PART 25—RURAL EMPOWERMENT ZONES AND ENTERPRISE COMMUNITIES Authority: 5 U.S.C. 301; 26 U.S.C. 1391; Pub. L. 103-66, 107 Stat. 543; Pub L. 105-34, 111 Stat. 885; Sec. 766, Pub. L. 105-277, 112 Stat. 2681-37; Pub. L. 106-554 [Title I of H.R. 5562], 114 Stat. 2763. Source: 63 FR 19114, Apr. 16, 1998, unless otherwise noted. Subpart A—General Provisions § 25.1 Applicability and scope. (a) Applicability. This part contains policies and procedures applicable to rural empowerment zones and enterprise communities, authorized under the Omnibus Budget Reconciliation Act of 1993, title XIII, subchapter C, part I (Round I), the Taxpayer Relief Act of 1997, title IX, subtitle F (Round II), the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 1999 (Public Law 105-277) (Round IIS), and the Community Renewal Tax Relief Act of 2000 (Public Law 106-554) (Round III). (b) Scope. [63 FR 19114, Apr. 16, 1998, as amended at 67 FR 13556, Apr. 24, 2002] § 25.2 Objective and purpose. The purpose of this part is to provide for the establishment of Empowerment Zones and Enterprise Communities in rural areas in order to facilitate the empowerment of the disadvantaged and long-term unemployed such that they may become economically self-sufficient, and to promote revitalization of economically distressed areas, primarily by facilitating: (a) Coordination of economic, human services, health, transportation, education, community, and physical development plans, and other plans and related activities at the local level; (b) Local partnerships fully involving affected communities and local institutions and organizations in developing and implementing a comprehensive multi-sectoral strategic plan for any nominated rural Empowerment Zone or Enterprise Community; (c) Tax incentives and credits; and (d) Distribution of other federal resources including grants from USDA and other federal departments, including Empowerment Zone and Enterprise Community Social Services Block Grant (EZ/EC SSBG) funds as may be available from the U.S. Department of Health and Human Services (HHS). § 25.3 Definitions. As used in this part— Annual report Applicant Baseline condition Benchmark activity Benchmark goal Brownfield Census tract Champion Community Designation et seq. Designation date Designation period Developable site Empowerment Zone Enterprise Community EZ/EC SSBG funds EZ/EC Social Services Block Grant funds Funding official HHS HUD Indian reservation Lead managing entity Local government Nominated area Office of Community Development OCD Outmigration (1) Net Domestic Migration; (2) Net Federal Movement; and (3) Net International Migration, as such terms are defined for purposes of the 1990 Census. Poverty rate Revocation of designation Round I Round II Round IIS Round III Rural Secretary State State director Strategic plan USDA USDA EZ/EC grant program [63 FR 19114, Apr. 16, 1998, as amended at 67 FR 13556, Apr. 24, 2002; 68 FR 16170, Apr. 3, 2003] § 25.4 Secretarial review and designation. (a) Designation. Federal Register. (b) Number of rural empowerment zones, enterprise communities and champion communities Round I. (2) Round II. (3) Round IIS. (4) Round III. (5) Champion communities. (c) Period of designation. (1) End of the tenth calendar year beginning on or after the designation date; (2) Termination date designated by the state and local governments in their application for nomination; (3) Date the Secretary revokes the designation; or (4) Date the Empowerment Zone or Enterprise Community modifies its boundary without first obtaining the written approval of the Secretary. [63 FR 19114, Apr. 16, 1998, as amended at 67 FR 13556, Apr. 24, 2002] § 25.5 Waivers. The Secretary may waive any provision of this part in any particular case for good cause, where it is determined that application of the requirement would produce a result adverse to the purpose and objectives of this part. §§ 25.6-25.99 [Reserved] Subpart B—Area Requirements § 25.100 Eligibility requirements. A nominated rural area may be eligible for designation pursuant to this part only if the area: (a) Has a maximum population of 30,000; (b) Is one of pervasive poverty, unemployment, and general distress, as described in § 25.102; (c) Meets the area size and boundary requirements of § 25.103; (d) Is located entirely within the jurisdiction of the general local government making the nomination; and (e) Meets the poverty rate criteria contained in § 25.104. (f) Provision for Alaska and Hawaii. A nominated area in Alaska or Hawaii shall be presumed to meet the criteria of paragraphs (b), (c), and (e) of this section if, for each Census tract or block group in the area, at least 20 percent of the families in such tract have an income which is 50 percent or less of the statewide median family income. § 25.101 Data utilized for eligibility determinations. (a) Source of data. (b) Use of statistics on boundaries. (1) Nominated areas in Alaska and Hawaii shall coincide with the boundaries of census tracts or block groups as such term is used for purposes of the 1990 Census; (2) Developable sites are not required to coincide with the boundaries of Census tracts; and (3) Nominated areas