section.) proposed project.)
(B) Health priorities. Points will be (i) Public safety—10 points. (Exam-
distributed as indicated. ples include police services and fire,
52
rescue and ambulance services as au- cate that an eligible, high scoring
thorized by subpart C of this part 1942.) preapplication is unfeasible or would
(ii) Health care—5 points. (Examples require an amount of funding from
include clinics, nursing homes, con- Rural Development that exceeds either
valescent facilities, and hospital 25 percent of a State’s current annual
projects designed to make the facility allocation or an amount greater than
conform with life/safety codes, medi- that remaining in the State’s alloca-
care and medicaid requirements, and tion, the State Director may instead
minor expansions needed to meet the select the next lower scoring
immediate requirements of the com- preapplication(s) for futher processing
munity. Points under this authority provided the high scoring applicant is
should not be awarded to a notified of this action and given an op-
preapplication if points were awarded portunity to revise the proposal and re-
under § 1942.17(c)(2)(iii)(B)(2) of this submit it. If it is found that there is no
subpart.) effective way to reduce costs, the State
(3) Water and Waste Disposal and Director, after consultation with appli-
Community Facilities preapplications. cant, may submit a request for an addi-
(i) Applicant is a public body or In- tional allocation of funds for the pro-
dian tribe—5 points. posed project to the National Office.
(ii) Project is located in a ‘‘truly The request should be submitted dur-
rural area’’ as described in § 1942.17(c)(1) ing the fiscal year in which obligation
of this subpart—10 points. is anticipated. Such request will be
(iii) Amount of joint financing com- considered along with all others on
mitted to the project is: hand. A written justification must be
(a) 20% or more private, local or prepared and placed in the project file
state funds except federal funds chan- when an eligible preapplication with a
neled through a state agency—10 higher rating is not selected for further
points. processing. The State Director will no-
(b) 5%–19% private, local or state tify the District Director of the results
funds except federal funds channeled of the review action. The State Direc-
through a state agency—5 points. tor will return the preapplication in-
(E) In certain cases the State Direc- formation with an authorization for
tor may assign up to 15 points to a the District Director to prepare and
preapplication, in addition to those issue Form AD–622 in accordance with
that may be scored under paragraphs § 1942.2(a)(2)(iv) of this subpart. Pri-
(c)(2)(iii) (A) through (D), of this sec- ority will be given to those
tion. These points are primarily in- preapplications and applications for
tended to address an unforeseen exi- funding which meet criteria in
gency or emergency, such as the loss of § 1942.17(c)(2)(iii)(A) (1) or (2); and the
a community facility due to accident criteria in § 1942.17(c) (2)(iii)(B)(1) (i) or
or natural disaster or the loss of joint (ii) or (B)(2) of this subpart.
financing if Rural Development funds (v) Application development. Applica-
are not committed in a timely fashion. tions should be developed expeditiously
However, the points may also be following good management practices.
awarded to projects in order to improve Applications that are not developed in
compatibility/coordination between a reasonable period of time taking into
Rural Development’s and other agen- account the size and complexity of the
cies’ selection systems and to assist proposed project may be removed from
those projects that are the most cost the State’s active file. Applicants will
effective. A written justification must be consulted prior to taking such ac-
be prepared and placed in the project tion.
file each time the State Director as- (vi) Project obligations. To ensure effi-
signs these points. cient use of resources, obligations
(iv) Results of State Office review. should occur in a timely fashion
After completing the review, the State throughout the fiscal year. Projects
Director will normally select the eligi- may be obligated as their applications
ble preapplications with the highest are completed and approved.
scores for further processing. In cases (vii) Requests for additional funding.
where preliminary cost estimates indi- All requests for additional allocations
53
of funds submitted to the National Of- (4) Hydroelectric generating facilities

fice must follow the formats found in and related connecting systems and ap-
parts I and II of guide 26. In selecting purtenances, when not eligible for
projects for funding at the National Of- Rural Electrification Administration
fice level, additional points may be (REA) financing;
scored based on the priority assigned (5) Supplemental and supporting
to the project by the State Office. structures for other rural electrifica-
These points will be scored in the man- tion or telephone systems (including
ner shown below. Only the three high- facilities such as headquarters and of-
est priority projects can score points. fice buildings, storage facilities, and
In addition, the Administrator may as- maintenance shops) when not eligible
sign up to 15 additional points to ac- for Rural Electrification Administra-
count for items such as geographic dis- tion financing. Additionally, a bor-
tribution of funds and emergency con- rower is permitted to use up to 10 per-
ditions caused by economic problems cent of the amount provided under this
or natural disasters. subpart to construct, improve, or ac-
Priority Points
quire broadband infrastructure related
to the project financed, subject to the
1 ..................................................................... 5 requirements of 7 CFR part 1980, sub-
2 ..................................................................... 3 part M.
3 ..................................................................... 1
(6) Natural gas distribution systems;
(viii) Cost overruns. A preapplication and
may receive consideration for funding (7) Industrial park sites, but only to
before others at the State Office level the extent of land acquisition and nec-
or at the National Office level, if funds essary site preparation, including ac-
are not available in the State Office, cess ways and utility extensions to and
when it is a subsequent request for a throughout the site. Funds may not be
previously approved project which has used in connection with industrial
encountered cost overruns due to high parks to finance on-site utility sys-
bids or unexpected construction prob- tems, or business and industrial build-
lems that cannot be reduced by nego- ings.
tiations, redesign, use of bid alter- (C) Otherwise improve includes but is
natives, rebidding or other means. not limited to the following:
(d) Eligible loan purposes. (1) Funds (1) The purchase of major equipment,
may be used: such as solid waste collection trucks
(i) To construct, enlarge, extend, or and X-ray machines, which will in
otherwise improve water or waste dis- themselves provide an essential service
posal and other essential community to rural residents;
facilities providing essential service (2) The purchase of existing facilities
primarily to rural residents and rural when it is necessary either to improve
businesses. Rural businesses would in- or to prevent loss of service;
clude facilities such as educational and (3) Payment of tap fees and other
other publicly owned facilities. utility connection charges as provided
(A) Water or waste disposal facilities in- in utility purchase contracts prepared
clude water, sanitary sewerage, solid under § 1942.18(f) of this subpart.
waste disposal, and storm waste-water (ii) To construct or relocate public
facilities. buildings, roads, bridges, fences, or
(B) Essential community facilities are utilities, and to make other public im-
those public improvements requisite to provements necessary to the successful
the beneficial and orderly development operation or protection of facilities au-
of a community operated on a non- thorized in paragraph (d)(1)(i) of this
profit basis including but not limited section.
to: (iii) To relocate private buildings,
(1) Health services; roads, bridges, fences, or utilities, and
(2) Community, social, or cultural other private improvements necessary
services; to the successful operation or protec-
(3) Transportation facilities, such as tion of facilities authorized in para-
streets, roads, and bridges; graph (d)(1)(i) of this section.
54
(iv) To pay the following expenses, (ii) All Rural Development loan funds
but only when such expenses are a nec- are restored at a later date for pur-
essary part of a loan to finance facili- pose(s) for which they were obligated.
ties authorized in paragraphs (d)(1)(i), (v) To pay obligations for construc-
(d)(1)(ii) and (d)(1)(iii) of this section. tion incurred before loan approval.
(A) Reasonable fees and costs such as Construction work should not be start-
legal, engineering, architectural, fiscal ed and obligations for such work or
advisory, recording, environmental im- materials should not be incurred before
pact analyses, archeological surveys the loan is approved. However, if there
and possible salvage or other mitiga- are compelling reasons for proceeding
tion measures, planning, establishing with construction before loan approval,
or acquiring rights. applicants may request Rural Develop-
(B) Interest on loans until the facil- ment approval to pay such obligations.
ity is self-supporting, but not for more Such requests may be approved if
than three years unless a longer period Rural Development determines that:
is approved by the National Office; in- (A) Compelling reasons exist for in-
terest on loans secured by general obli- curring obligations before loan ap-
gation bonds until tax revenues are proval; and
available for payment, but not for (B) The obligations will be incurred
more than two years unless a longer for authorized loan purposes; and
period is approved by the National Of- (C) Contract documents have been
fice; and interest on interim financing, approved by Rural Development; and
including interest charges on interim (D) All environmental requirements
financing from sources other than applicable to Rural Development and
Rural Development. the applicant have been met; and
(C) Costs of acquiring interest in (E) The applicant has the legal au-
land; rights, such as water rights, thority to incur the obligations at the
leases, permits, rights-of-way; and time proposed, and payment of the
other evidence of land or water control debts will remove any basis for any me-
necessary for development of the facil- chanic, material, or other liens that
ity. may attach to the security property.
(D) Purchasing or renting equipment Rural Development may authorize pay-
necessary to install, maintain, extend, ment of such obligations at the time of
protect, operate, or utilize facilities. loan closing. Rural Development’s au-
(E) Initial operating expenses for a thorization to pay such obligations,
period ordinarily not exceeding one however, is on the condition that it is
year when the borrower is unable to not committed to make the loan; it as-
pay such expenses. sumes no responsibility for any obliga-
(F) Refinancing debts incurred by, or tions incurred by the applicant; and
on behalf of, a community when all of the applicant must subsequently meet
the following conditions exist: all loan approval requirements. The ap-
(1) The debts being refinanced are a plicant’s request and Rural Develop-
secondary part of the total loan; ment authorization for paying such ob-
(2) The debts are incurred for the fa- ligations shall be in writing. If con-
cility or service being financed or any struction is started without Rural De-
part thereof; velopment approval, post approval in
(3) Arrangements cannot be made accordance with this section may be
with the creditors to extend or modify considered.
the terms of the debts so that a sound (2) Funds may not be used to finance:
basis will exist for making a loan. (i) On-site utility systems or business
(G) Prepay costs for which Rural De- and industrial buildings in connection
velopment grant funds were obligated with industrial parks.
provided there is: (ii) Facilities to be used primarily for
(1) No conflict with the loan resolu- recreation purposes.
tion, State statutes, or any other loan (iii) Community antenna television
requirements; and services or facilities.
(2) Full documentation showing that: (iv) Electric generation or trans-
(i) Loan funds will only be utilized on mission facilities or telephone systems,
a temporary basis; and except as provided in paragraph
55
(d)(1)(i)(B)(4), or (d)(1)(i)(B)(5) of this (3) This does not preclude:

section; or extensions to serve a par- (i) Financing or constructing projects
ticular essential community facility as in phases when it is not practical to fi-
provided in paragraph (d)(1)(ii) or nance or construct the entire project
(d)(1)(iii) of this section. at one time; and
(v) Facilities which are not modest in (ii) Financing or constructing facili-
size, design, and cost. ties where it is not economically fea-
(vi) Loan or grant finder’s fees. sible to serve the entire area, provided
(vii) Projects located within the economic feasibility is determined on
Coastal Barriers Resource System that the basis of the entire system and not
do not qualify for an exception as de- by considering the cost of separate ex-
fined in section 6 of the Coastal Bar- tensions to or parts thereof; the appli-
riers Resource Act, Pub. L. 97–348.
cant publicly announces a plan for ex-
(viii) New combined sanitary and
tending service to areas not initially
storm water sewer facilities.
receiving service from the system; and
(ix) That portion of a water and/or
waste disposal facility normally pro- potential users located in the areas not
vided by a business or industrial user. to be initially served receive written
(e) Facilities for public use. All facili- notice from the applicant that service
ties financed under the provisions of will not be provided until such time as
this subpart shall be for public use. it is economically feasible to do so, and
(1) Utility-type service facilities will (iii) Extending services to industrial
be installed so as to serve any user areas when service is made available to
within the service area who desires users located along the extensions.
service and can be feasibly and legally (4) The State Director will determine
served. Applicants and borrowers must that, when feasibly and legally pos-
obtain written concurrence of the sible, inequities within the proposed
Rural Development prior to refusing project’s service area for the same type
service to such user. Upon failure to service proposed (i.e., water or waste
provide service which is reasonable and disposal) will be remedied by the owner
legal, such user shall have direct right on or before completion of the project
of action against the applicant/bor- that includes Rural Development fund-
rower. A notice of the availability of ing. Inequities are defined as flagrant
this service should be given by the ap- variations in availability, adequacy or
plicant/borrower to all persons living quality of service. User rate schedules
within the area who can feasibly and for portions of existing systems that
legally be served by the phase of the were developed under different financ-
project being financed. ing, rates, terms or conditions, as de-
(i) If a mandatory hookup ordinance termined by the State Director, do not
will be adopted, the required bond ordi- necessarily constitute inequities.
nance or resolution advertisement will (5) Before a loan is made to an appli-
be considered adequate notification. cant other than a public body, for
(ii) When any portion of the income other than utility type projects, the ar-
will be derived from user fees and a ticles of incorporation or loan agree-
mandatory hookup ordinance will not ment will include a condition similar
be adopted, each potent user will be af- to the following:
forded an opportunity to request serv-
ice by signing a Users Agreement. In the event of dissolution of this corpora-
tion, or in the event it shall cease to carry
Those declining service will be afforded out the objectives and purposes herein set
an opportunity to sign a statement to forth, all business, property, and assets of
such effect. Rural Development has the corporation shall go and be distributed
guides available for these purposes in to one or more nonprofit corporations or
all Rural Development offices. public bodies as may be selected by the board
(2) In no case will boundaries for the of directors of this corporation and approved
by at least 75 percent of the users or mem-
proposed service area be chosen in such
bers to be used for, and devoted to, the pur-
a way that any user or area will be ex- pose of a community facility project or other
cluded because of race, color, religion, purpose to serve the public welfare of the
sex, marital status, age, handicap, or community. In no event shall any of the as-
national origin. sets or property, in the event of dissolution
56
thereof, go or be distributed to members, di- nonmetropolitan median household in-
rectors, stockholders, or others having finan- come.
cial or managerial interest in the corpora- (3) Intermediate rate. The inter-
tion either for the reimbursement of any
sum subscribed, donated or contributed by
mediate interest rate will be set at the
such members or for any other purposes, pro- poverty line rate plus one-half of the
vided that nothing herein shall prohibit the difference between the poverty line
corporation from paying its just debts. rate and the market rate, not to exceed
7 percent per annum. It will apply to
(f) Rates and terms—(1) General. Each
loans that do not meet the require-
loan will bear interest at the rate pre-
scribed in RD Instruction 440.1, exhibit ments for the poverty line rate and for
B (available in any Rural Development which the median household income of
office). The interest rates will be set by the service area is below the poverty
Rural Development at least for each line or not more than 100 percent of the
quarter of the fiscal year. All rates will nonmetropolitan median household in-
be adjusted to the nearest one-eighth come of the State.
of 1 percent. The applicant may submit (4) Market rate. The market interest
a written request prior to loan closing rate will be set using as guidance the
that the interest rate charged on the average of the Bond Buyer Index for
loan be the lower of the rate in effect the four weeks prior to the first Friday
at the time of loan approval or the rate of the last month before the beginning
in effect at the time of loan closing. If of the quarter. The market rate will
the interest rate is to be that in effect apply to all loans that do not qualify
at loan closing, the interest rate for a different rate under paragraph
charged on a loan involving multiple (f)(2) or (f)(3) of this section. It may be
advances of Rural Development funds, adjusted as provided in paragraph (f)(5)
using temporary debt instruments, of this section.
shall be that in effect on the date when (5) Prime farmland. For essential com-
the first temporary debt instrument is munity facilities loans, the rate indi-
issued. If no written request is received cated by paragraphs (f)(2), (f)(3) or (f)(4)
from the applicant prior to loan clos- of this section will be increased by two
ing, the interest rate charged on the per centum per annum if the project
loan will be the rate in effect at the being financed will involve the use of,
time of loan approval. or construction on, prime or unique
(2) Poverty line rate. The poverty line farmland in accordance with RD In-
interest rate will not exceed 5 per cen- struction 440.1, exhibits B and J (avail-
tum per annum. The provisions of para- able in any Rural Development office).
graph (f)(2)(i) of this section do not (6) Income determination. The income
apply to health care and related facili- data used to determine median house-
ties that provide direct health care to hold income should be that which most
the public. Otherwise, all loans must accurately reflects the income of the
comply with the following conditions: service area. The service area is that
(i) The primary purpose of the loan is area reasonably expected to be served
to upgrade existing facilities or con- by the facility being financed by Rural
struct new facilities required to meet Development. The median household
applicable health or sanitary stand- income of the service area and the non-
ards. Documentation will be obtained metropolitan median household income
from the appropriate regulatory agen- of the State will be determined from 5-
cy with jurisdiction to establish the year income data from the American
standard, to verify that a bonafide Community Survey (ACS) or, if needed,
standard exists, what that standard is, other Census Bureau data. If there is
and that the proposed improvements reason to believe that the ACS or other
are needed and required to meet the Census Bureau data does not accu-
standard; and rately represent the median household
(ii) The median household income of income within the area to be served,
the service area is below the poverty the reasons will be documented and the
line for a family of four, as defined in applicant may furnish, or Rural Devel-
section 673(2) of the Community Serv- opment may obtain, additional infor-
ices Block Grant Act (42 U.S.C. 9902(2)), mation regarding such median house-
or below 80 percent of the Statewide hold income data. Information must
57
consist of reliable data from local, re- (D) Make any capital improvements
gional, State or Federal sources or except those approved by Rural Devel-
from a survey conducted by a reliable opment determined to be essential to
impartial source. The nonmetropolitan the repayment of the loan or to the ob-
median household income of the State taining of adequate security thereof.
may only be updated on a national (E) Accelerate the payment of other
basis by the Rural Development Na- debts.
tional Office. This will be done only (ii) Payment date. Loan payments will
when median household income data be scheduled to coincide with income
for the same year for all Bureau of the availability and be in accordance with
Census areas is available from the Bu- State law. If consistent with the fore-
reau of the Census or other reliable
going, monthly payments will be re-
sources. Bureau of the Census areas
quired and will be enumerated in the
would include areas such as: Counties,
bond, other evidence of indebtedness,
County Subdivisions, Cities, Towns,
Townships, Boroughs, and other places. or other supplemental agreement. How-
(7) Repayment terms. The loan repay- ever, if State law only permits prin-
ment period shall not exceed the useful cipal plus interest (P&I) type bonds,
life of the facility, State statute or 40 annual or semiannual payments will be
years from the date of the note(s) or used. Insofar as practical monthly pay-
bond(s), whichever is less. Where ments will be scheduled one full month
FmHA or its successor agency under following the date of loan closing; or
Public Law 103–354 grant funds are used semiannual or annual payments will be
in connection with a Rural Develop- scheduled six or twelve full months, re-
ment loan, the loan will be for the spectively, following the date of loan
maximum term permitted by this sub- closing or any deferment period. Due
part, State statute, or the useful life of dates falling on the 29th, 30th or 31st
the facility, whichever is less, unless day of the month will be avoided.
there is an exceptional case where cir- (g) Security. Loans will be secured by
cumstances justify making a Rural De- the best security position practicable
velopment loan for less than the max- in a manner which will adequately pro-
imum term permitted. In such cases, tect the interest of Rural Development
the reasons must be fully documented. during the repayment period of the
In all cases, including those in which loan. Specific requirements for secu-
the Rural Development is jointly fi- rity for each loan will be included in a
nancing with another lender, the Rural letter of conditions.
Development payments of principal (1) Joint financing security. For
and interest should approximate amor- projects utilizing joint financing, when
tized installments.
adequate security of more than one
(i) Principal payments may be de-
type is available, the other lender may
ferred in whole or in part for a period
take one type of security with the
not to exceed 36 months following the
date the first interest installment is United States taking another type. For
due. If for any reason it appears nec- projects utilizing joint financing with
essary to permit a longer period of the same security to be shared by the
deferment, the State Director may au- United States and another lender, the
thorize such deferment with the prior United States will obtain at least a
approval of the National Office. parity position with the other lender.
Deferments of principal will not be A parity position is to ensure that with
used to: joint security, in the event of default,
(A) Postpone the levying of taxes or each lender will be affected on a pro-
assessments. portionate basis. A parity position will
(B) Delay collection of the full rates conform with the following unless an
which the borrower has agreed to exception is granted by the National
charge users for its services as soon as Office:
major benefits or the improvements (i) Terms. It is not necessary for loans
are available to those users. to have the same repayment terms to
(C) Create reserves for normal oper- meet the parity requirements. Loans
ation and maintenance. made by other lenders involved in joint
58
financing with the United States for fa- lenders before one lender makes a pro-
cilities should be scheduled for repay- tective advance.
ment on terms similar to those cus- (2) Public bodies. Loans to such bor-
tomarily used in the State for financ- rowers will be evidenced by notes,
ing such facilities. bonds, warrants, or other contractual
(ii) Use of trustee or other similar pay- obligations as may be authorized by
ing agent. The use of a trustee or other relevant State statutes and by bor-
similar paying agent by the other lend- rower’s documents, resolutions, and or-
er in a joint financing arrangement is dinances.
acceptable to the United States. A (i) Utility-type facilities such as
trustee or other similar paying agent water and sewer systems, natural gas
will not normally be used for the distribution systems, electric systems,
United States portion of the funding etc., will be secured by:
unless required to comply with State (A) The full faith and credit of the
law. The responsibilities and authori- borrower when the debt is evidenced by
ties of any trustee or other similar general obligation bonds; and/or
paying agent on projects that include (B) Pledges of taxes or assessments;
United States funds must be clearly and/or
specified by written agreement and ap- (C) Pledges of facility revenue and,
proved by the State Director and Re- when it is the customary financial
gional Attorney. The United States practice in the State, liens will be
must be able to deal directly with the taken on the interest of the applicant
borrower to enforce the provisions of in all land, easements, rights-of-way,
loan and grant agreements and perform water rights, water purchase contracts,
necessary servicing actions. water sales contracts, sewage treat-
ment contracts, and similar property
(iii) Regular payments. In the event
rights, including leasehold interest,
adequate funds are not available to
used or to be used in connection with
meet regular installments on parity
the facility whether owned at the time
loans, the funds available will be ap-
the loan is approved or acquired with
portioned to the lenders based on the
loan funds; and/or
respective current installments of prin-
(D) In those cases involving water
cipal and interest due.
and waste disposal projects where there
(iv) Disposition of property. Funds ob- is a substantial number of other than
tained from the sale or liquidation of full-time users and facility costs result
secured property or fixed assets will be in a higher than reasonable rate for
apportioned to the lenders on the basis such full-time users, the loan will be
of the pro rata amount loaned, but not secured by the full faith and credit of
to exceed their respective outstanding the borrower or by an assignment or
balances; provided, however, funds ob- pledge of taxes or assessments from
tained from such sale or liquidation for public bodies or other organizations
a project that included grant funds will having the authority to issue bonds or
be apportioned as may be required by pledge such taxes or assessments.
the grant agreement. (ii) Solid waste systems. The type of se-
(v) Protective advances. Protective ad- curity required will be based on State
vances are payments made by a lender law and what is determined adequate
for items such as insurance or taxes, to to protect the interest of the United
protect the financial interest of the States during the repayment period of
lender, and charged to the borrower’s the loan.
loan account. To the extent consistent (iii) Other essential community facilities
with State law and customary lending other than utility type, such as those
practices in the area, repayment of for public health and safety, social, and
protective advances made by either cultural needs and the like will meet
lender, for the mutual protection of the following security requirements:
both lenders, should receive first pri- (A) Such loans will be secured by one
ority in apportionment of funds be- or a combination of the following and
tween the lenders. To ensure agree- in the following order of preference:
ment between lenders, efforts should be (1) General obligation bonds.
made to obtain the concurrence of both (2) Assessments.
59
(3) Bonds which pledge other taxes. (i) The applicant is a new organiza-
(4) Bonds pledging revenues of the fa- tion or one that has not operated the
cility being financed when such bonds type of facility being proposed.
provide for the mandatory levy and (ii) There is a demonstration of ex-
collection of taxes in the event reve- ceptional community support such as
nues later become insufficient to prop- substantial financial contributions,
erly operate and maintain the facility and aggressive leadership in the forma-
and to retire the loan. tion of the organization and proposed
(5) Assignment of assured income project which indicates a commitment
which will be available for the life of of the entire community.
the loan, from such sources as insur- (iii) The State Director has deter-
ance premium rebates, income from en- mined that adequate and dependable
dowments, irrevocable trusts, or com- revenues will be available to meet all
mitments from industries, public bod- operation expenses, debt repayment,
ies, or other reliable sources. and the required reserve.
(6) Liens on real and chattel property (iv) Prior National Office review and
when legally permissible and an assign- concurrence is obtained.
ment of the borrowers income from ap-
(B) Real estate and chattel property
plicants who have been in existence
taken as security in accordance with
and are able to present evidence of a fi-
paragraphs (g)(2)(iii)(A) (6) through (9)
nancially successful operation of a
of this section:
similar facility for a period of time suf-
(1) Ordinarily will include the prop-
ficient to indicate project success. Na-
erty that is used in connection with
tional Office concurrence is required
the facility being financed; and
when the applicant has been in exist-
ence for less than five years or has not (2) Will have an as-developed present
operated on a financially successful market value determined by a qualified
basis for five years immediately prior appraiser equal to or exceeding the
to loan application. amount of the loan to be obtained plus
(7) Liens on real and chattel property any other indebtedness against the pro-
when legally permissible and an assign- posed security; and
ment of income from an organization (3) May have one of the lien require-
receiving Health and Human Services ments deleted when the loan approval
(HHS) operating grants under the official determines that the loan will
‘‘Memorandum of Understanding Be- be adequately secured with a lien on ei-
tween Health Resources and Services ther the real estate or chattel prop-
Administration, U.S. Department of erty.
Health and Human Services and Rural (C) When security is not available in
Development, U.S. Department of Agri- accordance with paragraphs
culture’’ (see RD Instruction 2000–T, (g)(2)(iii)(A) (1) through (5) of this sec-
available in any Rural Development of- tion and State law precludes securing
fice.) the loan with liens on real or chattel
(8) Liens on real and chattel property property, the loan will be secured in
when legally permissible and an assign- the best manner consistent with State
ment of income from an organization law and customary security taken by
proposing a facility whose users receive private lenders in the State, such as
reliable income from programs such as revenue bonds, and any other security
social security, supplemental security the loan approval official determines
income (SSI), retirement plans, long- necessary for a sound loan. Such loans
term insurance annuities, medicare or will otherwise meet the requirements
medicaid. Examples are homes for the of (g)(2)(iii)(A) (6) through (9) of this
handicapped or institutions whose cli- section as appropriate.
entele receive State or local govern- (3) Other-than-public bodies. Loans to
ment assistance. other-than-public body applicants will
(9) When the applicant cannot meet be secured as follows:
the criteria in paragraph (g)(2)(iii)(A) (i) Utility-type facilities eligible for
(1) through (8) of this section, such pro- Rural Development assistance under
posals may be considered when all the paragraph (d) of this section such as
following are met: water and sewer systems, natural gas
60
distribution systems, electric systems, States during the repayment period of

etc., will be secured as follows: the loan.
(A) Assignments of borrower income (iii) Essential community facilities
will be taken and perfected by filing, if other than utility type such as those
legally permissable; and for public health and safety, social, and
(B) A lien will be taken on the inter- cultural needs and the like will meet
est of the applicant in all land, ease- the following security requirements:
ments, rights-of-way, water rights, (A) Such loans will be secured by one
water purchase contracts, water sales or a combination of the following and
contracts, sewage treatment contracts in the following order of preference:
and similar property rights, including (1) An assignment of assured income
leasehold interest, used, or to be used that will be available for the life of the
in connection with the facility whether loan, from sources such as insurance
owned at the time the loan is approved premium rebates, income from endow-
or acquired with loan funds. In unusual ments, irrevocable trusts, or commit-
circumstances where it is not feasible ments from industries, public bodies,
to obtain a lien on such land (such as or other reliable sources.
land rights obtained from Federal or
(2) Liens on real and chattel property
local government agencies, and from
with an assignment of income from ap-
railroads) and the loan approval offi-
plicants who have been in existence
cial ‘determines that the interest of
and are able to present evidence of a fi-
the United States otherwise is secured
nancially successful operation of a
adequately, the lien requirement may
similar facility for a period of time suf-
be omitted as to such land rights.
(C) When the loan is approved or the ficient to indicate project success. Na-
acquisition of real property is subject tional Office concurrence is required
to an outstanding lien indebtedness, when the applicant has been in exist-
the next highest priority lien obtain- ence for less than five years or has not
able will be taken if the loan approval operated on a financially successful
official determines that the loan is basis for at least the five years imme-
adequately secured. diately prior to loan application.
(D) Other security. Promissory notes (3) Liens on real and chattel property
from individuals, stock or membership and an assignment of income from an
subscription agreements, individuals organization receiving HHS operating
member’s liability agreements, or grants under the ‘‘Memorandum of Un-
other evidences of debt, as well as derstanding Between Health Resources
mortgages or other security instru- and Services Administration, U.S. De-
ments encumbering the private prop- partment of Health and Human Serv-
erty of members of the association may ices and Rural Development, U.S. De-
be pledged or assigned to the United partment of Agriculture’’ (see RD In-
States as additional security in any struction 2000–T, available in any
case in which the interest of the United Rural Development office).
States will not be otherwise adequately (4) Liens on real and chattel property
protected. when legally permissible and an assign-
(E) In those cases where there is a ment of income from an organization
substantial number of other than full- proposing a facility whose users receive
time users and facility costs result in a reliable income from programs such as
higher than reasonable rate for such social security, supplemental security
full-time users, the loan will be secured income (SSI), retirement plans, long-
by an assignment or pledge of general term insurance annuities, medicare or
obligation bonds, taxes, or assessments medicaid. Examples are homes for the
from public bodies or other organiza- handicapped or institutions whose cli-
tions having the authority to issue entele receive State or local govern-
bonds or pledge such taxes, or assessment assistance.
ments. (5) When the applicant cannot meet
(ii) Solid waste systems. The type of se- the criteria in paragraphs (g)(3)(iii)(A)
curity required will be based on State (1) through (4) of this section, such pro-
law and what is determined adequate posals may be considered when all the
to protect the interest of the United following are met:
61
(i) The applicant is a new organiza- vided to a typical rural residential

tion or one that has not operated the dwelling.
type of facility being proposed. (1) Financial feasibility reports. All ap-
(ii) There is a demonstration of ex- plicants will be expected to provide a
ceptional community support such as financial feasibility report prepared by
substantial financial contributions, a qualified firm or individual. These fi-
and aggressive leadership in the forma- nancial feasibility reports will nor-
tion of the organization and proposed mally be:
project which indicates a commitment (i) Included as part of the prelimi-
of the entire community. nary engineer/architectural report
(iii) The State Director has deter- using guides 6 through 10 as applicable;
mined that adequate and dependable or
revenues will be available to meet all (ii) Prepared by a qualified firm or
operation expenses, debt repayment, individual not having a direct interest
and the required reserve. in the management or construction of
(iv) Prior National Office review and the facility using guide 5 when:
concurrence is obtained. (A) The project will significantly af-
(6) Additional security may be taken fect the applicant’s financial oper-
as determined necessary by the loan ations and is not a utility-type facility
approval official. but is dependent on revenues from the
(B) Real estate and chattel property facility to repay the loan; or
taken as security: (B) It is specifically requested by
(1) Ordinarily will include the prop- Rural Development.
erty that is used in connection with (2) Applicants for loans for utility-type
the facility being financed; and facilities dependent on users fees for
(2) Will have an as-developed present debt payment shall base their income
market value determined by a qualified and expense forecast on realistic user
appraiser equal to or exceeding the estimates in accordance with the fol-
amount of the loan to be obtained plus lowing:
any other indebtedness against the pro- (i) In estimating the number of users
posed security; and and establishing rates or fees on which
(3) May have one of the lien require- the loan will be based for new systems
ments deleted when the loan approval and for extensions or improvements to
official determines that the loan will existing systems, consideration should
be adequately secured with a lien on ei- be given to the following:
ther the real estate or the chattel prop- (A) An estimated number of max-
erty. imum initial users should not be used
(h) Economic feasibility requirements. when setting user fees and rates since
All projects financed under the provi- it may be several years before all resi-
sions of this section must be based on dents in the community will need the
taxes, assessments, revenues, fees, or services provided by the system. In es-
other satisfactory sources of revenues
tablishing rates a realistic number of
in an amount sufficient to provide for
initial users should be employed.
facility operation and maintenance, a
reasonable reserve, and debt payment. (B) User agreements from individual
An overall review of the applicant’s fi- vacant property owners will not be
nancial status, including a review of all considered when determining project
assets and liabilities, will be a part of feasibility unless:
the docket review process by the Rural (1) The owner has plans to develop
Development staff and approval offi- the property in a reasonable period of
cial. If the primary use of the facility time and become a user of the facility;
is by business and the success or fail- and
ure of the facility is dependent on the (2) The owner agrees in writing to
business, then the economic viability make a monthly payment at least
of that business must be assessed. The equal to the proportionate share of
number of users for a rural business debt service attributable to the vacant
will be based on equivalent dwelling property until the property is devel-
units, which is the level of service pro- oped and the facility is utilized on a
62
regular basis. A bond or escrowed secu- tributions, the contribution, member-

rity deposit must be provided to guar- ship fee or other fees that may be im-
antee this monthly payment and to posed are not a requirement of Rural
guarantee an amount at least equal to Development under this section. How-
the owner’s proportionate share of con- ever, borrowers do have an additional
struction costs. If a bond is provided, it responsibility relating to generating
must be executed by a surety company sufficient revenues as set forth in para-
that appears on the Treasury Depart- graph (n)(2)(iii) of this section.
ment’s most current list (Circular 570, (C) Enforceable user agreement. Ex-
as amended) and be authorized to cept for users presently receiving serv-
transact business in the State where ice, an enforceable user agreement
the project is located. The guarantee with a penalty clause is required unless
shall be payable jointly to the bor- State statutes or local ordinances re-
rower and the Rural Development; and quire mandatory use of the system and
(3) Such guarantee will mature not the applicant or legal entity having
later than 4 years from the date of exe- such authority agrees in writing to en-
cution and will be finally due and pay- force such statutes or ordinances.
able upon default of a monthly pay- (iii) In those cases where all or part
ment or at maturity, unless the prop- of the borrower’s debt payment reve-
erty covered by the guarantee has been nues will come from user fees, appli-
developed and the facility is being uti- cants must provide a positive program
lized on a regular basis. to encourage connection by all users as
(C) Income from other vacant prop- soon as service is available. The pro-
erty owners will be considered only as gram will be available for review and
extra income. approval by Rural Development before
(ii) Realistic user estimates will be loan closing or commencement of con-
established as follows: struction, whichever occurs first. Such
(A) Meaningful potential user cash a program shall include:
contributions. Potential user cash con- (A) An aggressive information pro-
tributions are required except: gram to be carried out during the con-
(1) For users presently receiving serv- struction period. The borrower should
ice, or send written notification to all signed
(2) Where Rural Development deter- users at least three weeks in advance
mines that the potential users as a of the date service will be available,
whole in the applicant’s service area stating the date users will be expected
cannot make cash contributions, or to have their connections completed,
(3) Where State statutes or local or- and the date user charges will begin.
dinances require mandatory use of the (B) Positive steps to assure that in-
system and the applicant or legal enti- stallation services will be available.
ty having such authority agrees in These may be provided by the con-
writing to enforce such statutes, or or- tractor installing the system, local
dinances. plumbing companies, or local contrac-
(B) The amount of cash contributions tors.
required in paragraph (h)(2)(ii)(A) of (C) Aggressive action to see that all
this section will be set by the applicant signed users can finance their connec-
and concurred in by Rural Develop- tions. This might require collection of
ment. Contribtions should be an sufficient user contributions to finance
amount high enough to indicate sin- connections. Extreme cases might ne-
cere interest on the part of the poten- cessitate additional loan funds for this
tial user, but not so high as to preclude purpose; however, loan funds should be
service to low income families. Con- used only when absolutely necessary
tributions ordinarily should be an and when approved by Rural Develop-
amount approximating one year’s min- ment prior to loan closing.
imum user fee, and shall be paid in full (3) Utility-type facilities for new devel-
before loan closing or commencement oping communities or areas. Developers
of construction, whichever occurs first. are normally expected to provide util-
Once economic feasibility is ity-type facilities in new or developing
ascertained based on a demonstration areas and such facilities shall be in-
of meaningful potential user cash con- stalled in compliance with appropriate
63
State statutes and regulations. Rural other bonds which pledge the full faith
Development will be considered to an and credit of the political subdivision
eligible applicant in such cases when are used, or special assessment bonds
failure to complete development would are used, and if such bonds provide for
result in an adverse economic condi- the annual collection of sufficient
tion for the rural area (not the commu- taxes or assessments to cover debt
nity being developed); the proposal is service, operation and maintenance,
necessary to the success of an area de- and a reasonable amount for emer-
velopment plan; and loan repayment gencies and to offset the possible non-
can be assured by: payment of taxes or assessments by a
(i) The applicant already having suf- percentage of the property owners, or a
ficient assured revenues to repay the statutory method is provided to pre-
loan; or vent the incurrence of a deficiency.
(ii) Developers providing a bond or (2) Other than general obligation or spe-
escrowed security deposit as a guar- cial assessment bonds. Each borrower
antee sufficient to meet expenses at- will be required to establish and main-
tributable to the area in question until tain reserves sufficient to assure that
a sufficient number of the building loan installments will be paid on time,
sites are occupied and connected to the for emergency maintenance, for exten-
facility to provide enough revenues to sions to facilities, and for replacement
meet operating, maintenance, debt of short-lived assets which have a use-
service, and reserve requirements. ful life significantly less than the re-
Such guarantees from developers will payment period of the loan. It is ex-
meet the requirements in paragraph pected that borrowers issuing bonds or
(h)(2)(i)(B) of this section; or other evidences of debt pledging facil-
(iii) Developers paying cash for the ity revenues as security will ordinarily
increased capital cost and any in- plan their reserve to provide for a total
creased operating expenses until the reserve in an amount at least equal to
developing area will support the in- one average loan installment. It is also
creased costs; or expected the ordinarily such reserve
(iv) The full faith and credit of a pub- will be accumulated at the rate of at
lic body where the debt is evidenced by least one-tenth of the total each year
general obligation bonds; or until the desired level is reached.
(v) The loan is to a public body evi-
(j) General requirements—(1) Member-
denced by a pledge of tax assessments;
ship authorization. For organizations
or
other than public bodies, the member-
(vi) The user charges can become a
ship will authorize the project and its
tax lien upon the property being served
and income from such lien can be col- financing except that the State Direc-
lected in sufficient time to be used for tor may, with the concurrence of OGC,
its intended purposes. accept the loan resolution without
(i) Reserve requirements. Provision for such membership authorization when
the accumulation of necessary reserves State statutes and the organization’s
over a reasonable period of time will be charter and bylaws do not require such
included in the loan documents and in authorization; and
assessments, tax levies, or rates (i) The organization is well estab-
charged for services. In those cases lished and is operating with a sound fi-
where statutes providing for extin- nancial base; or
guishing assessment liens of public (ii) For utility-type projects the
bodies when properties subject to such members of the organization have all
liens are sold for delinquent State or signed an enforceable user agreement
local taxes, special reserves will be es- with a penalty clause and have made
tablished and maintained for the pro- the required meaningful user cash con-
tection of the borrower’s assessment tribution, except for members pres-
lien. ently receiving service or when State
(1) General obligation or special assess- statutes or local ordinances require
ment bonds. Ordinarily, the require- mandatory use of the facility.
ments for reserves will be considered to (2) Planning, bidding, contracting, con-
have been met if general obligation or structing. (See § 1942.18).
64
(3) Insurance and fidelity bonds. The under § 1942.17(q)(2) or other docu-
purpose of RD’s insurance and fidelity mentation. The borrower is responsible
bond requirements is to protect the for updating and/or renewing policies
government’s financial interest based or coverage which expire between sub-
on the facility financed. The require- missions to Rural Development. Any
ments below apply to all types of cov- monitoring of insurance and fidelity
erage determined necessary. The Na- bond coverage by FmHA or its suc-
tional Office may grant exceptions to cessor agency under Public Law 103–354
normal requirements when appropriate is solely for the benefit of FmHA or its
justification is provided establishing successor agency under Public Law 103–
that it is in the best interest of the ap- 354, and does not relieve the applicant/
plicant/borrower and will not adversely borrower of its obligation under the
affect the government’s interest. loan resolution to maintain such cov-
(i) General. (A) Applicants must pro- erage.
vide evidence of adequate insurance
(ii) Fidelity bond. Applicants/bor-
and fidelity bond coverage by loan clos-
rowers will provide fidelity bond cov-
ing or start of construction, whichever
occurs first. Adequate coverage in ac- erage for all persons who have access
cordance with this section must then to funds. Coverage may be provided ei-
be maintained for the life of the loan. ther for all individual positions or per-
It is the responsibility of the applicant/ sons, or through ‘‘blanket’’ coverage
borrower and not that of Rural Devel- providing protection for all appropriate
opment to assure that adequate insur- employees and/or officials. An excep-
ance and fidelity bond coverage is tion may be granted by the State Di-
maintained. rector when funds relating to the facil-
(B) Insurance and fidelity bond re- ity financed are handled by another en-
quirements by Rural Development tity and it is determined that the enti-
shall normally not exceed those pro- ty has adequate coverage or the gov-
posed by the applicant/borrower if the ernment’s interest would otherwise be
Rural Development loan approval or adequately protected.
servicing official determines that pro- (A) The amount of coverage required
posed coverage is adequate to protect by Rural Development will normally
the government’s financial interest. approximate the total annual debt
Applicants/borrowers are encouraged to service requirements for the Rural De-
have their attorney, consulting engi- velopment loans.
neer/architect, and/or insurance pro- (B) Form RD 440–24, ‘‘Position Fidel-
vider(s) review proposed types and ity Schedule Bond’’ may be used. Simi-
amounts of coverage, including any de- lar forms may be used if determined
ductible provisions. If the FmHA or its acceptable to Rural Development.
successor agency under Public Law 103– Other types of coverage may be consid-
354 official and the applicant/borrower
ered acceptable if it is determined by
cannot agree on the acceptability of
Rural Development that they fulfill es-
coverage proposed, a decision will be
sentially the same purpose as a fidelity
made by the State Director.
(C) The use of deductibles, i.e., an ini- bond.
tial amount of each claim to be paid by (C) Fidelity bonds must be obtained
the applicant/borrower, may be allowed from companies holding certificates of
by Rural Development providing the authority as acceptable sureties, as
applicant/borrower has financial re- prescribed in 31 CFR part 223, ‘‘Surety
sources which would likely be adequate Companies doing Business with the
to cover potential claims requiring United States.’’
payment of the deductible. (iii) Insurance. The following types of
(D) Borrowers must provide evidence coverage must be maintained if appro-
to Rural Development that adequate priate for the type of project and enti-
insurance and fidelity bond coverage is ty involved. Insurance must be in
being maintained. This may consist of amounts acceptable to the Agency and
a listing of policies and coverage at least equivalent to coverage for real
amounts in yearend reports submitted property and equipment acquired with-
with management reports required out Federal funds.
65
(A) Property insurance. Fire and ex- 20, ‘‘Right-of-Way Easement,’’ may be
tended coverage will normally be main- used. When a site is for major struc-
tained on all structures except as noted tures for utility-type facilities such as
in paragraphs (j)(3)(iii)(A)(1) and (2) of a reservoir or pumping station and the
this section. Ordinarily, Rural Develop- applicant is able to obtain only a right-
ment should be listed as mortgagee on of-way or easement on such a site rath-
the policy when Rural Development er than a fee simple title, the applicant
has a lien on the property. Normally, will furnish a title report thereon by
major items of equipment or machin- the applicant’s attorney showing own-
ery located in the insured structures ership of the land and all mortgages or
must also be covered. Exceptions: other lien defects, restrictions, or en-
(1) Reservoirs, standpipes, elevated cumbrances, if any. It is the responsi-
tanks, and other structures built en- bility of the applicant to obtain and
tirely of noncombustible materials if record such releases, consents or subor-
such structures are not normally in- dinations to such property rights from
sured. holders of outstanding liens or other
(2) Subsurface lift stations except for instruments as may be necessary for
the value of electrical and pumping the construction, operation, and main-
equipment therein. tenance of the facility and give Rural
(B) Liability and property damage in- Development the required security.
surance, including vehicular coverage. (B) Title for land or existing facilities.
(C) Malpractice insurance. The need Title to land essential to the successful
and requirements for malpractice in- operation of facilities or title to facili-
surance will be carefully and thor- ties being purchased, must not contain
oughly considered in connection with any restrictions that will adversely af-
each health care facility financed. fect the suitability, successful oper-
(D) Flood insurance. Facilities located ation, security value, or transferability
in special flood- and mudslide-prone of the facility. Title opinions must be
areas must comply with the eligibility provided by the applicant’s attorney.
and insurance requirements of subpart The opinions must be in sufficient de-
B of part 1806 of this chapter (RD In- tail to assess marketability of the
struction 426.2). property. Form RD 1927–9, ‘‘Prelimi-
(E) Worker’s compensation. The bor- nary Title Opinion,’’ and Form RD
rower will carry worker’s compensa- 1927–10, ‘‘Final Title Opinion,’’ may be
tion insurance for employees in accord- used to provide the required title opin-
ance with State laws. ions. If other forms are used they must
(4) Acquisition of land, easements, be reviewed and approved by Rural De-
water rights, and existing facilities. Ap- velopment and OGC.
plicants are responsible for acquisition (1) In lieu of receiving title opinions
of all property rights necessary for the from the applicant’s attorney, the ap-
project and will determine that prices plicant may use a title insurance com-
paid are reasonable and fair. Rural De- pany. If a title insurance company is
velopment may require an appraisal by used, the company must provide RD a
an independent appraiser or Rural De- title insurance binder, disclosing all
velopment employee. title defects or restrictions, and in-
(i) Title for land, rights-of-way, ease- clude a commitment to issue a title in-
ments, or existing facilities. The appli- surance policy. The policy should be in
cant must certify and provide a legal an amount at least equal to the market
opinion relative to the title to rights- value of the property as improved. The
of-way and easements. Form RD 442–21, title insurance binder and commitment
‘‘Rights-of-Way Certificate,’’ and Form should be provided to RD prior to re-
RD 442–22, ‘‘Opinion of Counsel Rel- questing closing instructions. RD will
ative to Rights-of-Way,’’ may be used. be provided a title insurance policy
(A) Rights-of-way and easements. Ap- which will insure RD’s interest in the
plicants are responsible for and will ob- property without any title defects or
tain valid, continuous and adequate restrictions which have not been
rights-of-way and easements needed for waived by RD.
the construction, operation, and main- (2) The loan approval official may
tenance of the facility. Form RD 442– waive title defects or restrictions, such
66
as utility easements, that do not ad- future advances (except for taxes, in-
versely affect the suitability, success- surance, or other costs needed to pro-
ful operation, security value, or trans- tect the security), summary cancella-
ferability of the facility. If the District tions, summary forfeiture, or other
Director is the loan approval official clauses that may jeopardize the Gov-
and is unable to waive the defect or re- ernment’s interest or the purchaser’s
striction, the title opinion or title inability to pay the Rural Development
surance binder will be forwarded to the loan. The contract must provide that if
State Director. If the State Director, the purchaser fails to make payment
with the advice of the OGC, determines that Rural Development will be given
that the defect or restriction cannot be at least 90 days written notice with an
waived, the defect or restriction must option to cure the default before the
be removed. contract can be cancelled, terminated
(ii) Water rights. When legally permis- or foreclosed. Then Rural Development
sible, an assignment will be taken on must have the option of making the
water rights owned or to be acquired payment and charging it to the pur-
by the applicant. The following will be chaser’s account, making the payment
furnished as applicable: and taking over the ownership of the
(A) A statement by the applicant’s purchase contract, or taking any other
attorney regarding the nature of the action necessary to protect the Gov-
water rights owned or to be acquired ernment’s interest.
by the applicant (such as conveyance of (D) Prior to loan closing or the begin-
title, appropriation and decree, appli- ning of construction, whichever occurs
cation and permit, public notice and first, the following actions must be
appropriation and use). taken in the order listed below:
(B) A copy of a contract with another (1) The land purchase contract and
company or municipality to supply any appropriate title opinions must be
water; or stock certificates in another reviewed by the Regional Attorney to
company which represents the right to determine if they are legally sufficient
receive water. to protect the interest of the Govern-
(iii) Land purchase contract: (A) A ment.
land purchase contract (known in some (2) The land purchase contract, the
areas as a contract for deed) is an Regional Attorney’s comments, and
agreement between two or more parties the State Director’s recommendations
which obligates the purchaser to pay must be submitted to the National Of-
the purchase price, gives the purchaser fice for concurrence.
the rights of immediate possession, (3) The land purchase contract must
control, and beneficial use of the prop- be recorded.
erty, and entitles the purchaser to a (5) Lease agreements. Where the right
deed upon paying all or a specified part of use or control of real property not
of the purchase price. owned by the applicant/borrower is es-
(B) Applicants may obtain land sential to the successful operation of
through land purchase contracts when the facility during the life of the loan,
all of the following conditions are met: such right will be evidenced by written
(1) The applicant has exhausted all agreements or contracts between the
reasonable means of obtaining outright owner(s) of the property and the appli-
fee simple title to the necessary land. cant/borrower. Lease agreements shall
(2) The applicant cannot obtain the not contain provisions for restricted
land through condemnation. use of the site of facility, forfeiture or
(3) There are not other suitable sites summary cancellation clauses and
available. shall provide for the right to transfer
(4) National Office concurrence is ob- and lease without restriction. Lease
tained in accordance with paragraph agreements will ordinarily be written
(j)(4)(iii)(D)(2) of this section. for a term at least equal to the term of
(C) The land purchase contract must the loan. Such lease contracts or agree-
provide for the transfer of ownership ments will be approved by the Rural
by the seller without any restrictions, Development loan approval official
liens or other title defects. The con- with the advice and counsel of the Re-
tract must not contain provisions for gional Attorney, OGC, as to the legal
67
sufficiency of such documents. A copy culation in the service area, to post a

of the lease contract or agreement will public notice at the applicant’s prin-
be included in the loan docket. cipal office, and to notify Rural Devel-
(6) Notes and bonds. Notes and bonds opment. The applicant will provide
will be completed on the date of loan Rural Development a copy of the pub-
closing except for the entry of subse- lished notice and minutes of the public
quent multiple advances where applica- meeting. A public meeting is not nor-
ble. The amount of each note will be in mally required for subsequent loans
multiples of not less than $100. The which are needed to complete the fi-
amount of each bond will ordinarily be nancing of the project.
in multiples of not less than $1,000. (10) Service through individual installa-
(i) Form RD 440–22, ‘‘Promissory Note tion. Community owned water or waste
(Association or Organization),’’ will or-
disposal systems may provide service
dinarily be used for loans to nonpublic
through individual installations or
bodies.
small clusters of users within the ap-
(ii) Section 1942.19 contains instruc-
plicant’s service area. When individual
tions for preparation of notes and
bonds evidencing indebtedness of pub- installations or small clusters are pro-
lic bodies. posed, the loan approval official should
(7) Environmental review requirements. consider items such as: quantity and
Loans made under this subpart must quality of the individual installations
comply with the environmental review that may be developed; cost effective-
requirements in accordance with 7 CFR ness of the individual facility com-
part 1970. pared with the initial and long term
(8) Health care facilities. The applicant user cost on a central system; health
will be responsible for obtaining the and pollution problems attributable to
following documents: individual facilities; operational or
(i) A statement from the responsible management problems peculiar to indi-
State agency certifying that the pro- vidual installations; and permit and
posed health care facility is not incon- regulatory agency requirements.
sistent with the State Medical Facili- (i) Applicants providing service
ties Plan. through individual facilities must meet
(ii) A statement from the responsible the eligibility requirements in
State agency or regional office of the § 1942.17(b).
Department of Health and Services cer- (ii) Rural Development must approve
tifying that the proposed facility meets the form of agreement between the
the standards in § 1942.18(d)(4). owner and individual users for the in-
(9) Public information. Applicants stallation, operation and payment for
should inform the general public re- individual facilities.
garding the development of any pro-
(iii) If taxes or assessments are not
posed project. Any applicant not re-
pledged as security, owners providing
quired to obtain authorization by vote
service through individual facilities
of its membership or by public ref-
must obtain security as necessary to
erendum, to incur the obligations of
the proposed loan or grant, will hold at assure collection of any sum the indi-
least one public information meeting. vidual user is obligated to pay the
The public meeting must be held after owner.
the preapplication is filed and not later (iv) Notes representing indebtedness
than loan approval. The meeting must owed the owner by a user for an indi-
give the citizenry an opportunity to be- vidual facility will be scheduled for
come acquainted with the proposed payment over a period not to exceed
project and to comment on such items the useful life of the individual facility
as economic and environmental im- or the loan, whichever is shorter. The
pacts, service area, alternatives to the interest rate will not exceed the inter-
project, or any other issue identified by est rate charged the owner on the
Rural Development. The applicant will Rural Development indebtedness.
be required, at least 10 days prior to (v) Owners providing service through
the meeting, to publish a notice of the individual or cluster facilities must ob-
meeting in a newspaper of general cir- tain:
68
(A) Easements for the installation propriate State and Federal Water Pol-
and ingress to and egress from the fa- lution Control Standards. A certifi-
cility; and cation from the appropriate State and
(B) An adequate method for denying Federal agencies for water pollution
service in the event of nonpayment of control standards will be obtained
user fees. showing that established standards are
(11) Funds from other sources. Rural met.
Development loan funds may be used (4) Consistency with other development
along with or in connection with funds plans. Rural Development financed fa-
provided by the applicant or from other cilities will not be inconsistent with
sources. Since ‘‘matching funds’’ is not any development plans of State, multi-
a requirement for Rural Development jurisdictional areas, counties, or mu-
loans, shared revenues may be used nicipalities in which the proposed
with Rural Development funds for project is located.
project construction. (5) State agency regulating water rights.
(k) Other Federal, State, and local re- Each Rural Development financed fa-
quirements. Each application shall con- cility will be in compliance with appro-
tain the comments, necessary certifi- priate State agency regulations which
cations and recommendations of appro- have control of the appropriation, di-
priate regulatory or other agency or version, storage and use of water and
institution having expertise in the disposal of excess water. All of the
planning, operation, and management rights of any landowners, appropri-
of similar facilities. Proposals for fa- ators, or users of water from any
cilities financed in whole or in part source will be fully honored in all re-
with Rural Development funds will be spects as they may be affected by fa-
coordinated with appropriate Federal, cilities to be installed.
State, and local agencies in accordance
(6) Civil Rights Act of 1964. All bor-
with the following:
rowers are subject to, and facilities
(1) Compliance with special laws and
must be operated in accordance with,
regulations. Except as provided in para-
title VI of the Civil Rights Act of 1964
graph (k)(2) of this section applicants
will be required to comply with Fed- and subpart E of part 1901 of this chap-
eral, State, and local laws and any reg- ter, particularly as it relates to con-
ulatory commission rules and regula- ducting and reporting of compliance
tions pertaining to: reviews. Instruments of conveyance for
(i) Organization of the applicant and loans and/or grants subject to the Act
its authority to construct, operate, and must contain the covenant required by
maintain the proposed facilities; § 1901.202(e) of subpart E of part 1901 of
(ii) Borrowing money, giving security this chapter.
therefore, and raising revenues for the (7) Title IX of the Education Amend-
repayment thereof; ments of 1972. No person in the United
(iii) Land use zoning; and States shall, on the basis of sex, be ex-
(iv) Health and sanitation standards cluded from participation in, be denied
and design and installation standards the benefits of, or be subjected to dis-
unless an exception is granted by Rural crimination under any education pro-
Development. gram or education activity receiving
(2) Compliance exceptions. If there are Agency financial assistance except as
conflicts between this subpart and otherwise provided for in the Edu-
state or local laws or regulatory com- cation Amendments of title IX. The
mission regulations, the provisions of State Director will provide guidance
this subpart will control. and technical assistance to carry out
(3) State Pollution Control or Environ- the intent of this paragraph.
mental Protection Agency Standards. (8) Section 504 of the Rehabilitation Act
Water and waste disposal facilities will of 1973. Under section 504 of the Reha-
be designed, installed, and operated in bilitation Act of 1973, as amended (29
such a manner that they will not result U.S.C. 794), no handicapped individual
in the pollution of water in the State in the United States shall, solely by
in excess of established standards and reason of their handicap, be excluded
that any effluent will conform with ap- from participation in, be denied the
69
benefits of, or be subjected to discrimi- Guide 14 may be used in the prepara-

nation under any program or activity tion of the legal services agreement.
receiving Agency financial assistance. (2) Bond counsel. Unless otherwise
(9) Age Discrimination Act of 1975. This provided by § 1942.19(b), public bodies
Act provides that no person in the are required to obtain the service of
United States shall on the basis of age, recognized bond counsel in the prepara-
be excluded from participation in, be tion of evidence of indebtedness.
denied the benefits of, or be subjected (3) Contracts for other services. Con-
to discrimination under any program tracts or other forms of agreements for
or activity receiving Federal financial other services including management,
assistance. This Act also applies to operation, and maintenance will be de-
programs or activities funded under veloped by the applicant and presented
the State and Local Fiscal Assistance to the Agency for review and approval.
Act of 1972 (31 U.S.C. 1221 et. seq.). This Management agreements should pro-
Act does not apply to: (i) age distinc- vide at least those items in guide 24.
tions contained in Federal, State or (4) Fees. Fees provided for in con-
local statutes or ordinances adopted by tracts or agreements shall be reason-
an elected, general purpose legislative able. They shall be considered to be
body which provide benefits or assist- reasonable if not in excess of those or-
ance based on age; (ii) establish cri- dinarily charged by the profession for
teria for participation in age-related similar work when the Agency financ-
terms; (iii) describe intended bene- ing is not involved.
ficiaries or target groups in age-related (m) Applying for the Agency loans—(1)
terms; and, (iv) any employment prac- Preapplication. Applicants desiring
tice of any employer, employment loans will file SF 424.2 and comments
agency, labor organization, or any from the appropriate A–95 clearing-
labor-management joint apprenticeship house agency normally with the appro-
training program except for any propriate Agency County Office. The
gram or activity receiving Federal fi- County Supervisor will immediately
nancial assistance for public service forward all documents to the District
employment under the Comprehensive Office. The District Director has prime
Employment and Training Act of 1974 responsibility for all community pro-
(CETA) (29 U.S.C. 801 et. seq.). gram loan making and servicing activi-
(l) Professional services and contracts ties within the District.
related to the facility—(1) Professional (2) Preapplication review. Upon receipt
services. Applicants will be responsible of the preapplication, RD will ten-
for providing the services necessary to tatively determine eligibility including
plan projects including design of facili- the likelihood of credit elsewhere at
ties, preparation of cost and income es- reasonable rates and terms and avail-
timates, development of proposals for ability of agency loan funds. The deter-
organization and financing, and overall mination as to availability of other
operation and maintenance of the facil- credit will be made after considering
ity. Professional services of the fol- present rates and terms available for
lowing may be necessary: Engineer, ar- similar proposals (not necessarily
chitect, attorney, bond counsel, ac- based upon rates and terms available
countant, auditor, appraiser, and finan- from Rural Development); the repay-
cial advisory or fiscal agent (if desired ment potential of the applicant; long-
by applicant). Contracts or other forms term cost to the applicant; and average
of agreement between the applicant user or other charges. In those cases
and its professional and technical rep- where Rural Development determines
resentatives are required and are sub- that loans at reasonable rates and
ject to Agency concurrence. Form RD terms should be available from com-
1942–19, ‘‘Agreement for Engineering mercial sources, Rural Development
Services,’’ may be used when appro- will notify the applicant so that it may
priate. Guide 20, ‘‘Agreement for Engi- apply for such financial assistance.
neering Services (Agency/EPA—Jointly Such applicants may be reconsidered
Funded Projects)’’ may be used on for Rural Development loans upon
projects jointly funded by RD and EPA. their presenting satisfactory evidence
70
of inability to obtain commercial fi- (2) Loan resolutions. Loan resolutions

nancing at reasonable rates and terms. will be adopted by both public and
(3) Incurring obligations. Applicants other-than-public bodies using Form
should not proceed with planning nor RD 1942–47, ‘‘Loan Resolution (Public
obligate themselves for expenditures Bodies),’’ or Form RD 1942–9, ‘‘Loan
until authorized by Rural Develop- Resolution (Security Agreement).’’
ment. These resolutions supplement other
(4) Results of preapplication review. provisions in this subpart. The appli-
After Rural Development has reviewed cant will agree:
the preapplication material and any (i) To indemnify the Government for
additional material that may be re- any payments made or losses suffered
quested, Form AD–622 will be sent to by the Government on behalf of the as-
the applicant. Ordinarily the review sociation. Such indemnification shall
will not exceed 45 days. be payable from the same source of
(5) Application conference. Before funds pledged to pay the bonds or any
starting to assemble the application other legally permissible source.
and after the applicant selects its pro- (ii) To comply with applicable local,
fessional and technical representatives, State and Federal laws, regulations,
it should arrange with Rural Develop- and ordinances.
ment for an application conference to (iii) To provide for the receipt of ade-
provide a basis for orderly application quate revenues to meet the require-
assembly. Rural Development will pro- ments of debt service, operation and
vide applicants with a list of docu- maintenance, establishment of ade-
ments necessary to complete the appli- quate reserves, and to continually op-
cation. Guide 15 may be used for this erate and maintain the facility in good
purpose. Applications will be filed with condition. Except for utility-type fa-
the District Office. cilities, free service use may be per-
(6) Application completion and assem- mitted. If free services are extended no
bling. This is the responsibility of the distinctions will be made in the exten-
applicant with guidance from Rural sion of those services because of race,
Development. The applicant may uti- color, religion, sex, national origin,
lize their professional and technical marital status, or physical or mental
representatives or other competent handicap.
sources. (iv) To acquire and maintain such in-
(7) Review of decision. If an applica- surance coverage including fidelity
tion is rejected, the applicant may re- bonds, as may be required by the Gov-
quest a review of this decision under ernment.
subpart B of part 1900 of this chapter. (v) To establish and maintain such
(n) Actions prior to loan closing and books and records relating to the oper-
start of construction—(1) Excess Rural ation of the facility and its financial
Development loan and grant funds. If affairs and to provide for required
there is a significant reduction in audit thereof in such a manner as may
project cost, the applicant’s funding be required by the Government and to
needs will be reassessed before loan provide the Government without its re-
closing or the start of construction, quest, a copy of each such audit and to
whichever occurs first. In such cases make and forward to the Government
applicable Rural Development forms, such additional information and re-
the letter of conditions, and other ports as it may, from time to time, re-
items will be revised. Decreases in quire.
Rural Development funds will be based (vi) To provide the Government at all
on revised project costs and current reasonable times, access to all books
number of users, however, other factors and records relating to the facility and
including Rural Development regula- access to the property of the system so
tions used at the time of loan/grant ap- that the Government may ascertain
proval will remain the same. Obligated that the association is complying with
loan or grant funds not needed to com- the provisions hereof and of the instru-
plete the proposed project will be ments incident to the making or insur-
deobligated. ing of the loan.
71
(vii) To provide adequate service to the Department of Health and Human

all persons within the service area who Services, Payment Management Sys-
can feasibly and legally be served and tem, Rockville, MD 20852. Interest
to obtain Rural Development’s concur- amounts up to $500 per year may be re-
rence prior to refusing new or adequate tained by the non-Federal entity for
services to such persons. Upon failure administrative expense.
of the applicant to provide services (xii) Not to sell, transfer, lease, or
which are feasible and legal, such per- otherwise encumber the facility or any
son shall have a direct right of action portion thereof or interest therein, and
against the applicant organization. not to permit others to do so, without
(viii) To have prepared on its behalf the prior written consent of the Gov-
and to adopt an ordinance or resolution ernment.
for the issuance of its bonds or notes or
(xiii) Not to borrow any money from
other debt instruments or other such
any source, enter into any contract or
items and in such forms as are required
by State statutes and as are agreeable agreement, or incur any other liabil-
and acceptable to the Government. ities in connection with making en-
(ix) To refinance the unpaid balance, largements, improvements or exten-
in whole or in part, of its debt upon the sions to, or for any other purpose in
request of the Government if at any connection with the facility (exclusive
time it should appear to the Govern- of normal maintenance) without the
ment that the association is able to re- prior written consent of the Govern-
finance its bonds by obtaining a loan ment if such undertaking would in-
for such purposes from responsible co- volve the source of funds pledged to
operative or private sources at reason- repay the debt to Rural Development.
able rates and terms. (xiv) That upon default in the pay-
(x) To provide for, execute, and comments of any principal and accrued in-
ply with Form RD 400–4, ‘‘Assurance terest on the bonds or in the perform-
Agreement,’’ and Form RD 400–1, ance of any covenant or agreement
‘‘Equal Opportunity Agreement,’’ in- contained herein or in the instruments
cluding an ‘‘Equal Opportunity incident to making or insuring the
Clause,’’ which is to be incorporated in loan, the Government, at its option,
or attached as a rider to each construc- may:
tion contract and subcontract in excess (A) Declare the entire principal
of $10,000. amount then outstanding and accrued
(xi)(A) To place the proceeds of the interest, due and payable;
loan on deposit in a manner approved
(B) For the account of the associa-
by the Government. Funds must be de-
tion (payable from the source of funds
posited and maintained in insured ac-
pledged to pay the bonds or notes or
counts whenever possible. Funds must
any other legally permissiable source),
be maintained in interest bearing ac-
counts, unless the following apply: incur and pay reasonable expenses for
(1) The borrower receives less than repair, maintenance and operation of
$120,000 in Federal awards per year; the facility and such other reasonable
(2) The best reasonably available in- expenses as may be necessary to cure
terest-bearing account would not be ex- the cause of default; and/or
pected to earn interest in excess of $500 (C) Take possession of the facility,
per year on Federal cash balances; repair, maintain and operate, or other-
(3) The depository would require an wise dispose of the facility. Default
average or minimum balance so high under the provisions of the resolution
that it would not be feasible within the or any instrument incident to the mak-
expected Federal and non-Federal cash ing or insuring of the loan may be con-
resources; and, strued by the Government to con-
(4) A foreign government or banking stitute default under any other instru-
system prohibits or precludes interest ment held by the Government and exe-
bearing accounts. cuted or assumed by the association
(B) Interest earned on Federal pay- and default under any such instrument
ments deposited in interest-bearing ac- may be construed by the Government
counts must be remitted annually to to constitute default hereunder.
72
(3) Interim financing. In all loans ex- its security position is not impaired;
ceeding $50,000, where funds can be bor- and
rowed at reasonable interest rates on (iii) Adequate provisions are made
an interim basis from commercial for handling the unpaid accounts by
sources for the construction period, withholding or escrowing sufficient
such interim financing will be obtained funds to pay such claims.
so as to preclude the necessity for mul- (4) Obtaining closing instructions. After
tiple advances of Rural Development loan approval, the completed docket
funds. Guide 1 or guide 1a, as appro- will be reviewed by the State Director.
priate, may be used to inform the pri- The information required by OGC will
vate lender of Rural Development’s be transmitted to OGC with request for
commitment. When interim commer- closing instructions. Upon receipt of
cial financing is used, the application the closing instructions from OGC, the
will be processed, including obtaining State Director will forward them along
construction bids, to the stage where with any appropriate instructions to
the Rural Development loan would nor- the District Director. Upon receipt of
mally be closed, that is immediately closing instructions, the District Di-
prior to the start of construction. The rector will discuss with the applicant
Rural Development loan should be and its architect or engineer, attorney,
closed as soon as possible after the dis- and other appropriate representatives,
bursal of all interim funds. Interim fi- the requirements contained therein
nancing may be for a fixed term pro- and any actions necessary to proceed
with closing.
vided the fixed term does not extend
(5) Applicant contribution. An appli-
beyond the time projected for comple-
cant contributing funds toward the
tion of construction. For this purpose,
project cost shall deposit these funds in
a fixed term is when the interim lender
its construction account on or before
cannot be repaid prior to the end of the
loan closing or start of construction,
stipulated term of the interim instru-
whichever occurs first. Project costs
ments. When a Rural Development
paid prior to the required deposit time
Water and Waste Disposal grant is in-
with applicant funds shall be appro-
cluded, any interim financing involv-
priately accounted for.
ing a fixed term must be for the total
(6) Evidence of and disbursement of
Rural Development loan amount. Mul- other funds. Applicants expecting funds
tiple advances may be used in conjunc- from other sources for use in com-
tion with interim commercial financ- pleting projects being partially fi-
ing when the applicant is unable to ob- nanced with Rural Development funds
tain sufficient funds through interim will present evidence of the commit-
commercial financing in an amount ment of these funds from such other
equal to the loan. The Rural Develop- sources. This evidence will be available
ment loan proceeds (including ad- before loan closing, or the start of con-
vances) will be used to retire the instruction, whichever occurs first. Ordi-
terim commercial indebtedness. Before narily, the funds provided by the appli-
the Rural Development loan is closed, cant or from other sources will be dis-
the applicant will be required to pro- bursed prior to the use of Rural Devel-
vide Rural Development with state- opment loan funds. If this is not pos-
ments from the contractor, engineer, sible, funds will be disbursed on a pro
architect, and attorney that they have rata basis. Rural Development funds
been paid to date in accordance with will not be used to pre-finance funds
their contracts or other agreements committed to the project from other
and, in the case of the contractor, that sources.
any suppliers and subcontractors have (o) Loan closing—(1) Closing instruc-
been paid. If such statements cannot be tions. Loans will be closed in accord-
obtained, the loan may be closed pro- ance with the closing instructions
vided: issued by OGC.
(i) Statements to the extent possible (2) Obtaining insurance and fidelity
are obtained; bonds. Required property insurance
(ii) The interest of Rural Develop- policies, liability insurance policies,
ment can be adequately protected and and fidelity bonds will be obtained by
73
the time of loan closing or start of con- (i) Section 1942.19 contains instruc-
struction, whichever occurs first. tions for making multiple advances to
(3) Distribution of recorded documents. public bodies.
The originals of the recorded deeds, (ii) Advances will be requested by the
easements, permits, certificates of borrower in writing. The request
water rights, leases, or other contracts should be in sufficient amounts to pay
and similar documents which are not cost of construction, rights-of-way and
to be held by Rural Development will land, legal, engineering, interest, and
be returned to the borrower. The origi- other expenses as needed. The appli-
nal mortgage(s) and water stock cer- cant may use Form RD 440–11, ‘‘Esti-
tificates, if any, if not required by the mate of Funds Needed for 30 Day Pe-
recorder’s office will be retained by riod Commencing lll,’’ to show the
Rural Development. amount of funds needed during the 30-
(4) Review of loan closing. In order to day period.
determine that the loan has been prop- (iii) Rural Development loan funds
erly closed the loan docket will be re- obligated for a specific purpose, such as
viewed by the State Director and OGC. the paying of interest, but not needed
(p) Project monitoring and fund deliv- at the time of loan closing will remain
ery during construction—(1) Coordination in the Finance Office until needed un-
of funding sources. When a project is less State statutes require all funds to
jointly financed, the State Director be delivered to the borrower at the
will reach any needed agreement or un- time of closing. Loan funds may be ad-
derstanding with the representatives of vanced to prepay costs under para-
the other source of funds on distribu- graph (d)(1)(iv)(G) of this section. If all
tion of responsibilities for handling funds must be delivered to the bor-
various aspects of the project. These rower at the time of closing to comply
responsibilities will include super- with State statutes, funds not needed
vision of construction, inspections and at loan closing will be handled as fol-
determinations of compliance with ap- lows:
propriate regulations concerning equal (A) Deposited in an appropriate bor-
employment opportunities, wage rates, rower account, such as the debt service
nondiscrimination in making services account, or
or benefits available, and environ- (B) Deposited in a supervised bank
mental compliance. If any problems de- account under paragraph (p)(3)(i) of
velop which cannot be resolved locally, this section.
complete information should be sent to (3) Use and accountability of funds—(i)
the National Office for advice. Supervised bank account. Rural Develop-
(2) Multiple advances. In the event in- ment loan funds and any funds fur-
terim commercial financing is not le- nished by the applicant/borrower to
gally permissible or not available, mul- supplement the loan including con-
tiple advances of Rural Development tributions to purchase major items of
loan funds are required. An exception equipment, machinery, and furnishings
to this requirement may be granted by may be deposited in a supervised bank
the National Office when a single ad- account if determined necessary as pro-
vance is necessitated by State law or vided in subpart A of part 1902 of this
public exigency. Multiple advances will chapter. When Rural Development has
be used only for loans in excess of a Memorandum of Understanding with
$50,000. Advances will be made only as another agency that provides for the
needed to cover disbursements required use of supervised bank accounts, or
by the borrower over a 30-day period. when Rural Development is the pri-
Advances should not exceed 24 in num- mary source of funds for a project and
ber nor extend longer than two years has determined that the use of a super-
beyond loan closing. Normally, the revised bank account is necessary,
tained percentage withheld from the project funds from other sources may
contractor to assure construction com- also be deposited in the supervised
pletion will be included in the last ad- bank account. Rural Development shall
vance. not be accountable to the source of the
74
other funds nor shall Rural Develop- tions to conduct similar monitoring
ment undertake responsibility to ad- and inspection activities. Project mon-
minister the funding program of the itoring will include periodic inspec-
other entity. Supervised bank accounts tions to review partial payment esti-
should not be used for funds advanced mates prior to their approval and to re-
by an interim lender. view project development in accord-
(ii) Other than supervised bank ac- ance with plans and specifications.
count. If a supervised bank account is Each inspection will be recorded using
not used, arrangements will be agreed Form RD 1924–12, ‘‘Inspection Report.’’
upon for the prior concurrence by The original Form RD 1924–12 will be
Rural Development of the bills or filed in the project case folder and a
vouchers upon which warrants will be copy furnished to the State Director.
drawn, so that the payments from loan
The State Director will review inspec-
funds can be controlled and Rural De-
tion reports and will determine that
velopment records kept current. If a
the project is being effectively mon-
supervised bank account is not used,
use Rural Development 402–2, ‘‘State- itored. The District Director is author-
ment of Deposits and Withdrawals,’’ or ized to review and accept partial pay-
similar form to monitor funds. Peri- ment estimates prepared by the con-
odic reviews of nonsupervised accounts tractor and approved by the borrower,
shall be made by Rural Development at provided the consulting engineer or ar-
the times and in the manner as Rural chitect, if one is being utilized for the
Development prescribes in the condi- project, has approved the estimate and
tions of loan approval. State laws regu- certified that all material purchased or
lating the depositories to be used shall work performed is in accordance with
be complied with. the plans and specifications, or if a
(iii) Use of minority owned banks. Ap- consulting engineer or architect is not
plicants are encouraged to use minor- being utilized, the District Director
ity banks (a bank which is owned at has determined that the funds re-
least 50 percent by minority group quested are for authorized purposes. If
members) for the deposit and disburse- there is any indication that construc-
ment of funds. A list of minority owned tion is not being completed in accord-
banks can be obtained from the Office ance with the plans and specifications
of Minority Business Enterprise, De- or that any other problems exist, the
partment of Commerce, Washington, District Director should notify the
DC 20230 and is also available in all State Director immediately and with-
Rural Development offices. hold all payments on the contract.
(4) Development inspections. The Dis- (5) Payment for construction. Each
trict Director will be responsible for payment for project costs must be ap-
monitoring the construction of all proved by the borrower’s governing
projects being financed, wholly or in body. Payment for construction must
part, with Rural DevelopmentFmHA or
be for amounts shown on payment esti-
its successor agency under Public Law
mate forms. Form RD 1924–18, ‘‘Partial
103–354 funds. Technical assistance will
Payment Estimate,’’ may be used for
be provided by the State Director’s
staff. Project monitoring will include this purpose or other similar forms
construction inspections and a review may be used with the prior approval of
of each project inspection report, each the State Director or designee. How-
change order and each partial payment ever, the State Director or designee
estimate and other invoices such as cannot require a greater reporting bur-
payment for engineering/architectural den than is required by Form RD 1924–
and legal fees and other materials de- 18. Advances for contract retainage
termined necessary to effectively mon- will not be made until such retainage
itor each project. These activities will is due and payable under the terms of
not be performed on behalf of the appli- the contract. The review and accept-
cant/borrower, but are solely for the ance of project costs, including con-
benefit of Rural Development and in no struction partial payment estimates by
way are intended to relieve the appli- the Agency, does not attest to the cor-
cant/borrower of corresponding obliga- rectness of the amounts, the quantities
75
shown, or that the work has been per- and loan guarantees. A Federal award
formed under the terms of agreements is Federal financial assistance a non-
or contracts. Federal entity received directly from
(6) Use of remaining funds. Funds re- Federal awarding agencies or indi-
maining after all costs incident to the rectly from pass-through entities. Fed-
basic project have been paid or pro- eral awards expended generally pertain
vided for will not include applicant to events that require the non-Federal
contributions. Applicant contributions entity to comply with Federal Statues,
will be considered as funds initially ex- regulations, and terms and conditions
pended for the project. Funds remain- of federal awards, such as: expenditure/
ing, with exception of applicant con- expense transactions associated with
tributions, may be considered in direct grants, cost-reimbursement contracts,
proportion to the amount obtained cooperative agreements, and direct ap-
from each source. Remaining funds will propriations; the disbursement of funds
be handled as follows: passed through to sub-recipients; the
(i) Agency loan and/or grant funds. Re- use of loan proceeds under loan and
maining funds may be used for pur- loan guarantee programs; the receipt of
poses authorized by paragraph (d) of property; the receipt of surplus prop-
this section, provided the use will not erty; the receipt or use of program in-
result in major changes to the facility come; the distribution or consumption
design or project and that the purposes of food commodities; the disbursement
of the loan and/or grant remains the of amounts entitling the non-Federal
same. entity to an interest subsidy; and, the
(A) On projects that only involve an period when insurance is in force.
agency loan and no agency grant, funds (2) Method of accounting and prepara-
that are not needed will be applied as tion of financial statements. Annual or-
an extra payment on the RD indebted- ganization-wide financial statements
ness unless other disposition is re- must be prepared on the accrual basis
quired by the bond ordinance, resolu- of accounting, in accordance with Gen-
tion, or State statute. erally Accepted Accounting Principles
(B) On projects that involve an agen- (GAAP), unless State statute, tribal
cy grant, all remaining agency funds law or regulatory agencies provide oth-
will be considered to be grant funds up erwise, or an exception is granted by
to the full amount of the grant. Grant the Agency. An organization may
funds not expended under paragraph maintain its accounting records on a
(p)(6)(i) of this section will be basis other than accrual accounting,
deobligated. and make the necessary adjustments so
(ii) Funds from other sources. Funds that annual financial statements are
remaining from other sources will be presented on the accrual basis.
handled according to rules, regulations (3) Record retention. Each Applicant
and/or the agreement governing their will retain all records, books, and sup-
participation in the project. porting material for 3 years after the
(q) Borrower accounting methods, man- issuance of the audit or management
agement reporting and audits. (1) Annual reports, or for a time period required
financial statements. Borrowers are re- by other agencies or common business
quired to provide the Agency with an- practice, whichever is longer. Upon re-
nual financial statements for the life of quest, this material will be made avail-
the loan as outlined in the Letter of able to Rural Development, OIG,
Conditions issued by the Agency. The USDA, the Comptroller General, or to
financial statements are the responsi- their assignees.
bility of the borrower’s governing (4) Audits. Any applicant that ex-
body. The type of statement required is pends $750,000 or more in Federal finan-
dependent on the amount of Federal ficial assistance during their fiscal year
nancial assistance received during the must submit an audit report conducted
borrower’s fiscal year. Federal finan- in accordance with 2 CFR part 200, sub-
cial assistance includes Federal assist- part F, ‘‘Audit Requirements.’’ Appli-
ance that a non-Federal entity received cants expending less than $750,000 in
or administered during the entity’s fis- Federal financial assistance per fiscal
cal year in the form of grants, loans, year are exempt from 2 CFR part 200
76
audit requirements. All audits are to and Government Accountability Office

be performed in accordance with the (GAO).
latest revision of the Generally Accept- (i) Annual management reports. Thirty
ed Government Accounting Standards days prior to the beginning of each fis-
(GAGAS), developed by the Comp- cal year the following will be sub-
troller General of the United States. mitted to the Servicing Official:
Further guidance on preparing an ac- (A) One copy of the proposed annual
ceptable audit can be obtained from budget. The borrower will submit two
any Agency office. It is not intended copies of Form RD 442–2, or equivalent,
that audits required by this part be Statement of Budget, Income and Eq-
separate and apart from audits per- uity, Schedule 1, page 1; and Schedule
formed in accordance with State and 2, Projected Cash Flow. The only data
local laws. To the extent feasible, the required at this time is Schedule 1,
audit work should be done in conjunc- page 1, Column 3, annual budget, and
tion with those audits. Audits should all of Schedule 2, Projected Cash Flow.
be supplied to the Processing Official (B) An annual audit report may be
within the timeframes stated in para- submitted in lieu of Forms RD 442–2
graph (f) of this section. OMB Circulars and 442–3.
and Agency Compliance Supplements (ii) [Reserved]
are available in any USDA/Agency of- (6) Deadlines for submitting audits and
fice or OMB’s Web site. Any state, local management reports. In accordance with
2 CFR part 200, audits must be sub-
government, or Indian tribe that is re-
mitted no later than 9 months after the
quired by constitution or state statute,
end of the fiscal year or 30 days after
in effect on January 1, 1987, to undergo
the borrower’s receipt of the auditor’s
its audits less frequently than annu-
reports, whichever is earlier. Manage-
ally, is permitted to undergo its audits
ment reports must be submitted no
biennially, pursuant to 2 CFR later than 2 months after the end of
200.504(a). This requirement must still the borrower’s fiscal year.
be in effect for the biennial period. Any (7) Additional information to be sub-
nonprofit organization that had bien- mitted with audits and management re-
nial audits for all biennial periods end- ports. (i) Insurance. Agency borrowers
ing between July 1, 1992, and January 1, will maintain adequate insurance cov-
1995, is permitted to undergo its audits erage as required by the loan resolu-
biennially, pursuant to 2 CFR tion and § 1942.17(j)(3). The servicing of-
200.504(b). All biennial audits must ficial is required to monitor insurance
cover both years within the biennial annually after the initial insurance
period. verification.
(5) Exemption from audits. Except as (ii) Reserve account(s). Borrowers will
noted in 2 CFR 200.503, Relation to provide documentation that the Agen-
other audit requirement, public bodies cy required reserve account(s) is prop-
or nonprofits expending less than erly funded;
$750,000 in Federal awards during its (iii) Property tax information. If appli-
fiscal year, whose payments are cur- cable, documentation that property
rent, and are having no signs of oper- taxes have been paid and are current.
ational or financial difficulty may sub- (iv) A list of directors and officers.
mit a management report. A manage- (8) Quarterly reports. A quarterly
ment report, at a minimum, will in- management report will be required for
clude a balance sheet and income and the first full year of operations for new
expense statement. Financial informa- borrowers, and existing borrowers oper-
tion may be reported on Form RD 442– ating a new facility, starting a new
2, ‘‘Statement of Budget, Income and type of operation or proposing a sig-
Equity’’ and RD Form 442–3, ‘‘Balance nificant expansion of an existing facil-
Sheet’’, or similar. The following man- ity. Borrowers should submit the fol-
agement data will be submitted by the lowing to the Servicing Official:
borrower to the servicing office. (i) One copy of Form RD 442–2, or
Records must be available for review or equivalent, Schedule 1, page 1, columns
audit by appropriate officials of the 4–6, as appropriate, and page 2. This in-
Federal agency, pass-through entity, formation should be received in the
77
Servicing Office 30 days after the end of ments of Federal, State and local agen-
each of the first three quarters of the cies.
fiscal year. (1) Natural resources. Facility plan-
(ii) The Servicing Office may request ning should be responsive to the own-
a borrower experiencing financial or er’s needs and should consider the long-
management problems to submit quar- term economic, social and environ-
terly copies of Form RD 442–2, or equiv- mental needs as set forth in this sec-
alent, Schedule 1, pages 1 and 2. tion. The Agency’s environmental re-
view requirements are found at 7 CFR
[50 FR 7296, Feb. 22, 1985]
part 1970.
EDITORIAL NOTE: For FEDERAL REGISTER ci- (2) Historic preservation. Facilities
tations affecting § 1942.17, see the List of CFR should be designed and constructed in a
Sections Affected, which appears in the
Finding Aids section of the printed volume
manner which will contribute to the
and at www.govinfo.gov. preservation and enhancement of sites,
structures, and objects of historical,
§ 1942.18 Community facilities—Plan- architectural, and archaeological sig-
ning, bidding, contracting, con- nificance. All facilities must comply
structing. with Section 106 of the National His-
(a) General. This section is specifi- toric Preservation Act of 1966 (16 U.S.C
cally designed for use by owners in- 470), as implemented by 36 CFR part
cluding the professional or technical 800, and Executive Order 11593, ‘‘Pro-
consultants and/or agents who provide tection and Enhancement of the Cul-
assistance and services such as archi- tural Environment.’’ 7 CFR part 1970
tectural, engineering, inspection, fi- sets forth procedures for the protection
nancial, legal or other services related of historic and archaeological prop-
to planning, bidding, contracting, and erties.
constructing community facilities. (3) Architectural barriers. All facilities
These procedures do not relieve the intended for or accessible to the public
owner of the contractual obligations or in which physically handicapped
that arise from the procurement of persons may be employed or reside
these services. For this section, an must be developed in compliance with
owner is defined as an applicant, bor- the Architectural Barriers Act of 1968
rower, or grantee. (Pub. L. 90–480) as implemented by the
(b) Technical services. Owners are re- General Services Administration regu-
sponsible for providing the engineering lations 41 CFR 101–19.6 and section 504
or architectural services necessary for of the Rehabilitation Act of 1973 (Pub.
planning, designing, bidding, con- L. 93–112) as implemented by 7 CFR
tracting, inspecting, and constructing parts 15 and 15b.
their facilities. Services may be pro- (4) Health care facilities. The proposed
vided by the owner’s ‘‘in house’’ engi- facility must meet the minimum
neer or architect or through contract, standards for design and construction
subject to Rural Development concur- contained in the American Institute of
rence. Architects and engineers must Architects Press Publication No. ISBN
be licensed in the State where the fa- 0–913962–96–1, ‘‘Guidelines for Construc-
cility is to be constructed. tion and Equipment of Hospital and
(c) Preliminary reports. Preliminary Medical Facilities,’’ 1987 Edition. The
architectural and engineering reports facility must also meet the life/safety
must conform with customary profes- aspects of the 1985 edition of the Na-
sional standards. Preliminary report tional Fire Protection Association
guidelines for water, sanitary sewer, (NFPA) 101 Life Safety Code, or any
solid waste, storm sewer, and other es- subsequent code that may be des-
sential community facilities are avail- ignated by the Secretary of HHS. All
able from Rural Development. publications referenced in this section
(d) Design policies. Facilities financed are available in all Rural Development
by Rural Development will be designed State Offices. Under § 1942.17(j)(8)(ii) of
and constructed in accordance with this subpart, a statement by the re-
sound engineering and architectural sponsible regulatory agency that the
practices, and must meet the require- facility meets the above standards will
78
be required. Any exceptions must have ordinating Council for Science, Engi-
prior National Office concurrence. neering and Technology.
(5) Energy conservation. Facility de- (14) Pipe. All pipe used shall meet
sign should consider cost effective en- current American Society for Testing
ergy saving measures or devices. Materials (ASTM) or American Water
(6) Lead base paints. Lead base paints Works Association (AWWA) standards.
shall not be used in facilities designed (15) Water system testing. For new
for human habitation. Owners must water systems or extensions to existing
comply with the Lead Base Paints Poi- water systems, leakage shall not ex-
soning and Prevention Act of 1971 (42 ceed 10 gallons per inch of pipe diame-
U.S.C. 4801) and the National Consumer ter per mile of pipe per 24 hours when
Health Information and Health Pro- tested at 11⁄2 times the working pres-
motion Act of 1976 (Pub. L. 94–317) with sure or rated pressure of the pipe,
reference to paint specifications used whichever is greater.
according to exhibit H of subpart A of (16) Metering devices. Water facilities
part 1924 of this chapter. financed by Rural Development will
(7) Fire protection. Water facilities have metering devices for each connec-
must have sufficient capacity to pro- tion. An exception to this requirement
vide reasonable fire protection to the may be granted by the Rural Develop-
extent practicable. ment’s State Director when the owner
(8) Growth capacity. Facilities must demonstrates that installation of me-
have sufficient capacity to provide for tering devices would be a significant
reasonable growth to the extent prac- economic detriment and that environ-
ticable. mental consideration would not be ad-
(9) Water conservation. Owners are en- versely affected by not installing such
couraged, when economically feasible, devices.
to incorporate water conservation (17) Seismic safety. (i) All new building
practices into a facility’s design. For construction shall be designed and con-
existing water systems, evidence must structed in accordance with the seis-
be provided showing that the distribu- mic provisions of one of the following
tion system water losses do not exceed model building codes or the latest edi-
reasonable levels. tion of that code providing an equiva-
(10) Water quality. All water facilities lent level of safety to that contained in
must meet the requirements of the latest edition of the National Earth-
Safe Drinking Water Act (Pub. L. 93– quake Hazard Reduction Program’s
523) and provide water of a quality that (NEHRP) Recommended Provisions for
meets the current Interim Primary the Development of Seismic Regula-
Drinking Water Regulations (40 CFR tions for New Building (NEHRP Provi-
part 141). sions):
(11) Combined sewers. New combined (A) 1991 International Conference of
sanitary and storm water sewer facili- Building Officials (ICBO) Uniform
ties will not be financed by Rural De- Building Code;
velopment. Extensions to existing com- (B) 1993 Building Officials and Code
bined systems can only be financed Administrators International, Inc.
when separate systems are impractical. (BOCA) National Building Code; or
(12) Compliance. All facilities must (C) 1992 Amendments to the Southern
meet the requirements of Federal, Building Code Congress International
State, and local agencies having the (SBCCI) Standard Building Code.
appropriate jurisdiction. (ii) The date, signature, and seal of a
(13) Dam safety. Projects involving registered architect or engineer and
any artificial barrier which impounds the identification and date of the
or diverts water, or the rehabilitation model building code on the plans and
or improvement of such a barrier, specifications will be evidence of com-
should comply with the provisions for pliance with the seismic requirements
dam safety as discussed in the Federal of the appropriate building code.
Guidelines for Dam Safety (Govern- (e) Construction contracts. Contract
ment Printing Office stock No. 041–001– documents must be sufficiently de-
00187–5) as prepared by the Federal Co- scriptive and legally binding in order
79
to accomplish the work as economi- ignee. To the extent practical, Rural

