TITLE 7 - AGRICULTURE

SUBTITLE B - REGULATIONS OF THE DEPARTMENT OF AGRICULTURE

CHAPTER XVIII - RURAL HOUSING SERVICE, RURAL BUSINESS - COOPERATIVE SERVICE, RURAL UTILITIES SERVICE, AND FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE

SUBCHAPTER H - PROGRAM REGULATIONS

PART 1942 - ASSOCIATIONS

subpart g - RURAL BUSINESS ENTERPRISE GRANTS AND TELEVISION DEMONSTRATION GRANTS

1942.305 - Eligibility and priority.

  (a) Eligibility. (1) RBE grants may be made to public bodies and private nonprofit corporations serving rural areas. Public bodies include States, counties, cities, townships, and incorporated town and villages, boroughs, authorities, districts, and Indian tribes on Federal and State reservations and other Federally recognized Indian Tribal groups in rural areas.

  (2) The end result of the project must finance or develop a small and emerging private business enterprise. The small business receiving assistance must meet the definition contained in 1942.304. However, if the small and emerging private business enterprise is an eligible nonprofit entity or other tax-exempt organization located in a city, town or unincorporated area with a population of 5,000 or less and has a principal office on land of an existing or former Native American reservation, the small and emerging private business enterprise is exempt from meeting the definition contained in 1942.304.

  (3) Regional Commission Grant applicants must meet eligibility requirements of the Regional Commission and also of the Agency, in accordance with paragraph (a)(1) of this section, for the Agency to administer the Regional Commission Grant under this subpart.

  (4) Television demonstration grants may be made to statewide, private, nonprofit, public television systems whose coverage is predominantly rural. An eligible applicant must be organized as a private, nonprofit, public television system, licensed by the Federal Communications Commission, and operated statewide and within a coverage area that is predominantly rural.

  (b) Project selection process. The following paragraphs indicate items and conditions which must be considered in selecting RBE applications for further development. When ranking eligible RBE applications for consideration for limited funds, FmHA or its successor agency under Public Law 103354 officials must consider the priority items met by each RBE application and the degree to which those priorities are met, and apply good judgment. Due to the small number of applicants eligible for television demonstration grants, such applicants will not compete for priority points against RBE applicants.

  (1) Applications. The application and supporting information submitted with it will be considered in determining the proposed project's priority for available funds.

  (2) State Office review. All applications will be reviewed and scored for funding priority. Eligible applicants that cannot be funded should be advised by the State Director that funds are not available, and requested to advise whether they wish to have their application maintained in an active file for future consideration.

  (3) Selection priorities. The priorities described below will be used by the State Director to rate applications. Points will be distributed as indicated in paragraphs (b)(3) (i) through (iv) of this section. A copy of the score sheet should be placed in the case file for future reference.

  (i) Population. Proposed project(s) will primarily be located in a community of (1) between 15,000 and 25,000 population5 points, (2) between 5,000 and 15,000 population10 points, (3) under 5,000 population15 points.

  (ii) Economic conditions. (A) Proposed project(s) will primarily be located in areas where the unemployment rate (1) exceeds the State rate by 25% or more20 points, (2) exceeds the State rate by less than 25%10 points, (3) is equal to or less than the State rate0 points.

  (B) Proposed project(s) will primarily be located in areas where Median Household Income (MHI) as prescribed by section 673(2) of the Community Services Block Grant Act (42 U.S.C. 9902(2)) for a family of 4 for the State is: (1) Less than poverty line25 points, (2) more than poverty line but less than 85% of State MHI15 points, (3) between 85% and 100% of State MHI10 points, (4) equal or greater than State MHI0 points.

  (iii) Experience. Applicant has evidence of at least 5 years of successful experience in the type of activity proposed in the application for funds under this subpart. Evidence of successful experience may be (1) a description of experience supplied and certified by the applicant, or (2) a letter of support from appropriate local elected officials explaining the applicant's experience. Experience10 points (iv) Other. (A) Applicant has evidence that small business development will occur by startup or expansion as a result of the activities to be carried out under the grant. Written evidence of commitment by small business must be provided to FmHA or its successor agency under Public Law 10335425 points.

  (B) Applicant has evidence of substantial commitment of funds from nonfederal sources for proposed project. An authorized representative of the source organization of the nonfederal funds must provide evidence that the funds are available and will be used for the proposed project.

More than 50 percent of the project costs from nonfederal sources15 points; more than 25 percent, but less than 50 percent of project costs from nonfederal sources10 points; between 5 percent and 25 percent of project costs from nonfederal sources5 points.

  (C) For a grant to establish a revolving fund, the applicant provides evidence to FmHA or its successor agency under Public Law 103354 through loan applications or letters from businesses that the loans are needed by small emerging businesses in the proposed project area25 points.

  (D) The anticipated development, expansion, or furtherance of business enterprises as a result of the proposed project will create and/or save jobs associated with the affected businesses. The number of jobs must be evidenced by a written commitment from the business to be assisted. One job per each $10,000 or less in grant funds expended10 points. One job per each $25,000 to $10,000 in grant funds expended5 points.

  (E) The proposed grant project is consistent with, and does not duplicate, economic development activities for the project area under an existing community or economic development plan covering the project area. If no local plan is in existence for the project area, an areawide plan may be used. The plan used must be adopted by the appropriate governmental officials/entities as the area's community or economic development plan. Appropriate plan references and copies of appropriate sections of the plan, as well as evidence of plan adoption by appropriate governmental officials, should be provided to FmHA or its successor agency under Public Law 103354. Project is reflected in a plan5 points.

  (F) Grant projects utilizing funds available under this subpart of less than $100,00025 points, $100,000 to $200,00015 points, more than $200,000 but not more than $500,00010 points.

  (G) The project will assist a small and emerging private business enterprise as described in 1942.305 (a)(2) of this subpart10 points.

  (v) Discretionary. In certain cases, when a grant is an initial grant for funding under this subpart and is not more than $500,000, FmHA or its successor agency under Public Law 103354 may assign up to 50 points in addition to those that may be assigned in paragraphs (b)(3)(i) through (iv) of this section. Use of these points must include a written justification, such as geographic distribution of funds, criteria which will result in substantial employment improvement, mitigation of economic distress of a community through the creation or saving of jobs, or emergency situations. For grants of less than $100,00050 points; $100,000 to $200,00030 points; more than $200,000, but not more than $500,00020 points.

[50 FR 7296, Feb. 22, 1985, as amended at 53 FR 30247, Aug. 11, 1988; 55 FR 134, Jan. 3, 1990; 57 FR 33099, July 27, 1992; 57 FR 35627, Aug. 10, 1992; 67 FR 77908, Dec. 20, 2002]