wholly within an Indian reservation are not required to adhere to census tract boundaries if sufficient credible data are available to show compliance with other requirements of this part. The requirements of § 25.103 are otherwise applicable. [63 FR 19114, Apr. 16, 1998, as amended at 63 FR 53780, Oct. 7, 1998] § 25.102 Pervasive poverty, unemployment and general distress. (a) Pervasive poverty. (b) Unemployment. (c) General distress. § 25.103 Area size and boundary requirements. (a) General eligibility requirements. A nominated area: (1) May not exceed one thousand square miles in total land area; (2) Must have one continuous boundary if located in more than one State or may consist of not more than three noncontiguous parcels if located in only one State; (3) If located in more than one State, must be located within no more than three contiguous States; (4) May not include any portion of a central business district (as such term is used for purposes of the most recent Census of Retail Trade) unless the poverty rate for each Census tract in such district is not less than 35 percent for an Empowerment Zone (30 percent in the case of an Enterprise Community); (5) Subject to paragraph (b)(4) of this section, may not include any portion of an area already included in an Empowerment Zone or Enterprise Community or included in an area otherwise nominated to be designated under this section; (b) Eligibility requirements specific to different rounds. (1) For purposes of Round I designations only, a nominated area may not include any area within an Indian reservation; (2) For purposes of applying paragraph (a)(1) of this section to Round II, Round IIS and Round III designations: (i) A Census tract larger than 1,000 square miles shall be reduced to a 1,000 square mile area with a continuous boundary, if necessary, after application of §§ 25.103(b)(2) (ii) and (iii); (ii) Land owned by the Federal, State or local government may (and in the event the Census tract exceeds 1,000 square miles, will) be excluded in determining the square mileage of a nominated area; and (iii) Developable sites, in the aggregate not exceeding 2,000 acres, may (and in the event the Census tract exceeds 1,000 square miles, will) be excluded in determining the square mileage of the nominated area; (3) For purposes of applying paragraph (a)(2) of this section to Round II, Round IIS and Round III designations, the following shall not be treated as violating the continuous boundary requirement nor the limit on the number of noncontiguous parcels: (i) Exclusion of excess area pursuant to paragraph (b)(2)(i) of this section; (ii) Exclusion of government owned land pursuant to paragraph (b)(2)(ii) of this section; or (iii) Exclusion of developable sites pursuant to paragraph (b)(2)(iii) of this section; and (4) Paragraph (a)(5) of this section shall not apply where a Round I Enterprise Community is applying either in its entirety or together with an additional area for a Round II Empowerment Zone designation. [63 FR 19114, Apr. 16, 1998, as amended at 63 FR 53780, Oct. 7, 1998; 67 FR 13557, Mar. 25, 2002] § 25.104 Poverty rate. (a) General. (1) Round I (ii) For at least 90 percent of the Census tracts within the nominated area, the poverty rate may not be less than 25 percent; and (iii) For at least 50 percent of the Census tracts within the nominated area, the poverty rate may not be less than 35 percent. (2) Round II, Round IIS and Round III (ii) For at least 90 percent of the Census tracts within the nominated area, the poverty rate may not be less than 25 percent; (iii) Up to three noncontiguous developable sites, in the aggregate not exceeding 2,000 acres, may be excluded in determining whether the requirements of paragraphs (a)(2)(i) and (a)(2)(ii) of this section are met; and (iv) The Secretary may designate not more than one rural Empowerment Zone without regard to paragraphs (a)(2)(i) and (a)(2)(ii) of this section if such nominated area satisfies the emigration criteria specified in paragraph (b)(2)(iii) of this section. (b) Special rules. (1) Round I Census tracts with no population. (ii) Census tracts with populations of less than 2,000. (iii) Adjustment of poverty rates for Round I Enterprise Communities. (A) Reduce by 5 percentage points one of the following thresholds for not more than 10 percent of the Census tracts (or, if fewer, five Census tracts) in the nominated area: ( 1 ( 2 ( 3 (B) Reduce the 35 percent threshold in paragraph (a)(1)(iii) of this section by 10 percentage points for three Census tracts. (2) Round II, Round IIS and Round III Census tracts with no population. (ii) Census tracts with populations of less than 2,000. (A) More than 75 percent of such tract is zoned for commercial or industrial use; and (B) Such tract is contiguous to 1 or more other Census tracts which have a poverty rate of 25 percent or more, where such determination is made without applying § 25.104(b)(2)(ii). (iii) Emigration criteria. Provided, however, (c) General rules. (1) Rounding up of percentages. (2) Noncontiguous parcels. (3) Areas not within census tracts. [63 FR 19114, Apr. 16, 1998, as amended at 67 FR 13557, Apr. 24, 2002] §§ 