cally and expeditiously as possible. Development review and approval of
(1) Standard construction contract doc- such contracts should take place prior
uments are available from Rural Devel- to their execution by the owner. Form
opment. When Rural Development’s RD 442–30, ‘‘Water Purchase Contract,’’
standard construction contract docu- may be used when appropriate. If the
ments are used, it will normally not be Rural Development loan will be repaid
necessary for the Office of the General from system revenues, the contract
Counsel (OGC) to perform a detailed will be pledged to Rural Development
legal review. If the construction con- as part of the security for the loan.
tract documents utilized are not in the Such contracts will:
format of guide forms previously ap- (1) Include a commitment by the sup-
proved by Rural Development, OGC’s plier to furnish, at a specified point, an
review of the construction contract adequate quantity of water or other
documents will be obtained prior to service and provide that, in case of
their use. shortages, all of the supplier’s users
(2) Contract review and approval. The will proportionately share shortages. If
owner’s attorney will review the exe- it is impossible to obtain a firm com-
cuted contract documents, including mitment for either an adequate quan-
performance and payment bonds, and tity or sharing shortages proportion-
will certify that they are adequate, and ately, a contract may be executed and
that the persons executing these docu- approved provided adequate evidence is
ments have been properly authorized to furnished to enable Rural Development
do so. The contract documents, bids to make a determination that the sup-
bonds, and bid tabulation sheets will be plier has adequate supply and/or treat-
forwarded to Rural Development for ment facilities to furnish its other
approval prior to awarding. All con- users and the applicant for the foresee-
tracts will contain a provision that able future; and
they are not in full force and effect (i) The supplier is subject to regula-
until they have been approved by Rural tions of the Federal Energy Regulatory
Development. The Rural Development Commission or other Federal or State
State Director or designee is respon- agency whose jurisdiction can be ex-
sible for approving construction con- pected to prevent unwarranted curtail-
tracts with the legal advice and guid- ment of supply; or
ance of the OGC when necessary. (ii) A suitable alternative supply
(3) Separate contracts. Arrangements could be arranged within the repay-
which split responsibility of contrac- ment ability of the borrower if it
tors (separate contracts for labor and should become necessary; or
material, extensive subcontracting and (iii) Prior approval is obtained from
multiplicity of small contracts on the the National Office. The following in-
same job), should be avoided whenever formation should be submitted to the
it is practical to do so. Contracts may National Office:
be awarded to suppliers or manufactur- (A) Transmittal memorandum in-
ers for furnishing and installing cer- cluding:
tain items which have been designed by (1) Alternative supplies considered;
the manufacturer and delivered to the and
job site in a finished or semifinished (2) Recommendations and comments;
state such as perfabricated buildings and
and lift stations. Contracts may also be (3) Any other necessary supporting
awarded for material delivered to the information.
job site and installed by a patented (B) Copies of the following:
process or method. (1) Proposed letter of conditions; and
(f) Utility purchase contracts. Appli- (2) Form RD 442–7, ‘‘Operating Budg-
cants proposing to purchase water or et’’; and
other utility service from private or (3) Form RD 442–3, ‘‘Balance Sheet’’;
public sources shall have written con- and
tracts for supply or service which are (4) Preliminary Engineering Report;
reviewed and approved by the Rural and
Development State Director or des- (5) Proposed Contract.
80
(C) Owner and Rural Development en- owner to provide the necessary supply
gineer’s comments and recommenda- by other means.
tions. (6) Provide for a pledge of the con-
(D) Documentation and statement tract to Rural Development as part of
from the supplier that it has an ade- the security for the loan.
quate supply and treatment facilities (7) Not contain provisions for:
available to meet the needs of its users (i) Construction of facilities which
and the owner for the foreseeable fu- will be owned by the supplier. This
ture. does not preclude the use of money
(2) Set out the ownership and mainte- paid as a connection charge for con-
nance responsibilities of the respective struction to be done by the supplier.
parties including the master meter if a (ii) Options for the future sale or
meter is installed at the point of deliv- transfer. This does not preclude an
ery. agreement recognizing that the sup-
(3) Specify the initial rates and pro- plier and owner may at some future
vide some kind of escalator clause date agree to a sale of all or a portion
which will permit rates for the associa- of the facility.
tion to be raised or lowered proportion- (g) Sewage treatment and bulk water
ately as certain specified rates for the sales contracts. Owners entering into
supplier’s regular customers are raised agreements with private or public par-
or lowered. Provisions may be made for ties to treat sewage or supply bulk
altering rates in accordance with the water shall have written contracts for
decisions of the appropriate State such service and all such contracts
agency which may have regulatory au- shall be subject to Rural Development
thority. concurrence. Paragraph (f) of this sec-
(4) Run for a period of time which is tion should be used as a guide to pre-
at least equal to the repayment period pare such contracts.
of the loan. State Directors may ap- (h) Performing construction. Owners
prove contracts for shorter periods of are encouraged to accomplish con-
time if the supplier cannot legally construction through contracts with rec-
tract for such period, or if the owner ognized contractors. Owners may ac-
and supplier find it impossible or im- complish construction by using their
practical to negotiate a contract for own personnel and equipment provided
the maximum period permissible under the owners possess the necessary skills,
State law, provided: abilities and resources to perform the
(i) The supplier is subject to regula- work and provided a licensed engineer
tions of the Federal Energy Regulatory or architect prepares design drawings
Commission or other Federal or State and specifications and inspects con-
agency whose jurisdiction can be ex- struction and furnishes inspection re-
pected to prevent unwarranted curtail- ports as required by paragraph (o) of
ment of supply; or this section. For other than utility-
(ii) The contract contains adequate type facilities, inspection services may
provisions for renewal; or be provided by individuals as approved
(iii) A determination is made that in by the Rural Development State Direc-
the event the contract is terminated, tor. In either case, the requirements of
there are or will be other adequate paragraph (j) of this section apply.
sources available to the owner that can Payments for construction will be han-
feasibly be developed or purchased. dled under § 1942.17(p)(5) of this part.
(5) Set out in detail the amount of (i) Owner’s contractual responsibility.
connection or demand charges, if any, This subpart does not relieve the owner
to be made by the supplier as a condi- of any contractual responsibilities
tion to making the service available to under its contract. The owner is re-
the owner. However, the payment of sponsible for the settlement of all
such charges from loan funds shall not contractural and administrative issues
be approved unless Rural Development arising out of procurements entered
determines that it is more feasible and into in support of a loan or grant.
economical for the owner to pay such a These include, but are not limited to:
connection charge than it is for the source evaluation, protests, disputes,
81
and claims. Matters concerning viola- ant will consider all materials nor-
tion of laws are to be referred to the mally suitable for the project commen-
local, State, or Federal authority as surate with sound engineering prac-
may have jurisdiction. tices and project requirements. For a
(j) Owner’s procurement regulations. water or waste disposal facility, Rural
Owner’s procurement regulations must Development shall consider fully any
comply with the following standards: recommendation made by the loan ap-
(1) Code of conduct. Owners shall plicant or borrower concerning the
maintain a written code or standards technical design and choice of mate-
of conduct which shall govern the per- rials to be used for such a facility. If
formance of their officers, employees Rural Development determines that a
or agents engaged in the award and ad- design or material, other than those
ministration of contracts supported by that were recommended should be con-
Rural Development funds. No em- sidered by including them in the pro-
ployee, officer or agent of the owner
curement process as an acceptable de-
shall participate in the selection,
sign or material in the water or waste
award, or administration of a contract
disposal facility, Rural Development
supported by Rural Development funds
if a conflict of interest, real or appar- shall provide such applicant or bor-
ent, would be involved. Examples of rower with a comprehensive justifica-
such conflicts would arise when: the tion for such a determination. The jus-
employee, officer or agent; any mem- tification will be documented in writ-
ber of their immediate family; their ing.
partner; or an organization which em- (3) Owner’s review. Proposed procure-
ploys, or is about to employ, any of the ment actions shall be reviewed by the
above; has a financial or other interest owner’s officials to avoid the purchase
in the firm selected for the award. of unnecessary or duplicate items. Con-
(i) The owner’s officers, employees or sideration should be given to consolida-
agents shall neither solicit nor accept tion or separation of procurement
gratuities, favors or anything of mone- items to obtain a more economical pur-
tary value from contractors, potential chase. Where appropriate, an analysis
contractors, or parties of subagree- shall be made of lease versus purchase
ments. alternatives, and any other appropriate
(ii) To the extent permitted by State analysis to determine which approach
or local law or regulations, the owner’s would be the most economical. To fos-
standards of conduct shall provide for ter greater economy and efficiency,
penalties, sanctions, or other discipli- owners are encouraged to enter into
nary actions for violations of such State and local intergovernmental
standards by the owner’s officers, em- agreements for procurement or use of
ployees, agents, or by contractors or common goods and services.
their agents. (4) Solicitation of offers, whether by
(2) Maximum open and free competition.
competitive sealed bids or competitive
All procurement transactions, regard-
negotiation, shall:
less of whether by sealed bids or by ne-
gotiation and without regard to dollar (i) Incorporate a clear and accurate
value, shall be conducted in a manner description of the technical require-
that provides maximum open and free ments for the material, product, or
competition. Procurement procedures service to be procured. The description
shall not restrict or eliminate competi- shall not, in competitive procurements,
tion. Examples of what are considered contain features which unduly restrict
to be restrictive of competition in- competition. The description may in-
clude, but are not limited to: Placing clude a statement of the qualitative
unreasonable requirements on firms in nature of the material, product or serv-
order for them to qualify to do busi- ice to be procured, and when necessary
ness; noncompetitive practices between shall set forth those minimum essen-
firms; organizational conflicts of inter- tial characteristics and standards to
est; and unnecessary experience and which it must conform if it is to satisfy
bonding requirements. In specifying its intended use. Detailed product spec-
material(s), the owner and its consult- ifications should be avoided if at all
82
possible. When it is impractical or un- (7) Unacceptable bidders. The fol-

economical to make a clear and accu- lowing will not be allowed to bid on, or
rate description of the technical renegotiate for, a contract or sub-
quirements, a ‘‘brand name or equal’’ contract related to the construction of
description may be used to define the the project:
performance or other salient require- (i) An engineer or architect as an in-
ments of a procurement. The specific dividual or firm who has prepared plans
features of the named brands which and specifications or who will be re-
must be met by offerors shall be clear- sponsible for monitoring the construc-
ly stated. tion;
(ii) Clearly specify all requirements (ii) Any firm or corporation in which
which offerors must fulfill and all the owner’s architect or engineer is an
other factors to be used in evaluating officer, employee, or holds or controls
bids or proposals. a substantial interest;
(5) Small, minority, and women’s busi- (iii) The governing body’s officers,
nesses and labor surplus area firms. (i) af- employees, or agents;
firmative steps should be taken to as- (iv) Any member of the immediate
sure that small and minority busi- family or partners in paragraphs
nesses are utilized when possible as (j)(7)(i), (j)(7)(ii), or (j)(7)(iii) of this
sources of supplies, equipment, con- section; or
struction and services. Affirmative (v) An organization which employs,
steps shall include the following: or is about to employ, any person in
(A) Include qualified small and mi- paragraph (j)(7)(i), (j)(7)(ii), (j)(7)(iii) or
nority businesses on solicitation lists. (j)(7)(iv) of this section.
(B) Assure that small and minority (8) Contract award. Contracts shall be
businesses are solicited whenever they made only with responsible parties pos-
are potential sources. sessing the potential ability to perform
(C) When economically feasible, di- successfully under the terms and condi-
vide total requirements into smaller tions of a proposed procurement. Con-
tasks or quantities so as to permit sideration shall include but not be lim-
maximum small and minority business ited to matters such as integrity,
participation. record of past performance, financial
(D) Where the requirement permits, and technical resources, and accessi-
establish delivery schedules which will bility to other necessary resources.
encourage participation by small and Contracts shall not be made with par-
minority businesses. ties who are suspended or debarred.
(E) Use the services and assistance of (k) Procurement methods. Procure-
the Small Business Administration and ment shall be made by one of the fol-
the Office of Minority Business Enter- lowing methods: small purchase proce-
prise of the Department of Commerce. dures; competitive sealed bids (formal
(F) If any subcontracts are to be let, advertising); competitive negotiation;
require the prime contractor to take or noncompetitive negotiation. Com-
the affirmative steps in paragraphs petitive sealed bids (formal adver-
(j)(5)(i) (A) through (E) of this section. tising) is the preferred procurement
(ii) Owners shall take similar appro- method for construction contracts.
priate affirmative action in support of (1) Small purchase procedures. Small
women’s businesses. purchase procedures are those rel-
(iii) Owners are encouraged to pro- atively simple and informal procure-
cure goods and services from labor sur- ment methods for securing services,
plus areas. supplies or other property, costing in
(iv) Owners shall submit a written the aggregate not more than the Sim-
statement or other evidence to Rural plified Acquisition Threshold. If small
Development of the steps taken to purchase procedures are used for a pro-
comply with paragraphs (j)(5)(i) (A) curement, written price or rate
through (F), (j)(5)(ii), and (j)(5)(iii) of quotations shall be obtained from an
this section. adequate number of qualified sources.
(6) Contract pricing. Cost plus a per- (2) Competitive sealed bids. In competi-
centage of cost method of contracting tive sealed bids (formal advertising),
shall not be used. sealed bids are publicly solicited and a
83
firm-fixed-price contract (lump sum or ored to the maximum extent prac-

unit price) is awarded to the respon- ticable.
sible bidder whose bid, conforming with (ii) The Request for Proposal shall
all the material terms and conditions identify all significant evaluation fac-
of the invitation for bids, is lowest, tors, including price or cost where re-
price and other factors considered. quired, and their relative importance.
When using this method the following (iii) The owner shall provide mecha-
shall apply: nisms for technical evaluation of the
(i) At a sufficient time prior to the proposals received, determination of
date set for opening of bids, bids shall responsible offerors for the purpose of
be solicited from an adequate number written or oral discussions, and selec-
of qualified sources. In addition, the in- tion for contract award.
vitation shall be publicly advertised. (iv) Award may be made to the re-
(ii) The invitation for bids, including sponsible offeror whose proposal will be
specifications and perinent attach- most advantageous to the owner, price
ments, shall clearly define the items or and other factors considered. Unsuc-
services needed in order for the bidders cessful offerors should be promptly no-
to properly respond to the invitation tified.
under paragraph (j)(4) of this section. (v) Owners may utilize competitive
(iii) All bids shall be opened publicly negotiation procedures for procure-
at the time and place stated in the in- ment of architectural/engineering and
vitation for bids. other professional services, whereby
(iv) A firm-fixed-price contract award competitors’ qualifications are evalu-
shall be made by written notice to that ated and the most qualified competitor
responsible bidder whose bid, con- is selected, subject to negotiations of
forming to the invitation for bids, is fair and reasonable compensation.
lowest. When specified in the bidding (4) Noncompetitive negotiation. Non-
documents, factors such as discounts competitive negotiation is procure-
and transportation costs shall be con- ment through solicitation of a proposal
sidered in determining which bid is from only one source, or after solicita-
lowest. tion of a number of sources competi-
(v) Any or all bids may be rejected by tion is determined inadequate. Non-
the owner when it is in their best inter- competitive negotiation may be used
est. when the award of a contract is not
(3) Competitive negotiation. In com- feasible under small purchase, competi-
petitive negotiations, proposals are re- tive sealed bids (formal advertising) or
quested from a number of sources and competitive negotiation procedures.
the Request for Proposal is publicized. Circumstances under which a contract
Negotiations are normally conducted may be awarded by noncompetitive ne-
with more than one of the sources sub- gotiations are limited to the following:
mitting offers. Competitive negotia- (i) The item is available only from a
tion may be used if conditions are not single source; or
appropriate for the use of formal adver- (ii) There exists a public exigency or
tising and where discussions and bar- emergency and the urgency for the re-
gaining with a view to reaching agree- quirement will not permit a delay inci-
ment on the technical quality, price, dent to competitive solicitation; or
other terms of the proposed contract (iii) After solicitation of a number of
and specifications may be necessary. If sources, competition is determined in-
competitive negotiation is used for a adequate; or
procurement, the following require- (iv) No acceptable bids have been re-
ments shall apply: ceived after formal advertising; or
(i) Proposals shall be solicited from (v) The procurement of architectural/
an adequate number of qualified engineering and other professional
sources to permit reasonable competi- services.
tion consistent with the nature and re- (vi) The aggregate amount does not
quirements of the procurement. The exceed $50,000.
Request for Proposal shall be pub- (5) Additional procurement methods.
licized and reasonable requests by Additional innovative procurement
other sources to compete shall be hon- methods may be used by the owner
84
with prior written approval of the (viii) The owner’s attorney’s opinion
Rural Development National Office. and comments regarding the legal ade-
(l) Alternate contracting methods. The quacy of the proposed contract docu-
services of the consulting engineer or ments and evidence that the owner has
architect and the general construction the legal authority to enter into and
contractor shall normally be procured fulfill the contract.
from unrelated sources in accordance (2) The State Office may approve de-
with paragraph (j)(7) of this section. sign/build or construction manage-
Alternate contracting methods which ment/constructor projects if the con-
combine or rearrange design, inspec- tract amount is equal to or less than
tion or construction services (such as $250,000.
design/build or construction manage- (3) If the contract amount exceeds
ment/constructor) may be used with $250,000, National Office prior concur-
Rural Development written approval. rence must be obtained in accordance
(1) The owner will request Rural De- with § 1942.9(b) of this subpart. Addi-
velopment approval by providing the tional information, such as plans and
following information to the State Of- specifications, may be requested by the
fice for review and approval by the National Office.
State Architect: (4) The Design/Build method of con-
struction is one in which the architec-
(i) The owner’s written request to use
tural and engineering services, nor-
an unconventional contracting method
mally provided by an independent con-
with a description of the proposed
sultant to the owner, are combined
method.
with those of the General Contractor
(ii) A proposed scope of work describ- under a single source contract. These
ing in clear, concise terms the tech- services are commonly provided by a
nical requirements for the contract. Design/Build firm, a joint venture be-
This would include a nontechnical tween an architectural firm and a con-
statement summarizing the work to be struction firm, or a company providing
performed by the contractor, the ex- pre-engineered buildings and design
pected results, the sequence in which services.
the work is to be performed, and a pro- (5) The Construction Management/
posed construction schedule. constructor (CMc), acts in the capacity
(iii) A proposed firm-fixed-price con- of a General Contractor and is actually
tract for the entire project which pro- responsible for the construction. This
vides that the contractor shall be re- type of construction management is
sponsible for any extra cost which may also referred to as Construction Man-
result from errors or omissions in the ager ‘‘At Risk.’’ The construction con-
services provided under the contract tract is between the owner and the
and compliance with all Federal, State, CMc. The CMc, in turn, may sub-
and local requirements effective on the contract for some or all of the work.
contract execution date. (6) The National Office may approve
(iv) An evaluation of the contractor’s other alternative contact methods,
performance on previous similar such as Construction Management/ad-
projects in which the contractor acted visor (CMa), with a recommendation
in a similar capacity. from the State Office. The rec-
(v) A detailed listing and cost esti- ommendation shall indicate the cir-
mate of equipment and supplies not in- cumstances which prove this method
cluded in the construction contract but advantageous to the applicant and the
which are necessary to properly oper- Government. A CMa acts in an advi-
ate the facility. sory capacity to the owner, and the ac-
(vi) Evidence that a qualified con- tual contract for construction is be-
struction inspector who is independent tween the owner and a prime con-
of the contractor has or will be hired. tractor or multiple prime contractors.
(vii) Preliminary plans and outline When a contract for an architect and a
specifications. However, final plans and CMa are being provided, it is important
specifications must be completed and to make sure that separate profes-
reviewed by Rural Development prior sionals are not being paid to provide
to the start of construction. similar services. Further, paragraph
85
(e)(3) of this section discourages sepa- for construction already performed

rate contracts for construction. even though the requirements may not
(7) All alternate contracting method have been included in the contract doc-
projects must comply with the require- uments.
ments for ‘‘maximum open and free (n) Contract provisions. In addition to
competition’’ in paragraph (j)(2) of this provisions defining a sound and com-
section. Choosing an alternate con- plete contract, any recipient of Rural
tracting method is not a way to avoid Development funds shall include the
competition. Further information on following contract provisions or condi-
procurement methods, which must be tions in all contracts:
followed, is provided in paragraph (k) (1) Remedies. Contracts other than
of this section. small purchases shall contain provi-
(m) Contracts awarded prior to sions or conditions which will allow for
preapplications. Owners awarding con- administrative, contractual, or legal
struction or other procurement con- remedies in instances where contrac-
tracts prior to filing a pre-application tors violate or breach contract terms,
with Rural Development must comply and provide for such sanctions and pen-
with the following: alties as may be appropriate. A real-
(1) Evidence. Provide conclusive evi- istic liquidated damage provision
dence that the contract was entered should also be included.
into without intent to circumvent the
(2) Termination. All contracts exceed-
requirements of Rural Development
ing $10,000, shall contain provisions for
regulations. The evidence will consist
termination by the owner including the
of at least the following:
manner by which it will be affected and
(i) The lapse of a reasonable period of
the basis for settlement. In addition,
time between the date of contract
award and the date of filing the such contracts shall describe condi-
preapplication which clearly indicates tions under which the contract may be
an irreconcilable failure of previous fi- terminated for default as well as condi-
nancial arrangements; or tions when the contract may be termi-
(ii) A written statement explaining nated because of circumstances beyond
initial plans for financing the project the control of the contractor.
and reasons for failure to obtain the (3) Surety. In all contracts for con-
planned credit. struction or facility improvements
(2) Modifications. Modify the out- awarded exceeding $100,000, the owner
standing contract to conform with the shall require bonds, a bank letter of
provisions of this subpart. Where this credit or cash deposit in escrow assur-
is not possible, modifications will be ing performance and payment, each in
made to the extent practicable and, as the amount of 100 percent of the con-
a minimum, the contract must comply tract cost. The surety will normally be
with all State and local laws and regu- in the form of performance bonds and
lations as well as statutory require- payment bonds; however, when other
ments and executive orders related to methods of surety may be necessary,
the Rural Development financing. bid documents must contain provisions
When all construction is complete and for such alternative types of surety.
it is impracticable to modify the con- The use of surety other than perform-
tracts, the owner must provide the cer- ance bonds and payment bonds requires
tification required by paragraph (m)(4) concurrence by the National Office
of this section. after submission of a justification by
(3) Consultant’s certification. Provide a the State Director together with the
certification by an engineer or archi- proposed form of escrow agreement or
tect that any construction performed letter of credit. For contracts of lesser
complies fully with the plans and spec- amounts, the owner may require sur-
ifications. ety. When a surety is not provided,
(4) Owner’s certification. Provide a contractors will furnish evidence of
certification by the owner that the payment in full for all materials, labor,
contractor has complied with all statu- and any other items procured under
tory and executive requirements re- the contract. Form RD 1924–10, ‘‘Re-
lated to Rural Development financing lease by Claimants,’’ and Form RD
86
1924–9, ‘‘Certificate of Contractor’s Re- Policy and Conservation Act (Pub. L.

lease,’’ may be obtained at the local 94–163).
Rural Development office and used for (8) Change orders. The construction
this purpose. The United States, acting contract shall require that all contract
through Rural Development, will be change orders be approved in writing
named as co-obligee on all surety un- by Rural Development.
less prohibited by State law. Compa- (9) Rural Development concurrence. All
nies providing performance bonds and contracts must contain a provision
payment bonds must hold a certificate that they shall not be effective unless
of authority as an acceptable surety on and until the Rural Development State
Federal bonds as listed in Treasury Cir- Director or designee concurs in writ-
cular 570 as amended and be legally ing.
doing business in the State where the (10) Retainage. All construction con-
facility is located. tracts shall contain adequate provi-
(4) Equal Employment Opportunity. All sions for retainage. No payments will
contracts awarded in excess of $10,000
be made that would deplete the
by owners shall contain a provision re-
retainage nor place in escrow any funds
quiring compliance with Executive
that are required for retainage nor in-
Order 11246, entitled, ‘‘Equal Employ-
vest the retainage for the benefit of the
ment Opportunity,’’ as amended by Ex-
contractor. The retainage shall not be
ecutive Order 11375, and as supple-
less than an amount equal to 10 per-
mented by Department of Labor regu-
cent of an approved partial payment
lations 41 CFR part 60.
estimate until 50 percent of the work
(5) Anti-kickback. All contracts for
has been completed. If the job is pro-
construction shall include a provision
ceeding satisfactory at 50 percent com-
for compliance with the Copeland
‘‘Anti-Kickback’’ Act (18 U.S.C. 874). pletion, further partial payments may
This Act provides that each contractor be made in full, however, previously re-
shall be prohibited from inducing, by tained amounts shall not be paid until
any means, any person employed in the construction is substantially complete.
construction, completion, or repair of Additional amounts may be retained if
public work, to give up any part of the the job is not proceeding satisfactorily,
compensation to which they are other- but in no event shall the total
wise entitled. The owner shall report retainage be more than 10 percent of
all suspected or reported violations to the value of the work completed.
Rural Development. (11) Other compliance requirements.
(6) Records. All negotiated contracts Contracts in excess of $100,000 shall
(except those of $2,500 or less) awarded contain a provision which requires
by owners shall include a provision to compliance with all applicable stand-
the effect that the owner, Rural Devel- ards, orders, or requirements issued
opment, the Comptroller General of the under section 306 of the Clean Air Act
United States, or any of their duly au- (42 U.S.C. 1857(h)), section 508 of the
thorized representatives, shall have ac- Clean Water Act (33 U.S.C. 1368), Exec-
cess to any books, documents, papers, utive Order 11738, and Environmental
and records of the contractor which are Protection Agency (EPA) regulations
directly pertinent to a specific Federal 40 CFR part 15, which prohibit the use
loan program for the purpose of mak- under non-exempt Federal contracts,
ing audits, examinations, excerpts, and grants or loans of facilities included on
transcriptions. Owners shall require the EPA List of Violating Facilities.
contractors to maintain all required The provision shall require reporting of
records for three years after owners violations to Rural Development and
make final payments and all other to the U.S. Environmental Protection
pending matters are closed. Agency, Assistant Administrator for
(7) State Energy Conservation Plan. Enforcement. Solicitations and con-
Contracts shall recognize mandatory tract provisions shall include the re-
standards and policies relating to en- quirements of 40 CFR part 15.4(c) as set
ergy efficiency which are contained in forth in guide 18 of this subpart which
the State energy conservation plan is available in all Rural Development
issued in compliance with the Energy offices.
87
(o) Contract administration. Owners cost underruns or lower unit costs than
shall be responsible for maintaining a originally planned and which may re-
contract administration system to sult in less Rural Development assist-
monitor the contractors’ performance ance.
and compliance with the terms, condi- (3) Inspection. Full-time resident in-
tions, and specifications of the con- spection is required for all construc-
tracts. tion unless a written exception is made
(1) Preconstruction conference. Prior to by Rural Development upon written re-
beginning construction, the owner will quest of the owner. Unless otherwise
schedule a preconstruction conference agreed, the resident inspector will be
where Rural Development will review provided by the consulting architect/
the planned development with the engineer. Prior to the preconstruction
owner, its architect or engineer, resi- conference, the architect/engineer will
dent inspector, attorney, contractor(s), submit a resume of qualifications of
and other interested parties. The con- the resident inspector to the owner and
ference will thoroughly cover applica- to Rural Development for acceptance
ble items included in Form RD 1924–16, in writing. If the owner provides the
‘‘Record of Preconstruction Con- resident inspector, it must submit a re-
ference,’’ and the discussion and agree- sume of the inspector’s qualifications
ments will be documented. Form RD to the project architect/engineer and
1924–16 may be used for this purpose. Rural Development for acceptance in
(2) Monitoring reports. Each owner writing prior to the preconstruction
will be required to monitor and provide conference. The resident inspector will
reports to Rural Development on ac- work under the general supervision of
tual performance during construction the project architect/engineer. A guide
for each project financed, or to be fi- format for preparing daily inspection
nanced, in whole or in part with Rural reports (Guide 11 of this subpart) and
Development funds to include: Form RD 1924–18, ‘‘Partial Payment Es-
(i) A comparison of actual accom- timate,’’ are available on request from
plishments with the construction Rural Development.
schedule established for the period. The (4) Inspector’s daily diary. The resi-
partial payment estimate may be used dent inspector will maintain a record
for this purpose. of the daily construction progress in
(ii) A narrative statement giving full the form of a daily diary and daily in-
explanation of the following: spection reports as follows:
(A) Reasons why established goals (i) A complete set of all daily con-
were not met. struction records will be maintained
(B) Analysis and explanation of cost and the original set furnished to the
overruns or high unit costs and how owner upon completion of construc-
payment is to be made for the same. tion.
(iii) If events occur between reports (ii) All entries shall be legible and
which have a significant impact upon shall be made in ink.
the project, the owner will notify Rural (iii) Daily entries shall include but
Development as soon as any of the fol- not be limited to the date, weather
lowing conditions are met: conditions, number and classification
(A) Problems, delays, or adverse con- of personnel working on the site, equip-
ditions which will materially affect the ment being used to perform the work,
ability to attain program objectives or persons visiting the site, accounts of
prevent the meeting of project work substantive discussions, instructions
units by established time periods. This given to the contractors, directions re-
disclosure shall be accompanied by a ceived, all significant or unusual hap-
statement of the action taken, or con- penings involving the work, any
templated, and any Federal assistance delays, and daily work accomplished.
needed to resolve the situation. (iv) The daily entries shall be made
(B) Favorable developments or events available to Rural Development per-
which enable meeting time schedules sonnel and will be reviewed during
and goals sooner than anticipated or project inspections.
producing more work units than origi- (5) Prefinal inspections. A prefinal in-
nally projected or which will result in spection will be made by the owner,
88
resident inspector, project architect or (D) Any increase or decrease in the

engineer, representatives of other time to complete the project.
agencies involved, the District Direc- (iv) All changes shall be recorded on
tor and a Rural Development State Of- chronologically numbered contract
fice staff representative, preferably the change orders as they occur. Change
State Staff architect or engineer. orders will not be included in payment
Prefinal inspections may be made estimates until approved by all parties.
without Rural Development State Of- [50 FR 7296, Feb. 22, 1985, as amended at 52
fice staff participation if the State Di- FR 8035, Mar. 13, 1987; 53 FR 6791, Mar. 3, 1988;
rector or a designee determines that 54 FR 14334, Apr. 11, 1989; 54 FR 18883, May 3,
the facility does not utilize com- 1989; 61 FR 65156, Dec. 11, 1996; 77 FR 29539,
plicated construction techniques, ma- May 18, 2012; 79 FR 76001, Dec. 19, 2014; 81 FR
terials or equipment for facilities such 11030, Mar. 2, 2016]
as small fire stations, storage buildings
§ 1942.19 Information pertaining to
or minor utility extensions, and that preparation of notes or bonds and
an experienced District Office staff rep- bond transcript documents for pub-
resentative will be present. The inspec- lic body applicants.
tion results will be recorded on Form (a) General. This section includes in-
RD 1924–12, ‘‘Inspection Report,’’ and a formation for use by public body appli-
copy provided to all appropriate par- cants in the preparation and issuance
ties. of evidence of debt (bonds, notes, or
(6) Final inspection. A final inspection debt instruments, herein referred to as
will be made by Rural Development be- bonds). This section is made available
fore final payment is made. to applicants as appropriate for appli-
(7) Change is development plans. (i) cation processing and loan docket prep-
Changes in development plans may be aration.
approved by Rural Development when (b) Policies related to use of bond coun-
requested by owners, provided: sel. Preparation of the bonds and the
(A) Funds are available to cover any bond transcript documents will be the
additional costs; and responsibility of the applicant. Public
(B) The change is for an authorized body applicants will obtain the services
loan purpose; and and opinion of recognized bond counsel
(C) It will not adversely affect the with respect to the validity of a bond
soundness of the facility operation or issue, except as provided in (b) (1)
Rural Development’s security; and through (3) below. The applicant nor-
(D) The change is within the scope of mally will be represented by a local at-
the contract. torney who will obtain the assistance
of a recognized bond counsel firm
(ii) Changes will be recorded on Form
which has experience in municipal fi-
RD 1924–7, ‘‘Contract Change Order,’’
nancing with such investors as invest-
or, other similar forms may be used
ment dealers, banks, and insurance
with the prior approval of the State Di-
companies.
rector or designee. Regardless of the
(1) Issues of $250,000 or less. At the op-
form, change orders must be approved
tion of the applicant for issues of
by the Rural Development State Direc-
$250,000 or less, bond counsel may be
tor or a designated representative.
used for the issuance of a final opinion
(iii) Changes should be accomplished only and not for the preparation of the
only after Rural Development approval bond transcript and other documents
on all changes which affect the work when the applicant, Rural Develop-
and shall be authorized only by means ment, and bond counsel have agreed in
of contract change order. The change advance as to the method of prepara-
order will include items such as: tion of the bond transcript documents.
(A) Any changes in labor and mate- Under such circumstances the appli-
rial and their respective cost. cant will be responsible for the prepa-
(B) Changes in facility design. ration of the bond transcript docu-
(C) Any decrease or increase in quan- ments.
tities based on final measurements (2) Issues of $50,000 or less. At the op-
that are different from those shown in tion of the applicant and with the prior
the bidding schedule. approval of the Rural Development
89
State Director, the applicant need not (c) Bond transcript documents. Any
use bond counsel if: questions with respect to Rural Devel-
(i) The amount of the issue does not opment requirements should be dis-
exceed $50,000 and the applicant recog- cussed with the Rural Development
nizes and accepts the fact that proc- representatives. The bond counsel (or
essing the application may require ad- local counsel where no bond counsel is
ditional legal and administrative time. involved) is required to furnish at least
(ii) There is a significant cost saving two complete sets of the following to
to the applicant particularly with ref- the applicant, who will furnish one
erence to total legal fees after deter- complete set to Rural Development:
mining what bond counsel would (1) Copies of all organizational docu-
charge as compared with what the ments.
local attorney will charge without (2) Copies of general incumbency cer-
bond counsel. tificate.
(iii) The local attorney is able and (3) Certified copies of minutes or ex-
experienced in handling this type of cerpts therefrom of all meetings of the
legal work. applicant’s governing body at which
action was taken in connection with
(iv) The applicant understands that,
the authorization and issuance of the
if it is required by Rural Development
bonds.
to refinance its loan pursuant to the
(4) Certified copies of documents evi-
statutory refinancing requirements, it
dencing that the applicant has com-
will probably have to obtain at its ex-
plied fully with all statutory require-
pense a bond counsel’s opinion at that
ments incident to calling and holding
time. of a favorable bond election, if such an
(v) All bonds will be prepared in ac- election is necessary in connection
cordance with this regulation and will with bond issuance.
conform as nearly as possible to the (5) Certified copies of the resolution
preferred methods of preparation stat- or ordinances or other documents, such
ed in paragraph (e) of this section but as the bond authorizing resolutions or
still be consistent with State law. ordinance and any resolution estab-
(vi) Many matters necessary to com- lishing rates and regulating the use of
ply with Rural Development require- the improvement, if such documents
ments such as land rights, easements, are not included in the minutes fur-
and organizational documents will be nished.
handled by the applicant’s local attor- (6) Copies of official Notice of Sale
ney. Specific closing instructions will and affidavit of publication of Notice of
be issued by the Office of the General Sale where a public sale is required by
Counsel of the U.S. Department of Ag- State statute.
riculture for the guidance of Rural De- (7) Specimen bond, with any attached
velopment. coupons.
(3) For loans of less than $500,000. The (8) Attorney’s no-litigation certifi-
applicant shall not be required to use cate.
bond counsel in a straight mortgage- (9) Certified copies of resolutions or
note situation where competitive bid- other documents pertaining to the
ding is not required for the sale of the bond award.
debt instrument, unless a complicated (10) Any additional or supporting
financial situation exists with the ap- documents required by bond counsel.
plicant. In addition, if there is a known (11) For loans involving multiple ad-
backlog in a particular OGC regional vances of Rural Development loan
office the applicant will be advised of funds a preliminary approving opinion
such backlog and it will be suggested of bond counsel (or local counsel if no
to the applicant that the appointment bond counsel is involved) if a final un-
of bond counsel may be more expedi- qualified opinion cannot be obtained
tious. However, it will be the decision until all funds are advanced. The pre-
of the applicant whether or not to ap- liminary opinion for the entire issue
point bond counsel. The applicant must shall be delivered on or before the first
comply with (b)(2) (iii) through (vi) of advance of loan funds and state that
this section. the applicant has the legal authority
90
to issue the bonds, construct, operate for amortized installments. Show the
and maintain the facility, and repay full amount of the loan on the face of
the loan subject only to changes during the document and provide for entering
the advance of funds such as litigation the date and amount of each Rural De-
resulting from the failure to advance velopment advance on the reverse
loan funds, and receipt of closing thereof or on an attachment to the in-
certrificates. strument. Form RD 440–22 should be
(12) Preliminary approving opinion, if followed to the extent possible. When
any, and final unqualified approving principal payment is deferred, no at-
opinion of recognized bond counsel (or tempt should be made to compute in
local counsel if no bond counsel is in- dollar terms the amount of interest
volved) including opinion regarding in- due on these installment dates. Rather
terest on bonds being exempt from Fed- the instrument should provide that
eral and any State income taxes. On ‘‘interest only’’ is due on these dates.
approval of the Administrator, a final The appropriate amortized installment
opinion may be qualified to the extent computed as follows will be shown due
that litigation is pending relating to on the installment date thereafter.
Indian claims that may affect title to (i) Annual payments—Subtract the
land or validity of the obligation. It is due date of the last annual interest only
permissible for such opinions to con- installment from the due date of the
tain language referring to the last sen- final installment to determine the
tence of section 306(a)(1) or to section number of annual payments applicable.
309A(h) of the Consolidated Farm and When there are no interest only in-
Rural Development Act [7 U.S.C. stallments, the number of annual pay-
1926(a)(1) or 1929a(h)], and providing ments will equal the number of years
that if the bonds evidencing the indebt- over which the loan is amortized. Then
edness in question are required by the multiply the amount of the note by the
Federal Government and sold on an inapplicable amortization factor shown
sured basis from the Agriculture Credit in Rural Development Amortization
Insurance Fund, or the Rural Develop- Tables and round to the next higher
ment Insurance Fund, the interest on dollar. Example of Computation of An-
such bonds will be included in gross in- nual Payment:
come for the purpose of the Federal in-
Date of Loan Closing: 7–5–1976
come tax statutes. Amount of Loan: $100,000.00
(d) Interim financing from commercial Interest Rate: 5%
sources during construction period for Amortization Period: 40 years
loans of $50,000 or more. In all cases Interest Only Installments: 7–5–1977 and 7–5–
where it is possible for funds to be bor- 1978
rowed at current market interest rates First Regular Installment: 7–5–1979
on an interim basis from commercial Final Installment: 7–5–2016
sources, such interim financing will be Computation:
obtained so as to preclude the neces- 2016 ¥ 1978 = 38 annual payments
sity for multiple advances of Rural De- $100,000.00 × .05929 = $5,929.00 annual pay-
ment due
velopment funds.
(e) Permanent instruments for Rural (ii) Semiannual payments—Multiply
Development loans to repay interim com- by two the number of years between
mercial financing. Rural Development the due date of the last annual interest
loans will be evidenced by the fol- only installment and the due date of
lowing types of instruments chosen in the final installment to determine the
accordance with the following order of correct number of semiannual periods
preference: applicable. When there are no interest
(1) First preference—Form RD 440–22, only installments, multiply by two the
‘‘Promissory Note (Association or Organi- number of years over which the loan is
zation)’’. If legally permissible use amortized. Then multiply the amount
Form RD 440–22 for insured loans. of the note by the applicable amortiza-
(2) Second preference—single instru- tion factor shown in Rural Develop-
ments with amortized installments. If ment Amortization Tables and round
Form RD 440.22 is not legally permis- to the next higher dollar. Example of
sible, use a single instrument providing Computation of Semiannual Payment:
91
Date of Loan Closing: 7–5–1976 (A) A statement of principal matu-
Amount of Loan: $100,000.00 rities and due dates.
Interest Rate: 5% (B) Payments made on indebtedness
Amortization Period: 40 years
Interest Only Installments: 7–5–1977 and 7–5– evidenced by this instrument shall be
1978 applied to the interest due through the
First Regular Installment: 7–5–1979 next installment due date and the bal-
Final Installment: 7–5–2016 ance to principal in accordance with
Computation: the terms of the bond. Payments on de-
2016 ¥ 1978 = 38 × 2 = 76 semiannual peri- linquent accounts will be applied in the
ods
following sequence:
$100,000.00 × .02952 = $2,952.00 semiannual
payment due (1) Billed delinquent interest,
(2) Past due interest installments,
(iii) Monthly payments—Multiply by (3) Past due principal installments,
twelve the number of years between (4) Interest installment due, and
the due date of the last annual interest (5) Principal installment due.
only installment and the final install- Extra payments and payments made
ment to determine the number of from security depleting sources shall
monthly payments applicable. When be applied to the principal last to come
there are no interest only installments, due or as specified in the bond instru-
multiply by twelve the number of years ment.
over which the loan is amortized. Then (4) Fourth preference—serial bonds with
multiply the amount of the note by the installments of principal plus interest. If
applicable amortization factor shown instruments described under the first,
in Rural Development Amortization second, and third preferences are not
Tables and round to the next higher legally permissible, use serial bonds
dollar. Example of Computation of with a bond or bonds delivered in the
Monthly Payment: amount of each advance. Bonds will be
Date of Loan Closing: 7–5–1976 delivered in the order of their numbers.
Amount of Loan: $100,000.00 Such bonds will conform with the min-
Interest Rate: 5% imum requirements of paragraph (h) of
Amortization Period: 40 years this section. Rules for application of
Interest Only Installments: 7–5–1977 and 7–5–
payments on serial bonds will be the
1978
First Regular Installment: 7–5–1979 same as those for principal installment
Final Installment: 7–5–2016 single bonds as set out in the preceding
Computation: paragraph (e)(3) of this section.
2016 ¥ 1978 = 38 × 12 = 456 monthly pay- (f) Multiple advances of Rural Develop-
ments ment funds using permanent instruments.
$100,000.00 × .00491 = $491.00 monthly pay- Where interim financing from commer-
ment due
cial sources is not available, Rural De-
(3) Third preference—single instrument velopment loan proceeds will be dis-
with installments of principal plus inter- bursed on an ‘‘as needed by borrower’’
est. If a single instrument with amor- basis in amounts not to exceed the
tized installments is not legally per- amount needed during 30-day periods.
missible, use a single instrument pro- (g) Multiple advances of Rural Develop-
viding for installments of principal ment funds using temporary debt instru-
plus interest accrued on the unmatured ment. When none of the instruments de-
principal balance. The principal should scribed in paragraph (e) of this section
be in an amount best adapted to mak- are legally permissible or practical, a
ing principal retirement and interest bond anticipation note or similar tem-
payments which closely approximate porary debt instrument may be used.
equal installments of combined inter- The debt instrument will provide for
est and principal as required by the multiple advance of Rural Develop-
first two preferences. ment loan funds and will be for the full
(i) The repayment terms concerning amount of the Rural Development
interest only installments described in loan. The instrument will be prepared
paragraph (e)(2) of this section, ‘‘Sec- by bond counsel (or local counsel if
ond perference’’ applies. bond counsel is not involved) and ap-
(ii) The instrument shall contain in proved by the State Director and OGC.
substance the following provisions: At the same time Rural Development
92
delivers the last advance, the borrower ment due date; this is the individual
will deliver the permanent bond instru- coupon amount.
ment and the canceled temporary in- (2) Bond registration. Bonds will con-
strument will be returned to the bor- tain provisions permitting registration
rower. The approved debt instrument as to both principal and interest. Bonds
will show at least the following: purchased by Rural Development will
(1) The date from which each advance be registered in the name of ‘‘United
will bear interest. States of America, Rural Develop-
(2) The interest rate. ment,’’ and will remain so registered at
(3) A payment schedule providing for all times while the bonds are held or
interest on outstanding principal at insured by the United States. The ad-
least annually. dress of Rural Development for reg-
(4) A maturity date which shall be no
istration purposes will be that of the
earlier than the anticipated issuance
appropriate Rural Development State
date of the permanent instrument(s).
Office.
(h) Minimum bond specifications. The
provisions of this paragraph are min- (3) Size and quality. Size of bonds and
imum specifications only, and must be coupons should conform to standard
followed to the extent legally permis- practice. Paper must be of sufficient
sible. quality to prevent deterioration
(1) Type and denominations. Bond res- through ordinary handling over the life
olutions or ordinances will provide of the loan.
that the instrument(s) be either a bond (4) Date of bond. Bonds will preferably
representing the total amount of the be dated as of the day of delivery, how-
indebtedness or serial bonds in denomi- ever, may be dated another date at the
nations customarily accepted in mu- option of the borrower and subject to
nicipal financing (ordinarily in mul- approval by Rural Development. If the
tiples of not less than $1000). Single date of delivery is other than the date
bonds may provide for repayment of of the bond, the date of delivery will be
principal plus interest or amortized in- stated in the bond. In all cases, inter-
stallments; amortized installments are est will accrue from the date of deliv-
preferable from the standpoint of Rural ery of the funds.
Development. Coupon bonds will not be (5) Payment date. Loan payments will
used unless required by State statute. be scheduled to coincide with income
(i) To compute the value of each cou- availability and be in accordance with
pon when the bond denomination is State law. If consistent with the fore-
consistent: going, monthly payments will be re-
(A) Multiply the amount of the loan quired and will be enumerated in the
or advance by the interest rate and di-
bond, other evidence of indebtedness,
vide the product by 365 days.
or other supplemental agreement. How-
(B) Multiply the daily accrual factor
ever, if State law only permits prin-
determined in (A) by the number of
cipal plus interest (P&I) type bonds,
days from the date of advance or last
annual or semiannual P&I bonds will
installment date to the next install-
ment date. be used. Insofar as practical monthly
(C) Divide the interest computed in payments will be scheduled one full
(B) by the number of bonds securing month following the date of loan clos-
the advance; this is the individual cou- ing; or semiannual or annual payments
pon amount. will be scheduled six or twelve full
(ii) to compute the value of each cou- months, respectively, following the
pon when the bond denomination var- date of loan closing or any deferment
ies: period. Due dates falling on the 29th,
(A) Multiply the denomination of the 30th or 31st day of the month will be
bond by the interest rate and divide avoided.
the product by 365 days. (6) [Reserved]
(B) Multiply the daily accrual factor (7) Redemptions. Bonds should contain
determined in (A) by the number of customary redemption provisions, sub-
days from the date of advance or last ject, however, to unlimited right of re-
installment date to the next install- demption without premium of any
93
bonds held by Rural Development ex- (iv) Provisions that amend

cept to the extent limited by the provi- convenants contained in Forms RD
sions under the ‘‘Third Preference’’ and 1942–47, ‘‘Loan Resolution (Public Bod-
‘‘Fourth Preference’’ in paragraph (e) ies),’’ or FmHA 1942–9, ‘‘Loan Resolu-
of this section. tion Security Agreement.’’
(8) Additional revenue bonds. Parity (11) Multiple Loan Instruments. The
bonds may be issued to complete the following will be adhered to when pre-
project. Otherwise, parity bonds may paring debt instruments:
not be issued unless the net revenues (i) When more than one loan type is
(that is, unless otherwise defined by used in financing a project, each type
the State statute, gross revenues less of loan will be evidenced by a separate
essential operation and maintenance debt instrument or series of debt in-
expense) for the fiscal year preceding struments.
the year in which such parity bonds are (ii) Loan funds obligated in different
to be issued, were 120 percent of the av- fiscal years and those obligated with
erage annual debt service requirements different interest rates or terms in the
on all bonds then outstanding and same fiscal year will be evidenced by
those to be issued; provided, that this separate debt instruments.
limitation may be waived or modified (iii) Loan funds obligated for the
by the written consent of bondholders same loan type in the same fiscal year
representing 75 percent of the then out- at the same interest rate and term may
standing principal indebtedness. Junior be combined in the same debt instru-
and subordinate bonds may be issued in ment; provided the borrower has been
accordance with the loan agreement. notified on Form RD 1940–1, ‘‘Request
for Obligation of Funds’’, of the action.
(9) Scheduling of Rural Development
(i) Bidding by Rural Development.
payments when joint financing is in-
Bonds offered for public sale shall be
volved. In all cases in which Rural De-
offered in accordance with State law,
velopment is participating with an- in such a manner to encourage public
other lender in the joint financing of bidding. Rural Development will not
the project to supply funds required by submit a bid at the advertised sale un-
one applicant, the Rural Development less required by State law, nor will ref-
payments of principal and interest erence to Rural Development’s rates
should approximate amortized install- and terms be included. If no acceptable
ments. bid is received, Rural Development will
(10) Precautions. The following types negotiate the purchase of the bonds.
of provisions in debt instruments
should be avoided. [50 FR 7296, Feb. 22, 1985, as amended at 53
FR 6791, Mar. 3, 1988; 54 FR 18883, May 3, 1989;
(i) Provisions for the holder to manu- 56 FR 29168, June 26, 1991; 68 FR 61331, Oct. 28,
ally post each payment to the instru- 2003]
ment.
(ii) Provisions for returning the per- § 1942.20 Community Facility Guides.
manent or temporary debt instrument (a) The following documents are at-
to the borrower in order that it, rather tached and made part of this subpart
than Rural Development, may post the and may be used by officials in admin-
date and amount of each advance or re- istering this program.
payment on the instrument. (1) Guide 1 and 1a—Guide Letter for
(iii) Defeasance provisions in loan or Use in Informing Private Lender of
bond resolutions. When a bond issue is Agency’s Commitment.
defeased, a new issue is sold which su- (2) Guide 2—Water Users Agreement.
persedes the contractual provisions of (3) Guide 3—Service Declination
the prior issue, including the refi- Statement.
nancing requirement and any lien on (4) Guide 4—Bylaws.
revenues. Since defeasance in effect (5) Guide 5—Financial Feasibility Re-
precludes Rural Development from report.
quiring graduation before the final ma- (6) Guide 6—Preliminary Architec-
turity date, it represents a violation of tural Feasibility Report.
the statutory refinancing requirement, (7) Guide 7—Preliminary Engineering
therefore it is disallowed. Report Water Facility.
94
(8) Guide 8—Preliminary Engineering certain matters related to the plan-

Report Sewerage Systems. ning, development, and operation of es-
(9) Guide 9—Preliminary Engineering sential community facilities which in-
Report Solid Waste Disposal Systems. volve the use of loans and/or grants
(10) Guide 10—Preliminary Engineer- from Agency. This includes activities
ing Report Storm Waste-Water Dis- related to applying for and obtaining
posal. such financial assistance. These guides
(11) Guide 11—Daily Inspection Re- and exhibits are not published in the
port. FEDERAL REGISTER, however, they are
(12) Guide 12—Memorandum of Un- available in any Agency office.
derstanding Between the Economic De- [50 FR 7296, Feb. 22, 1985, as amended at 53
velopment Administration—Depart- FR 6787, Mar. 3, 1988]
ment of Commerce and the Department
of Agriculture Pertaining to EDA Pub- § 1942.21 Statewide nonmetropolitan
lic Works Projects Assisted by an median household income.
Agency loan. Statewide nonmetropolitan median
(13) Guide 13—Memorandum of Un- household income means the median
derstanding Between the Economic De- household income of the State’s non-
velopment Administration—Depart- metropolitan counties and portions of
ment of Commerce and the Department metropolitan counties outside of cities,
of Agriculture Regarding Supple- towns or places, of 50,000 or more popu-
mentary Grant Assistance for the Con- lation.
struction of Public Works and Develop-
[69 FR 65519, Nov. 15, 2004]
ment Facilities.
(14) Guide 14—Legal Services Agree- §§ 1942.22–1942.29 [Reserved]
ment.
(15) Guide 15—Community Facility § 1942.30 Re-lending.
Borrower’s Application. The provisions in this section estab-
(16) Guide 16—Community Facility lish the process by which the Agency
Loan Docket. may make loans to eligible re-lenders
(17) Guide 17—Construction Contract who then in turn re-loan the funds to
Documents—Short Form. eligible applicants for eligible projects
(18) Guide 18—Agency Supplemental under this subpart. This section may
General Conditions. be supplemented by provisions in an-
(19) Guide 19—Construction Contract nual notices published in the FEDERAL
Documents. REGISTER. In such notices, the Agency
(20) Guide 20—Agreement for Engi- may impose, among other things, lim-
neering Services (Agency/EPA Jointly its on the total amount of funds to be
Funded Projects). used through this process and the
(21) Guide 21—Review of Audit Re- amount of the loan funding that will be
ports. provided to each re-lender.
(22) Guide 22—Delinquent Accounts (a) Re-lender eligibility. Re-lenders
Positive Action Plan. must meet each of the following re-
(23) Guide 23—Agreement for Joint quirements:
Use of Electric System Poles. (1) Demonstrate the legal authority
(24) Guide 24—Minimum Suggested necessary to make and service loans in-
Contents of Management Agreements. volving community infrastructure and
(25) Guide 25—Joint Policy State- development similar to the type of
ment Between Environmental Protec- projects listed in § 1942.17(d);
tion Agency and the Agency. (2) Meet federal, state and local re-
(26) Guide 26—Community Programs quirements in accordance with
Project Selection Criteria. § 1942.17(k);
(27) Exhibit A—Circular No. A–128. (3) As specified in the annual FED-
(28) Exhibit B—Department of Agri- ERAL REGISTER notice, demonstrate
culture Regional Inspector General that a percent of its portfolio is for
(OIG). projects located in or serving Per-
(b) These guides and exhibits are for sistent Poverty County(ies) or High
use by Agency officials, applicants and Poverty Areas, or that the Re-lender
applicant’s officials and/or agents on has a minimum amount of experience
95
making loans for projects located in or cy in accordance with the annual FED-
serving Persistent Poverty County(ies) ERAL REGISTER notice;
or High Poverty Area(s); (8) Be a legal, non-governmental en-
(4) Agree to provide adequate collat- tity at the time of application (with
eral, as determined by the Agency, to the exception of Tribal governmental
support the loan request; entities);
(5) Provide a Letter of Intent from a (9) Be a member of a national organi-
financial institution that an Irrev- zation that provides training, technical
ocable Letter of Credit (or performance assistance and credit evaluation of
guarantee) acceptable to the Agency member organizations, such as FDIC,
will be issued by the financial institu- NCUA or other similar organizations;
tion if the Re-lender is approved for or be certified by a Government agency
funding; as having a primary mission of pro-
(6) As specified in the annual FED- moting community development in
ERAL REGISTER notice, agree to provide
low-income target markets and per-
an Irrevocable Letter of Credit (or perform training and technical assistance
formance guarantee) acceptable to the as part of that mission;
Agency in the minimum amount equal (10) Agrees to loan a majority of
to the principal and interest install- Agency funds, as specified in the an-
nual FEDERAL REGISTER notice, to ap-
ments due the Agency during the first
plicants whose projects are located in
five (5) years of the loan, prior to re-
or serve Persistent Poverty County(ies)
ceiving loan disbursements;
or High Poverty Area(s); and
(7) Demonstrate one of the following, (11) Meet any other criteria specified
as provided in the annual FEDERAL by the Agency in the annual Notice
REGISTER notice: published in the FEDERAL REGISTER.
(i) Re-lender is regulated and super- (b) Applicant and project eligibility. To
vised by a Federal or State Banking be eligible for a CF Direct loan from a
Regulatory Agency that is subject to re-lender under this section,
credit examination, AND the institu- (1) The applicant must meet the eli-
tion, its subsidiaries, holding compa- gibility requirements found in this sub-
nies, and affiliates are not on their re- part, including but not limited to those
spective regulatory agency’s watch list in § 1942.2(a)(2) regarding the inability
and have no regulatory actions out- to obtain credit elsewhere and
standing against them; § 1942.17(b) and (k);
(ii) Re-lender has a strong Financial (2) The applicant must comply with
Strength and Performance Rating as any other criteria specified by the
specified in the annual FEDERAL REG- Agency in the annual Program Notice
ISTER notice. The achieved rating must published in the FEDERAL REGISTER;
indicate financial strength, perform- and
ance, and risk management practices (3) The project must:
that consistently provide for safe and (i) Meet all of the eligibility require-
sound operations; or ments for a project found in this sub-
(iii) At the time of application, Re- part, including but not limited to
lender provides written documentation, § 1942.17(b)(2), (d), (e), and (g) and all en-
acceptable to the Agency, from a finan- vironmental review requirements as
cial institution that an Irrevocable specified in § 1942.2(b) and 7 CFR part
Letter of Credit (or performance guar- 1970; and
antee) acceptable to the Agency will be (ii) Meet any additional requirements
issued by the financial institution, if that may be specified in the program’s
the Re-lender is approved for funding; annual Notice published in the FED-
and the Re-lender: ERAL REGISTER.
(A) Obtains a strong Financial (c) Application submission require-
Strength and Performance Rating as ments. To apply for funds under this
specified in the Annual FEDERAL REG- section, a Re-lender must timely sub-
ISTER notice prior to any funds being mit all items as specified in the annual
advanced; or FEDERAL REGISTER notice.
(B) Proves to be a financially sound (d) Evaluation criteria. The Agency
institution as determined by the Agen- will score and rank all eligible and
96
complete Re-lender applications based in 5 years. Any loan funds not dis-
upon the evaluation factors set out in bursed within that time will be
the annual FEDERAL REGISTER notice, deobligated and become unavailable for
including but not limited to: Lending disbursement.
experience and strength of the re-lend- (2) Agency responsibilities. (i) Based on
er, poverty and project service area, the information presented by the Re-
and Administrator’s discretionary lender and any additional information
points. that may be requested by the Agency,
(e) Other Re-lender requirements. Prior the Agency will determine the eligi-
to receiving a direct loan from the bility of the applicant and project
Agency, the eligible re-lender must: under this subpart.
(1) Enter into a Re-lender’s agree- (ii) The Agency will notify the re-
ment provided by the Agency; lender of its determination and any ad-
(2) Execute a promissory note; ministrative review or appeal rights for
(3) Provide an Agency approved Irrev- Agency decisions made under this sub-
ocable Letter of Credit (or performance
part. Programmatic decisions based on
guarantee) acceptable to the Agency in
clear and objective statutory or regu-
the minimum amount equal to the
latory requirements are not appeal-
principal and interest installments due
able; however, such decisions are re-
during the first five (5) years of the
viewable for appealability by the Na-
loan, prior to receiving any loan dis-
bursements; tional Appeals Division (NAD). The ap-
(4) Provide adequate collateral satis- plicant and re-lender may appeal any
factory to the agency; and Agency decision that directly and ad-
(5) Meet any other loan conditions as versely impacts them. For an adverse
described in the annual Notice pub- decision that impacts the applicant,
lished in the FEDERAL REGISTER. the re-lender and applicant must joint-
(f) Loan origination and servicing— ly execute a written request for appeal
(1)Re-lenders. After the Agency loan is for an alleged adverse decision made by
made to the Re-lender, the Re-lender is the Agency. An adverse decision that
responsible for: only impacts the re-lender may be ap-
(i) Presenting to the Agency eligible pealed by the re-lender only. A decision
CF direct loan applications in accord- by a re-lender adverse to the interest of
ance with this subpart and any addi- an applicant or borrower is not a deci-
tional terms established in the applica- sion by the Agency, whether or not
ble annual Notice published in the FED- concurred in by the Agency. Appeals
ERAL REGISTER; will be conducted by USDA NAD and
(ii) Underwriting and servicing each will be handled in accordance with 7
loan reviewed and approved by the CFR part 11.
Agency under this section; (iii) For approved eligible borrowers
(iii) Submitting reports to the Agen- and projects, the Agency will confirm
cy after any loan disbursement as spec- that all environmental requirements as
ified in the annual FEDERAL REGISTER specified in this subpart and 7 CFR
notice; part 1970 have been met and that the
(iv) Certifying to the Agency that the Re-lender has provided adequate secu-
Re-lender and Borrower have met the rity for its loan, before the Agency will
requirements of 7 CFR 3575.42 and disburse funds to the Re-lender;
3575.43 for planning, bidding, con- (iv) The Agency will service each re-
tracting and construction, as specified lender’s loan in accordance with 7 CFR
in the annual FEDERAL REGISTER No- part 1951, subpart E. The Agency may
tice; suspend further disbursements, and
(v) Complying with other Agency re- pursue any other available and appro-
quirements as specified in the annual priate remedies, if any of the re-lender
FEDERAL REGISTER notice concerning loans become troubled, delinquent, or
environmental, civil rights, and other otherwise in default status, or if the re-
applicable Federal state, and local law;
lender is not meeting the terms of its
(vi) Obtaining disbursement of loan
Relender’s Agreement.
funds according to this section and the
annual FEDERAL REGISTER notice with- [81 FR 43936, July 6, 2016]
97
§§ 1942.31–1942.49 [Reserved] ship or association with a Rural Devel-

opment employee. Community Facili-
§ 1942.50 OMB control number. ties loans for other types of facilities,
The reporting and recordkeeping re- and those costing in excess of $300,000,
quirements contained in this regula- are defined in subpart A of this part.
tion have been approved by the Office [68 FR 65830, Nov. 24, 2003]
of Management and Budget (OMB) and
have been assigned OMB control num- § 1942.102 Nondiscrimination.
ber 0575–0015. Public reporting burden (a) Federal statutes provide for ex-
for this collection of information is es- tending Agency financial programs
timated to vary from five minutes to 15 without regard to race, color, religion,
hours per response, with an average of sex, national origin, marital status,
2.7 hours per response, including time age, or physical/mental handicap. The
for reviewing instructions, searching
participants must possess the capacity
existing data sources, gathering and
to enter into legal contracts under
maintaining the data needed, and com-
State and local statutes.
pleting and reviewing the collection of
(b) Indian tribes on Federal and State
information. Send comments regarding
reservations and other Federally recog-
this burden estimate or any other as-
nized Indian tribes are eligible to apply
pect of this collection of information,
for and are encouraged to participate
including suggestions for reducing this
in this program. Such tribes might not
burden to the Department of Agri-
be subject to State and local laws or
culture, Clearance Officer, OIRM, Ag
jurisdiction. However, any require-
Box 7630, Washington, DC 20250; and to
the Office of Management and Budget, ments of this subpart that affect appli-
Paperwork Reduction Project (OMB cant eligibility, the adequacy of RD’s
#0575–0015), Washington, DC 20503. security or the adequacy of service to
users of the facility and all other re-
[60 FR 11019, Mar. 1, 1995] quirements of this subpart must be
met.
Subpart B [Reserved]
§ 1942.103 Definitions.
Subpart C—Fire and Rescue and Agency. The Rural Housing Service
Other Small Community Fa- (RHS), an agency of the U.S. Depart-
cilities Projects ment of Agriculture.
Approval official. An official who has
been delegated loan or grant approval
SOURCE: 52 FR 43726, Nov. 16, 1987, unless
otherwise noted.
authorities within applicable pro-
grams, subject to certain dollar limita-
§ 1942.101 General. tions.
Construction. The act of building or
This subpart provides the policies
putting together a facility that is a
and procedures for making and proc-
part of, or physically attached to, real
essing insured Community Facilities
estate. This does not include procure-
(CF) loans for facilities that will pri-
ment of major equipment even though
marily provide fire or rescue services
the equipment may be custom built to
and other small essential community
facility projects and applies to fire and meet the owner’s requirements.
rescue and other Community Facilities Owner. An applicant or borrower.
loans for projects costing $300,000 and Processing office. The office des-
under. Any processing or servicing ac- ignated by the State program official
tivity conducted pursuant to this sub- to accept and process applications for
part involving authorized assistance to Community Facilities projects.
Rural Development employees, mem- Regional Attorney or OGC. The head of
bers of their families, known close rel- a Regional Office of the General Coun-
atives, or business or close personal as- sel (OGC).
sociates, is subject to the provisions of Small Community Facilities projects.
subpart D of part 1900 of this chapter. Community Facilities loans costing
Applicants for this assistance are re- $300,000 and under.
quired to identify any known relation- [68 FR 65830, Nov. 24, 2003]
98
§ 1942.104 Application processing. § 1942.105 Environmental review re-

quirements.
(a) General. Prospective applicants
should request assistance by filing SF Loans made under this subpart must
424.2, ‘‘Application for Federal Assist- be in compliance with the environ-
ance (For Construction),’’ with the mental review requirements in accord-
Local or Area Rural Development Of- ance with 7 CFR part 1970.
fice. When practical, approval officials [81 FR 11031, Mar. 2, 2016]
should meet with prospective appli-
cants before an application is filed to § 1942.106 Intergovernmental review.
discuss eligibility and Rural Develop- (a) Loans under this subpart are sub-
ment requirements and processing project to intergovernmental review re-
cedures. Throughout loan processing, quirements set forth in U. S. Depart-
Rural Development should confer with ment of Agriculture regulations 7 CFR
applicant officials as needed to ensure 3015, subpart V and RD Instruction
that applicant officials understand the 1970–I, ‘Intergovernmental Review,’
current status of the processing of available in any Agency office or on
their application, what steps and deter- the Agency’s Web site.
(b) State intergovernmental review
minations are necessary, and what is
agencies that have selected community
required from them. Rural Develop-
facility loans as a program they want
ment should assist the applicant as to review may not be interested in re-
needed and generally try to develop viewing proposed loans for fire and res-
and maintain a cooperative working re- cue facilities. In such cases, the State
lationship with the applicant. Director should obtain a letter from
(b) Unfavorable decision. If, at any the State single point of contact ex-
time prior to loan approval, it is de- empting fire and rescue loans from
cided that favorable action will not be intergovernmental consultation re-
taken on an application, the approval view. A copy of the letter should be
official will notify the applicant, in placed in the case file for each fire and
writing, of the reasons why the request rescue facility application in lieu of
was not favorably considered. The noti- completing the intergovernmental re-
fication to the applicant will state that view process.
a review of this decision by Rural De- (c) When an application is filed and
velopment may be requested by the ap- adverse comments are not expected,
plicant in accordance with subpart B of the District Director should proceed
part 1900 of this chapter. The following with application processing pending
statement will also be made on all no- intergovernmental review. The loan
tifications of adverse action: should not be obligated until any re-
quired review process has been com-
The Federal Equal Credit Opportunity Act pleted.
prohibits creditors from discriminating (d) Funds allocated for use under this
against credit applicants on the basis of subpart are also for the use of eligible
race, color, religion, national origin, sex, Indian tribes within the State, regard-
marital status, age (provided that the appli- less of whether State development
cant has the capacity to enter into a binding
strategies include Indian reservations.
contract); because all or part of the appli-
Eligible Indian tribes must have equal
cant’s income is derived from any public as-
sistance program; or because the applicant
opportunity to participate in the pro-
has in good faith exercised any right under gram as compared with other residents
the Consumer Credit Protection Act. The of the State.
Federal agency that administers compliance [52 FR 43726, Nov. 16, 1987, as amended at 61
with this law is the Federal Trade Commis- FR 6309, Feb. 20, 1996; 76 FR 80730, Dec. 27,
sion, Equal Credit Opportunity, Washington, 2011]
DC 20580.
§ 1942.107 Priorities.
[52 FR 43726, Nov. 16, 1987, as amended at 54
FR 47197, Nov. 13, 1989; 55 FR 13504, Apr. 11, (a) Eligible applications must be se-
1990; 68 FR 65830, Nov. 24, 2003; 68 FR 69001, lected for processing in accordance
Dec. 11, 2003] with § 1942.17(c) of subpart A of this
part 1942.
99
(b) The District Director must score (e) Organizational review. As early in
each eligible application in accordance the application process as practical,
with § 1942.17(c)(2)(iii) of subpart A of the approval official should obtain cop-
this part 1942. The District Director ies of organization documents from
must then notify the State Director of each applicant and forward them
the score, proposed loan amount, and through the State Office to the Re-
other pertinent data. The State Direc- gional Attorney for review and com-
tor should determine as soon as pos- ments. The Regional Attorney’s com-
sible if the project has sufficient pri- ments should be received and consid-
ority for further processing and notify ered before obligation of funds.
the District Director. Normally, this (f) National Office review. Applications
consultation should be handled by tele- that require National Office review will
phone and documented in the running be submitted in accordance with
record. § 1942.5(b) of subpart A of this part 1942.
(c) Applicants who appear eligible (g) State Office review. The State Of-
but do not have the priority necessary fice must monitor fire and rescue and
for further consideration at this time other small community facility project
should be notified that funds are not loanmaking and servicing and provide
available, requested to advise whether guidance, assistance, and training as
they wish to have their application necessary to ensure the activities are
maintained for future consideration accomplished in an orderly manner
and given the following notice: consistent with the Agency’s regula-
You are advised against incurring obligations. The processing office should re-
tions which would limit the range of alter- quest advice and assistance from the
natives to be considered, or which cannot be State Office as needed. The State Di-
fulfilled without Agency funds until the rector may require all or part of a spe-
funds are actually made available. There- cific application docket to be sub-
fore, you should refrain from such actions as mitted to the State Office for review at
initiating engineering and legal work, tak- any time. The State Director may de-
ing actions which would have an adverse ef-
termine that one or more of the proc-
fect on the environment, taking options on
land rights, developing detailed plans and essing office staffs do not have ade-
specifications, or inviting construction bids quate training and expertise to rou-
until notified by RD to proceed. tinely complete application dockets
without State Office review. In such
§ 1942.108 Application docket prepara- cases, the State Director should estab-
tion and review. lish guidelines by memorandum or by
(a) Guides. Application dockets State supplement to the subpart for
should be developed in accordance with the necessary State Office reviews.
§ 1942.2(c) of subpart A of this part 1942. (h) Loan approval and fund obligation.
(b) [Reserved] Loans must be approved and obligated
(c) Budgets. All applicants must com- in accordance with § 1942.5(d) of subpart
plete Form RD 442–7, ‘‘Operating Budg- A of this part 1942 and subpart A of
et,’’ except as provided in this para- part 1901 of this chapter.
graph. Applicants with annual incomes [52 FR 43726, Nov. 16, 1987, as amended at 54
not exceeding $100,000 may, with con- FR 47197, Nov. 13, 1989; 67 FR 60854, Sept. 27,
currence of the District Director, use 2002; 68 FR 65830, Nov. 24, 2003]
Form RD 1942–52, ‘‘Cash Flow Projec-
tion,’’ instead of Form RD 442–7. Pro- § 1942.109 [Reserved]
jections should be provided for the cur-
rent year and each year thereafter § 1942.110 Strategic economic and
until the facility is expected to have community development.
been in operation for a full year and a Applicants with projects that support
full annual installment paid on the the implementation of Strategic Com-
loan. munity Investment Plans are encour-
(d) Letter of conditions. The District aged to review and consider 7 CFR part
Director should prepare and issue a let- 1980, subpart K, which contains provi-
ter of conditions in accordance with sions for providing priority to projects
§ 1942.5 (a)(1) and (c) of subpart A of this that support the implementation of
part 1942. Strategic Community Investment
100
Plans on a multi-jurisdictional and (ii) The purchase of existing facilities

multi-sectoral basis. when it is necessary either to improve
or to prevent a loss of service.
[85 FR 59393, Sept. 22, 2020]
(iii) The construction or development
§ 1942.111 Applicant eligibility. of an essential community facility req-
uisite to the beneficial and orderly de-
(a) General. Loans under this subpart velopment of a community operated on
are subject to the provisions of a nonprofit basis in accordance with
§ 1942.17(b) of subpart A of this part § 1942.17(d) of this subpart. This subpart
1942. includes those projects meeting the
(b) Credit elsewhere determinations. definition of a small community facil-
The approval official must determine ity project.
whether financing from commercial (2) To pay the following expenses, but
sources at reasonable rates and terms only when such expenses are a nec-
is available. If credit elsewhere is indi- essary part of a loan to finance facili-
cated, the approval official should in- ties authorized in paragraph (a)(1) of
form the applicant and recommend the this section:
applicant apply to commercial sources (i) Reasonable fees and costs such as
for financing. To provide a basis for re- legal, engineering, architectural, fiscal
ferral of only those applicants who advisory, recording, environmental im-
may be able to finance projects pact analyses, archaeological surveys
through commercial sources, approval and possible salvage or other mitiga-
officials should maintain liaison with tion measures, planning, establishing
representatives of lenders in the area. or acquiring rights.
(ii) Interest on loans until the facil-
The State Director should keep ap-
ity is self-supporting but not for more
proval officials informed regarding
than 3 years unless a longer period is
lenders outside the area who might
approved by the National Office; inter-
make loans in the area. Approval offi-
est on loans secured by general obliga-
cials should maintain criteria for de-
tion bonds until tax revenues are avail-
termining applications that should be able for payment, but not for more
referred to commercial lenders and than 2 years unless a longer period is
maintain a list of lender representa- approved by the National Office; and
tives interested in receiving such refer- interest on interim financing, includ-
rals. ing interest charges on interim financ-
(c) Public use. Loans under this sub- ing from sources other than RD.
part are subject to the provisions of (iii) Costs of acquiring interest in
§ 1942.17(e) of subpart A of this part land, rights such as water rights,
1942. leases, permits, rights-of-way, and
[52 FR 43726, Nov. 16, 1987, as amended at 68 other evidence of land or water control
FR 65830, Nov. 24, 2003] necessary for development of the facil-
ity.
§ 1942.112 Eligible loan purposes. (iv) Purchasing or renting equipment
necessary to install, maintain, extend,
(a) Funds may be used: protect, operate, or utilize facilities.
(1) To construct, enlarge, extend, or (v) Initial operating expenses for a
otherwise improve essential commu- period ordinarily not exceeding 1 year
nity facilities primarily providing fire when the borrower is unable to pay
or rescue services primarily to rural such expenses.
residents and rural business. Rural (vi) Refinancing debts incurred by, or
businesses would include facilities such on behalf of, a community when all of
as educational and other publicly the following conditions exist:
owned facilities. ‘‘Otherwise improve’’ (A) The debts being refinanced are a
includes but is not limited to the fol- secondary part of the total loan;
lowing: (B) The debts are incurred for the fa-
(i) The purchase of major equipment, cility or service being financed or any
such as fire trucks and ambulances, part thereof; and
which will, in themselves, provide an (C) Arrangements cannot be made
essential service to rural residents. with the creditors to extend or modify
101
the terms of the debts so that a sound § 1942.113 Rates and terms.
basis will exist for making a loan. Rates and terms for loans under this
(3) To pay obligations for construc- subpart are as set out in § 1942.17(f) of
tion or procurement incurred before subpart A of this part 1942.
loan approval. Construction work or
procurement actions should not be § 1942.114 Security.
started and obligations for such work Specific requirements for security for
or materials should not be incurred be- each loan will be included in the letter
fore the loan is approved. However, if of conditions. Loans must be secured
there are compelling reasons for pro- by the best security position prac-
ceeding with construction or procure- ticable, in a manner which will ade-
ment before loan approval, applicants quately protect the interest of RD dur-
may request Agency approval to pay ing the repayment period of the loan,
such obligations. Such requests may be and in accordance with the following;
approved if RD determines that: (a) Security must include one of the
(i) Compelling reasons exist for in- following:
curring obligations before loan ap- (1) A pledge of revenue and a lien on
proval; and all real estate and major equipment
(ii) The obligations will be incurred purchased or developed with the Agen-
for authorized loan purposes; and cy loan; or
(iii) Contract documents have been (2) General obligation bonds or bonds
approved by RD; and pledging other taxes.
(iv) All environmental requirements (b) Additional security may be re-
applicable to RD and the applicant quired as determined necessary by the
have been met; and loan approval official. In determining
(v) The applicant has the legal au- the need for additional security the
thority to incur the obligations at the loan approval official should carefully
time proposed, and payment of the consider:
debts will remove any basis for any me- (1) The estimated market value of
chanic, material or other liens that real estate and equipment security.
may attach to the security property. (2) The adequacy and dependability of
RD may authorize payment of such ob- the applicant’s revenues, based on the
ligations at the time of loan closing. applicant’s financial records, the
RD’s authorization to pay such obliga- project financial feasibility report, and
tions, however, is on the condition that the project budgets.
it is not committed to make the loan; (3) The degree of community commit-
it assumes no responsibility for any ob- ment to the project, as evidenced by
ligations incurred by the applicant; items such as active broad based mem-
and the applicant must subsequently bership, aggressive leadership, broad
meet all loan approval requirements. based fund drives, or contributions by
The applicant’s request and Agency au- local public bodies.
thorization for paying such obligations (c) Additional security may include,
shall be in writing. If construction or but is not limited to, the following:
procurement is started without Agency (1) Liens on additional real estate or
approval, post approval in accordance equipment.
with this section may be considered. (2) A pledge of revenues from addi-
tional sources.
(b) Funds may not be used to finance:
(3) An assignment of assured income
(1) Facilities which are not modest in
in accordance with
size, design, and cost.
§ 1942.17(g)(3)(iii)(A)(1) of subpart A of
(2) Loan finder’s fees. this part 1942.
(3) Projects located within the Coast- (d) Review and approval or concur-
al Barriers Resource system that do rence in the State Office is required if
not qualify for an exception as defined the security will not include a pledge
in section 6 of the Coastal Barriers Re- of taxes and the applicant cannot pro-
source Act, Pub. L. 97–348. vide evidence of the financially suc-
[52 FR 43726, Nov. 16, 1987, as amended at 57 cessful operation of a similar facility
FR 21195, May 19, 1992; 68 FR 65831, Nov. 24, for the 5 years immediately prior to
2003] loan application.
102
(e) Review and concurrence in the project and its financing except the
National Office is required if the secu- District Director may, with the con-
rity will not include a pledge of taxes, currence of the State Director (with
the applicant cannot provide evidence advice of OGC as needed), accept the
of the financially successful operation loan resolution without such member-
of a similar facility for the 5 years im- ship authorization when State statutes
mediately prior to loan application, and the organization charter and by-
and the amount of the loan will exceed laws do not require such authorization.
$250,000. (c) Insurance and bonding. Loans
(f) Loans under this subpart are sub- under this subpart are subject to the
ject to the provisions of § 1942.17(g)(1) of provisions of § 1942.17(j)(3) of subpart A
subpart A of this part 1942, regarding of this part 1942.
security for projects utilizing joint fi- (d) Acquisition of land and rights.
nancing. Loans under this subpart are subject to
[52 FR 43726, Nov. 16, 1987; 52 FR 47097, Dec. the provisions of § 1942.17(j)(4) of sub-
11, 1987] part A of this part 1942.
(e) Lease agreements. Loans under this
§ 1942.115 Reasonable project costs. subpart are subject to the provisions of
Applicants are responsible for deter- § 1942.17(j)(5) of subpart A of this part
mining that prices paid for property 1942.
rights, construction, equipment, and (f) Notes and bonds. Loans under this
other project development are reason- subpart are subject to the provisions of
able and fair. RD may require an ap- §§ 1942.17(j)(6) and 1942.19 of subpart A of
praisal by an independent appraiser or this part 1942.
Agency employee. (g) Public information. Loans under
this subpart are subject to the provi-
§ 1942.116 Economic feasibility re-
quirements. sions of § 1942.17 (j)(9) of subpart A of
this part 1942.
All projects financed under this sec-
(h) Joint funding. Loans under this
tion must be based on taxes, assess-
subpart are subject to the provisions of
ments, revenues, fees, or other satisfac-
§§ 1942.2 (e) and 1942.17 (j)(11) of subpart
tory sources of revenues in an amount
A of this part 1942.
sufficient to provide for facility oper-
ation and maintenance, a reasonable § 1942.118 Other Federal, State, and
reserve, and debt payment. An overall local requirements.
review of the applicant’s financial sta-
tus, including a review of all assets and (a) Loans under this subpart are sub-
liabilities, will be a part of the docket ject to the provisions of § 1942.17 (k) of
review process by the Agency staff and subpart A of this part 1942.
approval official. All applicants will be (b) An initial compliance review
expected to provide a financial feasi- should be completed under subpart E of
bility report. These financial feasi- part 1901 of this chapter.
bility reports will normally be:
(a) Included as part of the prelimi- § 1942.119 Professional services and
borrower contracts.
nary engineer/architectural report
using guide 6 to subpart A of this part (a) Loans under this subpart are sub-
1942 (available in any RD Office), or ject to the provisions of § 1942.17 (l) of
(b) Prepared by the applicant using subpart A of this part 1942.
Form RD 1942–54, ‘‘Applicant’s Feasi- (b) The District Director will, with
bility Report.’’ assistance as necessary by the State
Director and OGC, concur in agree-
§ 1942.117 General requirements. ments between borrowers and third
(a) Reserve requirements. Loans under parties such as contracts for profes-
this subpart are subject to the provi- sional and technical services. The
sions of § 1942.17 (i) of subpart A of this State Director may require State Of-
part 1942. fice review of such documents in ac-
(b) Membership authorization. The cordance with § 1942.108 (g) of this sub-
membership of organizations other part. State Directors are expected to
than public bodies must authorize the work closely with representatives of
103
engineering and architectural soci- OGC will be transmitted to OGC with a

eties, bar associations, commercial request for closing instructions. Upon
lenders, accountant associations, and receipt of the closing instructions from
others in developing standard forms of OGC, the State Director will forward
agreements, where needed, and other them along with any appropriate in-
matters to expedite application proc- structions to the District Director.
essing, minimize referrals to OGC, and Upon receipt of closing instructions,
resolve problems which may arise. the District Director will discuss with
Standard forms should be reviewed by the applicant and its architect or engi-
and approved by OGC. neer, attorney, and other appropriate
representatives, the requirements con-
§§ 1942.120–1942.121 [Reserved] tained therein and any actions nec-
§ 1942.122 Actions prior to loan closing essary to proceed with closing.
and start of construction. (2) Loans will be closed in accordance
with the closing instructions issued by
(a) Excess Agency loan funds. Loans
OGC and § 1942.19 of subpart A of this
under this subpart are subject to the
part 1942.
provisions of § 1942.17 (n)(1) of subpart A
of this part 1942. (c) Organizations other than public
(b) Loan resolutions. Loans under this bodies and Indian tribes. District Direc-
subpart are subject to the provisions of tors are authorized to close loans to or-
§ 1942.17 (n)(2) of subpart A of this part ganizations other than public bodies
1942. and Indian tribes without closing in-
(c) Interim financing. Loans under this structions from OGC. State Directors,
subpart are subject to the provisions of in consultation with OGC, should de-
§ 1942.17 (n)(3) of subpart A of this part velop standard closing procedures and
1942. forms as needed. Assistance with loan
(d) Applicant contribution. Loans closing and a certification regarding
under this subpart are subject to the the validity of the note and mortgage
provisions of § 1942.17 (n)(5) of subpart A or other debt instruments should be
of this part 1942 this chapter. provided by the applicant’s attorney.
(e) Evidence of and disbursement of Appropriate title opinion or title insur-
other funds. Loans under this subpart ance is required as provided in § 1942.17
are subject to the provisions of § 1942.17 (j)(4)(i)(B) of subpart A of this part
(n)(6) of subpart A of this part 1942. 1942.
(f) Assurance agreement. All appli- (d) Authority to execute, file, and
cants must execute Form RD 400–4, record legal instruments. District Office
‘‘Assurance Agreement,’’ at or before employees are authorized to execute
loan closing. and file or record any legal instru-
ments necessary to obtain or preserve
§ 1942.123 Loan closing. security for loans. This includes, as ap-
(a) Ordering loan checks. Checks will propriate, mortgages and other lien in-
not be ordered until: struments, as well as affidavits, ac-
(1) Form RD 440–57, ‘‘Acknowledge- knowledgements, and other certifi-
ment of Obligated Funds/Check Re- cates.
quest,’’ has been received from the Fi- (e) Mortgages. Unless otherwise re-
nance Office. quired by State law or unless an excep-
(2) The applicant has complied with tion is approved by the State Director
approval conditions and any closing in- with advice of the OGC, only one mort-
structions, except for those actions gage will be taken even though the in-
which are to be completed on the date debtedness is to be evidenced by more
of loan closing or subsequent thereto. than one instrument. The real estate
(3) The applicant is ready to start or chattel mortgages or security in-
construction or funds are needed to pay struments will be delivered to the re-
interim financing obligations. cording office for recordation or filing,
(b) Public bodies and Indian tribes. (1) as appropriate. A copy of such instru-
After loan approval the completed ments will be delivered to the bor-
docket will be reviewed by the State rower. The original instrument, if re-
Director. The information required by turnable after recording or filing, will
104
be retained in the borrower’s case fold- struments. The permanent instruments

