[Federal Register: December 15, 2005 (Volume 70, Number 240)]
[Rules and Regulations]
[Page 74193-74196]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15de05-1]
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Rules and Regulations
Federal Register
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[[Page 74193]]
DEPARTMENT OF COMMERCE
Economic Development Administration
13 CFR Parts 300, 301, 304 and 308
[Docket No.: 050729210-5325-04]
RIN 0610-AA63
Economic Development Administration Reauthorization Act of 2004
Implementation; Regulatory Revision
AGENCY: Economic Development Administration, Department of Commerce.
ACTION: Interim final rule; amendments.
-----------------------------------------------------------------------
SUMMARY: The Economic Development Administration (``EDA'') published an
interim final rule in the Federal Register on August 11, 2005. EDA is
publishing this interim final rule to effect those changes to the
August 11, 2005 interim final rule specified in the conference report,
accompanying the FY 2006 Science, State, Justice, Commerce and Related
Agencies Appropriations Act. Capitalized terms used but not otherwise
defined in this interim final rule have the meanings ascribed to them
in the August 11, 2005 interim final rule.
DATES: This rule is effective as of December 15, 2005.
FOR FURTHER INFORMATION CONTACT: Hina Shaikh, Esq., Attorney Advisor,
Office of Chief Counsel, Economic Development Administration,
Department of Commerce, Room 7005, 1401 Constitution Avenue, NW.,
Washington, DC 20230; telephone: (202) 482-4687.
SUPPLEMENTARY INFORMATION:
Preamble
EDA published an interim final rule in the Federal Register (70 FR
47002) on August 11, 2005. The interim final rule reflects the
amendments made to EDA's authorizing statute, the Public Works and
Economic Development Act of 1965 (42 U.S.C. 3121 et seq.) (``PWEDA''),
by the Economic Development Administration Reauthorization Act of 2004
(Pub. L. 108-373). In addition to tracking the statutory amendments to
PWEDA, the interim final rule reflects EDA's current practices and
policies in administering its economic development programs that have
evolved since the promulgation of EDA's former regulations. The interim
final rule provided for a public comment period from August 11, 2005
through October 11, 2005. Additionally, on September 1, 2005, EDA held
a public hearing on the August 11, 2005 interim final rule.
On September 30, 2005, EDA published a final rule in the Federal
Register (70 FR 57124) delaying the effective date, from October 1,
2005 until November 14, 2005, of (i) Section 304.2(c)(2) of the interim
final rule, pertaining to membership of a District Organization's
governing body; and (ii) Section 301.4 of the interim final rule, as
the provisions of this section pertain to Investment Rates for EDA
Planning Investments. The September 30, 2005 final rule also extended
the deadline for submitting public comments on the interim final rule
from October 11, 2005 until November 14, 2005. All other provisions of
the interim final rule became effective on October 1, 2005. On November
14, 2005, EDA published another final rule in the Federal Register (70
FR 69053) delaying the effective date, from November 14, 2005 until
January 31, 2006, of those provisions of the interim final rule for
which the effective date was previously delayed by the final rule
published on September 30, 2005.
The conference report (H.R. Conf. Rep. No. 109-272; the
``Conference Report'') accompanying the FY 2006 Science, State,
Justice, Commerce and Related Agencies Appropriations Act (Pub. L. 109-
108) expresses Congressional intent as to specific changes to EDA's
interim final rule. EDA is publishing this interim final rule to effect
only those changes to the August 11, 2005 interim final rule specified
in the Conference Report.
EDA will consider and respond to all comments received during the
public comment period on all aspects of this rulemaking, and will make
additional revisions to the August 11, 2005 interim final rule in
publishing a final rule during 2006. All section citations used herein
refer to those same sections of the August 11, 2005 interim final rule.
Section 300.3--Definitions
In Section 300.3, the definition of ``Private Sector
Representative'' is expanded from the definition set forth in the
August 11, 2005 interim final rule and now includes a designee of any
senior management official or executive holding a key decision-making
position in any for-profit enterprise.
Section 301.4--Investment Rates
The August 11, 2005 interim final rule provided maximum allowable
Investment Rate categories of 30% and 40% for those Regions eligible
for Investment Assistance under PWEDA, but which are experiencing lower
levels of economic distress. As discussed in the Conference Report,
Table 1 in Section 301.4 is revised to show that projects located in
Regions demonstrating (i) a 24-month unemployment rate at least 1%
greater than the national average or (ii) per capita income not more
than 80% of the national average will be eligible to receive a maximum
allowable Investment Rate of 50%. This revision eliminates the 30% and
40% maximum allowable Investment Rate categories. The higher threshold
levels of economic distress for the 60%, 70% and 80% maximum allowable
Investment Rate categories remain the same as provided in the August
11, 2005 interim final rule.