25.105-25.199 [Reserved] Subpart C—Nomination Procedure § 25.200 Nominations by State and local governments. (a) Nomination criteria. (1) The rural area meets the applicable requirements for eligibility identified in § 25.100; (2) The Secretary determines such governments have the authority to nominate the area for designation and to provide the assurances described in paragraph (b) of this section; and (3) The Secretary determines all information furnished by the nominating States and local governments is reasonably accurate. (b) Required certifications and assurances. (1) Submit the following certifications: (i) Each nominating governmental entity has the authority to: (A) Nominate the rural area for designation as an Empowerment Zone or Enterprise Community and make the assurances required under this part; (B) Make the State and local commitments contained in the strategic plan or otherwise required under this part; and (C) Provide written assurances satisfactory to the Secretary that these commitments will be met; and (ii) The nominated area satisfies the eligibility criteria referenced in § 25.100, inclusive of the requirement that either; (A) No portion of the area nominated is already included in a designated Empowerment Zone or Enterprise Community or in an area otherwise nominated to be designated under this section; or (B) Where an existing Round I Enterprise Community is seeking to be designated as a Round II Empowerment Zone, that the nominated area includes the entirety of the applicable Round I Enterprise Community and that any other areas as may be included in the application do not comprise any portion of a designated Empowerment Zone or Enterprise Community or part of an area otherwise nominated to be designated under this section; and (2) Provide written assurance that: (i) The strategic plan will be implemented; (ii) The nominating governments will make available, or cause to be made available, all information requested by USDA to aid in the evaluation of progress in implementing the strategic plan; and (iii) EZ/EC SSBG funds, as applicable, will be used to supplement, not supplant, other Federal or non-Federal funds available for financing services or activities which promote the purposes of section 2007 of the Social Security Act. § 25.201 Application. No rural area may be considered for designation pursuant to this part unless the application: (a) Demonstrates that the nominated rural area satisfies the eligibility criteria contained in § 25.100; (b) Includes a strategic plan, which meets the requirements contained in § 25.202; (c) Includes the written commitment of the applicant, as applicable, that EZ/EC SSBG funds will be used to supplement, not replace, other Federal and non-Federal funds available for financing services or activities that promote the purposes of section 2007 of the Social Security Act; and (d) Includes such other information as may be required by USDA. § 25.202 Strategic plan. (a) Principles of strategic plan. (1) Strategic vision for change, which identifies what the community will become and a strategic map for revitalization. The vision should build on assets and coordinate a response to community needs in a comprehensive fashion. It should also set goals and performance benchmarks for measuring progress and establish a framework for evaluating and adjusting the revitalization plan. (2) Community-based partnerships, involving the participation of all segments of the community, including the political and governmental leadership, community groups, local public health and social service departments and nonprofit groups providing similar services, environmental groups, local transportation planning entities, public and private schools, religious organizations, the private and nonprofit sectors, centers of learning, and other community institutions and individual citizens. (3) Economic opportunity, including job creation within the community and throughout the region, entrepreneurial initiatives, small business expansion, job training and other important services such as affordable childcare and transportation services that may enable residents to be employed in jobs that offer upward mobility. (4) Sustainable community development, to advance the creation of livable and vibrant communities through comprehensive approaches that coordinate economic, physical, environmental, community, and human development. These approaches should preserve the environment and historic landmarks—they may include “brownfields” clean-up and redevelopment, and promote transportation, education, and public safety. (b) Minimum requirements. (1) Describe the coordinated economic, human, community, and physical development plan and related activities proposed for the nominated area; (2) Describe the process by which the affected community is a full partner in the process of developing and implementing the plan and the extent to which local institutions and organizations have contributed to the planning process; (3) Identify the amount of State, local, and private resources that will be available in the nominated area and the private and public partnerships to be used, which may