er. and the cash collection will be for-
(f) Notes and bonds. When the debt in- warded to the Office of the Deputy
strument is a note or single instrument Chief Financial Officer immediately,
bond fully registered as to principal except that for notes and single instru-
and interest a conformed copy will be ment bonds fully registered as to prin-
sent to the Finance Office immediately cipal and interest the original will be
after loan closing and the original in- retained in the Area Office and a copy
strument will be stored in the District will be forwarded to the Office of the
Office. When other types of bonds are Deputy Chief Financial Officer. In de-
used, the original bond(s) will be for- veloping the permanent instruments,
warded to the Finance Office imme- the sequence of preference set out
diately after loan closing. § 1942.19(e) of Subpart A of Part 1942 of
(g) Disposition of title evidence. All this chapter will be followed.
title evidence other than the opinion of (i) Bond registration record. Form RD
title and mortgage title insurance pol- 442–28, ‘‘Bond Registration Book,’’ may
icy, will be returned to the borrower be used as a guide to assist borrowers
when the loan has been closed. in the preparation of a bond registra-
(h) Multiple advances. When tem- tion book in those cases where a reg-
porary paper, such as bond anticipation istration book is required and a book is
notes or interim receipts, is used to not provided in connection with the
conform with the multiple advance re- printing of the bonds.
quirement, the original temporary (j) Loan disbursements. Whenever a
paper will be forwarded to the Finance loan disbursement is received, lost, or
Office after each advance is made to destroyed, the Rural Development
the borrower. The borrower’s case Manager will take the appropriate ac-
number will be entered in the upper tions outlined in Rural Development
right-hand corner of such paper by the Instruction 2018–D.
Distict Office. The permanent debt in- (k) Safeguarding bond shipments.
strument(s) should be forwarded to the Agency personnel will follow the proce-
Finance Office as soon as possible after dures for safeguarding mailings and de-
the last advance is made, except that liveries of bonds and coupons outlined
for notes and single instrument bonds in RD Instruction 2018–E (available in
fully registered as to principal and in- any RD office), whenever they mail or
terest the original will be retained in deliver these items.
the District Office and a copy will be (l) Review of loan closing. When the
forwarded to the Finance Office. The loan has been closed, the Rural Devel-
following actions will be taken prior to opment Manager will submit the com-
issuance of the permanent instru- pleted loan closing documents and a
ments: statement showing what was done in
(1) The Finance Office will be notified closing the loan to the State Director.
of the anticipated date for the retire- The State Director will review the doc-
ment of the interim instruments and uments and the Rural Development
the issuance of permanent instruments Manager’s statement to determine
of debt. whether the transaction was closed
(2) The Office of the Deputy Chief Fi- properly. For loans to public bodies or
nancial Officer will prepare a state- Indian tribes the State Director will
ment of account including accrued in- forward all documents, along with a
terest through the proposed date of re- statement that all administrative re-
tirement and also show the daily inter- quirements have been met, to the Re-
est accrual. The statement of account gional Attorney. The Regional Attor-
and the interim financing instruments ney will review the submitted material
will be forwarded to the Rural Develop- to determine whether all legal require-
ment Manager. ments have been met. The Regional At-
(3) The Rural Development Manager torney should review Rural Develop-
will collect interest through the actual ment standard forms only for proper
date of the retirement and obtain the execution, unless the State Director
permanent instrument(s) of debt in ex- brings attention to specific questions.
change for the interim financing in- Facility development should not be
105
held up pending receipt of the Regional not more than $100,000 the final plans
Attorney opinion. When the review of and specifications may be provided by
the State Director has been completed, the contractor who submits the suc-
and for public bodies and Indian tribes cessful proposal. The plans and speci-
the Regional Attorney’s opinion has fications must be prepared by or under
been received, the State Director must the supervision of an architect or engi-
advise the Rural Development Manager neer who is licensed in the State where
of any deficiencies that must be cor- the facility is to be located and should
rected and return all material that was include all materials and work to be
submitted for review. provided under the contract. Some
(m) Loan cancellation. Loans under work and material may be omitted
this subpart are subject to the provi- from the contract provided the owner
sions of § 1942.12 of subpart A of this furnishes detailed cost estimates for
part 1942. whatever is needed to fully complete
[52 FR 43726, Nov. 16, 1987, as amended at 59 the facility and will complete the facil-
FR 54788, Nov. 2, 1994; 70 FR 19254, Apr. 13, ity in accordance with paragraph (e) of
2005] this section and the small purchase
procedures set out in § 1942.18(k)(1) of
§§ 1942.124–1942.125 [Reserved] subpart A of this part 1942. In such
§ 1942.126 Planning, bidding, con- cases, RD may determine that it is not
tracting, constructing, procuring. necessary to require the applicant to
hire a consulting architect/engineer;
(a) General. This section provides pro-
however, if a second contract that does
cedures and requirements for planning,
not qualify for small purchase proce-
bidding, contracting, constructing and
dures is needed to complete the facil-
procuring facilities financed under this
ity, the owner must provide for an ar-
subpart. These procedures do not re-
chitect/engineer to design the entire
lieve the owner of contractual obliga-
facility. When the contractor provides
tions that arise from procurement of
the plans and specifications, the con-
services.
tract will be considered a design/build
(b) Technical services. Owners are re-
procurement method under § 1942.18(1)
sponsible for providing the engineering
of subpart A of this part 1942.
or architectural services necessary for
planning, designing, bidding, con- (3) Major equipment. An architect/en-
tracting, inspecting and constructing gineer is not required for major equip-
their facilities. Services may be pro- ment if RD determines the owner has
vided by the owner’s ‘‘in-house’’ engi- the ability to develop an adequate re-
neer or architect or through contract, quest for proposal and evaluate the
subject to Agency concurrence. Archi- proposals received or can obtain ade-
tects and engineers must be licensed in quate assistance from other sources,
the State where the facility is to be lo- such as State or Federal agencies or
cated. trade associations.
(1) Preliminary reports. A preliminary (c) Design policies. Facilities financed
architectural or engineering report by RD must be designed and con-
conforming with customary profes- structed in accordance with sound en-
sional standards is required for all con- gineering and architectural practices,
struction, except that RD may waive and must meet the requirements of
the requirement for a preliminary ar- Federal, State and local agencies. All
chitectural/engineering report or ac- facilities intended for or accessible to
cept a brief report if the cost of the the public or in which physically
construction does not exceed $100,000. handicapped persons may be employed
Guide 6 to subpart A of this part 1942 or reside must be developed in compli-
(available in any RD office) may be ance with the Architectural Barriers
used. Act of 1968 (Pub. L. 90–480) as imple-
(2) Final reports. Detailed final plans mented by the General Services Ad-
and specifications are required for all ministration regulations 41 CFR 101–
construction and must receive Agency 19.6 and section 504 of the Rehabilita-
concurrence. When negotiated procure- tion Act of 1973 (Pub. L. 93–112) as im-
ment is used for construction costing plemented by 7 CFR parts 15 and 15b.
106
(d) Construction contracts. Contract the owners possess the necessary skills,
documents must be sufficiently de- abilities and resources to perform the
scriptive and legally binding to accom- work and provided a licensed engineer
plish the work as economically and ex- or architect prepares design drawings
peditiously as possible. and specifications and inspection is
(1) Standard construction contract doc- provided in accordance with paragraph
uments. When standard construction (l)(3) of this section.
contract documents available from RD (f) Owner’s contractual responsibility.
are used, or when the amount of the Loans under this subpart are subject to
contract does not exceed $100,000, it the provisions of § 1942.18(i) of subpart
will normally not be necessary for the A of this part 1942.
Regional Attorney to perform a de- (g) Owner’s procurement regulations.
tailed legal review. If construction con- Loans under this subpart are subject to
tract documents used are not in the the provisions of § 1942.18(j) of subpart
format of guide forms approved by RD, A of this part 1942.
and the contract amount exceeds (h) Procurement methods. Unless the
$100,000, the Regonal Attorney must re- Agency National Office gives prior
view the documents before their use. written approval of another method,
(2) Contract review and approval. The procurement must be made by one of
owner’s attorney will review executed the following methods:
contract documents, including per- (1) Small purchase procedures as pro-
formance and payment bonds, and cer- vided in § 1942.18(k)(1) of subpart A of
tify that they are adequate, legal and this part 1942.
binding, and that the persons executing (2) Competitive sealed bids as pro-
the documents have been authorized to vided in § 1942.18(k)(2) of subpart A of
do so. The contract documents, bid this part 1942. Competitive sealed bids
bonds, and bid tabulation sheets will be is the preferred procurement method of
forwarded to RD for approval prior to construction projects, except for build-
awarding. All contracts will contain a ings costing $100,000 or less when the
provision that they are not in full force owner desires to use a ‘‘preengineered’’
and effect until they have been ap- or ‘‘packaged’’ building.
proved by RD. The Agency District Di- (3) Competitive negotiation as pro-
rector is responsible for approving con- vided in § 1942.18(k)(3) of subpart A of
struction contracts with advice and this part 1942. Competitive negotiation
guidance of the State Director and Re- is the preferred procurement method of
gional Attorney when necessary. buildings not exceeding $100,000 in cost
(3) Separate contracts. Arrangements when the owner desires to use a ‘‘pre-
which split responsibility of contrac- engineered’’ or ‘‘packaged’’ building
tors (separate contracts for labor and and for major equipment.
material, extensive subcontracting and (4) Noncompetitive negotiation as
multiplicity of small contracts on the provided in § 1942.18(k)(4) of subpart A
same job) should be avoided whenever of this part 1942.
it is practical to do so. Contracts may (i) Contracting methods. Loans under
be awarded to suppliers or manufactur- this subpart are subject to the provi-
ers for furnishing and installing cer- sions of § 1942.18(1) of subpart A of this
tain items which have been designed by part 1942.
the manufacturer and delivered to the (j) Contracts awarded prior to
job site in a finished or semifinished preapplications. Loans under this sub-
state such as prefabricated buildings. part are subject to the provisions of
Contracts may also be awarded for ma- § 1942.18(m) of subpart A of this part
terial delivered to the job site and in- 1942.
stalled by a patented process or meth- (k) Construction contract provisions.
od. Construction contracts for loans under
(e) Performing construction. Owners this subpart are subject to the provi-
are encouraged to accomplish con- sions of § 1942.18(n) of subpart A of this
struction through contracts with rec- part 1942. Construction contracts for
ognized contractors. Owners may ac- loans under this subpart are also sub-
complish construction by using their ject to the provisions of § 1901.205 of
own personnel and equipment provided subpart E of part 1901 of this chapter,
107
regarding nondiscrimination in con- prevent the meeting of project work

struction, except that guides 18 and 17 units by established time periods. This
or 19 to subpart A of this part 1942 of disclosure shall be accompanied by a
this chapter will normally be used in- statement of the action taken, or con-
stead of Form RD 1924–5, ‘‘Invitation templated, and any Federal assistance
for Bid (Construction Contract),’’ and needed to resolve the situation.
Form RD 1924–6, ‘‘Construction Con- (B) Favorable developments or events
tract.’’ When guide 18 is used with a de- which enable meeting time schedules
sign/build type contract, section 4, and goals sooner than anticipated or
‘‘Conflict of Interest,’’ may need revi- producing more work units than origi-
sion. nally projected or which will result in
(l) Construction contract administra- cost underruns or lower unit costs than
tion. Owners shall be responsible for originally planned and which may re-
maintaining a contract administration sult in less Agency assistance.
system to monitor the contractors’ (3) Inspection. The borrower must pro-
performance and compliance with the vide for inspection of all construction.
terms, conditions, and specifications of When the borrower enters into an
the contracts. agreement for technical services with
(1) Preconstruction conference. Prior to an engineer/architect, the agreement
beginning construction the owner will should provide for general engineering/
schedule a preconstruction conference architectural inspection of the con-
where RD will review the planned de- struction work. When no such agree-
velopment with the owner, its archi- ment exists, or RD or the borrower de-
tect or engineer, project inspector, at- termines the inspection services of the
torney, contractor(s), and other inter- engineer/architect may not be suffi-
ested parties. The conference will thor- cient, the owner must provide a project
oughly cover applicable items included inspector. Prior to the preconstruction
in Form RD 1924–16, ‘‘Record of conference, the borrower must submit
Preconstruction Conference,’’ and the a résumé of qualifications of the
discussions and agreements will be doc- project inspector to RD for acceptance
umented. Form RD 1924–16 may be used in writing. The project inspector will
for this purpose. be responsible for making inspections
(2) Monitoring reports. Each owner necessary to protect the borrower’s in-
will be required to monitor and provide terest and for providing written inspec-
reports to RD on actual performance tion reports to the borrower with cop-
during construction for each project fi- ies to the Agency District Director.
nanced, or to be financed, in whole or Guide 11 of subpart A of this part 1942
in part with Agency funds. The reports (available in any Rural Development
are to include: office) may be used as a guide format
(i) A comparison of actual accom- for inspection reports. For new build-
plishments with the construction ings, additions to existing buildings,
schedule established for the period. The and rehabilitation of existing build-
partial payment estimate may be used ings, the project inspector should make
for this purpose. inspections at the following stages of
(ii) A narrative statement giving full construction and at other stages of
explanation of the following: construction as determined by the Dis-
(A) Reasons why established goals trict Director and the borrower. In-
were not met. spections by RD are solely for its ben-
(B) Analysis and explanation of cost efit as lender.
overruns or high unit costs and how (i) An initial inspection should be
payment is to be made for the same. made just prior to or during the place-
(iii) If events occur between reports ment of concrete footings or mono-
which have a significant impact upon lithic footings and floor slabs. At this
the project, the owner will notify RD point, foundation excavations are com-
as soon as any of the following condi- plete, forms or trenches and steel are
tions are known: ready for concrete placement and the
(A) Problems, delays, or adverse con- subsurface installation is roughed in. If
ditions which will materially affect the the building design does not include
ability to attain program objectives or concrete footings the initial inspection
108
should be made just after or during the (C) Any decrease or increase in quan-
placement of poles or other foundation tities based on final measurements
materials. that are different from those shown in
(ii) An inspection should be made the bidding schedule.
when the building is enclosed, struc- (D) Any increase or decrease in the
tural members are still exposed, rough- time to complete the project.
ing in for heating, plumbing and elec- (iv) All changes shall be recorded on
trical work is in place and visible, and chronologically numbered contract
wall insulation and vapor barriers are change orders as they occur. Change
installed. orders will not be included in payment
(iii) A final inspection should be estimates until approved by all parties.
made when all development of the [52 FR 43726, Nov. 16, 1987; 52 FR 47097, Dec.
structure has been completed and the 11, 1987, as amended at 81 FR 11031, Mar. 2,
structrure is ready for its intended use. 2016]
(4) Prefinal inspections. A prefinal in-
spection will be made by the owner, § 1942.127 Project monitoring and fund
project inspector, owner’s architect or delivery.
engineer, representatives of other (a) Coordination of funding sources.
agencies involved, and the District Di- When a project is jointly financed, the
rector. The inspection results will be District Director will reach any needed
recorded on Form RD 1924–12, ‘‘Inspec- agreement or understanding with the
tion Report,’’ and a copy provided to representatives of the other source of
all interested parties, including the funds on distribution of responsibilities
Agency State Director. for handling various aspects of the
(5) Final inspection. A final inspection project. These responsibilities will in-
will be made by RD before final pay- clude supervision of construction, in-
ment is made. spections and determination of compli-
(6) Changes in development plans. (i) ance with appropriate regulations con-
Changes in development plans may be cerning equal employment opportuni-
approved by RD when requested by ties, wage rates, nondiscrimination in
owners, provided: making services or benefits available,
(A) Funds are available to cover any and environmental compliance. If any
additional costs; and problems develop which cannot be re-
(B) The change is for an authorized solved locally, complete information
loan purpose; and should be sent to the State Office for
advice.
(C) It will not adversely affect the
(b) Multiple advances. Loans under
soundness of the facility operation or
this subpart are subject to the provi-
RD’s security; and
sions of § 1942.17 (p)(2) of subpart A of
(D) The change is within the scope of this part 1942.
the contract; and (c) Use and accountability of funds.
(E) Any applicable requirements of 7 Loans under this subpart are subject to
CFR part 1970 have been met. the provisions of § 1942.17 (p)(3) of sub-
(ii) Changes will be recorded on Form part A of this part 1942.
RD 1924–7, ‘‘Contract Change Order,’’ or (d) Development inspections. Loans
other similar forms may be used with under this subpart are subject to the
the prior approval of the District Di- provisions of § 1942.17(p)(4) of subpart A
rector. Regardless of the form, change of this part 1942.
orders must be approved by the Agency (e) Payment for project costs. Each
District Director. payment for project costs must be ap-
(iii) Changes should be accomplished proved by the borrower’s governing
only after Agency approval on all body.
changes which affect the work and (1) Construction. Payment for con-
shall be authorized only by means of struction must be for amounts shown
contract change order. The change on payment estimate forms. Form RD
order will include items such as: 1924–18, ‘‘Partial Payment Estimate,’’
(A) Any changes in labor and mate- may be used for this purpose or other
rial and their respective cost. similar forms may be used with the
(B) Changes in facility design. prior approval of the District Director.
109
However, the District Director cannot § 1942.129 Borrower supervision and

require more reporting burden than is servicing.
required by Form RD 1924–18. Advances Loans under this subpart are subject
for contract retainage will not be made to the provisions of § 1942.17(r) of sub-
until such retainage is due and payable part A of this part 1942 and subpart E
under the terms of the contract. The of part 1951 of this chapter.
review and acceptance of project cost,
including construction partial payment §§ 1942.130–1942.131 [Reserved]
estimates, by RD does not attest to the
correctness of the amounts, the quan- § 1942.132 Subsequent loans.
tities shown, or that the work has been Subsequent loans will be processed
performed under the terms of agree- under this subpart.
ments or contracts.
(2) Major equipment. Payment for § 1942.133 Delegation and redelegation
major equipment should generally co- of authority.
incide with delivery of the usable Loan approval authority is in sub-
equipment, along with any necessary part A of part 1901 of this chapter.
title or certifications, to the borrower. State Directors may delegate approval
Borrowers may not use Agency loan authority to District Directors to ap-
funds to make deposits on equipment prove fire and rescue loans regardless
not ready for delivery. If a borrower of whether authority to approve other
purchases a truck chassis from one community facility loans is delegated.
supplier and another supplier will com- Except for loan approval authority,
plete the development of a fire or res- District Directors may redelegate their
duties to qualified staff members.
cue vehicle, RD may release funds to
pay for the chassis when title to the § 1942.134 State supplements and
chassis is transferred to the borrower. guides.
(f) Use of remaining funds. Loans
State Directors will obtain National
under this subpart are subject to the Office clearance for all State supple-
provisions of § 1942.17 (p)(6) of subpart A ments and guides under RD Instruction
of this part 1942. 2006–B (available in any Rural Develop-
[52 FR 43726, Nov. 16, 1987; 52 FR 47097, Dec. ment office).
11, 1987] (a) State supplements. State Directors
may supplement this subpart to meet
§ 1942.128 Borrower accounting meth- State and local laws and regulations
ods, management reports and au- and to provide for orderly application
dits. processing and efficient service to ap-
(a) Loans under this subpart are sub- plicants. State supplements shall not
ject to the provisions of § 1942.17(q) of contain any requirements pertaining to
subpart A of this part 1942 except as bids, contract awards, and materials
provided in this section. more restrictive than those in this sub-
(b) Borrowers with annual incomes part.
not exceeding $100,000 may, with con- (b) State guides. State Directors may
develop guides for use by applicants if
currence of the District Director, use
the guides to this subpart and subpart
Form RD 1942–53, ‘‘Cash Flow Report,’’
A of part 1942 are not adequate. State
instead of page one of schedule one and
Directors may prepare guides for items
schedule two of Form RD 442–2, needed for the application; items nec-
‘‘Statement of Budget, Income, and Eq- essary for the docket; and items re-
uity.’’ When used for budgeting, the quired prior to loan closing or con-
cash statement should be projected for struction starts.
the upcoming fiscal year. When used
for quarterly or annual reports, the §§ 1942.135–1942.149 [Reserved]
cash flow report should include current
year projections and actual data for § 1942.150 OMB control number.
the prior year, the quarter just ended, The collection of information re-
and the current year to date. quirements in this regulation have
110
RHS, RBS, RUS, FSA, USDA Pt. 1944
been approved by the Office of Manage- 1944.261 Program participant fees.

ment and Budget and have been as- 1944.262 Grant agreement and administra-
signed OMB control number 0575–0120. tion.
1944.263 Eligibility and priority for 1978 Act
recipients.
Subparts D–H [Reserved] 1944.264 Evaluation of Congregate Housing
Services Programs.
PART 1943 [RESERVED] 1944.265 Reserve for supplemental adjust-
ment.
1944.266 Other Federal requirements.
PART 1944—HOUSING
Subparts G–H [Reserved]
Subpart A [Reserved]
Subpart I—Self-Help Technical Assistance
Subpart B—Housing Application Grants
Packaging Grants
1944.401 Objective.
Sec. 1944.402 Grant purposes.
1944.51 Objective. 1944.403 Definitions.
1944.52 Definitions. 1944.404 Eligibility.
1944.53 Grantee eligibility. 1944.405 Authorized use of grant funds.
1944.54–1944.61 [Reserved] 1944.406 Prohibited use of grant funds.
1944.62 Authorized representative of the ap- 1944.407 Limitations.
plicant. 1944.408 [Reserved]
1944.63 Authorized use of grant funds. 1944.409 Executive Order 12372.
1944.64–1944.65 [Reserved] 1944.410 Processing preapplications, applica-
1944.66 Administrative requirements. tions, and completing grant dockets.
1944.67 Ineligible activities. 1944.411 Conditions for approving a grant.
1944.68 [Reserved] 1944.412 Docket preparation.
1944.69 Agency point of contact. 1944.413 Grant approval.
1944.70 Targeting of HAPG funds to States. 1944.414 [Reserved]
1944.71 Term of grant. 1944.415 Grant approval and other approving
1944.72 Application packaging orientation authorities.
and training. 1944.416 Grant closing.
1944.73 Package submission. 1944.417 Servicing actions after grant clos-
1944.74 Debarment or suspension. ing.
1944.75 Exception authority. 1944.418 [Reserved]
1944.76–1944.99 [Reserved] 1944.419 Final grantee evaluation.
1944.100 OMB control number. 1944.420 Extension or revision of the grant
EXHIBIT A TO SUBPART B OF PART 1944 [RE- agreement.
SERVED]
1944.421 Refunding of an existing grantee.
EXHIBIT B TO SUBPART B OF PART 1944—HOUS- 1944.422 Audit and other report require-
ING APPLICATION PACKAGING GRANT ments.
(HAPG) FEE PROCESSING 1944.423 Loan packaging and 502 RH applica-
EXHIBIT C TO SUBPART B OF PART 1944—RE- tion submittal.
QUIREMENTS FOR HOUSING APPLICATION
1944.424 Dwelling construction and stand-
PACKAGES ards.
EXHIBIT D TO SUBPART B OF PART 1944—DES- 1944.425 Handling and accounting for bor-
IGNATED COUNTIES FOR HOUSING APPLICA-
rower loan funds.
TION PACKAGING GRANTS
1944.426 Grant closeout.
1944.427 Grantee self-evaluation.
1944.428–1944.449 [Reserved]
Subparts C–E [Reserved]
1944.450 OMB control number.
Subpart F—Congregate Housing Services EXHIBIT A TO SUBPART I OF PART 1944—SELF-
Program HELP TECHNICAL ASSISTANCE GRANT
AGREEMENT
1944.251 Purpose. EXHIBIT B TO SUBPART I OF PART 1944—EVAL-
1944.252 Definitions. UATION REPORT OF SELF-HELP TECHNICAL
1944.253 Notice of funding availability, ap- ASSISTANCE (TA) GRANTS
plication process and selection. EXHIBIT B–1 TO SUBPART I OF PART 1944—IN-
1944.254 Program costs. STRUCTIONS FOR PREPARATION OF EVALUA-
1944.255 Eligible supportive services. TION REPORT OF SELF-HELP TECHNICAL
1944.256 Eligibility for services. ASSISTANCE GRANTS
1944.257 Service coordinator. EXHIBIT B–2 TO SUBPART I OF PART 1944—
1944.258 Professional assessment committee. BREAKDOWN OF CONSTRUCTION DEVELOP-
1944.259 Participatory agreement. MENT FOR DETERMINING PERCENTAGE CON-
1944.260 Cost distribution. STRUCTION COMPLETED
111
Pt. 1944 7 CFR Ch. XVIII (1–1–21 Edition)
EXHIBIT B–3 TO SUBPART I OF PART 1944—PRE- 1944.547 Management assistance.
CONSTRUCTION AND CONSTRUCTION PHASE 1944.548 Counseling consent by Rural Devel-
BREAKDOWN opment single family housing borrowers.
EXHIBIT C TO SUBPART I OF PART 1944— 1944.549 Grant evaluation, closeout, suspen-
AMENDMENT TO SELF-HELP TECHNICAL AS- sion, and termination.
SISTANCE GRANT AGREEMENT 1944.550 [Reserved]
EXHIBIT D TO SUBPART I OF PART 1944—SELF- EXHIBIT A TO SUBPART K OF PART 1944—
HELP TECHNICAL ASSISTANCE GRANT GRANT AGREEMENT—TECHNICAL AND SU-
PREDEVELOPMENT AGREEMENT PERVISORY ASSISTANCE
EXHIBIT E TO SUBPART I OF PART 1944—GUID- EXHIBIT B TO SUBPART K OF PART 1944—AD-
ANCE FOR RECIPIENTS OF SELF-HELP TECH- MINISTRATIVE INSTRUCTIONS FOR STATE
NICAL ASSISTANCE GRANTS (SECTION 523 OFFICES REGARDING THEIR RESPONSIBIL-
OF HOUSING ACT OF 1949) ITIES IN THE ADMINISTRATION OF THE
EXHIBIT F TO SUBPART I OF PART 1944—SITE TECHNICAL AND SUPERVISORY ASSISTANCE
OPTION LOAN TO TECHNICAL ASSISTANCE GRANT PROGRAM
GRANTEES EXHIBIT C TO SUBPART K OF PART 1944—IN-
STRUCTIONS FOR DISTRICT OFFICES RE-
Subpart J [Reserved] GARDING THEIR RESPONSIBILITIES IN THE
ADMINISTRATION OF THE TECHNICAL AND
Subpart K—Technical and Supervisory SUPERVISORY ASSISTANCE GRANT PRO-
Assistance Grants GRAM
EXHIBIT D TO SUBPART K OF PART 1944—
1944.501 General. AMENDMENT TO TECHNICAL AND SUPER-
1944.502 Policy. VISORY ASSISTANCE GRANT AGREEMENT
1944.503 Objectives. EXHIBIT E TO SUBPART K OF PART 1944—GUIDE
1944.504–1944.505 [Reserved] LETTER TO DELINQUENT FMHA OR ITS
1944.506 Definitions. SUCCESSOR AGENCY UNDER PUBLIC LAW
1944.507–1944.509 [Reserved] 103–354 SINGLE FAMILY HOUSING LOAN
1944.510 Applicant eligibility. BORROWERS
1944.511 [Reserved]
1944.512 Authorized representative of the Subparts L–M [Reserved]
applicant.
1944.513 [Reserved] Subpart N—Housing Preservation Grants
1944.514 Comprehensive TSA grant projects.
1944.515 [Reserved] 1944.651 General.
1944.516 Grant purposes. 1944.652 Policy.
1944.517 [Reserved] 1944.653 Objective.
1944.518 Term of grant. 1944.654 Debarment and suspension—drug-
1944.519 [Reserved] free workplace.
1944.520 Ineligible activities. 1944.655 [Reserved]
1944.521 [Reserved] 1944.656 Definitions.
1944.522 Equal opportunity requirements. 1944.657 Restrictions on lobbying.
1944.523 Other administrative requirements. 1944.658 Applicant eligibility.
1944.524 [Reserved] 1944.659 Replacement housing.
1944.525 Targeting of TSA funds to States. 1944.660 Authorized representative of the
1944.526 Preapplication procedure. HPG applicant and Rural Development
1944.527 [Reserved] point of contact.
1944.528 Preapplication submission deadline. 1944.661 Individual homeowners—eligibility
1944.529 Project selection. for HPG assistance.
1944.530 [Reserved] 1944.662 Eligibility of HPG assistance on
1944.531 Applications submission. rental properties or co-ops.
1944.532 [Reserved] 1944.663 Ownership agreement between HPG
1944.533 Grant approval and announcement. grantee and rental property owner or co-
1944.534 [Reserved] op.
1944.535 Cancellation of an approved grant. 1944.664 Housing preservation and replace-
1944.536 Grant closing. ment housing assistance.
1944.537 [Reserved] 1944.665 Supervision and inspection of work.
1944.538 Extending and revising grant agree- 1944.666 Administrative activities and poli-
ments. cies.
1944.539 [Reserved] 1944.667 Relocation and displacement.
1944.540 Requesting TSA checks. 1944.668 Term of grant.
1944.541 Reporting requirements. 1944.669 [Reserved]
1944.542 [Reserved] 1944.670 Project income.
1944.543 Grant monitoring. 1944.671 Equal opportunity requirements
1944.544 [Reserved] and outreach efforts.
1944.545 Additional grants. 1944.672 Environmental review require-
1944.546 [Reserved] ments.
112
1944.673 Historic preservation and replace- counties. Eligible organizations will
ment housing requirements and proce- aid very low- and low-income individ-
dures. uals and families in obtaining benefits
1944.674 Public participation and intergov-
ernmental review.
from Federal, State, and local housing
1944.675 Allocation of HPG funds to States programs. The targeted groups are very
and unused HPG funds. low- and low-income families without
1944.676 Preapplication procedures. adequate housing who will receive pri-
1944.677 [Reserved] ority for recruitment and participation
1944.678 Preapplication submission deadline. and nonprofit organizations able to
1944.679 Project selection criteria. propose rental or housing rehabilita-
1944.680 Limitation on grantee selection.
tion assistance benefitting such fami-
1944.681 Application submission.
1944.682 Preapplication/application review, lies. These funds are available only in
grant approval, and requesting HPG the areas defined in exhibit D of this
funds. subpart. Participants will assist very
1944.683 Reporting requirements. low- and low-income families in solving
1944.684 Extending grant agreement and their housing needs. One way of assist-
modifying the statement of activities. ing is to package single family housing
1944.685 [Reserved] applications for families wishing to
1944.686 Additional grants.
buy, build, or repair houses for their
1944.687 [Reserved]
1944.688 Grant evaluation, closeout, suspen- own use. Another way is to package ap-
sion, and termination. plications for organizations wishing to
1944.689 Long-term monitoring by grantee. develop rental units for lower income
1944.690 Exception authority. families. The intent is to make Rural
1944.691–1944.699 [Reserved] Development housing assistance pro-
1944.700 OMB control number. grams available to very low- and low-
EXHIBIT A TO SUBPART N OF PART 1944—HOUS- income rural residents in colonias and
ING PRESERVATION GRANT AGREEMENT designated counties. Rural Develop-
EXHIBIT B TO SUBPART N OF PART 1944— ment will reimburse eligible organiza-
AMENDMENT TO HOUSING PRESERVATION
tions packaging loan/grant applica-
GRANT AGREEMENT
EXHIBIT C TO SUBPART N OF PART 1944 [RE- tions without discrimination because
SERVED] of race, color, religion, sex, national
EXHIBIT D TO SUBPART N OF PART 1944— origin, age, familial status, or handicap
PROJECT SELECTION CRITERIA-OUTLINE if such an organization has authority
RATING FORM to contract.
EXHIBIT E TO SUBPART N OF PART 1944—GUIDE
FOR QUARTERLY PERFORMANCE REPORT § 1944.52 Definitions.
AUTHORITY: 5 U.S.C. 301; 42 U.S.C. 1480. References in this subpart to County,
EDITORIAL NOTE: Nomenclature changes to District, State, National and Finance
part 1944 appear at 80 FR 9885, Feb. 24, 2015. Offices, and to County Supervisor, Dis-
trict Director, State Director, and Ad-
Subpart A [Reserved] ministrator refer to Rural Develop-
ment offices and officials and should be
read as prefaced by Rural Develop-
Subpart B—Housing Application ment. Terms used in this subpart have
Packaging Grants the following meanings:
Colonias. As defined in exhibit C of
SOURCE: 58 FR 58643, Nov. 3, 1993, unless subpart L of part 1940 of this chapter.
otherwise noted. Complete application package (hereafter
called package). The package submitted
§ 1944.51 Objective. to the appropriate Rural Development
This subpart states the policies and office which is considered acceptable in
procedures for making grants under accordance with exhibit C of this sub-
section 509 of the Housing Act of 1949, part.
as amended (42 U.S.C. 1479). Grants re- Cost reimbursement. Amount deter-
imburse eligible organizations for part mined by the Administrator that
or all of the costs of conducting, ad- equals the customary and reasonable
ministering, and coordinating an effec- costs incurred in preparing a package
tive housing application packaging for a loan or grant. These amounts are
program in colonias and designated included in exhibit B of this subpart.
113
Designated counties. These counties tion and/or rehabilitation, or repair of

are listed in exhibit D of this subpart. existing housing.
The counties meet the following cri- (2) Contacting and assisting eligible
teria: applicants to develop multi-family
(1) Twenty percent or more of the housing loan/grant applications for new
county population is at or below the construction, rehabilitation, or repair
poverty level based on the most recent to serve very low- and low-income fam-
5-year survey of the American Commu- ilies.
nity Survey of the Census Bureau or [58 FR 58643, Nov. 3, 1993, as amended at 80
other Census Bureau data if needed; FR 9885, Feb. 24, 2015]
and
(2) Ten percent or more of the occu- § 1944.53 Grantee eligibility.
pied housing units are substandard An eligible grantee is an organization
based on the most recent decennial as defined in § 1944.52 of this subpart
Census of the United States. and has received a current ‘‘Certificate
Organization. Any of the following en- of Training’’ pertaining to the type of
tities which are legally authorized to application being packaged. In addi-
work in designated counties and/or tion, the grantee must:
colonias and are: (a) Have the financial, legal, and ad-
(1) A State, State agency, or unit of ministrative capacity to carry out the
general local government or; responsibilities of packaging housing
(2) A private nonprofit organization applications for very low- and low-in-
or corporation that is owned and con- come applicants. To meet this require-
trolled by private persons or interests, ment it must have the necessary back-
is organized and operated for purposes ground and experience with proven
other than making gains or profits for ability to perform responsibly in the
the corporation, and is legally pre- field of housing application packaging,
cluded from distributing any gains or low-income housing development, or
profits to its members. other business or administrative ven-
Packager. Any eligible organization tures which indicate an ability to per-
which is reimbursed with Housing Ap- form responsibly in this field of hous-
plication Packaging Grants (HAPG) ing application packaging.
funds. (b) Legally obligate itself to admin-
Technical assistance. Any assistance ister grant funds, provide adequate ac-
necessary to carry out housing efforts counting of the expenditure of such
by or for very low- and low-income in- funds, and comply with Rural Develop-
dividuals/families to improve the qual- ment regulations.
ity and/or quantity of housing avail- (c) If the organization is a private
able to meet their needs. Such assist- nonprofit corporation, be a corporation
ance must include, but is not limited that:
to: (1) Is organized under State and local
(1) Contacting and assisting very low- laws.
and low-income families in need of ade- (2) Is qualified under section 501(c)(3)
quate housing by: of the Internal Revenue Code of 1986.
(3) Has as one of its purposes assist-
(i) Implementing an organized out-
ing very low- and low-income families
reach program using available media
to obtain affordable housing.
and personal contacts;
(ii) Explaining available housing pro- §§ 1944.54–1944.61 [Reserved]
grams and alternatives to increase the
awareness of very low- and low-income § 1944.62 Authorized representative of
families and to educate the community the applicant.
as to the benefits from improved hous- RHS or its successor agency under
ing; Public Law 103–354 will deal only with
(iii) Assisting very low- and low-in- authorized representatives designated
come families in locating adequate by the applicant. The authorized rep-
housing; and resentatives must have no pecuniary
(iv) Developing and packaging loan/ interest in the award of the architec-
grant applications for new construc- tural or construction contracts, the
114
purchase of equipment, or the purchase an audit in accordance with 2 CFR part

of the land for the housing site. 200 as adopted by USDA through 2 CFR
[58 FR 58643, Nov. 3, 1993, as amended at 61 part 400 and OMB Circular A–128.
FR 39851, July 31, 1996] (2) Nonprofit organizations will com-
plete an audit in accordance with 2
§ 1944.63 Authorized use of grant CFR part 200 as adopted by USDA
funds. through 2 CFR part 400.
Grant funds may only be used to re- (f) Performance reports, as required,
imburse a packager for delivered pack- will be submitted in accordance with 2
ages. Payment will be made for each CFR part 200 as adopted by USDA
complete package received and accept- through 2 CFR part 400.
ed in accordance with exhibit C of this
subpart. [58 FR 58643, Nov. 3, 1993, as amended at 61
FR 39851, July 31, 1996; 79 FR 76008, Dec. 19,
§§ 1944.64–1944.65 [Reserved] 2014; 81 FR 11031, Mar. 2, 2016]
§ 1944.66 Administrative requirements. § 1944.67 Ineligible activities.

The following policies and regula- The packager may not charge fees or
tions apply to grants made under this accept compensation or gratuities di-
subpart: rectly or indirectly from the very low-
(a) Grantees must comply with all and low-income families being assisted
provisions of the Fair Housing Act of under this program. The packager may
1988 and subpart E of part 1901 of this not represent or be associated with
chapter which states in part, that no anyone else, other than the applicant,
person in the United States shall, on
who may benefit in any way in the pro-
the grounds of race, color, national ori-
posed transaction. If the packager is
gin, sex, religion, familial status, hand-
compensated for this service from
icap, or age, be excluded from partici-
pating in, be denied the benefits of, or other sources, then the packager is not
be subject to discrimination in connec- eligible for compensation from this
tion with the use of grant funds. source except as permitted by Agency.
(b) The policies and regulations con- Grantees who are funded to do Self-
tained in RD Instruction 1940–Q (avail- Help Housing, may not be reimbursed
able in any Agency office), Depart- for packaging applications for partici-
mental Regulation 2400–5, 2 CFR part pation in the Self-Help Housing effort.
200 as adopted by USDA through 2 CFR [58 FR 58643, Nov. 3, 1993, as amended at 61
part 400 apply to grantees under this FR 39851, July 31, 1996]
subpart.
(c) Grants made under the subpart § 1944.68 [Reserved]
must be in compliance with the envi-
ronmental review requirements in ac- § 1944.69 Agency point of contact.
cordance with 7 CFR part 1970.
Grantees must submit packages to
(d) The grantee will retain records
for 3 years from the date Standard the appropriate Agency office serving
Form (SF)-269A, ‘‘Financial Status Re- the designated county and/or colonias.
port (Short Form),’’ is submitted. Packages for Single Family Housing
These records will be accessible to RHS loans/grants are submitted to the ap-
and other Federal officials in accord- propriate County Office. All other
ance with 2 CFR part 200 as adopted by packages are submitted to the appro-
USDA through 2 CFR part 400. priate District Office. The applicable
(e) Annual audits will be completed if forms required to develop a package
the grantee has received more than can be obtained in any District or
$25,000 of Federal assistance in the year County Office. Packagers should co-
in which HAPG funds were received. ordinate their packaging activity with
These audits will be due 13 months the appropriate District and County
after the end of the fiscal year in which Offices.
funds were received.
(1) States, State agencies, or units of [58 FR 58643, Nov. 3, 1993, as amended at 61
FR 39851, July 31, 1996]
general local government will complete
115
§ 1944.70 Targeting of HAPG funds to § 1944.72 Application packaging ori-

States. entation and training.
(a) HAPG funds will be distributed Agency approval officials will orient
administratively by the Administrator and train organizations on how to
to achieve the success of the program. package. A newspaper advertisement
Allocations will be distributed to will be published by Agency offices
States as set forth in Attachment 2 of serving designated counties and/or
exhibit A of subpart L of part 1940 of colonias after October 1. The advertise-
this chapter. ment will announce that application
packaging services are being requested
(b) The State Director will determine
and specify the date of the certifi-
based on the housing funds available
cation training. All eligible organiza-
and the personnel available, how many
tions may attend this training. This
applications can be processed for each date will be no more than 30 days after
program during the fiscal year in each the advertisement appears in the news-
Agency office serving a designated paper and no later than December 31 of
county and/or colonias. The number of any year. The advertisement will in-
applications will be published in the clude the estimated number of pack-
advertisement required under § 1944.72 ages needed by loan type, i.e., Single
of this subpart. Family, Multi-Family, etc. Exhibit A
[58 FR 58643, Nov. 3, 1993, as amended at 61 of this subpart (available in any Agen-
FR 39851, July 31, 1996] cy office) is an example of an appro-
priate advertisement. ‘‘Certificates of
§ 1944.71 Term of grant. Training’’ as required under § 1944.53 of
this subpart will be signed by the State
(a) For Single Family Housing loans/ Director and given after completion of
grants, HAPG funds will be specifically the training. Efforts will be made by
available for designated counties. the appropriate Agency office to com-
Packages may be submitted after the plete this training process and certify
annual housing application packaging packagers as quickly as possible.
orientation and training is held. The Grantees must attend this training
grant period will end when sufficient each year in order to qualify for assist-
packages are received for each des- ance.
ignated county or colonia or on Sep-
tember 30, of the fiscal year, whichever FR 39851, July 31, 1996]
is earlier. The State Director must
send notification, in the form of a let- § 1944.73 Package submission.
ter, to all packagers who attended the (a) When submitting its first package
packaging orientation and training to a Rural Development office, in addi-
that the number of applications speci- tion to the item in paragraph (b) of
fied in the advertisement required this section and the information set
under § 1944.72 of this subpart have been forth in exhibit C of this subpart, the
received. Any packages submitted after organization must submit the fol-
this date will be paid for only if the lowing. A file of these documents will
grantee can demonstrate the package be established in the Rural Develop-
was prepared in good faith and prior to ment office and retained in accordance
receipt of the above notification. with RD Instruction 2033–A (available
(b) For Multi-Family Housing loans/ in any Rural Development office).
grants, HAPG funds will be available (1) Proof of their nonprofit status
for designated areas or colonias to the under section 501(c)(3) or section
extent specified in Rural Develop- 501(c)(4) of the Internal Revenue Code
ment’s advertisement. Preapplications of 1986 or of their existence as a state
approved in one fiscal year, for which agency or unit of general local govern-
grant funds were obligated, may have ment legally authorized to work in the
the balance disbursed in a later fiscal designated county and/or colonias. If
year when the application is submitted the Rural Development approval offi-
and approved. cial is in doubt about the legal status
of the organization, the evidence will
116
be sent to the State Director. The Appendix 9 of HB–1–3550 (available in

State Director may, if needed, submit any Rural Development office) or when
the above documents with any com- the applicant does not own and occupy
ments or questions to the Office of his/her property, or for a section 504
General Counsel (OGC) for an opinion grant when the applicant is not 62
as to whether the applicant is a legal years of age or older.
organization of the type required by (e) Submissions for sections 514/516,
these regulations. 515, and 524 loans/grants will be re-
(2) An original and copy of Forms RD viewed and, if incomplete, a letter sent
400–1, ‘‘Equal Opportunity Agreement,’’ within 15 working days advising of ad-
and RD 400–4, ‘‘Assurance Agreement.’’ ditional information required.
(3) A copy of a current ‘‘Certificate of (f) Form SF–269A, will be submitted
Training’’ pertaining to the type of ap- within 15 days of the end of the fiscal
plication package submitted. year.
(b) All packages must contain a [58 FR 58643, Nov. 3, 1993, as amended at 67
signed statement which states, ‘‘Nei- FR 78328, Dec. 24, 2002]
ther the organization nor any of its
employees have charged, received or § 1944.74 Debarment or suspension.
accepted compensation from any Certified packagers whose actions or
source other than Rural Development acts warrant they not be allowed to
for packaging this application and are participate in the program are to be in-
not associated with or represent any- vestigated in accordance with agency
one other than the applicant in this procedures (available in any Rural De-
transaction.’’ velopment office).
(c) Form SF–270, ‘‘Request for Ad-
vance or Reimbursement’’ will be sub- [70 FR 7651, Feb. 15, 2005]
mitted with each application package
§ 1944.75 Exception authority.
for the amount authorized for the spe-
cific loan type in exhibit B of this sub- The Administrator may, in indi-
part. vidual cases, make an exception to any
(d) The Rural Development approval requirement or provision of this sub-
official will review each package for part which is not inconsistent with the
completeness, accuracy, and conform- authorizing statute or other applicable
ance to program policy and regula- law if the Administrator determines
tions. Cost reimbursement will be that the Government’s interest would
made in accordance with exhibit B of be adversely affected. The Adminis-
this subpart. Packagers that submit trator will exercise this authority only
‘‘incomplete’’ packages for sections 502 at the request of the State Director
and 504 loans/grants will be sent a let- and recommendation of the Deputy Ad-
ter within 5 working days after submis- ministrator, Single Family Housing.
sion of the ‘‘incomplete’’ package ad- Requests for exceptions must be in
vising of additional information need- writing by the State Director and sup-
ed. Payment will be held until all the ported with documentation to explain
information is received. Packagers for the adverse effect on the Government’s
sections 502 loans and 504 loans/grants interest and/or impact on the appli-
will not be paid for packages submitted cant, borrower, or community, pro-
on applicants who are obviously ineli- posed alternative courses of action, and
gible for the programs. For example, a show how the adverse effect will be
grantee would not be reimbursed for eliminated or minimized if the excep-
submitting a package for a section 502 tion is granted.
loan applicant with an adjusted income [58 FR 58643, Nov. 3, 1993, as amended at 67
exceeding the limits of Appendix 9 of FR 78328, Dec. 24, 2002]
HB–1–3550 (available in any Rural De-
velopment office) or who already owns §§ 1944.76–1944.99 [Reserved]
adequate housing. Likewise, a grantee
would not be reimbursed for submit- § 1944.100 OMB control number.
ting a package for a section 504 loan/ The reporting and recordkeeping re-
grant when the adjusted family income quirements contained in this regula-
exceeds the very low-income limits of tion have been approved by the Office
117
Pt. 1944, Subpt. B, Exh. B 7 CFR Ch. XVIII (1–1–21 Edition)
of Management and Budget and have (A) Sections 514/516 Farm Labor Housing
been assigned OMB control number Loans and Grants
0575–0157. Public reporting burden for ‘‘Off’’ farm labor housing loans/grants—
this collection of information is esti- fees paid in accordance with the schedule for
mated to vary from 30 minutes to five section 515 Rural Rental Housing loans.
hours per response, with an average of (B) Section 515 Rural Rental Housing
3 hours per response including time for Loans.
reviewing instruction, searching exist- (1) The scale for packaging fees is based on
ing data sources, gathering and main- the percentage of the total development cost
as follows:
taining the data needed, and com-
pleting and reviewing the collection of Up to $400,000—1.6 percent
information. Send comments regarding For additional amounts between:
this burden estimate or any other as- $400,001 and $800,000—add 1.2 percent
pect of this collection of information, $800,001 and $1,200,000—add 1.0 percent
including suggestions for reducing this $1,200,001 and $1,600,000—add .7 percent
burden, to Department of Agriculture, $1,600,001 and $2,000,000—add .5 percent
Clearance Officer, OIRM, Room 404–W, Over $2,000,001—No additional amount
Washington, DC 20250; and to the Office (2) Twenty-five percent paid from HAPG
of Management and Budget, Paperwork funds when Form AD–622, ‘‘Notification of
Preapplication Review Action,’’ is sent invit-
Reduction Project (OMB #0575–0157),
ing submission of a complete application.
Washington, DC 20503. (3) Twenty percent paid from HAPG funds
when a complete application is filed includ-
EXHIBIT A TO SUBPART B OF PART 1944 ing plans and specifications.
[RESERVED] (4) The 55 percent balance paid when the
loan is approved. Funds for this 55 percent
EXHIBIT B TO SUBPART B OF PART 1944— will be drawn from loan funds in accordance
HOUSING APPLICATION PACKAGING with 7 CFR 3560.53 (o).
GRANT (HAPG) FEE PROCESSING (C) Section 524 Rural Housing Site Loans—
total fee is 1 percent of the loan amount pay-
The Farmers Home Administration able in two installments.
(FmHA) or its successor agency under Public (1) Thirty percent paid after FmHA or its
Law 103–354 approval official will execute successor agency under Public Law 103–354’s
and distribute Form FmHA or its successor review of the preapplication under
agency under Public Law 103–354 1940–1, ‘‘Re- § 1822.271(a) of subpart G of part 1822 of this
quest for Obligation of Funds,’’ in accord- chapter (paragraph XI A of FmHA Instruc-
ance with the Forms Manual Insert (FMI). tion 444.8).
HAPG funds will be used for the fees except (2) Seventy percent paid upon the comple-
as otherwise noted in paragraphs II (A) and tion of the docket in accordance with
(B) of this exhibit. Funds for all loan and/or § 1822.271(c) of subpart G of part 1822 of this
grant application packages will be paid as chapter (paragraph XI C of FmHA Instruc-
follows. tion 444.8).
I. For all Single Family Housing loans (D) Section 533 Housing Preservation
(Sections 502, 504, and 514 (‘‘on’’ farm labor Grants—total fee is 2 percent of the grant
housing only) of the Housing Act of 1949, amount paid in two installments.
checks will be ordered when complete appli- (1) Forty percent will be paid when the
cation packages as defined in § 1944.73 of this Form AD–622, inviting submission of a com-
subpart and exhibit C of this subpart are re- plete application, is sent.
ceived. The fees are as follows: (2) Sixty percent will be paid after grant
(A) Section 502 Single Family Housing closes.
Loans—$500
(B) Section 504 Rural Housing Loans and FR 69104, Nov. 26, 2004]
Grants—$500
(C) Section 514 ‘‘On’’ Farm Labor Housing EXHIBIT C TO SUBPART B OF PART 1944—
Loans—$500
REQUIREMENTS FOR HOUSING APPLI-
II. For all Multi-Family Housing loans and CATION PACKAGES
grants (sections 514/516, 515, 524, and 533 of
the Housing Act of 1949), the entire amount A package will consist of the following re-
of the fee coming from HAPG funds will be quirements for the respective program.
obligated when the packager has met all the A. Section 502—Complete application pack-
requirements of the preapplication stage, ages will be submitted in accordance with
however, payments will be made in accord- the requirements of 7 CFR part 3550. The
ance with the following schedules: package must also include the following:
118
RHS, RBS, RUS, FSA, USDA Pt. 1944, Subpt. B, Exh. C
Form RD 410–9—‘‘Statement Required by the C. Section 514/516—Complete application
Privacy Act’’ packages will be submitted in accordance
Form RD 1910–11—‘‘Applicant Certification with the Notice of Funding Availability that
Federal Collection Policies for Consumer will be published in the FEDERAL REGISTER
or Commercial Debts’’ each Fiscal Year.
Form RD 1944–3—‘‘Budget and/or Financial D. Section 515—Complete application pack-
Statement’’
ages will be submitted in accordance with
B. Section 504—Complete application pack- the Notice of Funding Availability that will
ages will be submitted in accordance with 7 be published in the FEDERAL REGISTER each
CFR part 3550. The package must include the Fiscal Year.
forms listed in paragraph A. of this exhibit
E. Section 524—Complete application pack-
and the following:
The appropriate Agency application form ages will be submitted in accordance with
for Rural Housing assistance (non-farm § 1822.271(a) of subpart G of part 1822 of this
tract) (available in any Rural Development chapter (paragraph XI.A. of RD Instruction
office). 444.8). After Rural Development’s review and
The appropriate Agency form to request as instructed, the application should be com-
verification of employment (available in any pleted in accordance with § 1822.271(c) of sub-
Rural Development office). part G of part 1822 of this chapter (paragraph
The appropriate Agency Rural Housing XI.C. of RD Instruction 444.8).
Loan application package (available in any F. Section 533—Complete application pack-
Rural Development office). ages will be submitted in accordance with
Evidence of ownership in accordance with 7 the requirements of subpart N of part 1944 of
CFR part 3550. this chapter.
Cost estimates or bid prices for removal of
health or safety hazards in accordance with [69 FR 69104, Nov. 26, 2004]
7 CFR part 3550.
119
Pt. 1944, Subpt. B, Exh. D 7 CFR Ch. XVIII (1–1–21 Edition)
EXHIBIT D TO SUBPART B OF PART 1944—DESIGNATED COUNTIES FOR HOUSING

APPLICATION PACKAGING GRANTS
120
ER25my05.036</GPH>
RHS, RBS, RUS, FSA, USDA Pt. 1944, Subpt. B, Exh. D
121
ER25my05.037</GPH>
Pt. 1944, Subpt. B, Exh. D 7 CFR Ch. XVIII (1–1–21 Edition)
122
ER25my05.038</GPH>
[70 FR 29927, May 25, 2005] § 1944.252 Definitions.

In addition to the definitions in sec-
Subparts C–E [Reserved] tion 802(k), the following definitions
apply to CHSP:
Subpart F—Congregate Housing Activity of Daily Living (ADL) means
Services Program an activity regularly necessary for per-
sonal care.
SOURCE: 61 FR 42943, 42949, Aug. 19, 1996, un-
(1) The minimum requirements of
less otherwise noted. ADLs include:
(i) Eating (may need assistance with
§ 1944.251 Purpose. cooking, preparing or serving food, but
must be able to feed self);
The requirements of this subpart
(ii) Dressing (must be able to dress
augment the requirements of section self, but may need occasional assist-
802 of the National Affordable Housing ance);
Act of 1990 (approved November 28, (iii) Bathing (may need assistance in
1990, Public Law 101–625) (42 U.S.C. getting in and out of the shower or tub,
8011), (hereinafter, section 802), as but must be able to wash self);
amended by the Housing and Commu- (iv) Grooming (may need assistance
nity Development Act of 1992 (Public in washing hair, but must be able to
Law 102–550, approved October 28, 1992), take care of personal appearance);
which authorizes the Congregate Hous- (v) Getting in and out of bed and
ing Services Program (hereinafter, chairs, walking, going outdoors, using
CHSP or Program). the toilet; and
123
ER25my05.039</GPH>
(vi) Household management activi- Americans Act of 1965 (45 CFR chapter
ties (may need assistance in doing 13).
housework, grocery shopping or laun- Assistant Secretary means the HUD
dry, or getting to and from one loca- Assistant Secretary for Housing-Fed-
tion to another for activities such as eral Housing Commissioner or the HUD
going to the doctor and shopping, but Assistant Secretary for Public and In-
must be mobile. The mobility require- dian Housing.
ment does not exclude persons in Case management means imple-
wheelchairs or those requiring mobil- menting the processes of: establishing
ity devices.) linkages with appropriate agencies and
(2) Each of the Activities of Daily service providers in the general com-
Living noted in paragraph (1) of this munity in order to tailor the needed
definition includes a requirement that services to the program participant;
a person must be able to perform at a linking program participants to pro-
specified minimal level (e.g., to satisfy viders of services that the participant
the eating ADL, the person must be needs; making decisions about the way
able to feed himself or herself). The de- resources are allocated to an individual
termination of whether a person meets on the basis of needs; developing and
this minimal level of performance monitoring of case plans in coordina-
must include consideration of those tion with a formal assessment of serv-
services that will be performed by a ices needed; and educating participants
person’s spouse, relatives or other at- on issues, including, but not limited to,
tendants to be provided by the indi- supportive service availability, appli-
vidual. For example, if a person re- cation procedures and client rights.
quires assistance with cooking, pre- Eligible housing for the elderly means
paring or serving food plus assistance any eligible project including any
in feeding himself or herself, the indi- building within a mixed-use project
vidual would meet the minimal per- that was designated for occupancy by
formance level and thus satisfy the elderly persons, or persons with dis-
eating ADL, if a spouse, relative or at- abilities at its inception or, although
tendant provides assistance with feed- not so designated, for which the eligi-
ing the person. Should such assistance ble owner or grantee gives preference
become unavailable at any time, the in tenant selection (with HUD ap-
owner is not obligated at any time to proval) for all units in the eligible
provide individualized services beyond project (or for a building within an eli-
those offered to the resident population gible mixed-use project) to eligible el-
in general. The Activities of Daily Liv- derly persons, persons with disabilities,
ing analysis is relevant only with re- or temporarily disabled individuals.
gard to determination of a person’s eli- For purposes of this subpart, this term
gibility to receive supportive services does not include projects assisted
paid for by CHSP and is not a deter- under the Low-Rent Housing Home-
mination of eligibility for occupancy; ownership Opportunity program (Turn-
Adjusted income means adjusted in- key III (24 CFR part 905, subpart G)).
come as defined in 24 CFR parts 813 or Eligible owner means an owner of an
913. eligible housing project.
Applicant means a State, Indian Excess residual receipts mean residual
tribe, unit of general local government, receipts of more than $500 per unit in
public housing authority (PHA), Indian the project which are available and not
housing authority (IHA) or local non- committed to other uses at the time of
profit housing sponsor. A State, Indian application to HUD for CHSP. Such re-
tribe, or unit of general local govern- ceipts may be used as matching funds
ment may apply on behalf of a local and may be spent down to a minimum
nonprofit housing sponsor or a for-prof- of $500/unit.
it owner of eligible housing for the el- For-profit owner of eligible housing for
derly. the elderly means an owner of an eligi-
Area agency on aging means the single ble housing project in which some part
agency designated by the State Agency of the project’s earnings lawfully inure
on Aging to administer the program to the benefit of any private share-
described in Title III of the Older holder or individual.
124
Grantee or Grant recipient means the ices, and resides in the eligible housing
recipient of funding under CHSP. project served by CHSP grant.
Grantees under this Program may be Qualifying supportive services means
states, units of general local govern- those services described in section
ment, Indian tribes, PHAs, IHAs, and 802(k)(16). Under this Program, health-
local nonprofit housing sponsors. related services mean non-medical su-
Local nonprofit housing sponsor means pervision, wellness programs, preven-
an owner or borrower of eligible hous- tive health screening, monitoring of
ing for the elderly; no part of the net medication consistent with state law,
earnings of the owning organization and non-medical components of adult
shall lawfully inure to the benefit of day care. The Secretary concerned may
any shareholder or individual. also approve other requested sup-
Nonprofit includes a public housing portive services essential for achieving
agency as that term is defined in sec- and maintaining independent living.
tion 3(b)(6) of the United States Hous- Rural Housing Service (RHS) means a
ing Act of 1937. credit agency for rural housing and
Person with disabilities means a house- rural development in the U.S. Depart-
hold composed of one or more persons, ment of Agriculture (USDA).
at least one of whom is an adult who Secretary concerned means (1) The
has a disability. Secretary of Housing and Urban Devel-
(1) A person shall be considered to opment, with respect to eligible feder-
have a disability if such person is de- ally assisted housing administered by
termined under regulations issued by HUD; and
the Secretary to have a physical, men- (2) The Secretary of Agriculture with
tal, or emotional impairment which: reference to programs administered by
(i) Is expected to be of long-continued the Administrator of the Rural Hous-
and indefinite duration; ing Service.
(ii) Substantially impedes his or her Service coordinator means CHSP staff
ability to live independently; and person responsible for coordinating
(iii) Is of such a nature that the per- Program services as described in sec-
son’s ability could be improved by tion 1944.130.
more suitable housing conditions. Service provider means a person or or-
(2) A person shall also be considered ganization licensed or otherwise ap-
to have a disability if the person has a proved in writing by a State or local
developmental disability as defined in agency (e.g., Department of Health, De-
section 102(5) of the Developmental partment of Human Services or Wel-
Disabilities Assistance and Bill of fare) to provide supportive services.
Rights Act (42 U.S.C. 6001–7). Notwith- State agency means the State or an
standing the preceding provisions of agency or instrumentality of the State.
this paragraph, the terms person with State agency on aging means the sin-
disabilities or temporarily disabled in- gle agency designated by the Governor
clude two or more persons with disabil- to administer the program described in
ities living together, one or more such Title III of the Older Americans Act of
persons living with another person who 1965 (See 45 CFR part 13).
is determined (under regulations pre-
scribed by the Secretary of HUD) to be § 1944.253 Notice of funding avail-
essential to their care or well-being, ability, application process and se-
and the surviving member or members lection.
of any household where at least one or (a) Notice of funding availability. A No-
more persons was an adult with a dis- tice of Funding Availability (NOFA)
ability who was living, in a unit as- will be published periodically in the
sisted under this section, with the de- FEDERAL REGISTER by the Secretary
ceased member of the household at the concerned containing the amounts of
time of his or her death. funds available, allocation or distribu-
Program participant (participant) tion of funds available among eligible
means any project resident as defined applicant groups, where to obtain and
in section 802(e)(1) who is formally ac- submit applications, the deadline for
cepted into CHSP, receives CHSP serv- submissions, and further explanation of
125
the selection criteria, review and selec- (ii) Administrative costs that rep-
tion process. The Secretary concerned resent a non-proportional share of
will designate the maximum allowable costs charged to the Congregate Hous-
size for grants. ing Services Program for rent or lease,
(b) Selection criteria are set forth in utilities, staff time;
section 802(h)(1) and shall include addi- (iii) Cost of supportive services other
tional criteria specified by the Sec- than those approved by the Secretary
retary concerned. concerned;
(iv) Modernization, renovation or
§ 1944.254 Program costs. new construction of a building or facil-
(a) Allowable costs. (1) Allowable costs ity, including kitchens;
for direct provision of supportive serv- (v) Any costs related to the develop-
ices includes the provision of sup- ment of the application and plan of op-
portive services and others approved by erations before the effective date of
the Secretary concerned for: CHSP grant award;
(i) Direct hiring of staff, including a (vi) Emergency medical services and
service coordinator; ongoing and regular care from doctors
and nurses, including but not limited
(ii) Supportive service contracts with
to administering medication, purchase
third parties;
of medical supplies, equipment and
(iii) Equipment and supplies (includ- medications, overnight nursing serv-
ing food) necessary to provide services; ices, and other institutional forms of
(iv) Operational costs of a transpor- service, care or support;
tation service (e.g., mileage, insurance, (vii) Occupational therapy and voca-
gasoline and maintenance, driver tional rehabilitation services; or
wages, taxi or bus vouchers); (viii) Other items defined as unallow-
(v) Purchase or leasing of vehicles; able costs elsewhere in this subpart, in
(vi) Direct and indirect administra- CHSP grant agreement, and OMB Cir-
tive expenses for administrative costs cular A–87 or 122.
such as annual fiscal review and audit, (c) Administrative cost limitation.
telephones, postage, travel, profes- Grantees are subject to the limitation
sional education, furniture and equip- in section 802(j)(4).
ment, and costs associated with self
evaluation or assessment (not to ex- § 1944.255 Eligible supportive services.
ceed one percent of the total budget for (a) Supportive services or funding for
the activities approved); and such services may be provided by state,
(vii) States, Indian tribes and units local, public or private providers and
of general local government with more CHSP funds. A CHSP under this sec-
than one project included in the grant tion shall provide meal and other
may receive up to 1% of the total cost qualifying services for program partici-
of the grant for monitoring the pants (and other residents and non-
projects. residents, as described in § 1944.125(a))
(2) Allowable costs shall be reason- that are coordinated on site.
able, necessary and recognized as ex- (b) Qualifying supportive services are
penditures in compliance with OMB those listed in section 802(k)(16) and in
Cost Policies, i.e., OMB Circular A–87, section 1944.105.
24 CFR 85.36, and OMB Circular A–128. (c) Meal services shall meet the fol-
(b) Nonallowable costs. (1) CHSP funds lowing guidelines:
may not be used to cover expenses re- (1) Type of service. At least one meal
lated to any grantee program, service, a day must be served in a group setting
or activity existing at the time of ap- for some or all of the participants; if
plication to CHSP. more than one meal a day is provided,
(2) Examples of nonallowable costs a combination of a group setting and
under the program are: carry-out meals may be utilized.
(i) Capital funding (such as purchase (2) Hot meals. At least one meal a day
of buildings, related facilities or land must be hot. A hot meal for the pur-
and certain major kitchen items such pose of this program is one in which
as stoves, refrigerators, freezers, dish- the principal food item is hot at the
washers, trash compactors or sinks); time of serving.
126
(3) Special menus. Grantees shall pro- standards required by the Secretary
vide special menus as necessary for concerned. The service coordinator
meeting the dietary needs arising from shall be trained in the subject areas set
the health requirements of conditions forth in section 802(d)(4), and in any
such as diabetes and hypertension. other areas required by the Secretary
Grantees should attempt to meet the concerned.
dietary needs of varying religious and (c) The service coordinator may be
ethnic backgrounds. employed directly by the grantee, or
(4) Meal service standards. Grantees employed under a contract with a case
shall plan for and provide meals which management agency on a fee-for-serv-
are wholesome, nutritious, and each of ice basis, and may serve less than full-
which meets a minimum of one-third of time. The service coordinator or the
the minimum daily dietary allowances case management agency providing
as established by the Food and Nutri- service coordination shall not provide
tion Board of the National Academy of supportive services under a CHSP
Sciences-National Research Council (or grant or have a financial interest in a
State or local standards, if these stand- service provider agency which intends
ards are higher). Grantees must have to provide services to the grantee for
an annual certification, prepared and CHSP.
signed by a registered dietitian, which (d) The service coordinator shall:
states that each meal provided under (1) Provide general case management
CHSP meets the minimum daily die- and referral services to all potential
tary allowances. participants in CHSP. This involves in-
(5) Food stamps and agricultural com- take screening, upon referral from the
modities. In providing meal services grantee of potential program partici-
grantees must apply for and use food pants, and preliminary assessment of
stamps and agricultural commodities frailty or disability, using a commonly
as set forth in section 802(d)(2)(A). accepted assessment tool. The service
(6) Preference for nutrition providers: In coordinator then will refer to the pro-
contracting for or otherwise providing fessional assessment committee (PAC)
for meal services grantees must follow those individuals who appear eligible
the requirements of section for CHSP;
802(d)(2)(B). These requirements do not
(2) Establish professional relation-
preclude a grantee or owner from di-
ships with all agencies and service pro-
rectly preparing and providing meals
viders in the community, and develop a
under its own auspices.
directory of providers for use by pro-
§ 1944.256 Eligibility for services. gram staff and program participants;
(3) Refer proposed participants to
(a) Participants, other residents, and
service providers in the community, or
nonresidents. Such individuals are eligi-
those of the grantee;
ble either to participate in CHSP or to
receive CHSP services, if they qualify (4) Serve as staff to the PAC;
under section 802(e)(1), (4) and (5). (5) Complete, for the PAC, all paper-
Under this paragraph, temporarily dis- work necessary for the assessment, re-
abled persons are also eligible. ferral, case monitoring and reassess-
(b) Economic need. In providing serv- ment processes;
ices under CHSP, grantees shall give (6) Implement any case plan devel-
priority to very low income individ- oped by the PAC and agreed to by the
uals, and shall consider their service program participant;
needs in selecting program partici- (7) Maintain necessary case files on
pants. each program participant, containing
such information and kept in such
§ 1944.257 Service coordinator. form as HUD and RHS shall require;
(a) Each grantee must have at least (8) Provide the necessary case files to
one service coordinator who shall per- PAC members upon request, in connec-
form the responsibilities listed in section with PAC duties;
tion 802(d)(4). (9) Monitor the ongoing provision of
(b) The service coordinator shall services from community agencies and
comply with the qualifications and keep the PAC and the agency providing
127
the supportive service informed of the ticipants may be counted as match. If

progress of the participant; a community agency discharges the du-
(10) Educate grant recipient’s pro- ties of the PAC, staff time is counted
gram participants on such issues as as its imputed value, and if the mem-
benefits application procedures (e.g. bers are volunteers, their time is
SSI, food stamps, Medicaid), service counted as volunteer time, according
availability, and program participant to sections 1944.145(c)(2) (ii) and (iv).
options and responsibilities; (b) Duties of the PAC. The PAC is re-
(11) Establish volunteer support pro- quired to:
grams with service organizations in the (1) Perform a formal assessment of
community; each potential elderly program partici-
(12) Assist the grant recipient in pant to determine if the individual is
building informal support networks frail. To qualify as frail, the PAC must
with neighbors, friends and family; and determine if the elderly person is defi-
(13) Educate other project manage- cient in at least three ADLs, as defined
ment staff on issues related to ‘‘aging- in section 1944.105. This assessment
in-place’’ and services coordination, to shall be based upon the screening done
help them to work with and assist by the service coordinator, and shall
other persons receiving housing assist- include a review of the adequacy of the
ance through the grantee. informal support network (i.e., family
(e) The service coordinator shall tai- and friends available to the potential
lor each participant’s case plan to the participant to assist in meeting the
individual’s particular needs. The serv- ADL needs of that individual), and may
ice coordinator shall work with com- include a more in-depth medical eval-
munity agencies, the grantee and third uation, if necessary;
party service providers to ensure that
(2) Determine if non-elderly disabled
the services are provided on a regular,
individuals qualify under the definition
ongoing, and satisfactory basis, in ac-
of person with disabilities under sec-
cordance with the case plan approved
tion 1944.105. If they do qualify, this is
by the PAC and the participant.
the acceptance criterion for them for
(f) Service coordinators shall not
CHSP. Persons with disabilities do not
serve as members of the PAC.
require an assessment by the PAC;
§ 1944.258 Professional assessment (3) Perform a regular assessment and
committee. updating of the case plan of all partici-
(a) General. (1) A professional assess- pants;
ment committee (PAC), as described in (4) Obtain and retain information in
this section, shall recommend services participant files, containing such infor-
appropriate to the functional abilities mation and maintained in such form,
and needs of each eligible project resi- as HUD or RHS shall require;
dent. The PAC shall be either a vol- (5) Replace any members of the PAC
untary committee appointed by the within 30 days after a member resigns.
project management or an agency in A PAC shall not do formal assessments
the community which provides assess- if its membership drops below three, or
ment services and conforms to section if the qualified medical professional
802(e)(3)(A) and (B). PAC members are leaves the PAC and has not been re-
subject to the conflict of interest pro- placed.
visions in section 1944.175(b). (6) Notify the grantee or eligible
(2) The PAC shall utilize procedures owner and the program participants of
that ensure that the process of deter- any proposed modifications to PAC
mining eligibility of individuals for procedures, and provide these parties
congregate services affords individuals with a process and reasonable time pe-
fair treatment, due process, and a right riod in which to review and comment,
of appeal of the determination of eligi- before adoption of a modification;
bility, and shall ensure the confiden- (7) Provide assurance of non-
tiality of personal and medical records. discrimination in selection of CHSP
(3) The dollar value of PAC members’ participants, with respect to race, reli-
time spent on regular assessments gion, color, sex, national origin, famil-
after initial approval of program par- ial status or type of disability;
128
(8) Provide complete confidentiality portive services, even if only for a

of information related to any indi- short time (in which case readmission,
vidual examined, in accordance with based upon reassessment to determine
the Privacy Act of 1974; the degree of frailty or the disability,
(9) Provide all formal information is acceptable);
and reports in writing. (2) Requires a higher level of care
(c) Prohibitions relating to the PAC. (1) than that which can be provided under
At least one PAC member shall not CHSP; or
have any direct or indirect relationship (3) Fails to pay services fees.
to the grantee. (f) Procedural rights of participants. (1)
(2) No PAC member may be affiliated The PAC must provide an informal
with organizations providing services process that recognizes the right to due
under the grant. process of individuals receiving assist-
(3) Individuals or staff of third party ance. This process, at a minimum,
organizations that act as PAC mem- must consist of:
bers may not be paid with CHSP grant (i) Serving the participant with a
funds. written notice containing a clear state-
(d) Eligibility and admissions. (1) Be- ment of the reasons for termination;
fore selecting potential program par- (ii) A review of the decision, in which
ticipants, each grantee (with PAC as- the participant is given the oppor-
sistance) shall develop a CHSP applica- tunity to present written or oral objec-
tion form. The information in the indi- tions before a person other than the
vidual’s application is crucial to the person (or a subordinate of that person)
PAC’s ability to determine the need for who made or approved the termination
further physical or psychological eval- decision; and
uation. (iii) Prompt written notification of
(2) The PAC, upon completion of a the final decision to the participant.
potential program participant’s initial (2) Procedures must ensure that any
assessment, must make a recommenda- potential or current program partici-
tion to the service coordinator for that pant, at the time of initial or regular
individual’s acceptance or denial into assessment, has the option of refusing
CHSP. offered services and requesting other
(3) Once a program participant is ac- supportive services as part of the case
cepted into CHSP, the PAC must pro- planning process.
vide a supportive services case plan for (3) In situations where an individual
each participant. In developing this requests additional services, not ini-
plan, the PAC must take into consider- tially recommended by the PAC, the
ation the participant’s needs and PAC must make a determination of
wants. The case plan must provide the whether the request is legitimately a
minimum supportive services nec- needs-based service that can be covered
essary to maintain independence. under CHSP subsidy. Individuals can
(e) Transition-out procedures. The pay for services other than those rec-
grantee or PAC must develop proce- ommended by the PAC as long as the
dures for providing for an individual’s additional services do not interfere
transition out of CHSP to another set- with the efficient operation of the pro-
ting. Transition out is based upon the gram.
degree of supportive services needed by
an individual to continue to live inde- § 1944.259 Participatory agreement.
pendently. If a program participant (a) Before actual acceptance into
leaves the program, but wishes to re- CHSP, potential participants must
tain supportive services, he or she may work with the PAC and the service co-
do so, as long as he or she continues to ordinator in developing supportive
live in an eligible project, pays the full services case plans. A participant has
cost of services provided, and manage- the option of accepting any of the serv-
ment agrees (section 802(e)(4) and (5)). ices under the case plan.
A participant can be moved out of (b) Once the plan is approved by the
CHSP if he or she: PAC and the program participant, the
(1) Gains physical and mental health participant must sign a participatory
and is able to function without sup- agreement governing the utilization of
129
the plan’s supportive services and the or excess residual funds with the ap-
payment of supportive services fees. proval of the Secretary concerned),
The grantee annually must renegotiate (ii) The imputed dollar value of other
the agreement with the participant. agency or third party-provided direct
services or staff who will work with or
§ 1944.260 Cost distribution. provide services to program partici-
(a) General. (1) Grantees, the Sec- pants; these services must be justified
retary concerned, and participants in the application to assure that they
shall all contribute to the cost of pro- are the new or expanded services of
viding supportive services according to CHSP necessary to keep the program
section 802(i)(A)(i). Grantees must con- participants independent. If services
tribute at least 50 percent of program are provided by the state, Indian tribe,
cost, participants must contribute fees unit of general local government, or
that in total are at least 10 percent of local nonprofit housing sponsor, IHA,
program cost, and the Secretary con- PHA, or for-profit or not-for-profit
cerned will provide funds in an amount owner, any salary paid to staff from
not to exceed 40 percent. governmental sources to carry out the
(2) Section 802(i)(1)(B)(ii) creates a program of the grantee and any funds
cost-sharing provision between grantee paid to residents employed by the Pro-
and the Secretary concerned if total gram (other than from amounts under
participant fees collected over a year a contract under section 1944.155) is al-
are less than 10 percent of total pro- lowable match.
gram cost. This provision is subject to (iii) In-kind items (these are limited
availability of appropriated grant to 10 percent of the 50 percent match-
funds. If funds are not available, the ing amount), such as the current mar-
grantee must assume the funding ket value of donated common or office
shortfall. space, utility costs, furniture, mate-
(b) Prohibition on substitution of funds rial, supplies, equipment and food used
and maintenance of existing supportive in direct provision of services. The ap-
services. Grantees shall maintain exist- plicant must provide an explanation
ing funding for and provision of sup- for the estimated donated value of any
portive services prior to the applica- item listed.
tion date, as set forth in section (iv) The value of services performed
802(i)(1)(D). The grantee shall ensure by volunteers to CHSP, at the rate of
that the activities provided to the $5.00 an hour.
project under a CHSP grant will be in (d) Limitation. (1) The following are
addition to, and not in substitution for, not eligible for use as matching funds:
these previously existing services. The (i) PHA operating funds;
value of these services do not qualify (ii) CHSP funds;
as matching funds. Such services must (iii) Section 8 funds other than excess
be maintained either for the time the residual receipts;
participant remains in CHSP, or for (iv) Funds under section 14 of the
the duration of CHSP grant. The grant- U.S. Housing Act of 1937, unless used
ee shall certify compliance with this for service coordination or case man-
paragraph to the Secretary concerned. agement; and
(c) Eligible matching funds. (1) All (v) Comprehensive grant funds unless
sources of matching funds must be di- used for service coordination or case
rectly related to the types of sup- management;
portive services prescribed by the PAC (2) Local government contributions
or used for administration of CHSP. are limited by section 802(i)(1)(E).
(2) Matching funds may include: (e) Annual review of match. The Sec-
(i) Cash (which may include funds retary concerned will review the infu-
from Federal, State and local govern- sion of matching funds annually, as
ments, third party contributions, part of the program or budget review.
available payments authorized under If there are insufficient matching funds
Medicaid for specific individuals in available to meet program require-
CHSP, Community Development Block ments at any point after grant start-
Grants or Community Services Block up, or at any time during the term of
Grants, Older American Act programs the grant (i.e., if matching funds from
130
sources other than program participant of eligible housing projects (other than
fees drop below 50 percent of total sup- eligible project residents) and for non-
portive services cost), the Secretary residents who receive meals and other
concerned may decrease the federal services from CHSP under section
grant share of supportive services 1944.125(a). These fees shall be in an
funds accordingly. amount equal to the cost of providing
the services.
§ 1944.261 Program participant fees.
(a) Eligible program participants. The § 1944.262 Grant agreement and ad-
grantee shall establish fees consistent ministration.
with section 1944.145(a). Each program (a) General. HUD will enter into grant
participant shall pay CHSP fees as agreements with grantees, to provide
stated in paragraphs (d) and (e) of this congregate services for program par-
section, up to a maximum of 20 percent ticipants in eligible housing projects,
of the program participant’s adjusted in order to meet the purposes of CHSP.
income. Consistent with section (b) Term of grant agreement and res-
802(d)(7)(A), the Secretary concerned ervation of amount. A grant will be for
shall provide for the waiver of fees for a term of five years and the Secretary
individuals who are without sufficient concerned shall reserve a sum equal to
income to provide for any payment. the total approved grant amount for
(b) Fees shall include: (1) Cash con- each grantee. Grants will be renewable
tributions of the program participant; at the expiration of a term, subject to
(2) Food Stamps; and the availability of funds and conform-
(3) Contributions or donations to ance with the regulations in this sub-
other eligible programs acceptable as part, except as otherwise provided in
matching funds under section section 1944.160.
1944.145(c). (c) Monitoring of project sites by gov-
(c) Older Americans Act programs. No ernmental units. States, Indian tribes,
fee may be charged for any meals or and units of general local government
supportive services under CHSP if that with a grant covering multiple projects
service is funded under an Older Ameri- shall monitor, review, and evaluate
cans Act Program. Program performance at each project
(d) Meals fees: (1) For full meal serv- site for compliance with CHSP regula-
ices, the fees for residents receiving tions and procedures, in such manner
more than one meal per day, seven as prescribed by HUD or RHS.
days per week, shall be reasonable and (d) Reports. Each grantee shall sub-
shall equal between 10 and 20 percent of mit program and fiscal reports and pro-
the adjusted income of the project resi- gram budgets to the Secretary con-
dent, or the cost of providing the serv- cerned in such form and at such times,
ices, whichever is less. as the Secretary concerned requires.
(2) The fees for residents receiving (e) Enforcement. The Secretary con-
meal services less frequently than as cerned will enforce the obligations of
described in paragraph (d)(1) of this the grantee under the agreement
section shall be in an amount equal to through such action as may be nec-
10 percent of the adjusted income of essary, including terminating grants,
the project resident, or the cost of pro- recapturing grant funds, and imposing
viding the services, whichever is less. sanctions.
(e) Other service fees. The grantee may (1) These actions may be taken for:
also establish fees for other supportive (i) A grantee’s non-compliance with
services so that the total fees collected the grant agreement or HUD or RHS
from all participants for meals and regulations;
other services is at least 10 percent of (ii) Failure of the grantee to provide
the total cost of CHSP. However, no supportive services within 12 months of
program participants may be required execution of the grant agreement.
to pay more than 20 percent of their (2) Sanctions include but are not lim-
adjusted incomes for any combination ited to the following:
of services. (i) Temporary withholding of reim-
(f) Other residents and nonresidents. bursements or extensions or renewals
Fees shall be established for residents under the grant agreement, pending
131
correction of deficiencies by the grant- requested to do so by the Secretary

ee; concerned.
(ii) Setting conditions in the con-
tract; § 1944.265 Reserve for supplemental
adjustment.
(iii) Termination of the grant;
(iv) Substitution of grantee; and The Secretary concerned may reserve
(v) Any other action deemed nec- funds subject to section 802(o). Re-
essary by the Secretary concerned. quests to utilize supplemental funds by
(f) Renewal of grants. Subject to the the grantee shall be transmitted to the
availability of funding, satisfactory Secretary concerned in such form as
performance, and compliance with the may be required.
regulations in this subpart: § 1944.266 Other Federal requirements.
(1) Grantees funded initially under
this subpart shall be eligible to receive In addition to the Federal Require-
continued, non-competitive renewals ments set forth in 24 CFR part 5, the
after the initial five-year term of the following requirements apply to grant
grant. recipient organizations in this pro-
gram:
(2) Grantees will receive priority
(a) Office of Management and Budget
funding and grants will be renewed
(OMB) Circulars and Administrative Re-
within time periods prescribed by the
quirements. The policies, guidelines, and
Secretary concerned.
requirements of OMB Circular No. A–87
(g) Use of Grant Funds. If during any and 24 CFR part 85 apply to the accept-
year, grantees use less than the annual ance and use of assistance under this
amount of CHSP funds provided to program by public body grantees. The
them for that year, the excess amount policies, guidelines, and requirements
can be carried forward for use in later of OMB Circular No. A–122 apply to the
years. acceptance and use of assistance under
§ 1944.263 Eligibility and priority for this program by non-profit grantees.
1978 Act recipients. Grantees are also subject to the audit
requirements described in 24 CFR part
Grantees funded initially under 42 44 (OMB Circular A–128).
U.S.C. 8001 shall be eligible to receive (b) Conflict of interest. In addition to
continued, non-competitive funding the conflict of interest requirements in
subject to its availability. These grant- OMB Circular A–87 and 24 CFR part 85,
ees will be eligible to receive priority no person who is an employee, agent,
funding under this subpart if they com- consultant, officer, or elected or ap-
ply with the regulations in this part pointed official of the applicant, and
and with the requirements of any who exercises or has exercised any
NOFA issued in a particular fiscal function or responsibilities with re-
year. spect to activities assisted with CHSP
grant funds, or who is in a position to
§ 1944.264 Evaluation of Congregate participate in a decision-making proc-
Housing Services Programs.
ess or gain inside information with re-
(a) Grantees shall submit annually to gard to such activities, may obtain a
the Secretary concerned, a report eval- personal or financial interest or benefit
uating the impact and effectiveness of from the activity, or have an interest
CHSPs at the grant sites, in such form in any contract, subcontract, or agree-
as the Secretary concerned shall re- ment with respect thereto, or any pro-
quire. ceeds thereunder, either for himself or
(b) The Secretaries concerned shall herself or for those with whom he or
further review and evaluate the per- she has family or business ties during
formance of CHSPs at these sites and his or her tenure, or for one year there-
shall evaluate the Program as a whole. after. CHSP employees may receive
(c) Each grantee shall submit a cer- reasonable salary and benefits.
tification with its application, agree- (c) Disclosures required by Reform Act.
ing to cooperate with and to provide Section 102(c) of the HUD Reform Act
requested data to the entity respon- of 1989 (42 U.S.C. 3545(c)) requires dis-
sible for the Program’s evaluation, if closure concerning other government
132
assistance to be made available with for providing Technical Assistance

respect to the Program and parties (TA) funds to eligible applicants to fi-
with a pecuniary interest in CHSP and nance programs of technical and super-
submission of a report on expected visory assistance for self-help housing,
sources and uses of funds to be made as authorized under section 523 of the
available for CHSP. Each applicant Housing Act of 1949. Any processing or
shall include information required by servicing activity conducted pursuant
24 CFR part 12 on form HUD–2880 ‘‘Ap- to this subpart involving authorized as-
plicant/Recipient Disclosure/Update sistance to Rural Development employ-
Report,’’ as required by the FEDERAL ees, members of their families, known
REGISTER Notice published on January close relatives, or business or close per-
16, 1992, at 57 FR 1942. sonal associates, is subject to the pro-
(d) Nondiscrimination and equal oppor- visions of subpart D of part 1900 of this
tunity. (1) The fair housing poster regu- chapter. Applicants for this assistance
lations (24 CFR part 110) and adver- are required to identify any known re-
tising guidelines (24 CFR part 109); lationship or association with a Rural
(2) The Affirmative Fair Housing Development employee. This financial
Marketing Program requirements of 24 assistance may pay part or all of the
CFR part 200, subpart M, and the im- cost of developing, administering, or
plementing regulations at 24 CFR part coordinating programs of technical and
108; and supervisory assistance to aid needy
(3) Racial and ethnic collection re- very low- and low-income families in
quirements—Recipients must maintain carrying out self-help housing efforts
current data on the race, ethnicity and in rural areas. Very low-income fami-
gender of program applicants and bene- lies must receive a priority for recruit-
ficiaries in accordance with section 562 ment and participation and may not
of the Housing and Community Devel- comprise less than the percentage stat-
opment Act of 1987 and section 808(e)(6) ed in subpart L of part 1940 of this
of the Fair Housing Act. chapter of those assisted in any grant.
(e) Environmental requirements. Sup- The primary purpose is to fund organi-
zations that are willing to locate and
port services, including the operating
work with families that otherwise do
and administrative expenses described
not qualify as homeowners. Generally,
in section 1944.115(a), are categorically
these are families below 50 percent of
excluded from the requirements of the
median incomes, living in substandard
National Environmental Policy Act
housing, and/or lacking the skills to be
(NEPA) of 1969. These actions, however,
good homeowners. Grantees will com-
are not excluded from individual com-
ply with the nondiscrimination regula-
pliance requirements of other environ-
tion subpart E of part 1901 of this chap-
mental statutes, Executive Orders, and
ter which states that no person in the
agency regulations where appropriate.
United States shall, on the grounds of
When the responsible official deter-
race, color, national origin, sex, reli-
mines that any action under this sub-
gion, marital status, mental or phys-
part may have an environmental effect
ical handicap, or age, be excluded from
because of extraordinary cir-
participating in, be denied the benefits
cumstances, the requirements of NEPA
of, or be subject to discrimination in
shall apply.
connection with the use of grant funds
and all provisions of the Fair Housing
Subparts G–H [Reserved] Act of 1988.
[55 FR 41833, Oct. 16, 1990, as amended at 58
Subpart I—Self-Help Technical FR 227, Jan. 5, 1993]
Assistance Grants
§ 1944.402 Grant purposes.
SOURCE: 55 FR 41833, Oct. 16, 1990, unless Rural Development may contract or
otherwise noted. make a grant to an organization to:
(a) Give technical and supervisory as-
§ 1944.401 Objective. sistance to eligible very low- and low-
This subpart sets forth the policies income families as defined in Appendix
and procedures and delegates authority 9 of HB–1–3550 (available in any Rural
133
Development office), in carrying out tractor-built Rural Development fi-

self-help housing efforts. nanced home in the area plus the ac-
(b) Assist other organizations to pro- tual or projected costs of an acceptable
vide technical and supervisory assist- site and site development. If Rural De-
ance to eligible families. velopment has not financed a con-
(c) Develop a final application, re- tractor-built house during the last
cruit families and related activities twelve months, the value will be estab-
necessary to participate under para- lished by use of the Marshall and Swift
graph (a) of this section. cost handbook or a similar type of
[55 FR 41833, Oct. 16, 1990, as amended at 67 handbook. Equivalent value of a mod-
FR 78328, Dec. 24, 2002] est house is established by Rural De-
velopment.
§ 1944.403 Definitions. (h) Indirect costs. Those costs that are
(a) Agreement. The Self-Help Tech- incurred for common or joint objec-
nical Assistance Agreement, which is a tives and therefore, cannot be readily
document signed by Rural Develop- and specifically identified with a par-
ment and the grantee, sets forth the ticular project or activity, e.g., self-
terms and conditions under which TA help.
funds will be made available. (Exhibit (i) Mutual self-help. The construction
A of this subpart). method by which participating families
(b) Agreement period (or grant period). organized in groups generally of 4 to 10
The period of time for which an agree- families utilize their own labor to re-
ment is in force. Generally, the period duce the total construction cost of
will not exceed 24 months. their homes. Participating families
(c) Date of completion. The date when complete construction work on their
all work under a grant is completed or homes by an exchange of labor with
the date in the TA grant agreement, or one another. The mutual self-help
any supplement or amendment to it, method must be used for new construc-
when Federal assistance ends. tion.
(d) Direct costs. Those costs that are (j) Organization. (1) A State, political
specifically identified with a particular subdivision, or public nonprofit cor-
project or activity. Grantees receiving poration (including Indian tribes or
funds from a single grant source would Tribal corporations); or
consider all costs as direct costs. (2) A private nonprofit corporation
(e) Disallowed costs. Those charges to that is owned and controlled by private
a grant which Rural Development de- persons or interests and is organized
termines cannot be authorized. and operated for purposes other than
(f) Equivalent units. Equivalent units making gains or profits for the cor-
represent the ‘‘theoretical number of poration and is legally precluded from
units’’ arrived at by adding the equiva- distributing any gains or profits to its
lent percentage of completion figure members.
for each family in the self-help pro- (k) Participating family. Individuals
gram (pre-construction and actual con- and/or their families who agree to build
struction) together at any given date homes by the mutual self-help method
during program operations. The sum of and rehabilitate homes by the self-help
the percentage of completion figures method. Participants are families with
for all participant families represent very low- or low-incomes who have the
the total number of ‘‘theoretical units’’ ability to furnish their share of the re-
completed at any point in time. Equiv- quired labor input regardless of the
alent units are useful in measuring handicap, age, race, color, national ori-
progress during the period of the grant gin, religion, family status, or sex of
and are not a measurement of actual the head of household. The partici-
accomplishments. The number of pating family must be approved for a
equivalent units for any group can section 502 RH loan or similar loans
never exceed the number of planned or from other Federal, state, and private
completed houses for that group. lenders that uses income guidelines
(g) Equivalent value of a modest house. substantially similar to the Depart-
The equivalent value of a modest house ment of Housing and Urban Develop-
is the typical cost of a recent con- ment before the start of construction,
134
have sufficient time available to assist (5) Assisting families in obtaining