Subsection 301.4(b) of the August 11, 2005 interim final rule never
became effective to the extent that it pertains to Investment Rates for
EDA Planning Investments (see the October 1, 2005 and November 14, 2005
final rules delaying the effective date for this provision).
Accordingly, subsection 306.3(b)(2) and (3) of EDA's former regulations
continued to apply. This interim final rule replaces section
306.3(b)(2) and (3) of EDA's former regulations and revises section
301.4(b) of the August 11, 2005 interim final rule to the extent that
it applies to Planning Investments.
Specifically, this interim final rule includes a new subsection
titled Projects Under Part 303, which includes the following provisions
for determining the Investment Rates for Planning Investments: (i) All
Planning
[[Page 74194]]
Investments will receive a minimum Investment Rate of 50%; (ii) except
as otherwise provided in Section 204(c) of PWEDA, the maximum allowable
Investment Rate for Planning Investments will be the maximum allowable
Investment Rate set forth in Table 1 of Section 301.4 for the most
economically distressed county or other equivalent political unit
(e.g., parish) within the Region; (iii) the maximum allowable
Investment Rate will not exceed 80%; and (iv) in compelling
circumstances, the Assistant Secretary may waive the requirement in
paragraph (ii) above. The Assistant Secretary cannot delegate the
authority to grant this waiver.
Section 304.2--District Organizations: Formation, Organizational
Requirements and Operations
Subsection 304.2(c)(2) of the August 11, 2005 interim final rule
requires that a District Organization's governing body must include a
majority of Private Sector Representatives. This provision, however,
never became effective as the October 1, 2005 and November 14, 2005
final rules delayed its effective date until January 31, 2006.
Accordingly, Section 302.3(c) of EDA's former regulations continued to
apply. This interim final rule replaces Section 302.3(c) of EDA's
former regulations and revises Section 304.2(c) of the August 11, 2005
interim final rule as follows: (i) A District Organization's governing
body must include at least one (1) Private Sector Representative,
together with one (1) or more of the following: Executive Directors of
Chambers of Commerce, or representatives of institutions of post-
secondary education, workforce development groups, or labor groups, all
of which must comprise in the aggregate a minimum of 35% of the
District Organization's governing body; and (ii) if the District
Organization demonstrates an inability to locate a Private Sector
Representative to serve on its governing body following extensive due
diligence (acceptable to EDA), the Assistant Secretary may waive the
Private Sector Representative requirement. This interim final rule also
adds a provision stating that the District Organization's governing
body will also have at least a simple majority of its membership who
are elected officials and/or employees of a general purpose unit of
local government who have been appointed to represent the government.
Subsection 304.2(d) of the August 11, 2005 interim final rule
provided that District Organizations may contract for services to
accomplish approved scopes of work for Planning Investments. This
subsection is revised in this interim final rule to specify that the
District Organization will engage in the full range of economic
development activities listed in its EDA-approved CEDS, which may
include (i) coordinating and implementing economic development
activities in the District; (ii) carrying out economic development
research, planning, implementation and advisory functions identified in
the CEDS; and (iii) coordinating the development and implementation of
the CEDS with other local, State, federal and private organizations.
This subsection continues to give District Organizations the discretion
to contract for services as necessary.
Section 304.3--District Modification and Termination
Subsection 304.3(b)(2) of the August 11, 2005 interim final rule
provides that EDA may terminate a Region's designation as an Economic
Development District when EDA determines that the District Organization
fails to execute its CEDS according to the development, implementation
and other performance measures set forth in the CEDS. This interim
final rule adds a new subsection (c) to Section 304.3 to clarify that
prior to terminating a District's designation under subsection
304.3(b)(2), EDA will (a) consult with the District Organization and
(b) consider all facts and circumstances surrounding the District
Organization's operations. New subsection (c) also provides that EDA
will not terminate a District's designation based on circumstances
beyond the control of the District Organization (e.g., natural
disaster, plant closure, overall economic downturn, sudden and severe
economic dislocation, or other situation).
Section 308.2--Performance Awards
EDA revises Section 308.2 of the August 11, 2005 interim final rule
to better adhere to Section 215 of PWEDA. In subsection 308.2(b) of
this interim final rule, consistent with the ``meet or exceeds''
threshold in Section 215 of PWEDA, EDA eliminates the requirement that
project performance be ``exceptional.'' Additionally, this interim
final rule revises and redesignates subsection 308.2(d) (new subsection
308.2(e)) to clarify that EDA will set forth in an annual FFO the
requirements, qualifications, guidelines and procedures for performance
awards, with all performance awards being subject to the availability
of funds.