include participation by, and cooperation with, universities, medical centers, and other private and public entities; (4) Identify the funding requested under any Federal program in support of the proposed economic, human, community, and physical development and related activities, including details about proposed uses of EZ/EC SSBG funds that may be available from HHS; (5) Identify the baselines, methods, and benchmarks for measuring the success of carrying out the strategic plan, including the extent to which poor persons and families will be empowered to become economically self-sufficient; (6) Must not include any action to assist any establishment in relocating from one area outside the nominated area to the nominated area, except that assistance for the expansion of an existing business entity through the establishment of a new branch, affiliate, or subsidiary is permitted if: (i) The establishment of the new branch, affiliate, or subsidiary will not result in a decrease in employment in the area of original location or in any other area where the existing business entity conducts business operations; and (ii) There is no reason to believe that the new branch, affiliate, or subsidiary is being established with the intention of closing down the operations of the existing business entity in the area of its original location or in any other area where the existing business entity conducts business operation; and (7) Include such other information as required by USDA in the notice inviting applications or other applicable notice. (c) Implementation of strategic plan. (d) Public access to materials and proceedings. [63 FR 19114, Apr. 16, 1998, as amended at 67 FR 13557, Apr. 24, 2002] § 25.203 Submission of applications. General. Federal Register [67 FR 13557, Apr. 24, 2002] § 25.204 Evaluation of the strategic plan. The strategic plan will be evaluated for effectiveness as part of the designation process for nominated rural areas described in subpart D of this part. On the basis of this evaluation, USDA may request additional information pertaining to the plan and the proposed area and may, as part of that request, suggest modifications to the plan, proposed area, or term that would enhance its effectiveness. The effectiveness of the strategic plan will be determined in accordance with the four key principles contained in § 25.202(a). USDA will review each plan submitted in terms of the four equally weighted principal objectives, and of such other elements of these principal objectives as are appropriate to address the opportunities and problems of each nominated area, which may include: (a) Strategic vision for change Goals and coordinated strategy. (2) Creativity and innovation. (3) Building on assets. (4) Benchmarks and learning. (b) Community-based partnerships Community partners. (2) Private and nonprofit organizations as partners. (3) State and local government partners. (4) Permanent implementation and evaluation structure. (c) Economic opportunity. (2) The extent to which residents will achieve a real economic stake in the zone or community; (3) The extent to which residents will be employed in the process of implementing the plan and in all phases of economic, community and human development; (4) The extent to which residents will be linked with employers and jobs throughout the entire area and the way in which residents will receive training, assistance, and family support to become economically self-sufficient; (5) The extent to which economic revitalization in the zone or community interrelates with the broader regional economies; and (6) The extent to which lending and investment opportunities will increase within the zone or community through the establishment of mechanisms to encourage community investment and to create new economic growth. (d) Sustainable community development Consolidated planning. (2) Public safety. (3) Amenities and design. (4) Sustainable development. (5) Supporting families. (6) Youth development. (i) Provided with the opportunity to take responsibility for learning the skills, discipline, attitude, and initiative to make work rewarding; (ii) Invited to take part as resources in the rebuilding of their community; and (iii) Provided the opportunity to develop a sense of industry and competency and a belief they might exercise some control over the course of their lives. (7) Education goals. (8) Affordable housing. (9) Drug abuse. (10) Health care. (11) Equal opportunity. §§ 25.205-25.299 [Reserved] Subpart D—Designation Process § 25.300 USDA action and review of nominations for designation. (a) Establishment of submission procedures. Federal Register. (b) Acceptance for processing. Federal Register. (c) Site visits. (d) Modification of the strategic plan, boundaries of nominated rural areas, or period during the application review period. (1) USDA may request additional information pertaining to the strategic plan and proposed area and may, as a part of that request, suggest modifications to the strategic plan or nominated area that would enhance the effectiveness of the strategic plan; (2) Enlargement of a nominated area will not be allowed if the inclusion