in building their own homes, and show cost estimates for construction mate-
a desire to work with other families. rials and any contracting that may be
Each family in the group must con- required.
tribute labor on each other’s homes to (6) Providing assistance in the prepa-
accomplish the 65 percent of the total ration of loan applications.
100 percent of tasks listed in exhibit B– (7) Providing construction super-
2 of this subpart. A participating fam- vision and training for families while
ily may use a substitute to perform the they construct their homes.
labor with prior approval of the Grant- (8) Providing financial supervision to
ee and the Rural Development State individual families with section 502
Director. A substitute is only per- Rural Housing (RH) loans which will
mitted when the participating family minimize the time and effort required
is incapacitated. by Rural Development in processing
(l) Self-help. The construction method borrower expenditures for materials
by which an individual family utilizes and contract services.
their labor to reduce the construction (9) Assisting families in solving other
cost of their home without an exchange housing problems.
of labor between participating families. (o) Termination of a grant. The can-
Unless otherwise authorized by the cellation of Federal assistance, in
District Director, this method is only whole or in part, at any time before the
funded for repair and rehabilitation date of completion.
type construction.
(m) Sponsor. An existing entity that § 1944.404 Eligibility.
is willing and able to assist an appli- To receive a grant, the applicant
cant, with or without charge, in apply- must:
ing for a grant and in carrying out re- (a) Be an organization as defined in
sponsibilities under the agreement. Ex- § 1944.403(j) of this subpart.
amples of sponsors are local rural elec- (b) Have the financial, legal, adminis-
tric cooperatives, institutions of higher trative, and actual capacity to assume
education, community action agencies and carry out the responsibilities im-
and other self-help grantees. Also, posed by the Agreement. To meet the
when available, regional technical and requirement of actual capacity it must
management assistance contractors either:
may qualify to serve as a sponsor at no (1) Have necessary background and
charge. experience with proven ability to per-
(n) Technical assistance. The orga- form responsibly in the field of mutual
nizing and supervising of groups of self-help or other business manage-
families in the construction of their ment or administrative ventures which
own homes including: indicate an ability to perform responsi-
(1) Recruiting families who are inter- bility in the field of mutual self-help;
ested in sharing labor in the construc- or
tion of each other’s homes and assist- (2) Be sponsored by an organization
ing such families in obtaining housing with background experience, and abil-
loans. ity, which agrees in writing to help the
(2) Conducting meetings of the fami- applicant to carry out its responsibil-
lies to explain the self-help program ities.
and subjects related to home owner- (c) Legally obligate itself to admin-
ship, such as loan payments, taxes, in- ister TA funds, provide adequate ac-
surance, maintenance, and upkeep of counting of the expenditure of such
the property. funds, and comply with the Agreement
(3) Helping families in planning and and Rural Development regulations.
developing activities that lead to the (d) If the organization is a private
acquisition and development of suit- nonprofit corporation, be a corporation
able building sites. that:
(4) Assisting families in selecting or (1) Is organized under State and local
developing house plans for homes laws.
which will meet their needs and which (2) Is qualified under section 501(c)(3)
they can afford. of the Internal Revenue Code of 1986.
135
(3) Has as one of its purposes the pro- overall reduction in the cost of assist-
duction of affordable housing. ance. Typically, this will be limited to
(4) Has a Board of Directors which new grantees and an existing grantee
consist of not less than five. for the period of time that its size or
activity does not justify a full staff. A
§ 1944.405 Authorized use of grant full staff is a full or part-time director,
funds. project worker, secretary-bookkeeper,
(a) Payment of salaries of personnel and a construction supervisor. This
as authorized in the Agreement. type of cost is generally direct.
(b) Payment of necessary and reason- (i) Payment of certain consulting and
able office expenses such as office rent- legal costs required in the administra-
al, office utilities, and office equipment tion of the grant if such service is not
rental. The purchase of office equip- available without cost. This does not
ment is permissible when the grantee include legal expenses for claims
determines it to be more economical against the Federal Government.
than renting. As a general rule, these (Legal costs that may be incurred by
types of expenses would be classified as the organization for the benefit of the
indirect costs in multiple funded orga- participating families may be paid
nizations. with prior approval of the State Direc-
(c) Purchase of office supplies such as tor).
paper, pens, pencils, and trade maga- (j) Payments of the cost of an ac-
zines. countant to set up an accounting sys-
(d) Payment of necessary employee tem and perform audits that may be re-
benefit costs including but not limited quired. Generally, these costs are indi-
to items such as Worker’s Compensa- rect.
tion, employer’s share of social secu- (k) Payments of reasonable expenses
rity, health benefits, and a reasonable of board members for attending regular
tax deferred pension plan for perma- or special board meetings. These costs
nent employees. are indirect.
(e) Purchase, lease, or maintenance
§ 1944.406 Prohibited use of grant
of power or specialty tools such as a funds.
power saw, electric drill, sabre saw,
ladders, and scaffolds, which are needed (a) Hiring personnel specifically for
by the participating families. The par- the purpose of performing any of the
ticipating families, however, are ex- construction work for participating
pected to provide their own hand tools families in the self-help projects.
such as hammers and handsaws. (b) Buying real estate or building ma-
(f) Payment of liability insurance terials or other property of any kind
and special purpose audit costs associ- for participating families.
ated with self-help activities. These (c) Paying any debts, expenses, or
would be considered direct costs, even costs which should be the responsi-
though the grantee’s general liability bility of the participating families in
insurance cost and the cost of audits the self-help projects.
for the organization are generally indi- (d) Paying for training of an em-
rect costs. ployee as authorized by 2 CFR part 200
(g) Payment of reasonable fees for as adopted by USDA through 2 CFR
training of grantee personnel including part 400.
board members. This may include the (e) Paying costs other than approved
cost of travel and per diem to attend in indirect (including salaries) that are
or out-of-State training as authorized not directly related to helping very
by the board of directors and, when low- and low-income families obtain
necessary, for the employee to do the housing consistent with the objectives
current job. These costs are generally of this program.
direct costs. [55 FR 41833, Oct. 16, 1990, as amended at 79
(h) Payment of services rendered by a FR 76009, Dec. 19, 2014]
sponsor or other organization after the
grant is closed and when it is deter- § 1944.407 Limitations.
mined the sponsor can provide the nec- The amount of the TA grant depends
essary services which will result in an on the experience and capability of the
136
applicant and must be justified based Agency. The name of the point of con-
on the number of families to be as- tact is available from the State Office.
sisted. As a guide, the maximum grant [55 FR 41833, Oct. 16, 1990, as amended at 61
amounts for any grant period will be FR 39851, July 31, 1996; 76 FR 80730, Dec. 27,
limited to: 2011]
(a) An average TA cost per equiva-
lent unit of no more than 15 percent of § 1944.410 Processing preapplications,
the cost of equivalent value of modest applications, and completing grant
dockets.
homes built in the area. (Upon request,
the County Supervisor will provide the (a) Form SF–424, ‘‘Application for Fed-
grantee the average cost of modest eral Assistance.’’ Form SF–424 in an
homes for the area); or original and one copy must be sub-
(b) An average TA cost per equiva- mitted by the applicant to the District
lent unit that does not exceed the dif- Director. It will be used to establish
ference between the equivalent value of communication between the applicant
and RHS, determine the applicant’s eli-
modest homes in the area and the aver-
gibility, determine how well the
age mortgage of the participating fam-
project can compete with similar appli-
ilies minus $1,000; or
cations from other organizations and
(c) A TA per equivalent unit cost eliminate any proposals which have lit-
that does not exceed an amount estab- tle or no chance for Federal funding be-
lished by the State Director. The State fore applicants incur significant ex-
Director may authorize a greater TA penditures for preparing an applica-
cost than paragraph (a) or (b) of this tion. In addition, the following infor-
section when needed to accomplish a mation will be attached to and become
particular objective, such as requiring a part of the preapplication:
the grantee to serve very low-income (1) Complete information about the
families, remote areas, or similar situ- applicant’s previous experience and ca-
ations; or pacity to carry out the objective of the
(d) A negotiated amount for repair agreement.
and rehabilitation type proposals. At a (2) If the applicant organization is al-
minimum, applicants applying for re- ready formed, a copy of or an accurate
pair and rehabilitation grants must in- reference to the specific provisions of
clude information on the proximity of State law under which the applicant is
the houses in a project, the typical organized; a certified copy of the appli-
needed repairs, and the cost savings be- cant’s Articles of Incorporation and
tween self-help and contractor reha- Bylaws or other evidence of corporate
bilitation and repair. existence; certificate of incorporation
for other than public bodies; evidence
[55 FR 41833, Oct. 16, 1990; 56 FR 19253, Apr. of good standing from the State when
26, 1991]
the corporation has been in existence 1
§ 1944.408 [Reserved] year or more; the names and addresses
of the applicant’s members, directors,
§ 1944.409 Executive Order 12372. and officers; and, if another organiza-
tion is a member of the applicant-orga-
The self-help program is subject to nization, its name, address, and prin-
the provision of Executive Order 12372 cipal business. If the applicant is not
which requires intergovernmental con- already formed, attach copies of the
sultation with State and local officials. proposed organizational documents
These requirements are set forth in U. demonstrating compliance with
S. Department of Agriculture regula- § 1944.404(d) of this subpart.
tions 7 CFR 3015, subpart V and RD In- (3) A current (no more than 12
struction 1970–I, ‘Intergovernmental months old) dated and signed financial
Review,’ available in any Agency office statement showing the amounts and
or on the Agency’s Web site, new appli- specific nature of assets and liabilities
cants for the self-help program must together with information on the re-
submit their Statement of Activities to payment schedule and status of any
the State single point of contact prior debt owed by the applicant. If the ap-
to submitting their preapplication to plicant is being sponsored by another
137
organization, the same type of finan- ment. If multi-funded, its cost alloca-
cial statement also must be provided tion plan or indirect cost rate must be
by the applicant’s sponsor. part of the pre-application.
(4) A narrative statement which in- (9) Whether assistance under para-
cludes information about the amount graph (d) of this section is requested
of the grant funds being requested, and a brief narrative identifying the
area(s) to be served, need for self-help need, amount of funds needed, and pro-
housing in the area(s), the number of jected time period.
self-help units proposed to be built, re- (10) If a project is planned for five or
habilitated or repaired during the more housing lots or units, an Affirma-
agreement period, housing conditions tive Fair Marketing Plan is required.
of low-income families in the area and The plan will be in effect until the
reasons why families need self-help as- completion of the project.
sistance. Evidence should be provided (b) Preapplication review. (1) The Dis-
that the communities support the ac- trict Director, within 30 days of receipt
tivity and that there are low-income of the preapplication, Form SF–424,
families willing to contribute their and all other required information and
labor in order to obtain adequate hous- material will complete a thorough re-
ing. Evidence of community support view for completeness, accuracy, and
may be letters of support from local of- conformance to program policy and
ficials, individuals and community or- regulations. Incomplete
ganizations. The pre-application may preapplications will be returned to the
contain information such as census applicant for completion. The appli-
materials, local planning studies, sur- cant should be given the name of the
veys, or other readily available infor- regional technical assistance con-
mation which indicates a need in the tractor. The County Supervisor in the
area for housing of the type and cost to prospective county will be contacted as
be provided by the proposed self-help to the need for the program in the pro-
TA program. posed area and if the necessary re-
(5) A plan of how the organization sources are available to the grantee.
proposes to reach very low-income This will include a discussion of the
families living in houses that are dete- number of 502 and 504 units that will
riorated, dilapidated, overcrowded, need to be committed to the grantee
and/or lacking plumbing facilities. and the potential work impact on the
(6) A proposed budget which will be office during the grant period. If it is
prepared on SF–424A, ‘‘Budget Informa- determined that the County Office
tion (Non-Construction Programs)’’ lacks the resources (either personnel or
will be completed to address applicable funds) to process all loan requests in a
assurances as outlined in 2 CFR part timely manner, the District Director
200 as adopted by USDA through 2 CFR must communicate this need to the
part 400. State and local Government State Director along with a rec-
will include an assurance that the ommended solution. (Lack of resources
grantee shall comply with all applica- at the county level are not grounds to
ble Federal statutes and regulations in deny a request). After the District Di-
effect with respect to the periods for rector has determined that the
which it receives grant funding. The preapplication is complete and accu-
State and local governments shall also rate, the District Director will assem-
comply with 2 CFR part 200 as adopted ble the material in an applicant case
by USDA through 2 CFR part 400. file and forward it to the State Direc-
(7) A preliminary survey as to the tor. The case file, as a minimum, must
availability of lots and projected cost contain the following:
of the sites. (i) Form SF–424,
(8) A list of other activities the appli- (ii) Documentation required in ac-
cant is engaged in and expects to con- cordance with 7 CFR part 1970.
tinue, and a statement as to other (iii) Eligibility recommendations,
sources of funding and whether it will and
have sufficient funds to assure contin- (iv) HUD Form 935.2 ‘‘Affirmative
ued operation of the other activities Fair Housing Marketing Plan’’, if ap-
for at least the period of the agree- plicable.
138
(2) The State Director may, if needed, file, a copy to the County Supervisor,
submit the organizational documents and a copy to the State Director.
with any comments or questions to the (2) If the applicant is not eligible and
Office of General Counsel (OGC) for a after the State Director has returned
preliminary opinion as to whether the the preapplication information, the
applicant is or will be a legal organiza- District Director will within 5 days no-
tion of the type required by these regu- tify the applicant on Form AD–622. The
lations and for advice on any other as- notification will inform the applicant
pects of the preapplication. that an appeal of the decision may be
(3) The State Director, if unable to made to the National Appeals Staff
determine eligibility or qualifications under subpart B of part 1900 of this
with the advice of the OGC, may subchapter.
mit the preapplication to the National (3) If the applicant is eligible and no
Office for review. The preapplication grant or loan funds are available, the
will contain all memoranda from OGC State Director will return the
giving the results of its review. The preapplication information to the Dis-
State Director will identify in the trict Director who will, within 10 days,
transmittal memorandum to the Na- notify the applicant on Form AD–622.
tional Office the specific problem and The notification will explain the facts
will recommend possible solutions and concerning the lack of funding and
any information about the applicant that Rural Development will notify
which would be helpful to the National them when funding will be available.
Office in reaching a decision. This is not an appealable decision.
(4) After an eligibility determination (d) Self-help technical assistance grant
has been made, which should be com- predevelopment agreement. If the grantee
pleted within 30 days unless OGC is in- requested predevelopment assistance
volved, the State Director will: and the State Director determines that
(i) If the applicant is eligible, contact the applicant lacks the financial re-
the National Office as to the avail- sources to meet the conditions of grant
ability of funds or submit the proposal approval, a grant of up to $10,000 and
to the National Office for authorization for up to six months will be made in
if the requested amount exceeds the order for the applicant to provide what
State Director’s approval authority. If is required by paragraph (e) of this sec-
funds are available, the final review of- tion. Exhibit D of this subpart will be
ficer, either the State Director or the used for this purpose. Existing grantees
Assistant Administrator, Housing will proposing to operate in an area dif-
issue a letter of conditions that the ap- ferent from the area that they are cur-
plicant must meet and direct the Dis- rently funded to operate are eligible
trict Director to issue Form AD–622, for this grant. However, this grant is
‘‘Notice of Preapplication Review Ac- available only once for a defined area.
tion.’’ This grant is available only after the
(ii) If the applicant is determined not letter of conditions has been issued.
eligible, the State Director will direct Denial of this assistance is an appeal-
the District Director to issue Form able decision under subpart B of part
AD–622. 1900 of this chapter.
(c) Form AD–622, ‘‘Notice of (e) Form SF–424, ‘‘Application for Fed-
Preapplication Review Action.’’ (1) If the eral Assistance.’’ The applicant will sub-
applicant is eligible and after the State mit Form SF–424 in an original and one
Director has returned the pre-applica- copy to the District Director. The ap-
tion information and, as appropriate, plication should provide a detailed pro-
the environmental review documenta- posal of its goals including:
tion required in 7 CFR part 1970 to the (1) Names, addresses, number in
Area Office, the Area Director will, household, and total annual household
within 10 days, prepare and issue Form income of families who have been con-
AD–622. The original Form AD–622 will tacted by the applicant and are inter-
be signed and delivered to the appli- ested in participating in a self-help
cant along with the letter of condi- housing project. Community organiza-
tions, a copy to the applicant’s case tions including minority organizations
139
may be used as a source of names of (b) The applicant has met all of the
people interested in self-help housing. conditions listed in § 1944.410(e) of this
(2) Proof that the first group of pro- subpart.
spective participating self-help fami- (c) The grantee furnishes a signed
lies have qualified for financial assist- statement that it complies with the re-
ance. quirements of the Departmental Regu-
(3) Evidence that lots are optioned by lations found in 2 CFR part 200 as
the prospective participating self-help adopted by USDA through 2 CFR part
families for the first group. Evidence 400.
that lots are available for the remain- (d) A resolution has been adopted by
ing groups. the board of directors which authorizes
(4) Detailed cost estimates of houses the appropriate officer to execute ex-
to be built by the mutual self-help hibit A of this subpart and Form RD
method. Plans and specifications 400–4, ‘‘Assurance Agreement.’’
should be submitted with the cost esti- (e) The grantee has fidelity bonding
mates. as covered in 2 CFR part 200 as adopted
(5) Proposed staffing need, including by USDA through 2 CFR part 400 if a
qualifications, experience, proposed nonprofit organization or, if a State or
hiring schedule, and availability of any local government, to the extent re-
prospective employees. quired in 2 CFR part 200 as adopted by
(6) Name, address, and official posi- USDA through 2 CFR part 400.
tion of the applicant’s representative (f) The grantee has agreed by com-
or representatives authorized to act for pleting SF–424B, ‘‘Assurances-Non Con-
the applicant and work with Rural De- struction Programs,’’ that it will es-
velopment. tablish a recordkeeping system that is
(7) Budget information including a certifiable by a certified public ac-
detailed budget for the Agreement pe- countant that it adequately meets the
riod based upon the needs outlined in Agreement.
the proposal. SF 424A will be completed (g) The grantee has established an in-
to furnish the budget information. terest bearing checking account on
(8) Indirect or direct cost policy and which at least two bonded officials will
proposed indirect cost rate developed sign all checks issued and understands
in accordance with 2 CFR part 200 as that interest earned in excess of $250.00
adopted by USDA through 2 CFR part annually must be submitted to Rural
400. Development quarterly. (The use of mi-
(9) Personnel procedures and prac- nority depository institutions is en-
tices that will be established or are in couraged.)
existence. Forms to be used should be (h) The grantee has developed an
submitted with the application. agreement to be executed by the grant-
(10) A proposed monthly activities ee and the self-help participants which
schedule showing the proposed dates clearly sets forth what is expected of
for starting and completing the re- each and has incorporated exhibit B–2
cruitment, loan processing and con- of this subpart which clearly shows
struction phases for each group of par- what work is expected of the partici-
ticipant families. pating family.
[55 FR 41833, Oct. 16, 1990, as amended at 61 [55 FR 41833, Oct. 16, 1990; 56 FR 19253, Apr.
FR 39851, July 31, 1996; 79 FR 76009, Dec. 19, 26, 1991; 79 FR 76010, Dec. 19, 2014]
2014; 81 FR 11031, Mar. 2, 2016]
§ 1944.412 Docket preparation.
§ 1944.411 Conditions for approving a When the application and all items
grant. required for the complete docket have
A grant may be approved for an eligi- been received, the District Director
ble applicant when the conditions in will thoroughly examine it to insure
the letter of conditions are met and the the application has been properly and
following conditions are present: accurately prepared and that it in-
(a) The applicant has or can hire, or cludes the required dates and signa-
contract directly or indirectly with, tures. The docket items will be assem-
qualified people to carry out its respon- bled and distributed by the District Di-
sibilities in administering the grant. rector in the following order:
140
Total Signed No. for Copy for

Form No. Name of form or document No. of by appli- agreement applicant
copies cant docket
SF–424 .......... Application for Federal Assistance ........................................... 3 1 1–O and 1C 1–C
AD–622 .......... Notice of Preapplication Review Action .................................... 2 .............. 1–C 1–O
RD 1940–1 .... Request for Obligation of Funds ............................................... 4 2 3–O and 2C 1–C
RD 400–4 ...... Assurance Agreement ............................................................... 2 1 1–O 1–C
HUD Form 935.2, Affirmative Fair Housing Marketing Plan .... 3 1 1–O and 1C 1–C
Certified Copy Authorizing Resolution ...................................... 1 1 1–O –
Self-Help Technical Assistance Grant Agreement (Exhibit A) 2 1 1–O 1–C
Any Personnel Forms to be used ............................................. 2 .............. 1–O 1–C
O = Original.
C = Copy.
§ 1944.413 Grant approval. (c) Disapproval of grant. If a grant is

disapproved after the docket has been
(a) Approval of grant. Within 30 days
developed, the approving official will
of the grantee meeting the conditions
state the reason on the original Form
of § 1944.411 of this subpart or, if appli-
RD 1940–1, or in a memorandum to the
cable, signing exhibit D, the approving
District Director. The District Director
official will:
will notify the applicant in writing of
(1) Execute and distribute Form RD the disapproval and the reason for dis-
1940–1 in accordance with the Forms approval. Also, the notification will in-
Manual Insert (FMI). form the applicant of its appeal rights
(2) After the Finance Office acknowl- under subpart B of part 1900 of this
edges that funds are obligated, request chapter.
an initial advance of funds on Form RD
440–57, ‘‘Acknowledgment of Obligated § 1944.414 [Reserved]
Funds/Check Request,’’ in accordance
with the FMI. The amount of this re- § 1944.415 Grant approval and other
quest should cover the applicant’s approving authorities.
needs for the remainder of the month (a) The State Director is authorized
in which the grant is closed plus the to approve or disapprove TA grants
next month. Subsequent advances will under this subpart. For a grant in ex-
cover only a one-month period. cess of $300,000, or in the case of a grant
(b) Cancellation of an approved grant. amendment when the amount of the
An approved grant may be canceled be- grant plus any unexpended funds from
fore closing if the applicant is no a previous grant will exceed $400,000,
longer eligible, the proposal is no prior written consent of the National
longer feasible, or the applicant re- Office is required. In such cases, the
quests cancellation. Cancellation will docket, along with the State Director’s
be accomplished as follows: recommendations, must be submitted
(1) The District Director will prepare to the National Office for review.
Form RD 1940–10, ‘‘Cancellation of U.S. (b) The State Director may approve a
Treasury Check and/or Obligation,’’ ac- grant not to exceed $10,000 to an eligi-
cording to the FMI and send it to the ble organization under § 1944.410(d) of
State Director with the reasons for this subpart. The grant must be lim-
cancellation. If the State Director ap- ited to 6 months and funds must be
proves the request, Form RD 1940–10 used for the development of the final
will be returned to the District Office application, family recruitment, and
for processing in accordance with the related activities as explained in
FMI. § 1944.410(e) of this subpart. The amount
(2) The District Director will notify of this grant will not be included in fig-
the applicant of the cancellation and uring TA cost per units.
the right to appeal under subpart B of (c) The authority to contract for
part 1900 of this chapter. If the appli- services is limited to the Adminis-
cant requested the cancellation, no ap- trator of Rural Development.
peal rights are provided, but the appli- (d) Monthly expenditures of the
cant will still be notified of the can- grantee will normally be approved by
cellation. the District Director unless:
141
(1) The grantee operates in only one (1) If the request appears to be in
county, in which case the authority order, process Form RD 440–57 so that
may be delegated to the County Super- delivery of the check will be possible
visor. on the first of the next month.
(2) The grantee operates in more than (2) If the request does not appear to
one Rural Development District, in be in order, immediately contact the
which case the State Director will des- grantee to resolve the problem. After
ignate the approving official. the contact:
(3) The grantee operates in more than (i) If the explanation is acceptable,
one State Director’s jurisdiction, in process Form RD 440–57 so delivery
which case the Administrator will des- may be possible by the first of the next
ignate the approving official. month, or
(4) The expenditure is under contract (ii) If the explanation is not accept-
authority, in which case the Con- able, immediately notify the grantee
tracting Official Representative will and request the amount of funds that
approve the monthly expenditure.
appear reasonable for the next 30 days
§ 1944.416 Grant closing. on Form RD 440–57, so that delivery
may be possible by the first of the next
The grant is closed on the date the month. Unapproved funds that are
Agreement is executed as defined in later approved will be added to the
§ 1944.403(a) by the applicant and the next month’s request.
Government. Funds may not be ad-
(b) Quarterly, the grantee will sub-
vanced prior to the signing of the
mit exhibit B of this subpart in an
Agreement. The District Director or
original and three copies to the County
Assistant District Director are author-
Supervisor on or before January 15,
ized to execute the Agreement for
April 15, July 15, and October 15 which
Rural Development. Person(s) author-
ized by resolution may sign for the ap- will verify its progress toward meeting
plicant. the objectives stated in the Agreement
and the application. The County Super-
§ 1944.417 Servicing actions after visor will immediately complete the
grant closing. County Office review part and forward
Rural Development has a responsi- the report to the District Office. After
bility to help the grantee be successful exhibit B is received in the District Of-
and help the grantee avoid cases of fice, a meeting should be scheduled be-
fraud and abuse. Servicing actions also tween the grantee, District Director,
include correlating activities between and the County supervisor since this is
the grantee and Rural Development to an opportune time for both the grantee
the benefit of the participating fami- and Rural Development to review
lies. The amount of servicing actions progress to date and make necessary
needed will vary in accordance with adjustments for the future. This meet-
the experience of the grantee, but as ing is required if the grantee was pre-
minimum the following actions are re- viously identified as a problem grantee
quired: or will be identified as a problem
(a) Monthly, the grantee will provide grantee at this time. Regardless of
the District Director with a request for whether a meeting will be held, the fol-
additional funds on Form SF–270, ‘‘Re- lowing will be done:
quest for Advance or Reimbursement.’’ (1) Exhibit B and other information
This request need only show the will be evaluated to determine progress
amount of funds used during the pre- made to date. The District Director
vious month, amount of unspent funds, will comment on exhibit B as to wheth-
projected need for the next 30 days, and er the grantee is ahead or behind
written justification if the request ex- schedule in each of the following areas:
ceeds the projected need for the next 30 (i) Assisting the projected number of
days. This request must be in the Dis- families.
trict Director’s office fifteen days prior (ii) Serving very low-income applicants.
to the beginning of the month. Upon Is the grantee reaching a minimum of
receipt of the grantee’s request, the very low-income families as required in
District Director will: exhibit A, attachment 2 to subpart L of
142
part 1940 of this chapter (available in grant will be terminated under

any Rural Development office). § 1944.426(b)(1) of this subpart.
(iii) Equivalent units (EUs). Is the [55 FR 41833, Oct. 16, 1990; 56 FR 19253, Apr.
number of EUs completed representa- 26, 1991]
tive of lapse in time of the grant? For
example, if 25 percent of the grant pe- § 1944.418 [Reserved]
riod has elapsed, are 25 percent of the
number of EUs completed? § 1944.419 Final grantee evaluation.
(iv) Labor contributions by the family. Near the end of the grant period but
Are the families working together and prior to the last month, an evaluation
are they completing the labor tasks as of the grantee will be conducted by
established on exhibit B–2? Rural Development. The State Director
(2) The District Director will submit may use Rural Development employees
exhibit B to the State Director who or an organization under contract to
will evaluate the quarterly report Rural Development to provide the eval-
along with the District Director’s com- uation. The evaluation is to determine
ments. If the State Director deter- how successful the grantee was in
meeting goals and objectives as defined
mines the grantee is progressing satis-
in the agreement, application, this reg-
factorily, the State Director will sign
ulation, and any amendments.
and forward exhibit B to the National
(a) This is a quantitative evaluation
Office. However, if the State Director
of the grantee to determine if it met
determines the grantee is not per- its goals in:
forming as expected, the State Director (1) Assisting the project number of
will notify the grantee that it has been families in obtaining adequate housing.
classified a ‘‘High Risk’’ grantee. The (2) Meeting the goal of assisting very
notice will specify the deficiencies and low-income families.
inform the grantee of proposed rem- (3) Meeting the family labor require-
edies for noncompliance. The notice ment in § 1944.411(h) and exhibit B–2 of
will advise the grantee that Rural De- this subpart.
velopment is available to assist and (4) Keeping costs within the guides
provide the name and address of an or- set in § 1944.407.
ganization that is under contract with (5) Meeting order objectives in the
Rural Development to assist them. The Agreement.
State Director will forward a copy of (b) The evaluation is a narrative ad-
exhibit B, District Directors com- dressed to the State Director with a
ments, and the reasons for classifying copy of the National Office, Single
them as ‘‘High Risk’’ to the National Family Housing Processing Division. It
Office, Single Family Housing, Special will be in 3 parts, namely; findings, rec-
Programs Branch. When the period of ommendations, and an overall rating.
time provided for corrective action has The rating will be either unacceptable,
expired, an assessment will be made of acceptable, or outstanding, as follows:
the progress by the grantee toward cor- (1) Outstanding if the grantee met or
recting the situation. If the State Di- exceeded all of the goals in paragraph
rector determines: (a) of this section.
(i) The situation has been corrected (2) Acceptable if the grantee met or
or reasonable progress has been made exceeded all of the goals as defined in
toward correcting the situation, the paragraph (a) except two.
‘‘High Risk’’ status will be lifted and (3) Unacceptable if the grantee failed
the grantee so notified. to obtain an acceptable rating.
(ii) The situation has not been cor- (c) After the State Director has re-
rected but it is correctable if addi- viewed the evaluation, a copy will be
mailed to the grantee. The grantee
tional time is granted, an extension
may request a review of the evaluation
will be issued.
with the District Director. This review
(iii) The situation has not been cor- is for clarification of the material and
rected and it is unlikely to be cor- to dispute the findings if they are
rected if given additional time, the known to be wrong. The rating is not
143
open for discussion except to the ex- § 1944.422 Audit and other report re-
tent it can be proven that the findings quirements.
do not support the rating. If this is the The grantee must submit an audit to
case, the District Director will file an the appropriate Rural Development
amendment to the State Director. District Office annually (or biennially
if a State or local government with au-
§ 1944.420 Extension or revision of the thority to do a less frequent audit re-
grant agreement. quests it) and the earlier of 30 calendar
The State Director may authorize days after receipt of the auditor’s re-
the District Director to execute on be- port or nine months after the end of
half of the Government, exhibit C of the grantee’s audit period. The audit,
this subpart, at any time during the conducted by the grantee’s auditors, is
grant period provided: to be performed in accordance with
(a) The extension period is for no Generally Accepted Government Audit-
more than one year from the final date ing Standards (GAGAS), using the pub-
lication ‘‘Standards for Audit of Gov-
of the existing Agreement.
ernmental Organizations, Programs,
(b) The need for the extension is Activities and Functions’’ developed by
clearly justified. the Comptroller General of the United
(c) If additional funds are needed, a States in 1981, and any subsequent revi-
revised budget is submitted with com- sions. In addition, the audits are also
plete justification, and to be performed in accordance with 2
(d) The grantee is within the guide- CFR part 200 as adopted by USDA
lines in § 1944.407 of this subpart or the through 2 CFR part 400 and Rural De-
State Director determines that the velopment requirements as specified in
best interest of the Government will be this subpart. Audits of borrower loan
served by the extension. funds will be required. The number of
borrower accounts audited will be de-
§ 1944.421 Refunding of an existing termined by the auditor. In incidences
grantee. where it is difficult to determine the
Grantees wishing to continue with appropriate number of accounts to be
self-help efforts after the end of the audited, auditors should be authorized
current grant plus any extensions by the State Director to audit the less-
should file Form SF–424, in accordance er of 10 loans or 10 percent of total
with § 1944.410(e). It is recommended loans.
(a) Nonprofit organizations and others.
that it be filed at least 6 months before
If determined necessary, these organi-
the end of the current grant period.
zations are to be audited in accordance
Funds from the existing grant may be
with Rural Development requirements
used to meet the conditions of a new
in accordance with 2 CFR part 200 as
grant to serve the same or redefined
adopted by USDA through 2 CFR part
geographic area. If the grantee is tar- 400. These requirements also apply to
geting a different geographic area, a public hospitals, public colleges, and
new preapplication must be submitted universities if they are excluded from
in accordance with § 1944.410 and the the audit requirements of paragraph (b)
grantee may apply for a of this section.
predevelopment grant in accordance (1) An audit conducted by the grant-
with § 1944.410(d). In addition to meet- ee’s auditor shall be supplied to the
ing the conditions of an applicant as Rural Development District Director
defined in § 1944.411 of this subpart, the as soon as possible but in no case later
grantee must also have received or will than ninety (90) days following the pe-
receive an acceptable rating on its cur- riod covered by the grant agreement.
rent grant unless an exception is grant- (2) Auditors shall promptly notify
ed by the State Director. The State Di- United States Department of Agri-
rector may grant an exception to the culture’s Office of the Inspector Gen-
rating if it is determined that the rea- eral Regional Inspector General and
sons causing the previous unacceptable the Rural Development District Office,
rating have been removed or will be re- in writing, of any indication of fraud,
moved with the approval of this grant. abuse, or illegal acts in grantees use of
144
grant funds or in the handling of bor- made in accordance with paragraph (a)
rowers accounts. of this section.
(3) Nonprofit organizations that re- [55 FR 41833, Oct. 16, 1990; 56 FR 19253, Apr.
ceive less than $25,000 a year in Federal 26, 1991, as amended at 79 FR 76010, Dec. 19,
financial assistance need not be au- 2014; 81 FR 7698, Feb. 16, 2016]
dited.
(b) State and local governments and In- § 1944.423 Loan packaging and 502 RH
dian tribes. These organizations are to application submittal.
be audited in accordance with this sub- A grantee is required to assist 502 RH
part and 2 CFR part 200 as adopted by applicants in submitting their applica-
USDA through 2 CFR part 400. The tion for a RH loan. Loan packaging
grantee will forward completed audits will be performed in accordance with 7
to the appropriate Federal Cognizant CFR part 3550; therefore, it is impor-
agency and a copy to the Rural Devel- tant that the grantee be trained at an
opment District Director. ‘‘Cognizant early date in the packaging of RH
agency’’ for audits is defined at 2 CFR loans. Typically, this training should
200.18 as the Federal agency designated take place before the first applications
to carry out the responsibilities de- are submitted to the County Office and
scribed in § 200.513 Responsibilities, before the grant is closed. A grantee
paragraph (a). The cognizant agency should become very knowledgeable of
for audit is not necessarily the same as Rural Development’s eligibility re-
the cognizant agency for indirect costs. quirements but must understand that
A list of cognizant agencies for audit only Rural Development can approve
may be found at the FAC Web site. or deny an applicant assistance. Grant-
Within USDA, the OIG shall fulfill cog- ee must work cooperatively with Rural
nizant agency responsibilities. Smaller Development in the 502 loan approval
grantees not assigned a cognizant process and must work within the reg-
agency by OMB should contact the ulations for the 502 program and recog-
Federal agency that provided the most nize Rural Development’s ultimate de-
funds. When USDA is designated as the cision making authority to approve or
cognizant agency or when it has been deny loans. However, the grantee may
determined by the borrower that Rural ask for clarification that may be help-
Development provided the major por- ful in working with future applicants.
tion of Federal financial assistance, Grant funds may not be used to pay
the State Director will contact the ap- any expense in connection with an ap-
propriate USDA OIG Regional Inspec- peal that the applicant may file or pur-
tor General. Rural Development and sue.
the borrower shall coordinate all pro-
posed audit plans with the appropriate [55 FR 41833, Oct. 16, 1990, as amended at 67
FR 78328, Dec. 24, 2002]
USDA OIG.
(1) State and local governments and § 1944.424 Dwelling construction and
Indian tribes that receive $25,000 or standards.
more a year in Federal financial assist-
All construction will be performed in
ance shall have an audit made in ac-
accordance with subpart A of part 1924
cordance with 2 CFR part 200 as adopt-
of this chapter. The planned work must
ed by USDA through 2 CFR part 400.
meet the building requirements of 7
(2) State and local and Indian tribes
CFR part 3550 and meet the Develop-
that receive less than $25,000 a year in
ment Standards as defined in subpart A
Federal financial assistance shall be
of part 1924 of this chapter and in any
exempt from 2 CFR part 200 as adopted
local codes. Sites and site develop-
by USDA through 2 CFR part 400.
ments must conform to the require-
(3) Public hospitals and public col-
ments of subpart C of part 1924 of this
leges and universities may be excluded
chapter.
by the State Director from OMB Cir-
cular A–128 audit requirements. If such [55 FR 41833, Oct. 16, 1990, as amended at 67
entities are excluded, audits shall be FR 78328, Dec. 24, 2002]
145
§ 1944.425 Handling and accounting believes the reason for the proposed
for borrower loan funds. termination can be resolved, the grant-
Grantees will be required to admin- ee should, within 15 calendar days of
ister borrower loan funds during the the date of this notification, contact
construction phases. The extent of the State Director in writing request-
their involvement will depend on the ing a meeting for further consider-
experience of the grantee and the ation. The meeting will be an informal
amount of authority delegated to them proceeding at which the grantee will be
by the District Director in accordance given the opportunity to provide what-
with § 1924.6(c) of subpart A of part 1924 ever additional information it believes
of this chapter. Training should in- should be considered in reaching a de-
clude Rural Development’s non-dis- cision concerning the case. The grantee
crimination policies in receiving appli- may have an attorney or any other per-
cations. son present at the meeting if desired.
Within 7 calendar days of the meeting,
§ 1944.426 Grant closeout. the State Director will determine what
(a) Grant purposes completed. Prompt- action to take.
ly after the date of completion, grant (i) If the State Director determines
closeout actions will be taken to allow that termination is not necessary, the
the orderly discontinuance of grantee grantee will be informed by letter
activity. along with the District Director.
(1) The grantee will immediately re- (ii) If the State Director determines
fund to Rural Development any bal- that termination of the grant is appro-
ance of grant funds that are not com- priate, he/she will promptly inform the
mitted for the payment of authorized grantee by the use of exhibit B–3 of
expenses. subpart B of part 1900 of this chapter.
(2) The grantee will furnish Form (2) National Office review. (i) Upon re-
SF–269A, ‘‘Financial Status Report ceipt of a request from a grantee that
(short form)’’ to Rural Development the decision of the State Director be
within 90 days after the date of comple- reconsidered, the National Office will
tion of the grant. All other financial, make a preliminary decision con-
performance, and other reports re- cerning the continued funding of the
quired as a condition of the grant also grantee during the appeal period. Writ-
will be completed. ten notification of the decision will be
(3) After the grant closeout, Rural given to the State Director and grant-
Development retains the right to re- ee.
cover any disallowed costs which are (ii) The National Office will then ob-
discovered as a result of the final tain a comprehensive report on the
audit. 7 CFR part 3550 will be used by matter from the State Office. This in-
Rural Development to recover any un- formation will be considered together
authorized expenditures. with any additional information that
(4) The grantee will provide Rural may be provided by the grantee.
Development an audit conforming to (c) Grant suspension. When the grant-
those requirements established in this ee has failed to comply with the terms
part, including audits of self-help bor- of the agreement, the District Director
rower accounts. will promptly report the facts to the
(5) Upon request from the recipient, State Director. The State Director will
any allowable reimbursable cost not consider termination or suspension of
covered by previous payments shall be the grant usually only after a Grantee
promptly paid by Rural Development. has been classified as ‘‘high risk’’ in ac-
(b) Grant purposes not completed—(1) cordance with § 1944.417(b)(2). When the
Notification of termination. The State State Director determines that the
Director will promptly notify the grantee has a reasonable potential to
grantee and the National Office in correct deficiencies the grant may be
writing of the termination action in- suspended. The State Director will re-
cluding the specific reasons for the de- quest written authorization from the
cision and the effective date of the ter- National Office to suspend a grantee.
mination. The notification to the The suspension will adhere to 2 CFR
grantee will specify that if the grantee part 200 as adopted by USDA through 2
146
RHS, RBS, RUS, FSA, USDA Pt. 1944, Subpt. I, Exh. A
CFR part 400. The grantee will be noti- to determine if they need to make ad-
fied of the grant suspension in writing justments in order to prevent fraud and
by the State Director. The State Direc- abuse, and meet the goals in the cur-
tor will also promptly inform the rent grant agreement.
grantee of its rights to appeal the deci-
sion by use of Exhibit B–3 of Subpart B §§ 1944.428–1944.449 [Reserved]
of part 1900 of this chapter.
(d) Grant termination. The State Di- § 1944.450 OMB control number.
rector may terminate the grant agree- The reporting and recordkeeping re-
ment whenever Rural Development de- quirements contained in this regula-
termines that the grantee has failed to tion have ben approved by the Office of
comply with terms of the Agreement. Management and Budget and have been
The reasons for termination may in- assigned OMB control number 0575–
clude, but are not limited to, such 0043. Public reporting burden for this
problems as listed in paragraph (e)(3)(i) collection of information is estimated
of exhibit A of this subpart. The State to vary from 10 minutes to 18 hours per
Director may also withhold further dis- response, with an average of 1.17 hours
bursement of grant funds and prohibit per response including time for review-
the grantee from incurring additional ing instructions, searching existing
obligations of grant funds with written data sources, gathering and maintain-
approval of the National Office. Rural ing the data needed, and completing
Development will allow all necessary and reviewing the collection of infor-
and proper costs which grantee could mation. Send comments regarding this
not reasonably avoid. burden estimate or any other aspect of
(1) Termination for cause. The grant this collection of information, includ-
agreement may be terminated in ing suggestions for reducing this bur-
whole, or in part, at any time before den, to Department of Agriculture,
date of completion, whenever Rural De- Clearance Officer, OIRM, room 404–W,
velopment determines that the grantee Washington, DC 20250; and to the Office
has failed to comply with terms of the of Management and Budget, Paperwork
Agreement. The State Director will no- Reduction Project (OMB# 0575–0043),
tify the grantee in writing giving the Washington, DC 20503.
reasons for the action and inform the
grantee of its rights of appeal by use of EXHIBIT A TO SUBPART I OF PART 1944—
exhibit B–3 of subpart B of part 1900 of SELF-HELP TECHNICAL ASSISTANCE
this chapter. GRANT AGREEMENT
(2) Termination for convenience. FmHA
or its successor agency under Public THIS GRANT AGREEMENT dated
Law 103–354 or the grantee may termi- llllllllll, 19ll, is between
llllll
nate the grant in whole, or in part,
when both parties agree that the con- llllllllllllllllllllllll
tinuation of the grant would not a nonprofit corporation (‘‘Grantee’’), orga-
nized and operating under
produce beneficial results. The two par-
llllllllllllllllllllllll
ties will agree in writing to the termi-
(authorizing State statute)
nation conditions including the effec-
tive date. No notice of rights of appeal and the United States of America acting
through the Farmers Home Administration,
will be issued by Rural Development. Department of Agriculture (‘‘FmHA’’) or its
[55 FR 41833, Oct. 16, 1990, as amended at 67 successor agency under Public Law 103–354.
FR 78328, Dec. 24, 2002; 68 FR 61331, Oct. 28, In consideration of financial assistance in
2003; 79 FR 76010, Dec. 19, 2014] the amount of $llll (called ‘‘Grant
Funds’’) to be made available by FmHA or
§ 1944.427 Grantee self-evaluation. its successor agency under Public Law 103–
Annually or more often, the board of 354 to Grantee under section 523(b)(1)(A) of
directors will evaluate their own self- the Housing Act of 1949 to be used in (specify
area to be served) llll for the purpose of
help program. Exhibit E of this subpart
providing a program of technical and super-
is provided for that purpose. It is also visory assistance which will aid low-income
recommended that they review their families in carrying out mutual self-help
personnel policy, any audits that may housing efforts. Grantee will provide such a
have been conducted and other reports program in accordance with the terms of this
147
Pt. 1944, Subpt. I, Exh. A 7 CFR Ch. XVIII (1–1–21 Edition)
Agreement and FmHA or its successor agen- (1) Promptly after the date of completion
cy under Public Law 103–354 regulations. or a decision to terminate a grant, grant
closeout actions are to be taken to allow the
DEFINITIONS: orderly discontinuation of Grantee activity.
Date of Completion means the date when all (i) Grantee shall immediately refund to
work under a grant is completed or the date FmHA or its successor agency under Public
in the TA Grant Agreement, or any supple- Law 103–354 any uncommitted balance of
ment or amendment thereto, on which Fed- grant funds.
eral assistance ends. (ii) Grantee will furnish to FmHA or its
successor agency under Public Law 103–354
Disallowed costs are those charges to a
within 90 days after the date of completion
grant which the FmHA or its successor agen-
of the grant a ‘‘Financial Status Report’’,
cy under Public Law 103–354 determines can-
Form SF–269A. All financial, performance,
not be authorized.
and other reports required as a condition of
Grant Closeout is the process by which the
the grant will also be completed.
grant operation is concluded at the expira-
(iii) Grantee shall account for any property
tion of the grant period or following a deci-
acquired with technical assistance (TA)
sion to terminate the grant.
grant funds, or otherwise received from
Termination of a grant means the cancella- FmHA or its successor agency under Public
tion of Federal assistance, in whole of in Law 103–354.
part, under a grant at any time prior to the (iv) After the grant closeout, FmHA or its
date of completion. successor agency under Public Law 103–354
TERMS OF AGREEMENT: retains the right to recover any disallowed
costs which may be discovered as a result of
(a) This Agreement shall terminate any audit.
llll years from this date unless extended (2) When there is reasonable evidence that
or sooner terminated under paragraphs (e) Grantee has failed to comply with the terms
and (f) of this Agreement. of this Agreement, the State Director may
(b) Grantee shall carry out the self-help determine Grantee as ‘‘high risk’’. A ‘‘high
housing activity described in the application risk’’ Grantee will be supervised to the ex-
docket which is attached to and made a part tent necessary to protect the Government’s
of this Agreement. Grantee will be bound by interest and to help Grantee overcome the
the conditions set forth in the docket, 7 CFR deficiencies.
part 1944, subpart I, and the further condi- (3) Grant termination will be based on the
tions set forth in this Agreement. If any of following:
the conditions in the docket are inconsistent (i) Termination for cause. This grant may be
with those in the Agreement or subpart I of terminated in whole, or in part, 90 days after
part 1944, the latter will govern. A waiver of a Grantee has been classified as ‘‘high risk’’
any condition must be in writing and must if the State Director determines that Grant-
be signed by an authorized representative of ee has failed to correct previous deficiencies
FmHA or its successor agency under Public and is unlikely to correct such items if addi-
Law 103–354. tional time is allowed. The reasons for ter-
(c) Grantee shall use grant funds only for mination may include, but are not limited
the purposes and activities specified in to, such problems as:
FmHA or its successor agency under Public (A) Actual TA costs significantly exceed-
Law 103–354 regulations and in the applica- ing the amount stipulated in the proposal.
tion docket approved by FmHA or its suc- (B) The number of homes being built is sig-
cessor agency under Public Law 103–354 in- nificantly less than proposed construction or
cluding the approved budget. Any uses not is not on schedule.
provided for in the approved budget must be (C) The cost of housing not being appro-
approved in writing by FmHA or its suc- priate for the self-help program.
cessor agency under Public Law 103–354 in (D) Failure of Grantee to only use grant
advance. funds for authorized purposes.
(d) If Grantee is a private nonprofit cor- (E) Failure of Grantee to submit adequate
poration, expenses charged for travel or per and timely reports of its operation.
diem will not exceed the rates paid FmHA or (F) Failure of Grantee to require families
its successor agency under Public Law 103– to work together in groups by the mutual
354 employees for similar expenses. If Grant- self-help method in the case of new construc-
ee is a public body, the rates will be those tion.
that are allowable under the customary (G) Serious or repetitive violation of any of
practice in the government of which Grantee the provisions of any laws administered by
is a part; if none are customary, the FmHA FmHA or its successor agency under Public
or its successor agency under Public Law Law 103–354 or any regulation issued under
103–354 rates will be the maximum allowed. those laws.
(e) Grant closeout and termination proce- (H) Violation of any nondiscrimination or
dures will be as follows: equal opportunity requirement administered
148
RHS, RBS, RUS, FSA, USDA Pt. 1944, Subpt. I, Exh. A
by FmHA or its successor agency under Pub- (i) Acquisition and disposal of personal,
lic Law 103–354 in connection with any equipment and supplies should comply with
FmHA or its successor agency under Public Subpart R of 2 CFR part 200 as adopted by
Law 103–354 programs. USDA through 2 CFR part 400.
(I) Failure to establish an accounting sys- (j) Results of the program assisted by
tem acceptable to FmHA or its successor grant funds may be published by Grantee
agency under Public Law 103–354. without prior review by FmHA or its suc-
(J) Failure to serve very low-income fami- cessor agency under Public Law 103–354, pro-
lies. vided that such publications acknowledge
(K) Failure to recruit families from sub- the support provided by funds pursuant to
standard housing. the provisions of Title V of the Housing Act
(ii) Termination for convenience. FmHA or of 1949, 42 U.S.C. 1471, et seq., and that five
its successor agency under Public Law 103– copies of each such publication are furnished
354 or Grantee may terminate the grant in to the local representative of FmHA or its
whole, or in part, when both parties agree successor agency under Public Law 103–354.
that the continuation of the project would (k) Grantee certifies that no person or or-
not produce beneficial results commensurate ganization has been employed or retained to
with the further expenditure of funds. The solicit or secure this grant for a commission,
percentage, brokerage, or contingent fee.
two parties shall agree upon the termination
(l) Grantee shall comply with all civil
conditions, including the effective date and,
rights laws and the FmHA or its successor
in case of partial termination, the portion to
agency under Public Law 103–354 regulations
be terminated.
implementing these laws.
(4) To terminate a grant for cause, FmHA (m) In all hiring or employment made pos-
or its successor agency under Public Law sible by or resulting from this grant, Grant-
103–354 shall promptly notify Grantee in ee: (1) Will not discriminate against any em-
writing of the determination and the reasons ployee or applicant for employment because
for and the effective date of the whole or par- of race, religion, color, sex, marital status,
tial termination. Grantee will be advised of national origin, age, or mental or physical
its appeal rights under 7 CFR part 1900, sub- handicap, and (2) will take affirmative ac-
part B. tion to insure that applicants are employed,
(f) An extension of this grant agreement and that employees are treated during em-
may be approved by FmHA or its successor ployment without regard to their race, reli-
agency under Public Law 103–354 provided, in gion, color, sex, marital status, national ori-
its opinion, the extension is justified and gin, or mental or physical handicap. This re-
there is a likelihood that the Grantee can ac- quirement shall apply to, but not be limited
complish the goals set out and approved in to, the following: Employment, upgrading,
the application docket during the period of demotion, or transfer; recruitment or re-
the extension. cruitment advertising; layoff or termination;
(g) Grant funds may not be used to pay ob- rates of pay or other forms of compensation;
ligations incurred before the date of this and selection for training, including appren-
Agreement. Grantee will not obligate grant ticeship. In the event Grantee signs a con-
funds after the grant termination or comple- tract which would be covered by any Execu-
tion date. tive Order, law, or regulation prohibiting
(h) As requested and in the manner speci- discrimination, Grantee shall include in the
fied by FmHA or its successor agency under contract the ‘‘Equal Employment Clause’’ as
Public Law 103–354, the Grantee must make specified by FmHA or its successor agency
quarterly reports, exhibit C of this subpart under Public Law 103–354.
(on 1⁄15, 4⁄15, 7⁄15 and 10⁄15 of each year), and a fi- (n) It is understood and agreed by Grantee
nancial status report at the end of the grant that any assistance granted under this
period, and permit on-site inspections of pro- Agreement will be administered subject to
gram progress by FmHA or its successor the limitations of Title V of the Housing Act
agency under Public Law 103–354 representa- of 1949 as amended, 42 U.S.C. 1471 et seq., and
tives. FmHA or its successor agency under related regulations, and that rights granted
Public Law 103–354 may require progress re- to FmHA or its successor agency under Pub-
ports more frequently if it deems necessary. lic Law 103–354 in this Agreement or else-
Grantee must also comply with the audit re- where may be exercised by it in its sole dis-
quirements found in § 1944.422 of subpart I of cretion to carry out the purposes of the as-
7 CFR part 1944, if applicable. Grantee will sistance, and protect FmHA or its successor
maintain records and accounts, including agency under Public Law 103–354’s financial
property, personnel and financial records, to interest.
assure a proper accounting of all grant (o) Grantee will maintain a code or stand-
funds. These records will be made available ards of conduct which will govern the per-
to FmHA or its successor agency under Pub- formance of its officers, employees, or
lic Law 103–354 for auditing purposes and will agents. Grantee’s officers, employees, or
be retained by Grantee for three years after agents will neither solicit nor accept gratu-
the termination or completion of this grant. ities, favors, or anything of monetary value
149
Pt. 1944, Subpt. I, Exh. B 7 CFR Ch. XVIII (1–1–21 Edition)
from suppliers, contractors, or others doing Stick built lll%, Panelized lll%,
business with the grantee. To the extent per- Combined lll%
missible by State or local law, rules, or regu- b. Number of bedrooms per house built this
lations such standards will provide for pen- grant period:
alties, sanctions, or other disciplinary ac- 2BR, lllllllllllllllllllll
tions to be taken for violations of such 3BR, lllllllllllllllllllll
standards. llllllllllllllllllllllll
(p) Grantee shall not hire or permit to be c. Household size this Quarter:
hired any person in a staff position or as a 1 person lll,
participant if that person or a member of 2 persons lll,
that person’s immediate household is em- 3 persons lll,
ployed in an administrative capacity by the 4 persons lll,
organization, unless waived by the State Di- 5 persons lll.
rector. (For the purpose of this section, the
term household means all persons sharing the d. Number of houses under construction
same dwelling, whether related or not). this grant period, but started during pre-
(q) Grantee’s board members or employees vious grant period: lll
shall not directly pr indirectly participate, 5. a. Number of houses proposed under this
for financial gain, in any transactions in- grant:
volving the organization or the participating (11) lllllllllllllllllllll
families. This includes activities such as b. Number of houses completed under this
selling real estate, building material, sup- grant:
plies, and services. (12) lllllllllllllllllllll
(r) Grantee will retain all financial c. Number of houses currently under con-
records, supporting documents, statistical struction:
records, and other records pertinent to this (13) lllllllllllllllllllll
agreement for 3 years, and affirms that it is d. Number of families in pre construction:
fully aware of the provisions of the Adminis- (14) lllllllllllllllllllll
trative Remedies for False Claims and State- e. Number of Construction Supervisors:
ments Act, 31 U.S.C. 3801, et seq. (15) lllllllllllllllllllll
By llllllllllllllllllllll f. Number of TA employees:
(Signature) (16) lllllllllllllllllllll
6. a. Average time needed to construct a sin-
gle house:
(Title)
(17) lllllllllllllllllllll
GRANTEE
b. Number of months between submission
By llllllllllllllllllllll of self-help borrower’s docket and ap-
(Signature) proval/rejection:
llllllllllllllllllllllll (18) lllllllllllllllllllll
(Title) c. Number and percentage of loan docket
FARMERS HOME ADMINISTRATION or its rejections during reporting period: lll
successor agency under Public Law 103–354 (19) lllllllllllllllllllll
7. a. Did any of the following adversely affect
EXHIBIT B TO SUBPART I OF PART 1944— the Grantee’s ability to accomplish pro-
EVALUATION REPORT OF SELF-HELP gram objectives?
TECHNICAL ASSISTANCE (TA)
GRANTS YES NO
Evaluation for Quarter Ending: (1) TA Staff Turnover .......... llll llll
llllllll, 19ll FmHA Staff Turnover ..... llll llll
1. a. Name of Grantee: (2) lll Bad Weather .................... llll llll
b. Address: (3) lll Loan Processing Delays .. llll llll
c. Area the grant serves: (4) lll Site Acquisition and De-
2. Date of Agreement: (5) lll Time Ex- velopment .................... llll llll
tended (6) lll Unavailable Loan/Grant
3. a. Equivalent unit increase during quarter: Funds ........................... llll llll
(7) llllllllllllllllllllll Lack of Participants ....... llll llll
First Month Communication between
(8) llllllllllllllllllllll FmHA/Grantee ............. llll llll
Second Month
(9) llllllllllllllllllllll 8. Attach information concerning number of
Third Month families contacted, number who have in-
b. Cumulative total number of Equivalent dicated a willingness to be a partici-
Units since beginning of grant: pating family, number of mutual self-
(10) lllllllllllllllllllll help groups organized, progress on any
Total to Date construction started, and any problems
4. a. Method of Construction: relating to the operation of this grant.
150
RHS, RBS, RUS, FSA, USDA Pt. 1944, Subpt. I, Exh. B–1
I certify that the statements made above are 1. Enter the date the quarter ends either
true to the best of my knowledge and be- March 31, June 30, September 30, or Decem-
lief. ber 31 and the year.
(20) lllllllllllllllllllll 2. Enter the full name of the TA Grantee
(Date) organization.
3. Enter the complete mailing address of
(21) lllllllllllllllllllll the TA Grantee organization.
(Title) 4. Enter the area served by the grant.
GRANTEE 5. Enter the date of the initial self-help TA
(22) lllllllllllllllllllll grant agreement.
(Signature) 6. Enter the time of any extension self-help
TA grant agreement(s).
County Office Review 7. Insert the number of equivalent units
(EU) completed the first/second/third month
I have reviewed the above information which of the quarter using steps 1, 2, and 3 of ex-
I have found to be substantially correct. hibit B–3.
Must be completed by County Office. 8. Insert the number of EU’s completed the
Comment: Must be completed (23) second month of the quarter by using steps 1,
Average appraisal value of units financed 2, and 3 of exhibit B–3.
this Quarter: 9. Insert the number of EU’s completed the
llllllllllllllllllllllll third month of the quarter by using steps 1,
Average amount loan per unit financed this 2, and 3 of exhibit B–3.
Quarter: 10. Add items (7), (8), and (9) to the total
llllllllllllllllllllllll from the previous quarterly report to obtain
the cumulative total number of EU’s. This
(24) lllllllllllllllllllll
total is the cumulative total number of EU’s
(Date)
for the project.
(25) lllllllllllllllllllll 11. Enter the number of houses planned in
County Supervisor the TA Grantee proposal(s).
12. Enter the number of houses completed
District Office Review and occupied since the beginning of the
Comment: Must be completed (26) grant.
(27) lllllllllllllllllllll 13. Enter the number of houses that are
Date under construction at the end of this quar-
ter.
(28) lllllllllllllllllllll 14. Enter the number of families in the pre-
District Director construction phase.
15. Enter the total number of construction
State Office Review
supervisor(s) paid with TA grant funds.
Comments: Must be completed (29) 16. Enter the number of employees paid
(30) lllllllllllllllllllll with TA grant funds including those listed in
Date item 15.
(31) lllllllllllllllllllll 17. Insert the average elapsed time needed
per house from excavation to final inspec-
State Office Representative
tion by FmHA or its successor agency under
Public Law 103–354 to complete construction
EXHIBIT B–1 TO SUBPART I OF PART
of a house. If no self-help homes have been
1944—INSTRUCTIONS FOR PREPARA- completed by this grantee, use other projects
TION OF EVALUATION REPORT OF or your best estimate as a guide.
SELF-HELP TECHNICAL ASSISTANCE 18. Enter the number of months it takes on
GRANTS average to approve or reject a borrower’s
docket once it’s submitted.
Exhibit B will be used by all Technical As- 19. Enter number and percent of dockets
sistance (TA) Grantees obtaining self-help submitted and rejected this quarter.
TA grants. This attachment provides the 20. Enter date of exhibit submittal.
grantee and FmHA or its successor agency 21. Insert title of the Grantee or authorized
under Public Law 103–354 a uniform method representative.
of reporting the performance progress of self- 22. Signature of Grantee or authorized rep-
help projects. The TA Grantee will prepare resentative.
an original and 4 copies of the attachment. 23. County Supervisor must answer ques-
The TA Grantee will sign the original and 3 tions concerning market value and loan
copies and forward it to the local FmHA or amount and also should insert comments
its successor agency under Public Law 103– concerning progress of construction, success
354 County Office. The TA Grantee will keep of the project and any problems that the or-
the unsigned copy for its records. ganization may have.
The evaluation report will be completed in 24. Insert date of County Supervisor’s re-
accordance with the following: view.
151
Pt. 1944, Subpt. I, Exh. B–2 7 CFR Ch. XVIII (1–1–21 Edition)
25. Signature of County Supervisor. 28. Signature of District Director or rep-
26. District Director representative should resentative.
insert his/her comments concerning items 29. Insert State Office comments.
listed in § 1944.417(b)(1) of 1944–I. 30. Insert date of State Office review.
27. Insert date of District Director review. 31. Signature of State Office representa-
tive.
EXHIBIT B–2 TO SUBPART I OF PART 1944—BREAKDOWN OF CONSTRUCTION

DEVELOPMENT FOR DETERMINING PERCENTAGE CONSTRUCTION COMPLETED
In percent—
With With With

slab on crawl base-
grade space ment
1. Excavation ............................................................................ 3 5 6
The removal of earth to allow the construction of a foundation or basement.
2. Footing, Foundations, columns ............................................ 8 8 11
Footing: Construction of the spreading course or courses at the base or bottom of a
foundation wall, pier, or column.
Foundation: Construction of the supporting portion of a structure below the first
floor construction, or below grade, including footing.
3. Floor slab or framing ............................................................ 6 4 4
The floor slab consist of concrete, usually reinforced, poured over gravel and a vapor
barrier with perimeter insulation to prevent heat loss.
4. Subflooring ........................................................................... 0 1 1
The installation of materials used for flooring that is laid directly on the joist and
serving the purpose of a floor during construction prior installation of the finish
floor.
5. Wall framing sheathing ......................................................... 7 7 6
The construction process of putting together and erecting the skeleton parts of a
building’s walls (the rough lumber work) and, for the exterior walls, covering with
sheathing (plywood, waferboard, oriented strand board or lumber) and insulating
board to close up the side walls prior to the installation of finish materials on the
surface.
6. Roof and ceiling framing, sheathing ..................................... 6 6 5
The process, or method, of putting the parts of a roof, such as truss, rafters, ridge
and plates in position. Ceiling joist support the overhead interior lining of a room.
Roof sheathing is any sheet material, such as plywood or particleboard, connected
to the roof rafters or truss to act as a base for sheathing felt, shingles or other roof
covers.
7. Roofing .................................................................................. 5 5 4
The installation of a material that acts as a roof covering, making it impervious to
the weather, such as shingles over sheathing felt, tile, or slate.
8. Siding, exterior trim, porches ............................................... 7 7 6
The installation of lumber, panel products or other materials intended for use as the
exterior wall covering including all trim.
9. Windows and exterior doors .................................................. 9 9 8
The installation of all exterior windows and doors. This includes securely fastening
windows and doors plumb and level, square and true and adjusting sash, screens
and hardware for smooth and proper operation.
10. Plumbing—roughed in ......................................................... 3 2 3
Subject to local codes and regulations the installation of all parts of the plumbing
system which must be completed prior to the installation of plumbing fixtures or
appliances. This includes drain, waste, and vent piping, water supply, and the nec-
essary built-in fixture supports.
11. Sewage disposal ................................................................... 1 1 1
152
RHS, RBS, RUS, FSA, USDA Pt. 1944, Subpt. I, Exh. B–2
In percent—
With With With

slab on crawl base-
grade space ment
Subject to local codes and regulations the construction and installation of a waste-
water disposal system consisting of a house sewer, a pretreatment unit (e.g., septic
tank, individual package treatment plant), an acceptable absorption system (sub-
surface absorption field, seepage pit, or subsurface absorption bed). The system
shall be designed to receive all sanitary sewage (bathroom, kitchen and laundry)
from the dwelling, but not footing or roof drainage. It shall be designed so that
gases generated anywhere in the system can easily flow back to the building sewer
stack.
12. Heating—roughed in ............................................................ 1 1 1
Subject to local codes and regulations the installation of ducts and/or piping and the
necessary supports to minimize the cutting of walls and joist. This rough in is
done before finish wall and floor installed.
13. Electrical—roughed in ......................................................... 2 2 2
Subject to local codes and regulations the installation of conduit or cable and the lo-
cation of switch, light, and outlet boxes with wires ready to connect. This rough-
ing-in work is done before the dry wall finish is applied, and before the insulation
is placed in the walls and ceiling.
14. Insulation ............................................................................ 2 2 2
The installation of any material used in walls, floors, and ceilings to prevent heat
transmission as required by FmHA Instruction 1924–A, exhibit D of 7 CFR of part
1924, subpart A.
15. Dry wall ............................................................................... 8 8 7
Dry walling is covering the interior walls using sheets of gypsum board and taped
joints.
16. Basement or porch floor, steps ............................................ 1 1 6
The construction of basement or porch floors and steps whether wood or concrete.
17. Heating—finished ................................................................ 3 3 3
Subject to local codes and regulations the installation of registers, grilles and ther-
mostats.
18. Flooring covering ................................................................ 6 6 5
The installation of the ‘‘finish flooring’’ (the material used as the final wearing sur-
face that is applied to a floor). Floor covering include numerous flooring materials
such as wood materials, vinyl, linoleum, cork, plastic, carpet and other materials
in tile or sheet form.
19. Interior carpentry, trim, doors ............................................ 6 6 5
Installing visible interior finish work (molding and/or trim), including covering
joints around window and door openings. The installation of an interior door in-
cluding frames and trim.
20. Cabinets and counter tops ................................................... 1 1 1
Securing cabinets and counter tops (usually requiring only fastening to the wall or
floor) that are plumb and level, square and true.
21. Interior painting ................................................................. 4 4 3
Cleaning and preparation of all interior surfaces and applying paint in strict accord-
ance with the paint manufacturer’s instructions.
22. Exterior painting ................................................................. 1 1 1
Cleaning and preparation of all exterior surfaces and applying paint in strict accord-
ance with the paint manufacturer’s instructions.
23. Plumbing—complete fixtures .............................................. 4 4 3
Subject to local codes and regulations the installation of a receptor or device which
requires both a water supply connection and a discharge to the drainage system,
such as water closets, lavatories, bathtubs or sinks. Also, the installation of an en-
ergized household appliance with plumbing connections, such as a clothes washer,
water heater, dishwasher or garbage grinder.
24. Electrical—complete fixtures .............................................. 1 1 1
Subject to local codes and regulations the installation of the fixtures, the switches,
and switch plates. This is usually done after the dry wall finish is applied.
25. Finish hardware .................................................................. 1 1 1
The installation of all the visible, functional hardware in a house that has a finish
appearance, including such features as hinges, locks, catches, pulls, knobs, and
clothes hooks.
26. Gutters and downspouts ...................................................... 1 1 1
153
Pt. 1944, Subpt. I, Exh. B–3 7 CFR Ch. XVIII (1–1–21 Edition)
In percent—
With With With

slab on crawl base-
grade space ment
The installation of a shallow channel of wood, metal, or PVC (gutters) positioned

just below and following along the eaves of the house for the purpose of collecting
and diverting water from a roof to a vertical pipe (downspouts) used to carry rain-
water from the roof to the ground by way of a splash block or into a drainage sys-
tem.
27. Grading, paving, landscaping .............................................. 3 3 3
Landscaping includes final grading, planting of shrubs and trees, and seeding or sod-
ding of lawn areas. Final grading includes the best available routing of runoff
water to assure that house and adjacent homes will not be endangered by the path
of water runoff. The minimum slope should be 6″ in 10′ or 5% from the foundation
of the home. Paving includes both driveways and walks.
Total ................................................................. 100 100 100
EXHIBIT B–3 TO SUBPART I OF PART cost per unit at that stage of the program’s
1944—PRE-CONSTRUCTION AND CON- progress.
STRUCTION PHASE BREAKDOWN C. The definition of pre-construction and
construction phases described are follows:
I. General. This exhibit will be used by Farm-
ers Home Administration (FmHA) or its Pre-Construction
successor agency under Public Law 103– Phase I: Hold community meetings; con-
354 and the Grantee in determining duct interviews; obtain house plans; prepare
Grantee performance as required in cost estimates; begin search for land; submit
§ 1944.417(b) of this subpart. family applications to the lender; lender
II. Determining technical assistance (TA) cost runs credit check; applications. Lender ei-
per unit. ther approves or rejects.
A. Equivalent units are used to measure Phase II: Organize an association of section
progress at any time during the period of the 502 Rural Housing eligible families; associa-
grant. It is necessary because self-help tion conducts weekly meetings at which re-
grantees have several groups of families in quired lender forms are discussed and com-
various stages of progress during the period pleted; house plans and land sites are se-
of the grant. The following formula has been lected; outside speakers explain and discuss
developed to provide a more accurate meth- taxes, insurance, how to keep a checking ac-
od of determining progress. count, how interest is computed, home main-
tenance, decorating, and landscaping; etc.;
FORMULA completed loan dockets for each family are
submitted to the lender. Family loan dock-
In percent— ets are reviewed and recommendations made
Phase breakdown as to the loan amounts requested; the lender
Value of Cumulative
each phase reviews family loan dockets; preliminary
title search of each proposed building site is
Pre-construction:
begun; requests loan check from Finance Of-
Phase I ............................... 10 10
Phase II .............................. 10 10 fice; when check arrives, final title search is
Construction: made, loan closed, checking accounts
Phase III ............................. 80 21–100 opened, and construction begun.
Construction: The grantee will utilize ex-
B. Using the Description of Phase Break- hibit B–2 which outlines 27 construction
down as a guide, the project staff selects the tasks to determine the percentage of com-
total percentage pertinent to the stage the pleted construction activities.
self-help group is in and multiplies that per- D. The computation of equivalent units
centage by the number of families (units) in and TA costs will be computed as follows:
the group. The result is the equivalent num- Exhibit C will be used for recording the fol-
ber of units completed. No credit may be lowing information and construction in this
given for Phase I, if the application is re- example which starts January 1.
jected. When this computation has been
completed for each group that falls within STEP 1
Phases I-III, the total number of equivalent Both the grantee and FmHA or its suc-
units is divided into the total grant funds ex- cessor agency under Public Law 103–354 re-
pended to that date. The result is the TA view the FmHA or its successor agency
154
RHS, RBS, RUS, FSA, USDA Pt. 1944, Subpt. I, Exh. D
under Public Law 103–354 loan application EXHIBIT C TO SUBPART I OF PART 1944—
records to determine the percentage of com- AMENDMENT TO SELF-HELP TECH-
pletion for each family in the pre-construc- NICAL ASSISTANCE GRANT AGREE-
tion phase of the program. These are Phases
MENT
I-III. Total these percentages to find the
number of ‘‘equivalent units’’ (EUs) com- This Agreement dated,
pleted at that date during pre-construction. llllllllllll 19ll
For example, if there are eight families in between lllllllllllllllllll
Group #2 and all have completed the 20 per- a nonprofit corporation (‘‘Grantee’’), orga-
cent phase of pre-construction, then there nized and operating under
would be 1.6 EUs in the pre-construction
phase of the program as of that date. Each
(authorizing State Statute)
phase must be completed before it is consid-
ered in the calculation. and the United States of America acting
through the Farmers Home Administration,
STEP 2 Department of Agriculture (‘‘FmHA’’) or its
successor agency under Public Law 103–354,
Refer to the records of construction amends the ‘‘Self-Help Technical Assistance
progress for families in the construction Grant Agreement’’ between the parties dated
Phase III. As of that date, the director totals lllllllll 19ll, (‘‘Agreement’’).
the percentage of completion figures for each The Agreement is amended by providing
family as follows: additional financial assistance in the
Askew ................................................. 0.45 amount of llll to be made available by
Whited ................................................ 0.40 FmHA or its successor agency under Public
Martinez ............................................. 0.40 Law 103–354 to Grantee pursuant to section
Gonzalez .............................................. 0.38 523 of Title V of the Housing Act of 1949 for
Sherry ................................................. 0.34 the purpose of assisting in providing a pro-
gram of technical and supervisory assistance
Duran .................................................. 0.33
which will aid low-income families in car-
Johnson ............................................... 0.13 rying out mutual self-help housing efforts; or
Harvey ................................................ 0.31 The Agreement is amended by changing
the completion date specified in convenant 1
EUs ............................................... 2.92 from llll to llll and by making the
Total production in the construction phase following attachments to this amendment:
is therefore 2.92 EUs as of that date. (List and identify proposal and any other
documents pertinent to the grant.)
STEP 3 Agreed to this lllll day of llllll
19ll.
Add the pre-construction and construction
subtotals together: llllllllllllllllllllllll
(Name of Grantee)
Pre-construction ................................. 1.60
Construction ....................................... 2.92 By llllllllllllllllllllll
(Signature)
Total EUs ...................................... 4.52 llllllllllllllllllllllll
(Title)
This provides the total EUs of production
during the first three months of operation. United States of America
Steps 1, 2, and 3 will be used to complete By llllllllllllllllllllll
items 7, 8 and 9 of exhibit B of this subpart. (Signature)
III. Preparation: llllllllllllllllllllllll
Compile exhibit B of this subpart in an (Title)
original and four copies. The exhibit will be Farmers Home Administration or its suc-
signed by the TA Grantee. Submit the origi- cessor agency under Public Law 103–354
nal and three copies of the exhibit quarterly
to FmHA or its successor agency under Pub- EXHIBIT D TO SUBPART I OF PART 1944—
lic Law 103–354 County Office on or before SELF-HELP TECHNICAL ASSISTANCE
January 15, April 15, July 15, and October 15, GRANT PREDEVELOPMENT AGREE-
of each year for the quarters ending March MENT
31, June 30, September 30, and December 31 of
each year. The District Director will keep This grant predevelopment agreement
the original and forward two copies to the dated, lllllllll 19ll, is between
State Office. The State Office will forward llllllllllll
one copy to the National Office. The State a nonprofit corporation (‘‘Grantee’’), orga-
Office will prepare information concerning nized and operating under
TA grants closed within 30 days of the end of llllllllllll
a quarter on the next quarterly report. (authorizing State statute)
155
Pt. 1944, Subpt. I, Exh. E 7 CFR Ch. XVIII (1–1–21 Edition)
and the United States of America acting 2. Are there records of discus-
through the Farmers Home Administration, sions with participating fami-
Department of Agriculture (‘‘FmHA’’) or its lies counselling them when the
successor agency under Public Law 103–354. family contribution is falling
In consideration of financial assistance in behind? ..................................... Yes No
the amount of $lll (‘‘Grant Funds’’) to be 3. Are there obstacles which pre-
made available by FmHA or its successor vent the family from per-
agency under Public Law 103–354 to Grantee forming the required tasks? ..... Yes No
under section 523 (b)(1)(A) of the Housing Act
of 1949 to be used in (specify area to be B. USE OF GRANT FUNDS
served) llllllll for the purpose of de- 1. Were grant funds used to pay
veloping a program of technical and super- salaries or other expenses of
visory assistance which will aid low-income personnel not directly associ-
families in carrying out mutual self-help ated with this grant? ................ Yes No
housing efforts, Grantee will provide such a 2. Were grant funds used to pay
program in accordance with the terms of this for construction work for par-
Agreement and FmHA or its successor agen- ticipating families? .................. Yes No
cy under Public Law 103–354 regulations. 3. Were all purchases or rentals
Grant funds will be used for authorized (item and cost) of office equip-
purposes as contained in § 1944.410(d) of 7 CFR ment authorized? ..................... Yes No
part 1944, subpart I, as necessary, to develop 4. Are all office expenses author-
a complete program for a self-help TA grant. ized by 7 CFR part 1944, subpart
This will include recruitment, screening, I? .............................................. Yes No
loan packaging and related activities for 5. Was a record of long distance
prospective self-help participants. telephone calls maintained and
Agreed to this lllll day of llllll was that log and telephone
19ll. checked? ................................... Yes No
llllllllllllllllllllllll 6. Was all travel and mileage in-
curred for official business and
(Name of Grantee) properly authorized in ad-
By llllllllllllllllllllll vance? ...................................... Yes No
(Signature) 7. Were mileage and per diem
llllllllllllllllllllllll rates within authorized levels? Yes No
(Title) 8. Were participating families
United States of America charged for use of tools? .......... Yes No
9. Were grant funds expended to
By llllllllllllllllllllll
train grant personnel? ............. Yes No
(Signature)
10. Was training appropriate for
llllllllllllllllllllllll the individual trainee? ............. Yes No
(Title) 11. Were any technical or con-
Farmers Home Administration or its suc- sultant services obtained for
cessor agency under Public Law 103–354 participating families? ............. Yes No
12. Were the provided technical
EXHIBIT E TO SUBPART I OF PART 1944— or consultant services appro-
GUIDANCE FOR RECIPIENTS OF SELF- priate in type and cost? ........... Yes No
HELP TECHNICAL ASSISTANCE C. FINANCIAL RESPONSIBILITIES
GRANTS (SECTION 523 OF HOUSING 1. Does each invoice paid by the
ACT OF 1949) grant recipient match the pur-
7 CFR part 1944, subpart I provides the spe- chase order? ............................. Yes No
cific details of this grant program. The fol- 2. Does each invoice paid by the
lowing is a list of some functions of the borrower and FmHA or its suc-
grant recipients taken from this subpart. cessor agency under Public
With the list are questions we request to be Law 103–354 match the pur-
answered by the recipients to reduce the po- chase order? ............................. Yes No
tential for fraud, waste, unauthorized use or 3. Were purchases made from the
mismanagement of these grant funds. We appropriate vendors? ................ Yes No
suggest the Board of Directors answer these 4. Are the invoices and itemized
questions every six months by conducting statements totalled for mate-
their own review. Paid staff should not be rials purchased for individual
permitted to complete this evaluation. families? ................................... Yes No
5. Is there a record of deposits
A. FAMILY LABOR CONTRIBUTION and withdrawals to account for
1. Does your organization main- all loan funds? .......................... Yes No
tain a list of each family and a 6. Are checks from grant funds
running total of hours worked signed by the Board Treasurer
(when and on what activity)? ... Yes No and Executive Director? ........... Yes No
156
RHS, RBS, RUS, FSA, USDA Pt. 1944, Subpt. I, Exh. F
7. Are grant funds deposited in Date
an interest bearing account? .... Yes No llllllllllllllllllllllll
8. Are checks from loan funds President, Board of Directors
prepared by the grant recipient (Period covered by report lll)
for the borrower’s and lender’s
signature? ................................ Yes No Answer Key
9. Are checks from loan funds ac-
The following answers should help your or-
companied by accurate in-
ganization in assessing its vulnerability to
voices? ...................................... Yes No
fraud, waste, and abuse. You should take ac-
10. Are any borrower loan funds
tions to correct practices that now generate
including interests, deposited
an answer different from the key.
in grantee accounts? ................ Yes No
11. Are checks from loan funds
Question Answer
submitted to FmHA or its suc-
cessor agency under Public A. 1 .............................................. Yes
Law 103–354 more often than A. 2 .............................................. Yes
once every 30 days? .................. Yes No A. 3 .............................................. Yes
12. Is the reconciliation of bank B. 1 .............................................. No
statements for both grant and B. 2 .............................................. No
loan funds completed on a B. 3 .............................................. Yes
monthly basis? ......................... Yes No B. 4 .............................................. Yes
13. If the person who issues the B. 5 .............................................. Yes
checks also reconciles them, B. 6 .............................................. Yes
does the Executive Director re- B. 7 .............................................. Yes
view this activity? ................... Yes No B. 8 .............................................. No
14. Are materials purchased in B. 9 .............................................. Yes
bulk approved by the Executive B. 10 ............................................ Yes
Director? .................................. Yes No B. 11 ............................................ Yes
15. Was the amount of materials B. 12 ............................................ Yes
determined by both the Execu- C. 1 .............................................. Yes
tive Director and construction C. 2 .............................................. Yes
staff? ........................................ Yes No C. 3 .............................................. Yes
16. Were any participating fami- C. 4 .............................................. Yes
lies consulted about the pur- C. 5 .............................................. Yes
chase of materials? .................. Yes No C. 6 .............................................. Yes
17. Were savings accomplished by C. 7 .............................................. No
the bulk purchase method? ...... Yes No C. 8 .............................................. Yes
18. Did the Executive Director C. 9 .............................................. Yes
review the purchase order and C. 10 ............................................. No
the ultimate use of the mate- C. 11 ............................................. No
rials? ........................................ Yes No C. 12 ............................................. Yes
19. Are materials covered by in- C. 13 ............................................. Yes
surance when stored by grant- C. 14 ............................................. Yes
ee? ............................................ Yes No C. 15 ............................................. Yes
C. 16 ............................................. Yes
D. REPORTING
C. 17 ............................................. Yes
1. Are ‘‘Requests for Advance or C. 18 ............................................. Yes
Reimbursement’’ made once C. 19 ............................................. Yes
monthly to the FmHA or its D. 1 .............................................. Yes
successor agency under Public D. 2 .............................................. Yes
Law 103–354 District Office? ..... Yes No D. 3 .............................................. Yes
2. Has the grant recipient en-
gaged a certified public Ac- EXHIBIT F TO SUBPART I OF PART 1944—
countant (CPA) or CPA firm to SITE OPTION LOAN TO TECHNICAL
review their operations on a ASSISTANCE GRANTEES
regular basis: (Annually is pref-
erable but every two years and I. OBJECTIVES
at the end or the grant period
are requirements)? ................... Yes No The objective of a Site Option (SO) loan
3. Are the quarterly evaluation under Section 523(b)(1)(B) of Title V of the
reports submitted on time to Housing Act of 1949 is to enable technical as-
the County Supervisor? ............ Yes No sistance (TA) grantees to establish revolving
fund accounts to obtain options on land
What, if any, problems exist that need to needed to make sites available to families
be corrected for effective management of the that will build their own homes by the self-
grant project? help method. An SO loan will be considered
llllllllllllllllllllllll only when sites cannot be made available by
157
Pt. 1944, Subpt. I, Exh. F 7 CFR Ch. XVIII (1–1–21 Edition)
other means including a regular Rural Hous- of SO funds advanced on the option, unless
ing Site (RHS) loan. SO loan funds will still be needed to pur-
chase other options. Under no cir-
II. ELIGIBILITY REQUIREMENTS cumstances, however, will the repayment pe-
To be eligible for an SO loan, the applicant riod exceed the applicant’s remaining TA
must be a TA grantee that is currently oper- grant funding period.
ating in a satisfactory manner under a TA
grant agreement. If the SO loan applicant VI. PROCESSING APPLICATION
has applied for TA funds but is not already a (A) Form of application: The application for
TA grantee and it appears that the TA grant assistance will be in the form of a letter to
will be made, the SO loan may be approved the FmHA or its successor agency under
but not closed until the TA grant is closed. Public Law 103–354 County Supervisor having
jurisdiction over the area of the proposed
III. LOAN PURPOSES
site to be optioned. The letter will be signed
Loans may be made only as necessary to by the applicant or its authorized represent-
enable eligible applicants to establish re- ative and contain, as a minimum, the fol-
volving accounts with which to obtain op- lowing information:
tions on land that will be needed as building (1) A copy of the proposed option that
sites by self-help families participating in shows a legal description of the land, option
the TA self-help housing program. Loans will price, purchase price, and terms of the op-
not be made to pay the full purchase price of tion. If more than one site is to be pur-
land but only for the minimum amounts nec- chased, a schedule of the proposed options
essary to obtain an option from the seller. should be included.
The option should be for as long as necessary (2) Information to verify that a regular
but in no case should the option be for less RHS loan cannot be processed in time to se-
than 90 days. cure the option.
(3) Proposed method repayment of the SO
IV. LIMITATIONS loan.
(A) If the amount of an SO loan will exceed (4) Resolution from the applicant’s gov-
$10,000, the prior consent of the National Of- erning body authorizing the application for
fice shall be obtained before approval. an SO loan from FmHA or its successor
(B) The amount of the SO loan should not agency under Public Law 103–354.
exceed 15 percent of the purchase price of the (B) Responsibility of the County Supervisor.
land expected to be under option at any one Upon receipt of an SO loan application, the
time, unless a higher percent is authorized County Supervisor will:
by the State Director when other land in not (1) Determine whether the applicant is eli-
available or the particular area requires gible. If the applicant is not eligible, or the
more down payment than elsewhere or simi- loan cannot be made for other reasons, the
lar circumstances exist. application may be rejected by the County
(C) Form FmHA or its successor agency Supervisor with the concurrence of the Dis-
under Public Law 103–354 440–34, ‘‘Option to trict Director. The reasons for the rejection
Purchase Real Property,’’ will be used with- should be clearly stated and provided, in
out modification in all cases for obtaining writing to the applicant. The applicant will
options under this subpart. have the right to have the decision reviewed
(D) The limitations of § 1822.266(b) (1) and following the procedure established in sub-
(2) of subpart F of part 1822 of this chapter part B of part 1900 of this chapter.
(FmHA Instruction 444.8, paragraphs VI B (1) (2) Review and verify the accuracy of the
and (2)) concerning land purchase will apply information provided.
to options purchased under this subpart. (3) Make an inspection and a memorandum
appraisal of each proposed site ‘‘as is.’’ The
V. RATES AND TERMS appraisal will include a narrative statement
(A) Interest. Loans will be made at an inter- as to whether the site has been recently sold,
est rate of 3 percent. verify that the seller is the owner of the
(B) Repayment period. Each SO loan will be property, and indicate whether the purchase
repaid in one installment which will include price is acceptable based on the selling price
the entire principal balance and accrued in- of similar properties in the area.
terest. The maximum repayment period for (4) Indicate whether or not it appears that,
each SO loan will be the applicant’s remain- considering the location and cost of develop-
ing TA grant funding period. ment, adequate building sites can be pro-
(1) A shorter repayment period will be es- vided at reasonable costs.
tablished if SO funds will not be needed for (5) If the option is for a tract of land on
the entire TA grant funding period. which 5 or more sites are proposed, the Coun-
(2) If a regular RHS loan is to be processed, ty Supervisor will forward to the District Di-
the SO loan should be scheduled for repay- rector with recommendations as defined in
ment when RHS loan funds will be available § 1924.119 of subpart C of part 1924 of this
to purchase the land and repay the amount chapter.
158
(6) If approval is recommended, prepare have been properly bonded in accordance
and have the applicant execute Form FmHA with § 1944.411 (e) and (g) of this subpart.
or its successor agency under Public Law (D) Grantees will not expend funds for any
103–354 1940–1, ‘‘Request for Obligation of options until the site and the option form
Funds,’’ for the amount needed. Copies of the have been reviewed and approved by the
form will be distributed as provided in the County Supervisor.
Forms Manual Insert (FMI). (1) SO funds will not be left unused in the
(7) Forward the SO loan application and revolving account in excess of 60 days.
the applicant’s TA application or TA docket (2) If the funds are not used for the in-
to the State Director. The submission will tended purpose within the 60 days specified
include the appraisal report and the County above, the unused portion will be refunded
Supervisor’s comments and recommenda- on the account.
tions. (E) When funds become available for repay-
ment of the SO loan, such funds will be de-
VII. LOAN APPROVAL AUTHORITY AND STATE posited in the revolving account for the pur-
OFFICE ACTIONS chase of additional site options if needed. If
The State Director is authorized to ap- such funds are not needed to purchase more
prove SO loans developed in accordance with options, they will be applied on the SO loan.
this exhibit. The approval or disapproval of X. SOURCE OF FUNDS
the loan will be handled in the same manner
as provided in § 1822.272 of subpart F of part SO loans will be funded from the self-help
1822 of this chapter (FmHA Instruction 444.8, housing land development fund.
paragraph XII). SO loans will be established [55 FR 41833, Oct. 16, 1990, as amended at 69
in Automated Multiple Housing Accounting FR 69105, Nov. 26, 2004; 79 FR 76010, Dec. 19,
System (AMAS) using Form RD 3560–51, 2014]
‘‘Multiple Family Housing Obligation Fund
Analysis’’. The Issue loan/Grant checks
transaction will be used to request a check Subpart J [Reserved]
for SO loans.
VIII. LOAN CLOSING
Subpart K—Technical and
Supervisory Assistance Grants
(A) General. Loan closing instructions will
be provided by the Office of the General
Counsel (OGC) to assure that the Promissory SOURCE: 44 FR 36891, June 22, 1979, unless
Note is properly completed and executed. otherwise noted.
The County Supervisor may then close the
loan. § 1944.501 General.
(B) Security for the loan. The loan will be (a) This subpart sets forth the poli-
secured by a Promissory Note properly exe- cies and procedures for making grants
cuted by the grantee using Form FmHA or under section 525(a) of the Housing Act
354 1940–16, ‘‘Promissory Note.’’ A lien on the
of 1949, 42 U.S.C. 1490e(a), to provide
optioned real estate will not be taken. funds to eligible applicants to conduct
(1) The ‘‘kind of loan’’ block on the note programs of technical and supervisory
will read ‘‘SO loan.’’ assistance (TSA) for low-income rural
(2) The note will be modified to show that residents to obtain and/or maintain oc-
the only installment on the loan will be the cupancy of adequate housing. Any
final installment. processing or servicing activity con-
(C) Loan is closed. The loan will be consid- ducted pursuant to this subpart involv-
ered closed when the note is executed and
ing authorized assistance to Rural De-
the loan check delivered to the grantee.
velopment employees, members of
IX. ESTABLISHMENT OF SO LOAN REVOLVING their families, known close relatives,
ACCOUNT or business or close personal associ-
(A) Supervised bank accounts will not be ates, is subject to the provisions of sub-
used for SO loans. part D of part 1900 of this chapter. Ap-
(B) Grantee will deposit SO loan funds in a plicants for this assistance are required
depository institution of its choice. The use to identify any known relationship or
of minority institutions is encouraged. Such association with a Rural Development
funds will remain separate from any other employee. This financial assistance
account of the grantee and shall be estab-
may pay part or all of the cost of devel-
lished as an SO revolving account.
(C) Checks drawn on the revolving account oping, conducting, administering, or
will be for the sole purpose of purchasing coordinating effective and comprehen-
land options and must be signed by at least sive programs of technical and super-
two authorized officials of the grantee who visory assistance which will aid needy
159
low-income individuals and families in adequate rental properties or home-