Classification
Prior notice and opportunity for public comment are not required
for rules concerning public property, loans, grants, benefits, and
contracts (5 U.S.C. 553(a)(2)). Because prior notice and an opportunity
for public comment are not required pursuant to 5 U.S.C. 553, or any
other law, the analytical requirements of the Regulatory Flexibility
Act (5 U.S.C. 601 et seq.) are inapplicable. Therefore, a regulatory
flexibility analysis has not been prepared.
Executive Order No. 12866
It has been determined that this interim final rule is significant
for purposes of Executive Order 12866.
Congressional Review Act
This interim final rule is not ``major'' under the Congressional
Review Act (5 U.S.C. 801 et seq.)
Executive Order No. 13132
Executive Order 13132 requires agencies to develop an accountable
process to ensure ``meaningful and timely input by State and local
officials in the development of regulatory policies that have
federalism implications.'' ``Policies that have federalism
implications'' is defined in Executive Order 13132 to include
regulations that have ``substantial direct effects on the States, on
the relationship between the national government and the States, or on
the distribution of power and responsibilities among the various levels
of government.'' It has been determined that this interim final rule
does not contain policies that have federalism implications.
List of Subjects
13 CFR Part 300
Grant administration, Grant programs, Financial assistance, Private
sector representative.
13 CFR Part 301
Grant administration, Grant programs, Eligibility requirements,
Applicant and application requirements, Economic distress levels,
Investment rates, Proposal selection.
13 CFR Part 304
Grant administration, Grant programs, Economic development
district, Organizational requirements, District modification and
Termination, performance evaluations.
13 CFR Part 308
Grant administration, Grant programs, Performance awards, Planning
performance awards.
[[Page 74195]]
Regulatory Text
0
For reasons stated in the preamble, Chapter III of Title 13 of the CFR
is amended as follows:
PART 300--GENERAL INFORMATION
0
1. The authority citation for part 300 continues to read as follows:
Authority: 42 U.S.C. 3121; 42 U.S.C. 3122; 42 U.S.C. 3211;
Department of Commerce Organization Order 10-4.
0
2. Amend Sec. 300.3 by revising the definition of ``Private Sector
Representative'' to read as follows:
Sec. 300.3 Definitions.
* * * * *
Private Sector Representative means, with respect to any for-profit
enterprise, any senior management official or executive holding a key
decision-making position, or that person's designee.
* * * * *
PART 301--ELIGIBILITY, INVESTMENT RATE AND PROPOSAL AND APPLICATION
REQUIREMENTS
0
1. The authority citation for part 301 continues to read as follows:
Authority: 42 U.S.C. 3121; 42 U.S.C. 3141-3147; 42 U.S.C. 3149;
42 U.S.C. 3161; 42 U.S.C. 3175; 42 U.S.C. 3192; 42 U.S.C. 3194; 42
U.S.C. 3211; 42 U.S.C. 3233; Department of Commerce Delegation Order
10-4.
0
2. Amend Sec. 301.4 by revising paragraph (b)(1)(ii); by redesignating
paragraphs (b)(3) and (b)(4) as paragraphs (b)(4) and (b)(5),
respectively; and by adding new paragraph (b)(3) to read as follows:
Sec. 301.4 Investment Rates.
* * * * *
(b) * * *
(1) * * *
(ii) Table 1. Table 1 of this paragraph sets forth the maximum
allowable Investment Rate for Projects located in Regions subject to
certain levels of economic distress. In cases where Table 1 produces
divergent results (i.e., where Table 1 produces more than one (1)
maximum allowable Investment Rate based on the Region's levels of
economic distress), the higher Investment Rate produced by Table 1
shall be the maximum allowable Investment Rate for the Project.
Table 1
------------------------------------------------------------------------
Maximum
allowable
Projects located in regions in which: investment
rates
(percentage)
------------------------------------------------------------------------
(A) The twenty-four (24) month unemployment rate is at 80
least 225% of the national average; or.................
(B) The per capita income is not more than 50% of the 80
national average.......................................
(C) The twenty-four (24) month unemployment rate is at 70
least 200% of the national average; or.................
(D) The per capita income is not more than 60% of the 70
national average.......................................
(E) The twenty-four (24) month unemployment rate is at 60
least 175% of the national average; or.................
(F) The per capita income is not more than 65% of the 60
national average.......................................
(G) The twenty-four (24) month unemployment rate is at 50
least 1% greater than the national average; or.........
(H) The per capita income is not more than 80% of the 50
national average.......................................
------------------------------------------------------------------------
* * * * *
(3) Projects under part 303.
(i) The minimum Investment Rate for Projects under part 303 of this
Chapter shall be fifty (50) percent.
(ii) Except as otherwise provided in paragraph (iii) of this
section or in paragraph (b)(5), the maximum allowable Investment Rate
for Projects under part 303 of this chapter shall be the maximum
allowable Investment Rate set forth in Table 1 for the most
economically distressed county or other equivalent political unit
(e.g., parish) within the Region. The maximum allowable Investment Rate
shall not exceed eighty (80) percent.