of the additional area will result in an average poverty rate less than the average poverty rate at the time of initial application; and (3) An applicant may modify the nominated area or strategic plan during the application review period with USDA approval. (e) Designations. [63 FR 19114, Apr. 16, 1998, as amended at 67 FR 13557, Apr. 24, 2002] § 25.301 Selection factors for designation of nominated rural areas. In choosing among nominated rural areas eligible for designation as Empowerment Zone, Enterprise Community or Champion Community, the Secretary shall consider: (a) The potential effectiveness of the strategic plan, in accordance with the key principles in § 25.202(a); (b) The strength of the assurances made pursuant to § 25.200(b) that the strategic plan will be implemented; (c) The extent to which an application proposes activities that are creative and innovative; (d) The extent to which areas consisting of noncontiguous parcels are not so widely separated as to compromise achievement by the nominated area of a cohesive community or regional identity; and (e) Such other factors as established by the Secretary, which include the degree of need demonstrated by the nominated area for assistance under this part and the diversity within and among the nominated areas. If other factors are established by USDA, a Federal Register §§ 25.302-25.399 [Reserved] Subpart E—Post-Designation Requirements § 25.400 Reporting. (a) Periodic reports. (b) Annual report. (1) Executive summary. (i) Identify the most significant accomplishments to date. (ii) Describe the level of community participation and overall support for the EZ/EC initiative. (iii) List and describe new partnerships or alliances formed. (iv) Identify problems or obstacles not otherwise anticipated in the strategic plan. (v) Describe solutions developed or efforts to address the problems and obstacles. (vi) Identify practices or concepts which were found especially effective in implementing the strategic plan. (2) Benchmark progress report. (c) Timely State data. § 25.401 Responsibility of lead managing entity. (a) Financial. (b) Reporting. (c) Cooperation. § 25.402 Periodic performance reviews. USDA will regularly evaluate the progress in implementing the strategic plan in each designated Empowerment Zone and Enterprise Community on the basis of performance reviews to be conducted on site and using other information submitted. USDA may also commission evaluations of the Empowerment Zone program as a whole by an impartial third party. Evidence of continual involvement of all segments of the community, including low income and disadvantaged residents, must be evidenced in the implementation of the strategic plan. § 25.403 Ongoing 2-year work plan requirement. (a) Each Empowerment Zone and Enterprise Community shall prepare and submit annually, work plans for the subsequent 2-year interval of the designation period. (b) The 2-year work plan shall be submitted to USDA 45 days prior to the start of the applicable 2-year period. (c) The 2-year work plan must include the following sections and content: (1) Section 1—Work Plan. (2) Section 2—Operational Budget. (i) Expected implementation costs; (ii) Proposed sources of funding and whether actual commitments have been obtained; (iii) Technical assistance resources and other forms of support pledged by Federal, State and local governments, non-profit organizations, foundations, private businesses, and any other entity to assist in implementation of the community's strategic plan, and whether this support is conditional upon the designation of the community as an Empowerment Zone; and (iv) Documentation of applications for assistance and commitments identified as proposed funding and other resources. § 25.404 Validation of designation. (a) Maintaining the principles of the program. (1) Continuous improvement. (2) Participation. (b) Administration of the strategic plan. (1) Lead entity. (2) Capacity. (3) Board membership. (4) Partnerships. (5) Public information. (c) Reevaluation of designations. (d) Modification of designation. [63 FR 19114, Apr. 16, 1998, as amended at 67 FR 13557, Apr. 24, 2002] § 25.405 Revocation of designation. (a) Basis for revocation. (1) Modified the boundaries of the area without written approval from USDA; (2) Failed to make progress in implementing the strategic plan; or (3) Not complied substantially with the strategic plan (which may include failing to apply funds as contained in the strategic plan without advance written approval from USDA). (b) Letter of Warning. (1) Advising that the Secretary has determined that the applicant and/or lead managing entity and/or the nominating local governments and State: (i) Have modified the boundaries of the area without written approval from USDA; or (ii) Are not complying substantially with, or have failed to make satisfactory progress in implementing the strategic plan; and (2) Requesting a reply from all involved parties within 90 days of the receipt of this letter of warning. (c) Notice of revocation. (1) Allowing 90 days from the date of receipt of the letter of warning for response; and (2) Making a determination pursuant to