benefiting from federal, state, and ownership.
local programs in rural areas.
(b) Rural Development will provide §§ 1944.504–1944.505 [Reserved]
technical and supervisory grant assist-
ance to applicants without discrimina-
tion because of race, color, religion, References in this subpart to County,
sex, national origin, age, marital sta- District, State, National and Finance
tus, or physical or mental handicap. Offices and to County Supervisor, Dis-
trict Director, State Director, and Ad-
[44 FR 36891, June 22, 1979, as amended at 58
ministrator refer to Rural Develop-
FR 228, Jan. 5, 1993]
ment offices and officials and should be
§ 1944.502 Policy. read as prefaced by Rural Develop-
ment. Terms used in this subpart have
(a) The policy of the Rural Develop- the following meanings:
ment is to provide Technical and Su- (a) Adequate housing. A housing unit
pervisory Assistance to eligible appli- of adequate size and design to meet the
cants to do the following: specific needs of low-income families
(1) Provide homeownership and finan- and the requirements governing the
cial counseling to reduce both the po- particular housing program providing
tential for delinquency by loan appli- the services or financial assistance.
cants and the level of payment delin- (b) Applicant or grantee. Any eligible
quency by present Rural Development organization which applies for or re-
housing loan borrowers; and ceives TSA funds under a grant agree-
(2) Facilitate the delivery of housing ment.
programs to serve the most needy low- (c) Grant agreement. The contract be-
income families in rural areas of great- tween Rural Development and the ap-
est need for housing. plicant which sets forth the terms and
(b) Rural Development intends to conditions under which TSA funds will
fund projects which include counseling be made available.
and delivery of housing programs. (d) Low-income family. Any household,
(c) State Directors are given a strong including those with one member,
role in the selection of grantees so this whose adjusted annual income, com-
program can complement Rural Devel- puted in accordance with 7 CFR part
opment’s policies of targeting Rural 3550, subpart B, does not exceed the
Development resources to areas of maximum low-income limits specified
greatest need within their States. in Appendix 9 of HB–1–3550 (available in
(d) Rural Development expects grant any Rural Development office).
recipients to implement a TSA pro- (e) Organization. (1) Public or private
gram and not to use TSA funds to pre- nonprofit corporations, agencies, insti-
pare housing plans and strategies ex- tutions, Indian tribes, and other asso-
cept as necessary to accomplish the ciations.
specific objectives of the TSA project. (2) A private nonprofit corporation
with local representation from the area
§ 1944.503 Objectives. being served that is owned and con-
The objectives of the TSA Grant Pro- trolled by private persons or interests
gram are to assist low-income rural and is organized and operated by pri-
families in obtaining adequate housing vate persons or interests for purposes
to meet their family’s needs and/or to other than making gains or profits for
provide the necessary guidance to pro- the corporation and is legally pre-
mote their continued occupancy of al- cluded from distributing any gains or
ready adequate housing. These objec- profits to its members.
tives will be accomplished through the (f) Rural area. The definition in 7 CFR
establishment or support of housing depart 3550 applies.
livery and counseling projects run by (g) Sponsored applicant. An eligible
eligible applicants. This program is in- applicant which has a commitment of
tended to make use of any available financial and/or technical assistance to
housing program which provides the apply for the TSA program and to im-
low-income rural resident access to plement such a program from a state,
160
county, municipality, or other govern- tion, or repair to serve low-income

mental entity or public body. families.
(h) Supervisory assistance. Any type of (i) Technical assistance. Any specific
assistance to low-income families expertise necessary to carry out hous-
which will assist those families in ing efforts by or for low-income fami-
meeting the eligibility requirements lies to improve the quantity and/or
for, or the financial and managerial re- quality of housing available to meet
sponsibilities of, homeownership or their needs. Such assistance should be
tenancy in an adequate housing unit. specifically related to the supervisory
Such assistance must include, but is assistance provided by the project, and
not limited to, the following activities: may include, as appropriate, the fol-
(1) Assisting individual Rural Devel- lowing activities:
opment borrowers with financial prob- (1) Develop, or assist eligible appli-
lems to overcome delinquency and/or cants to develop, multi-housing loan
prevent foreclosure and assisting new and/or grant applications for new con-
low-income applicants to avoid finan- struction, rehabilitation, or repair to
cial problems through: serve low-income families.
(i) Financial and budget counseling (2) Market surveys, engineering stud-
including advice on debt levels, credit ies, cost estimates, and feasibility
purchases, consumer and cost aware- studies related to applications for
ness, debt adjustment procedures, and housing assistance to meet the specific
availablity of other financial coun- needs of the low-income families as-
seling services; sisted under the TSA program.
(ii) Monitoring payment of taxes and [44 FR 36891, June 22, 1979, as amended at 46
insurance; FR 61990, Dec. 21, 1981; 50 FR 39967, Oct. 1,
(iii) Home maintenance and manage- 1985; 51 FR 6393, Feb. 26, 1986; 59 FR 7193, Feb.
ment; and 15, 1994; 67 FR 78328, Dec. 24, 2002]
(iv) Other counseling based on the §§ 1944.507–1944.509 [Reserved]
needs of the low-income families.
(2) Contracting and assisting low-in- § 1944.510 Applicant eligibility.
come families in need of adequate
To be eligible to receive a grant, the
housing by:
applicant must:
(i) Implementing an organized out- (a) Be an organization as defined in
reach program using available media § 1944.506(e).
and personal contacts; (b) Have the financial, legal, adminis-
(ii) Explaining available housing pro- trative, and operational capacity to as-
grams and alternatives to increase the sume and carry out the responsibilities
awareness of low-income families and imposed by the grant agreement. To
to educate the community as to the meet this requirement of actual capac-
benefits which can accrue from im- ity, it must either:
proved housing; (1) Have necessary background and
(iii) Assisting low-income families lo- experience with proven ability to per-
cate adequate housing; form responsibly in the field of low-in-
(iv) Providing construction super- come rural housing development and
vision, training, and guidance to low- counseling, or other business manage-
income families not involved in mutual ment or administrative experience
self-help projects who are otherwise which indicates an ability to provide
being assisted by the TSA project; responsible technical and supervisory
(v) Organizing local public or private assistance; or
nonprofit groups willing to provide (2) Be assisted by an organization
adequate housing for low-income fami- which has such background experience
lies; and and ability and which agrees in writing
(vi) Providing assistance to families that it will provide, without charge,
and organizations in processing hous- the assistance the applicant will need
ing loan and/or grant applications gen- to carry out its responsibilities.
erated by the TSA program, including (c) Legally obligate itself to admin-
developing and packaging such applica- ister TSA funds, provide an adequate
tions for new construction, rehabilita- accounting of the expenditure of such
161
funds, and comply with the grant and trends of the rural areas con-
agreement and Rural Development reg- cerned, and any other factors affecting
ulations; the quantity and quality of housing
(d) Demonstrate an understanding of currently available or planned for the
the needs of low-income rural families; area. Consideration must also be given
(e) Have the ability and willingness to the needs and desires of the commu-
to work within established guidelines; nity; the financial and social condition
and of the individuals within the commu-
(f) If the applicant is engaged in or nity; the needs of areas with a con-
plans to become engaged in any other centration of low-income minority
activities, it must be able to provide families and the needs of Rural Devel-
sufficient evidence and documentation opment borrowers who are delinquent
that it has adequate resources, includ- in their housing loan payments; the
ing financial resources, to carry on any availability of supporting services such
other programs or activities to which as water, sewerage, health and edu-
it is committed without jeopardizing cational facilities, transportation, rec-
the success and effectiveness of its TSA reational and community facilities,
project. and the types of housing facilities and
services presently available or planned
§ 1944.511 [Reserved]
to which the low-income families have
§ 1944.512 Authorized representative or will have ready access.
of the applicant. (c) Each TSA applicant should con-
sider the alternatives available to pro-
Rural Development will deal only
vide needed housing facilities and serv-
with authorized representatives de-
signed by the applicant. The authorized ices for the area. Consideration should
representatives must have no pecu- also be given to the recommendations
niary interest in any of the following and services available from local,
as they would relate in any way to the state, federal governmental entities,
TSA grant: the award of any engineer- and from private agencies and individ-
ing, architectural, management, ad- uals.
ministration, or construction con- (1) In no case should the TSA project
tracts; purchase of the furnishings, fix- deliberately conflict with or duplicate
tures or equipment; or purchase and/or housing studies, plans, projects, or any
development of land. other housing related activities in a
rural area unless documentation shows
NOTE: Rural Development has designated these activities do not meet the needs
the District Office as the primary point of of low-income families.
contact for all matters relating to the TSA
program and as the office responsible for the (2) Each TSA project should be co-
administration of approved TSA projects. ordinated to the extent possible with
any comprehensive or special purpose
§ 1944.513 [Reserved] plans and projects affecting low-in-
come housing in the area.
§ 1944.514 Comprehensive TSA grant (3) To the fullest extent possible,
projects. TSA projects should be coordinated
(a) The rural area to be covered by with any housing-related activities
the TSA project must be realistically currently being carried out in the area.
serviceable by the applicant in terms (d) TSA applicants must coordinate
of funding resources, manpower, and their proposals with the appropriate
distances and generally should be lim- County and District Offices to be fully
ited to one to four counties within the familiar with the needs of those offices
service area of one District Office. and of the low-income families cur-
(b) Consideration of the following rently served by the County Offices.
items may assist applicants develop
TSA projects which meet the needs of § 1944.515 [Reserved]
low-income families in the proposed
TSA service area: present population § 1944.516 Grant purposes.
distribution, projected population Grant funds are to be used for a hous-
growth or decline, the amount of inad- ing delivery system and counseling
equate housing, economic conditions, program to include a comprehensive
162
program of technical and supervisory quisition of land, vehicles, or equip-

assistance as set forth in the grant ment.
agreement and any other special condi- (2) Replacement of or substitution for
tions as required by Rural Develop- any financial support which would be
ment. Uses of grant funds may include, available from any other source.
but are not limited to: (3) Duplication of current services in
(a) The development and implemen- conflict with the requirements of
tation of a program of technical and § 1944.514(c).
supervisory assistance as defined in (4) Hiring personnel to perform con-
§ 1944.506 (h) and (i). struction.
(b) Payment of reasonable salaries of (5) Buying property of any kind from
professional, technical, and clerical families receiving technical or super-
staff actively assisting in the delivery visory assistance from the grantee
of the TSA project. under the terms of the TSA grant.
(c) Payment of necessary and reason- (6) Paying for or reimbursing the
able office expenses such as office sup- grantee for any expenses or debts in-
plies and office rental, office utilities, curred before Rural Development exe-
telephone services, and office equip- cutes the grant agreement.
ment rental. (7) Paying any debts, expenses, or
(d) Payment of necessary and reason- costs which should be the responsi-
able administrative costs such as work- bility of the individual families receiv-
ers’ compensation, liability insurance, ing technical and supervisory assist-
audit reports, travel to and attendance ance.
at Rural Development approved train- (8) Any type of political activities.
ing sessions, and the employer’s share (9) Other costs including contribu-
of Social Security and health benefits. tions and donations, entertainment,
Payments to private retirement funds fines and penalties, interest and other
are prohibited unless prior written au- financial costs, legislative expenses
thorization is obtained from the Ad- and any excess of cost from other grant
ministrator. agreements.
(e) Payment of reasonable fees for (b) Advice and assistance may be ob-
necessary training of grantee per- tained from the National Office where
sonnel. This may include the cost of ineligible costs are proposed as part of
travel and per diem to attend regional the TSA project or where a proposed
training sessions when authorized by cost appears ineligible.
the State Director. (c) The grantee may not charge fees
(f) Other reasonable travel and mis- or accept compensation or gratuities
cellaneous expenses necessary to ac- from TSA recipients for the grantee’s
complish the objectives of the specific assistance under this program.
TSA grant which were anticipated in
§ 1944.521 [Reserved]
the individual TSA grant proposal and
which have been included as eligible § 1944.522 Equal opportunity require-
expenses at the time of grant approval. ments.
§ 1944.517 [Reserved] The policies and regulations con-
tained in subpart E of part 1901 of this
§ 1944.518 Term of grant. chapter apply to grants made under
this subpart.
TSA projects will be funded under
one Grant Agreement for two years § 1944.523 Other administrative re-
commencing on the date of execution quirements.
of the Agreement by the State Direc-
The following policies and regula-
tor.
tions apply to grants made under this
§ 1944.519 [Reserved] subpart:
The policies of 7 CFR part 1970 apply
§ 1944.520 Ineligible activities. to grants made under this subpart re-
(a) Grant funds may not be used for: garding historic properties and envi-
(1) Acquisition, construction, repair, ronmental compliance.
or rehabilitation of structures or ac- [81 FR 11031, Mar. 2, 2016]
163
§ 1944.524 [Reserved] a TSA program and to determine

whether the applicant might be funded.
§ 1944.525 Targeting of TSA funds to (i) A narrative presentation of the
States. applicant’s proposed TSA program, in-
(a) The Administrator will deter- cluding:
mine, based on the most current avail- (A) The technical and supervisory as-
able information (generally that infor- sistance to be provided;
mation used to determine the alloca- (B) The time schedule for imple-
tion to States of Rural Development menting the program;
housing loan funds), those States with (C) The staffing pattern to execute
the highest degree of substandard hous- the program and salary range for each
ing and persons in poverty in rural position, existing and proposed;
areas eligible to receive Rural Develop- (D) The estimated number of low-in-
ment housing assistance. The Adminis- come and low-income minority fami-
trator will distribute a portion of the lies the applicant will assist in obtain-
available funds for TSA to these ing affordable adequate housing;
States, leaving the balance available (E) The estimated number of Rural
for national competition. Development borrowers who are delin-
quent or being foreclosed that the ap-
(b) The Administrator will provide
plicant will assist in resolving their fi-
annual notice through a published No-
nancial problems relating to their de-
tice on the distribution of appropriated
linquency;
TSA funds, the number of
(F) The estimated number of house-
preapplications to be submitted to the
holds which will be assisted in obtain-
National Office from the State Offices,
ing adequate housing in the TSA area
and the maximum grant amount per
through new construction and/or reha-
project.
bilitation;
§ 1944.526 Preapplication procedure. (G) Annual estimated budget for each
of the two years based on the financial
(a) Preapplication submission. (1) All needs to accomplish the objectives out-
applicants will file an original and two lined in the proposal. The budget
copies of SF 424.1, ‘‘Application for should include proposed direct and in-
Federal Assistance (For Non-construc- direct costs for personnel, fringe bene-
tion),’’ and supporting information de- fits, travel, equipment, supplies, con-
tailed below with the appropriate Dis- tracts, and other costs categories, de-
trict Office serving the proposed TSA tailing those costs for which the grant-
area. A preapplication packet includ- ee proposes to use the TSA grant sepa-
ing SF 424.1 is available in all District rately from non-TSA resources, if any;
and State Offices. (H) The accounting system to be
(i) The applicant will provide infor- used;
mational copies of the preapplication (I) The method of evaluation pro-
to the County Supervisor(s) of the area posed to be used by the applicant to de-
to be served by the TSA project at the termine the effectiveness of its pro-
time of submittal to the appropriate gram;
District Office. (J) The sources and estimated
(ii) If the TSA area encompasses amounts of other financial resources to
more than one District Office, the be obtained and used by the applicant
preapplication will be filed at the Dis- for both TSA activities and housing de-
trict Office which serves the area in velopment and/or supporting facilities;
which the grantee will provide the and
greatest amount of TSA efforts. Addi- (K) Any other information necessary
tional informational copies of the to explain the manner of delivering the
preapplication will be sent by the ap- TSA assistance proposed.
plicant to the other affected District (ii) Complete information about the
Office(s). applicant’s previous experience and ca-
(2) All preapplications shall be ac- pacity to carry out the objectives of
companied by the following informa- the proposed TSA program;
tion which will be used to determine (iii) Evidence of the applicant’s legal
the applicant’s eligibility to undertake existence, including, in the case of a
164
private nonprofit organization, a copy units will not provide such statements,
of, or an accurate reference to, the spe- the applicant will prepare and include
cific provisions of State law under with its preapplication a summary of
which the applicant is organized; a cer- its analysis of alternatives considered
tified copy of the applicant’s Articles under § 1944.514(c). However, Indian
of Incorporation and Bylaws or other nonprofit organization applicants
evidence of corporate existence; certifi- should obtain the written concurrence
cate of incorporation for other than of the Tribal governing body in lieu of
public bodies; evidence of good stand- the concurrence of the county govern-
ing from the State when the corpora- ments.
tion has been in existence one year or (4) Sponsored applicants should sub-
more; the names and addresses of the mit a written commitment for finan-
applicant’s members, directors, and of- cial and/or technical assistance from
ficers; and, if another organization is a their sponsoring entity.
member of the applicant-organization, (5) Environmental review documenta-
its name, address, and principal busi- tion in accordance with 7 CFR part
ness. 1970.
(iv) For a private nonprofit entity, a (b) District Office processing of
current financial statement dated and preapplications. (1) The District Direc-
signed by an authorized officer of the tor with whom the preapplication is
entity showing the amounts and spe-
filed will review the preapplication, SF
cific nature of assets and liabilities to-
424.1, and any other supporting infor-
gether with information on the repay-
mation from the applicant. The Dis-
ment schedule and status of any debt(s)
trict Director will also:
owed by the applicant. If the applicant
(i) Complete any required environ-
is an organization being assisted by an-
mental review documentation in ac-
other private nonprofit organization,
cordance with 7 CFR part 1970, and at-
the same type of financial statement
tach to the application.
should also be provided by that organi-
zation. (ii) Complete an historical and ar-
(v) A brief narrative statement which chaeological review in accordance with
includes information about the area to 7 CFR part 1970, and attach to the ap-
be served and the need for improved plication.
housing (including both percentage and (2) All District Directors and County
actual number of both low-income and Supervisors receiving informational
low-income minority families and sub- copies of the preapplication should sub-
standard housing), the need for the mit their comments within five work-
type of technical and supervisory as- ing days to the District Director with
sistance being proposed, the method of whom the preapplication if filed.
evaluation to be use by the applicant (3) The original and one copy of the
in determining the effectiveness of its preapplication, together with the Dis-
efforts (as related to paragraph (a)(2)(i) trict Director’s written comments and
of this section), and any other informa- recommendations, reflecting the cri-
tion necessary to specifically address teria used in § 1944.529 and exhibit C of
the selection criteria in § 1944.529. this subpart, will be forwarded to the
(vi) A list of other activities the ap- State Director within ten working days
plicant is engaged in and expects to of receipt of the preapplication.
continue and a statement as to any (c) State Office processing of
other funding and whether it will have preapplications. (1) Upon receipt of a
sufficient funds to assure continued op- preapplication, the State Office will re-
eration of the other activities for at view and evaluate the preapplication
least the period of the TSA grant and accompanying documents in ac-
agreement. cordance with the project selection cri-
(3) An applicant should submit writ- teria of § 1944.529 and exhibit B of this
ten statements from the county, par- subpart. The State Office will also:
ish, or township governments of the (i) Make a determination regarding
area affected that the project is bene- the appropriate level of environmental
ficial and does not duplicate current review in accordance with 7 CFR part
activities. If the local governmental 1970.
165
(ii) Complete an historical and ar- the project selection criteria of

chaeological review in accordance with § 1944.529. Those preapplications which
7 CFR part 1970, and attach to the ap- are selected, and for which funds are
plication. available, will be returned to the ap-
(2) Within 30 days of the closing date propriate State Office with any Na-
for receipt of preapplications as pub- tional Office comments and rec-
lished in the FEDERAL REGISTER, the ommendations. The State Office will be
State Director will forward to the Na- advised to proceed with the issuance of
tional Office the original SF 424.1 and to request the applicant to
preapplication(s) and supporting docu- prepare Form AD–623 for submission to
ments of the selected applicant(s), in- the District Office as detailed in
cluding any comments received in ac- § 1944.531.
cordance with 2 CFR part 200 as adopt- (3) Those preapplications for which
ed by USDA through 2 CFR part 400. funds are not available will be returned
See RD Instruction 1970–I available in to the appropriate State Office which
any Rural Development Office and the will notify each applicant and advise
comments and recommendations of the the applicant of its appeal rights under
County Office(s), District Office(s), and subpart B of part 1900 of this chapter.
the State Office. The State Office will (4) State Directors will be advised of
submit the preapplication(s) in accord- the National Office’s action on their se-
ance with the annual notice provided lected preapplication within 30 days of
for by § 1944.525 (b). receipt of all preapplications.
(3) Concurrently the State Office will
[47 FR 40400, Sept. 14, 1982, as amended at 48
send a copy of the selected appli- FR 29121, June 24, 1983; 49 FR 3763, Jan. 30,
cant’s(s’) SF 424.1 and relevant docu- 1984; 55 FR 13503, 13504, Apr. 11, 1990; 55 FR
ments to the Regional Office of the 50081, Dec. 4, 1990; 76 FR 80730, Dec. 27, 2011;
General Counsel (OGC) requesting a 79 FR 76010, Dec. 19, 2014; 81 FR 11031, Mar. 2,
legal determination be made of the ap- 2016]
plicant’s legal existence and authority
to conduct the proposed program of § 1944.527 [Reserved]
technical and supervisory assistance.
§ 1944.528 Preapplication submission
(4) The State Office will notify other deadline.
applicants that their preapplications
will not selected and advise them of Dates governing the review and selec-
their appeal rights under subpart B of tion of TSA grant preapplications will
part 1900 of this chapter. be published annually in the FEDERAL
(d) National Office processing of REGISTER. Preapplications received
preapplications. (1) Preapplications for after that time will not be considered
this program from those States tar- for funding. For use of fiscal year 1979
geted under § 1944.525 will be reviewed funds, the deadline for submission of
by the National Office for completeness preapplications will be 45 calendar days
and compliance with this subpart. If a from date of publication of final regu-
grant is recommended, the National Of- lations.
fice will return the preapplication(s)
with any comments and recommenda- § 1944.529 Project selection.
tions to the State Office and advise (a) Projects must meet the following
that office to proceed with the issuance criteria:
of Form AD–622, ‘‘Notice of (1) Provide a program of supervisory
Preapplication Review Action,’’ and to assistance as defined in § 1944.506(h),
request the applicant to prepare SF and
424.1 for submission to the District Of- (2) Serve areas with a concentration
fice. If a grant is not recommended, the of substandard housing and low-income
National Office will advise the State and low-income minority households.
Office of action to take. (b) In addition to the items listed in
(2) Preapplications from States which paragraph (a) of this section, the fol-
are not targeted in accordance with lowing criteria will be considered in
§ 1944.525 will be reviewed for complete- the selection of grant recipients:
ness and compliance with this subpart (1) The extent to which the project
and then evaluated in accordance with serves areas with concentrations of
166
Rural Development single family hous- (12) The anticipated capacity of the
ing loan borrowers who are delinquent applicant to implement the proposed
in their housing loan payments and/or time schedule for starting and com-
threatened with foreclosure. pleting the TSA program and each
(2) The capability and past perform- phase thereof.
ance demonstrated by the applicant in (13) The adequacy of the records and
administering its programs. practices, including personnel proce-
(3) The effectiveness of the current dures and practices, that will be estab-
efforts by the applicant to assist low- lished and maintained by the applicant
income families in obtaining adequate during the term of the agreement.
housing.
(c) Among the projects proposed by
(4) The extent to which the project
will provide or increase the delivery of private nonprofit entities, preference
housing resources to low-income and will be given to sponsored applicants.
low-income minority families in the [47 FR 40400, Sept. 14, 1982, as amended at 48
area who are not currently occupying FR 29121, June 24, 1983; 76 FR 80731, Dec. 27,
adequate housing. 2011; 79 FR 76011, Dec. 19, 2014]
(5) The services the applicant will
provide that are not presently avail- § 1944.530 [Reserved]
able to assist low-income families in
obtaining or maintaining occupancy of § 1944.531 Applications submission.
adequate housing and the extent of du- (a) Upon notification that the appli-
plication of technical and supervisory cant has been tentatively selected for
assistance activities currently pro- funding, the State Office will forward
vided for low-income families. to the applicant a signed Form AD–622
(6) The extent of citizen and local and provide SF 424.1 with instructions
government participation and involve- to the applicant for preparation of an
ment in the development of the application.
preapplication and project.
(b) Upon receipt of Form AD–622, the
(7) The extent of planned coordina-
applicant will submit an application in
tion with other Federal, State, or local
technical and/or supervisory assistance an original and 2 copies on Form SF
programs. 424.1, and provide whatever additional
(8) The extent to which the project information is requested to the Dis-
will make use of other financial and trict Office within 30 days.
contributions-in-kind resources for (c) Upon receipt of an application on
both technical and supervisory assist- SF 424.1 by the District Office, a docket
ance and housing development and sup- shall be assembled which will include
porting facilities. the following:
(9) Any comments received in accord- (1) Form SF 424.1 and the informa-
ance with 2 CFR part 200 as adopted by tion submitted in accordance with
USDA through 2 CFR part 400. See RD § 1944.526(a)(2).
Instruction 1970–I, available in any (2) Form AD–622.
Rural Development Office. (3) Any comments received in accord-
(10) The extent to which the project ance with 2 CFR part 200 as adopted by
will be cost effective, including but not USDA through 2 CFR part 400. See RD
limited to the ratio of personnel to be Instruction 1970–I, available in any
hired by the applicant to the cost of Rural Development Office.
the project, the cost, both direct and (4) SF 424.1.
indirect, per person benefiting from the
(5) OGC legal determination made
project, and the expected benefits to
pursuant to § 1944.526(c)(3).
low-income families from the project.
(11) The extent to which the proposed (6) Grant Agreement.
staff and salary ranges, including (7) Form RD 1940–1, ‘‘Request for Ob-
qualifications, experience, proposed ligation of Funds.’’
hiring schedule and availability of any (8) Form RD 400–1, ‘‘Equal Oppor-
prospective employees, will meet the tunity Agreement.’’
objectives of the proposed TSA pro- (9) Form RD 400–4, ‘‘Assurance Agree-
gram. ment.’’
167
(10) Environmental review docu- (1) The State Director, or the State
mentation and historical and archae- Director’s designee, will telephone the
ological review in accordance with 7 Finance Office Check Request Station
CFR part 1970. requesting that grant funds for a par-
(11) The detailed budget for the ticular project be obligated. Imme-
agreement period based upon the needs diately after contacting the Finance
outlined in the proposal and the com- Office, the requesting official will fur-
ments and recommendations by Rural nish the requesting office’s security
Development. identification code. Failure to furnish
the security code will result in the re-
[47 FR 40400, Sept. 14, 1982, as amended at 48
FR 29121, June 24, 1983; 49 FR 3763, Jan. 30, jection of the request for obligation.
1984; 55 FR 13503, 13504, Apr. 11, 1990; 76 FR After the security code is furnished,
80731, Dec. 27, 2011; 79 FR 76011, Dec. 19, 2014; the required information from Form
81 FR 11031, Mar. 2, 2016] RD 1940–1 will be furnished to the Fi-
nance Office. Upon receipt of the tele-
§ 1944.532 [Reserved] phone request for obligation of funds,
the Finance Office will record all infor-
§ 1944.533 Grant approval and an- mation necessary to process the re-
nouncement.
quest for obligation in addition to the
Grant approval and announcement date and time of the request.
will be accomplished under the fol- (2) The individual making the request
lowing procedure. The Administrator will record the date and time of the re-
may modify this section if necessary to quest and sign section 37 of Form RD
obligate funds in a timely and efficient 1940–1.
manner. (i) The Finance Office will notify the
(a) The District Office will review the State Office by telephone when funds
docket to determine whether the appli- are reserved and of the date of obliga-
cation complies with these regulations tion. If funds cannot be reserved for a
and is consistent with the information project, the Finance Office will notify
and supporting documents submitted the State Office that funds are not
with the preapplication and any com- available. The obligation date will be
ments and recommendations of the the date the request for obligation is
State and National Offices. processed.
(b) If major problems occur during (ii) The Finance Office will termi-
the development of the docket, the Dis- nally process telephone obligation re-
trict Office will call upon the State Of- quests. Those requests received prior to
fice for assistance. 2:30 p.m. Central Time will be proc-
(c) If a grant is recommended, Form essed on the date of the request. Those
RD 1940–1 and the Grant Agreement requests received after 2:30 p.m., to the
will be prepared by the District Office extent possible, will be processed on
and forwarded to the applicant for sig- the day received; however, there may
nature as authorized in its authorizing be instances where the obligation will
resolution. Exhibit A, Grant Agree- be processed on the next working day.
ment, is a part of these regulations. (iii) The Finance Office will mail
(d) When Form RD 1940–1 and the Form RD 440–57, ‘‘Acknowledgement of
Grant Agreement are received from the Obligated Funds/Check Request,’’ to
applicant and signed by the applicant, the State Director, confirming the res-
the docket will be forwarded to the ervation of funds with the obligation
State Director. date inserted as required by Item 9 on
(e) Exhibit A to RD Instruction 2015– the Forms Manual Insert (FMI) for
C (available in any FmHA or its suc- Form RD 440–57.
cessor agency under Public Law 103–354 (iv) Form RD 1940–1 will not be
office) will be prepared and sent to the mailed to the Finance Office.
Director, Legislative and Public Af- (3) The State Director will notify the
fairs Staff (LAPAS), in the Rural De- Director of Information in the National
velopment National Office. Office with a recommendation that the
(f) If the State Director approves the project announcement be released.
project, the following actions will be (4) An executed form RD 1940–1 will
taken in the order listed: be sent to the applicant along with an
168
executed copy of the Grant Agreement check is being canceled) with the rea-
and scope of work 6 working days from sons for requesting cancellation.
the date funds are obligated. (b) If the State Director approves the
(i) The actual date of applicant noti- request for cancellation, he/she will
fication will be entered on the original forward the original request for can-
of Form RD 1940–1 and the original of cellation (original and one copy of
the form will be included as a perma- Form RD 1940–10 with the check if the
nent part of the file. Treasury check is being canceled) to
(ii) Standard Form 270, ‘‘Request for the Finance Office. If the TSA check is
Advance or Reimbursement,’’ will be received in the District Office, the Dis-
sent to the applicant for completion trict Director will return it to the Fi-
and returned to Rural Development. nance Office with an original and one
(5) If it is determined that a project copy of Form RD 1940–10.
will not be funded or if major changes (c) The District Director will notify
in the scope of the project are made the applicant of the cancellation and,
after release of the approval announce- unless the applicant requested the can-
ment, the State Director will notify cellation, its right to appeal in accord-
the Administrator and the Director, ance with the Rural Development Ap-
Legislative Affairs and Public Informa- peal Procedure contained in subpart B
tion Staff (LAPAS) by telephone or of part 1900 of this chapter.
electronic mail, giving the reasons for
such action. The Director, LAPAS, will [44 FR 36891, June 22, 1979, as amended at 47
inform all parties who were notified by FR 36415, Aug. 20, 1982]
the project announcement if the
project will not be funded or of major § 1944.536 Grant closing.
changes in the project using the proce- Closing is the process by which Rural
dure similar to the announcement Development determines that applica-
process. Form RD 1940–10, ‘‘Cancella- ble administrative actions have been
tion of U.S. Treasury Check and/or Ob- completed and the Grant Agreement is
ligation,’’ will not be submitted to the signed. The Grant Agreement (Exhibit
Finance Office until five working days A) will be executed by the State Direc-
after notifying the Administrator and tor at the time the Form RD 1940–1 and
the Director, LAPAS. Grant Agreement is sent to the Grant-
(6) Upon receipt from the grantee of a ee in accordance with § 1944.533 (f)(4).
properly completed SF–270, Form RD An executed original of the Grant
440–57 will be completed and the check Agreement shall be sent to the District
request will be called to the Finance Director and one copy to the grantee.
Office Check Request Station in ac-
cordance with the FMI for Form RD [44 FR 36891, June 22, 1979, as amended at 55
440–57. FR 13504, Apr. 11, 1990]
[44 FR 36891, June 22, 1979, as amended at 47 § 1944.537 [Reserved]

FR 36415, Aug. 20, 1982; 48 FR 30946, July 6,
1983; 55 FR 13504, Apr. 11, 1990; 79 FR 55967, § 1944.538 Extending and revising
Sept. 18, 2014] grant agreements.
§ 1944.534 [Reserved] (a) All requests extending the origi-
nal grant agreement or revising the
§ 1944.535 Cancellation of an approved TSA program must be in writing. Such
grant. requests will be processed through the
(a) The District Director will prepare District Director. Any such requests
Form RD 1940–10, ‘‘Cancellation of U.S. will be processed in accordance with
Treasury Check and/or Obligation,’’ in the processing procedure specified in
an original and two copies (three copies § 1944.526 (b) and (c) of this subpart. The
if the technical and supervisory assist- State Office will respond to the appli-
ance (TSA) check has been received in cant within 30 days of receipt of the re-
the District Office from the Disbursing quest in the State Office.
Office). Form RD 1940–10 will be sent to (b) An extension of a grant beyond
the State Director (original and two the two year term may be granted by
copies with the check if the Treasury the State Director when:
169
(1) There are grant funds remaining procedures under subpart B of part 1900
and the grantee requests an extension of this chapter.
at the end of the grant period,
(2) The grantee has demonstrated its § 1944.539 [Reserved]
ability to conduct a comprehensive
§ 1944.540 Requesting TSA checks.
program of technical and supervisory
assistance in accordance with the (a) The initial TSA check may cover
terms of its grant agreement and in a the applicant’s needs for the first cal-
manner satisfactory to Rural Develop- endar month. If the first calendar
ment, month is a partial month, the check
(3) The grantee is likely to complete will cover the needs for the partial
the goals outlined in the initial pro- month and the next whole month.
posal, (b) The initial advance of TSA grant
(4) There is an unmet need to con- funds may not be requested simulta-
tinue the delivery of the technical and neously with the request for obligation
supervisory assistance being provided of TSA grant funds. The initial ad-
by the grantee, and vance must be requested on Form RD
(5) The District Director recommends 440–57 in accordance with the FMI after
continuation of the grant until the it has been received from the Finance
grantee has expended all of the remain- Office indicating that funds have been
ing grant funds. obligated.
(c) Upon approval of the extension, (c) All advances will be requested
the State Director will authorize the only after receipt of Standard Form 270
District Director to amend the ending from the grantee. The amount re-
date of the grant agreement and revise quested must be in accordance with the
the budgets, if necessary, on behalf of detailed budget, including amend-
the Government. ments, as approved by Rural Develop-
(d) If the grant agreement must be ment. Standard Form 270 will not be
revised and amended other than by ex- submitted more frequently than once
tension, including any changes in the every 30 days. In no case will addi-
scope and objectives of the TSA pro- tional funds be advanced if the grantee
gram, the grantee will submit a revised fails to submit required reports or is in
budget and TSA program together with violation of the grant agreement.
any information necessary to justify
its requests. Such requests will be sub- § 1944.541 Reporting requirements.
mitted to the State Director through (a) Standard Form 269, ‘‘Financial
the District Director. Status Report,’’ and a project perform-
(e) The State Office will advise the ance report will be required of all
National Office of all requests to ex- grantees on a quarterly basis. All
tend or modify the original grant grantees shall submit an original and
agreement. Prior concurrence of the two copies of these reports to the Dis-
National Office is not required unless trict Director. The project performance
the State Director so desires, in which reports will be submitted not later
case the State Director will advise the than January 15, April 15, July 15, and
applicant that the request has been for- October 15 of each year.
warded to the National Office for con- (b) As part of the grantee’s
currence. The State Director’s rec- preapplication submission required by
ommendation will accompany such re- § 1944.526(a)(2)(i), the grantee estab-
quests. lished the objectives of its TSA pro-
(f) Exhibit D to this subpart shall be gram including the estimated number
executed upon approval of an extension of low-income families to be assisted
of the grant period, or significant by the TSA program and established
change in either the project budget or its method of evaluation to determine
the objectives of the approved tech- the effectiveness of its program. The
nical and supervisory activities. project performance report should re-
(g) If extension or modification is not late the activities during the report pe-
approved, the State Office will notify riod to the project’s objectives and
the applicant in writing of the decision analyze the effectiveness of the pro-
and advise the applicant of the appeal gram. Accordingly, the report should
170
include, but need not be limited to the recommend appropriate action to re-
following: solve the indicated problem(s). The
(1) A comparison of actual accom- State Director has the discretion to
plishments to the objectives estab- not authorize further advances where
lished for that period, including: the progress of the project is unsatis-
(i) The number of low-income fami- factory. The State Director will notify
lies assisted in improving their housing the grantee through the District Direc-
conditions or in obtaining affordable tor of a decision not to authorize fur-
adequate housing. ther advances and advise the grantee of
(ii) The number of Rural Develop- its appeal rights under subpart B of
ment borrowers who were delinquent or part 1900 of this chapter.
being foreclosed who were assisted in (3) A copy of the memorandum re-
resolving their financial problems. turning the unsatisfactory reports will
(iii) The number of households as- be forwarded to the National Office to-
sisted in obtaining adequate housing gether with the State Director’s deci-
by the TSA program through new con- sion, comments and recommendations,
struction and/or rehabilitation. if appropriate.
(2) Reasons why, if established objec- (e) The grantee will complete a final
tives are not met. Standard Form 269 and a final perform-
(3) Problems, delays, or adverse con- ance report upon termination or expi-
ditions which will materially affect at- ration of the grant agreement.
tainment of the TSA grant objectives,
prevent the meeting of time schedules § 1944.542 [Reserved]
or objectives, or preclude the attain-
ment of project work elements during § 1944.543 Grant monitoring.
established time periods. This disclo-
Each grant will be monitored by
sure shall be accompanied by a state-
Rural Development to ensure that the
ment of the action taken or con-
grantee is complying with the terms of
templated and any Federal assistance
needed to resolve the situation. the grant and that the TSA project ac-
(4) Objectives established for the next tivity is completed as approved. Ordi-
reporting period, sufficiently detailed narily, this will involve a review of
to identify the type of assistance to be quarterly and final reports by Rural
provided, the number and type of fami- Development and review by the appro-
lies to be assisted, etc. priate District Director.
(c) These reports will be reviewed by
§ 1944.544 [Reserved]
the District Director to determine sat-
isfactory progress. The District Direc- § 1944.545 Additional grants.
tor will work with the grantee to re-
solve any problems. The District Direc- An additional grant may be made to
tor will forward the original and one an applicant that has previously re-
copy of the reports with any comments ceived a TSA grant and has achieved or
and recommendations to the State Di- nearly achieved the goals established
rector within ten working days of re- for the previous grant by submitting a
ceipt. new proposal for TSA funds. The addi-
(d) The State Director will review the tional grant application will be proc-
reports, comments, and recommenda- essed as if it were an initial applica-
tions forwarded by the District Direc- tion. Upon approval, a new grant agree-
tor within five working days of receipt. ment will be required and the grant
(1) If the reports indicate satisfactory will be coded as an initial grant on
progress, the State Director will for- Form RD 1940–1.
ward the original to the National Of-
fice with any comments or suggestions § 1944.546 [Reserved]
and return the remaining copy to the
grantee through the District Director § 1944.547 Management assistance.
with a copy of the comments or rec- The District Director will see that
ommendations. each TSA grantee receives manage-
(2) If the reports indicate unsatisfac- ment assistance to help achieve a suc-
tory progress, the State Director will cessful program.
171
(a) TSA employees who will be con- § 1944.548 Counseling consent by

tacting and assisting families will re- Rural Development single family
ceive training in packaging single fam- housing borrowers.
ily housing and Rural Rental Housing (a) Subsequent to execution of the
loans when, or very shortly after, they TSA grant agreement, the County Su-
are hired so that they can work effec- pervisor(s) serving the TSA project
tively. area will contact the delinquent Rural
(b) TSA employees who will provide Development single family housing
counseling, outreach, and other tech- borrowers who appear to be in need of
nical and supervisory assistance will supervisory assistance as defined in
receive training on Rural Development § 1944.506(h)(1). Such contact will indi-
policies, procedures, and requirements cate the availability of the counseling
appropriate to their positions and the services of the grantee and solicit the
borrower’s participation in the pro-
type of assistance the grantee will pro-
gram. Exhibit E should be used in con-
vide at the outset of the grant.
tacting and/or discussing counseling
(c) Training will be provided by with the borrowers.
FmHA or its successor agency under (b) Upon indication of the borrower’s
Public Law 103–354 employees and/or willingness to participate in the pro-
outside sources approved by Rural De- gram by his or her signature on exhibit
velopment when the technical and su- E or similar letter or statement, the
pervisory assistance involves rural County Supervisor will make available
housing programs other than Rural De- to the grantee (at no cost) the bor-
velopment programs. Appropriate rower’s Rural Development loan his-
training of TSA employees should be tory including the following informa-
anticipated during the planning stages tion:
of the grant and the reasonable cost of (1) Name, address, and telephone
such training included in the budget. number;
(d) The District Director, in coopera- (2) Status of the account including
tion with the appropriate County Su- the amount of the loan, the repayment
pervisor(s), should coordinate the man- schedule, and the amount of the delin-
agement assistance given to the TSA quency; and
grantee in a manner which is timely (3) Other information needed for
counseling purposes which may be pro-
and effective. This will require periodic
vided in accordance with RD Instruc-
meetings with the grantee to discuss
tion 2018–F.
problems being encountered and offer
assistance in solving these problems; to § 1944.549 Grant evaluation, closeout,
discuss the budget, the effectiveness of suspension, and termination.
the grant, and any other unusual cir- (a) Grant evaluation will be an ongo-
cumstances affecting delivery of the ing activity performed by both the
proposed TSA services; to keep the grantee and Rural Development. The
grantee aware of procedural and policy grantee will perform self-evaluations
changes, availability of funds, etc.; and by preparing periodic project perform-
to discuss any other matters affecting ance reports in accordance with
the availability of housing opportuni- § 1944.541. Rural Development will also
ties for low-income families. review all reports prepared and sub-
(e) The District Director will advise mitted by the grantee in accordance
the grantee of the options available to with the grant agreement and this
bring the delinquent borrowers’ ac- part.
counts current and advise the grantee (b) Within forty-five (45) days after
that the appropriate County Super- the grant ending date, the grantee will
visor retains all approval authority for complete closeout procedures as speci-
any resolution of the delinquent ac- fied in the grant agreement.
(c) The grant can also be terminated
counts and all other authority cur-
before the grant ending date for the
rently available to remedy delinquent
causes specified in the grant agree-
accounts. ment. No further grant funds will be
disbursed when grant suspension or
172
RHS, RBS, RUS, FSA, USDA Pt. 1944, Subpt. K, Exh. A
termination procedures have been ini- cable Federal costs principles or other condi-
tiated in accordance with the grant tions contained in this Agreement.
agreement. 4. Grant closeout is the process by which the
grant operation is concluded at the expira-
§ 1944.550 [Reserved] tion of the grant period or following a deci-
sion to terminate the grant.
EXHIBIT A TO SUBPART K OF PART 1944— 5. Termination of a grant means the can-
GRANT AGREEMENT—TECHNICAL AND cellation of Federal assistance, in whole or
in part, under a grant at any time before the
SUPERVISORY ASSISTANCE date of completion.
This Agreement dated lllll is between
PART B—TERMS OF AGREEMENT:
llllllllllll (name),
llllllllllll (address), (Grantee) Grantor and grantee agree:
and the United States of America acting 1. This agreement shall be effective when
through the Farmers Home Administration executed by both parties.
(Grantor or FmHA) or its successor agency 2. The TSA activities approved by FmHA
under Public Law 103–354. The Grantor or its successor agency under Public Law
agrees to grant to Grantee a sum not to ex- 103–354 shall commence not later than
ceed $llll subject to the terms and condi- llllll, and shall be completed by
tions established by the Grantor: Provided, llllll, unless earlier terminated under
however, That the proportionate share of any paragraph B 18 below, or extended.
grant funds actually advanced and not need- 3. Grantee shall carry out the TSA activi-
ed for grant purposes shall be returned im- ties described in the application docket
mediately to the Grantor. The Grantor may which is made a part of this Agreement.
terminate the grant in whole, or in part, at Grantee will be bound by the conditions set
any time before the date of completion, forth in the docket and the further condi-
whenever it is determined that the Grantee tions set forth in this Agreement. If any of
has failed to comply with the conditions of the conditions in the docket are inconsistent
the grant. The grantee may appeal this deci- with those in the Agreement, the latter will
sion in accordance with the FmHA or its suc- govern. A change of any conditions must be
cessor agency under Public Law 103–354 Ap- in writing and must be signed by an author-
peal Procedure contained in subpart B of ized representative of FmHA or its successor
part 1900 of this chapter. In consideration of agency under Public Law 103–354.
said grant by Grantor to Grantee, to be made 4. Grantee shall use grant funds only for
pursuant to Section 525(a) of the Housing the purpose and activities specified in FmHA
Act of 1949 for the purpose of providing funds or its successor agency under Public Law
to eligible nonprofit applicants (grantees) to 103–354 regulations and in the application
pay part or all of the cost of developing, con- docket approved by FmHA or its successor
ducting, administering, or coordinating com- agency under Public Law 103–354 including
prehensive programs of technical and super- the approved budget. Any uses not provided
visory assistance (TSA) which will aid needy for in the approved budget must be approved
low-income individuals and families in bene- in writing by FmHA or its successor agency
fiting from Federal, State and local housing under Public Law 103–354 in advance.
programs in rural areas, the Grantee will 5. If the Grantee is a private nonprofit cor-
provide such a program in accordance with poration, expenses charged for travel or per
the terms of this agreement and applicable diem will not exceed the rates paid FmHA or
Farmers Home Administration (FmHA) or its successor agency under Public Law 103–
its successor agency under Public Law 103– 354 employees for similar expenses. If the
354 regulations. Grantee is a public body, the rates will be
those that are allowable under the cus-
PART A—DEFINITIONS: tomary practice in the government of which
1. Beginning date means the date when the grantee is a part; if none are customary,
work under this grant will commence. Such the FmHA or its successor agency under
date is set forth in paragraph 2 of part B of Public Law 103–354 rates will be the max-
this Agreement. imum allowed.
2. Ending date means the date when all 6. Grant funds will not be used for any of
work under this agreement is scheduled to be the following:
completed. It is also the latest date grant (a) To pay obligations incurred before the
funds will be provided under this agreement, effective date of this Agreement.
without an approved extension. Such date is (b) To pay obligations incurred after the
set forth in paragraph 2 of part B of this grant termination or ending date.
Agreement. (c) Entertainment purposes.
3. Disallowed costs are those charges to a (d) To pay for capital assets, the purchase
grant which the FmHA or its successor agen- of real estate or vehicles, improvement or
cy under Public Law 103–354 determines can- renovation of space, or repair or mainte-
not be authorized in accordance with appli- nance of privately owned vehicles.
173
Pt. 1944, Subpt. K, Exh. A 7 CFR Ch. XVIII (1–1–21 Edition)
(e) Any other purpose specified in 7 CFR (c) Within forty-five (45) days after the ter-
1944.520. mination or expiration of the grant agree-
7. Grant funds shall not be used to replace ment, an original and 2 copies of Standard
any financial support previously provided or Form 269, and a final Project Performance
assured from any other source. report which will include a summary of the
8. Disbursal of grants will be governed as project’s accomplishments, problems, and
follows: planned future activities of the Grantee for
(a) In accordance with Treasury Circular TSA. Final reports may serve as the last
1075 (fourth revision) Part 205, Chapter II of quarterly report.
title 31 of the Code of Federal Regulations, (d) FmHA or its successor agency under
grant funds will be provided by Rural Devel- Public Law 103–354 may require performance
opment as cash advances on an as needed reports more frequently if it deems nec-
basis not to exceed one advance every 30 essary.
days. The advance will be made by direct 10. In accordance with FMC 74–4, Attach-
Treasury check to the Grantee. The financial ment B, compensation for employees will be
management system of the recipient organi- considered reasonable to the extent that
zation shall provide for effective control over such compensation is consistent with that
and accountability for all Federal funds as paid for similar work in other activities of
stated in 2 CFR part 200 as adopted by USDA the State or local government.
through 2 CFR part 400 for State and local 11. If the grant exceeds $100,000, transfers
governments and 2 CFR part 200 as adopted among direct cost budget categories totaling
by USDA through 2 CFR part 400 for non- more than 5 percent of the total budget must
profit organizations. have prior written approval by the appro-
priate District Director.
(b) Cash advances to the Grantee shall be
12. Results of the program assisted by
limited to the minimum amounts needed and
grant funds may be published by the grantee
shall be timed to be in accord only with the
without prior review by FmHA or its suc-
actual, immediate cash requirements of the
cessor agency under Public Law 103–354, pro-
Grantee in carrying out the purpose of the
vided that such publications acknowledge
planned project.
the support provided by funds pursuant to
(c) Grant funds should be promptly re- the provisions of Title V of the Housing Act
funded to the FmHA or its successor agency of 1949 and that five copies of each such pub-
under Public Law 103–354 and redrawn when lication are furnished to the District Direc-
needed if the funds are erroneously drawn in tor.
excess of immediate disbursement needs. The 13. Grantee certifies that no person or or-
only exceptions to the requirement for ganization has been employed or retained to
prompt refunding are when the funds in- solicit or secure this grant for a commission,
volved: percentage, brokerage, or contingent fee.
(i) Will be disbursed by the recipient orga- 14. No person in the United States shall, on
nization within seven calendar days from the the grounds of race, creed, color, sex, marital
date of the Treasury check, or status, age, national origin, or mental or
(ii) Are less than $10,000 and will be dis- physical handicap, be excluded from partici-
bursed within 30 calendar days from the date pating in, be denied the proceeds of, or be
of the Treasury check. subject to discrimination in connection with
(d) Grantee shall provide satisfactory evi- the use of grant funds. Grantee will comply
dence to FmHA or its successor agency with pertinent nondiscrimination regula-
under Public Law 103–354 that all officers of tions of FmHA or its successor agency under
the Grantee organization authorized to re- Public Law 103–354.
ceive and/or disburse Federal funds are cov- 15. In all hiring or employment made pos-
ered by satisfactory fidelity bonds sufficient sible by or resulting from this grant, Grant-
to protect the Grantor’s interests. ee: (a) Will not discriminate against any em-
(e) Grant funds will be placed in the Grant- ployee or applicant for employment because
ee’s bank account(s) until disbursed. of race, creed, color, sex, marital status, na-
9. the Grantee will submit Performance tional origin, age, or mental or physical
and Financial reports as indicated below to handicap, and (b) will take affirmative ac-
the appropriate FmHA or its successor agen- tion to insure that employees are treated
cy under Public Law 103–354 District Office: during employment without regard to their
(a) As needed, but not more frequently race, creed, color, sex, marital status, na-
than once every 30 days, an original and 2 tional origin, age, or mental or physical
copies of Standard Form 270, ‘‘Request for handicap. This requirement shall apply to,
Advance or Reimbursement.’’ but not be limited to, the following: Employ-
(b) Quarterly, (not later than January 15, ment, upgrading, demotion, or transfer; re-
April 15, July 15, and October 15 of each year) cruitment or recruitment advertising; layoff
an original and 2 copies of Standard Form or termination; rates of pay or other forms
269, ‘‘Financial Status Report,’’ and a of compensation; and selection for training,
Project Performance report in accordance including apprenticeship. In the event Grant-
with § 1944.541 of this subpart. ee signs a contract related to this grant
174
which would be covered by any Executive Law 103–354 may allow all necessary and
Order, law, or regulation prohibiting dis- proper costs which the Grantee could not
crimination, Grantee shall include in the reasonably avoid.
contract the ‘‘Equal Employment Clause’’ as (c) Grant termination will be based on the
specified by FmHA or its successor agency following:
under Public Law 103–354. (i) Termination for cause. This grant may be
16. The grantee accepts responsibility for terminated in whole, or in part, at any time
accomplishing the TSA program as sub- before the date of completion, whenever
mitted and included in the application dock- FmHA or its successor agency under Public
et. The Grantee shall also: Law 103–354 determines that the Grantee has
(a) Endeavor to coordinate and provide li- failed to comply with the terms of the Agree-
aison with State and local housing organiza- ment. The reasons for termination may in-
tions, where they exist. clude, but are not limited to, such problems
(b) Provide continuing information to as:
FmHA or its successor agency under Public (A) Failure to make satisfactory progress
Law 103–354 on the status of Grantee pro- in attaining grant objectives.
grams, projects, related activities, and prob- (B) Failure of Grantee to use grant funds
lems. only for authorized purposes.
(c) The Grantee shall inform the Grantor (C) Failure of Grantee to submit adequate
as soon as the following types of conditions and timely reports of its operation.
become known: (D) Violation of any of the provisions of
(i) Problems, delays, or adverse conditions any laws administered by FmHA or its suc-
which materially affect the ability to attain cessor agency under Public Law 103–354 or
program objectives, prevent the meeting of any regulation issued thereunder.
time schedules or goals, or preclude the at- (E) Violation of any nondiscrimination or
tainment of project work units by estab- equal opportunity requirement administered
lished time periods. This disclosure shall be by FmHA or its successor agency under Pub-
accompanied by a statement of the action lic Law 103–354 in connection with any
taken or contemplated, and any Grantor as- FmHA or its successor agency under Public
sistance needed to resolve the situation. Law 103–354 programs.
(ii) Favorable developments or events (F) Failure to maintain an accounting sys-
which enable meeting time schedules and tem acceptable to FmHA or its successor
goals sooner than anticipated or producing agency under Public Law 103–354.
more work units than originally projected. (ii) Termination for convenience. FmHA or
17. Grant closeout and termination proce- its successor agency under Public Law 103–
dures will be as follows: 354 or the Grantee may terminate the grant
(a) Promptly after the date of completion in whole, or in part, when both parties agree
or a decision to terminate a grant, grant that the continuation of the project would
closeout actions are to be taken to allow the not produce beneficial results commensurate
orderly discontinuation of Grantee activity. with the further expenditure of funds. The
(i) The grantee shall immediately refund two parties shall agree upon the termination
to FmHA or its successor agency under Pub- conditions, including the effective date and,
lic Law 103–354 any uncommitted balance of in case of partial termination, the portion to
grant funds. be terminated.
(ii) The Grantee will furnish to FmHA or (d) Procedure for termination of grant for
its successor agency under Public Law 103– cause. FmHA or its successor agency under
354 within 45 days after the date of comple- Public Law 103–354 shall notify the Grantee
tion of the grant a Standard Form 269 and all in writing of the determination and the rea-
financial, performance, and other reports re- sons for and the effective date of the whole
quired as a condition of the grant. or partial termination in accordance with 7
(iii) The Grantee shall account for any CFR 1900.53.
property acquired with TSA grant funds, or 18. Extension and/or revision of this grant
otherwise received from FmHA or its suc- agreement may be approved by FmHA or its
cessor agency under Public Law 103–354. successor agency under Public Law 103–354
(iv) After the grant closeout, FmHA or its provided, in its opinion, the extention and/or
successor agency under Public Law 103–354 revision is justified and there is a likelihood
retains the right to recover any disallowed that the Grantee can accomplish the goals
costs which may be discovered as a result of set out and approved in the application dock-
an audit. et during the period of the extension and/or
(b) When there is reasonable evidence that revision as specified in 7 CFR 1944.538.
the Grantee has failed to comply with the
PART C—GRANTEE AGREES:
terms of this Agreement, the State Director
can, on reasonable notice, terminate the (1) To comply with property management
grant pursuant to paragraph (c) below and standards for expendable and nonexpendable
withhold further payments or prohibit the personal property established by Attachment
Grantee from further obligating grant funds. N of OMB Circular A–102 or Attachment N of
FmHA or its successor agency under Public 2 CFR part 200 as adopted by USDA through
175
2 CFR part 400 for State and local govern- project or program continues to be supported
ments or nonprofit organizations respec- by Federal funds. When it is no longer need-
tively. ‘‘Personal property’’ means property ed for the original project or program, the
of any kind except real property. It may be Grantee shall use the property in connection
tangible—having physical existence—or in- with its other federally sponsored activities,
tangible-having no physical existence, such in the following order of priority:
as patents, inventions, and copyrights. (A) Activities sponsored by FmHA or its
‘‘Nonexpendable personal property’’ means successor agency under Public Law 103–354.
tangible personal property having a useful (B) Activities sponsored by other Federal
life of more than one year and an acquisition agencies.
cost of $300 or more per unit. A Grantee may (ii) Shared use. During the time that non-
use its own definition of nonexpendable per- expendable personal property is held for use
sonal property provided that such definition on the project or program for which it was
would at least include all tangible personal acquired, the Grantee shall make it avail-
property as defined above. ‘‘Expendable per- able for use on other projects or programs if
sonal property’’ refers to all tangible per- such other use will not interfere with the
sonal property other than nonexpendable work on the project or program for which
personal property. When nonexpendable tan- the property was originally acquired. First
gible personal property is acquired by a preference for such other use shall be given
Grantee with project funds, title shall not be to other projects or programs sponsored by
taken by the Federal Government but shall FmHA or its successor agency under Public
vest in the Grantee subject to the following Law 103–354; second preference shall be given
conditions: to projects or programs sponsored by other
(a) Right to transfer title. For items of Federal agencies. If the property is owned by
nonexpendable personal property having a the Federal Government, use on other activi-
unit acquisition cost of $1,000 or more, ties not sponsored by the Federal Govern-
FmHA or its successor agency under Public ment shall be permissible if authorized by
Law 103–354 may reserve the right to transfer FmHA or its successor agency under Public
title to the Federal Government or to a third Law 103–354. User charges should be consid-
party named by the Federal Government ered if appropriate.
when such third party is otherwise eligible (c) Disposition of other nonexpendable
under existing statutes. Such reservation property. When the Grantee no longer needs
shall be subject to the following standards: the property, the property may be used for
(i) The property shall be appropriately other activities in accordance with the fol-
identified in the grant or otherwise made lowing standards:
known to the Grantee in writing. (i) Nonexpendable property with a unit ac-
(ii) FmHA or its successor agency under quisition cost of less than $1,000. The Grant-
Public Law 103–354 shall issue disposition in- ee may use the property for other activities
structions within 120 calendar days after the without reimbursement to the Federal Gov-
end of the Federal support of the project for ernment or sell the property and retain the
which it was acquired. If FmHA or its suc- proceeds.
cessor agency under Public Law 103–354 fails (ii) Nonexpendable personal property with
to issue disposition instructions within the a unit acquisition cost of $1,000 or more. The
120 calendar day period, the Grantee shall Grantee may retain the property for other
apply the standards of paragraph 1(c) below. use provided that compensation is made to
(iii) When FmHA or its successor agency FmHA or its successor agency under Public
under Public Law 103–354 exercises its right Law 103–354 or its successor. The amount of
to take title, the personal property shall be compensation shall be computed by applying
subject to the provisions for federally owned the percentage of Federal participation in
nonexpendable property discussed in para- the cost of the original project or program to
graph 1(a)(iv) below. the current fair market value of the prop-
(iv) When title is transferred either to the erty. If the Grantee has no need for the prop-
Federal Government or to a third party and erty and the property has further use value,
the Grantee is instructed to ship the prop- the Grantee shall request disposition in-
erty elsewhere, the Grantee shall be reim- structions from the original Grantor agency.
bursed by the benefitting Federal agency FmHA or its successor agency under Public
with an amount which is computed by apply- Law 103–354 shall determine whether the
ing the percentage of the Grantee participa- property can be used to meet the agency’s
tion in the cost of the original grant project requirements. If no requirement exists with-
or program to the current fair market value in that agency, the availability of the prop-
of the property, plus any reasonable shipping erty shall be reported, in accordance with
or interim storage costs incurred. the guidelines of the Federal Property Man-
(b) Use of other tangible nonexpendable agement Regulations (FPMR) to the General
property for which the Grantee has title. Services Administration by FmHA or its suc-
(i) The Grantee shall use the property in cessor agency under Public Law 103–354 to
the project or program for which it was ac- determine whether a requirement for the
quired as long as needed, whether or not the property exists in other Federal agencies.
176
FmHA or its successor agency under Public tion with the inventory, verify the existence,
Law 103–354 shall issue instructions to the current utilization, and continued need for
Grantee no later than 120 days after the the property.
Grantee request and the following proce- (4) A control system shall be in effect to
dures shall govern: ensure adequate safeguards to prevent loss,
(A) If so instructed or if disposition in- damage, or theft of the property. Any loss,
structions are not issued within 120 calendar damage, or theft of nonexpendable property
days after the Grantee’s request, the Grantee shall be investigated and fully documented;
shall sell the property and reimburse FmHA if the property was owned by the Federal
or its successor agency under Public Law Government, the Grantee shall promptly no-
103–354 an amount computed by applying to tify FmHA or its successor agency under
the sales proceeds the percentage of Federal Public Law 103–354.
participation in the cost of the original (5) Adequate maintenance procedures shall
project or program. However, the Grantee be implemented to keep the property in good
shall be permitted to deduct and retain from condition.
the Federal shares $100 or ten percent of the (6) When the Grantee is authorized or re-
proceeds, whichever is greater, for the quired to sell the property, proper sales pro-
Grantee’s selling and handling expenses. cedures shall be established which will pro-
(B) If the Grantee is instructed to dispose vide for competition to the extent prac-
of the property other than as described in ticable and result in the highest possible re-
paragraph 1(a)(iv) above, the Grantee shall turn.
be reimbursed by FmHA or its successor (7) Expendable personal property shall vest
agency under Public Law 103–354 for such in the Grantee upon acquisition. If there is a
costs incurred in its disposition. residual inventory of such property exceed-
(C) The Grantee’s property management ing $1,000 in total aggregate fair market
standards for nonexpendable personal prop- value, upon termination or completion of the
erty shall include the following procedural grant and if the property is not needed for
requirements: any other federally sponsored project or pro-
(1) Property records shall be maintained gram, the Grantee shall retain the property
accurately and shall include: for use on nonfederally sponsored activities,
(a) A description of the property. or sell it, but must in either case compensate
(b) Manufacturer’s serial number, model the Federal Government for its share. The
number, Federal stock number, national amount of compensation shall be computed
stock number, or other identification num- in the same manner as nonexpendable per-
ber. sonal property.
(c) Sources of the property including grant 2. To provide a financial management sys-
or other agreement number. tem which will include:
(d) Whether title vests in the Grantee or (a) Accurate, current, and complete disclo-
the Federal Government. sure of the financial results of each grant.
(e) Acquisition date (or date received, if Financial reporting will be on an accrual
the property was furnished by the Federal basis.
Government) and cost. (b) Records which identify adequately the
(f) Percentage (at the end of the budget source and application of funds for grant-
year) of Federal participation in the cost of supported activities. Those records shall con-
the project or program for which the prop- tain information pertaining to grant awards
erty was acquired. (Not applicable to prop- and authorizations, obligations, unobligated
erty furnished by the Federal Government). balances, assets, liabilities, outlays, and in-
(g) Location, use, and condition of the come.
property and the date the information was (c) Effective control over and account-
reported. ability for all funds, property, and other as-
(h) Unit acquisition cost. sets. Grantee shall adequately safeguard all
(i) Ultimate disposition data, including such assets and shall assure that they are
date of disposal and sales price or the meth- solely for authorized purposes.
od used to determine current fair market (d) Accounting records supported by source
value when a Grantee compensates the Fed- documentation.
eral agency for its share. 3. To retain financial records, supporting
(2) Property owned by the Federal Govern- documents, statistical records, and all other
ment must be marked to indicate Federal records pertinent to the grant for a period of
ownership. at least three years after the submission of
(3) A physical inventory of property shall the final Project Performance report pursu-
be taken and the results reconciled with the ant to paragraph B(9)(c) of this agreement
property records at least once every two except in the following situations:
years. Any difference between quantities de- (a) If any litigation, claim, or audit is com-
termined by the physical inspection and menced before the expiration of the three
those shown in the accounting records shall year period, the records shall be retained
be investigated to determine the causes of until all litigations, claims, or audit findings
the difference. The Grantee shall, in connec- involving the records have been resolved.
177
(b) Records for nonexpandable property ac- 10. That no member of Congress shall be
quired with Federal funds shall be retained admitted to any share or part of this Grant
for three years after final disposition. or any benefit that may arise therefrom; but
(c) When records are transferred to or this provision shall not be construed to bar
maintained by FmHA or its successor agency as a contractor under the Grant a publicly
under Public Law 103–354, the three year re- held corporation whose ownership might in-
tention requirement is not applicable. clude a member of Congress.
Microfilm copies may be substituted in 11. That all nonconfidential information
lieu of original records. The Grantor and the resulting from its activities shall be made
Comptroller General of the United States, or available to the general public on an equal
any of their duly auhthorized representa- basis.
tives, shall have access to any books, docu- 12. That the purpose for which this grant is
ments, papers, and records of the Grantee made may complement, but shall not dupli-
which are pertinent to the specific grant pro- cate programs for which monies have been
gram for the purpose of making audits, ex- received, are committed, or are applied for
aminations, excerpts, and transcripts. from other sources, public and private.
4. To provide information as requested by 13. That the Grantee shall relinquish any
the Grantor concerning the Grantee’s ac- and all copyrights and/or privileges to the
tions in soliciting citizen participation in materials developed under this grant, such
the application process, including published material being the sole property of the Fed-
notice of public meetings, actual public eral Government. In the event anything de-
meetings held, and content of written com- veloped under this grant is published in
ments received. whole or in part, the material shall contain
5. Not encumber, transfer, or dispose of the notice and be identified by language to the
property or any part thereof, furnished by following effect: ‘‘The material is the result
the Grantor or acquired wholly or in part of tax-supported research and as such is not
with Grantor funds without the written con- copyrightable. It may be freely reprinted
sent of the Grantor except as provided in with the customary crediting of the source.’’
part C 1. (14) That the Grantee shall abide by the
6. To provide Grantor with such periodic policies promulgated in 2 CFR part 200 as
reports of Grantee operations as may be re- adopted by USDA through 2 CFR part 400
quired by authorized representatives of the which provides standards for use by Grantees
Grantor. in establishing procedures for the procure-
7. To execute Form FmHA or its successor ment of supplies, equipment and other serv-
agency under Public Law 103–354 400–1, ices with Federal grant funds.
‘‘Equal Opportunity Agreement,’’ and to exe- 15. That it is understood and agreed that
cute any other agreements required by any assistance granted under this Agreement
Grantor to implement the civil rights re- will be administered subject to the limita-
quirements. tions of Title V of the Housing Act of 1949 as
8. To include in all contracts in excess of amended, 42 U.S.C. 1471 et. seq., and related
$100,000 a provision for compliance with all regulations, and that rights granted to
applicable standards, orders, or regulations FmHA or its successor agency under Public
issued purusant to the Federal Clean Air Act Law 103–354 herein or elsewhere may be exer-
as amended. Violations shall be reported to cised by it in its sole discretion to carry out
the Grantor and the Regional Office of the the purposes of the assistance, and protect
Environmental Protection Agency. FmHA or its successor agency under Public
9. That, upon any default under its rep- Law 103–354’s financial interest.
resentations or agreements set forth in this 16. Standard of Conduct. No employee, offi-
instrument, Grantee, at the option and de- cer or agent of Grantee shall participate in
mand of Grantor, will, to the extent legally the selection, award or administration of a
permissible, repay to the Grantor forthwith contract in which Federal funds are used
the grant funds received with interest at the where, to the knowledge of such employee,
rate of five percentum per annum from the officer or agent, the employee, officer or
date of the default. The provisions of this agent or such person’s immediate family
Grant Agreement may be enforced by Grant- members, partners or any organization in
or, at its option and without regard to prior which such person or such person’s imme-
waivers by it of previous defaults of Grantee, diate family award or administration of the
by judicial proceedings to require specific contract, or (2) when such person is negoti-
performance of the terms of this Grant ating or has any arrangement concerning fu-
Agreement or by such other proceedings in ture employment. The recipient’s officers,
law or equity, in either Federal or State employees or agents shall neither solicit nor
Courts, as may be deemed necessary by accept gratuities, favors or anything of mon-
Grantor to assure compliance with the provi- etary value from landlords or developers of
sions of this Grant Agreement and the laws rental or ownership housing projects in
and regulations under which this grant is which the persons receiving TSA assistance
made. may be placed as a result of such assistance.
178
RHS, RBS, RUS, FSA, USDA Pt. 1944, Subpt. K, Exh. B
PART D—GRANTOR AGREES: 3. Form FmHA or its successor agency
under Public Law 103–354 400–4, ‘‘Assurance
1. That it may assist Grantee, within avail-
Agreement.’’
able appropriations, with such technical and
4. Environmental review documentation in
management assistance as needed in plan-
ning the project and coordinating the plan
5. Subpart K of part 1944 of this chapter.
with local officials, comprehensive plans, B. The State Office should inform all po-
and any State or area plans for improving tential applicants, at the time they pick up
housing for low-income families in the area forms, that:
in which the project is located. 1. The preapplication must be submitted to
2. That at its sole discretion, Grantor may the District Office serving the area in which
at any time give any consent, deferment, the applicant proposes to operate the Tech-
subordination, release, satisfaction, or ter- nical and Supervisory Assistance (TSA) pro-
mination of any or all of Grantee’s grant ob- gram.
ligations, with or without valuable consider- 2. The State Office will refer all requests
ation, upon such terms and conditions as for assistance in completing the
Grantor may determine to be (a) advisable to preapplication to the appropriate District
further the purposes of the grant or to pro- Office.
tect Grantor’s financial interests therein, C. Beyond the responsibilities of the State
and (b) consistent with the statutory pur- Office in the selection of grantees and the
poses of the grant and the limitations of the administration of the program, and as stated
statutory authority under which it is made in § 1944.502 of this subpart, the TSA program
and Grantor’s regulations. provides an opportunity for the State Direc-
This Agreement is subject to current tor to give priority to applicants serving the
Grantor regulations and any future regula- rural areas of greatest need as well as use
tions not inconsistent with the express the program cooperatively with other Fed-
terms hereof. Grantee on llllllllll, eral and State agencies in addressing the
19ll, has caused this Agreement to be exe- housing needs of the residents of a proposed
cuted by its duly authorized TSA service area. Therefore, the State Office
lllllllll and attested and its cor- should be prepared, before receipt of
porate seal affixed by its duly authorized preapplications, to advise the District Direc-
llllllll. tors, potential applicants and other Federal
Attest: and State agencies which part(s) of the State
has the greatest need for the TSA program.
llllllllllllllllllllllll The State Director should identify target
Grantee areas in a similar manner to the process used
llllllllllllllllllllllll by the Administrator pursuant to § 1944.525 of
By llllllllllllllllllllll this subpart. Proposals which are clearly in-
(Title) appropriate and do not meet the basic prior-
By llllllllllllllllllllll ities of § 1944.529 (a) of this subpart should
not be encouraged due to the complexity of
(Title)
the preapplication submission.
Grantor D. In addition to the instructions of
United States of America § 1944.526 of this subpart, the State Office
Farmers Home Administration or its suc- should follow the procedures outlined below:
cessor agency under Public Law 103–354 1. Review preapplications for completeness
By llllllllllllllllllllll and adequacy and make assessments re-
quired by § 1944.526(c)(1) of this subpart.
2. Request clarifications from the District
(Title)
Office if necessary.
3. Evaluate the proposals in light of
EXHIBIT B TO SUBPART K OF PART 1944—
§ 1944.529 of this subpart and select the pro-
ADMINISTRATIVE INSTRUCTIONS FOR posal(s) which best meets the priorities es-
STATE OFFICES REGARDING THEIR tablished under the project selection criteria
RESPONSIBILITIES IN THE ADMINIS- in § 1944.529 (a), (b) and (c) of this subpart.
TRATION OF THE TECHNICAL AND SU- 4. The State Office must provide written
PERVISORY ASSISTANCE GRANT PRO- comments to be attached to the
GRAM preapplication(s) justifying the selection(s)
and addressing the items in § 1944.529 of this
A. The State Office will maintain for dis- subpart.
tribution to potential applicants, upon re- 5. The State Office will forward the origi-
quest, a supply of preapplication packets nal SF 424.1 and accompanying documents of
consisting of: the selected preapplication(s) as quickly as
1. SF 424.1. possible to the National Office, Attention:
2. Form FmHA or its successor agency Special Authorities Division, Multi-Family
under Public Law 103–354 400–1, ‘‘Equal Op- Housing. In no case should the State Office
portunity Agreement.’’ forward their selected TSA preapplication(s)
179
Pt. 1944, Subpt. K, Exh. C 7 CFR Ch. XVIII (1–1–21 Edition)
later than thirty (30) days after the closing preapplication is complete and make assess-
date for receipt of preapplications. ments required by § 1944.526(b)(1) of this sub-
6. Preapplications not selected by the part.
State Office will be returned to the appli- D. The District Director will provide writ-
cants through the appropriate District Of- ten comments to be attached to the
fices with notice of appeal rights. preapplication. These comments will, at a
7. In accordance with § 1944.525 of this sub- minimum, address the following items:
part, State Offices will be advised of the 1. Whether the area to be covered by the
number of preapplications to be submitted project is a ‘‘rural area’’ as defined by FmHA
from each state to the National Office. or its successor agency under Public Law
E. Sections 1944.531 and 1944.533 of this sub- 103–354 regulations.
part detail the responsibilities of the State 2. The District Director’s knowledge of the
Office after tentative selection or concur- applicant’s past history.
rence of the TSA grantees by the National 3. The need for the proposed activity, and
Office. Those preapplicants not selected will its relationship to the targeting strategies
be promptly notified and their for the District.
preapplication returned with notice of ap- 4. Appropriateness and applicability of this
peal rights. Form AD–622, ‘‘Notice of proposal for FmHA or its successor agency
Preapplication Review Action,’’ will be under Public Law 103–354 implementation
mailed from the State Office to the appli- funds.
cants. District Offices will receive a copy 5. Extent of citizen involvement in devel-
from the State Office. opment of preapplication, particularly the
F. After execution of the grant agreement, involvement of minority and/or low-income
the State Office will work closely with the groups.
District Office and the grantee to obtain ad- 6. All other criteria specified in § 1944.529 of
ditional resources from other Federal and this subpart.
State agencies to meet the needs of the TSA 7. The comments and recommendations of
service area. The State Office should closely the County Supervisors for the proposed TSA
review the quarterly project performance re- service area.
ports and assist the District Director, as ap- E. The District Director will forward the
propriate, in resolving any problems or tak- original and one copy of the preapplication
ing advantage of favorable funding or pro- and accompanying documents along with the
gram opportunities. comments and a summary recommendation
to the State Director within ten (10) working
days of receipt of the preapplication.
FR 29121, June 24, 1983; 49 FR 3763, Jan. 30,
F. Those applicants invited to submit ap-
1984; 55 FR 13503, 13504, Apr. 11, 1990; 79 FR
plications will submit their applications to
76011, Dec. 19, 2014; 81 FR 11031, Mar. 2, 2016]
the District Office with two copies. The Dis-
trict Office will retain the original for the
EXHIBIT C TO SUBPART K OF PART 1944—
docket and forward one copy to the appro-
INSTRUCTIONS FOR DISTRICT OFFICES priate State Office after making sufficient
REGARDING THEIR RESPONSIBILITIES copies to forward one copy to each of the ap-
IN THE ADMINISTRATION OF THE propriate County Offices.
TECHNICAL AND SUPERVISORY AS- G. The District Director, upon receipt of
SISTANCE GRANT PROGRAM the application, will prepare a docket in ac-
cordance with § 1944.531 of this subpart. The
A. The District Office will maintain for procedures for approval and project servicing
distribution to potential applicants, upon re- are detailed in this subpart.
quest, a supply of preapplication packets
consisting of: [44 FR 36891, June 22, 1979, as amended at 48
1. SF 424.1. FR 29121, June 24, 1983; 49 FR 3763, Jan. 30,
2. Form FmHA or its successor agency 1984; 55 FR 13504, Apr. 11, 1990; 81 FR 11031,
under Public Law 103–354 400–1, ‘‘Equal Op- Mar. 2, 2016]
portunity Agreement.’’
3. Form FmHA or its successor agency EXHIBIT D TO SUBPART K OF PART 1944—
under Public Law 103–354 400–4, ‘‘Assurance AMENDMENT TO TECHNICAL AND SU-
Agreement.’’ PERVISORY ASSISTANCE GRANT
4. Environmental review documentation in AGREEMENT
5. Subpart K of part 1944 of this chapter. This Amendment to Agreement dated
B. District Directors will provide any nec- llllllllll 19ll between
essary assistance in completing herein called ‘‘Grantee,’’ organized and oper-
preapplication forms. ating under llllllllllllllll
C. All applicants will submit llllllllllllllllllllllll
preapplications to District Offices. Upon re- (authorizing State Statute)
ceipt of the preapplication the District Di- and the United States of America acting
rector will review it to ensure that the through the Farmers Home Administration,
180
Department of Agriculture, herein called agency under Public Law 103–354 has to bring
‘‘FmHA,’’ or its successor agency under Pub- your loan current or recover the loan in full.
lic Law 103–354 amends the Technical and Su- Any plan altering your repayment schedule
pervisory Assistance Grant Agreement’’ be- in any way must be approved by this office.
tween the parties hereto dated However, it is our intention to work with
llllllllll 19ll, hereinafter called you and the counseling organization in every
the ‘‘Agreement.’’ way we can to resolve your delinquency.
Said Agreement is amended by changing If you want to participate in this program,
the ending date specified in paragraph 2 of please sign the attached copy of this letter
part B of the Agreement from and return it to this office. At that time we
lllllllll to lllllllll and/or will advise (name of TSA grantee) that you
by making the following changes noted in are interested in their services and provide
the attachments hereto: (List and identify them with the information they need to con-
proposal and any other documents pertinent tact you. Only information available to the
to the grant which are attached to the general public will be released.
Amendment.) We are sure you agree that it is in your in-
Agreed to this lllll day of terest to make every effort to bring your ac-
lllllll 19ll. count current. We look forward to your re-
llllllllllllllllllllllll turn of the attached copy of this letter.
(Name of Grantee) Sincerely,
By llllllllllllllllllllll County Supervisor
(Signature) Farmers Home Administration or its suc-
llllllllllllllllllllllll cessor agency under Public Law 103–354
(Title) Enclosure
United States of America (On attached copy only:)
By llllllllllllllllllllll I desire to participate in the counseling
(Signature) program with (name of TSA grantee).
llllllllllllllllllllllll llllllllllllllllllllllll
Borrower
(Title)
Farmers Home Administration or its suc-
cessor agency under Public Law 103–354 Date
(Date) Subparts L–M [Reserved]
EXHIBIT E TO SUBPART K OF PART 1944— Subpart N—Housing Preservation
GUIDE LETTER TO DELINQUENT Grants
FMHA OR ITS SUCCESSOR AGENCY
UNDER PUBLIC LAW 103–354 SINGLE
SOURCE: 58 FR 21894, Apr. 26, 1993, unless
FAMILY HOUSING LOAN BORROWERS otherwise noted.
Dear lllllllllllllllllllll
(name of borrower): § 1944.651 General.
This is to advise you that (name of TSA (a) This subpart sets forth the poli-
grantee) is available to provide independent cies and procedures for making grants
counseling services to Farmers Home Ad- under section 533 of the Housing Act of
ministration (FmHA) or its successor agency 1949, 42 U.S.C. 1490(m), to provide funds
under Public Law 103–354 borrowers in need to eligible applicants (hereafter also
of financial management assistance. These referred to as grantee(s)) to conduct
services may assist you in resolving your
housing preservation programs bene-
present delinquency in your housing loan.
This organization is prepared to provide fi- fiting very low- and low-income rural
nancial and budget counseling at no charge residents. Program funds cover part or
to you. Their counseling services include ad- all of the grantee’s cost of providing
vice on debt levels and credit purchases, con- loans, grants, interest reduction pay-
sumer and cost awareness, debt adjustment ments or other assistance to eligible
procedures, and other financial information homeowners, owners of single or mul-
and services. tiple unit rental properties or for the
You are urged to take advantage of this
benefit of owners (as occupants) of con-
program. However, your participation is vol-
untary and does not relieve you of any of sumer cooperative housing projects
your loan obligations to FmHA or its suc- (hereafter also referred to as co-ops).
cessor agency under Public Law 103–354 or Such assistance will be used to reduce
limit the remedies FmHA or its successor the cost of repair and rehabilitation, to
181
remove or correct health or safety haz- that the housing is not economically
ards, to comply with applicable devel- feasible for repair or rehabilitation.
opment standards or codes, or to make Grantees are expected to:
needed repairs to improve the general (1) Coordinate and leverage funding
living conditions of the resident(s), infor repair and rehabilitation activities,
cluding improved accessibility by as well as replacement housing, with
handicapped persons. Such assistance housing and community development
will be used to reduce the cost of repair organizations or activities operating in
and rehabilitation, to remove or cor- the same geographic area; and
rect health or safety hazards, to com- (2) Focus the program on rural areas
ply with applicable development stand- and smaller communities so that it
ards or codes, or to make needed reserves very low and low-income per-
pairs to improve the general living sons.
conditions of the residents, including (b) RHS intends to permit grantees
improved accessibility by persons with considerable latitude in program de-
a disability. Individual housing that is sign and administration. The forms or
owner occupied may qualify for re- types of assistance must provide the
placement housing when it is deter- greatest long-term benefit to the great-
mined by the grantee that the housing est number of persons residing in indi-
is not economically feasible for repair vidual housing, rental properties, or
or rehabilitation. co-ops needing repair and rehabilita-
(b) The Rural Housing Service (RHS) tion or replacement of individual hous-
will provide Housing Preservation ing.
Grant (HPG) assistance to grantees (c) Repairs and rehabilitation or re-
who are responsible for providing as- placement activities affecting prop-
sistance to eligible persons without erties on or eligible for listing on the
discrimination because of race, color, National Register of Historic Places
religion, sex, national origin, age, fa- will be accomplished in a manner that
milial status, or disability. supports national historic preservation
(c) The preapplication must only ad- objectives as specified in § 1944.673.
dress a proposal to finance repairs and
rehabilitation activities to individual [62 FR 26208, May 13, 1997]
housing or rental properties or co-ops.
Any combination proposal will not be § 1944.653 Objective.
accepted. The objective of the HPG program is
(d) Any processing or servicing activ- to repair or rehabilitate individual
ity conducted pursuant to this subpart housing, rental properties, or co-ops
involving authorized assistance to RHS owned and/or occupied by very low- and
employees, members of their families, low-income rural persons. Grantees
known close relatives, or business or will provide eligible homeowners, own-
close personal associates, is subject to ers of rental properties, and owners of
the provisions of subpart D of part 1900 co-ops with financial assistance
of this chapter. Applicants for this as- through loans, grants, interest reduc-
sistance are required to identify any tion payments or other comparable fi-
known relationship or association with nancial assistance for necessary repairs
an RHS employee. and rehabilitation. Further, individual
housing that is owner occupied may
FR 26208, May 13, 1997] qualify for replacement housing when
it is determined by the grantee that
§ 1944.652 Policy. the housing is not economically fea-
(a) The policy of RHS is to provide sible for repair or rehabilitation, ex-
HPG’s to grantees to operate a pro- cept as specified in § 1944.659.
gram which finances repair and reha- [58 FR 21894, Apr. 26, 1993, as amended at 62
bilitation activities to individual hous- FR 26209, May 13, 1997]
ing, rental properties, or co-ops for
very low- and low-income persons. Indi- § 1944.654 Debarment and suspen-
vidual housing that is owner occupied sion—drug-free workplace.
may qualify for replacement housing (a) For purposes of this subpart, ex-
when it is determined by the grantee hibit A of RD Instruction 1940–M
182
(available in any Agency office) re- Cooperative (co-op). For the purposes
quires all Rural Development appli- of the HPG program, a cooperative (co-
cants; for an HPG to sign and submit op) is one which:
with their preapplication, Form AD– (1) Is a corporation organized as a
1047, ‘‘Certification Regarding Debar- consumer cooperative;
ment, Suspension, and Other Responsi- (2) Will operate the housing on a non-
bility Matters—Primary Covered profit basis solely for the benefit of the
Transactions,’’ which basically states occupants; and
that the applicant has not been (3) Is legally precluded from distrib-
debarred or suspended from Govern- uting, for a minimum period of 5 years
ment assistance. Further, all grantees from the date of HPG assistance from
after receiving a HPG must obtain a the grantee, any gains or profits from
signed certification (Form AD–1048, operation of the co-op. For this pur-
‘‘Certification Regarding Debarment, pose, any patronage refunds to occu-
Suspension, Ineligibility and Vol- pants of the co-op would not be consid-
untary Exclusion—Lower Tier Covered ered gains or profits. A co-op may ac-
Transactions’’) from all persons or en- cept non-members as well as members
tities (excluding homeowner recipi- for occupancy in the project.
ents) that the grantee does business Grant agreement. The contract be-
with as a result of the HPG. Grantees tween Agency and the grantee which
are responsible for informing these per- sets forth the terms and conditions
sons or entities of the provisions of ex- under which HPG funds will be made
hibit A of RD Instruction 1940–M available. (See exhibit A of this sub-
(available in any Agency office) and of part which is available in any Agency
maintaining Form AD–1048 in the office.)
grantee’s office.
Homeowner. For the purposes of the
(b) Grantees must also be made HPG program, a homeowner is one who
aware of the Drug-free Workplace Act
can meet the conditions of income and
of 1988 requirements found in exhibit A
ownership under § 1944.661 of this sub-
of RD Instruction 1940–M (available in
part.
any Rural Development office). For
this subpart, a grantee is defined as Household. For the purposes of the
any organization who applies for or re- HPG program, a household is defined as
ceives a direct grant from Rural Devel- all persons living all or part of the next
opment. All preapplications must in- 12 months in a unit or dwelling assisted
clude a signed Form AD–1049, ‘‘Certifi- with HPG funds.
cation Regarding Drug-free Workplace Housing preservation. The repair and
Requirements (Grants) Alternative I— rehabilitation activities that con-
Grants Other Than Individuals.’’ tribute to the health, safety, and well-
being of the occupant, and contribute
[58 FR 21894, Apr. 26, 1993, as amended at 61 to the structural integrity or long-
FR 39851, July 31, 1996] term preservation of the unit. As a re-
sult of these activities, the overall con-
§ 1944.655 [Reserved] dition of the unit or dwelling must be
raised to meet Thermal Standards for
existing structures adopted by the lo-
References in this subpart to Dis- cality/jurisdiction and applicable de-
trict, State, National and Finance Of- velopment standards for existing hous-
fices, and to District Director, State ing recognized by RHS in subpart A of
Director, and Administrator refer to part 1924 or standards contained in any
Rural Development offices and officials of the voluntary national model codes
and should be read as prefaced by Rural acceptable upon review by RHS. Prop-
Development. Terms used in this sub- erties included on or eligible for inclu-
part have the following meanings: sion on the National Register of His-
Adjusted income. As defined in 7 CFR toric Places are subject to the stand-
3550.54(c). ards and conditions of § 1944.673. The
Applicant or grantee. Any eligible or- term ‘‘housing preservation’’ does not
ganization which applies for or receives apply to replacement housing.
HPG funds under a grant agreement. HPG. Housing Preservation Grant.
183
Low income. An adjusted annual in- Overcrowding. Guidance is provided at

come that does not exceed the ‘‘lower’’ 7 CFR 3560.155(e). These guidelines
income limit according to size of should result in an ideal range of per-
household as established by the United sons per housing unit.
States Department of Housing and Rental properties. Rental properties
Urban Development (HUD) for the are defined as single-unit or multi-unit
county or Metropolitan Statistical dwellings used for occupancy by ten-
Area (MSA) where the property is lo- ants, owners, or members of an owner’s
cated. Maximum low-income limits are immediate family.
set forth in Appendix 9 of HB–1–3550 Replacement housing. The replace-
(available in any Rural Development ment of existing, individual owner oc-
office). cupied housing where repair and reha-
Organization. An organization is de-
bilitation assistance is not economi-
fined as one of the following:
cally feasible or practical. The term re-
(1) A State, commonwealth, trust
placement housing does not apply to
territory, other political subdivision,
housing preservation. The overall con-
or public nonprofit corporation author-
dition of the unit or dwelling must
ized to receive and administer HPG
funds; meet Thermal Standards adopted by
(2) An American Indian tribe, band, the locality/jurisdiction for new or ex-
group, nation, including Alaskan Indi- isting structures and applicable devel-
ans, Aleuts, Eskimos and any Alaskan opment standards for new or existing
Native Village, of the United States housing recognized by RHS in subpart
which is considered an eligible recipi- A of part 1924 or standards contained in
ent under the Indian Self-Determina- any of the voluntary national model
tion and Education Assistance Act codes acceptable upon review by RHS.
(Pub. L. 93–638) or under the State and Properties included on or eligible for
Local Fiscal Assistance Act of 1972 inclusion on the National Register of
(Pub. L. 92–512); Historic Places are subject to the
(3) A private nonprofit organization, standards and conditions of § 1944.673
including faith-based and community prior to replacement.
organizations, that is owned and con- RHS. RHS means the Rural Housing
trolled by private persons or interests Service, or a successor agency.
for purposes other than making gains Rural area. The definition in 7 CFR
or profits for the corporation, is legally part 3550 applies.
precluded from distributing any gains Tenant. Any person who resides in a
or profits to its members, and is au- single- or multi-unit rental property.
thorized to undertake housing develop- Very low-income. An adjusted annual
ment activities; or income that does not exceed the very
(4) A consortium of units of govern- low-income limit according to size of
ment and/or private nonprofit organi- household as established by HUD for
zations, including faith-based and com- the county of MSA where the property
munity organizations, which is other- is located. Maximum very low-income
wise eligible to receive and administer limits are set forth in 7 CFR part 3550.
HPG funds and which meets the fol-
lowing conditions: [58 FR 21894, Apr. 26, 1996, as amended at 61
(i) Be comprised of units of govern- FR 39851, July 31, 1996; 62 FR 26209, May 13,
ment and/or private nonprofit corpora- 1997; 67 FR 78329, Dec. 24, 2002; 69 FR 69105,
tions that are close together, located Nov. 26, 2004; 72 FR 70221, Dec. 11, 2007; 73 FR
36268, June 26, 2008]
in the same state, and serve areas eligi-
ble for USDA Rural Development as- § 1944.657 Restrictions on lobbying.
sistance; and
(ii) Have executed an agreement All applicants must comply with RD
among its members designating one Instruction 1940–Q (available in any
participating unit of government or Rural Development office) which pro-
private nonprofit corporation as the hibits applicants of Federal grants
applicant or designating a legal entity from using appropriated funds for lob-
(such as a Council of Governments) to bying the Federal Government in con-
be the applicant. nection with a specific grant.
184
§ 1944.658 Applicant eligibility. the repairs and rehabilitation prior to