(iii) In compelling circumstances, the Assistant Secretary may
waive the application of the first sentence in paragraph (ii) of this
section. The Assistant Secretary shall not delegate the authority to
grant a waiver under this paragraph.
* * * * *
PART 304--ECONOMIC DEVELOPMENT DISTRICTS
0
1. The authority citation for part 304 continues to read as follows:
Authority: 42 U.S.C. 3122; 42 U.S.C. 3171; 42 U.S.C. 3172; 42
U.S.C. 3196; Department of Commerce Organization Order 10-4.
0
2. Amend Sec. 304.2 by revising paragraphs (c)(2) and (d) to read as
follows:
Sec. 304.2 District Organizations: Formation, organizational
requirements and operations.
* * * * *
(c) * * *
(2) The District Organization must demonstrate that its governing
body is broadly representative of the principal economic interests of
the Region, and, unless otherwise prohibited by applicable State or
local law, must include at least one (1) Private Sector Representative
and one (1) or more of the following: Executive Directors of Chambers
of Commerce, or representatives of institutions of post-secondary
education, workforce development groups or labor groups, all of which
must comprise in the aggregate a minimum of thirty-five (35) percent of
the District Organization's governing body. The governing body shall
also have at least a simple majority of its membership who are elected
officials and/or employees of a general purpose unit of State, local or
Indian tribal government who have been appointed to represent the
government. Upon the District Organization's showing of its inability
to locate a Private Sector Representative to serve on its governing
body following extensive due diligence, the Assistant Secretary may
waive the Private Sector Representative requirement. The Assistant
Secretary shall not delegate the authority to grant a waiver under this
paragraph.
* * * * *
(d) Operations.
(1) The District Organization shall engage in the full range of
economic development activities listed in its EDA-approved CEDS. These
activities may include:
(i) Coordinating and implementing economic development activities
in the District;
(ii) Carrying out economic development research, planning,
implementation and advisory functions identified in the CEDS; and
(iii) Coordinating the development and implementation of the CEDS
with other local, State, federal and private organizations.
[[Page 74196]]
(2) The District Organization may at its option contract for
services to accomplish the activities listed above.
0
3. Amend Sec. 304.3 by redesignating paragraph (c) as paragraph (d);
and by adding new paragraph (c) to read as follows:
Sec. 304.3 District modification and termination.
* * * * *
(c) Prior to terminating a District Organization under paragraph
(b)(2) of this section, EDA will consult with the District Organization
and consider all facts and circumstances regarding the District
Organization's operations. EDA will not terminate a District's
designation based on circumstances beyond the control of the District
Organization (e.g., natural disaster, plant closure, overall economic
downturn, sudden and severe economic dislocation, or other situation).
* * * * *
PART 308--PERFORMANCE MEASURES
0
1. The authority citation for part 308 continues to read as follows:
Authority: 42 U.S.C. 3151; 42 U.S.C. 3154a; 42 U.S.C. 3154b;
Department of Commerce Delegation Order 10-4.
0
2. Amend Sec. 308.2 by revising it to read as follows:
Sec. 308.2 Performance awards.
(a) A Recipient of Investment Assistance under parts 305 or 307 of
this chapter may receive a performance award in connection with an
Investment made on or after the date of enactment of Section 215 of
PWEDA in an amount not to exceed ten (10) percent of the amount of the
Investment award.
(b) To receive a performance award, a Recipient must demonstrate
Project performance in one (1) or more of the areas listed in this
paragraph, weighted at the discretion of the Assistant Secretary:
(1) Meet or exceed the Recipient's projection of jobs created;
(2) Meet or exceed the Recipient's projection of private sector
capital invested;
(3) Meet or exceed target dates for Project start and completion
stated at the time of Investment approval;
(4) Fulfill the proposal evaluation criteria set forth in Sec.
301.8 of this chapter; or
(5) Demonstrate other unique Project performance characteristics as
determined by the Assistant Secretary.
(c) A Recipient may receive a performance award no later than three
(3) years following the Project's closeout.
(d) A performance award may fund up to one hundred (100) percent of
the cost of an eligible Project or any other authorized activity under
PWEDA. For the purpose of meeting the non-federal share requirement of
PWEDA or any other statute, the amount of a performance award shall be
treated as non-federal funds.
(e) The applicable FFO will set forth the requirements,
qualifications, guidelines and procedures for performance awards to be
made during the applicable fiscal year, with all performance awards
being subject to the availability of funds.
Dated: December 7, 2005.
Benjamin Erulkar,
Chief Counsel, Economic Development Administration.
[FR Doc. 05-23927 Filed 12-14-05; 8:45 am]
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