paragraph (a) of this section. (d) Notice to affected Federal agencies. (e) Effective date. Federal Register, §§ 25.406-25.499 [Reserved] Subpart F—Special Rules § 25.500 Indian reservations. (a) An area in an Indian reservation shall be treated as nominated by a State and a local government if it is nominated by the reservation governing body. (b) For purposes of paragraph (a) of this section, a reservation governing body must be the governing body of an Indian entity recognized and eligible to receive services from the United States Bureau of Indian Affairs, U.S. Department of Interior. (c) Where two or more governing bodies have joint jurisdiction over an Indian reservation, the nomination of a reservation area must be a joint nomination. § 25.501 Governments. If more than one State or local government seeks to nominate an area under this part, any reference to or requirement of this part shall apply to all such governments. § 25.502 Nominations by State-chartered economic development corporations. Any rural area nominated by an economic development corporation chartered by a State and qualified to do business in the State in which it is located shall be treated as nominated by a State and local government. § 25.503 Rural areas. (a) What constitutes “rural”. (b) Exceptions to the definition. (1) The name, address and daytime phone number of the contact person for the applicant seeking the waiver; and (2) Sufficient information regarding the area that would support the infrequent exception from the definition. (c) Waiver process. §§ 25.504-25.999 [Reserved] Subpart G—Round II and Round IIS Grants Source: 67 FR 13558, Mar. 25, 2002, unless otherwise noted. § 25.600 Purpose. This subpart outlines USDA policies and authorizations and contains procedures for the USDA EZ/EC grant program. § 25.601 Delegation of authority. (a) Program administration. (b) Funding official. (c) Environmental review determinations. (d) Authority to issue regulations. § 25.602 Eligible recipients. (a) General. (b) Exception. (c) Subrecipients. § 25.603 Grant approval and obligation of funds. Grants may be made at such time as the nominated area has been designated and such other prerequisites as USDA shall determine have been met, including but not limited to: (a) The empowerment zone or enterprise community has entered into a memorandum of agreement satisfactory to USDA; (b) The empowerment zone or enterprise community has conformed its strategic plan to be consistent with the level of federal grant aid available and such conforming amendments (if any) have met with the approval of the Office of Community Development and the funding official; (c) Completion of the environmental review process, including all appropriate public notices; (d) The proposed grantee has agreed, in form and substance satisfactory to the Office of Community Development, to any funding conditions imposed by USDA; (e) The grantee has submitted a request for obligation of funds, in form and substance satisfactory to the Office of Community Development, inclusive of the following certification: “The grantee certifies that it and all direct or substantial subrecipients are in compliance and will continue to comply with all applicable laws, regulations, executive orders and other generally applicable requirements, including those contained in 7 CFR part 25, 2 CFR part 200, and 2 CFR chapter IV and any agreement to meet funding conditions, in effect at the time of the grant or as subsequently amended.” [67 FR 13558, Mar. 25, 2002, as amended at 85 FR 31938, May 28, 2020] § 25.604 Disbursement of grant funds. (a) The funding official will determine, based on 7 CFR parts 3015, 3016 and 3019, as applicable, whether disbursement of a grant will be by advance or reimbursement. (b) A “request for advance or reimbursement,” in form and substance satisfactory to USDA, must be completed by the grantee on behalf of itself and all applicable subrecipients and submitted to the funding official. (c) Requests for advance or reimbursement must identify: (1) The amount requested for each benchmark activity; (2) The cumulative amount advanced to date (not inclusive of the current amount requested) for each benchmark activity; (3) The total USDA EZ/EC grant obligated for each benchmark activity; (4) The total approved budget for the applicable project or program (inclusive of non USDA EZ/EC grant program sources); (5) An estimated percentage of completion or progress made in accomplishing the benchmark goal associated with each benchmark activity; (6) Certification that the lead managing entity and the subrecipients (where applicable) are in compliance with all applicable laws and regulatory requirements; and (7) Such other information as the funding official may require. (d) Requests for advance or reimbursement may include only activities or projects which are identified in an approved strategic plan. § 25.605 Grant program reporting requirements. Grantees may incorporate grant reporting requirements in the reports submitted pursuant to § 25.400, or submit them separately. In complying with the requirements of 7 CFR parts 3015, 3016, or 3019, as applicable, grantees must