(a) To be eligible to receive a grant, any assistance given to an individual
the applicant must: homeowner. If the cost of such repairs
(1) Be an organization as defined in and rehabilitation is not economically
§ 1944.656 of this subpart; feasible, then the grantee may consider
(2) Have the necessary background replacing the existing housing with re-
and experience on the part of its staff placement housing, subject to the fol-
or governing body with proven ability lowing:
to perform responsibility in the field of (a) The HPG grantee:
low-income rural housing development, (1) Shall document the total costs for
repair and rehabilitation, or have other all repairs and rehabilitation of the ex-
business management or administra- isting housing; and
tive experience which indicates an abil- (2) Shall document the basis for the
ity to operate a program providing re- determination that the costs for all re-
pair and rehabilitation financial assist- pairs and rehabilitation for the exist-
ance as well as for replacement housing housing are not economically fea-
ing; sible.
(3) Legally obligate itself to admin- (b) The individual homeowner:
ister HPG funds, provide an adequate
(1) Must meet all requirements of
accounting of the expenditure of such
§ 1944.661;
funds in compliance with the terms of
this regulation, the grant agreement, (2) Must lack the income and repay-
and 2 CFR part 200 as adopted by USDA ment ability to replace their existing
through 2 CFR part 400 (available in home without the assistance of the
any Rural Development office), as ap- HPG grantee;
propriate, and comply with the grant (3) Must have been determined by the
agreement and Rural Development reg- HPG grantee and RHS to be unable to
ulations; and afford a loan under section 502 for re-
(4) If the applicant is engaged in or placement housing; and
plans to become engaged in any other (4) Must be able to afford the replace-
activities, provide sufficient evidence ment housing on terms set forth by the
and documentation that they have ade- HPG grantee.
quate resources, including financial re- (c) The existing home:
sources, to carry on any other pro- (1) Must be demolished as part of the
grams or activities to which they are process of providing replacement hous-
committed without jeopardizing the ing. It will be determined by the grant-
success and effectiveness of the HPG ee and individual homeowner when is
project.
the best time for demolition; and
(b) An applicant will not be consid-
(2) May not be sold to make way for
ered eligible if it is a nonprofit entity
and its proposal is based solely on an the replacement housing.
identity of interest, as defined in (d) The replacement housing:
§ 1924.4(i) of subpart A of part 1924 of (1) May be either new housing or a
this chapter, between the applicant and dwelling brought onto the site of the
the owner(s) of the proposed dwelling existing housing;
or co-op to be rehabilitated or repaired. (2) May use no more than $15,000 in
HPG funds;
FR 26209, May 13, 1997; 79 FR 76011, Dec. 19, (3) Must meet all applicable require-
2014] ments of 7 CFR 3550.57; and
(4) May not be sold within 5 years of
§ 1944.659 Replacement housing. completion of the project.
Replacement housing applies only to (e) Any moneys received by the
existing, individual owner occupied homeowner from selling salvaged ma-
housing. Replacement housing does not terial after demolishing the existing
apply to rental properties (single-unit home must be used towards the re-
or multiple-unit) or to cooperative placement housing.
housing projects. The grantee is re-
sponsible for determining the extent of [62 FR 26209, May 13, 1997]
185
§ 1944.660 Authorized representative owners are occupying the property.

of the HPG applicant and Rural De- HPG assistance may be made in such
velopment point of contact. cases when:
(a) Rural Development will deal only (i) The occupant has been living in
with authorized representatives des- the house for at least 1 year prior to
ignated by the HPG applicant. the date of requesting assistance;
(b) The State Director will designate (ii) The grantee has no reason to be-
either the State Office and/or the Dis- lieve the occupant’s position of owner/
trict Office as the processing office occupant will be jeopardized as a result
and/or the servicing office for the HPG of the improvements to be made with
program. The State Director’s selec- HPG funds; and
tion may be based on staffing, total (iii) In the case of a loan, and to the
program size, number of extent possible, the co-owner(s) should
preapplications anticipated, type of ap- also sign the security instrument.
plicants, or similar criteria. The State (3) A leasehold interest in the prop-
Director must publish this designation
erty to be repaired, rehabilitated, or
each year at the time the FEDERAL
replaced. When the potential HPG re-
REGISTER is published informing the
cipient’s ‘‘ownership’’ interest in the
public of the open period for accept-
property is based on a leasehold inter-
ance of preapplications as outlined in
est, the lease must be in writing and a
§ 1944.678 of this subpart.
copy must be included in the grantee’s
§ 1944.661 Individual homeowners—eli- file. The unexpired portion of the lease
gibility for HPG assistance. must not be less than 5 years and must
The individual homeowners assisted permit the recipient to make modifica-
must have income that meets the very tions to the structure without increas-
low- or low-income definitions, be the ing the recipient’s lease cost.
owner of an individual dwelling at least (4) A life estate, with the right of
1 year prior to the time of assistance, present possession, control, and bene-
and be the intended occupant of the ficial use of the property.
dwelling subsequent to the time of as- (5) Land assignments may be accept-
sistance. The dwelling must be located ed as evidence of ownership only for
in a rural area and be in need of hous- American Indians living on a reserva-
ing preservation assistance. Each tion, when historically the permits
homeowner is required to submit evi- have been used by the tribe and have
dence of income and ownership for re- had the comparable effect of a life es-
tention in the grantee’s files. tate.
(a) Income. Determination of income (c) Other evidence of ownership. The
will be made in accordance with 7 CFR following items may be accepted as
3550.54(c). All members of the house- evidence of ownership if a recorded
hold, as defined in § 1944.656 of this sub- deed cannot be provided:
part, must be included when deter- (1) Any legal instrument, whether or
mining income. Grantees must use cer- not recorded, which is commonly con-
tifications, may require additional in- sidered evidence of ownership.
formation from the homeowner, and (2) Evidence that the person(s) re-
should seek advice from their attorney. ceiving assistance from the HPG grant-
(b) Ownership. Evidence of ownership ee is listed as the owner of the property
may be a photostatic copy of the in- by the local taxing authority and is re-
strument evidencing ownership. Meth- sponsible for any real estate taxes.
ods for assuring the intention of the
(3) Affidavits by others in the com-
homeowner to continue to occupy the
munity that the person(s) receiving as-
unit after assistance will be established
sistance from the HPG grantee has oc-
by the grantee. Any of the following
cupied the property as the apparent
will satisfy or fulfill this requirement
owner for a period of not less than 10
of ownership:
years, and is generally believed to be
(1) Full marketable title.
(2) An undivided or divided interest the owner.
in the property to be repaired, rehabili- [58 FR 21894, Apr. 26, 1993, as amended at 62
tated, or replaced when not all of the FR 26209, May 13, 1997]
186
§ 1944.662 Eligibility of HPG assistance (c) Identity of interest. When an iden-

on rental properties or co-ops. tity of interest, as defined in § 1924.4(i)
(a) Ownership. The owner(s) of rental of subpart A of part 1924 of this chap-
properties or co-ops must own the ter, exists between a nonprofit entity
dwelling at the time of receiving as- and the owner(s) of a dwelling, the
sistance from the HPG grantee. The property is not eligible for assistance.
dwelling must be located in a rural
§ 1944.663 Ownership agreement be-
area and be in need of housing preser- tween HPG grantee and rental
vation assistance. Evidence of owner- property owner or co-op.
ship may be a photostatic copy of the
instrument evidencing ownership. Own- HPG assistance may be provided by a
ers of rental properties and co-ops are grantee with respect to rental prop-
required to submit evidence of owner- erties or co-ops only if the following
ship for retention in the grantee’s files. conditions are met by the rental prop-
Any of the following will satisfy or ful- erty owner(s) or by the co-op during a
fill this requirement of ownership: minimum 5 year restrictive period be-
(1) Full marketable title. ginning on the date agreed upon in the
(2) An undivided or divided interest agreement between the grantee and the
in the property to be repaired or reha- rental property owner (or co-op). The
bilitated. HPG grantee is responsible for pre-
(3) A leasehold interest in the prop- paring, executing, and monitoring for
erty to be repaired or rehabilitated. compliance, the ownership agreement
Ownership interest in the property is with the owner(s) of the rental prop-
based on a leasehold interest. The lease erty or the co-op. The rental property
must be in writing and a copy must be owner(s) or the co-ops are required to
included in the grantee’s file. The un- enter into an ownership agreement
expired portion of the lease must not with the grantee to assure compliance
be less than 5 years and must permit with the requirements of this section.
the recipient to make modifications to (a) Ownership agreement. At a min-
the structure without increasing the imum, the ownership agreement must
recipient’s lease cost. include the following clauses:
(4) Land assignments may be accept- (1) The owner(s) agrees to make the
ed as evidence of ownership only for units repaired or rehabilitated avail-
American Indians living on a reserva- able for occupancy to very low- or low-
tion, when historically the permits income persons for a period of not less
have been used by the tribe and have than 5 years, such restrictive period be-
had the comparable effect of a life es- ginning on the date agreed upon in the
tate. agreement between the grantee and the
(b) Tenant eligibility. The following re- rental property owner(s) or co-op.
quirements must be met in order for a (2) The owner(s) agrees to pass on to
unit within a rental property or co-op the tenants any reduction in the debt
to be assisted with HPG funds: service payments resulting from the
(1) The tenant must have income HPG assistance provided by the HPG
that meets the very low- or low-income grantee to the owner(s).
definition. (3) The owner(s) of rental properties
(2) The tenant must be the intended agrees not to convert the units to con-
occupant of the unit, but is not re- dominium ownership. In the case of co-
quired to have resided previously in the ops, the owner(s) agrees not to convert
dwelling. the dwelling(s) to condominium owner-
(3) Any owner(s) who receives assist- ship or any form of cooperative owner-
ance from an HPG grantee or a member ship not eligible under this section.
of the immediate family of the This paragraph (a)(3) is subject to the
owner(s), who also resides in the unit restrictive period noted in paragraph
within the dwelling to be repaired or (a)(1) of this section.
rehabilitated is eligible to have their (4) The owner(s) agrees not to refuse
unit repaired or rehabilitated, if they to rent a unit to any person solely be-
are income eligible and meet all other cause the person is receiving or is eligi-
requirements. ble to receive assistance under any
187
Federal, State, or local housing assist- bilitation activities eligible for HPG
ance program. assistance.
(5) The owner(s) agrees that the units (2) That the owner(s) is not repairing
repaired or rehabilitated will be occu- and/or rehabilitating any unit unless it
pied or available for occupancy by per- meets the requirements of § 1944.662
sons of very low- or low-income. (b)(3) of this subpart.
(6) The owner(s) agrees to enter into (3) That rental property units being
and abide by written leases with the repaired and/or rehabilitated and occu-
tenants and that such leases shall pro- pied by owners or members of the own-
vide that the tenants may be evicted er’s immediate family meet all other
only for good cause. requirements of this subpart.
(7) The owner(s) agrees that, in the (4) That, for multi-units not consid-
event the owner(s) or the owner’s suc- ered eligible as a result of paragraph
cessors in interest fail to carry out the (b)(2) or (b)(3) of this section, the
requirements of this section during the grantee and owner(s) shall agree on a
applicable period, they shall make a method, if any is needed, of deter-
payment to Rural Development in an mining the prorata share of repairs and
amount that equals the total amount rehabilitation activities to the dwell-
of assistance provided by the grantee ing, based on a percentage of the ineli-
plus interest thereon (without gible units to the total dwelling.
compounding) for each year and any
fraction thereof that the assistance § 1944.664 Housing preservation and
was outstanding. The interest rate replacement housing assistance.
shall be that as determined by Rural (a) Grantees are responsible for pro-
Development at the time of infraction viding loans, grants, or other com-
taking into account the average yield parable assistance to homeowners,
on outstanding marketable long-term owners of rental properties or co-ops
obligations of the United States during for housing preservation or for replace-
the month preceding the date on which ment housing as described in § 1944.656.
the assistance was initially made (b) HPG funds used for loans, grants,
available. or interest reduction payments to pro-
(8) The owner(s) agrees that, notwith- vide rental repair and/or rehabilitation
standing any other provisions of law, assistance to owners of rental prop-
the HPG assistance provided to the erties or co-ops shall not exceed the re-
owner(s) shall constitute a debt which quirement noted in § 1944.663(b)(1) of
is payable in the case of any failure of this subpart.
this section and shall be secured by a (c) Authorized housing preservation
security instrument provided by the assistance includes, but is not limited
owner(s) or co-op to the grantee, that to, cost of labor and materials for:
provides for Rural Development to (1) Installation and/or repair of sani-
take such action upon incapacity or tary water and waste disposal systems,
dissolution of the grantee. together with related plumbing and fix-
(9) The owner(s) agrees and certifies tures, which will meet local health de-
that the assistance is being made avail- partment requirements;
able in conformity with Public Law 88– (2) Energy conservation measures
352, the ‘‘Civil Rights Act of 1964,’’ and such as:
Public Law 90–284, the ‘‘Civil Rights (i) Insulation; and
Act of 1968.’’ (ii) Combination screen-storm win-
(b) Responsibilities of the grantee. The dows and doors;
grantee is responsible for insuring (3) Repair or replacement of the heat-
through verification and monitoring ing system including the installation
that the areas listed below are in com- of alternative systems such as
pliance: woodburning stoves or space heaters,
(1) That HPG funds used for loans, when appropriate and if local codes
grants, or interest reduction payments permit;
providing repair or rehabilitation as- (4) Electrical wiring;
sistance to owners of rental properties (5) Repair of, or provision for, struc-
or co-ops are not in excess of 75 percent tural supports and foundations;
of the total cost of all repairs and reha- (6) Repair or replacement of the roof;
188
(7) Replacement of severely deterio- on-site improvements required by local

rated siding, porches or stoops; jurisdictions;
(8) Alterations of the unit’s interior (4) Providing special design features
or exterior to provide greater accessi- or equipment when necessary because
bility for any handicapped person; of physical handicap or disability of
(9) For properties listed on or eligible the HPG recipient or member of the
for the National Register of Historic household;
Places, activities associated with con- (5) Purchasing and installing ap-
forming repair and rehabilitation ac- proved energy saving measures and ap-
tivities to the standards and/or design proved furnaces and space heaters
comments resulting from the consulta- which use a type of fuel that is com-
tion process contained in § 1944.673 of monly used, and is economical and de-
this subpart; pendably available;
(10) Necessary repairs to manufac- (6) Providing storm cellars and simi-
tured housing provided: lar protective structures, if typical for
(i) For homeowners only, the recipi- the area;
ent owns the home and the site on (7) Paying real estate taxes which are
which the home is situated and the due and payable on the existing dwell-
homeowner has occupied that home on ing or site at the time of closing, if this
that site for at least 1 year prior to re- amount is not a substantial part of the
ceiving HPG assistance; and HPG assistance. (HPG assistance may
not be made available if the real estate
(ii) For homeowners, owners of
taxes which are due and payable are
single- or multiple-unit rental prop-
not paid at the time assistance is
erties, and co-ops, the manufactured
granted.);
housing is on a permanent foundation
(8) Providing living area for the HPG
or will be put on a permanent founda-
recipient and all members of the house-
tion with HPG funds. Advice on the re-
hold as required in 7 CFR 3550.54(c);
quirements for a permanent foundation
(9) Moving a dwelling onto the site of
is available from Rural Development.
the demolished, previously existing
Guidance may be found in § 1944.223(e)
housing and meeting all HPG housing
of subpart E of this part and in exhibit
preservation requirements for repair
J of subpart A of part 1924 of this chap-
and rehabilitation;
ter;
(10) Providing funds for demolishing
(11) Additions to any dwelling (con-
the existing housing; and
ventional or manufactured) only when
(11) Any other cost that is reasonable
it is clearly necessary to alleviate
and justifiable directly related to re-
overcrowding or to remove health haz-
placement activities.
ards to the occupants; or
(e) HPG funds may be used for pay-
(12) Relocation costs either perma- ment of incidental expenses directly
nent or temporary for assistance to related to accomplishing authorized
rental properties or co-ops, as noted in activities such as fees for connection of
§ 1944.667 of this subpart. utilities (water, sewer, gas, electric),
(d) Authorized replacement housing credit reports, surveys, title clearance,
assistance includes, but is not limited loan closing, inspections, and architec-
to: tural or other technical services. All
(1) Building a dwelling and providing fees will be in accordance with local
related facilities for use by the indi- prevailing rates and so documented.
vidual homeowner as a permanent resi- (f) HPG funds may be used where
dent; they do not contribute to the health,
(2) Providing a safe and sanitary safety and well being of the occupant
water and waste disposal system, to- or do not materially contribute to the
gether with related plumbing and fix- structural integrity or long-term pres-
tures, which will meet local health de- ervation of the unit. The percentage of
partment requirements; the funds to be used for such purposes
(3) Providing minimum site prepara- must not exceed 20 percent of the total
tion and other on-site improvement in- funding for the unit(s) and/or dwelling,
cluding grading, foundation plantings, and such work must be combined with
and minimal landscaping, and other improvements listed as eligible under
189
paragraph (c) of this section. These im- § 1944.665 Supervision and inspection
provements may include, but are not of work.
limited to the following: Grantees are responsible for super-
(1) Painting; vising all rehabilitation and repair
(2) Paneling; work, as well as replacement housing
(3) Floor covering, including car- financed with HPG assistance. After all
peting; HPG work has been completed, a final
(4) Improving clothes closets or inspection must be done by a disin-
shelving; terested third party, such as local
(5) Improving kitchen cabinets; building and code enforcement offi-
(6) Air conditioning; or cials. If there are no such officials serv-
(7) Landscape plantings. ing the area where HPG activities will
(g) Under the following conditions, be undertaken, or if the grantee would
HPG funds may be used to reimburse also normally make such inspections,
the grantee for authorized housing the grantee must use qualified contract
preservation or replacement housing or fee inspectors.
activities performed by employees of [58 FR 21894, Apr. 26, 1993, as amended at 62
the grantee where the grantee acts as a FR 26210, May 13, 1997]
construction contractor and furnishes
construction services: § 1944.666 Administrative activities
(1) The grantee must demonstrate and policies.
that such work performed by the Grant funds are to be used primarily
grantee results in cost savings in terms for housing repair and rehabilitation
of time and labor over cost for such activities. Use of grant funds for direct
work prevailing in the area; and indirect administrative costs is a
(2) The grantee has established a secondary purpose and must not exceed
process for third party review of all 20 percent of the HPG funds awarded to
performance by a local government, the grantee.
building inspector or other independent (a) Administrative expenses may in-
party; clude:
(3) The grantee has established or (1) payment of reasonable salaries or
makes available a process that pro- contracts for professional, technical,
vides for consumer protection to the and clerical staff actively assisting in
individual homeowner, owner of a rent- the delivery of the HPG project.
al property, or co-op assisted; and (2) Payment of necessary and reason-
(4) The grantee’s accounting system able office expenses such as office rent-
provides a clear delineation between al, supplies, utilities, telephone serv-
administrative costs and construction ices, and equipment. (Any item of non-
contractor (non-administrative) costs. expendable personal property having a
(h) HPG funds may not be used to: unit value of $1,000 or more, acquired
(1) Assist in the construction or com- with HPG funds, will be specifically
pletion of an addition (excluding para- identified to Rural Development in
graph (c)(11) of this section) or a new writing.)
dwelling. This paragraph does not (3) Payment of necessary and reason-
apply to replacement housing. able administrative costs such as work-
(2) Refinance any debt or obligation ers’ compensation, liability insurance,
of the grantee, the individual home- and the employer’s share of Social Se-
owner, owners of a rental property, or curity and health benefits. Payments
co-ops other than obligations incurred to private retirement funds are per-
for eligible items covered by this sec- mitted if the grantee already has such
tion entered into after the date of a fund established and ongoing.
agreement with the HPG grantee. (4) Payment of reasonable fees for
(3) Repair or rehabilitate as well as necessary training of grantee per-
replace any property located in the sonnel.
Coastal Barrier Resources System. (5) Payment of necessary and reason-
[58 FR 21894, Apr. 26, 1993, as amended at 62 able costs for an audit upon expiration
FR 26210, May 13, 1997] of the grant agreement.
190
(6) Other reasonable travel and mis- review or when a proposed cost appears
cellaneous expenses necessary to ac- ineligible.
complish the objectives of the specific (d) The grantee may not charge fees
HPG grant which were anticipated in or accept any compensation or gratu-
the individual HPG grant proposal and ities from HPG recipients for the
which have been approved as eligible grantee’s technical or administrative
expenses at the time of grant approval. services under this program. Where the
(b) HPG administrative funds may grantee performs as a construction
not be used for: contractor, the grantee may be paid
(1) Preparing housing development such compensation directly related to
plans and strategies except as nec- construction services provided and lim-
essary to accomplish the specific objec- ited to authorized housing preservation
tives of the HPG project. activities.
(2) Substitution of any financial sup- (e) The policies, guidelines and re-
port previously provided or currently quirements of 2 CFR part 200, as adopt-
available from any other source. ed by USDA through 2 CFR part 400,
(3) Reimbursing personnel to perform apply to the acceptance and use of HPG
construction related to housing preser- funds.
vation assistance. (Non-administrative [58 FR 21894, Apr. 26, 1993, as amended at 62
funds may be used if construction is for FR 26210, May 13, 1997; 79 FR 76011, Dec. 19,
housing preservation assistance under 2014]
the provisions of § 1944.664(g) of this
subpart. § 1944.667 Relocation and displace-
(4) Buying property of any kind from ment.
persons receiving assistance from the (a) Relocation. Public bodies and
grantee under the terms of the HPG agencies must comply with the require-
agreement. ments of the Uniform Relocation As-
(5) Paying for or reimbursing the sistance and Real Property Acquisition
grantee for any expense or debts in- Act of 1970. The grantee must provide
curred before Rural Development exe- assistance for permanent or temporary
cutes the grant agreement. relocation of displaced persons for
(6) Paying any debts, expenses, or units repaired or rehabilitated or for
costs which should be the responsi- individual homes replaced with HPG
bility of the individual homeowner, assistance. HPG funds may be used to
owner, tenant or household member of cover costs incurred in the relocation
a rental property, or owner (member) of displaced persons. The applicant
or non-member of a co-op receiving shall include in its statement of activi-
HPG assistance outside the costs of re- ties, a statement concerning the tem-
pair and rehabilitation as well as for porary relocation of homeowners and/
replacement housing (individual home- or tenants during the period of repairs
owners only). and/or rehabilitation to the units or
(7) Any type of political activities dwellings. Any contract or agreement
prohibited by the Office of Manage- between the homeowner and the grant-
ment and Budget (OMB) Circular A–122. ee, as well as between the grantee and
(8) Other costs including contribu- the owner(s) of rental properties and
tions and donations, entertainment, co-ops shall include a statement cov-
fines and penalties, interest and other ering at a minimum;
financial costs unrelated to the HPG (1) The period of relocation (if any);
assistance to be provided, legislative (2) The name(s) of the party (or par-
expenses, and any excess of cost from ties) who shall bear the cost of tempo-
other grant agreements. rarily relocating; and
(9) Paying added salaries for employ- (3) The name(s) of the party (or par-
ees paid by other sources, i.e., public ties) who shall bear the cost of perma-
agencies who pay employees to handle nent relocation; and
grants. (4) If paragraphs (a) (2) or (3) of this
(c) Advice concerning ineligible costs section is the grantee, the maximum
may be obtained from Rural Develop- amount of temporary or permanent re-
ment as part of the HPG preapplication location costs proposed to be allowed.
191
(b) Displacement. The applicant shall residential real estate-related trans-

include in its statement of activities, a actions to discriminate against any
statement as to how its proposed HPG person in making loans, grants, or
financial assistance program shall keep other financial assistance for a unit or
to a minimum the displacement of dwelling, or which will be secured by a
homeowners and/or tenants. unit or dwelling, because of race, color,
[58 FR 21894, Apr. 26, 1993, as amended at 62 religion, sex, national origin, age, fa-
FR 26210, May 13, 1997] milial status, or handicap/disability.
Prohibited practices under this section
§ 1944.668 Term of grant. include:
HPG projects may be funded under (1) Failing to provide any person in
the terms of a grant agreement for a connection with a residential real es-
period of up to 2 years commencing on tate-related transaction, information
the date of execution of the grant regarding the availability of loans,
agreement by the Rural Development grants, or other financial assistance, or
approval official. Term of the project providing information that is inac-
will be based upon HPG resources curate or different from that provided
available for the proposed project and others; and
the accomplishability of the appli- (2) The term residential and real es-
cant’s proposal within 1 or 2 years. Ap- tate-related transaction includes the
plicants requesting a 2 year term may making or purchasing of loans, grants,
be asked to develop a feasible 1 year or other financial assistance for pur-
program if sufficient funds are not chasing, constructing, improving, re-
available for a 2 year program. pairing, or rehabilitating a unit or
dwelling, as well as for replacement
§ 1944.669 [Reserved] housing for individual homeowners.
(b) Outreach. In addition, the HPG
§ 1944.670 Project income. grantee is required to address an out-
(a) Project income during the grant reach effort in their program. The
period from loans made to home- amount of outreach should sufficiently
owners, owners of rental properties, reach the entire service area. As a
and co-ops is governed by 2 CFR part measure of compliance, the percent-
200 as adopted by USDA through 2 CFR ages of the individuals served by the
part 400. All income during the grant HPG grantee should be in proportion to
period, including amounts recovered by the percentages of the population of
the grantee due to breach of agree- the service area by race/national ori-
ments between the grantee and the gin. If the percentages are not propor-
HPG recipient, must be used under tional, then adequate justification is to
(and in accordance with) the require- be made. Exhibit E–1 of this subpart
ments of the HPG program. (available in any Rural Development
(b) Grantees are encouraged to estab- office) will be used to monitor these re-
lish a program which reuses income quirements. (Further explanation and
from loans after the grant period for guidance of exhibit E–1 can be found in
continuing repair and rehabilitation exhibit E–2 of this subpart which is
activities, as well as for individual available in any Rural Development of-
housing replaced. fice). A separate file will be maintained
[58 FR 21894, Apr. 26, 1993, as amended at 62 by the grantee that will include the
FR 26210, May 13, 1997; 79 FR 76011, Dec. 19, following outreach activities:
2014] (1) Community contacts to commu-
nity organizations, community leaders,
§ 1944.671 Equal opportunity require- including minority leaders, by name,
ments and outreach efforts. race, and date contacted;
The policies and regulations con- (2) Copies of all advertising in local
tained in subpart E of part 1901 of this newspapers, and through other media.
chapter apply to grantees under this Any advertising must reach the entire
subpart. service area. Rural Development en-
(a) Fair housing. The Fair Housing courages the use of minority-owned
Act prohibits any person or entity radio stations and other types of
whose business includes engaging in media, if available, in the service area.
192
The grantee’s file shall also include the ceive housing preservation or replace-
name of the media used, and the per- ment housing assistance that will re-
centage of its patronage by race/na- quire an environmental assessment.
tional origin; and This may be accomplished through use
(3) Copies of any other advertising or of exhibit F–2 of this subpart (available
other printed material, including the in any Rural Development State or
application form used. The application District Office) or another process sup-
form shall include the nondiscrimina- plying similar information acceptable
tion slogan: ‘‘This is an equal oppor- to RHS.
tunity program. Discrimination is pro- (c) If a specific dwelling is not lo-
hibited by Federal Law.’’ cated in a floodplain, wetland, or the
(c) Additional requirements. In order to proposed work is concurred in by the
meet the Fair Housing requirements Advisory Council on Historic Preserva-
and the nondiscrimination require- tion under the requirements of
ments of Title VI of the Civil rights § 1944.673 of this subpart, no environ-
Act of 1964, Section 504 of the Rehabili- mental review is required by Rural De-
tation Act of 1973, and the Age Dis- velopment. The grantee only needs to
crimination Act of 1975, the HPG indicate its review and compliance
grantee will need to adhere to the rec- with this subpart, indicating such in
ommendations of exhibit H of this sub- each recipient’s file in accordance with
part (available in any Rural Develop- paragraph (e) of this section.
ment office). (d) When an HPG proposal does not
[58 FR 21894, Apr. 26, 1993, as amended at 62 qualify as a categorical exclusion
FR 26210, May 13, 1997] under § 1970.53 and may require either
an environmental report under § 1970.54
§ 1944.672 Environmental review re- or an environmental assessment, the
quirements. applicant will immediately contact the
Grants made under this subpart must RHS office designated to service the
comply with the environmental review HPG grant. Prior to approval of HPG
requirements in accordance with 7 CFR assistance to the recipient by the ap-
part 1970. plicant, RHS must complete the envi-
(a) The approval of an HPG grant for ronmental review process in accord-
the repair, rehabilitation, or replace- ance with 7 CFR part 1970, with the as-
ment of dwellings is classified as a Cat- sistance of the applicant, as necessary.
egorical Exclusion, pursuant to (e) If Rural Development is required
§ 1970.53. As part of their pre-applica- to make an environmental assessment,
tion materials, applicants shall submit the grantee will be provided with a
environmental documentation in ac- copy of the assessment which will be
cordance with 7 CFR part 1970, for the made part of the recipient’s file. The
geographical areas proposed to be grantee must also include in each re-
served by the program. The applicant cipient’s file:
shall refer to Part 1944 Subpart N Ex- (1) Documentation on how the proc-
hibit F–1. ess for historic preservation review
(b) The use of HPG funds by the under § 1944.673 of this subpart has been
grantee to repair, rehabilitate, or re- complied with, including all relevant
place on the same site, specific dwell- reviews and correspondence; and
ings is generally exempt from an RHS (2) Determination as to whether the
environmental review. However, if such unit is located in a 100-year floodplain
dwellings are located in a floodplain, or a wetland.
wetland, or the proposed work is not (3) Documentation of this review. Sug-
concurred in by the Advisory Council gested language is: ‘‘We have consid-
on Historic Preservation under the re- ered this dwelling under Rural Devel-
quirements of § 1944.673, an RHS envi- opment’s environmental and historic
ronmental review is required. Dwell- preservation requirements for a HPG
ings within the Coastal Barrier Re- (§§ 1944.672 and 1944.673 of this subpart)
sources System are not eligible for and an environmental assessment is
HPG assistance. Applicants must in- not required. The review was com-
clude in their preapplication a process pleted in accordance with the process
for identifying dwellings that may re- to identify properties requiring a Rural
193
Development environmental assess- compliance with 36 CFR part 800 in ac-

ment approved with our statement of cordance with Stipulation III of the
activities.’’ PMOA, the grantee will assist RHS in
(f) Proposed use of funds by an appli- preparing an environmental assess-
cant to use monies for additions under ment. RHS will work with the grantee
§ 1944.664 (c)(11) of this subpart must be to develop alternative actions or miti-
addressed in the statement of activi- gation measures, as appropriate.
ties. (c) Such assumption of responsibility
(g) Grantees must contact Rural De- by Rural Development on a particular
velopment prior to actual usage of property shall not preclude the grantee
funds by the grantees under § 1944.664 from carrying out the requirements of
(c)(11) of this subpart. Rural Develop- 36 CFR part 800 on other properties as
ment must complete the appropriate though it were a Federal agency, but
level of environmental review in ac- no work may be commenced on any
cordance with part 1970 of this chapter. unit or dwelling in controversy until
and unless so advised by Rural Devel-
opment.
FR 26210, May 13, 1997; 81 FR 11031, Mar. 2,
2016; 82 FR 19319, Apr. 27, 2017] [58 FR 21894, Apr. 26, 1993, as amended at 62
FR 26211, May 13, 1997]
§ 1944.673 Historic preservation and
replacement housing requirements § 1944.674 Public participation and
and procedures. intergovernmental review.
(a) Rural Development has entered (a) In preparing its statement of ac-
into a Programmatic Memorandum of tivities, the applicant is responsible for
Agreement (PMOA) with the National consulting with leaders from the coun-
Conference of State Historic Preserva- ty, parish and/or township govern-
tion Officers (SHPO) and the Advisory ments of the area where HPG activities
Council on Historic Preservation in will take place for the purpose of assur-
order to implement the specific re- ing that the proposed HPO program is
quirements regarding historic preser- beneficial and does not duplicate cur-
vation contained in section 533 of the rent activities. American Indian non-
Housing Act of 1949, 42 U.S.C. 1490(m) of profit organization applicants should
the enabling legislation. The PMOA, obtain the written concurrence of the
with attachments, can be found in RD tribal governing body in lieu of con-
Instruction 2000–FF (available in any sulting with the county governments
Rural Development office). A copy of when the program is operated only on
the PMOA will be provided to each ap- tribal land.
plicant for a HPG as part of the (b) The applicant must also make its
preapplication package specified in statement of activities available to the
paragraph II of exhibit C of this sub- public for comment. The applicant
part (available in any Rural Develop- must announce the availability of its
ment office). statement of activities for review in a
(b) Each applicant for an HPG grant newspaper of general circulation in the
will provide, as part of its project area and allow at least 15 days
preapplication documentation sub- for public comment. The start of this
mitted to RHS, a description of its pro- 15-day period must occur no later than
posed process for assisting very low- 16 days prior to the last day for accept-
and low-income persons owning his- ance of preapplications by Rural Devel-
toric properties needing rehabilitation, opment.
repair, or replacement. ‘‘Historic prop- (c) The HPG program is subject to
erties’’ are defined as properties that the provisions of Executive Order 12372,
are listed or eligible for listing on the which requires intergovernmental con-
National Register of Historic Places. sultation with State and local officials.
Each HPG proposal shall comply with These requirements are set forth in
the provisions of Stipulation I, A-G of U.S. Department of Agriculture regula-
the PMOA (RD Instruction 2000–FF), tions 7 CFR part 3015, subpart V, and
available in any Rural Development RD Instruction 1970–I, ‘Intergovern-
State or District Office. Should RHS be mental Review,’ available in any Agen-
required to assume responsibility for cy office or on the Agency’s Web site.
194
Prospective applicants for HPG grants housing preservation needs of the

must submit its statement of activities dwelling, performing the necessary
to the State single point of contact work, and monitoring/inspecting work
prior to submitting their performed;
preapplication to Rural Development. (iii) A description of the process for
Evidence of submittal of the statement identifying potential environmental
of activities to the State single point impacts in accordance with § 1944.672 of
of contact is to be submitted with a this subpart, and the provisions for
preapplication. Comments and rec- compliance with Stipulation I, A-G of
ommendations made through the inter- the PMOA (RD Instruction 2000–FF
governmental review process are for available in any Rural Development of-
the purpose of assuring consideration fice) in accordance with § 1944.673 (b) of
of State and local government views. this subpart. With the exception of
The name of the State single point of Stipulation I, D of the PMOA, this may
contact is available from any Rural De- be accomplished by adoption of exhibit
velopment office. This section does not F–2 of this subpart (available in any
apply to American Indian tribes, bands, Rural Development office), or another
groups, etc., as noted in § 1944.656 of process supplying similar information
this subpart. acceptable to Rural Development;
[58 FR 21894, Apr. 26, 1993, as amended at 76 (iv) The development standard(s) the
FR 80731, Dec. 27, 2011] applicant will use for the housing pres-
ervation work; and, if not the Rural
§ 1944.675 Allocation of HPG funds to Development development standards
States and unused HPG funds. for existing dwellings, the evidence of
The allocation and distribution of its acceptance by the jurisdiction
HPG funds is found in § 1940.578 of sub- where the grant will be implemented;
part L of part 1940 of this chapter. (v) The time schedule for completing
the program;
§ 1944.676 Preapplication procedures. (vi) The staffing required to complete
(a) All applicants will file an original the program;
and two copies of Standard Form (SF) (vii) The estimated number of very
424.1, ‘‘Application For Federal Assist- low- and low-income minority and non-
ance (For Nonconstruction),’’ and sup- minority persons the grantee will as-
porting information with the appro- sist with HPG funds; and, if a rental
priate Rural Development office. A property or co-op assistance program,
preapplication package, including SF– the number of units and the term of re-
424.1, is available in any Rural Develop- strictive covenants on their use for
ment office. very low- and low-income;
(b) All preapplications shall be ac- (viii) The geographical area(s) to be
companied by the following informa- served by the HPG program;
tion which Rural Development will use (ix) The annual estimated budget for
to determine the applicant’s eligibility the program period based on the finan-
to undertake the HPG program and to cial needs to accomplish the objectives
evaluate the preapplication under the outlined in the proposal. The budget
project selection criteria of § 1944.679 of should include proposed direct and in-
this subpart. direct administrative costs, such as
(1) A statement of activities proposed personnel, fringe benefits, travel,
by the applicant for its HPG program equipment, supplies, contracts, and
as appropriate to the type of assistance other cost categories, detailing those
the applicant is proposing, including: costs for which the grantee proposes to
(i) A complete discussion of the type use the HPG grant separately from
of and conditions for financial assist- non-HPG resources, if any. The appli-
ance for housing preservation, includ- cant budget should also include a
ing whether the request for assistance schedule (with amounts) of how the ap-
is for a homeowner assistance program, plicant proposes to draw HPG grant
a rental property assistance program, funds, i.e., monthly, quarterly, lump
or a co-op assistance program; sum for program activities, etc.;
(ii) The process for selecting recipi- (x) A copy of an indirect cost pro-
ents for HPG assistance, determining posal as required in 2 CFR part 200 as
195
adopted by USDA through 2 CFR part the applicant is a consortium, docu-

400, when the applicant has another mentation showing compliance with
source of federal funding in addition to § 1944.656 of this subpart will also be in-
the HPG program; cluded.
(xi) A brief description of the ac- (4) For a private nonprofit entity, the
counting system to be used; most recent audited statement and a
(xii) The method of evaluation to be current financial statement dated and
used by the applicant to determine the signed by an authorized officer of the
effectiveness of its program which en- entity showing the amounts and spe-
compasses the requirements for quar- cific nature of assets and liabilities to-
terly reports to Rural Development in gether with information on the repay-
accordance with § 1944.683(b) of this ment schedule and status of any debt(s)
subpart and the monitoring plan for owed by the applicant. If the applicant
rental properties and co-ops (when ap- is an organization being assisted by an-
plicable) according to § 1944.689 of this other private nonprofit organization,
subpart; the same type of financial statement
(xiii) The source and estimated should also be provided by that organi-
amount of other financial resources to zation.
be obtained and used by the applicant (5) A brief narrative statement which
for both HPG activities and housing de- includes information about the area to
velopment and/or supporting activities; be served and the need for improved
(xiv) The use of program income, if housing (including both percentage and
any, and the tracking system used for actual number of both low-income and
monitoring same; low-income minority households and
(xv) The applicant’s plan for disposi- substandard housing), the need for the
tion of any security instruments held type of housing preservation assistance
by them as a result of its HPG activi- being proposed, the anticipated use of
ties in the event of its loss of legal sta- HPG resources for historic properties,
tus; the method of evaluation to be used by
(xvi) Any other information nec- the applicant in determining the effec-
essary to explain the proposed HPG tiveness of its efforts (according to
program; and paragraph (b)(1)(xii) of this section).
(xvii) The outreach efforts outlined (6) A statement containing the com-
in § 1944.671(b) of this subpart. ponent for alleviating overcrowding as
(2) Complete information about the defined by § 1944.656 of this subpart.
applicant’s experience and capacity to (7) A list of other activities the appli-
carry out the objectives of the pro- cant is engaged in and expects to con-
posed HPG program. tinue, a statement as to any other
(3) Evidence of the applicant’s legal funding, and whether it will have suffi-
existence, including, in the case of a cient funds to assure continued oper-
private nonprofit organization, a copy ation of the other activities for at least
of, or an accurate reference to, the spe- the period of the HPG grant agree-
cific provisions of State law under ment.
which the applicant is organized; a cer- (8) Any other information necessary
tified copy of the applicant’s Articles that specifically addresses the selec-
of Incorporation and Bylaws or other tion criteria in § 1944.679 of this sub-
evidence of corporate existence; certifi- part.
cate of incorporation for other than (c) Grants made under this subpart
public bodies; evidence of good stand- must be in compliance with the envi-
ing from the State when the corpora- ronmental review requirements in ac-
tion has been in existence 1 year or cordance with 7 CFR part 1970.
more; and, the names and addresses of (d) The applicant must submit a de-
the applicant’s members, directors and scription of its process for:
officers. If other organizations are (1) Identifying and rehabilitating
members of the applicant-organization, properties that are listed on or eligible
or the applicant is a consortium, for listing on the National Register of
preapplications should be accompanied Historic Places.
by the names, addresses, and principal (2) Identifying properties that are lo-
purpose of the other organizations. If cated in a floodplain or wetland.
196
(3) Identifying properties located § 1944.677 [Reserved]

within the Coastal Barrier Resources
System. § 1944.678 Preapplication submission
(4) Coordinating with other public deadline.
and private organizations and pro- Dates governing the invitation and
grams that provide assistance in the review of HPG preapplications will be
rehabilitation of historic properties published annually in the FEDERAL
(Stipulation I, D, of the PMOA, RD In- REGISTER and may be obtained from
struction 2000–FF, available in any Rural Development offices processing
Rural Development office). HPG preapplications. Preapplications
received after the date specified in the
(5) Paragraphs (d) (1), (2), and (3) of
FEDERAL REGISTER will not be consid-
this section may be accomplished by
ered for funding in that fiscal year and
adoption of exhibit F–2 of this subpart will be returned.
(available in any Rural Development
office), or another process supplying § 1944.679 Project selection criteria.
similar information acceptable to (a) Applicants must meet all of the
Rural Development. following threshold criteria:
(e) The applicant must submit evi- (1) Provide a financially feasible pro-
dence of SHPO concurrence in the program of housing preservation assist-
posal, or in the event of nonconcur- ance. Financially feasible is defined as
rence, a copy of SHPO’s comments to- proposed assistance which will be af-
gether with evidence that the applicant fordable to the intended recipient or
has sought the Advisory Council on result in affordable housing for very
Historic Preservation’s advice as to low- and low-income persons;
how the disagreement might be re- (2) Serve eligible rural areas with a
solved, and a copy of any advice pro- concentration of substandard housing
vided by the Council. for households with very low- and low-
(f) The applicant must submit writ- income;
ten statements and related correspond- (3) Be an eligible applicant entity as
ence reflecting compliance with defined in § 1944.658 of this subpart;
(4) Meet the requirements of con-
§ 1944.674 (a) and (c) of this subpart re-
sultation and public comment in ac-
garding consultation with local govern-
cordance with § 1944.674 of this subpart;
ment leaders in the preparation of its and
program and the consultation with (5) Submit a complete preapplication
local and state government pursuant to as outlined in § 1944.676 of this subpart.
the provisions of Executive Order 12372. (b) For applicants meeting all of the
(g) The applicant is to make its requirements listed in paragraph (a) of
statement of activities available to the this section, Rural Development will
public for comment prior to submission use the weighted criteria in this para-
to Rural Development pursuant to graph (b) in the selection of grant re-
§ 1944.674(b) of this subpart. The appli- cipients. Each preapplication and its
cation must contain a description of accompanying statement of activities
how the comments (if any were re- will be evaluated and, based solely on
ceived) were addressed. the information contained in the
(h) The applicant must submit an preapplication, the applicant’s pro-
original and one copy of Form RD 400– posal will be numerically rated on each
1, ‘‘Equal Opportunity Agreement,’’ criteria within the range provided. The
and Form RD 400–4, ‘‘Assurance Agree- highest ranking applicant(s) will be se-
ment,’’ in accordance with § 1944.674(c) lected based on allocation of funds
of this subpart. available to the State. Exhibit D of
this subpart (available in any Rural
[58 FR 21894, Apr. 26, 1993, as amended at 79 Development office) will be used to
FR 76011, Dec. 19, 2014; 81 FR 11031, Mar. 2, document the rating.
2016] (1) Points are awarded based on the
percentage of very low-income persons
that the applicant proposes to assist,
using the following scale:
197
(i) More than 80%: 20 points. (iv) 18%: 2 points.

(ii) 61% to 80%: 15 points. (v) 17%: 3 points.
(iii) 41% to 60%: 10 points. (vi) 16%: 4 points.
(iv) 20% to 40%: 5 points. (vii) 15% or less: 5 points.
(v) Less than 20%: 0 points. (6) The proposed program contains a
(2) The applicant’s proposal may be component for alleviating over-
expected to result in the following per- crowding as defined in § 1944.656 of this
centage of HPG fund use (excluding ad- subpart: 5 points.
ministrative costs) to total cost of unit
(c) In the event more than one
preservation. This percentage reflects
preapplication receives the same
maximum repair or rehabilitation with
amount of points, those
the least possible HPG funds due to
leveraging, innovative financial assist- preapplications will then be ranked
ance, owner’s contribution or other based on the actual percentage figure
specified approaches. Points are award- used for determining the points under
ed based on the following percentage of paragraph (b)(1) of this section. Fur-
HPG funds (excluding administrative ther, in the event that preapplications
costs) to total funds: are still tied, then those
(i) 50% or less: 20 points. preapplications still tied will be ranked
(ii) 51% to 65%: 15 points. based on the percentage figures used
(iii) 66% to 80%: 10 points. (low to high) in paragraph (b)(2) of this
(iv) 81% to 95%: 5 points. section. Further, for applications
(v) 96% to 100%: 0 points. where assistance to rental properties
(3) The applicant has demonstrated or co-ops is proposed, those still tied
its administrative capacity in assisting will be further ranked based on the
very low- and low-income persons to number of years the units are available
obtain adequate housing based on the for occupancy under the program (a
following: minimum of 5 years is required). For
(i) The organization or a member of this part, ranking will be based from
its staff has at least one or more years most to least number of years. Finally,
experience successfully managing and if there is still a tie, then a ‘‘lottery’’
operating a rehabilitation or weather- System will be used.
ization type program: 10 points. [58 FR 21894, Apr. 26, 1993, as amended at 73
(ii) The organization or a member of FR 36269, June 26, 2008]
its staff has at least one or more years
experience successfully managing and § 1944.680 Limitation on grantee selec-
operating a program assisting very tion.
low- and low-income persons obtain
After all preapplications have been
housing assistance: 10 points.
reviewed under the selection criteria
(iii) If the organization has adminis-
and if more than one preapplication
tered grant programs, there are no out-
has met the criteria of § 1944.679(a) of
standing or unresolved audit or inves-
tigative findings which might impair this subpart, the State Director or ap-
carrying out the proposal: 10 points. proval official may not approve more
(4) The proposed program will be un- than 50 percent of the State’s alloca-
dertaken entirely in rural areas out- tion to a single entity.
side MSAs identified by Rural Develop-
§ 1944.681 Application submission.
ment as having populations below
10,000 or in remote parts of other rural Applicants selected by Rural Devel-
areas (i.e., rural areas contained in opment will be advised to submit a full
MSAs with less than 5,000 population) application in an original and two cop-
as defined in § 1944.656 of this subpart: ies of SF 424.1, and are to include any
10 points. condition or amendments that must be
(5) The program will use less than 20 incorporated into the statement of ac-
percent of HPG funds for administra- tivities prior to submitting a full appli-
tion purposes: cation. Instructions on submission and
(i) More than 20%: Not Eligible. timing will be provided by FmHA or its
(ii) 20%: 0 points. successor agency under Public Law 103–
(iii) 19%: 1 point. 354.
198
§ 1944.682 Preapplication/application any conditions be attached to the

review, grant approval, and re- grant agreement that must be satisfied
questing HPG funds. prior to the applicant receiving any
The Rural Development offices proc- HPG funds, the grant agreement and
essing HPG preapplications/applica- the conditions will be returned to the
tions will review the preapplications applicant for acceptance and acknowl-
and applications submitted. Further edgement on the grant agreement prior
review and actions will be taken by to execution by the approval official.
Rural Development personnel in ac- (b) The application may be dis-
cordance with exhibit C of this subpart approved before execution of the grant
(available in any Rural Development agreement if the applicant is no longer
office). Exhibit G of this subpart (avail- eligible, the proposal is no longer fea-
able in any Rural Development office) sible, or the applicant requests can-
will be used by the State Office to no- cellation of its project. Except when
tify the National Office of the applicant requests cancellation,
preapplications received, eligibility, Rural Development will document its
ranking, number of proposed units, findings and advise the applicant of its
amount requested by applicants, and appeal rights under subpart B of part
amount recommended by State Office. 1900 of this chapter.
Preapplications determined not eligi- (c) With the executed grant agree-
ble and/or not meeting the selection ment and Form RD 1940–1, Rural Devel-
criteria will be notified in the manner opment will send the approved appli-
prescribed in exhibit C of this subpart cant (now the ‘‘grantee’’) copies of SF–
(available in any Rural Development 270, ‘‘Request for Advance or Reim-
office). In addition, Rural Development bursement’’. The grantee must submit
will document its findings and advise an original and two copies of SF–270 to
the applicant of its review rights or ap- the Rural Development office servicing
peal rights (if applicable) under sub- the project. In addition, the grantee
part B of part 1900 of this chapter. Ap- must submit SF–272, ‘‘Federal Cash
plications determined not eligible will Transactions Report,’’ each time an ad-
be handled in the same manner. The vance of funds is made. This report
preapplications or applications deter- shall be used by Rural Development to
mined incomplete will be notified in monitor cash advances made to the
the manner prescribed in exhibit C of grantee. Advances or reimbursements
this subpart (available in any Rural must be in accordance with the grant-
Development office) and will not be ee’s budget and statement of activities,
given appeal rights. The State Director including any amendments, prior ap-
is authorized to approve an HPG in ac- proved by Rural Development. Re-
cordance with this subpart and subpart quests for reimbursement or advances
A of part 1901 of this chapter. The must be at least 30 calendar days apart.
State Director may delegate this au- (d) If the grantee fails to submit re-
thority in writing to designated State quired reports pursuant to § 1944.683 of
Office personnel and District Directors. this subpart or is in violation of the
Further: grant agreement, Rural Development
(a) Grant approval is the process by may suspend HPG reimbursements and
which Rural Development determines advances or terminate the grant in ac-
that all applicable administrative and cordance with § 1944.688 of this subpart
legal conditions for making a grant and the grant agreement.
have been met, the grant agreement is
signed, and funds have been obligated § 1944.683 Reporting requirements.
for the HPG project. If acceptable, the (a) SF–269, ‘‘Financial Status Re-
approval official will inform the appli- port,’’ is required of all grantees on a
cant of approval, having the applicant quarterly basis. Grantees shall submit
sign Form RD 1940–1, ‘‘Request for Ob- an original and two copies of the report
ligation of Funds,’’ and exhibit A of to the designated Rural Development
this subpart (available in any Rural servicing office. When preparing the
Development office). The applicant will Financial Status Report, the total pro-
be sent a copy of the executed grant gram outlays (Item 10, g, of SF–269)
agreement and Form RD 1940–1. Should should be less any rebates, refunds, or
199
other discounts. Reports must be sub- tainment of the HPG grant objectives,
mitted no later than 15 days after the prevent the meeting of time schedules
end of each calendar quarter. or objectives, or preclude the attain-
(b) Quarterly performance reports ment of program work elements during
shall be submitted by grantees with established time periods. This disclo-
SF–269, in an original and two copies sure shall be accompanied by a state-
(see exhibit E–1 or this subpart which ment of the action taken or con-
is available in any Rural Development templated and any Federal or other as-
office.) The quarterly report should re- sistance needed to relieve the situa-
late the activities during the report pe- tion.
riod to the project’s objectives and (7) Objectives established for the next
analyze the effectiveness of the pro- reporting period, sufficiently detailed
gram. As part of the grantee’s to identify the type of assistance to be
preapplication submission, as required provided, the number and type of
by § 1944.676(b) of this subpart, the households to be assisted, etc.
grantee establishes its objectives for (8) A certification that the final
the HPG program, including its method building inspection reports for each re-
of evaluation to determine its effec- habilitation or repair work financed as
tiveness. Accordingly, the report must well as for replacement housing with
include, but need not be limited to, the HPG funds for that quarter is on file.
following: (c) The grantee should be prepared to
(1) Use of HPG funds for administra- meet with the Rural Development of-
tion and housing preservation activi- fice servicing the project to discuss its
ties. quarterly report shortly after submis-
(2) The following specific information sion.
for each unit or dwelling assisted: (d) If the reports are not submitted in
(i) Name(s), address, and income(s) of a timely manner or if the reports indi-
each homeowner assisted or the name cate that the grantee has made unsat-
and address of the owner(s) or co-op for isfactory progress or the grantee is not
each rental property (single or multi- meeting its established objectives, the
unit) or co-op assisted; Rural Development official servicing
(ii) Total cost of repair/rehabilita- the grant will recommend to the State
tion, a list of major repairs made, Director appropriate action to resolve
amount financed by HPG, and amount the indicated problem(s). If appropriate
financed from which other sources; corrective action is not taken by the
(iii) Type of assistance provided (in- grantee, the State Director has the dis-
terest subsidy, loan, grant, etc.); and cretion to not authorize further ad-
(iv) Results of implementing the en- vances by suspending the project in ac-
vironmental process contained in cordance with § 1944.688 of this subpart
§ 1944.672 of this subpart and the his- and the grant agreement.
toric preservation process contained in
§ 1944.673 of this subpart. [58 FR 21894, Apr. 26, 1993, as amended at 62
(3) The use of HPG and any other FR 26211, May 13, 1997]
funds for replacement housing.
(4) A comparison of actual accom- § 1944.684 Extending grant agreement
plishments to the objectives set for and modifying the statement of ac-
tivities.
that period, including:
(i) The number of very low- and low- (a) All requests extending the origi-
income, minority and nonminority per- nal grant agreement or modifying the
sons assisted in obtaining adequate HPG program’s statement of activities
housing by the HPG program through must be in writing. Such requests will
repair and rehabilitation as well as for be processed through the designated
replacement housing; and Rural Development office servicing the
(ii) The average cost of assistance project. The approval official will re-
provided to each household. spond to the applicant within 30 days
(5) Reasons why, if established objec- of receipt of the request.
tives are not met. (b) A grantee may request an exten-
(6) Problems, delays, or adverse con- sion of the grant agreement prior to
ditions which will materially affect at- the end of the project term specified in
200
the grant agreement if the grantee an- this subpart. Rural Development will
ticipates that there will be grant funds also review all reports prepared and
remaining and the grantee has dem- submitted by the grantee in accordance
onstrated its ability to conduct its pro- with the grant agreement and this sub-
gram in a manner satisfactory to Rural part.
Development. The approval official (b) The grant can be suspended or
may approve an extension when: terminated before the grant ending
(1) The grantee is likely to complete date for the causes specified in the
or exceed the goals outlined in the ap- grant agreement. No further grant
proved statement of activities; and funds will be advanced when grant sus-
(2) The Rural Development office re- pension or termination procedures
sponsible for servicing the grant rec- have been initiated in accordance with
ommends continuation of the grant the grant agreement. Grantees may be
until the grantee has expended all of reimbursed for eligible costs incurred
the remaining grant funds. prior to the effective date of the sus-
(c) Modifications to the statement of pension or termination. Grantees are
activities, such as revising the proc- prohibited from incurring additional
esses the grantee follows in operating obligations of funds after notification,
the HPG program, may be approved by pending corrective action by the grant-
the approval official when the modi- ee. Rural Development may allow nec-
fications are for eligible purposes in ac- essary and proper costs that the grant-
cordance with §§ 1944.664 and 1944.666 of ee could not reasonably avoid during
this subpart, meet any applicable re- the period of suspension provided they
view and process requirements of this are for eligible HPG purposes. In the
subpart, and the program will continue event of termination, Rural Develop-
to serve the geographic area originally ment may allow necessary and reason-
approved. The grantee will submit its able costs for an audit.
proposed revisions together with the (c) Grantees will have the oppor-
necessary supporting information to tunity to appeal a suspension or termi-
Rural Development prior to modifying nation under Rural Development’s ap-
its operation from the approved state- peal procedures under subpart B of part
ment of activities. 1900 of this chapter.
(d) Exhibit B of this subpart (avail- (d) The grantee will complete the
able in any Rural Development office) closeout procedures as specified in the
will be used for all extensions on and grant agreement.
modifications to the grant agreement. (e) The grantee will have an audit
performed upon termination or comple-
§ 1944.685 [Reserved]
tion of the project in accordance with 2
§ 1944.686 Additional grants. CFR part 200 as adopted by USDA
through 2 CFR part 400, as applicable.
An additional HPG grant may be As part of its final report, the grantee
made when the grantee has achieved or will address and resolve all audit find-
nearly achieved the goals established ings.
for the previous or existing grant. The
grantee must file a preapplication for [58 FR 21894, Apr. 26, 1993, as amended at 79
the current fiscal year which will be FR 76011, Dec. 19, 2014]
processed and compared under the
§ 1944.689 Long-term monitoring by
project selection criteria to others sub- grantee.
mitted at that time.
(a) The grantee is required to per-
§ 1944.687 [Reserved] form long-term monitoring on any
housing preservation program involv-
§ 1944.688 Grant evaluation, closeout, ing rental properties and co-ops. This
suspension, and termination. monitoring shall be at least on an an-
(a) Grant evaluation will be an on- nual basis and shall consist of, at a
going activity performed by both the minimum, the following:
grantee and Rural Development. The (1) All requirements noted in
grantee will perform self-evaluations § 1944.663 of this subpart;
by preparing quarterly performance re- (2) All requirements of the ‘‘owner-
ports in accordance with § 1944.683 of ship agreement’’ executed between the
201
grantee and the rental property owner no persons are required to respond to a
or co-op; and collection of information unless it dis-
(3) All requirements noted in 2 CFR plays a valid OMB control number. The
part 200 as adopted by USDA through 2 valid OMB control number for the in-
CFR part 400 during the effective pe- formation collection in this subpart is
riod of the grant agreement. 0575–0115.
(b) The grantee is required to make
[62 FR 26211, May 13, 1997]
available to Rural Development any
such information as requested by Rural EXHIBIT A TO SUBPART N OF PART 1944—
Development concerning the above. HOUSING PRESERVATION GRANT
The grantee shall submit to the Rural AGREEMENT
Development servicing office an annual
report every year while the ownership This Agreement dated lll is between
agreement is in effect. This report lll (name), lll (address), (grantee), or-
ganized and operating under lll (author-
shall be submitted within 15 days after
izing State statute), and the United States of
the anniversary date or end of the America acting through the Farmers Home
grant agreement. At a minimum, the Administration (FmHA) or its successor
report will consist of a statement that agency under Public Law 103–354. FmHA or
the grantee is in compliance with this its successor agency under Public Law 103–
subpart. 354 agrees to grant a sum not to exceed
(c) All files pertaining to such rental $lll subject to the terms and conditions of
property owner or co-op shall be kept this Agreement; provided, however, that the
separate and shall be maintained for a grant funds actually advanced and not need-
ed for grant purposes shall be returned im-
period of 3 years after the termination mediately to FmHA or its successor agency
date of the ownership agreement. under Public Law 103–354. The Housing Pres-
[58 FR 21894, Apr. 26, 1993, as amended at 79 ervation Grant (HPG) Statement of Activi-
FR 76011, Dec. 19, 2014] ties approved by FmHA or its successor
agency under Public Law 103–354, is at-
§ 1944.690 Exception authority. tached, and shall commence within 10 days
of the date of execution of this agreement by
The Under Secretary for Rural Devel- FmHA or its successor agency under Public
opment (or designee) may, in indi- Law 103–354 and be completed by lll
vidual cases, make an exception to any (date). FmHA or its successor agency under
requirements of this subpart not re- Public Law 103–354 may terminate the grant
quired by the authorizing statute if the in whole, or in part, at any time before the
Administrator finds that application of date of completion, whenever it is deter-
mined that the grantee has failed to comply
such requirement would adversely af-
with the conditions of this Grant Agreement
fect the interest of the Government, or or FmHA or its successor agency under Pub-
adversely affect the accomplishment of lic Law 103–354 regulation related hereto.
the purposes of the HPG program, or The grantee may appeal adverse decisions in
result in undue hardship by applying accordance with the FmHA or its successor
the requirement. The Administrator or agency under Public Law 103–354 Appeal Pro-
the Assistant Administrator for Hous- cedures contained in subpart B of part 1900 of
ing may exercise this exception author- this chapter.
In consideration of said grant by FmHA or
ity at the request of the State Direc-
tor. The request must be supported by 354 to the Grantee, to be made pursuant to
information demonstrating the adverse section 533 of the Housing Act of 1949, Hous-
impact, citing the particular require- ing Preservation Grant (HPG) program, the
ment involved, recommending proper grantee will provide such a program in ac-
alternative course(s) of action, and cordance with the terms of this Agreement
outlining how the adverse impact could and applicable FmHA or its successor agency
be mitigated. Exception to any require- under Public Law 103–354 regulations.
ment may also be initiated by the As- PART A—DEFINITIONS
sistant Administrator for Housing.
1. Beginning date means the date this
§§ 1944.691–1944.699 [Reserved] agreement is executed by FmHA or its suc-
cessor agency under Public Law 103–354 and
§ 1944.700 OMB control number. costs can be incurred.
2. Ending date means the date when all
According to the Paperwork Reduc- work under this agreement is scheduled to be
tion Act of 1995 (44 U.S.C. chapter 35), completed. It is also the latest date grant
202
RHS, RBS, RUS, FSA, USDA Pt. 1944, Subpt. N, Exh. A
funds will be provided under this agreement, cessor agency under Public Law 103–354 in
without an approved extension. advance.
3. Disallowed costs are those charges to a 6. If the Grantee is a private nonprofit cor-
grant which Rural Development or its suc- poration, expenses charged for travel or per
cessor agency under Public Law 103–354 de- diem will not exceed the rates paid FmHA or
termines cannot be authorized in accordance its successor agency under Public Law 103–
with applicable Federal cost principles con- 354 employees for similar purposes. If the
tained in Treasury Circular 74–4, ‘‘Cost Prin- grantee is a public body, the rates will be
ciples Applicable to Grants and Contracts those that are allowable under the cus-
with State and Local Governments,’’ OMB tomary practice in the government of which
Circular A–87, ‘‘Cost Principles for State and the grantee is a part; if none are customary,
Local Governments,’’ OMB Circular A–122, the FmHA or its successor agency under
‘‘Cost Principles for Nonprofit Organiza- Public Law 103–354 rates will be the max-
tions,’’ and other conditions contained in imum allowed.
this Agreement and OMB Circular A–102 7. Grant funds will not be used for any of
‘‘Uniform Requirements for Grants to State the following:
and Local Governments,’’ and OMB Circular (a) To pay obligations incurred before the
A–110, ‘‘Grants and Agreements with Institu- effective date of this Agreement.
tions of Higher Education, Hospitals and (b) To pay obligations incurred after the
Other Nonprofit Organizations, Uniform Ad- grant termination or ending date.
ministrative Requirements,’’ as appropriate, (c) Entertainment purposes.
and 2 CFR part 200, as adopted by USDA (d) To pay for capital assets, the purchase
through 2 CFR part 400. of real estate or vehicles, improvement or
4. ‘‘Grant closeout’’ is the process by which renovation of grantee’s office space, or re-
the grant operation is concluded at the expi- pair or maintenance of privately owned vehi-
ration of the grant period or following a de- cles.
cision to terminate the grant. (e) Any other purpose specified in
§§ 1944.664(f) and 1944.666(b) of this subpart.
5. ‘‘Termination’’ of the grant means the
(f) Administrative expenses exceeding 20%
cancellation of Federal assistance, in whole
HPG grant funds.
or in part, at any time before the date of
8. Grant funds shall not be used to sub-
completion.
stitute for any financial support previously
PART B—TERMS OF AGREEMENT provided and currently available or assured
from any other source.
FmHA or its successor agency under Pub- 9. Disbursal of grants will be governed as
lic Law 103–354 and grantee agree: follows:
1. All grant activities shall be limited to (a) In accordance with Treasury Circular
those authorized in subpart N of 7 CFR part 1075 (fourth revision) part 205, chapter II of
1944. title 31 of the Code of Federal Regulations,
2. This Agreement shall be effective when grant funds will be provided by FmHA or its
executed by both parties. successor agency under Public Law 103–354 as
3. The HPG activities approved by FmHA cash advances on an as needed basis not to
or its successor agency under Public Law exceed one advance every 30 days. The ad-
103–354 shall commence and be completed by vance will be made by direct Treasury check
the date indicated above, unless earlier ter- to the grantee. The financial management
minated under paragraph B 18 below or ex- system of the recipient organization shall
tended. provide for effective control over and ac-
4. Grantee shall carry out the HPG activi- countability for all Federal funds as stated
ties and processes as described in the ap- to OMB Circular A–102 (42 FR 45828, Sep-
proved Statement of Activities which is tember 12, 1977) for State and local govern-
made a part of this Agreement. Grantee will ments and OMB Circular A–110 (41 FR 32016,
be bound by the activities and processes set July 30, 1976) for nonprofit organizations.
forth in the Statement of Activities and the (b) Cash advances to the grantee shall be
further conditions set forth in this Agree- limited to the minimum amounts needed and
ment. If the Statement of Activities is in- shall be timed to be in accord only with the
consistent with the Agreement, the latter actual, immediate cash requirements of the
will govern. A change of any activities and Grantee in carrying out the purpose of the
processes must be in writing and must be planned project. The timing and amount of
signed by the FmHA or its successor agency cash advances shall be as close as adminis-
under Public Law 103–354 State Director or tratively feasible to the actual disburse-
his or her delegated representative. ments by the grantee for direct program
5. Grantee shall use grant funds only for costs (as identified in the grantee’s State-
the purpose and activities approved by ment of Activity and budget and fund use
FmHA or its successor agency under Public plan) and proportionate share of any allow-
Law 103–354 in the HPG budget. Any uses not able indirect costs.
provided for in the approved budget must be (c) Grant funds should be promptly re-
approved in writing by FmHA or its suc- funded to the FmHA or its successor agency
203
Pt. 1944, Subpt. N, Exh. A 7 CFR Ch. XVIII (1–1–21 Edition)
under Public Law 103–354 and redrawn when FmHA or its successor agency under Public
needed if the funds are erroneously drawn in Law 103–354.
excess of immediate disbursement needs. The 14. Grantee certifies that no person or or-
only exceptions to the requirement for ganization has been employed or retained to
prompt refunding are when the funds in- solicit or secure this grant for a commission,
volved: percentage, brokerage, or contingent fee.
(i) Will be disbursed by the recipient orga- 15. No person in the United States shall, on
nization within seven calendar days from the the grounds of race, creed, color, sex, marital
date of the Treasury check, or status, age, national origin, or mental or
(ii) Are less than $10,000 and will be dis- physical handicap, be excluded from partici-
bursed within 30 calendar days from the date pating in, be denied the proceeds of, or be
of the Treasury check. subject to discrimination in connection with
(d) Grantee shall provide satisfactory evi- the use of grant funds. Grantee will comply
dence to FmHA or its successor agency with the nondiscrimination regulations of
under Public Law 103–354 that all officers of FmHA or its successor agency under Public
the Grantee organization authorized to re- Law 103–354 contained in subpart E of part
ceive and/or disburse Federal funds are cov- 1901 of this chapter.
ered by satisfactory fidelity bonds sufficient 16. In all hiring or employment made pos-
to protect FmHA or its successor agency sible by or resulting from this grant, the
under Public Law 103–354’s interests. grantee: (a) Will not discriminate against
10. The grantee will submit performance any employee or applicant for employment
because of race, creed, color, sex, marital
and financial reports as indicated below to
status, national origin, age, or mental or
the appropriate FmHA or its successor agen-
physical handicap, and (b) will take affirma-
cy under Public Law 103–354 office.
tive action to insure that employees are
(a) As needed, but not more frequently
treated during employment without regard
than once every 30 calendar days, an original
to their race, creed, color, sex, marital sta-
and 2 copies of SF–270, ‘‘Request for Advance
tus, national origin, age, or mental or phys-
or Reimbursement.’’ ical handicap. This requirement shall apply
(b) Quarterly (not later than February 15, to, but not be limited to, the following: Em-
May 15, August 15, and November 15 of each ployment, upgrading, demotion, or transfer;
year), an original and 2 copies of SF–269, recruitment or recruitment advertising, lay-
‘‘Financial Status Report,’’ and a quarterly off or termination, rates of pay or other
performance report in accordance with forms of compensation; and selection for
§ 1944.683 of this subpart. training, including apprenticeship. In the
(c) Within ninety (90) days after the termi- event grantee signs a contract related to this
nation or expiration of the Grant Agree- grant which would be covered by any Execu-
ment, an original and 2 copies of SF–269, and tive Order, law, or regulation prohibiting
a final performance report which will include discrimination, grantee shall include in the
a summary of the project’s accomplish- contract the ‘‘Equal Employment Clause’’ as
ments, problems, and planned future activi- specified by Form FmHA or its successor
ties of the grantee for HPG. Final reports agency under Public Law 103–354 400–1,
may serve as the last quarterly report. ‘‘Equal Employment Agreement.’’
(d) FmHA or its successor agency under 17. The grantee accepts responsibility for
Public Law 103–354 may require performance accomplishing the HPG program as sub-
reports more frequently if deemed necessary. mitted and included in the Statement of Ac-
11. In accordance with FMC Circular 74–4, tivities. The grantee shall also:
Attachment B, compensation for employees (a) Endeavor to coordinate and provide li-
will be considered reasonable to the extent aison with State and local housing organiza-
that such compensation is consistent with tions, where they exist.
that paid for similar work in other activities (b) Provide continuing information to
of the State or local government. FmHA or its successor agency under Public
12. If the grant exceeds $100,000, cumulative Law 103–354 on the status of grantee HPG
transfers among direct cost budget cat- programs, projects, related activities, and
egories totaling more than 5 percent of the problems.
total budget must have prior written ap- (c) The grantee shall inform FmHA or its
proval by FmHA or its successor agency successor agency under Public Law 103–354 as
under Public Law 103–354. soon as the following types of conditions be-
13. Results of the program assisted by come known:
grant funds may be published by the grantee (i) Problems, delays, or adverse conditions
without prior review by FmHA or its suc- which materially affect the ability to attain
cessor agency under Public Law 103–354, pro- program objectives, prevent the meeting of
vided that such publications acknowledge time schedules or goals, or preclude the at-
the support provided by funds pursuant to tainment of project work units by estab-
the provisions of Title V of the Housing Act lished time periods. This disclosure shall be
of 1949, as amended, and that five copies of accompanied by a statement of the action
each such publications are furnished to taken or contemplated, new time schedules
204
required and any FmHA or its successor (C) Failure of grantee to submit adequate
agency under Public Law 103–354 assistance and timely reports of its operation.
needed to resolve the situation. (D) Violation of any of the provisions of
(ii) Favorable developments or events any laws administered by FmHA or its suc-
which enable meeting time schedules and cessor agency under Public Law 103–354 or
goals sooner than anticipated or producing any regulation issued thereunder.
more work units than originally projected. (E) Violation of any nondiscrimination or
18. Grant closeout and termination proce- equal opportunity requirement administered
dures will be as follows: by FmHA or its successor agency under Pub-
(a) Promptly after the date of completion lic Law 103–354 in connection with any
or a decision to terminate a grant, grant FmHA or its successor agency under Public
closeout actions are to be taken to allow the Law 103–354 programs.
orderly discontinuation of grantee activity. (F) Failure to maintain an accounting sys-
(i) The grantee shall immediately refund tem acceptable to FmHA or its successor
to FmHA or its successor agency under Pub- agency under Public Law 103–354.
lic Law 103–354 any uncommitted balance of (ii) Termination for convenience. FmHA or
grant funds. its successor agency under Public Law 103–
354 or the grantee may terminate the grant
(ii) The grantee will furnish to Rural De-
in whole, or in part, when both parties agree
velopment or its successor agency under
that the continuation of the project would
Public Law 103– 354 within 90 calendar days
not produce beneficial results commensurate
after the date of completion of the grant an
with the further expenditure of funds. The
SF–269 and all financial, performance, and
two parties shall agree upon the termination
other reports required as a condition of the
conditions, including the effective date and,
grant, including an audit report.
in case of partial termination, the portion to
(iii) The grantee shall account for any be terminated.
property acquired with HPG grant funds, or (d) FmHA or its successor agency under
otherwise received from FmHA or its suc- Public Law 103–354 shall notify the grantee
cessor agency under Public Law 103–354. in writing of the determination and the rea-
(iv) After the grant closeout, FmHA or its sons for and the effective date of the suspen-
successor agency under Public Law 103–354 sion or termination. Except for termination
retains the right to recover any disallowed convenience, grantees have the opportunity
costs which may be discovered as a result of to appeal a suspension or termination under
an audit. FmHA or its successor agency under Public
(b) When there is reasonable evidence that Law 103–354’s appeal procedure, subpart B of
the grantee has failed to comply with the part 1900 of this chapter.
terms of this Agreement, the State Director 19. Upon any default under its representa-
can, on reasonable notice, suspend the grant tives or agreements set forth in this instru-
pending corrective action or terminate the ment, the grantee, at the option and demand
grant pursuant to paragraph (c) below. In of FmHA or its successor agency under Pub-
such instances, FmHA or its successor agen- lic Law 103–354, will, to the extent legally
cy under Public Law 103–354 may reimburse permissible, repay to FmHA or its successor
the grantee for eligible costs incurred prior agency under Public Law 103–354 forthwith
to the effective date of the suspension or ter- the grant funds received with interest at the
mination and may allow all necessary and rate of five per centum per annum from the
proper costs which the grantee could not rea- date of the default. The provisions of this
sonably avoid. FmHA or its successor agency Grant Agreement may be enforced by FmHA
under Public Law 103–354 will withhold fur- or its successor agency under Public Law
ther advances and grantees are prohibited 103–354, at its option and without regard to
from further obligating grant funds, pending prior waivers by it or previous defaults of
corrective action. the grantee, by judicial proceedings to re-
(c) Grant termination will be based on the quire specific performance of the terms of
following: this Grant Agreement or by such other pro-
(i) Termination for cause. This grant may be ceedings in law or equity, in either Federal
terminated in whole or in part at any time or State Courts, as may be deemed necessary
before the date of completion, whenever by FmHA or its successor agency under Pub-
FmHA or its successor agency under Public lic Law 103–354 to assure compliance with the
Law 103–354 determines that the grantee has provisions of this Grant Agreement and the
failed to comply with the terms of this laws and regulations under which this grant
Agreement. The reasons for termination may is made.
include, but are not limited to, such prob- 20. Extension of this Grant Agreement and/
lems as: or modifications of the Statement of Activi-
(A) Failure to make reasonable and satis- ties may be approved by FmHA or its suc-
factory progress in attaining grant objec- cessor agency under Public Law 103–354 pro-
tives. vided, in its opinion, the extension and/or
(B) Failure of grantee to use grant funds modification is justified and there is a likeli-
only for authorized purposes. hood that the grantee can accomplish the
205
goals set out and approved in the Statement tion in the cost of the original grant project
of Activities during the period of the exten- or program to the current fair market value
sion and/or modifications as specified in of the property, plus any reasonable shipping
§ 1944.684 of this subpart. or interim storage costs incurred.
(b) Use of other tangible nonexpendable
PART C—GRANTEE AGREES property for which the grantee has title.
1. To comply with property management (i) The grantee shall use the property in
standards for expendable and nonexpendable the project or program for which it was ac-
personal property established by Attachment quired as long as needed, whether or not the
N of OMB Circular A–102 or Attachment N of project or program continues to be supported
OMB Circular A–110 for State and local gov- by Federal funds. When it is no longer need-
ernments or nonprofit organizations respec- ed for the original project or program, the
tively. Personal property means property of grantee shall use the property in connection
any kind except real property. It may be tan- with its other federally sponsored activities,
gible—having physical existence—or intan- in the following order of priority:
gible—having no physical existence, such as (A) Activities sponsored by FmHA or its
patents, inventions, and copyrights. Non- successor agency under Public Law 103–354.
expendable personal property means tangible (B) Activities sponsored by other Federal
personal property having a useful life of agencies.
more than one year and an acquisition cost (ii) Shared use. During the time that non-
of $300 or more per unit. A grantee may use expendable personal property is held for use
its own definitions of nonexpendable per- on the project or program for which it was
sonal property provided that such definition acquired, the grantee shall make it available
would at least include all tangible personal for use on other projects or programs if such
property as defined above. Expendable per- other use will not interfere with the work on
sonal property refers to all tangible personal the project or program for which the prop-
property other than nonexpendable personal erty was originally acquired. First pref-
property. When nonexpendable tangible per- erence for such other use shall be given to
sonal property is acquired by a grantee with other projects or programs sponsored by
project funds, title shall not be taken by the FmHA or its successor agency under Public
Federal Government but shall vest in the Law 103–354; second preference shall be given
grantee subject to the following conditions: to projects or programs sponsored by other
(a) Right to transfer title. For items of Federal agencies. If the property is owned by
nonexpendable personal property having a the Federal Government, use on other activi-
unit acquisition cost of $1,000 or more, ties not sponsored by the Federal Govern-
FmHA or its successor agency under Public ment shall be permissible if authorized by
Law 103–354 may reserve the right to transfer FmHA or its successor agency under Public
title to the Federal Government or to a third Law 103–354. User charges should be consid-
party named by the Federal Government ered if appropriate.
when such third party is otherwise eligible (c) Disposition of other nonexpendable
under existing statutes. Such reservation property. When the grantee no longer needs
shall be subject to the following standards: the property, the property may be used for
(i) The property shall be appropriately other activities in accordance with the fol-
identified in the grant or otherwise made lowing standards:
known to the grantee in writing. (i) Nonexpendable property with a unit ac-
(ii) FmHA or its successor agency under quisition cost of less than $1,000. The grantee
Public Law 103–354 shall issue disposition in- may use the property for other activities
structions within 120 calendar days after the without reimbursement to the Federal Gov-
end of the Federal support of the project for ernment or sell the property and retain the
which it was acquired. If FmHA or its suc- proceeds.
cessor agency under Public Law 103–354 fails (ii) Nonexpendable personal property with
to issue disposition instructions within the a unit acquisition cost of $1,000 or more. The
120 calendar day period, the grantee shall grantee may retain the property for other
apply the standards of paragraph 1(c) below. use provided that compensation is made to
(iii) When FmHA or its successor agency FmHA or its successor agency under Public
under Public Law 103–354 exercises its right Law 103–354 or its successor. The amount of
to take title, the personal property shall be compensation shall be computed by applying
subject to the provisions for federally owned the percentage of Federal participation in
nonexpendable property discussed in para- the cost of the original project or program to
graph 1(a)(iv) below. the current fair market value of the prop-
(iv) When title is transferred either to the erty. If the grantee has no need for the prop-
Federal Government or to a third party and erty and the property has further use value,
the grantee is instructed to ship the prop- the grantee shall request disposition instruc-
erty elsewhere, the grantee shall be reim- tions from the original Grantor agency.
bursed by the benefitting Federal agency FmHA or its successor agency under Public
with an amount which is computed by apply- Law 103–354 shall determine whether the
ing the percentage of the grantee participa- property can be used to meet the agency’s
206
requirements. If no requirement exists with- (2) Property owned by the Federal Govern-
in that agency, the availability of the prop- ment must be marked to indicate Federal
erty shall be reported, in accordance with ownership.
the guidelines of the Federal Property Man- (3) A physical inventory of property shall
agement Regulations (FPMR) to the General be taken and the results reconciled with the
Services Administration by FmHA or its suc- property records at least once every two
cessor agency under Public Law 103–354 to years. Any differences between quantities de-
determine whether a requirement for the termined by the physical inspection and
property exists in other Federal agencies. those shown in the accounting records shall
FmHA or its successor agency under Public be investigated to determine the causes of
Law 103–354 shall issue instructions to the the difference. The grantee shall, in connec-
grantee no later than 120 calendar days after tion with the inventory, verify the existence,
the grantee request and the following proce- current utilization, and continued need for
dures shall govern: the property.
(A) If so instructed or if disposition in- (4) A control system shall be in effect to
structions are not issued within 120 calendar ensure adequate safeguards to prevent loss,
days after the grantee’s request, the grantee damage, or theft of the property. Any loss,
shall sell the property and reimburse FmHA damage, or theft of nonexpendable property
or its successor agency under Public Law shall be investigated and fully documented;
103–354 an amount computed by applying to if the property was owned by the Federal
the sales proceeds the percentage of Federal Government, the grantee shall promptly no-
participation in the cost of the original tify FmHA or its successor agency under
project or program. However, the grantee Public Law 103–354.
shall be permitted to deduct and retain from (5) Adequate maintenance procedures shall
the Federal shares $100 or ten percent of the be implemented to keep the property in good
proceeds, whichever is greater, for the grant- condition.
ee’s selling and handling expenses. (6) When the grantee is authorized or re-
(B) If the grantee is instructed to dispose quired to sell the property, proper sales pro-
of the property other than as described in cedures shall be established which will pro-
paragraph 1(a)(iv) above, the grantee shall be vide for competition to the extent prac-
reimbursed by FmHA or its successor agency ticable and result in the highest possible re-
under Public Law 103–354 for such costs in- turn.
curred in its disposition. (7) Expendable personal property shall vest
(C) The grantee’s property management in the grantee upon acquisition. If there is a
standards for nonexpendable personal prop- residual inventory of such property exceed-
erty shall include the following procedural ing $1,000 in total aggregate fair market
requirements: value, upon termination or completion of the
(1) Property records shall be maintained grant and if the property is not needed for
accurately and shall include: any other federally sponsored project or pro-
(a) A description of the property. gram, the grantee shall retain the property
for use on nonfederally sponsored activities,
(b) Manufacturer’s serial number, model
or sell it, but must in either case compensate
number, Federal stock number, national
the Federal Government for its share. The
stock number, or other identification num-
amount of compensation shall be computed
ber.
in the same manner as nonexpendable per-
(c) Sources of the property including grant sonal property.
or other agreement number.
2. To provide a financial management sys-
(d) Whether title vests in the grantee or tem which will include:
the Federal Government. (a) Accurate, current, and complete disclo-
(e) Acquisition date (or date received, if sure of the financial results of each grant.
the property was furnished by the Federal Financial reporting will be on an accrual
Government) and cost. basis.
(f) Percentage (at the end of the budget (b) Records which identify adequately the
year) of Federal participation in the cost of source and application of funds for grant-
the project or program for which the prop- supported activities. Those records shall con-
erty was acquired. (Not applicable to prop- tain information pertaining to grant awards
erty furnished by the Federal Government). and authorizations, obligations, unobligated
(g) Location, use, and condition of the balances, assets, liabilities, outlays, and in-
property and the date the information was come.
reported. (c) Effecting control over and account-
(h) Unit acquisition cost. ability for all funds, property, and other as-
(i) Ultimate disposition data, including sets. Grantee shall adequately safeguard all
date of disposal and sales price or the meth- such assets and shall assure that they are
od used to determine current fair market solely for authorized purposes.
value when a grantee compensates the Fed- (d) Accounting records supported by source
eral agency for its share. documentation.
207
3. To retain financial records, supporting Office of the Environmental Protection
documents, statistical records, and all other Agency.
records pertinent to the grant for a period of 9. That no member of Congress shall be ad-
at least three years after the submission of mitted to any share or part of this grant or
the final Project Performance report pursu- any benefit that may arise therefrom, but
ant to part B (10)(c) of this Agreement except this provision shall not be construed to bar
in the following situations: as a contractor under the grant a publicly
(a) If any litigation, claim, audit, or inves- held corporation whose ownership might in-
tigation is commenced before the expiration clude a member of Congress.
of the three year period, the records shall be 10. That all nonconfidential information
retained until all litigations, claims, audit resulting from its activities shall be made
or investigation findings involving the available to the general public on an equal
records have been resolved. basis.
(b) Records for nonexpendable property ac- 11. That the purpose for which this grant is
quired by FmHA or its successor agency made may complement, but shall not dupli-
under Public Law 103–354, the three year re- cate programs for which monies have been
tention requirement is not applicable. received, are committed, or are applied for
(c) When records are transferred to or from other sources, public and private.
maintained by FmHA or its successor agency 12. That the grantee shall relinquish any
under Public Law 103–354, the three year re- and all copyrights and/or privileges to the
materials developed under this grant, such
tention requirement is not applicable.
material being the sole property of the Fed-
Microfilm copies may be substituted in
eral Government. In the event anything de-
lieu of original records. FmHA or its suc-
veloped under this grant is published in
cessor agency under Public Law 103–354 and
whole or in part, the material shall contain
the Comptroller General of the United
notice and be identified by language to the
States, or any of their duly authorized rep-
following effect: ‘‘The material is the result
resentatives, shall have access to any books, of tax-supported research and as such is not
documents, papers, and records of the grant- copyrightable. It may be freely reprinted
ee which are pertinent to the specific grant with the customary crediting of the source.’’
program for the purpose of making audits, (13) That the grantee shall abide by the
examinations, excerpts, and transcripts. policies promulgated in OMB Circular A–102,
4. To provide information as requested by Attachment O, or OMB Circular A–110, At-
FmHA or its successor agency under Public tachment O, as applicable, which provides
Law 103–354 concerning the grantee’s actions standards for use by Grantees in establishing
in soliciting citizen participation in the ap- procedures for the procurement of supplies,
plication process, including published notice equipment, and other services with Federal
of public meetings, actual public meetings grant funds.
held, and content of written comments re- 14. That it is understood and agreed that
ceived. any assistance granted under this Agreement
5. Not to encumber, transfer, or dispose of will be administered subject to the limita-
the property or any part thereof, furnished tions of Title V of the Housing Act of 1949 as
by FmHA or its successor agency under Pub- amended, 42 U.S.C. 1471 et seq., and related
lic Law 103–354 or acquired wholly or in part regulations, and that all rights granted to
with HPG funds without the written consent FmHA or its successor agency under Public
of FmHA or its successor agency under Pub- Law 103–354 herein or elsewhere may be exer-
lic Law 103–354 except as provided in part C cised by it in its sole discretion to carry out
1 of this Agreement. the purposes of the assistance, and project
6. To provide FmHA or its successor agen- FmHA or its successor agency under Public
cy under Public Law 103–354 with such peri- Law 103–354’s financial interest.
odic reports of grantee operations as may be 15. That it will adopt a Standard of Con-
required by authorized representatives of duct that provides that, if an employee, offi-
FmHA or its successor agency under Public cer, or agent of the grantee, or such person’s
Law 103–354. immediate family members conducts busi-
7. To execute Form FmHA or its successor ness with the grantee, the grantee must not:
agency under Public Law 103–354 400–1, and to (a) Participate in the selection, award, or
execute any other agreements required by administration of a contract to such persons
FmHA or its successor agency under Public for which Federal funds are used;
Law 103–354 to implement the civil rights re- (b) Knowingly permit the award or admin-
quirements. istration of the contract to be delivered to
8. To include in all contracts in excess of such persons or other immediate family
$100,000 a provision for compliance with all members or to any entity (i.e., partnerships,
applicable standards, orders, or regulations corporation, etc.) in which such persons or
issued pursuant to the Clean Air Act, 42 their immediate family members have an
U.S.C. 1875C–9 as amended. Violations shall ownership interest; or
be reported to FmHA or its successor agency (c) Permit such person to solicit or accept
under Public Law 103–354 and the Regional gratuities, favors or anything of monetary
208
RHS, RBS, RUS, FSA, USDA Pt. 1944, Subpt. N, Exh. D
value from landlords or developers of rental lllllllllll, 19ll, hereinafter
or ownership housing projects or any other called the ‘‘Agreement.’’
person receiving HPG assistance. Said Agreement is amended by extending
the Agreement to llllllllll, 19ll,
PART D—FMHA OR ITS SUCCESSOR AGENCY and/or by making the following changes
UNDER PUBLIC LAW 103–354 AGREES noted in the attachments hereto: (List and
1. That it may assist grantee, within avail- identify proposal and any other documents
able appropriations, with such technical and pertinent to the grant which are attached to
management assistance as needed in coordi- the Amendment.)
nating the Statement of Activities with Grantee has caused this Agreement to be
local officials, comprehensive plans, and any executed by its duly authorized
State or area plans for improving housing for lllllllll, properly attested to and
very low- and low-income households in the its corporate seal affixed by its duly author-
area in which the project is located. ized llllllll.
2. That at its sole discretion, FmHA or its Attest:
successor agency under Public Law 103–354 Grantee:
may at any time give any consent, By llllllllllllllllllllll
deferment, subordination, release, satisfac- (Title) llllllllllllllllllll
tion, or termination of any or all of grant- United States Of America Farmers Home
ee’s grant obligations, with or without valu- Administration or its successor agency
able consideration, upon such terms and con- under Public Law 103–354.
ditions as Grantor may determine to be (a) By llllllllllllllllllllll
advisable to further the purposes of the (Title) llllllllllllllllllll
grant or to protect FmHA or its successor
Date of Execution of Amendment to Grant
agency under Public Law 103–354’s financial
Agreement by FmHA or its successor agency
interests therein, and (b) consistent with the
under Public Law 103–354: lll.
statutory purposes of the grant and the limi-
tations of the statutory authority under llllllllllllllllllllllll
which it is made and FmHA or its successor
agency under Public Law 103–354 regulations. EXHIBIT C TO SUBPART N OF PART 1944
This Agreement is subject to current [RESERVED]
FmHA or its successor agency under Public
Law 103–354 regulations and any future regu- EXHIBIT D TO SUBPART N OF PART 1944—
lations not inconsistent with the express PROJECT SELECTION CRITERIA—OUT-
terms hereof. Grantee has caused this Agree- LINE RATING FORM
ment to be executed by its duly authorized
lll, properly attested to and its corporate Applicant Name
seal affixed by its duly authorized lll. llllllllllllllll llllll
Attest: Applicant Address
Grantee: lllllllllllllllll lllll
By llllllllllllllllllllll Application received on lll.
(Title) llllllllllllllllllll State lll District Office lll.
United States Of America Farmers Home Threshold Criteria
Administration or its successor agency Applicant must meet the fol-
under Public Law 103–354: lowing:
By llllllllllllllllllllll 1. Proposes a financially
(Title) llllllllllllllllllll feasible HPG program .... yes— nol
Date of Execution of Grant Agreement by 2. Serves an eligible rural
FmHA or its successor agency under Public area ................................ yes— nol
Law 103–354: 3. Is an eligible HPG
llllllllllllllllllllllll grantee .......................... yes— nol
Attached Statement of Activities Is Made 4. Has met consultation
Part of This Agreement. and public comment
rules ............................... yes— no—
EXHIBIT B TO SUBPART N OF PART 1944— If answer to any of the above is ‘‘no’’, ap-
AMENDMENT TO HOUSING PRESERVA- plication is rejected and applicant so noti-
TION GRANT AGREEMENT fied.
Selection Criteria:
This Amendment between lll herein Select the appropriate rating:
called ‘‘Grantee,’’ and the United States of 1. Points awarded based on the percentage
America acting through the Farmers Home of very-low income homeowners or families
Administration, Department of Agriculture, the applicant proposes to assist, using the
herein called ‘‘FmHA,’’ or its successor agen- following scale lll:
cy under Public Law 103–354 hereby amends (a) More than 80%: 20 points.
the Housing Preservation Grant Agreement (b) 61% to 80%: 15 points.
executed by said parties on (c) 41% to 60%: 10 points.
209
Pt. 1944, Subpt. N, Exh. E 7 CFR Ch. XVIII (1–1–21 Edition)
(d) 20% to 40%: 5 points. Ranking of This Applicant llll
(e) Less than 20%: 0 points.
2. Points awarded based on the applicant’s
FR 36269, June 26, 2008; 79 FR 76011, Dec. 19,
percentage of use of HPG funds to total cost
2014]
of unit preservation. This percentage reflects
maximum rehabilitation with the least pos-
EXHIBIT E TO SUBPART N OF PART 1944—
sible HPG funds due to leveraging, innova-
tive financial assistance, or other specified GUIDE FOR QUARTERLY PERFORM-
approaches. Points are based on the fol- ANCE REPORT
lowing percentage of HPG funds to total
Grantee name: lllllllllllllll
funds lll: Grantee address: llllllllllllll
(a) 50% or less: 20 points. Grant quarter:llllll lllllllll
(b) 51% to 65%: 15 points.
(c) 66% to 80%: 10 points. Report Period: From: lll To: lll
(d) 81% to 95%: 5 points. I. General Information on Use of HPG
(e) 96% to 100%: 0 points. Funds During Period:
3. The applicant has demonstrated its ad- A. Use of Administrative Funds:
ministrative capacity in assisting very low- Budgeted Amount ................................$lll
and low-income families obtain adequate Expended Thru Last Quarter .................lll
housing based on the following: Direct Cost:
(a) The organization or a member of its Personnel .............................................$lll
staff has at least one or more years experi- Supplies & Equip ...................................lll
ence successfully managing and operating a Travel ....................................................lll
rehabilitation or weatherization type pro- Indirect Costs:
gram lll: (lll% Rate)........................................lll
Yes—10 points. This Quarter Total .......................lll
No—0 points. B. Use of Program Funds:
(b) The organization or a member of its Budgeted Amount ..................................lll
staff has at least one or more years experi- Expended Thru Last Quarter .................lll
ence successfully managing and operating a Loans ...................................No. lll $lll
program assisting very low- and low-income Grants ...................................No. lll lll
families obtain housing assistance lll: Other subsidies
Yes—10 points. (describe briefly) ................No. lll lll
No—0 points. This Quarter Total .................... lll
(c) If the organization has administered II. Description of recipients provided as-
grant programs, there are no outstanding or sistance during report period: (Attach break-
unresolved audit or investigative findings down for each HPG recipient on separate
which might impair carrying out the pro- page including name, address, income, size,
posal lll: race, housing preservation activities, and
No findings: 10 points. type of assistance received):
Outstanding findings: 0 points.
Number of low-income homeowners
4. The proposed program will be under-
assisted ......................................... lll
taken entirely in rural areas outside Metro- Number of very low-income home-
politan Statistical Areas (MSAs) identified owners assisted ............................. lll
by FmHA or its successor agency under Pub- Total number of homeowners
lic Law 103–354 as having populations below assisted ......................................... lll
10,000 or in remote parts of other rural areas
(i.e., rural areas contained in MSAs with less Racial composition:
than 5,000 population) lll: White ............................................ lll
Non-MSA area below 10,000 pop.: 10 points. Black ............................................ lll
MSA area below 5,000 pop.: 10 points. Hispanic........................................ lll
Neither: 0 points. Am. Indian .................................... lll
5. The program will use less than 20 per- Other............................................. lll
cent of HPG funds for administrationlll: III. Description of types of housing preser-
Less than 20%: 5 points. vation provided:
20%: 0 points.
6. The proposed program contains a compo- Housing preservation activity Financial assistance
nent for alleviating overcrowding lll: Item Cost of materials/labor HPG Other Total
Has component: 5 points.
No component: 0 points.
7. The applicant is an existing grantee and
meets the conditions of § 1944.686 of this sub-
part for additional points lll: IV. Objectives for next period:
Meets conditions: 10 points. Loans ...................................No. lll $lll
Doesn’t meet conditions: 0 points. Grants ..................................No. lll $lll
Total Points lll: Other subsidy .......................No. lll $lll
210
Totals .........................No. lll $lll 1948.81 State Investment Strategy for En-
V. Project summary: ergy Impacted Areas.
1948.82 Plan and State Investment Strategy
No. home- HPG funds Other approval procedure.
owners 1948.83 Performance of site development
Assistance ob- work.
jectives of 1948.84 Application procedure for site devel-
project ............ .................... $lll $lll opment and acquisition grants.
Assistance to 1948.85 [Reserved]
date ................ .................... lll lll 1948.86 Site development and acquisition
Assistance dur- grant selection criteria.
ing next period .................... lll lll
Average amount
1948.87 [Reserved]
of HPG assist- 1948.88 Direct land acquisition by Rural De-
ance. velopment.
Per unit provided 1948.89 Land condemnation by Rural Devel-
(program to opment.
date) (per unit) $lll 1948.90 Land transfers.
1948.91 Inspections of development.
VI. Narrative: 1948.92 Grant approval and fund obligation.
A. Significant accomplishments. 1948.93 Appeal procedure.
B. Problem areas. 1948.94 Reporting requirements.
C. Proposed changes/assistance needed, etc. 1948.95 Grant monitoring.
D. Status of implementing environmental 1948.96 Audit requirements.
and historic preservation requirements. In- 1948.97 Grant closing and fund disburse-
clude number of historic properties assisted. ment.
1948.98 Grant agreements.
PART 1946 [RESERVED] 1948.99–1948.100 [Reserved]
EXHIBIT A TO SUBPART B OF PART 1948—
PART 1948—RURAL DEVELOPMENT GRANT AGREEMENT—GROWTH MANAGE-
MENT AND HOUSING PLANNING FOR AP-
PROVED DESIGNATED ENERGY IMPACTED
Subpart A [Reserved] AREAS
EXHIBIT B TO SUBPART B OF PART 1948—
Subpart B—Section 601 Energy Impacted GRANT AGREEMENT (PUBLIC BODIES) FOR
Area Development Assistance Program SITE DEVELOPMENT AND/OR SITE ACQUISI-
TION FOR HOUSING AND/OR PUBLIC FACILI-
Sec.
TIES AND/OR SERVICES
1948.51 General.
1948.52 Objectives.
1948.53 Definitions. Subpart C [Reserved]
1948.54 Eligible applicants.
1948.55 Source of funds. AUTHORITY: 5 U.S.C. 301, 7 U.S.C. 1932 note.
1948.56 Program purposes. EDITORIAL NOTE: Nomenclature changes to
1948.57 Eligible activities. part 1948 appear at 80 FR 9888, Feb. 24, 2015.
1948.58 [Reserved]
1948.59 Ineligible activities.
1948.60 Delegation and redelegation of au- Subpart A [Reserved]
thority.
1948.62 Environmental impact require-
Subpart B—Section 601 Energy
ments. Impacted Area Development
1948.63 Historic preservation requirements. Assistance Program
1948.64 Equal opportunity requirements.
1948.65 Relocation Act requirements.
AUTHORITY: Sec. 601, Pub. L. 95–620, delega-
1948.66 [Reserved]
tion of authority by the Sec. of Agri., 7 CFR
1948.67 Procedure for designation.
2.23; delegation of authority by the Asst.
1948.68 Criteria for designation.
1948.69 [Reserved] Sec. for Rural Development, 7 CFR 2.70.
1948.70 Designation approval. SOURCE: 44 FR 35984, June 19, 1979, unless
1948.71 [Reserved] otherwise noted.
1948.72 Industry reports.
1948.73–1948.77 [Reserved] § 1948.51 General.
1948.78 Growth management and housing
planning projects. This subpart sets forth policies and
1948.79 Application procedure for planning procedures for designation, approval of
grants. designation, and making grants for as-
1948.80 Planning grant selection criteria. sistance to areas impacted by increased
211
coal and uranium production, proc- mine sites relating to mining, produc-
essing, or transportation. The Rural tion, and processing.
Development will fully consider all A– (2) Processing includes all operations
95 clearing-house review comments and performed on coal or uranium includ-
recommendations in selecting applica- ing construction of processing plants.
tions for funding. Any processing or However, processing does not include
servicing activity conducted pursuant conversion into electrical energy.
to this subpart involving authorized as- (3) Transportation which directly re-
sistance to Rural Development employ- lates to the production and processing
ees, members of their families, known of coal or uranium including transpor-
close relatives, or business or close per- tation networks in the county of origin
sonal associates, is subject to the proof the coal or uranium and counties of
visions of subpart D of part 1900 of this processing of coal and uranium. This
chapter. Applicants for this assistance includes transportation depots along
are required to identify any known re- transportation networks that are used
lationship or association with a Rural primarily for the transfer of coal or
Development employee. uranium for domestic consumption.
This also includes unit train rolling
FR 228, Jan. 5, 1993]
stock construction and repair facili-
ties.
§ 1948.52 Objectives. (e) Condemnation by U.S. Department
of Agriculture (USDA). The use of Fed-
The objective of the program is to eral authority by the Secretary of Ag-
help areas impacted by coal or uranium riculture to condemn real property.
development activities by providing as- (f) Council of local governments. An
sistance for the development of growth areawide development organization
management and housing plans and in which includes one or more local gov-
developing and acquiring sites for ernments servicing at least a portion of
housing and public facilities and serv- an approved designated area. Such or-
ices. ganization must either have a policy-
making body made up of a majority of
local elected officials.
(a) Approved designated area. A group (g) Eligible employment. Full time
of counties, a county, or a part of a work related to coal or uranium devel-
county designated as an energy im- opment activities.
pacted area by the Governor of a State (h) Eligible employment facility. A coal
and approved by the Secretary of En- or uranium mine, processing plant, or
ergy. transportation depot.
(b) Available financial resources. All (i) Energy impacted areas. An area
existing financial resources which where coal and uranium development
could be used for impact assistance in- activities have a significant impact on
cluding Federal, State, and local finan- the socio-economic structure of the
cial resources and financial resources area and which meet the criteria set
accruing to States and local govern- out at § 1948.68 of this subpart.
ments as a result of coal or uranium (j) Fair market value. The price at
development activity and not already which a property will sell in the open
committed to other programs by low or market allowing a reasonable period of
historical precedent. time for typical, fully-informed buyers
(c) Coal. Coal means anthracite and and sellers to react, assuming that the
bituminous coal, lignite, and any fuel purchaser and seller are both willing
derivative thereof. participants in the transaction.
(d) Coal or uranium development activi- (k) Grantee. An entity with whom
ties. The production, processing, or FmHA or its successor agency under
transportation of coal or uranium. Public Law 103–354 has entered into a
(1) Production includes the mining of grant agreement under this program.
coal or uranium and all mine site oper- (l) Growth management planning.
ations connected with such mining op- Planning for the orderly development
erations and processing activities. This of an approved designated area. This
includes construction activities on planning includes, but is not limited
212
to: Planning for provision of resources welfare. This includes but is not lim-
to support housing, public facility ited to: hospitals, clinics, firehouses,
needs, sewer and water needs; planning parks, recreation areas, sewer plants,
for the provision of additional public water plants, community centers, li-
services needed; overall plans for the braries, city or town halls, jailhouses,
coordinated development of all ap- courthouses, and schoolhouses.
proved designated areas within a State; (r) Public services. The provision to
the development of State Investment the public of services such as: health
Strategies for Energy Impacted Areas; care, fire and police protection, recre-
and coordination of development of ap- ation, etc.
proved designated areas at the inter- (s) Site. A site is a plot of land which
state level where impact is interstate is suitable or can be made suitable for
in nature. providing housing, public facilities, or
(m) Housing planning. Identification services.
of present and future housing needs (t) Site acquisition. Obtaining legal
within an approved designated area and title to a site (or sites) or obtaining
providing methods for developing need- leaseholds or other interests in land,
ed housing. This planning includes, but by an instrumentality of a state or
is not limited to the identification of: local Government, or by Rural Devel-
housing sites; housing site develop- opment, for housing, public facilities,
ment needs; data and resource needs; or services.
funding needs; acquisition methods; (u) Site development. Site restoration,
and agencies of government responsible necessary off-site improvements and
for delivery of housing services. such on-site improvements as the con-
(n) Industry reports. Those reports struction of sewerage collection and
concerning production, expected pro- water distribution lines (does not in-
duction, and employment within an ap- clude individual taps) and construction
proved designated area which are re- of access roads; but does not include
quested by the Governor and submitted the construction of houses or public fa-
by a person to the Secretary of Energy. cilities.
(o) Local government. Any county, (v) Site restoration. On-site improve-
parish, city, town, township, village, or ments to the real property (such as
other general purpose political subdivi- backfilling, compacting, grading and
sion of a State with the power to levy leveling) necessary for the construc-
taxes and expend Federal, State, and tion of houses and public facilities.
local funds and exercise governmental (w) State. Any of the fifty States,
powers and which is located in, or has Puerto Rico, and any territory or pos-
authority over, the energy impact session of the United States.
area. With the concurrence of the Gov- (x) State Investment Strategy for En-
ernor, the term may also include such ergy Impacted Areas. The investment
school, water, sewer, highway, or other strategy for the development of ap-
public special purpose districts or au- proved designated areas within a State
thorities, or public or private nonprofit as proposed by the Governor and ap-
corporations as may be appropriate to proved by Rural Development.
carry out the purpose for which a grant (y) Substandard housing. All housing
is being made. These corporations or units which do not have complete
special purpose districts or authorities plumbing fixtures, lack adequate heat-
may apply (including applications pre- ing systems, are not structurally
viously received) for grants from fiscal sound, or contain any other conditions
year 1981 and earlier fiscal year funds that would cause a safety, sanitary, or
only. health hazard to the family or commu-
(p) Person. Any corporation, indi- nity.
vidual, partnership, company, associa- [44 FR 35984, June 19, 1979, as amended at 45
tion, firm, institution, society, trust, FR 26943, Apr. 22, 1980; 46 FR 33021, June 26,
joint venture, or joint stock company, 1981]
any State or any agency or instrumen-
tality thereof. § 1948.54 Eligible applicants.
(q) Public facilities. Installations open Organizations eligible for grants in-
to the public and used for the public clude local governments, councils of
213
local government, and State govern- (d) Where needed, Rural Development
ments that have the leval authority will provide assistance for the develop-
necessary to undertake the proposed ment of sites and/or the acquisition of
project. sites for housing and public facilities
[46 FR 33022, June 26, 1981] and services within approved des-
ignated areas according to the criteria
§ 1948.55 Source of funds. contained in this subpart. Such assist-
(a) Grants will be awarded from ap- ance for site development and acquisi-
propriate funds specifically allocated tion will be made in accordance with
for this program. Rural Development approved plans and
(b) Grants made for growth manage- State Investment Strategies for En-
ment and housing planning may equal ergy Impacted Areas in accordance
but will not exceed 10 percent of the with the criteria contained in the sub-
total amount of funds appropriated for part.
and allocated to this program. (e) At the request of the Governor of
§ 1948.56 Program purposes. the appropriate State, Rural Develop-
ment will take action to acquire real
(a) Rural Development will make property directly for sites for housing
grants for assistance to approved des- and/or public facilities and services in
ignated areas in accordance with cri-
accordance with procedures set forth in
teria contained in this subpart by pro-
this subpart.
viding assistance to fill gaps in growth
management and housing planning, (f) At the request of the Governor of
and to provide supplementary support the appropriate State, where neither
for acquisition and development of the State nor local government has
sites for housing and public facilities power to do so for this purpose, Rural
and services by States, local govern- Development may take action through
ments, and councils of local govern- condemnation to acquire real property
ment. for sites necessary for housing, public
(b) Efforts will be made to provide facilities, or services.
comprehensive assistance to approved
designated areas through the coordina- § 1948.57 Eligible activities.
tion power of the Secretary of Agri- Grant Funds may be used for:
culture by utilizing existing plans,
(a) The preparation of growth man-
State and local programs, and other
agement and/or housing plans (or as-
Federal programs to the maximum ex-
tent possible. Particular attention will pects thereof) for which financial re-
be given to the utilization of existing sources are not available for approved
Rural Development authorities under designated areas as set forth in the
other Rural Development programs in grant agreement, including but limited
conjunction with this subpart for pro- to:
viding assistance to approved des- (1) One hundred percent of the total
ignated areas in accordance with the cost of developing growth management
Governor’s approved State Investment and/or housing plans.
Strategy for Energy Impacted Areas. (2) One hundred percent of the cost of
(c) Where existing plans are unsuit- developing aspects of growth manage-
able or nonexistent, and other assist- ment plans and/or housing plans in-
ance programs are inadequate or un- cluding but not limited to:
available on a timely basis, Rural De- (i) Sewer plans;
velopment will provide assistance (ii) Water plans;
under this subpart to States, councils
(iii) Recreation plans;
of local governments, and local govern-
ments for the modification, updating, (iv) Transportation plans;
and/or development of growth manage- (v) Education plans; and
ment and/or housing plans to deal with (vi) Subdivision plans.
problems resulting from coal or ura- (3) Payment of salaries of profes-
nium development within approved sional, technical, and clerical staff to
designated areas according to the cri- carry out growth management and
teria contained in this subpart. housing planning and evaluation;
214
(4) Payment of necessary reasonable (5) Planning for areas other than ap-
office expenses such as office rental, of- proved designated areas;
fice utilities, and office equipment (6) Planning other than growth man-
rental; agement and housing planning; or
(5) Purchase of office supplies; (7) Political activities.
(6) Payment of necessary reasonable (b) Grant funds for site development
administrative posts, such as work- may not be used for:
men’s compensation, liability insur- (1) Construction, repair, or rehabili-
ance, and employer’s share of social se- tation of housing and public facilities;
curity and travel; and (2) Replacement of, or substitution
(7) Payment of costs to undertake for, any financial support previously
tests, make appraisals, and arrange for provided or assured from any other
engineering/architectural services nec- source which would result in a reduc-
essary for the planning activity. tion of effort on the part of the appli-
(b) Up to 75 percent of the actual cost cant;
of developing or acquiring sites for (3) Administrative expenses not al-
housing, public facilities, or services lowed under FMC 74–4;
for which financial resources are other- (4) Purposes for which funding exists
wise not available as set forth in the under other State or Federal programs
grant agreement, including but not that may reasonably be obtained on a
limited to: timely basis by the applicants;
(1) Necessary grading and leveling;
(5) Duplication of current services; or
(2) Sewer and water connections;
(6) Political activities.
(3) Necessary water and sewer lines
to housing and public facilities sites; § 1948.60 Delegation and redelegation
(4) Access roads to housing and pub- of authority.
lic facilities sites;
(5) Restoring previously mined sites; The Rural Development State Direc-
(6) Necessary engineering reports in tor is responsible for implementing the
connection with site development; authorities contained in this subpart
(7) Payment of costs to undertake and may issue State supplements re-
tests, make appraisals, and engineer- delegating these authorities to appro-
ing/architectural services necessary for priate Rural Development employees.
the site development and/or site acqui-
§ 1948.61 State supplements and
sition; guides.
(8) Necessary legal fees involved in
the transfer of the real property. Rural Development State Directors
will obtain National Office clearance
§ 1948.58 [Reserved] for all State supplements and guides in
accordance with paragraph VIII of RD
§ 1948.59 Ineligible activities. Instruction 2006–B, (available in any
(a) Growth management and housing Rural Development office).
planning grant funds may not be used (a) State supplements. State Directors
for: may supplement this subpart as appro-
(1) Acquisition, construction, repair, priate to meet State and local laws and
or rehabilitation of existing housing regulations and to provide for orderly
and public facilities; application processing and efficient
(2) Replacement of, or substitution service to applicants. State supple-
for, any financial support previously ments shall not contain any require-
provided or assured from any other ments pertaining to designations, des-
source which would result in a reduc- ignation approval, or plan approvals
tion of current efforts on the part of more restrictive than those in this sub-
the applicant; part.
(3) Duplication of current services; (b) State guides. State Directors may
(4) Routine administrative activities develop guides for use by applicants if
not allowed under Federal Management the guides to this subpart are not ade-
Circular FMC 74–4, ‘‘Cost Principles quate. State Directors may prepare
Applicable to Grants and Contracts guides for: items needed for the appli-
with State and Local Governments;’’ cation; items necessary for the docket;
215
and items required prior to grant clos- § 1948.66 [Reserved]

ing or construction starts.
§ 1948.67 Procedure for designation.
FR 9888, Feb. 24, 2015] (a) Local governments may request
the Governor of the State in which
§ 1948.62 Environmental impact re- they are located to designate an area
quirements. served by them as an energy impacted
(a) Issuance of grants and other ac- area.
tions taken under this subpart must (b) The Governor will define the geo-
comply with the environmental review graphic area of a designated area con-
requirements in accordance with 7 CFR sistent with the nature of the impact
and the socio-economic integration of
part 1970.
the area.
(b) Subsequent to an energy impact
(c) The Governor may designate an
area designation by the Governor and
area as an energy impacted area based
establishment of priorities, the Rural on the criteria contained in this sub-
Development State Director, in con- part.
sultation with the Governor, shall de-
fine the geographic boundaries or oth- § 1948.68 Criteria for designation.
erwise delineate the areas which will
(a) An area designated by the Gov-
be studied for environmental impacts.
ernor must have the following charac-
(c) Boundaries shall define the area teristics:
within which the environmental im- (1) During the most recent calendar
pacts of the proposed action can be rea- year, the eligible employment in coal
sonably studied. Proper delineation of or uranium development activities
impact areas will avoid duplication of within the area has increased by eight
effort by using one assessment or im- percent or more from the preceding
pact statement to study a broad area year, or such employment (as projected
rather than numerous overlapping doc- by generally acceptable estimates) will
uments prepared for smaller projects. increase by eight percent (of the eligi-
ble employment in the year of the des-
FR 3764, Jan. 30, 1984; 81 FR 11032, Mar. 2, ignation) or more per year during each
2016] of the next three calendar years.
(2) Because of increased employment
§ 1948.63 Historic preservation re- in coal or uranium development activi-
quirements. ties, a shortage of housing, inadequate
public facilities, or services exists or
The policies and regulations con-
will exist in the area. Such shortages
tained in part 1901, subpart F, of this
or inadequacies may be demonstrated
chapter apply to this program.
by: Housing shortage statistics; higher
§ 1948.64 Equal opportunity require- occupancy rates of substandard houses
ments. than has historically occurred within
the area; an increase (for which data or
The policies and regulations con- projected data is available) in eligible
tained in part 1901, subpart E, of this employment from the year of the des-
chapter apply to grants made under ignation of at least 100 workers and
this program. one-half of one percent of the des-
ignated area’s population; or data
§ 1948.65 Relocation Act requirements. showing that available public facilities
The policies and regulations con- and services in the area are below gen-
tained in title 7, subtitle A, part 21 of erally accepted standards due to the in-
the Code of Federal Regulations (Uni- creased demand resulting from coal
form Relocation Assistance and Real and uranium development activities.
Property Acquisition Policies Act of (3) Available State and local finan-
1970) will apply to site development and cial resources are inadequate to meet
acquisition grants and other actions the public need for housing or public
under this program. facilities and services at present or in
the next three years. In making this
216
determination the Governor should those projections and a copy of any

consider the following: survey data used should be included.
(i) State revenue increases resulting (c) In areas where the impacted area
from coal and uranium development covers counties or parts of counties lo-
activity based on existing tax laws; cated in more than one State, the Gov-
(ii) Federal funds transferred to the ernors of the affected States may joint-
State for impact assistance; ly designate such area and submit the
(iii) Local revenue increases result- designation to the Secretary of Energy
ing from coal or uranium development for approval.
activities based on existing tax laws; (d) After examining these factors and
(iv) Other federal financial assistance determining that the area meets the
to which the area may have access; criteria of (a) above, the Governor may
(v) All other available State and so certify in a letter bearing his or her
local sources of funding; signature and submit the letter of cer-
(vi) The time during which the re- tification with all data and estimates
sources will be available; upon which the designation is based to
(vii) Existing laws committing in- the Secretary of Energy for approval.
creases in State and local revenues and (e) Each designation submitted
Federal transfers to purposes other should have the name and phone num-
than impact assistance; and ber of a contact person in the Gov-
(viii) The estimated cost of develop- ernor’s designating office.
ment based on the best available in- (f) An original and one copy of the
formed judgment. designation should be submitted to the
(b) Designations submitted to the Secretary of Energy, Department of
Secretary of Energy for approval must Energy, Mail Stop 8G–031, Forrestal
have the following attached: Building, Washington, DC 20585.
(1) A list of all counties and parts of (g) Two copies of all designations
counties covered by the designation; submitted for approval shall be sub-
(2) If the area is smaller than a coun- mitted to the appropriate Rural Devel-
ty, a map showing the boundary of the opment State Director. The Rural De-
area and the approximate location of velopment State Director shall forward
all eligible employment facilities in one copy to the Office of Area Develop-
the area and nearby; ment Assistance in the Rural Develop-
(3) A written justification for the in- ment National Office.
clusion of an area if the area is smaller (h) The Governor should designate all
than a county; areas expected to be considered in fis-
(4) The level of eligible employment cal year 1979 allocations of funds before
within the designated area for each of July 1, 1979.
the two most recent calendar years.
This data should be obtained from a [44 FR 35984, June 19, 1979, as amended at 46
single source for the entire State, if FR 33022, June 26, 1981]
possible; special surveys may be used
when the Governor determines that § 1948.69 [Reserved]
these more accurately reflect employ- § 1948.70 Designation approval.
ment conditions within the designated
area, or in cases where data from other Upon receipt of a request for ap-
sources for the most recent calendar proval of a designation made under this
year is unavailable at the time of des- section, the Secretary of Energy shall:
ignation. Reference should be made to (a) Determine to the best of his abil-
the data sources used if it is a Federal ity the consistency of the supporting
source; if a non-Federal sources is used, data submitted along with the designa-
a copy of the source and a brief description by the Governor;
tion of the procedures used for jus- (b) Confer with Rural Development
tification should be included. If projec- on approval;
tions of eligible employment are to be (c) Notify the Governor and the
considered, projections of such employ- Under Secretary for Rural Develop-
ment for the next three years must be ment of action taken on each designa-
attached; identification of data sources tion within 30 calendar days of the re-
and methodology used in developing ceipt of a request for approval;
217
(d) Consult with the Governor before GA152, Forrestal Building, Washington,
the disapproval of any designation; and DC 20585.
(e) Publish a description in the FED-
ERAL REGISTER of all designated areas §§ 1948.73–1948.77 [Reserved]
approved within 30 days of their ap-
§ 1948.78 Growth management and
proval. housing planning projects.
§ 1948.71 [Reserved] (a) Existing plans for growth man-
agement and housing may be used to
§ 1948.72 Industry reports. meet the planning requirements of this
Any person regularly engaged in any subpart.
coal or uranium development activity (b) A reasonable effort should be
within an area designated and approved made to modify existing plans for use
in accordance with this subpart, shall in meeting the planning requirements
prepare and transmit a report to the of this section.
Secretary of Energy, Department of (c) The Governor shall be responsible
Energy, Mail Stop 8G–031, Forrestal for the coordination of planning within
Building, Washington, DC 20585 within a State.
90 days after a written request to such (d) The planning process developed
person by the Governor of the State in with assistance under this section
which such area is located. should begin at the local level and flow
(a) The report shall contain: upward to the State.
(1) Projected levels of employment in (e) Planning processes developed with
coal or uranium development activities assistance under this section should
within the approved designated area have the maximum possible citizen in-
for the next three calendar years; volvement in the development of plans.
(2) The projected number of new jobs (f) Governors should give full consid-
to be created in coal or uranium devel- eration to local and substate priorities
opment activities by the person within in the development of the State Invest-
the approved designated area in each of ment Strategy for Energy Impacted
the following three calendar years; Areas.
(3) Current or planned actions of the (g) Plans developed with assistance
person in relation to the provision of under this section should be fully co-
housing or public facilities for such ordinated with other Federal, State,
person’s employees in the next three substate, and local planning activities
calendar years; affected by the project.
(4) Contracts in force whereby the (h) Planning conducted by the State
person intends to provide funds to include effective management activi-
State government, local governments, ties for coordinated development of ap-
and public or private nonprofit organi- proved designated areas through the
zations for the provision of housing or plan implementation stage.
public facilities for such person’s em- [44 FR 35984, June 19, 1979, as amended at 48
ployees; and FR 29121, June 24, 1983]
(5) The projected quantity of coal or
uranium to be produced, processed, or § 1948.79 Application procedure for
transported by the person in each of planning grants.
the next three years. (a) Applicants may submit a
(b) The Governor requesting the re- preapplication for a planning grant
port will notify the Secretary of En- upon designation of the area as an en-
ergy of persons from whom reports ergy impacted area by the Governor.
have been requested. Rural Development will not take final
(c) The Secretary of Energy shall action on the preapplication until the
provide a copy of these reports to the designation has been approved by the
Secretary of Agriculture, the appro- Secretary of Energy.
priate Governor, and the appropriate (b) Intergovernmental consultation
county or local officials, and make it should be carried out in accordance
available for public inspection and with 7 CFR part 3015 subpart V,
copying in the public reading room of ‘‘Intergovernmental Review of Depart-
the Department of Energy, Room ment of Agriculture office.’’
218
(c) Applicants shall file an original of this section to the appropriate Rural
and one copy of SF 424.1, ‘‘Application Development State Director within 10
for Federal Assistance (For Non-con- working days of receipt of the
struction),’’ with the appropriate Rural preapplication.
Development office. A copy should also (h) Upon receipt of a preapplication,
be filed with the Governor’s office of the Rural Development State Office
the appropriate State. This form is will:
available in all Rural Development of- (1) Review and evaluate the
fices. Local governments and councils preapplication and accompanying doc-
of local governments shall submit uments;
preapplications to the appropriate (2) Consult with the Governor of the
Rural Development District Office. appropriate State concerning the Gov-
State governments shall apply to the ernor’s priorities and recommended
appropriate Rural Development State funding level for the project; and
Office. The Rural Development District (3) Respond to the applicant within 30
Office will forward the preapplication days of the date of receipt of the
with written comments within 10 work- preapplication using Form AD–622,
ing days to the appropriate State Of- ‘‘Notice of Preapplication Review Ac-
fice. tion,’’ indicating the action taken on
(d) All preapplications shall be ac- the preapplication.
companied by: (i) Upon notification that the appli-
(1) Evidence of applicant’s legal ex- cant is eligible to compete with other
istence; applicants for funding, a SF 424.1 may
(2) Evidence of applicant’s authority be submitted to the Rural Development
to prepare growth management and/or State Office by all applicants.
housing plans; (j) The Rural Development State Of-
(3) A statement declaring that the fice will send evidence of the appli-
planning neither duplicates nor con- cant’s legal existence and authority to
flicts with current activities; the USDA Regional Office of General
(4) An original and one copy of Form Counsel (OGC) and request that a legal
RD 400–1, ‘‘Equal Opportunity Agree- determination be made of the appli-
ment,’’ and Form RD 400–4, ‘‘Assurance cant’s legal existence and authority to
Agreement;’’ and prepare growth management and/or
(5) A statement regarding other fi- housing plans in those cases where an
nancial resources available to the area application (SF 424.1) is requested.
for this planning. (k) Upon receipt of an application on
(e) District and State Rural Develop- SF 424.1 by the Rural Development
ment Offices receiving preapplications State Office, a docket will be prepared
will: which will include the following:
(1) Determine if the area to be cov- (1) Form SF 424.1;
ered by this project is an ‘‘approved (2) Form AD–622;
designated area’’ as defined in this sub- (3) Any comments received in accord-
part; ance with 7 CFR part 3015 subpart V,
(2) Comply with the environmental ‘‘Intergovernmental Review of Depart-
requirements set forth in this subpart; ment of Agriculture Programs and Ac-
and tivities’’. See RD Instruction 1970–I,
(3) Prepare a Historic Preservation ‘Intergovernmental Review,’ available
Assessment in accordance with part in any Agency office or on the Agen-
1901, subpart F, of this chapter. cy’s Web site.
(f) District Rural Development Of- (4) SF 424.1;
fices receiving preapplications will also (5) Evidence of the applicant’s legal
provide written comments reflecting existence and authority to prepare
planning grant selection criteria listed growth management and/or housing
in this subpart. plans;
(g) The Rural Development District (6) OGC legal determinations;
Office will forward the original of the (7) Grant agreement and scope of
preapplication and accompanying doc- work;
uments including those described in (8) Form RD 1940–1, ‘‘Request for Ob-
paragraphs (e)(1) through (e)(3) and (f) ligation of Funds;’’
219
(9) Form RD 400–1; in any Agency office or on the Agen-

(10) Form RD 400–4; cy’s Web site.)
(11) Historic Preservation Assess- [44 FR 35984, June 19, 1979, as amended at 48
ment; FR 29121, June 24, 1983; 76 FR 80731, Dec. 27,
(12) District, where appropriate, and 2011]
State Rural Development written com-
ments, assessments, and analysis of the § 1948.81 State Investment Strategy for
proposed projects in accordance with Energy Impacted Areas.
the grant selection criteria; and (a) The State Investment Strategy
(13) All certificates and statements for Energy Impacted Areas should be a
accompanying the pre-application and/ dynamic document updated as each
or application. plan or group of plans is submitted to
Rural Development for approval.
[44 FR 35984, June 19, 1979, as amended at 48 (b) The Governor shall consult with
FR 29121, June 24, 1983; 49 FR 3764, Jan. 30, the Rural Development State Director
1984; 55 FR 13503, 13504, Apr. 11, 1990; 76 FR
when developing or updating a State
80731, Dec. 27, 2011]
Investment Strategy for Energy Im-
§ 1948.80 Planning grant selection cri- pacted Areas.
teria. (c) The State Investment Strategy
for Energy Impacted Areas will include
The following criteria will be used in but is not limited to:
the selection of planning grant recipi- (1) A list of projects in order of pri-
ents: ority;
(a) Planning assistance which could (2) The Governor’s recommended
be used for the purpose of the proposed level of and method of funding for each
planning process is not available from project through completion of the
other sources on a timely basis (Man- project identified in the plans sub-
datory); mitted and incorporated into the State
(b) The increase in the number of new Investment Strategy for Energy Im-
employees and the percentage of in- pacted Areas;
crease in employment in coal and/or (3) Methods of coordinating assist-
uranium development activities in the ance with other State and Federal de-
year of designation within the ap- velopment programs;
proved designated area (years projected (4) The differential between available
will be averaged and treated equally); financial resources and the cost of
(c) The need for planning in relation needed site development and acquisi-
to the financial resources available for tion for housing and public facilities
such planning; and services within the area covered by
(d) The planning priorities and rec- the State Investment Strategy for En-
ergy Impacted Areas;
ommended funding level of the Gov-
(5) References to plan and page num-
ernor(s) of the appropriate State(s);
ber of plan on which each priority
(e) The appropriateness of the pro-
project is described.
posed planning activity for meeting the
(d) The State Investment Strategy
planning needs of the area, including for Energy Impacted Areas having
but not limited to the building of plan- projects expected to be funded in FY
ning capacity and the local priority for 1979 should be submitted to the Rural
the project; Development State Director of the ap-
(f) The inadequacy of existing plans propriate State before July 15, 1979. A
for mitigating the effects of coal and/or copy should also be forwarded to the
uranium development activities; and Under Secretary for Rural Develop-
(g) The nature of comments and rec- ment.
ommendation received in accordance
with 7 CFR part 3015 subpart V, § 1948.82 Plan and State Investment
‘‘Intergovernmental Review of Depart- Strategy approval procedure.
ment of Agriculture Programs and Ac- (a) Any plan submitted for Rural De-
tivities’’. (See RD Instruction 1970–I, velopment approval, whether it is a
‘Intergovernmental Review,’ available plan developed with assistance under
220
this section, an existing plan, or a number and type of public facilities

modified plan, should contain: and services now needed or expected to
(1) The present level of coal or ura- be needed in the next three years;
nium production, processing, or trans- (8) The type and quantity of real
portation within the approved des- property now needed or expected to be
ignated area covered by the plan; needed in the next three years for the
(2) The anticipated level of coal or construction of public facilities and/or
uranium production, processing, or housing and/or in the provisions of pub-
transportation in each of the next lic services;
three calendar years within the area (9) Proposed method of acquisition
covered by the plan; for each site to be acquired by the
(3) A brief description of the socio- State or local governments; and
economic impacts that have occurred (10) An estimate of assistance that
during the two most recent calendar will be necessary under this section
years in the approved designated area and/or other Rural Development or
covered by the plan; Federal programs for the development
(4) A brief description of the socio- of the site.
economic impacts that are expected to (b) All plans meeting the criteria in
occur in the approved designated area paragraph (a) of this section should be
covered by the plan within each of the forwarded to the Governor of the ap-
next three calendar years; propriate State or States for possible
(5) The anticipated number of new incorporation into the State Invest-
employees expected to be hired in coal ment Strategy for Energy Impacted
or uranium development activities in Areas.
each of the next three years within the (c) Appropriate growth management
approved designated area covered by and/or housing plans received by the
the plan; Governor under this section may be
(6) Available financial resources and submitted to the appropriate Rural De-
federal programs that may be applied velopment State Office by the Gov-
to meeting the needs of the approved ernor.
designated area including but not lim- (d) The Governor shall submit a copy
ited to the following: of the State Investment Strategy for
(i) The expected amount of State as- Energy Impacted Areas along with all
sistance and State expenditures in the plans the Governor is submitting to
approved designated area covered by Rural Development for approval.
the plan which will be used for impact (e) During fiscal year 1979 the Gov-
assistance in the next three years; ernor may submit existing plans to
(ii) The amount of tax revenues ex- Rural Development for qualified ap-
pected to accrue to local governments proval in which some sections under
serving the approved designated area paragraph (a) above are incomplete,
covered by the plan in each of the next provided that planning is presently
three years due to increased economic being done to fill these gaps, or appli-
activities which have occurred since cation for a planning grant has been
the year prior to designation or are ex- submitted or is to be submitted to
pected to occur as a result of coal and cover the cost of the needed planning.
uranium development activity; These plans must be resubmitted for
(iii) Sources and amount of assist- final approval on or before December
ance State and local governments are 31, 1980. No requested grant will be ap-
now receiving or are expected to re- proved for land acquisition or site de-
ceive from persons for the provision of velopment unless the request is cited
housing and public facility and serv- in the Rural Development -approved
ices; and comprehensive growth management
(iv) Existing budget surplus at the plan for the designated area in which
State and local level. the project is located.
(7) The specific needs of the area cov- (f) The Rural Development State Di-
ered by the plan as to the number of rector shall review all plans and the
housing units now needed and the num- State Investment Strategy for Energy
ber that are expected to be needed in Impacted Areas and provide comments
each of the next three years, and/or the on the following:
221
(1) Appropriateness of Rural Develop- retary for Rural Development fol-

ment assistance under this section as lowing the above procedure.
called for in the plans; (m) The Governor’s modification to
(2) Appropriateness of Rural Develop- the State Investment Strategy for En-
ment assistance under other programs ergy Impacted Areas may be approved
as called for in the plans; by the Rural Development State Direc-
(3) Appropriateness of the State In- tor provided the modification is con-
vestment Strategy for Energy Im- sistent with Rural Development ap-
pacted Areas; proved plans.
(4) Other Federal programs which
§ 1948.83 Performance of site develop-
could be used instead of, or in addition ment work.
to, assistance under this section; and
(5) Recommended action. Site development work will be done
in accordance with § 1942.18 of RD In-
(g) The Rural Development State Di-
struction 1942–A.
rector shall submit all plans received
from the Governor, the State Invest- § 1948.84 Application procedure for
ment Strategy Energy Impacted Areas, site development and acquisition
and any comments to the Rural Devel- grants.
opment National Office for approval (a) For those projects for which Fed-
within 10 days of the submission of eral funding is sought in excess of
plans and the State Investment Strate- $100,000 the applicant shall file SF
gies for Energy Impacted Areas to the 424.2, ‘‘Application for Federal Assist-
State Director. ance (For Construction)’’ with the ap-
(h) The Rural Development National propriate Rural Development office.
Office shall review all plans and State For those projects for which Federal
Investment Strategy for Energy Im- funding is sought for less than $100,000,
pacted Areas received and approve or the applicant shall file SF 424.2 with
return them for modification within 30 the appropriate Rural Development of-
days of their receipt in the Rural De- fice. A copy should also be filed with
velopment National Office. the Governor’s office of the appropriate
(i) The Rural Development State Of- State.
fice shall notify the appropriate State (b) The Rural Development office re-
Director of all plans that have been ap- ceiving a SF 424.2 shall reply to the ap-
proved by the Under Secretary for plicant with-in 45 calendar days regard-
Rural Development. ing the applicant’s eligibility to com-
(j) Upon approval of the plans and pete for funding under this program
State Investment Strategies for En- using Form AD–622. (Rural Develop-
ergy Impacted Areas by the Under Sec- ment District offices will send each
retary for Rural Development, the preapplication to the Rural Develop-
Rural Development State Director may ment State Offices for review before re-
exercise the authority of the Secretary plying to the applicant. Rural Develop-
of Agriculture under Section 603 of the ment District offices will send a copy
Rural Development Act of 1972 to con- of Form AD–622 to the Rural Develop-
vene a meeting of the appropriate rep- ment State Office at the time the Form
resentatives of all Federal and State AD–622 is sent to the applicant.)
agencies which are requested to supply (c) Intergovernmental consultation
development funds by the State Invest- should be carried out in accordance
ment Strategy for Energy Impacted with 7 CFR part 3015 subpart V,
Areas for the purpose of obtaining ten- ‘‘Intergovernmental Review of Depart-
tative funding commitments con- ment of Agriculture Programs and Ac-
sistent with their authorities. tivities’’. (See RD Instruction 1970–I,
(k) The Rural Development State Of- ‘Intergovernmental Review,’ available
fice shall notify the Governor and the in any Agency office or on the Agen-
appropriate District Directors of all cy’s Web site.)
plans approved by the Under Secretary (d) Applicants shall file an original
for Rural Development. and one copy of SF 424.2, with the ap-
(l) Modifications to approved plans propriate Rural Development office.
shall be approved by the Under Sec- Local governments and councils of
222
local government shall submit applica- (1) Determine if the project is in ac-
tions to the Rural Development Dis- cordance with a Rural Development ap-
trict Office and State governments to proved growth management and/or
the Rural Development State Office. housing plan covering the approved
Applications shall include: designated area;
(1) Evidence of applicant’s legal ex- (2) Comply with environmental re-
istence and authority to undertake the view requirements in accordance with 7
proposed project; CFR part 1970;
(2) Evidence of ownership of or lease (3) Prepare a Historic Preservation
on a site to be developed or ‘‘Options to Assessment in accordance with part
Purchase Real Property,’’ Form RD 1901, subpart F, of this chapter;
440–34, (Lease on a site for a public fa- (4) Determine site stability if the
cility will be in accordance with FmHA land has been previously mined; and
Instruction 1942–A and lease on a site (f) District Rural Development Of-
for housing will be in accordance with fices receiving applications shall also
7 CFR part 3550); provide written comments reflecting
(3) Description of project and rela- site development and acquisition grant
tionship to approved growth manage- selection criteria (§ 1948.86) listed in
ment and housing plan. Applicant must this subpart.
cite pages and section of the approved (g) The Rural Development District
plan; Office shall forward the original of the
(4) A plat of the area including ele- application and accompanying docu-
vations; ments including those required in para-
(5) Preliminary plans and specifica- graph (e) of this section to the Rural
tions on proposed development which Development State Director within 10
will contain an estimate of the pro- working days of receipt of the applica-
jected cost of site development pre- tion.
pared by independent qualified apprais- (h) Upon receipt of an application,
ers or architects/engineers; the Rural Development State Office
(6) The amount of Federal grant shall:
needed; (1) Review and evaluate the applica-
(7) The amount and source of appli- tion and accompanying documents;
cant’s financial contribution to the (2) Determine that the project is a
project; part of and consistent with the State
(8) Grants made under this subpart Investment Strategy for Energy Im-
must comply with the environmental pacted Areas;
review requirements in accordance (3) Send a copy of the applicant’s evi-
with 7 CFR part 1970. dence of legal existence and authority
(9) An original and one copy of Form to the USDA Regional OGC for review;
RD 400–1 and Form RD 400–4; (4) If applicant is local govern-
(10) Evidence that the land is stable ment(s), consult with the Governor on
if the land has been previously mined funding recommendation of the
(include relevant data on soil and anal- project; and
ysis); (5) Respond to the applicant within 30
(11) Assurance that the requirements days of the date of receipt of the appli-
set forth in title 7, subtitle A, part 21 of cation.
the Code of Federal Regulations (Uni- (i) Upon receipt of an application by
form Relocation Assistance and Real the Rural Development State Office, a
Property Acquisition Policies Act of docket shall be prepared which shall
1970) have been met. include the following:
(12) Specific concurrence of the Gov- (1) Application SF 424.2 and enclo-
ernor if the proposed applicant is nei- sures;
ther a council of local governments nor (2) Any comments received in accord-
a general purpose political subdivision ance with 7 CFR part 3015 subpart V,
of a State; ‘‘Intergovernmental Review of Depart-
(e) District and State Rural Develop- ment of Agriculture Programs and Ac-
ment Offices receiving applications tivities’’. (See RD Instruction 1970–I,
shall: ‘Intergovernmental Review,’ available
223
in any Agency office or on the Agen- (4) The site is to be developed and/or
cy’s Web site.) acquired and is to be used for housing,
(3) Evidence of ownership or lease of public facilities, or services;
site to be developed; (5) The applicant has title to the site,
(4) Evidence of applicant’s legal ex- lease on site, or an option on the site
istence and authority; and funds to purchase the site, or is ap-
(5) OGC legal determination; plying for site acquisition funds;
(6) Preliminary plans and specifica- (6) The site will comply with Execu-
tions concerning the proposed develop- tive Orders 11988, ‘‘Flood Plain Man-
ment; agement’’ and 11990, ‘‘Protection of
(7) Grant agreement and scope of Wetlands;’’
work; (7) An appraisal of the fair market
(8) An estimate of projected cost of value of the site must have been com-
site development prepared by inde- pleted;
pendent qualified appraisers or engi- (8) Priority has been given in the se-
neers/architects; lection of site to unoccupied or pre-
(9) A topographical map of the area; viously mined land;
(10) Form RD 1940–1; (9) Class I or Class II farm land was
(11) Form RD 400–1; included in the site only if other suit-
(12) Form RD 400–4; able land was not available;
(13) Environmental review docu- (10) The land is stable if previously
mentation in accordance with 7 CFR mined; and
part 1970. (11) Assurance that the requirements
(14) Historic Preservation Assess- set forth in title 7, subtitle A, part 21 of
ment; the Code of Federal Regulations (Uni-
(15) A copy of the State Investment form Relocation Assistance and Real
for Energy Areas; and Property Acquisition Policies Act of
(16) District, where appropriate, and
1970) have been met.
State Rural Development written com-
(b) Competitive criteria. The following
ments, assessments and analysis of the
criteria will be considered in the selec-
proposed project in accordance with
tion of grantees:
the grant selection criteria.
(1) Priority assigned and rec-
[44 FR 35984, June 19, 1979, as amended at 46 ommended funding level by the Gov-
FR 61991, Dec. 21, 1981; 48 FR 29121, June 24, ernor in the State Investment Strategy
1983; 49 FR 3764, Jan. 30, 1984; 55 FR 13503, for Energy Impacted Areas;
13504, Apr. 11, 1990; 67 FR 78329, Dec. 24, 2002;
(2) The increase in the number of new
76 FR 80731, Dec. 27, 2011; 81 FR 11032, Mar. 2,
2016] employees and the percentage of in-
crease in employment in coal and/or
§ 1948.85 [Reserved] uranium development activities in the
year of designation within the ap-
§ 1948.86 Site development and acqui- proved designated area (years projected
sition grant selection criteria. will be averaged and treated equally);
The following criteria will be consid- (3) The severity of need for housing,
ered in the selection of site develop- public facilities, services that has re-
ment and/or acquisition grant recipi- sulted from coal or uranium develop-
ents: ment activities in relation to available
(a) Required criteria. Each project financial resources within the approved
must meet the following criteria: designated area covered by the plan
(1) The area is covered by a Rural De- calling for the project;
velopment approved plan; (4) Local priority for the project;
(2) The Rural Development approved (5) The amount of effort by State and
plan specifically calls for the site de- local government to meet the needs of
velopment and/or acquisition; the area covered by the application as
(3) Other Federal funds that the com- called for in the State Investment
munity could receive for the project Strategy for Energy Impacted Areas in
are inadequate or not available, and no relation to available financial re-
State or local funds for site develop- sources;
ment are available to permit develop- (6) An assessment of the environ-
ment on a timely basis; mental impacts of the project; and
224
(7) The nature of comments and rec- and there is authority to undertake the
ommendations of A–95 clearing- proposed project, then the State Direc-
house(s). tor shall follow the procedures set out
in title 7, subtitle A, part 21 of the
§ 1948.87 [Reserved] Code of Federal Regulations (Uniform
§ 1948.88 Direct land acquisition by Relocation Assistance and Real Prop-
Rural Development. erty Acquisition Policies Act of 1970)
and immediately open negotiations to
(a) Rural Development may take ac- directly acquire the real property
tion to acquire real property directly through purchase or trade.
upon the written request of the Gov-
(e) The Rural Development State Di-
ernor of the State in which the real
property is located. Rural Development rector may acquire real property by
will not acquire real property directly purchase to trade for other real prop-
under this section without such a re- erty when Rural Development has been
quest. requested to acquire real property by
(b) All requests for direct land acqui- the Governor of the State in which the
sition should be submitted to the Rural real property is located.
Development State Director. The fol- (f) The Governor shall submit, with
lowing conditions must be met prior to this request, a commitment from the
the submission of a request for direct State to acquire real property, to-
acquisition by Rural Development: gether with a plan of compensation to
(1) The State or local government Rural Development and evidence of the
serving the area must lack power to State’s legal authority to enter into
condemn land of this type for this pur- this agreement with Rural Develop-
pose and must supply an opinion by the ment to accept the real property and
State Attorney General that this au- repay Rural Development for the fair
thority is lacking; market value of the real property for
(2) The real property is to be used as the intended purpose.
a site for needed housing, public facili- (g) Real property acquired by Rural
ties, or services; Development shall be transferred to
(3) The site acquisition is called for the State requesting by a quitclaim
in a Rural Development approved plan; deed for a price equal to the fair mar-
(4) The site is specifically identified ket value in accordance with the terms
by a Rural Development approved plan; of a transfer agreement.
(5) State and local governments have (h) After obtaining title to the real
been unable to obtain the real property property and prior to transfer to the
for a price which does not substantially State, the property shall be managed
exceed its fair market value; and suit- by Rural Development in accordance
able alternate sites are not available;
with part 1955, subpart B of this chap-
(6) The land is not Indian Trust land;
ter.
(7) The land is not U.S. Forest Serv-
ice land; and (i) The State Director shall inform
(8) There is legal authority to under- the Governor that Rural Development
take the proposed project. real property acquisition is not likely
(c) Rural Development may acquire to occur by purchase or trade if nego-
Federal real property not prohibited in tiations have failed to produce accept-
paragraphs (b) (6) and (7) of this section able results within 90 days of the re-
for purposes contained in this subpart. quest for Rural Development acquisi-
Farm land (Class I and II) will not be tion of real property.
considered unless there is no other
suitable land available. § 1948.89 Land condemnation by Rural
Development.
(d) If the State Director determines
that no other suitable real property ex- (a) If Rural Development attempts to
ists that can be obtained at a price acquire real property at the request of
which does not substantially exceed its a Governor through purchase or trade
fair market value, and if the appro- and is unable to do so, Rural Develop-
priate State or local government lacks ment may take action to condemn the
condemnation authority as evidenced real property by the following proce-
by opinion from the Attorney General, dures:
225
(1) A request for condemnation shall after consulting with OGC, and for-
be submitted by the Rural Develop- warded for prior approval by the Rural
ment State Director to the Under Sec- Development National Office.
retary for Rural Development, Wash- (3) All funds from real property
ington, DC 20250 at the request of the transfers received by Rural Develop-
Governor of the appropriate State. A ment shall be deposited in the U.S.
copy of the Governor’s request for Treasury.
Rural Development real property con- (b) Transfer of real property acquired
demnation and the State Attorney and/or developed with grant funds from
General’s opinion that State and local a grant made under this subpart to a
government condemnation authority is person.
lacking shall be attached to the Rural (1) Real property acquired and/or de-
Development State Director’s request.
veloped under this subpart may be
(2) The Under Secretary for Rural De-
transferred to a person for the purposes
velopment shall forward all requests
of construction of privately-owned
for Federal condemnation to the OGC,
housing.
USDA with a recommendation for ac-
tion. (2) All transfers of real property to a
(3) The Under Secretary for Rural De- person must be approved by the Rural
velopment shall inform the Governor of Development State Director of the ap-
any action on the request for con- propriate State.
demnation. (3) Transfer of real property by a re-
(4) Real property condemned by cipient of assistance under this subpart
Rural Development shall be transferred to a person must be by contract which:
to the requesting State by a quitclaim acknowledges the use of funds provided
Deed for a price equal to the fair mar- under this subpart to acquire or de-
ket value of the real property in ac- velop the site; specifies the date of per-
cordance with terms of a negotiated formance prior to delivery of the deed;
real property transfer agreement. provides for Rural Development con-
(5) After obtaining title to real prop- currence before changes or modifica-
erty and prior to transfer to the State, tions; and assures Rural Development
the property shall be managed by that the real property will be used for
Rural Development in accordance with the purposes under which the grant was
part 1955, subpart B of this chapter. made.
(b) Rural Development may not con- (4) Proceeds derived from the sale of
demn Indian Trust Land or U.S. Forest land acquired or developed through the
Service Land. use of a grant provided under this sub-
part must be divided between the
§ 1948.90 Land transfers.
grantee and Rural Development on a
(a) Transfers of real property ac- pro rata basis. A grantee may not re-
quired by Rural Development. cover its cost from sale proceeds to the
(1) A request for Rural Development exclusion of Rural Development. The
acquisition of real property by a Gov- amount to be returned to Rural Devel-
ernor of a State constitutes an agree- opment is to be computed by applying
ment by that State to receive said real the percentage of the Rural Develop-
property and to reimburse Rural Devel- ment grant participation in the total
opment for the fair market value of cost of the project to the proceeds from
said real property for the intended use. the sale.
(2) Terms and conditions, including
(5) All funds received by Rural Devel-
reimbursement terms, for real property
opment from real property transfers
transfers shall be set forth in a Real
shall be deposited in the U.S. Treasury.
Property Transfer Agreement between
the Under Secretary for Rural Develop- (42 U.S.C. 8401; delegation of authority by the
ment and the appropriate Governor. Secretary of Agriculture, 7 CFR 2.23; delega-
These terms and conditions will be tion of authority by the Assistant Secretary
agreed upon by Rural Development and for Rural Development, 7 CFR 2.70)
the State prior to Rural Development [44 FR 35984, June 19, 1979, as amended at 46
attempting to acquire the property. FR 33022, June 26, 1981; 56 FR 28038, June 19,
These agreements shall be prepared 1991; 68 FR 61331, Oct. 28, 2003]
226
§ 1948.91 Inspections of development. Office, the requesting official shall fur-

Inspections will be made by the nish the requesting office’s security
Rural Development State Engineer or identification code. Failure to furnish
other employee designated by the the security code will result in the re-
Rural Development State Director to jection of the request of obligation.
ascertain whether site development is After the security code is furnished,
proceeding in accordance with plans the required information from Form
and specifications. Such inspections FmHA or its successor agency under
are solely for the benefit of the Govern- Public Law 103–354 440–1 shall be fur-
ment and not for the benefit of the nished to the Finance Office. Upon re-
Grantee or any other person. ceipt of the telephone request for obli-
gation of funds, the Finance Office
§ 1948.92 Grant approval and fund ob- shall record all information necessary
ligation. to process the request for obligation in
(a) The Rural Development State Of- addition to the date and time of re-
fice shall review the docket to deter- quest.
mine whether the proposed grant com- (2) The individual making the request
plies with this subpart and that funds shall record the date and time of the
are available. request.
(b) The Rural Development State Di- (3) The Finance Office will notify the
rector shall be the approving officer on Rural Development State Office by
all grants made under this subpart. telephone when funds are reserved and
(c) If at any time prior to grant ap- the date the funds will be obligated. If
proval it is decided that favorable ac- funds cannot be reserved for a project,
tion will not be taken on a the Finance Office will notify the
preapplication or application, the Rural Development State Office that
Rural Development State Director will funds are not available. The obligation
notify the applicant in writing of the date will be the date the request for ob-
reasons why the request was not favor- ligation is processed.
ably considered. The notification to (4) The Finance Office will send Form
the applicant will state that a review RD 440–57, ‘‘Acknowledgement of Obli-
of this decision by Rural Development gated Funds/Check Request,’’ to the
may be requested by the applicant in Rural Development State Director, in-
accordance with RD Instruction 1900–B. forming the State Director of the res-
(d) If a grant is recommended, Form ervation of funds with the obligation
RD 1940–1 and the proposed grant date inserted as required by Item 9 on
agreement and scope of work will be the Forms Manual Insert (FMI) for
prepared and forwarded to the appli- Form RD 440–57.
cant for signature. (5) Form FmHA or its successor agen-
(e) When Form RD 1940–1 and the cy under Public Law 103–354 440–1 will
grant agreement and scope of work are not be mailed to the Finance Office.
received by the applicant, the appli- (6) A copy of Form RD 1940–1 will be
cant will sign these documents and for- sent the Rural Development National
ward them to the State Director. Office.
(f) Exhibit A to RD Instruction 2015– (7) The State Director shall notify
C (available in any Rural Development the Director, LAPAS, in the Rural De-
office) will be prepared by the State Di- velopment National Office with a rec-
rector and sent to the Director, Legis- ommendation that the project an-
lative and Public Affairs Staff nouncement be released.
(LAPAS), in the Rural Development (8) An executed copy of Form FmHA
National Office. or its successor agency under Public
(g) If the State Director approves the Law 103–354 440–1 shall be sent to the
project, the following actions will be applicant along with an executed copy
taken in the order listed: of the grant agreement and scope of
(1) The State Director, or a designee, work 6 working days from the date
will telephone the Finance Office refunds are obligated.
questing that grant funds for a par- (9) The actual date of applicant noti-
ticular project be obligated. Imme- fication will be entered on the original
diately after contacting the Finance of Form FmHA or its successor agency
227
under Public Law 103–354 440–1 and the quired of all grantees on a quarterly
original of the form will be included as basis. SF–269 and a final project per-
a permanent part of the file. formance report will also be required.
(10) For planning grants, Standard These final reports may serve as the
Form 270, ‘‘Request for Advance or Re- last quarterly reports. Grantees shall
imbursement,’’ will be sent to the ap- constantly monitor performance to en-
plicant for completion and return to sure that time schedules are being met,
Rural Development. For site acquisi- projected work by time periods is being
tion and site development grants, accomplished, and other performance
Standard Form 271, ‘‘Outlay Report objectives are being achieved. All
and Request for Reimbursement for grantees except States should submit
Construction Programs,’’ will be sent an original of each report and one copy
to the applicant for completion and re- to the appropriate Rural Development
turned to Rural Development. District Office. When the grantee is a
(11) If it is determined that a project State, an original should be submitted
will not be funded or if major changes to the appropriate Rural Development
in the scope of the project are made State Office. The project performance
after release of the approval announce- reports shall include, but need not be
ment, the Rural Development State Di- limited to the following:
rector will notify the Director, LAPAS (1) A comparison of actual accom-
by telephone or electronic mail giving plishments to the objectives estab-
the reasons for such action. The Direc- lished for that period;
tor, LAPAS, will inform all parties (2) Reasons why established objec-
who were notified by the project an- tives were not met;
nouncement that the project will not (3) Problems, delays, or adverse con-
be funded or of major changes in the ditions which will materially affect at-
project using a procedure similar to tainment of planned project objectives,
the announcement process. Form RD prevent the meeting of time schedules
1940–10, ‘‘Cancellation of U.S. Treasury or objectives, or preclude the attain-
Check and/or Obligation,’’ will not be ment of project work elements during
submitted to the Finance Office until established time periods. This disclo-
five working days after notifying the sure shall be accompanied by a state-
Director, LAPAS. ment of the action taken or con-
(7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; sec.
templated and any Federal assistance
10 Pub. L. 93–357; delegation of authority by needed to resolve the situation; and
the Sec. of Agri., 7 CFR 2.23; delegation of (4) Objectives established for the next
authority by the Under Secretary for Small reporting period.
Community and Rural Development, 7 CFR (b) For site development and land ac-
2.70) quisition grants, grantees shall submit
[44 FR 35984, June 19, 1979, as amended at 47 Form SF–271 for payment of site devel-
FR 36416, Aug. 20, 1982; 48 FR 30946, July 6, opment costs. Multiple advances will
1983; 79 FR 55967, Sept. 18, 2014] be made in accordance with RD In-
struction 1902–A (available in any
§ 1948.93 Appeal procedure. Rural Development office) and will be
Any grantee or applicant for Rural made as needed to cover required dis-
Development assistance under this sub- bursements for not less than 30 day pe-
part who has been directly and ad- riods. Advances will be requested for
versely affected by an administrative the next 30 day period by the grantee
decision by Rural Development may on Form SF–272, ‘‘Report of Federal
appeal such decision in accordance Cash Transactions.’’ Each payment es-
with RD Instruction 1900–B. timate must be approved by the grant-
ee. A final Form SF–272 will be sub-
§ 1948.94 Reporting requirements. mitted to Rural Development to in-
(a) For planning grants, SF–270 shall clude the final advance not later than
be submitted by grantees on an as- 90 days after the final advance.
needed basis but not more frequently
that once every 30 days. SF–269, ‘‘Fi- § 1948.95 Grant monitoring.
nancial Status Report,’’ and a project Each grant will be monitored by
performance activity report will be re- Rural Development to ensure that the
228
RHS, RBS, RUS, FSA, USDA Pt. 1948, Subpt. B, Exh. A
Grantee is complying with the terms of Grantee has determined to undertake cer-
the grant and that the project activi- tain growth management and housing
ties are completed as approved. This planning for energy impacted areas at an
estimated cost of $lllll and has duly
will involve on-site visits to the project
authorized such planning. The Grantor
area and review of quarterly and final agrees to grant to Grantee a sum not to ex-
reports by Rural Development. ceed $lllll subject to the terms and
conditions established by the Grantor; pro-
§ 1948.96 Audit requirements. vided, however, that any grant funds actu-
(a) Audit requirements for Site De- ally advanced and not needed for grant
velopment and Acquisition Grants will purposes shall be returned immediately to
the Grantor. The Grantor may terminate
be made in accordance with RD In-
the grant in whole, or in part, at any time
struction 1942–G. before the date of completion, whenever it
(b) Audits for planning grants made is determined that the Grantee has failed
in accordance with State statutes or to comply with the conditions of the grant.
regulatory agencies will be acceptable In consideration of said grant by Grantor
provided they are prepared in sufficient to Grantee, to be made pursuant to Section
detail to permit Rural Development to 601 of the Powerplant and Industrial Fuel
determine that grant funds have been Use Act of 1978 (Pub. L. 95–620) for the pur-
used in compliance with the proposal, pose only of defraying the planning costs
as permitted by applicable Farmers Home
any applicable laws and regulations, Administration or its successor agency
and the grant agreement. A copy of the under Public Law 103–354 regulations:
audit shall be submitted to the State
Director as soon as possible but in no PART A
case later than 90 days following the Grantor and Grantee agree:
period covered by the grant.
1. This agreement shall be effective when
§ 1948.97 Grant closing and fund dis- executed by both parties.
bursement. 2. The scope of work set out below shall be
completed prior tolllllll.
Grant closing and fund disbursement 3. (a) Use of grant funds for travel which is
will be accomplished in accordance determined as being necessary to the pro-
with RD Instruction 1942–G. gram for which the grant is established may
be subject to the travel policies of the Grant-
§ 1948.98 Grant agreements. ee institution if they are uniformly applied
The following Grant Agreements are regardless of the source of funds in deter-
mining the amounts and types of reimburs-
a part of this regulation.
able travel expenses of Grantee staff and
(a) Exhibit A of this subpart is a consultants. Where the Grantee institution
Grant Agreement for Growth Manage- does not have such specific policies uni-
ment and Housing Planning Grants for formly applied, the Federal Travel Regula-
approved Designated Energy Impacted tions shall apply in determining the amount
Areas. charged to the grant. Grantee may purchase
(b) Exhibit B of this subpart is a furniture and office equipment only if spe-
Grant Agreement for Site Development cifically approved in the scope of work. Ap-
and/or Site Acquisition for Housing proval will be given only when Grantee dem-
onstrates that purchase is necessary and
and/or Public Facilities and/or Serv- would result in less cost to the Government
ices. in providing Federal-share funds or to the
Grantee in providing its contributions. Com-
§§ 1948.99–1948.100 [Reserved] mercial purchase under these circumstances
will be approved only after consideration of
EXHIBIT A TO SUBPART B OF PART 1948— Federal supply sources.
GRANT AGREEMENT—GROWTH MAN- (b) Expenses and Purchases Excluded:
AGEMENT AND HOUSING PLANNING (i) In no event shall the Grantee expend or
FOR APPROVED DESIGNATED ENERGY request reimbursement from Federal-share
IMPACTED AREAS funds for obligations entered into or for
costs incurred or accrued prior to the effec-
This Agreement is between tive date of this grant.
(Name), lllllllllllllllllll (ii) Funds budgeted under this grant may
(Address),(Grantee) and the United States of not be used for entertainment expenses.
America acting through the Farmers Home (iii) Funds budgeted under this grant may
Administration (Grantor or FmHA) or its not be used to pay for capital assets, the pur-
successor agency under Public Law 103–354. chase of real estate or vehicles, improvement
229
Pt. 1948, Subpt. B, Exh. A 7 CFR Ch. XVIII (1–1–21 Edition)
and renovation of space, and repair and 5. The Grantee will submit Performance
maintenance of privately-owned vehicles. and Financial reports as indicated below:
(c) Grant funds shall not be used to replace (a) As needed, but not more frequently
any financial support previously provided or than once every 30 days, an original and 2
assured from any other source. The Grantee copies of Standard Form 270, ‘‘Request for
agrees that the general level of expenditure Advance or Reimbursement;’’
by the Grantee for the benefit of program (b) Quarterly, an original and 2 copies of
area and/or program covered by this agree- Standard Form 269, ‘‘Financial Status Re-
ment shall be maintained and not reduced as port,’’ and a Project Performance report ac-
a result of the Federal share funds received cording to the schedule below:
under this grant.
4. (a) In accordance with Treasury Circular Period Date due
1075, grant funds will be disbursed by the (c) Final, an original and 2 copies of Stand-
FmHA or its successor agency under Public ard Form 269, ‘‘Financial Status Report,’’
Law 103–354 as cash advances on an as-needed and a Project Performance report according
basis not to exceed one advance every 30 to the schedule below:
days. The financial management system of Period Date due
the recipient organization shall provide for
effective control over and accountability for NOTE: Final reports may serve as the last
all Federal funds as stated in OMB Circular quarterly reports.
A–102 revised for State and local govern- (d) The Project Performance reports shall
ments. include but need not be limited to the fol-
(b) Cash advances to the Grantee shall be lowing:
limited to the minimum amounts needed and
(i) A comparison of actual accomplishment
shall be timed to be in accord only with the
to the objectives established for that period;
actual, immediate cash requirements of the
(ii) Reasons why established objectives
Grantee in carrying out the purpose of the
were not met;
planning project.
(c) The timing and amount of cash ad- (iii) Problems, delays, or adverse condi-
vances shall be as close as is administra- tions which will materially affect attain-
tively feasible to the actual disbursements ment of planned project objectives, prevent
by the recipient organization for direct pro- the meeting of time schedules or objectives,
gram costs. or preclude the attainment of project work
(d) Federal funds should be promptly re- elements during established time periods.
funded to the FmHA or its successor agency This disclosure shall be accompanied by a
under Public Law 103–354 and redrawn when Statement of the action taken or
needed if the funds are erroneously drawn in comtemplated and any Federal assistance
excess of immediate disbursement needs. The needed to resolve the situation; and
only exceptions to the requirement for (iv) Objectives established for the next re-
prompt refunding are when the funds in- porting period.
volved: (e) All Grantees except States shall submit
(i) Will be disbursed by the recipient orga- an original of each report and one copy to
nization within seven calendar days, or the appropriate FmHA or its successor agen-
(ii) Are less than $10,000 and will be dis- cy under Public Law 103–354 District Office.
bursed within 30 calendar days. A State Grantee shall submit original re-
(e) Grantee shall provide satisfactory evi- ports to the appropriate FmHA or its suc-
dence to FmHA or its successor agency cessor agency under Public Law 103–354 State
under Public Law 103–354 that all officers of Office.
Grantee organization authorized to receive (f) The plan(s) developed under this grant
and/or disburse Federal funds are covered by shall be submitted to the appropriate Gov-
such bonding and/or insurance requirements ernor for incorporation into the State In-
as are normally required by the Grantee. vestment Strategy for Energy Impacted
(f) Grant funds will be placed in a bank ac- Areas. The Governor will submit the plan
count(s). If for any reason grant funds are in- and the State Investment Strategy to the
vested, income earned on such investment appropriate FmHA or its successor agency
shall be identified as interest income on under Public Law 103–354 State Office(s). The
grant funds and forwarded to the Finance Of- FmHA or its successor agency under Public
fice, FmHA or its successor agency under Law 103–354 State Office will forward the
Public Law 103–354, St. Louis, Missouri, un- plan and State Investment Strategy to the
less the Grantee is a State. ‘‘State’’ includes FmHA or its successor agency under Public
instrumentalities of a State but not political Law 103–354 National Office for approval of
subdivisions of a State. A State Grantee is the plan.
not accountable for interest earned on grant 6. The Budget covered by this agreement
funds. is:
230
Non-Federal share
Federal
Budget categories Total
funds Cash In-kind
Direct charges:
1. Personnel ........................................................................................... $
2. Fringe benefits.
3. Travel.
4. Equipment.
5. Supplies.
6. Contractual.
7. Others.
Total Direct Charges.