submit, in lieu of the forms prescribed therein, the equivalent of such forms prescribed by the Office of Community Development pursuant to this subpart as such may be adapted to the USDA EZ/EC grant program and which may be submitted and retained in electronic form. § 25.606 Financial management and records. (a) In complying with the requirements of 7 CFR parts 3015, 3016, or 3019, as applicable, grantees must submit, in lieu of the forms prescribed therein, the equivalent of such forms prescribed by the Office of Community Development pursuant to this subpart as such may be adapted to the USDA EZ/EC grant program and which may be submitted and retained in electronic form. (b) Grantees must retain financial records, supporting documents, statistical records and all other records pertinent to the grant for a period of at least 3 years after the end of the designation period, except that the records shall be retained beyond the 3 year period if audit findings have not been resolved or if directed by the United States. Records may be retained and submitted in electronic form if allowed by Generally Accepted Government Accounting Principles. § 25.607 Suspension or termination of grant funds. (a) Grants under this subpart may be suspended or terminated by the funding official, in all or in part, in accordance with this subpart and the applicable provisions of 7 CFR parts 3015, 3016 and 3019, as applicable. (b) The funding official may elect to suspend or terminate the entirety of a grant, or funding of a particular benchmark activity, but nevertheless fund the remainder of a request for advance or reimbursement, where the funding official has determined: (1) That grantee or subrecipient of the grant funds has demonstrated insufficient progress toward achieving the related benchmark goal or in any other way failed to comply with the strategic plan; (2) There is reason to believe that other sources of joint funding have not been or will not be forthcoming on a timely basis; (3) The strategic plan calls for a revised use of the grant funds; or (4) Such other cause as the funding official identifies in writing to the grantee (including but not limited to the use of federal grant funds for ineligible purposes). §§ 25.608-25.619 [Reserved] § 25.620 Eligible grant purposes. Eligible grant purposes are: (a) Services directed at the goals of— (1) Achieving or maintaining economic self-support to prevent, reduce, or eliminate dependency; (2) Achieving or maintaining self sufficiency, including reduction or prevention of dependency; (3) Preventing or remedying neglect, abuse, or exploitation of children and adults unable to protect their own interests, or preserving, rehabilitating or reuniting families; (b) Projects and activities identified in the strategic plan for the area; and (c) Activities that benefit residents of the area for which the grant is made. § 25.621 Ineligible grant purposes. Grant funds may not be used: (a) As a source of local matching funds required for other federal grants; (b) To fund political activities; (c) To duplicate current services or replace or substitute for financial support provided from other sources. If the current service is inadequate, however, grant funds may be used to augment financial support or service levels beyond what is currently provided; (d) To pay costs of preparing the application package for designation under this program; (e) To pay costs of a project which were incurred prior to the execution date of the applicable memorandum of agreement; (f) To pay for assistance to any private business enterprise which does not have at least 51 percent ownership by those who are either citizens of the United States or reside in the United States after being legally admitted for permanent residence; (g) To pay any judgment or debt owed to the United States; (h) To assist in the relocation of businesses; (i) To support or promote gambling; or (j) For political lobbying. § 25.622 Other considerations. (a) Civil rights compliance requirements. (b) Environmental review requirements. (c) Other USDA regulations. (1) 2 CFR part 400, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards; (2) 2 CFR part 415, General Program Administrative Regulations; (3) 2 CFR part 416, General Program Administrative Regulations for Grants and Cooperative Agreements to State and Local Governments; (4) 2 CFR part 417, Nonprocurement Debarment and Suspension; (5) 2 CFR part 418, New Restrictions on Lobbying; (6) 2 CFR part 421, Requirements for Drug-Free Workplace (Financial Assistance); and (7) 2 CFR part 422, Research Institutions Conducting USDA-Funded Extramural Research; Research Misconducts. [67 FR 13558, Mar. 25, 2002, as amended at 81 FR 11025, Mar. 2, 2016; 85 FR 31938, May 28, 2020] § 25.623 Programmatic changes. Prior approval from USDA is required for all changes to the scope or objectives of an approved strategic plan or benchmark activity. Failure to obtain prior approval of changes to the strategic plan or benchmarks, including changes to the scope of work or a project budget may result in suspension, termination, and recovery of USDA EZ/EC grant funds. §§ 25.624-25.999 [Reserved]