8. Indirect charges.
Total ................................................................................................ .................. .................. .................. ..................
(a) In accordance with FMC 74–4, Attach- goals sooner than anticipated or producing
ment B, compensation for employees will be more work units than originally projected.
considered reasonable to the extent that
such compensation is consistent with that PART B
paid for similar work in other activities of Grantee agrees:
the State or local government. 1. To comply with property management
(b) In accordance with OMB Circular A–102, standards established by Attachment N of
Attachment K, transfers among direct cost OMB Circular A–102 for expendable and non-
budget categories of more than 5 percent of expendable personal property Personal prop-
the total budget must have prior written ap- erty means property of any kind except real
proval by the State Director, Farmers Home property. It may be tangible—having phys-
Administration or its successor agency ical existence—or intangible—having no
under Public Law 103–354. physical existence, such as patents, inven-
7. (a) The scope of work is described in the tions, and copyrights. Nonexpendable personal
attached exhibit 1. The Grantee accepts re- property means tangible personal property
sponsibility for establishing a development having a useful life of more than one year
process which will improve local conditions and an acquisition cost of $300 or more per
and alleviate problems associated with in- unit. A Grantee may use its own definition
creased coal or uranium production in the of nonexpendable personal property provided
Grantee areas. The Grantee shall: that such definition would at least include
(i) Develop a growth management and all tangible personal property as defined
housing plan for assistance to approved des- above. ‘‘Expendable personal property’’ re-
ignated area(s) impacted by increased coal or fers to all tangible personal property other
uranium production. than nonexpendable property. When non-
(ii) Contribute to development of a State expendable tangible property is acquired by
Investment Strategy for Energy Impacted a Grantee with project funds, title shall not
Areas. be taken by the Federal Government but
(iii) Endeavor to coordinate and provide li- shall vest in the Grantee subject to the fol-
aison with State development organizations, lowing conditions:
where they exist. (a) Right to transfer title. For items of
(iv) Provide continuing information to nonexpendable personal property having a
FmHA or its successor agency under Public unit acquisition cost of $1,000 or more,
Law 103–354 on the status of Grantee pro- FmHA or its successor agency under Public
grams, projects, related activities, and prob- Law 103–354 may reserve the right to transfer
lems. the title to the Federal Government or to a
(b) The Grantee shall inform the Grantor third party named by the Federal Govern-
as soon as the following types of conditions ment when such third party is otherwise eli-
become known: gible under existing statutes. Such reserva-
(i) Problems, delays, or adverse conditions tion shall be subject to the following stand-
which materially affect the ability to attain ards:
program objectives, prevent the meeting of (1) The property shall be appropriately
time schedules or goals, or preclude the at- identified in the grant or otherwise made
tainment of project work units by estab- known to the Grantee in writing.
lished time periods. This disclosure shall be (2) FmHA or its successor agency under
accompanied by a statement of the action Public Law 103–354 shall issue disposition in-
taken or contemplated, and any Grantor as- structions within 120 calendar days after the
sistance needed to resolve the situation. end of the Federal support of the project for
(ii) Favorable developments or events which it was acquired. If FmHA or its suc-
which enable meeting time schedules and cessor agency under Public Law 103–354 fails
231
to issue disposition instructions within the (2) Nonexpendable personal property with a
120 calendar day period, the Grantee shall unit acquisition cost of $1,000 or more. The
apply the standards of paragraph (4) below. Grantee may retain the property for other
(3) When FmHA or its successor agency use provided that compensation is made to
under Public Law 103–354 exercises its right FmHA or its successor agency under Public
to take title, the personal property shall be Law 103–354 or its successor. The amount of
subject to the provisions for federally owned compensation shall be computed by applying
nonexpendable property discussed in para- the percentage of Federal participation in
graph (4), below. the cost of the original project or program to
(4) When title is transferred either to the the current fair market value of the prop-
Federal Government or to a third party and erty. If the Grantee has no need for the prop-
the Grantee is instructed to ship the property and the property has further use value,
erty elsewhere, the Grantee shall be reim- the Grantee shall request disposition in-
bursed by the benefiting Federal agency with structions from the original Grantor agency.
an amount which is computed by applying FmHA or its successor agency under Pub-
the percentage of the Grantee participation lic Law 103–354 shall determine whether the
in the cost of the original grant project or property can be used to meet the agency’s
program to the current fair market value of requirements. If no requirement exists with-
the property, plus any reasonable shipping or in that agency, the availability of the prop-
interim storage costs incurred. erty shall be reported, in accordance with
(b) Use of other nontangible expendable the guidelines of the Federal Property Man-
property for which the Grantee has title. agement Regulations (FPMR), to the Gen-
(1) The Grantee shall use the property in eral Services Administration by FmHA or its
the project or program for which it was ac- successor agency under Public Law 103–354 to
quired as long as needed, whether or not the determine whether a requirement for the
project or program continues to be supported property exists in other Federal agencies.
by Federal funds. When it is no longer need- FmHA or its successor agency under Public
ed for the original project or program, the Law 103–354 shall issue instructions to the
Grantee shall use the property in connection Grantee no later than 120 days after the
with its other Federally sponsored activities, Grantee request and the following proce-
in the following order of priority: dures shall govern:
(a) Activities sponsored by FmHA or its (a) If so instructed or if disposition in-
successor agency under Public Law 103–354. structions are not issued within 120 calendar
(b) Activities sponsored by other Federal days after the Grantee’s request, the Grantee
agencies. shall sell the property and reimburse FmHA
(2) Shared use. During the time that non- or its successor agency under Public Law
expendable personal property is held for use 103–354 an amount computed by applying to
on the project or program for which it was the sales proceeds the percentage of Federal
acquired, the Grantee shall make it avail- participation in the cost of the original
able for use on other projects or programs if project or program. However, the Grantee
such other use will not interfere with the shall be permitted to deduct and retain from
work on the project or program for which the Federal share $100 or ten percent of the
the property was originally acquired. First proceeds, whichever is greater, for the
preference for such other use shall be given Grantee’s selling and handling expenses.
to other projects or programs sponsored by (b) If the Grantee is instructed to dispose
FmHA or its successor agency under Public of the property other than as described in
Law 103–354; second preference shall be given (1)(a)(4) above, the Grantee shall be reim-
to projects or programs sponsored by other bursed by FmHA or its successor agency
Federal agencies. If the property is owned by under Public Law 103–354 for such costs in-
the Federal Government, use on other activi- curred in its disposition.
ties not sponsored by the Federal Govern- (c) Property management standards for
ment shall be permissable if authorized by nonexpendable property. The Grantee’s prop-
FmHA or its successor agency under Public erty management standards for nonexpend-
Law 103–354. User charges should be consid- able personal property shall include the fol-
ered if appropriate. lowing procedural requirements:
(c) Disposition of other nonexpendable (1) Property records shall be maintained
property. When the Grantee no longer needs accurately and shall include:
the property as provided in 1(a)(4) above, the (a) A description of the property.
property may be used for other activities in (b) Manufacturer’s serial number, model
accordance with the following standards: number, Federal stock number, national
(1) Nonexpendable property with a unit ac- stock number, or other identification num-
quisition cost of less than $1,000. The Grant- ber.
ee may use the property for other activities (c) Sources of the property including grant
without reimbursement to the Federal Gov- or other agreement number.
ernment or sell the property and retain the (d) Whether title vests in the Grantee or
proceeds. the Federal Government.
232
(e) Acquisition date (or date received, if Financial Reporting will be on an accrual
the property was furnished by the Federal basis.
Government) and cost. (b) Records which identify adequately the
(f) Percentage (at the end of the budget source and application of funds for grant-
year) of Federal participation in the cost of supported activities. Those records shall con-
the project or program for which the prop- tain information pertaining to grant awards
erty was acquired. (Not applicable to prop- and authorizations, obligations, unobligated
erty furnished by the Federal Government.) balances, assets, liabilities, outlays, and in-
(g) Location, use and condition of the prop- come.
erty and the date the information was re- (c) Effective control over and account-
ported. ability for all funds, property, and other as-
(h) Unit acquisition cost. sets. Grantee shall adequately safeguard all
(i) Ultimate disposition data, including such assets and shall assure that they are
date of disposal and sales price or the meth- used solely for authorized purposes.
od used to determine current fair market (d) Accounting records supported by source
value where a Grantee compensates the Fed- documentation.
eral agency for its share. (e) Provide an audit report prepared in suf-
(2) Property owned by the Federal Govern- ficient detail to allow Grantor to determine
ment must be marked to indicate Federal that funds have been used in compliance
ownership. with the proposal any applicable laws and
(3) A physical inventory of property shall regulations and this agreement.
be taken and the results reconciled with the 3. To retain financial records, supporting
property records at least once every two documents, statistical records, and all other
years. Any differences between quantities de- records pertinent to the grant for a period of
termined by the physical inspection and at least three years after closing except that
those shown in the accounting records shall the records shall be retained beyond the
be investigated to determine the causes of three-year period if audit findings have not
the difference. The Grantee shall, in connec- been resolved. Microfilm copies may be sub-
tion with the inventory, verify the existence, stituted in lieu of original records. The
current utilization, and continued need for Grantor and the Comptroller General of the
the property. United States, or any of their duly author-
(4) A control system shall be in effect to ized representatives, shall have access to any
insure adequate safeguards to prevent loss, books, documents, papers, and records of the
damage, or theft of the property. Any loss, Grantee which are pertinent to the specific
damage, or theft of nonexpendable property grant program for the purpose of making
shall be investigated and fully documented; audit, examination, excerpts, and tran-
if the property was owned by the Federal scripts.
Government, the Grantee shall promptly no- 4. To provide information as requested by
tify FmHA or its successor agency under the Grantor to determine the need for and
Public Law 103–354. complete any necessary Environmental Im-
(5) Adequate maintenance procedures shall pact Statements.
be implemented to keep the property in good 5. To provide information as requested by
condition. the Grantor concerning the Grantee’s ac-
(6) Where the Grantee is authorized or re- tions in soliciting citizen participation in
quired to sell the property, proper sales pro- the application process, including published
cedures shall be established which would pro- notice of public meetings, actual public
vide for competition to the extent prac- meetings held, and content of written com-
ticable and result in the highest possible re- ments received.
turn. 6. To account for and to return to Grantor
(7) Expendable personal property shall vest interest earned on grant funds pending their
in the Grantee upon acquisition. If there is a disbursement for program purposes unless
residual inventory of such property exceed- the Grantee is a State. See part A 4(f) above.
ing $1,000 in total aggregate fair market 7. Not to encumber, transfer, or dispose of
value, upon termination or completion of the the property or any part thereof, furnished
grant and if the property is not needed for by the Grantor or acquired wholly or in part
any other Federally sponsored project or with Grantor funds without the written con-
program, the Grantee shall retain the prop- sent of the Grantor except as provided in
erty for use on nonfederally sponsored ac- part B 1.
tivities, or sell it, but must in either case 8. To provide Grantor such periodic reports
compensate the Federal Government for its as it may require of Grantee operations by
share. The amount of compensation shall be designated representative of the Grantor.
computed in the same manner as nonexpend- 9. To execute Form FmHA or its successor
able personal property. agency under Public Law 103–354 400–1,
2. To provide Financial Management Sys- ‘‘Equal Opportunity Agreement,’’ and to exe-
tems which will include: cute any other agreements required by
(a) Accurate, current, and complete disclo- Grantor to implement the civil rights re-
sure of the financial results of each grant. quirements.
233
10. To include in all contracts in excess of the Grantee has failed to comply with the
$100,000 a provision for compliance with all conditions of the grant. The Grantor agency
applicable standards, orders, or regulations shall promptly notify the Grantee in writing
issued pursuant to the Clean Air Act of 1970. of the determination and the reasons for the
Violations shall be reported to the Grantor termination, together with the effective
and the Regional Office of the Environ- date.
mental Protection Agency. (b) Termination for convenience. The
11. That, upon any default under its rep- Grantor agency or Grantee may terminate
resentations or agreements set forth in this grants in whole, or in part, when both par-
instrument, Grantee, at the option and de- ties agree that the continuation of the
mand of Grantor, will, to the extent legally project would not produce beneficial results
permissible, repay to the Grantor forthwith commensurate with the further expenditure
the original principal amount of the grant of funds. The two parties shall agree upon
stated herein above, with interest at the rate the termination conditions, including the ef-
of five per centum per annum from the date fective date and, in the case of partial termi-
of the default. The provisions of this Grant nations, the portion to be terminated. The
Agreement may be enforced by Grantor, at Grantee shall not incur new obligations for
its option and without regard to prior waiv- the terminated portion after the effective
ers by it of previous defaults of Grantee, by date, and shall cancel as many outstanding
judicial proceedings to require specific per- obligations as possible. The Grantor agency
formance of the terms of this Grant Agree- shall allow full credit to the Grantee for the
ment or by such other proceedings in law or Federal share of the noncancelable obliga-
equity, in either Federal or State courts, as tions, properly incurred by the Grantee prior
may be deemed necessary by Grantor to as- to termination.
sure compliance with the provisions of this
Grant Agreement and the laws and regula- PART C
tions under which this grant is made.
12. That no member of Congress shall be Grantor agrees:
admitted to any share or part of this grant 1. That it will assist Grantee, within avail-
or any benefit that may arise therefrom; but able appropriations, with such technical as-
this provision shall not be construed to bar sistance as Grantor deems appropriate in
as a contractor under the grant a publicly planning the project and coordinating the
held corporation whose ownership might in- plan with local official comprehensive plans
clude a member of Congress. and with any State or area plans for the area
13. That all non-confidential information in which the project is located.
resulting from its activities shall be made 2. That at its sole discretion, Grantor may
available to the general public on an equal at any time give any consent, deferment,
basis. subordination, release, satisfaction, or ter-
14. That the purpose and scope of work for mination of any or all of Grantee’s grant ob-
which this grant is made shall not duplicate ligations, with or without valuable consider-
programs for which monies have been re- ation, upon such terms and conditions as
ceived, are committed, or are applied for Grantor may determine to be (a) advisable to
from other sources, public and private. further the purposes of the grant or to pro-
15. That the Grantee shall relinquish any tect Grantor’s financial interest therein, and
and all copyrights and/or privileges to the (b) consistent with both the statutory pur-
materials developed under this grant, such poses of the grant and the limitations of the
material being the sole property of the Fed- statutory authority under which it is made.
eral Government. In the event anything de-
This agreement is subject to current
veloped under this grant is published in
Grantor regulations and any future regula-
whole or in part, the material shall contain
tions not inconsistent with the express
notice and be identified by language to the
terms hereof.
following effect: ‘‘The material is the result
of tax-supported research and as such is not Grantee on lllllllllll, 19ll,
copyrightable. It may be freely reprinted has caused this agreement to be executed by
with the customary crediting of the source.’’ its duly authorized lllllllllll and
16. That the Grantee shall abide by the attested and its corporate seal affixed by its
policies promulgated in OMB Circular A–102, duly authorized lllllllllll.
Attachment O, which provides standards for Attest:
use by Grantees in establishing procedures Grantee:
for the procurement of supplies, equipment, By llllllllllllllllllllll
and other services with Federal grant funds. llllllllllllllllllllllll
17. To the following termination provi-
(Title)
sions:
(a) Termination for cause: The Grantor
agency may terminate any grant in whole, llllllllllllllllllllllll
or in part, at any time before the date of (Title)
completion, whenever it is determined that Grantor:
234
RHS, RBS, RUS, FSA, USDA Pt. 1948, Subpt. B, Exh. B
United States of America Farmers Home Ad- tration or its successor agency under Public
ministration or its successor agency under Law 103–354 regulations:
Public Law 103–354. Grantee agrees that Grantee will:
1. Cause said project to be completed with-
llllllllllllllllllllllll in the total sums available to it, including
(Title) said grant, in accordance with the project
(Approved by the Office of Management and plans and specifications and any necessary
Budget under control number 0575–0040) modifications thereof prepared by Grantee
and approved by Grantor.
[44 FR 35984, June 19, 1979, as amended at 47 2. Permit periodic inspection of the project
FR 745, Jan. 7, 1982] by a representative of Grantor.
3. Make the housing or public facility or
EXHIBIT B TO SUBPART B OF PART 1948—
services available to all persons in Grantee’s
GRANT AGREEMENT (PUBLIC BODIES) servce area without regard to race, color, na-
FOR SITE DEVELOPMENT AND/OR SITE tional origin, religion, sex, marital status,
ACQUISITION FOR HOUSING AND/OR age, physical or mental handicap.
PUBLIC FACILITIES AND/OR SERV- 4. Use the real property including land and
ICES land improvements for authorized purposes
of the grant as long as needed.
This agreement dated llllllllll, a. The Grantee shall obtain approval of the
19l, between Grantor before using the real property for
llllllllllllllllll a public other purposes when the Grantee determines
body corporate organized and operating that the property is no longer for the origi-
under llllllllllll (Authorizing nal purposes.
State Statute)
b. When the real property is no longer
Herein called ‘‘Grantee,’’ and the United
needed as provided above, return all real
States of America acting through the Farm-
property furnished or purchased wholly with
ers Home Administration or its successor
Federal grant funds to the Grantor. In the
agency under Public Law 103–354, Depart-
case of property purchased in part with Fed-
ment of Agriculture, herein called ‘‘Grant-
eral grant funds, the Grantee may be per-
or,’’ Witnesseth:
Grantee has determined to undertake a mitted to take title to the Federal interest
project for site acquisition and/or site devel- therein upon compensating the Federal Gov-
opment as follows: ernment for its fair share of the property.
lllllllllllllll (herein called The Federal share of the property shall be
project) to serve the approved designated en- the amount computed by applying the per-
ergy impacted area under its jurisdiction at centage of the Federal Participation in the
an estimated cost of $lllll, and has duly total cost of the grant program for which the
authorized the undertaking of such project; property was acquired to the current fair
Grantee is able to finance not more than market value of the property.
$lllll of the site acquisition and/or site 5. Not use grant funds to replace any finan-
development costs through revenues, cial support previously provided or assured
charges, taxes or assessments, or funds oth- from any other source. The Grantee agrees
erwise available to Grantee. Said sum has that the general level of expenditure by the
been committed to and by Grantee for such Grantee for the benefit of program area and/
project acquisition and/or site development or program covered by this agreement shall
costs. be maintained and not reduced as a result of
The Grantor agrees to grant to Grantee a the Federal share funds received under this
sum not to exceed $lllll subject to the grant.
terms and conditions established by the 6. Not use grant funds to pay for construc-
Grantor. Provided, however, that the proportion costs of housing or public facilities.
tionate share of any grant funds actually ad- This Grant Agreement covers the following
vanced and not needed for grant purposes described real property (use continuation
shall be returned immediately to the Grant- sheets as necessary).
or. The Grantor may terminate the grant in 7. Abide by the following conditions per-
whole, or in part, at any time before the date taining to nonexpendable personal property
of completion, whenever it is determined which is furnished by the Grantor or ac-
that the Grantee has failed to comply with quired wholly or in part with Grant Funds.
the conditions of the grant. a. The Grantee shall retain such property
In consideration of said grant by Grantor as long as there is a need for the property to
to Grantee, to be made pursuant to Section accomplish the purpose of the grant. When
601 of the Powerplant and Industrial Fuel there is no longer a need for the property to
Use Act of 1978 (Pub. L. 95–620) for the pur- accomplish the purpose of the grant, the
pose only of defraying a part of the acquisi- Grantee shall use the property in connection
tion and/or site development costs, as de- with other Federal grants it has received in
fined by applicable Farmers Home Adminis- the following order of priority.
235
(1) Other grant of the Grantor needing the damage, or theft to the property shall be in-
property. vestigated and fully documented.
(2) Grants of other Federal agencies need- (4) Adequate maintenance procedures shall
ing the property. be implemented to keep the property in good
b. When the Grantee no longer has need for condition.
the property in any of its Federal grant pro- (5) Proper sales procedures shall be estab-
grams, the property may be used for its own lished for unneeded property which would
official activities in accordance with the fol- provide for competition to the extent prac-
lowing standards: ticable and result in the highest possible re-
(1) Nonexpendable property with an acqui- turn.
sition cost of less than $500 and used four This Grant Agreement covers the following
years or more. The Grantee may use the described nonexpendable property (use con-
property for its own official activities with- tinuation sheets as necessary).
out reimbursement to the Federal Govern-
ment or sell the property and retain the pro- 8. Provide Financial Management Systems
ceeds. which will include:
(2) All other nonexpendable property. The (a) Accurate, current, and complete disclo-
Grantee may retain the property for its own sure of the financial results of each grant.
use provided that a fair compensation is Financial Reporting will be on an accrual
made to the Grantor. The amount of com- basis.
pensation shall be computed by applying the (b) Records which identify adequately the
percentage of the Grantor participation in source and application of funds for grant-
the grant program to the current fair mar- supporting activities. Those records shall
ket value of the property as determined by contain information pertaining to grant
the Grantor. awards and authorizations, obligations, un-
c. If the Grantee has no need for the prop- obligated balances, assets, liabilities, out-
erty, disposition shall be made as follows: lays, and income.
(1) Nonexpendable property with an acqui- (c) Effective control over and account-
sition cost of $1,000 or less. Except for that ability for all funds, property and other as-
property which meets the criteria of b(1) sets. Grantees shall adequately safeguard all
above, the Grantee shall sell the property such assets and shall assure that they are
and reimburse the Grantor an amount which used solely for authorized purposes.
is computed in accordance with (3) below. (d) Accounting records supported by source
(2) Nonexpendable property with an acqui- documentation.
sition cost of over $1,000. The Grantee shall 9. Retain financial records, supporting doc-
request disposition instructions from Grant- uments, statistical records, and all other
or. records pertinent to the grant for a period of
(3) If disposition instructions are not at least three years after grant closing ex-
issued within 120 days after reporting, the cept that the records shall be retained be-
Grantee shall sell the property and reim- yond the three-year period if audit findings
burse the Grantor an amount which is com- have not been resolved. Microfilm copies
puted by applying the percentage of the may be substituted in lieu of original
Grantor participation in the grant program records. The Grantor and the Comptroller
to the sales proceeds. Further, the Grantee General of the United States, or any of their
shall be permitted to retain $100 or ten per- duly authorized representatives, shall have
cent of the proceeds, whichever is greater, access to any books, documents, papers, and
for the Grantee’s selling and handling ex- records of the Grantee governments which
penses. are pertinent to the specific grant program
d. The Grantee’s property management for the purpose of making audit, examina-
standards for nonexpendable personal prop- tion, excerpts and transcripts.
erty shall also include: 10. Provide information as requested by the
(1) Property records which accurately pro- Grantor to determine the need for and com-
vide for: a description of the property; manu- plete any necessary Environmental Impact
facturer’s serial number or other identifica- Statements.
tion number; acquisition date and cost; 11. Provide an audit report prepared in suf-
sources of the property; and ultimate dis- ficient detail to allow the Grantor to deter-
position data including sales price or the mine that funds have been used in compli-
method used to determine current fair mar- ance with the proposal, any applicable laws
ket value if the Grantee reimburses the and regulations and this agreement.
Grantor for its share. 12. Agree to account for and to return to
(2) A physical inventory of property shall Grantor interest earned on grant funds pend-
be taken and the result reconciled with the ing their disbursement for program purposes
property records at least once every two when the Grantee is a unit of local govern-
years to verify the existence, current utiliza- ment. States and agencies of instrumental-
tion, and continued need for the property. ities of states shall not be held accountable
(3) A control system shall be in effect to for interest earned on grant funds pending
insure adequate safeguards to prevent loss, their disbursement.
236
RHS, RBS, RUS, FSA, USDA Pt. 1948, Subpt. B, Exh. B
13. Not encumber, transfer, or dispose of deemed necessary by Grantor to assure com-
the property or any part thereof, furnished pliance with the provisions of this Grant
by the Grantor or acquired wholly or in part Agreement and the laws and regulations
with Grantor funds without the written con- under which this grant is made.
sent of the Grantor except as provided in 21. That no member of Congress shall be
item 5 above. admitted to any share or part of this grant
14. Provide Grantor with such periodic re- or any benefit that may arise therefrom; but
ports as it may require and permit periodic this provision shall not be construed to bar
inspection of its operations by a designated as a contractor under the grant a publicly
representative of the Grantor. held corporation whose ownership might in-
15. Execute Form FHA 400–1, ‘‘Equal Oppor- clude a member of Congress.
tunity Agreement,’’ Form FHA 400–4, ‘‘Non-
22. That all non-confidential information
discrimination Agreement,’’ and any other
resulting from its activities shall be made
agreements required by Grantor to imple-
available to the general public on an equal
ment the civil rights requirements. If any
such form has been executed by Grantee as a basis.
result of a loan being made to Grantee by 23. That the purpose and scope of work for
Grantor contemporaneously with the mak- which this grant is made shall not duplicate
ing of this grant, another form of the same programs for which monies have been re-
type need not be executed in connection with ceived are committed, or are applied for
this grant. from other sources, public and private.
16. Include in all contracts for construction 24. That Grantee shall relinquish any and
or repair a provision for compliance with the all copyrights and/or privileges to the mate-
Copeland ‘‘Anti-Kick Back’’ Act (18 U.S.C. rials developed under this grant, such mate-
874) as supplemented in Department of Labor rial being the sole property of the Federal
regulations (29 CFR, part 3). The Grantee Government. In the event anything devel-
shall report all suspected or reported viola- oped under this grant is published in whole
tions to the Grantor. or in part, the material shall contain notice
17. In Contracts in excess of $2,000 and in and be identified by language to the fol-
other contracts in excess of $2,500 which in- lowing effect: ‘‘The material is the result of
volve the employment of mechanics or labor- tax-supported research and as such is not
ers, to include a provision for compliance copyrightable. It may be freely reprinted
with sections 103 and 107 of the Contract with the customary crediting of the source.’’
Work Hours and Safety Standards Act (40 25. That the Grantee shall abide by the
U.S.C. 327–330) as supplemented by Depart- policies promulgated in OMB Circular A–95,
ment of Labor regulations (29 CFR, part 5). Attachment O, which provides standards for
18. Include in all contracts in excess of use by Grantees in establishing procedures
$2,500 a provision for compliance with appli- for the procurement of supplies, equipment,
cable regulations and standards of the Cost
and other services with Federal grant funds.
of Living Council in establishing wages and
prices. Grantee shall report any violations of 26. To the following termination provi-
such regulation and standards to the Grantor sions:
and the local Internal Revenue Service field (a) Termination for cause: The Grantor
office. agency may terminate any grant in whole,
19. Include in all contracts in excess of or in part, at any time before the date of
$100,000 a provision for compliance with all completion, whenever it is determined that
applicable standards, orders, or regulations the Grantee has failed to comply with the
issued pursuant to the Clear Air Act of 1970. conditions of the grant. The Grantor agency
Violations shall be reported to the Grantor shall promptly notify the Grantee in writing
and the Regional Office of the Environ- of the determination and the reasons for the
mental Protection Agency. termination, together with the effective
20. Upon any default under its representa- date.
tions or agreements set forth in this instru- (b) Termination for convenience. The
ment, Grantee, at the option and the demand Grantor agency or Grantee may terminate
of Grantor, will, to the extent legally per- grants in whole, or in part, when both par-
missible, repay to Grantor forthwith the ties agree that the continuation of the
original principal amount of the grant stated project would not produce beneficial results
hereinabove, with interest at the rate of five commensurate with the further expenditure
per centum per annum from the date of the of funds. The two parties shall agree upon
default. The provisions of this Grant Agree- the termination conditions, including the ef-
ment may be enforced by Grantor at its op- fective date and, in the case of partial termi-
tion and without regard to prior waivers by nations, the portion to be terminated. The
it of previous defaults of Grantee, by judicial Grantee shall not incur new obligations for
proceedings to require specific performance the terminated portion after the effective
of the terms of this Grant Agreement or by date, and shall cancel as many outstanding
such other proceedings in law or equity, in obligations as possible. The Grantor agency
either Federal or State courts, as may be shall allow full credit to the Grantee for the
237
Federal share of the noncancelable obliga- Attest:
tions, properly incurred by the Grantee prior (Seal)
to termination. By llllllllllllllllllllll
Grantor agrees that it will:
1. Assist Grantee, within available appro- (Title)
priations, with such technical assistance as Grantee
Grantor deems appropriate in planning the llllllllllllllllllllllll
project and coordinating the plan with local
official comprehensive plans and with any By llllllllllllllllllllll
State or area plans for the area in which the llllllllllllllllllllllll
project is located. (Title)
2. In its sole discretion, Grantor may at Grantor
any time give any consent, deferment, subor- United States of America
dination, release, satisfaction, or termi- Farmers Home Administration or its suc-
nation of any or all of Grantee’s grant obli- cessor agency under Public Law 103–354
gations, with or without valuable consider- By llllllllllllllllllllll
ation, upon such terms and conditions as llllllllllllllllllllllll
Grantor may determine to be (a) advisable to (Title)
further the purposes of the grant or to pro-
tect Grantor’s financial interest therein, and (Approved by the Office of Management and
(b) consistent with both the statutory pur- Budget under control number 0575–0040)
poses of the grant and the limitations of the [44 FR 35984, June 19, 1979, as amended at 47
statutory authority under which it is made. FR 745, Jan. 7, 1982]
Grantee on the date first above written has
caused this agreement to be executed by its
duly authorizedllllllllllll
Subpart C [Reserved]
and attested and its corporate seal affixed by
its duly authorizedllllllllllll PART 1949 [RESERVED]
238
FINDING AIDS
A list of CFR titles, subtitles, chapters, subchapters and parts and an alphabet-
ical list of agencies publishing in the CFR are included in the CFR Index and
Finding Aids volume to the Code of Federal Regulations which is published sepa-
rately and revised annually.
Table of CFR Titles and Chapters
Alphabetical List of Agencies Appearing in the CFR
List of CFR Sections Affected
239
Table of CFR Titles and Chapters
(Revised as of January 1, 2021)
Title 1—General Provisions
I Administrative Committee of the Federal Register (Parts 1—49)

II Office of the Federal Register (Parts 50—299)
III Administrative Conference of the United States (Parts 300—399)
IV Miscellaneous Agencies (Parts 400—599)
VI National Capital Planning Commission (Parts 600—699)
Title 2—Grants and Agreements
SUBTITLE A—OFFICE OF MANAGEMENT AND BUDGET GUIDANCE FOR

GRANTS AND AGREEMENTS
I Office of Management and Budget Governmentwide Guidance for
Grants and Agreements (Parts 2—199)
II Office of Management and Budget Guidance (Parts 200—299)
SUBTITLE B—FEDERAL AGENCY REGULATIONS FOR GRANTS AND
AGREEMENTS
III Department of Health and Human Services (Parts 300—399)
IV Department of Agriculture (Parts 400—499)
VI Department of State (Parts 600—699)
VII Agency for International Development (Parts 700—799)
VIII Department of Veterans Affairs (Parts 800—899)
IX Department of Energy (Parts 900—999)
X Department of the Treasury (Parts 1000—1099)
XI Department of Defense (Parts 1100—1199)
XII Department of Transportation (Parts 1200—1299)
XIII Department of Commerce (Parts 1300—1399)
XIV Department of the Interior (Parts 1400—1499)
XV Environmental Protection Agency (Parts 1500—1599)
XVIII National Aeronautics and Space Administration (Parts 1800—
1899)
XX United States Nuclear Regulatory Commission (Parts 2000—2099)
XXII Corporation for National and Community Service (Parts 2200—
2299)
XXIII Social Security Administration (Parts 2300—2399)
XXIV Department of Housing and Urban Development (Parts 2400—
2499)
XXV National Science Foundation (Parts 2500—2599)
XXVI National Archives and Records Administration (Parts 2600—2699)
241
Title 2—Grants and Agreements—Continued
Chap.
XXVII Small Business Administration (Parts 2700—2799)

XXVIII Department of Justice (Parts 2800—2899)
XXIX Department of Labor (Parts 2900—2999)
XXX Department of Homeland Security (Parts 3000—3099)
XXXI Institute of Museum and Library Services (Parts 3100—3199)
XXXII National Endowment for the Arts (Parts 3200—3299)
XXXIII National Endowment for the Humanities (Parts 3300—3399)
XXXIV Department of Education (Parts 3400—3499)
XXXV Export-Import Bank of the United States (Parts 3500—3599)
XXXVI Office of National Drug Control Policy, Executive Office of the
President (Parts 3600—3699)
XXXVII Peace Corps (Parts 3700—3799)
LVIII Election Assistance Commission (Parts 5800—5899)
LIX Gulf Coast Ecosystem Restoration Council (Parts 5900—5999)
Title 3—The President
I Executive Office of the President (Parts 100—199)
Title 4—Accounts
I Government Accountability Office (Parts 1—199)
Title 5—Administrative Personnel
I Office of Personnel Management (Parts 1—1199)

II Merit Systems Protection Board (Parts 1200—1299)
III Office of Management and Budget (Parts 1300—1399)
IV Office of Personnel Management and Office of the Director of
National Intelligence (Parts 1400—1499)
V The International Organizations Employees Loyalty Board
(Parts 1500—1599)
VI Federal Retirement Thrift Investment Board (Parts 1600—1699)
VIII Office of Special Counsel (Parts 1800—1899)
IX Appalachian Regional Commission (Parts 1900—1999)
XI Armed Forces Retirement Home (Parts 2100—2199)
XIV Federal Labor Relations Authority, General Counsel of the Fed-
eral Labor Relations Authority and Federal Service Impasses
Panel (Parts 2400—2499)
XVI Office of Government Ethics (Parts 2600—2699)
XXI Department of the Treasury (Parts 3100—3199)
XXII Federal Deposit Insurance Corporation (Parts 3200—3299)
XXIII Department of Energy (Parts 3300—3399)
XXIV Federal Energy Regulatory Commission (Parts 3400—3499)
XXV Department of the Interior (Parts 3500—3599)
XXVI Department of Defense (Parts 3600—3699)
242
Title 5—Administrative Personnel—Continued
Chap.
XXVIII Department of Justice (Parts 3800—3899)

XXIX Federal Communications Commission (Parts 3900—3999)
XXX Farm Credit System Insurance Corporation (Parts 4000—4099)
XXXI Farm Credit Administration (Parts 4100—4199)
XXXIII U.S. International Development Finance Corporation (Parts
4300—4399)
XXXIV Securities and Exchange Commission (Parts 4400—4499)
XXXV Office of Personnel Management (Parts 4500—4599)
XXXVI Department of Homeland Security (Parts 4600—4699)
XXXVII Federal Election Commission (Parts 4700—4799)
XL Interstate Commerce Commission (Parts 5000—5099)
XLI Commodity Futures Trading Commission (Parts 5100—5199)
XLII Department of Labor (Parts 5200—5299)
XLIII National Science Foundation (Parts 5300—5399)
XLV Department of Health and Human Services (Parts 5500—5599)
XLVI Postal Rate Commission (Parts 5600—5699)
XLVII Federal Trade Commission (Parts 5700—5799)
XLVIII Nuclear Regulatory Commission (Parts 5800—5899)
XLIX Federal Labor Relations Authority (Parts 5900—5999)
L Department of Transportation (Parts 6000—6099)
LII Export-Import Bank of the United States (Parts 6200—6299)
LIII Department of Education (Parts 6300—6399)
LIV Environmental Protection Agency (Parts 6400—6499)
LV National Endowment for the Arts (Parts 6500—6599)
LVI National Endowment for the Humanities (Parts 6600—6699)
LVII General Services Administration (Parts 6700—6799)
LVIII Board of Governors of the Federal Reserve System (Parts 6800—
6899)
LIX National Aeronautics and Space Administration (Parts 6900—
6999)
LX United States Postal Service (Parts 7000—7099)
LXI National Labor Relations Board (Parts 7100—7199)
LXII Equal Employment Opportunity Commission (Parts 7200—7299)
LXIII Inter-American Foundation (Parts 7300—7399)
LXIV Merit Systems Protection Board (Parts 7400—7499)
LXV Department of Housing and Urban Development (Parts 7500—
7599)
LXVI National Archives and Records Administration (Parts 7600—7699)
LXVII Institute of Museum and Library Services (Parts 7700—7799)
LXVIII Commission on Civil Rights (Parts 7800—7899)
LXIX Tennessee Valley Authority (Parts 7900—7999)
LXX Court Services and Offender Supervision Agency for the District
of Columbia (Parts 8000—8099)
LXXI Consumer Product Safety Commission (Parts 8100—8199)
LXXIII Department of Agriculture (Parts 8300—8399)
243
Title 5—Administrative Personnel—Continued
Chap.
LXXIV Federal Mine Safety and Health Review Commission (Parts

8400—8499)
LXXVI Federal Retirement Thrift Investment Board (Parts 8600—8699)
LXXVII Office of Management and Budget (Parts 8700—8799)
LXXX Federal Housing Finance Agency (Parts 9000—9099)
LXXXIII Special Inspector General for Afghanistan Reconstruction (Parts
9300—9399)
LXXXIV Bureau of Consumer Financial Protection (Parts 9400—9499)
LXXXVI National Credit Union Administration (Parts 9600—9699)
XCVII Department of Homeland Security Human Resources Manage-
ment System (Department of Homeland Security—Office of
Personnel Management) (Parts 9700—9799)
XCVIII Council of the Inspectors General on Integrity and Efficiency
(Parts 9800—9899)
XCIX Military Compensation and Retirement Modernization Commis-
sion (Parts 9900—9999)
C National Council on Disability (Parts 10000—10049)
CI National Mediation Board (Part 10101)
Title 6—Domestic Security
I Department of Homeland Security, Office of the Secretary

(Parts 1—199)
X Privacy and Civil Liberties Oversight Board (Parts 1000—1099)
Title 7—Agriculture
SUBTITLE A—OFFICE OF THE SECRETARY OF AGRICULTURE (PARTS

0—26)
I Agricultural Marketing Service (Standards, Inspections, Mar-
keting Practices), Department of Agriculture (Parts 27—209)
II Food and Nutrition Service, Department of Agriculture (Parts
210—299)
III Animal and Plant Health Inspection Service, Department of Ag-
riculture (Parts 300—399)
IV Federal Crop Insurance Corporation, Department of Agriculture
(Parts 400—499)
V Agricultural Research Service, Department of Agriculture
(Parts 500—599)
VI Natural Resources Conservation Service, Department of Agri-
culture (Parts 600—699)
VII Farm Service Agency, Department of Agriculture (Parts 700—
799)
VIII Agricultural Marketing Service (Federal Grain Inspection Serv-
ice, Fair Trade Practices Program), Department of Agri-
244
Title 7—Agriculture—Continued
Chap.
IX Agricultural Marketing Service (Marketing Agreements and Or-

ders; Fruits, Vegetables, Nuts), Department of Agriculture
(Parts 900—999)
X Agricultural Marketing Service (Marketing Agreements and Or-
ders; Milk), Department of Agriculture (Parts 1000—1199)
XI Agricultural Marketing Service (Marketing Agreements and Or-
ders; Miscellaneous Commodities), Department of Agriculture
(Parts 1200—1299)
XIV Commodity Credit Corporation, Department of Agriculture
(Parts 1400—1499)
XV Foreign Agricultural Service, Department of Agriculture (Parts
1500—1599)
XVI [Reserved]
XVII Rural Utilities Service, Department of Agriculture (Parts 1700—
1799)
XVIII Rural Housing Service, Rural Business-Cooperative Service,
Rural Utilities Service, and Farm Service Agency, Depart-
ment of Agriculture (Parts 1800—2099)
XX [Reserved]
XXV Office of Advocacy and Outreach, Department of Agriculture
(Parts 2500—2599)
XXVI Office of Inspector General, Department of Agriculture (Parts
2600—2699)
XXVII Office of Information Resources Management, Department of
Agriculture (Parts 2700—2799)
XXVIII Office of Operations, Department of Agriculture (Parts 2800—
2899)
XXIX Office of Energy Policy and New Uses, Department of Agri-
XXX Office of the Chief Financial Officer, Department of Agriculture
(Parts 3000—3099)
XXXI Office of Environmental Quality, Department of Agriculture
(Parts 3100—3199)
XXXII Office of Procurement and Property Management, Department
of Agriculture (Parts 3200—3299)
XXXIII Office of Transportation, Department of Agriculture (Parts
3300—3399)
XXXIV National Institute of Food and Agriculture (Parts 3400—3499)
XXXV Rural Housing Service, Department of Agriculture (Parts 3500—
3599)
XXXVI National Agricultural Statistics Service, Department of Agri-
XXXVII Economic Research Service, Department of Agriculture (Parts
3700—3799)
XXXVIII World Agricultural Outlook Board, Department of Agriculture
(Parts 3800—3899)
XLI [Reserved]
XLII Rural Business-Cooperative Service and Rural Utilities Service,
Department of Agriculture (Parts 4200—4299)
245
Title 7—Agriculture—Continued
Chap.
L Rural Business-Cooperative Service, Rural Housing Service, and

Rural Utilities Service, Department of Agriculture (Parts
5001—5099)
Title 8—Aliens and Nationality
I Department of Homeland Security (Parts 1—499)

V Executive Office for Immigration Review, Department of Justice
(Parts 1000—1399)
Title 9—Animals and Animal Products
I Animal and Plant Health Inspection Service, Department of Ag-

riculture (Parts 1—199)
II Agricultural Marketing Service (Federal Grain Inspection Serv-
ice, Fair Trade Practices Program), Department of Agri-
III Food Safety and Inspection Service, Department of Agriculture
(Parts 300—599)
Title 10—Energy
I Nuclear Regulatory Commission (Parts 0—199)

II Department of Energy (Parts 200—699)
III Department of Energy (Parts 700—999)
X Department of Energy (General Provisions) (Parts 1000—1099)
XIII Nuclear Waste Technical Review Board (Parts 1300—1399)
XVII Defense Nuclear Facilities Safety Board (Parts 1700—1799)
XVIII Northeast Interstate Low-Level Radioactive Waste Commission
(Parts 1800—1899)
Title 11—Federal Elections
I Federal Election Commission (Parts 1—9099)

II Election Assistance Commission (Parts 9400—9499)
Title 12—Banks and Banking
I Comptroller of the Currency, Department of the Treasury (Parts

1—199)
II Federal Reserve System (Parts 200—299)
III Federal Deposit Insurance Corporation (Parts 300—399)
IV Export-Import Bank of the United States (Parts 400—499)
V (Parts 500—599) [Reserved]
VI Farm Credit Administration (Parts 600—699)
VII National Credit Union Administration (Parts 700—799)
VIII Federal Financing Bank (Parts 800—899)
IX (Parts 900—999) [Reserved]
246
Title 12—Banks and Banking—Continued
Chap.
X Bureau of Consumer Financial Protection (Parts 1000—1099)

XI Federal Financial Institutions Examination Council (Parts
1100—1199)
XII Federal Housing Finance Agency (Parts 1200—1299)
XIII Financial Stability Oversight Council (Parts 1300—1399)
XIV Farm Credit System Insurance Corporation (Parts 1400—1499)
XV Department of the Treasury (Parts 1500—1599)
XVI Office of Financial Research (Parts 1600—1699)
XVII Office of Federal Housing Enterprise Oversight, Department of
Housing and Urban Development (Parts 1700—1799)
XVIII Community Development Financial Institutions Fund, Depart-
ment of the Treasury (Parts 1800—1899)
Title 13—Business Credit and Assistance
I Small Business Administration (Parts 1—199)

III Economic Development Administration, Department of Com-
merce (Parts 300—399)
IV Emergency Steel Guarantee Loan Board (Parts 400—499)
V Emergency Oil and Gas Guaranteed Loan Board (Parts 500—599)
Title 14—Aeronautics and Space
I Federal Aviation Administration, Department of Transportation

(Parts 1—199)
II Office of the Secretary, Department of Transportation (Aviation
Proceedings) (Parts 200—399)
III Commercial Space Transportation, Federal Aviation Adminis-
tration, Department of Transportation (Parts 400—1199)
V National Aeronautics and Space Administration (Parts 1200—
1299)
VI Air Transportation System Stabilization (Parts 1300—1399)
Title 15—Commerce and Foreign Trade
SUBTITLE A—OFFICE OF THE SECRETARY OF COMMERCE (PARTS 0—

29)
SUBTITLE B—REGULATIONS RELATING TO COMMERCE AND FOREIGN
TRADE
I Bureau of the Census, Department of Commerce (Parts 30—199)
II National Institute of Standards and Technology, Department of
Commerce (Parts 200—299)
III International Trade Administration, Department of Commerce
(Parts 300—399)
IV Foreign-Trade Zones Board, Department of Commerce (Parts
400—499)
VII Bureau of Industry and Security, Department of Commerce
(Parts 700—799)
247
Title 15—Commerce and Foreign Trade—Continued
Chap.
VIII Bureau of Economic Analysis, Department of Commerce (Parts

800—899)
IX National Oceanic and Atmospheric Administration, Department
of Commerce (Parts 900—999)
XI National Technical Information Service, Department of Com-
merce (Parts 1100—1199)
XIII East-West Foreign Trade Board (Parts 1300—1399)
XIV Minority Business Development Agency (Parts 1400—1499)
SUBTITLE C—REGULATIONS RELATING TO FOREIGN TRADE AGREE-
MENTS
XX Office of the United States Trade Representative (Parts 2000—
2099)
SUBTITLE D—REGULATIONS RELATING TO TELECOMMUNICATIONS
AND INFORMATION
XXIII National Telecommunications and Information Administration,
Department of Commerce (Parts 2300—2399) [Reserved]
Title 16—Commercial Practices
I Federal Trade Commission (Parts 0—999)

II Consumer Product Safety Commission (Parts 1000—1799)
Title 17—Commodity and Securities Exchanges
I Commodity Futures Trading Commission (Parts 1—199)

II Securities and Exchange Commission (Parts 200—399)
IV Department of the Treasury (Parts 400—499)
Title 18—Conservation of Power and Water Resources
I Federal Energy Regulatory Commission, Department of Energy

(Parts 1—399)
III Delaware River Basin Commission (Parts 400—499)
VI Water Resources Council (Parts 700—799)
VIII Susquehanna River Basin Commission (Parts 800—899)
XIII Tennessee Valley Authority (Parts 1300—1399)
Title 19—Customs Duties
I U.S. Customs and Border Protection, Department of Homeland

Security; Department of the Treasury (Parts 0—199)
II United States International Trade Commission (Parts 200—299)
III International Trade Administration, Department of Commerce
(Parts 300—399)
IV U.S. Immigration and Customs Enforcement, Department of
Homeland Security (Parts 400—599) [Reserved]
248
Title 20—Employees’ Benefits
Chap.
I Office of Workers’ Compensation Programs, Department of

Labor (Parts 1—199)
II Railroad Retirement Board (Parts 200—399)
III Social Security Administration (Parts 400—499)
IV Employees’ Compensation Appeals Board, Department of Labor
(Parts 500—599)
V Employment and Training Administration, Department of Labor
(Parts 600—699)
VI Office of Workers’ Compensation Programs, Department of
VII Benefits Review Board, Department of Labor (Parts 800—899)
VIII Joint Board for the Enrollment of Actuaries (Parts 900—999)
IX Office of the Assistant Secretary for Veterans’ Employment and
Training Service, Department of Labor (Parts 1000—1099)
Title 21—Food and Drugs
I Food and Drug Administration, Department of Health and

Human Services (Parts 1—1299)
II Drug Enforcement Administration, Department of Justice (Parts
1300—1399)
III Office of National Drug Control Policy (Parts 1400—1499)
Title 22—Foreign Relations
I Department of State (Parts 1—199)

II Agency for International Development (Parts 200—299)
III Peace Corps (Parts 300—399)
IV International Joint Commission, United States and Canada
(Parts 400—499)
V Broadcasting Board of Governors (Parts 500—599)
VII Overseas Private Investment Corporation (Parts 700—799)
IX Foreign Service Grievance Board (Parts 900—999)
X Inter-American Foundation (Parts 1000—1099)
XI International Boundary and Water Commission, United States
and Mexico, United States Section (Parts 1100—1199)
XII United States International Development Cooperation Agency
(Parts 1200—1299)
XIII Millennium Challenge Corporation (Parts 1300—1399)
XIV Foreign Service Labor Relations Board; Federal Labor Relations
Authority; General Counsel of the Federal Labor Relations
Authority; and the Foreign Service Impasse Disputes Panel
(Parts 1400—1499)
XV African Development Foundation (Parts 1500—1599)
XVI Japan-United States Friendship Commission (Parts 1600—1699)
XVII United States Institute of Peace (Parts 1700—1799)
249
Title 23—Highways
Chap.
I Federal Highway Administration, Department of Transportation

(Parts 1—999)
II National Highway Traffic Safety Administration and Federal
Highway Administration, Department of Transportation
(Parts 1200—1299)
III National Highway Traffic Safety Administration, Department of
Transportation (Parts 1300—1399)
Title 24—Housing and Urban Development
SUBTITLE A—OFFICE OF THE SECRETARY, DEPARTMENT OF HOUSING

AND URBAN DEVELOPMENT (PARTS 0—99)
SUBTITLE B—REGULATIONS RELATING TO HOUSING AND URBAN DE-
VELOPMENT
I Office of Assistant Secretary for Equal Opportunity, Department
of Housing and Urban Development (Parts 100—199)
II Office of Assistant Secretary for Housing-Federal Housing Com-
missioner, Department of Housing and Urban Development
(Parts 200—299)
III Government National Mortgage Association, Department of
Housing and Urban Development (Parts 300—399)
IV Office of Housing and Office of Multifamily Housing Assistance
Restructuring, Department of Housing and Urban Develop-
ment (Parts 400—499)
V Office of Assistant Secretary for Community Planning and De-
velopment, Department of Housing and Urban Development
(Parts 500—599)
VI Office of Assistant Secretary for Community Planning and De-
velopment, Department of Housing and Urban Development
(Parts 600—699) [Reserved]
VII Office of the Secretary, Department of Housing and Urban Devel-
opment (Housing Assistance Programs and Public and Indian
Housing Programs) (Parts 700—799)
VIII Office of the Assistant Secretary for Housing—Federal Housing
Commissioner, Department of Housing and Urban Develop-
ment (Section 8 Housing Assistance Programs, Section 202 Di-
rect Loan Program, Section 202 Supportive Housing for the El-
derly Program and Section 811 Supportive Housing for Persons
With Disabilities Program) (Parts 800—899)
IX Office of Assistant Secretary for Public and Indian Housing, De-
partment of Housing and Urban Development (Parts 900—1699)
XII Office of Inspector General, Department of Housing and Urban
Development (Parts 2000—2099)
XV Emergency Mortgage Insurance and Loan Programs, Depart-
ment of Housing and Urban Development (Parts 2700—2799)
[Reserved]
XX Office of Assistant Secretary for Housing—Federal Housing
Commissioner, Department of Housing and Urban Develop-
ment (Parts 3200—3899)
XXIV Board of Directors of the HOPE for Homeowners Program (Parts
4000—4099) [Reserved]
XXV Neighborhood Reinvestment Corporation (Parts 4100—4199)
250
Title 25—Indians
Chap.
I Bureau of Indian Affairs, Department of the Interior (Parts 1—

299)
II Indian Arts and Crafts Board, Department of the Interior (Parts
300—399)
III National Indian Gaming Commission, Department of the Inte-
rior (Parts 500—599)
IV Office of Navajo and Hopi Indian Relocation (Parts 700—899)
V Bureau of Indian Affairs, Department of the Interior, and Indian
Health Service, Department of Health and Human Services
(Part 900—999)
VI Office of the Assistant Secretary, Indian Affairs, Department of
the Interior (Parts 1000—1199)
VII Office of the Special Trustee for American Indians, Department
of the Interior (Parts 1200—1299)
Title 26—Internal Revenue
I Internal Revenue Service, Department of the Treasury (Parts 1—

End)
Title 27—Alcohol, Tobacco Products and Firearms
I Alcohol and Tobacco Tax and Trade Bureau, Department of the

Treasury (Parts 1—399)
II Bureau of Alcohol, Tobacco, Firearms, and Explosives, Depart-
ment of Justice (Parts 400—799)
Title 28—Judicial Administration
I Department of Justice (Parts 0—299)

III Federal Prison Industries, Inc., Department of Justice (Parts
300—399)
V Bureau of Prisons, Department of Justice (Parts 500—599)
VI Offices of Independent Counsel, Department of Justice (Parts
600—699)
VII Office of Independent Counsel (Parts 700—799)
VIII Court Services and Offender Supervision Agency for the District
of Columbia (Parts 800—899)
IX National Crime Prevention and Privacy Compact Council (Parts
900—999)
XI Department of Justice and Department of State (Parts 1100—
1199)
Title 29—Labor
SUBTITLE A—OFFICE OF THE SECRETARY OF LABOR (PARTS 0—99)

SUBTITLE B—REGULATIONS RELATING TO LABOR
I National Labor Relations Board (Parts 100—199)
251
Title 29—Labor—Continued
Chap.
II Office of Labor-Management Standards, Department of Labor

(Parts 200—299)
III National Railroad Adjustment Board (Parts 300—399)
IV Office of Labor-Management Standards, Department of Labor
(Parts 400—499)
V Wage and Hour Division, Department of Labor (Parts 500—899)
IX Construction Industry Collective Bargaining Commission (Parts
900—999)
X National Mediation Board (Parts 1200—1299)
XII Federal Mediation and Conciliation Service (Parts 1400—1499)
XIV Equal Employment Opportunity Commission (Parts 1600—1699)
XVII Occupational Safety and Health Administration, Department of
XX Occupational Safety and Health Review Commission (Parts
2200—2499)
XXV Employee Benefits Security Administration, Department of
XXVII Federal Mine Safety and Health Review Commission (Parts
2700—2799)
XL Pension Benefit Guaranty Corporation (Parts 4000—4999)
Title 30—Mineral Resources
I Mine Safety and Health Administration, Department of Labor

(Parts 1—199)
II Bureau of Safety and Environmental Enforcement, Department
of the Interior (Parts 200—299)
IV Geological Survey, Department of the Interior (Parts 400—499)
V Bureau of Ocean Energy Management, Department of the Inte-
VII Office of Surface Mining Reclamation and Enforcement, Depart-
ment of the Interior (Parts 700—999)
XII Office of Natural Resources Revenue, Department of the Interior
(Parts 1200—1299)
Title 31—Money and Finance: Treasury
SUBTITLE A—OFFICE OF THE SECRETARY OF THE TREASURY (PARTS

0—50)
SUBTITLE B—REGULATIONS RELATING TO MONEY AND FINANCE
I Monetary Offices, Department of the Treasury (Parts 51—199)
II Fiscal Service, Department of the Treasury (Parts 200—399)
IV Secret Service, Department of the Treasury (Parts 400—499)
V Office of Foreign Assets Control, Department of the Treasury
(Parts 500—599)
VI Bureau of Engraving and Printing, Department of the Treasury
(Parts 600—699)
VII Federal Law Enforcement Training Center, Department of the
252
Title 31—Money and Finance: Treasury—Continued
Chap.
VIII Office of Investment Security, Department of the Treasury

(Parts 800—899)
IX Federal Claims Collection Standards (Department of the Treas-
ury—Department of Justice) (Parts 900—999)
X Financial Crimes Enforcement Network, Department of the
Title 32—National Defense
SUBTITLE A—DEPARTMENT OF DEFENSE

I Office of the Secretary of Defense (Parts 1—399)
V Department of the Army (Parts 400—699)
VI Department of the Navy (Parts 700—799)
VII Department of the Air Force (Parts 800—1099)
SUBTITLE B—OTHER REGULATIONS RELATING TO NATIONAL DE-
FENSE
XII Department of Defense, Defense Logistics Agency (Parts 1200—
1299)
XVI Selective Service System (Parts 1600—1699)
XVII Office of the Director of National Intelligence (Parts 1700—1799)
XVIII National Counterintelligence Center (Parts 1800—1899)
XIX Central Intelligence Agency (Parts 1900—1999)
XX Information Security Oversight Office, National Archives and
Records Administration (Parts 2000—2099)
XXI National Security Council (Parts 2100—2199)
XXIV Office of Science and Technology Policy (Parts 2400—2499)
XXVII Office for Micronesian Status Negotiations (Parts 2700—2799)
XXVIII Office of the Vice President of the United States (Parts 2800—
2899)
Title 33—Navigation and Navigable Waters
I Coast Guard, Department of Homeland Security (Parts 1—199)

II Corps of Engineers, Department of the Army, Department of De-
fense (Parts 200—399)
IV Saint Lawrence Seaway Development Corporation, Department
of Transportation (Parts 400—499)
Title 34—Education
SUBTITLE A—OFFICE OF THE SECRETARY, DEPARTMENT OF EDU-

CATION (PARTS 1—99)
SUBTITLE B—REGULATIONS OF THE OFFICES OF THE DEPARTMENT
OF EDUCATION
I Office for Civil Rights, Department of Education (Parts 100—199)
II Office of Elementary and Secondary Education, Department of
Education (Parts 200—299)
253
Title 34—Education—Continued
Chap.
III Office of Special Education and Rehabilitative Services, Depart-

ment of Education (Parts 300—399)
IV Office of Career, Technical, and Adult Education, Department of
Education (Parts 400—499)
V Office of Bilingual Education and Minority Languages Affairs,
Department of Education (Parts 500—599) [Reserved]
VI Office of Postsecondary Education, Department of Education
(Parts 600—699)
VII Office of Educational Research and Improvement, Department of
Education (Parts 700—799) [Reserved]
SUBTITLE C—REGULATIONS RELATING TO EDUCATION
XI (Parts 1100—1199) [Reserved]
XII National Council on Disability (Parts 1200—1299)
Title 35 [Reserved]
Title 36—Parks, Forests, and Public Property
I National Park Service, Department of the Interior (Parts 1—199)

II Forest Service, Department of Agriculture (Parts 200—299)
III Corps of Engineers, Department of the Army (Parts 300—399)
IV American Battle Monuments Commission (Parts 400—499)
V Smithsonian Institution (Parts 500—599)
VI [Reserved]
VII Library of Congress (Parts 700—799)
VIII Advisory Council on Historic Preservation (Parts 800—899)
IX Pennsylvania Avenue Development Corporation (Parts 900—999)
X Presidio Trust (Parts 1000—1099)
XI Architectural and Transportation Barriers Compliance Board
(Parts 1100—1199)
XII National Archives and Records Administration (Parts 1200—1299)
XV Oklahoma City National Memorial Trust (Parts 1500—1599)
XVI Morris K. Udall Scholarship and Excellence in National Environ-
mental Policy Foundation (Parts 1600—1699)
Title 37—Patents, Trademarks, and Copyrights
I United States Patent and Trademark Office, Department of

II U.S. Copyright Office, Library of Congress (Parts 200—299)
III Copyright Royalty Board, Library of Congress (Parts 300—399)
IV National Institute of Standards and Technology, Department of
254
Title 38—Pensions, Bonuses, and Veterans’ Relief
Chap.
I Department of Veterans Affairs (Parts 0—199)

II Armed Forces Retirement Home (Parts 200—299)
Title 39—Postal Service
I United States Postal Service (Parts 1—999)

III Postal Regulatory Commission (Parts 3000—3099)
Title 40—Protection of Environment
I Environmental Protection Agency (Parts 1—1099)

IV Environmental Protection Agency and Department of Justice
(Parts 1400—1499)
V Council on Environmental Quality (Parts 1500—1599)
VI Chemical Safety and Hazard Investigation Board (Parts 1600—
1699)
VII Environmental Protection Agency and Department of Defense;
Uniform National Discharge Standards for Vessels of the
Armed Forces (Parts 1700—1799)
VIII Gulf Coast Ecosystem Restoration Council (Parts 1800—1899)
Title 41—Public Contracts and Property Management
SUBTITLE A—FEDERAL PROCUREMENT REGULATIONS SYSTEM

[NOTE]
SUBTITLE B—OTHER PROVISIONS RELATING TO PUBLIC CONTRACTS
50 Public Contracts, Department of Labor (Parts 50–1—50–999)
51 Committee for Purchase From People Who Are Blind or Severely
Disabled (Parts 51–1—51–99)
60 Office of Federal Contract Compliance Programs, Equal Employ-
ment Opportunity, Department of Labor (Parts 60–1—60–999)
61 Office of the Assistant Secretary for Veterans’ Employment and
Training Service, Department of Labor (Parts 61–1—61–999)
62—100 [Reserved]
SUBTITLE C—FEDERAL PROPERTY MANAGEMENT REGULATIONS
SYSTEM
101 Federal Property Management Regulations (Parts 101–1—101–99)
102 Federal Management Regulation (Parts 102–1—102–299)
103—104 (Parts 103–001—104–099) [Reserved]
105 General Services Administration (Parts 105–1—105–999)
109 Department of Energy Property Management Regulations (Parts
109–1—109–99)
114 Department of the Interior (Parts 114–1—114–99)
115 Environmental Protection Agency (Parts 115–1—115–99)
128 Department of Justice (Parts 128–1—128–99)
129—200 [Reserved]
SUBTITLE D—OTHER PROVISIONS RELATING TO PROPERTY MANAGE-
MENT [RESERVED]
255
Title 41—Public Contracts and Property Management—Continued
Chap.
SUBTITLE E—FEDERAL INFORMATION RESOURCES MANAGEMENT

REGULATIONS SYSTEM [RESERVED]
SUBTITLE F—FEDERAL TRAVEL REGULATION SYSTEM
300 General (Parts 300–1—300–99)
301 Temporary Duty (TDY) Travel Allowances (Parts 301–1—301–99)
302 Relocation Allowances (Parts 302–1—302–99)
303 Payment of Expenses Connected with the Death of Certain Em-
ployees (Part 303–1—303–99)
304 Payment of Travel Expenses from a Non-Federal Source (Parts
304–1—304–99)
Title 42—Public Health
I Public Health Service, Department of Health and Human Serv-

ices (Parts 1—199)
II—III [Reserved]
IV Centers for Medicare & Medicaid Services, Department of Health
and Human Services (Parts 400—699)
V Office of Inspector General-Health Care, Department of Health
Title 43—Public Lands: Interior
SUBTITLE A—OFFICE OF THE SECRETARY OF THE INTERIOR (PARTS

1—199)
SUBTITLE B—REGULATIONS RELATING TO PUBLIC LANDS
I Bureau of Reclamation, Department of the Interior (Parts 400—
999)
II Bureau of Land Management, Department of the Interior (Parts
1000—9999)
III Utah Reclamation Mitigation and Conservation Commission
(Parts 10000—10099)
Title 44—Emergency Management and Assistance
I Federal Emergency Management Agency, Department of Home-

land Security (Parts 0—399)
IV Department of Commerce and Department of Transportation
(Parts 400—499)
Title 45—Public Welfare
SUBTITLE A—DEPARTMENT OF HEALTH AND HUMAN SERVICES

(PARTS 1—199)
SUBTITLE B—REGULATIONS RELATING TO PUBLIC WELFARE
II Office of Family Assistance (Assistance Programs), Administra-
tion for Children and Families, Department of Health and
Human Services (Parts 200—299)
256
Title 45—Public Welfare—Continued
Chap.
III Office of Child Support Enforcement (Child Support Enforce-

ment Program), Administration for Children and Families,
Department of Health and Human Services (Parts 300—399)
IV Office of Refugee Resettlement, Administration for Children and
Families, Department of Health and Human Services (Parts
400—499)
V Foreign Claims Settlement Commission of the United States,
Department of Justice (Parts 500—599)
VI National Science Foundation (Parts 600—699)
VII Commission on Civil Rights (Parts 700—799)
VIII Office of Personnel Management (Parts 800—899)
IX Denali Commission (Parts 900—999)
X Office of Community Services, Administration for Children and
Families, Department of Health and Human Services (Parts
1000—1099)
XI National Foundation on the Arts and the Humanities (Parts
1100—1199)
XII Corporation for National and Community Service (Parts 1200—
1299)
XIII Administration for Children and Families, Department of Health
XVI Legal Services Corporation (Parts 1600—1699)
XVII National Commission on Libraries and Information Science
(Parts 1700—1799)
XVIII Harry S. Truman Scholarship Foundation (Parts 1800—1899)
XXI Commission of Fine Arts (Parts 2100—2199)
XXIII Arctic Research Commission (Parts 2300—2399)
XXIV James Madison Memorial Fellowship Foundation (Parts 2400—
2499)
XXV Corporation for National and Community Service (Parts 2500—
2599)
Title 46—Shipping
I Coast Guard, Department of Homeland Security (Parts 1—199)

II Maritime Administration, Department of Transportation (Parts
200—399)
III Coast Guard (Great Lakes Pilotage), Department of Homeland
Security (Parts 400—499)
IV Federal Maritime Commission (Parts 500—599)
Title 47—Telecommunication
I Federal Communications Commission (Parts 0—199)

II Office of Science and Technology Policy and National Security
Council (Parts 200—299)
III National Telecommunications and Information Administration,
Department of Commerce (Parts 300—399)
257
Title 47—Telecommunication—Continued
Chap.
IV National Telecommunications and Information Administration,

Department of Commerce, and National Highway Traffic Safe-
ty Administration, Department of Transportation (Parts 400—
499)
V The First Responder Network Authority (Parts 500—599)
Title 48—Federal Acquisition Regulations System
1 Federal Acquisition Regulation (Parts 1—99)

2 Defense Acquisition Regulations System, Department of Defense
(Parts 200—299)
3 Department of Health and Human Services (Parts 300—399)
4 Department of Agriculture (Parts 400—499)
5 General Services Administration (Parts 500—599)
6 Department of State (Parts 600—699)
7 Agency for International Development (Parts 700—799)
8 Department of Veterans Affairs (Parts 800—899)
9 Department of Energy (Parts 900—999)
10 Department of the Treasury (Parts 1000—1099)
12 Department of Transportation (Parts 1200—1299)
13 Department of Commerce (Parts 1300—1399)
14 Department of the Interior (Parts 1400—1499)
15 Environmental Protection Agency (Parts 1500—1599)
16 Office of Personnel Management, Federal Employees Health
Benefits Acquisition Regulation (Parts 1600—1699)
17 Office of Personnel Management (Parts 1700—1799)
18 National Aeronautics and Space Administration (Parts 1800—
1899)
19 Broadcasting Board of Governors (Parts 1900—1999)
20 Nuclear Regulatory Commission (Parts 2000—2099)
21 Office of Personnel Management, Federal Employees Group Life
Insurance Federal Acquisition Regulation (Parts 2100—2199)
23 Social Security Administration (Parts 2300—2399)
24 Department of Housing and Urban Development (Parts 2400—
2499)
25 National Science Foundation (Parts 2500—2599)
28 Department of Justice (Parts 2800—2899)
29 Department of Labor (Parts 2900—2999)
30 Department of Homeland Security, Homeland Security Acquisi-
tion Regulation (HSAR) (Parts 3000—3099)
34 Department of Education Acquisition Regulation (Parts 3400—
3499)
51 Department of the Army Acquisition Regulations (Parts 5100—
5199) [Reserved]
52 Department of the Navy Acquisition Regulations (Parts 5200—
5299)
53 Department of the Air Force Federal Acquisition Regulation
Supplement (Parts 5300—5399) [Reserved]
258
Title 48—Federal Acquisition Regulations System—Continued
Chap.
54 Defense Logistics Agency, Department of Defense (Parts 5400—

5499)
57 African Development Foundation (Parts 5700—5799)
61 Civilian Board of Contract Appeals, General Services Adminis-
tration (Parts 6100—6199)
99 Cost Accounting Standards Board, Office of Federal Procure-
ment Policy, Office of Management and Budget (Parts 9900—
9999)
Title 49—Transportation
SUBTITLE A—OFFICE OF THE SECRETARY OF TRANSPORTATION

(PARTS 1—99)
SUBTITLE B—OTHER REGULATIONS RELATING TO TRANSPORTATION
I Pipeline and Hazardous Materials Safety Administration, De-
partment of Transportation (Parts 100—199)
II Federal Railroad Administration, Department of Transportation
(Parts 200—299)
III Federal Motor Carrier Safety Administration, Department of
IV Coast Guard, Department of Homeland Security (Parts 400—499)
V National Highway Traffic Safety Administration, Department of
VI Federal Transit Administration, Department of Transportation
(Parts 600—699)
VII National Railroad Passenger Corporation (AMTRAK) (Parts
700—799)
VIII National Transportation Safety Board (Parts 800—999)
X Surface Transportation Board (Parts 1000—1399)
XI Research and Innovative Technology Administration, Depart-
ment of Transportation (Parts 1400—1499) [Reserved]
XII Transportation Security Administration, Department of Home-
land Security (Parts 1500—1699)
Title 50—Wildlife and Fisheries
I United States Fish and Wildlife Service, Department of the Inte-

II National Marine Fisheries Service, National Oceanic and Atmos-
pheric Administration, Department of Commerce (Parts 200—
299)
III International Fishing and Related Activities (Parts 300—399)
IV Joint Regulations (United States Fish and Wildlife Service, De-
partment of the Interior and National Marine Fisheries Serv-
ice, National Oceanic and Atmospheric Administration, De-
partment of Commerce); Endangered Species Committee Reg-
ulations (Parts 400—499)
V Marine Mammal Commission (Parts 500—599)
259
Title 50—Wildlife and Fisheries—Continued
Chap.
VI Fishery Conservation and Management, National Oceanic and

Atmospheric Administration, Department of Commerce (Parts
600—699)
260
Alphabetical List of Agencies Appearing in the CFR
(Revised as of January 1, 2021)
CFR Title, Subtitle or

Agency Chapter
Administrative Conference of the United States 1, III
Advisory Council on Historic Preservation 36, VIII
Advocacy and Outreach, Office of 7, XXV
Afghanistan Reconstruction, Special Inspector General for 5, LXXXIII
African Development Foundation 22, XV
Federal Acquisition Regulation 48, 57
Agency for International Development 2, VII; 22, II
Agricultural Marketing Service 7, I, VIII, IX, X, XI; 9, II
Agricultural Research Service 7, V
Agriculture, Department of 2, IV; 5, LXXIII
Advocacy and Outreach, Office of 7, XXV
Agricultural Marketing Service 7, I, VIII, IX, X, XI; 9, II
Agricultural Research Service 7, V
Animal and Plant Health Inspection Service 7, III; 9, I
Chief Financial Officer, Office of 7, XXX
Commodity Credit Corporation 7, XIV
Economic Research Service 7, XXXVII
Energy Policy and New Uses, Office of 2, IX; 7, XXIX
Environmental Quality, Office of 7, XXXI
Farm Service Agency 7, VII, XVIII
Federal Crop Insurance Corporation 7, IV
Food and Nutrition Service 7, II
Food Safety and Inspection Service 9, III
Foreign Agricultural Service 7, XV
Forest Service 36, II
Information Resources Management, Office of 7, XXVII
Inspector General, Office of 7, XXVI
National Agricultural Library 7, XLI
National Agricultural Statistics Service 7, XXXVI
National Institute of Food and Agriculture 7, XXXIV
Natural Resources Conservation Service 7, VI
Operations, Office of 7, XXVIII
Procurement and Property Management, Office of 7, XXXII
Rural Business-Cooperative Service 7, XVIII, XLII
Rural Development Administration 7, XLII
Rural Housing Service 7, XVIII, XXXV
Rural Utilities Service 7, XVII, XVIII, XLII
Secretary of Agriculture, Office of 7, Subtitle A
Transportation, Office of 7, XXXIII
World Agricultural Outlook Board 7, XXXVIII
Air Force, Department of 32, VII
Federal Acquisition Regulation Supplement 48, 53
Air Transportation Stabilization Board 14, VI
Alcohol and Tobacco Tax and Trade Bureau 27, I
Alcohol, Tobacco, Firearms, and Explosives, Bureau of 27, II
AMTRAK 49, VII
American Battle Monuments Commission 36, IV
American Indians, Office of the Special Trustee 25, VII
Animal and Plant Health Inspection Service 7, III; 9, I
Appalachian Regional Commission 5, IX
Architectural and Transportation Barriers Compliance Board 36, XI
261
Agency Chapter
Arctic Research Commission 45, XXIII
Armed Forces Retirement Home 5, XI; 38, II
Army, Department of 32, V
Engineers, Corps of 33, II; 36, III
Benefits Review Board 20, VII
Bilingual Education and Minority Languages Affairs, Office of 34, V
Blind or Severely Disabled, Committee for Purchase from 41, 51
People Who Are
Broadcasting Board of Governors 22, V
Career, Technical, and Adult Education, Office of 34, IV
Census Bureau 15, I
Centers for Medicare & Medicaid Services 42, IV
Central Intelligence Agency 32, XIX
Chemical Safety and Hazard Investigation Board 40, VI
Chief Financial Officer, Office of 7, XXX
Child Support Enforcement, Office of 45, III
Children and Families, Administration for 45, II, III, IV, X, XIII
Civil Rights, Commission on 5, LXVIII; 45, VII
Civil Rights, Office for 34, I
Coast Guard 33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage) 46, III
Commerce, Department of 2, XIII; 44, IV; 50, VI
Census Bureau 15, I
Economic Analysis, Bureau of 15, VIII
Economic Development Administration 13, III
Emergency Management and Assistance 44, IV
Foreign-Trade Zones Board 15, IV
Industry and Security, Bureau of 15, VII
International Trade Administration 15, III; 19, III
National Institute of Standards and Technology 15, II; 37, IV
National Marine Fisheries Service 50, II, IV
National Oceanic and Atmospheric Administration 15, IX; 50, II, III, IV, VI
National Technical Information Service 15, XI
National Telecommunications and Information 15, XXIII; 47, III, IV
Administration
National Weather Service 15, IX
Patent and Trademark Office, United States 37, I
Secretary of Commerce, Office of 15, Subtitle A
Commercial Space Transportation 14, III
Commodity Credit Corporation 7, XIV
Commodity Futures Trading Commission 5, XLI; 17, I
Community Planning and Development, Office of Assistant 24, V, VI
Secretary for
Community Services, Office of 45, X
Comptroller of the Currency 12, I
Construction Industry Collective Bargaining Commission 29, IX
Consumer Financial Protection Bureau 5, LXXXIV; 12, X
Consumer Product Safety Commission 5, LXXI; 16, II
Copyright Royalty Board 37, III
Corporation for National and Community Service 2, XXII; 45, XII, XXV
Cost Accounting Standards Board 48, 99
Council on Environmental Quality 40, V
Council of the Inspectors General on Integrity and Efficiency 5, XCVIII
Court Services and Offender Supervision Agency for the 5, LXX; 28, VIII
District of Columbia
Customs and Border Protection 19, I
Defense, Department of 2, XI; 5, XXVI; 32,
Subtitle A; 40, VII
Advanced Research Projects Agency 32, I
Air Force Department 32, VII
Army Department 32, V; 33, II; 36, III; 48,
51
Defense Acquisition Regulations System 48, 2
Defense Intelligence Agency 32, I
262
Agency Chapter
Defense Logistics Agency 32, I, XII; 48, 54
National Imagery and Mapping Agency 32, I
Navy, Department of 32, VI; 48, 52
Secretary of Defense, Office of 2, XI; 32, I
Defense Contract Audit Agency 32, I
Defense Intelligence Agency 32, I
Defense Logistics Agency 32, XII; 48, 54
Defense Nuclear Facilities Safety Board 10, XVII
Delaware River Basin Commission 18, III
Denali Commission 45, IX
Disability, National Council on 5, C; 34, XII
District of Columbia, Court Services and Offender Supervision 5, LXX; 28, VIII
Agency for the
Drug Enforcement Administration 21, II
East-West Foreign Trade Board 15, XIII
Economic Analysis, Bureau of 15, VIII
Economic Development Administration 13, III
Economic Research Service 7, XXXVII
Education, Department of 2, XXXIV; 5, LIII
Bilingual Education and Minority Languages Affairs, Office 34, V
of
Career, Technical, and Adult Education, Office of 34, IV
Civil Rights, Office for 34, I
Educational Research and Improvement, Office of 34, VII
Elementary and Secondary Education, Office of 34, II
Postsecondary Education, Office of 34, VI
Secretary of Education, Office of 34, Subtitle A
Special Education and Rehabilitative Services, Office of 34, III
Educational Research and Improvement, Office of 34, VII
Election Assistance Commission 2, LVIII; 11, II
Elementary and Secondary Education, Office of 34, II
Emergency Oil and Gas Guaranteed Loan Board 13, V
Emergency Steel Guarantee Loan Board 13, IV
Employee Benefits Security Administration 29, XXV
Employees’ Compensation Appeals Board 20, IV
Employees Loyalty Board 5, V
Employment and Training Administration 20, V
Employment Policy, National Commission for 1, IV
Employment Standards Administration 20, VI
Endangered Species Committee 50, IV
Energy, Department of 2, IX; 5, XXIII; 10, II,
III, X
Federal Energy Regulatory Commission 5, XXIV; 18, I
Property Management Regulations 41, 109
Energy, Office of 7, XXIX
Engraving and Printing, Bureau of 31, VI
Environmental Protection Agency 2, XV; 5, LIV; 40, I, IV,
VII
Environmental Quality, Office of 7, XXXI
Equal Employment Opportunity Commission 5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary for 24, I
Executive Office of the President 3, I
Environmental Quality, Council on 40, V
Management and Budget, Office of 2, Subtitle A; 5, III,
LXXVII; 14, VI; 48, 99
National Drug Control Policy, Office of 2, XXXVI; 21, III
National Security Council 32, XXI; 47, II
Presidential Documents 3
Science and Technology Policy, Office of 32, XXIV; 47, II
Trade Representative, Office of the United States 15, XX
Export-Import Bank of the United States 2, XXXV; 5, LII; 12, IV
263
Agency Chapter
Family Assistance, Office of 45, II
Farm Credit Administration 5, XXXI; 12, VI
Farm Credit System Insurance Corporation 5, XXX; 12, XIV
Farm Service Agency 7, VII, XVIII
Federal Aviation Administration 14, I
Federal Claims Collection Standards 31, IX
Federal Communications Commission 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of 41, 60
Federal Crop Insurance Corporation 7, IV
Federal Deposit Insurance Corporation 5, XXII; 12, III
Federal Election Commission 5, XXXVII; 11, I
Federal Emergency Management Agency 44, I
Federal Employees Group Life Insurance Federal Acquisition 48, 21
Regulation
Federal Employees Health Benefits Acquisition Regulation 48, 16
Federal Energy Regulatory Commission 5, XXIV; 18, I
Federal Financial Institutions Examination Council 12, XI
Federal Financing Bank 12, VIII
Federal Highway Administration 23, I, II
Federal Home Loan Mortgage Corporation 1, IV
Federal Housing Enterprise Oversight Office 12, XVII
Federal Housing Finance Agency 5, LXXX; 12, XII
Federal Labor Relations Authority 5, XIV, XLIX; 22, XIV
Federal Law Enforcement Training Center 31, VII
Federal Management Regulation 41, 102
Federal Maritime Commission 46, IV
Federal Mediation and Conciliation Service 29, XII
Federal Mine Safety and Health Review Commission 5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration 49, III
Federal Prison Industries, Inc. 28, III
Federal Procurement Policy Office 48, 99
Federal Property Management Regulations 41, 101
Federal Railroad Administration 49, II
Federal Register, Administrative Committee of 1, I
Federal Register, Office of 1, II
Federal Reserve System 12, II
Board of Governors 5, LVIII
Federal Retirement Thrift Investment Board 5, VI, LXXVI
Federal Service Impasses Panel 5, XIV
Federal Trade Commission 5, XLVII; 16, I
Federal Transit Administration 49, VI
Federal Travel Regulation System 41, Subtitle F
Financial Crimes Enforcement Network 31, X
Financial Research Office 12, XVI
Financial Stability Oversight Council 12, XIII
Fine Arts, Commission of 45, XXI
Fiscal Service 31, II
Fish and Wildlife Service, United States 50, I, IV
Food and Drug Administration 21, I
Food and Nutrition Service 7, II
Food Safety and Inspection Service 9, III
Foreign Agricultural Service 7, XV
Foreign Assets Control, Office of 31, V
Foreign Claims Settlement Commission of the United States 45, V
Foreign Service Grievance Board 22, IX
Foreign Service Impasse Disputes Panel 22, XIV
Foreign Service Labor Relations Board 22, XIV
Foreign-Trade Zones Board 15, IV
Forest Service 36, II
General Services Administration 5, LVII; 41, 105
Contract Appeals, Board of 48, 61
Federal Management Regulation 41, 102
Federal Property Management Regulations 41, 101
Federal Travel Regulation System 41, Subtitle F
264
Agency Chapter
General 41, 300
Payment From a Non-Federal Source for Travel Expenses 41, 304
Payment of Expenses Connected With the Death of Certain 41, 303
Employees
Relocation Allowances 41, 302
Temporary Duty (TDY) Travel Allowances 41, 301
Geological Survey 30, IV
Government Accountability Office 4, I
Government Ethics, Office of 5, XVI
Government National Mortgage Association 24, III
Grain Inspection, Packers and Stockyards Administration 7, VIII; 9, II
Gulf Coast Ecosystem Restoration Council 2, LIX; 40, VIII
Harry S. Truman Scholarship Foundation 45, XVIII
Health and Human Services, Department of 2, III; 5, XLV; 45,
Subtitle A
Centers for Medicare & Medicaid Services 42, IV
Child Support Enforcement, Office of 45, III
Children and Families, Administration for 45, II, III, IV, X, XIII
Community Services, Office of 45, X
Family Assistance, Office of 45, II
Food and Drug Administration 21, I
Indian Health Service 25, V
Inspector General (Health Care), Office of 42, V
Public Health Service 42, I
Refugee Resettlement, Office of 45, IV
Homeland Security, Department of 2, XXX; 5, XXXVI; 6, I;
8, I
Coast Guard 33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage) 46, III
Federal Emergency Management Agency 44, I
Human Resources Management and Labor Relations 5, XCVII
Systems
Immigration and Customs Enforcement Bureau 19, IV
Transportation Security Administration 49, XII
HOPE for Homeowners Program, Board of Directors of 24, XXIV
Housing, Office of, and Multifamily Housing Assistance 24, IV
Restructuring, Office of
Housing and Urban Development, Department of 2, XXIV; 5, LXV; 24,
Subtitle B
Community Planning and Development, Office of Assistant 24, V, VI
Secretary for
Equal Opportunity, Office of Assistant Secretary for 24, I
Federal Housing Enterprise Oversight, Office of 12, XVII
Government National Mortgage Association 24, III
Housing—Federal Housing Commissioner, Office of 24, II, VIII, X, XX
Assistant Secretary for
Inspector General, Office of 24, XII
Public and Indian Housing, Office of Assistant Secretary for 24, IX
Secretary, Office of 24, Subtitle A, VII
Housing—Federal Housing Commissioner, Office of Assistant 24, II, VIII, X, XX
Secretary for
Immigration and Customs Enforcement Bureau 19, IV
Immigration Review, Executive Office for 8, V
Independent Counsel, Office of 28, VII
Independent Counsel, Offices of 28, VI
Indian Affairs, Bureau of 25, I, V
Indian Affairs, Office of the Assistant Secretary 25, VI
Indian Arts and Crafts Board 25, II
Indian Health Service 25, V
Industry and Security, Bureau of 15, VII
265
Agency Chapter
Information Resources Management, Office of 7, XXVII
Information Security Oversight Office, National Archives and 32, XX
Records Administration
Inspector General
Agriculture Department 7, XXVI
Health and Human Services Department 42, V
Housing and Urban Development Department 24, XII, XV
Institute of Peace, United States 22, XVII
Inter-American Foundation 5, LXIII; 22, X
Interior, Department of 2, XIV
American Indians, Office of the Special Trustee 25, VII
Endangered Species Committee 50, IV
Federal Property Management Regulations System 41, 114
Fish and Wildlife Service, United States 50, I, IV
Geological Survey 30, IV
Indian Affairs, Bureau of 25, I, V
Indian Affairs, Office of the Assistant Secretary 25, VI
Indian Arts and Crafts Board 25, II
Land Management, Bureau of 43, II
National Indian Gaming Commission 25, III
National Park Service 36, I
Natural Resource Revenue, Office of 30, XII
Ocean Energy Management, Bureau of 30, V
Reclamation, Bureau of 43, I
Safety and Enforcement Bureau, Bureau of 30, II
Secretary of the Interior, Office of 2, XIV; 43, Subtitle A
Surface Mining Reclamation and Enforcement, Office of 30, VII
Internal Revenue Service 26, I
International Boundary and Water Commission, United States 22, XI
and Mexico, United States Section
International Development, United States Agency for 22, II
International Development Cooperation Agency, United 22, XII
States
International Development Finance Corporation, U.S. 5, XXXIII; 22, VII
International Joint Commission, United States and Canada 22, IV
International Organizations Employees Loyalty Board 5, V
International Trade Administration 15, III; 19, III
International Trade Commission, United States 19, II
Interstate Commerce Commission 5, XL
Investment Security, Office of 31, VIII
James Madison Memorial Fellowship Foundation 45, XXIV
Japan–United States Friendship Commission 22, XVI
Joint Board for the Enrollment of Actuaries 20, VIII
Justice, Department of 2, XXVIII; 5, XXVIII;
28, I, XI; 40, IV
Alcohol, Tobacco, Firearms, and Explosives, Bureau of 27, II
Drug Enforcement Administration 21, II
Federal Prison Industries, Inc. 28, III
Foreign Claims Settlement Commission of the United 45, V
States
Immigration Review, Executive Office for 8, V
Independent Counsel, Offices of 28, VI
Prisons, Bureau of 28, V
Labor, Department of 2, XXIX; 5, XLII
Benefits Review Board 20, VII
Employee Benefits Security Administration 29, XXV
Employees’ Compensation Appeals Board 20, IV
Employment Standards Administration 20, VI
Employment and Training Administration 20, V
Federal Contract Compliance Programs, Office of 41, 60
Federal Procurement Regulations System 41, 50
266
Agency Chapter
Labor-Management Standards, Office of 29, II, IV
Mine Safety and Health Administration 30, I
Occupational Safety and Health Administration 29, XVII
Public Contracts 41, 50
Secretary of Labor, Office of 29, Subtitle A
Veterans’ Employment and Training Service, Office of the 41, 61; 20, IX
Wage and Hour Division 29, V
Workers’ Compensation Programs, Office of 20, I, VI
Labor-Management Standards, Office of 29, II, IV
Land Management, Bureau of 43, II
Legal Services Corporation 45, XVI
Libraries and Information Science, National Commission on 45, XVII
Library of Congress 36, VII
Copyright Royalty Board 37, III
U.S. Copyright Office 37, II
Management and Budget, Office of 5, III, LXXVII; 14, VI;
48, 99
Marine Mammal Commission 50, V
Maritime Administration 46, II
Merit Systems Protection Board 5, II, LXIV
Micronesian Status Negotiations, Office for 32, XXVII
Military Compensation and Retirement Modernization 5, XCIX
Commission
Millennium Challenge Corporation 22, XIII
Mine Safety and Health Administration 30, I
Minority Business Development Agency 15, XIV
Miscellaneous Agencies 1, IV
Monetary Offices 31, I
Morris K. Udall Scholarship and Excellence in National 36, XVI
Environmental Policy Foundation
Museum and Library Services, Institute of 2, XXXI
National Aeronautics and Space Administration 2, XVIII; 5, LIX; 14, V
National Agricultural Library 7, XLI
National Agricultural Statistics Service 7, XXXVI
National and Community Service, Corporation for 2, XXII; 45, XII, XXV
National Archives and Records Administration 2, XXVI; 5, LXVI; 36,
XII
Information Security Oversight Office 32, XX
National Capital Planning Commission 1, IV, VI
National Counterintelligence Center 32, XVIII
National Credit Union Administration 5, LXXXVI; 12, VII
National Crime Prevention and Privacy Compact Council 28, IX
National Drug Control Policy, Office of 2, XXXVI; 21, III
National Endowment for the Arts 2, XXXII
National Endowment for the Humanities 2, XXXIII
National Foundation on the Arts and the Humanities 45, XI
National Geospatial-Intelligence Agency 32, I
National Highway Traffic Safety Administration 23, II, III; 47, VI; 49, V
National Imagery and Mapping Agency 32, I
National Indian Gaming Commission 25, III
National Institute of Food and Agriculture 7, XXXIV
National Institute of Standards and Technology 15, II; 37, IV
National Intelligence, Office of Director of 5, IV; 32, XVII
National Labor Relations Board 5, LXI; 29, I
National Marine Fisheries Service 50, II, IV
National Mediation Board 5, CI; 29, X
National Oceanic and Atmospheric Administration 15, IX; 50, II, III, IV, VI
National Park Service 36, I
National Railroad Adjustment Board 29, III
National Railroad Passenger Corporation (AMTRAK) 49, VII
National Science Foundation 2, XXV; 5, XLIII; 45, VI
National Security Council 32, XXI; 47, II
National Security Council and Office of Science and 47, II
Technology Policy
267
Agency Chapter
National Technical Information Service 15, XI
National Telecommunications and Information 15, XXIII; 47, III, IV, V
Administration
National Transportation Safety Board 49, VIII
Natural Resource Revenue, Office of 30, XII
Natural Resources Conservation Service 7, VI
Navajo and Hopi Indian Relocation, Office of 25, IV
Navy, Department of 32, VI
Neighborhood Reinvestment Corporation 24, XXV
Northeast Interstate Low-Level Radioactive Waste 10, XVIII
Commission
Nuclear Regulatory Commission 2, XX; 5, XLVIII; 10, I
Occupational Safety and Health Administration 29, XVII
Occupational Safety and Health Review Commission 29, XX
Ocean Energy Management, Bureau of 30, V
Oklahoma City National Memorial Trust 36, XV
Operations Office 7, XXVIII
Patent and Trademark Office, United States 37, I
Payment From a Non-Federal Source for Travel Expenses 41, 304
Payment of Expenses Connected With the Death of Certain 41, 303
Employees
Peace Corps 2, XXXVII; 22, III
Pennsylvania Avenue Development Corporation 36, IX
Pension Benefit Guaranty Corporation 29, XL
Personnel Management, Office of 5, I, IV, XXXV; 45, VIII
Federal Employees Group Life Insurance Federal 48, 21
Acquisition Regulation
Federal Employees Health Benefits Acquisition Regulation 48, 16
Human Resources Management and Labor Relations 5, XCVII
Systems, Department of Homeland Security
Pipeline and Hazardous Materials Safety Administration 49, I
Postal Regulatory Commission 5, XLVI; 39, III
Postal Service, United States 5, LX; 39, I
Postsecondary Education, Office of 34, VI
President’s Commission on White House Fellowships 1, IV
Presidential Documents 3
Presidio Trust 36, X
Prisons, Bureau of 28, V
Privacy and Civil Liberties Oversight Board 6, X
Procurement and Property Management, Office of 7, XXXII
Public and Indian Housing, Office of Assistant Secretary for 24, IX
Public Contracts, Department of Labor 41, 50
Public Health Service 42, I
Railroad Retirement Board 20, II
Reclamation, Bureau of 43, I
Refugee Resettlement, Office of 45, IV
Relocation Allowances 41, 302
Research and Innovative Technology Administration 49, XI
Rural Business-Cooperative Service 7, XVIII, XLII
Rural Development Administration 7, XLII
Rural Housing Service 7, XVIII, XXXV
Rural Utilities Service 7, XVII, XVIII, XLII
Safety and Environmental Enforcement, Bureau of 30, II
Saint Lawrence Seaway Development Corporation 33, IV
Science and Technology Policy, Office of 32, XXIV
Science and Technology Policy, Office of, and National 47, II
Security Council
Secret Service 31, IV
Securities and Exchange Commission 5, XXXIV; 17, II
Selective Service System 32, XVI
Small Business Administration 2, XXVII; 13, I
Smithsonian Institution 36, V
Social Security Administration 2, XXIII; 20, III; 48, 23
Soldiers’ and Airmen’s Home, United States 5, XI
268
Agency Chapter
Special Counsel, Office of 5, VIII
Special Education and Rehabilitative Services, Office of 34, III
State, Department of 2, VI; 22, I; 28, XI
Surface Mining Reclamation and Enforcement, Office of 30, VII
Surface Transportation Board 49, X
Susquehanna River Basin Commission 18, VIII
Tennessee Valley Authority 5, LXIX; 18, XIII
Trade Representative, United States, Office of 15, XX
Transportation, Department of 2, XII; 5, L
Emergency Management and Assistance 44, IV
Federal Aviation Administration 14, I
Federal Highway Administration 23, I, II
Federal Motor Carrier Safety Administration 49, III
Federal Railroad Administration 49, II
Federal Transit Administration 49, VI
Maritime Administration 46, II
National Highway Traffic Safety Administration 23, II, III; 47, IV; 49, V
Pipeline and Hazardous Materials Safety Administration 49, I
Saint Lawrence Seaway Development Corporation 33, IV
Secretary of Transportation, Office of 14, II; 49, Subtitle A
Transportation Statistics Bureau 49, XI
Transportation, Office of 7, XXXIII
Transportation Security Administration 49, XII
Transportation Statistics Bureau 49, XI
Travel Allowances, Temporary Duty (TDY) 41, 301
Treasury, Department of the 2, X; 5, XXI; 12, XV; 17,
IV; 31, IX
Alcohol and Tobacco Tax and Trade Bureau 27, I
Community Development Financial Institutions Fund 12, XVIII
Comptroller of the Currency 12, I
Engraving and Printing, Bureau of 31, VI
Federal Law Enforcement Training Center 31, VII
Financial Crimes Enforcement Network 31, X
Fiscal Service 31, II
Foreign Assets Control, Office of 31, V
Internal Revenue Service 26, I
Investment Security, Office of 31, VIII
Monetary Offices 31, I
Secret Service 31, IV
Secretary of the Treasury, Office of 31, Subtitle A
Truman, Harry S. Scholarship Foundation 45, XVIII
United States and Canada, International Joint Commission 22, IV
United States and Mexico, International Boundary and Water 22, XI
Commission, United States Section
U.S. Copyright Office 37, II
Utah Reclamation Mitigation and Conservation Commission 43, III
Veterans Affairs, Department of 2, VIII; 38, I
Veterans’ Employment and Training Service, Office of the 41, 61; 20, IX
Vice President of the United States, Office of 32, XXVIII
Wage and Hour Division 29, V
Water Resources Council 18, VI
Workers’ Compensation Programs, Office of 20, I, VII
World Agricultural Outlook Board 7, XXXVIII
269
List of CFR Sections Affected
All changes in this volume of the Code of Federal Regulations (CFR)
that were made by documents published in the FEDERAL REGISTER since
January 1, 2016 are enumerated in the following list. Entries indicate the
nature of the changes effected. Page numbers refer to FEDERAL REGISTER
pages. The user should consult the entries for chapters, parts and sub-
parts as well as sections for revisions.
For changes to this volume of the CFR prior to this listing, consult
the annual edition of the monthly List of CFR Sections Affected (LSA).
The LSA is available at www.govinfo.gov. For changes to this volume of
the CFR prior to 2001, see the ‘‘List of CFR Sections Affected, 1949–1963,
1964–1972, 1973–1985, and 1986–2000’’ published in 11 separate volumes. The
‘‘List of CFR Sections Affected 1986–2000’’ is available at
www.govinfo.gov.
2016 7 CFR—Continued 81 FR
Page
7 CFR 81 FR Chapter XVIII—Continued
Page
1942.311 Regulation at 79 FR 76009
Chapter XVIII confirmed .................................. 7696
1940.301—1940.350 (Subpart G) Re- 1942.314 Regulation at 79 FR 76009
moved ...................................... 51296 confirmed .................................. 7696
1940.301 (a) revised ........................ 11030 1942.315 Regulation at 79 FR 76009
1940.588 Heading correctly re- confirmed .................................. 7696
vised......................................... 66500 1942.316 Regulation at 79 FR 76009
1940.968 (h)(2) revised .................... 11030 confirmed .................................. 7696
1942.1 Regulation at 79 FR 76007 1944.66 Regulation at 79 FR 76008
confirmed .................................. 7696 confirmed .................................. 7696
(a) revised; interim ......................43935 (c) revised ....................................11031
(b) revised ....................................11030 1944.410 Regulation at 79 FR 76009
1942.5 Regulation at 79 FR 76007 confirmed .................................. 7696
confirmed .................................. 7696 (b)(1)(ii) and (c)(1) revised .............11031
1942.10 Added ................................ 10457 1944.411 Regulation at 79 FR 76010
1942.17 Regulation at 79 FR 76007 confirmed .................................. 7696
confirmed .................................. 7696 1944.422 Regulation at 79 FR 76010
(j)(7) revised .................................11030 confirmed .................................. 7696
1942.18 Regulation at 79 FR 76008 Introductory text amended ...........7698
confirmed .................................. 7696 1944.426 Regulation at 79 FR 76010
(d)(1) and (2) revised......................11030 confirmed .................................. 7696
1942.30 Added; interim .................. 43936 1944.401—1944.450 (Subpart I) Reg-
1942.105 Revised ............................ 11031 ulation at 79 FR 76010 con-
1942.110 Added .............................. 10457 firmed........................................ 7696
1942.126 (l)(6)(i)(E) revised............. 11031 1944.523 Revised ............................ 11031
1942.310 Regulation at 79 FR 76009 (a)(5), (b)(1)(i), (ii), (c)(1)(i) and
confirmed .................................. 7696 (ii) revised.................................11031
271
7 CFR (1–1–21 Edition)
7 CFR—Continued 81 FR 2017
Page
Chapter XVIII—Continued 7 CFR 82 FR
Page
confirmed .................................. 7696 Chapter XVIII
1944.531 Regulation at 79 FR 76011 1944.672 (g) correctly revised ......... 19319
confirmed .................................. 7696
(c)(10) revised; (c)(11) and (12) re- 2018
moved; (c)(13) redesignated as
new (c)(11) .................................11031 7 CFR 83 FR
Page
1944.501—1944.550 (Subpart K)
Regulation at 79 FR 76011 con- Chapter XVIII
firmed........................................ 7696 1940.401—1940.406 (Subpart I) Re-
Exhibits B and C amended ............11031 moved ...................................... 12659
confirmed .................................. 7696 2019
confirmed .................................. 7696 (No regulations published)
confirmed .................................. 7696 2020
1944.672 Heading, introductory 7 CFR 85 FR
text, (a) and (d) revised.............. 11031 Page
1944.676 Regulation at 79 FR 76011 Chapter XVIII
confirmed .................................. 7696
(c) revised ....................................11031 Chapter XVIII Heading re-
1944.688 Regulation at 79 FR 76011 vised......................................... 59393
confirmed .................................. 7696 1940.968 (h)(3) and (m) revised ........ 31938
1944.689 Regulation at 79 FR 76011 1942.10 Revised ............................. 59393
confirmed .................................. 7696 1942.17 (d)(1)(i)(B)(5) revised.......... 57082
1944.651—1944.700 (Subpart N) 1942.110 Revised ............................ 59393
Regulation at 79 FR 76011 con- Chapter XVIII
firmed........................................ 7696 Chapter XVIII Heading re-
1948.62 (a) revised.......................... 11032 vised......................................... 59393
1948.84 (d)(8), (e)(2) and (i)(13) re- 1940.968 (h)(3) and (m) revised ........ 31938
vised; (i)(14) removed; (i)(15), 1942.10 Revised ............................. 59393
(16) and (17) redesignated as 1942.17 (d)(1)(i)(B)(5) revised.......... 57082
new (i)(14), (15) and (16 ............... 11032 1942.110 Revised ............................ 59393
272

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Title 7

Revised as of January 1, 2021

Containing a codification of documents

Published by the Office of the Federal Register

Legal Status and Use of Seals and Logos

Use of ISBN Prefix

U.S. GOVERNMENT PUBLISHING OFFICE

U.S. Superintendent of Documents • Washington, DC 20402–0001

SUBTITLE B—REGULATIONS OF THE DEPARTMENT OF AGRICULTURE

Chapter XVIII—Rural Housing Service, Rural Business-Coopera-

Table of CFR Titles and Chapters ....................................................... 241

Alphabetical List of Agencies Appearing in the CFR ......................... 261

List of CFR Sections Affected ............................................................. 271

To cite the regulations in

Title 7—AGRICULTURE is composed of fifteen volumes. The parts in these vol-

SUBTITLE B—REGULATIONS OF THE DEPARTMENT OF AGRICULTURE

CHAPTER XVIII—Rural Housing Service, Rural Business-Co-

SUBCHAPTER H—PROGRAM REGULATIONS (CONTINUED)

PART 1940—GENERAL Subpart T—System for Delivery of Certain

subpart is inapplicable to Farm Service calculate a basic state factor as a part

State Director’s whether or not sub- tions receiving formula allocations do

504 grant funds may be suballocated to is multiplied by the weight assigned

§ 1940.592 Community facilities grants. § 1940.593 Other Rural Business-Coop-

§§ 1940.594–1940.600 [Reserved] 1 of this exhibit (available in any FmHA or

Subpart T—System for Delivery of provided to eligible designated States

(11) Nonprofit National Rural Devel- dence of eligibility requirements each

(vi) One of whom is appointed by a (iii) One from names submitted by

(c) Applications. The District Director by the applicant under subpart B of

§ 1942.17 (g)(2)(iii)(B)(2), (g)(3)(iii)(B)(2), mandering of specific communities or

(K) Environmental impact analysis (1) Form RD 1940–1, authorizing funds

‘‘Advice of Borrower’s Change of Ad- the commencement of construction,

permanent instruments and the cash § 1942.8 Actions subsequent to loan

§ 1942.10 Strategic economic and com- § 1942.13 Loan servicing.

This section is made available as need- ly based ownership and controlled by

considering authorizing the develop- (1) Water and Waste Disposal

of funds submitted to the National Of- (4) Hydroelectric generating facilities

(d)(1)(i)(B)(4), or (d)(1)(i)(B)(5) of this (3) This does not preclude:

distribution systems, electric systems, States during the repayment period of

(i) The applicant is a new organiza- vided to a typical rural residential

regular basis. A bond or escrowed secu- tributions, the contribution, member-

sufficiency of such documents. A copy culation in the service area, to post a

benefits of, or be subjected to discrimi- Guide 14 may be used in the prepara-

of inability to obtain commercial fi- (2) Loan resolutions. Loan resolutions

(vii) To provide adequate service to the Department of Health and Human

audit requirements. All audits are to and Government Accountability Office

to accomplish the work as economi- ignee. To the extent practical, Rural

possible. When it is impractical or un- (7) Unacceptable bidders. The fol-

firm-fixed-price contract (lump sum or ored to the maximum extent prac-

(e)(3) of this section discourages sepa- for construction already performed

1924–9, ‘‘Certificate of Contractor’s Re- Policy and Conservation Act (Pub. L.

resident inspector, project architect or (D) Any increase or decrease in the

bonds held by Rural Development ex- (iv) Provisions that amend

(8) Guide 8—Preliminary Engineering certain matters related to the plan-

§§ 1942.31–1942.49 [Reserved] ship or association with a Rural Devel-

§ 1942.104 Application processing. § 1942.105 Environmental review re-

Plans on a multi-jurisdictional and (ii) The purchase of existing facilities

engineering and architectural soci- OGC will be transmitted to OGC with a

be retained in the borrower’s case fold- struments. The permanent instruments

regarding nondiscrimination in con- prevent the meeting of project work

However, the District Director cannot § 1942.129 Borrower supervision and

been approved by the Office of Manage- 1944.261 Program participant fees.

Designated counties. These counties tion and/or rehabilitation, or repair of

purchase of equipment, or the purchase an audit in accordance with 2 CFR part