PART 1940—GENERAL Authority: 5 U.S.C. 301; 7 U.S.C. 1989; and 42 U.S.C. 1480. Editorial Note: Nomenclature changes to part 1940 appear at 80 FR 9876, Feb. 24, 2015. Subparts A-K [Reserved] Subpart L—Methodology and Formulas for Allocation of Loan and Grant Program Funds Source: 50 FR 24180, June 10, 1985, unless otherwise noted. § 1940.551 Purpose and general policy. (a) The purpose of this subpart is to set forth the methodology and formulas by which the Administrator for the Rural Business-Cooperative Service or the Administrator for the Rural Housing Service, as applicable, allocates program funds to the States. (The term State (b) The formulas in this subpart are used to allocate program loan and grant funds to State Offices so that the overall mission of the Agency can be carried out. Considerations used when developing the formulas include enabling legislation, congressional direction, and administration policies. Allocation formulas ensure that program resources are available on an equal basis to all eligible individuals and organizations. (c) The actual amounts of funds, as computed by the methodology and formulas contained herein, allocated to a State for a funding period are distributed to each State Office by an exhibit to this subpart. The exhibit is available for review in any Rural Development State Office. The exhibit also contains clarifications of allocation policies and provides further guidance to the State Directors on any suballocation within the State. Rural Development will publish a Notice of Availability of Rural Housing funds in the Federal Register [49 FR 3727, Jan. 30, 1984, as amended at 53 FR 26229, July 12, 1988; 55 FR 29560, July 20, 1990; 56 FR 66960, Dec. 27, 1991; 72 FR 64122, Nov. 15, 2007] § 1940.552 Definitions. (a) Amount available for allocation. (b) Basic formula criteria, data source and weight. (c) Basic formula allocation. BFA = (Amount available for allocation − NO reserve − Total base and administrative allocations) × SF. (d) Transition formula. If the current year's State BFA is not within this transition range, the State formula allocation is changed to the amount of the transition range limit closest to the BFA amount. After having performed this transition adjustment for each State, the sum of the funds allocated to all States will differ from the amount of funds available for BFA. This difference, whether a positive or negative amount, is distributed to all States receiving a formula allocation by multiplying the difference by the SF. The end result is the transition formula allocation. The transition range will not exceed 40% (±20%), but when a smaller range is used it will be stated in the individual program section. (e) Base allocation. (f) Administrative allocations. (g) Reserve. (h) Pooling of funds. (1) Mid-year: (2) Year-end: (3) Emergency: (i) Availability of the allocation. (j) Suballocation by the State Director. (k) Other documentation. [49 FR 3727, Jan. 30, 1984, as amended at 53 FR 26229, July 12, 1988] §§ 1940.553-1940.559 [Reserved] § 1940.560 Guarantee Rural Rental Housing Program. When funding levels are under $100,000,000, all funds will be held in a National Office reserve and made available administratively in accordance with the Notice of Funding Availability (NOFA) and program regulations. When program levels are sufficient for a nationwide program, funds are allocated based upon the following criteria and weights. (a) Amount available for allocations. (b) Basic formula criteria, data source and weight. Each factor will receive a weight respectively of 40%, 40% and 20%. The criteria used in the basic formula are: (1) State's percentage of National rural population, (2) State's percentage of the National number of rural households between 50 and 115 percent of the area median income, and (3) State's percentage of National average cost per unit. The data source for the criterion specified in paragraph (b)(1) of this section is the most recent decennial Census of the United States (decennial Census). The data source for the criterion specified in paragraph (b)(2) of this section is 5-year income data from the American Community Survey (ACS) or, if needed, other Census Bureau data. The data source for the criterion specified in paragraph (b)(3) of this section is the cost per unit data using the applicable maximum per unit dollar amount limitations under section 207(c) of the National Housing Act, which can be obtained from the Department of Housing and Urban Development. The percentage representing each criterion is multiplied by the weight assigned and totaled to arrive at a State factor. State Factor = (criterion No. 1 × weight of 40%) + (criterion No. 1 × weight of 40%) + (criterion No. 1 × weight of 20%) (c) Basic formula allocation. (d) Transition formula. (e) Base allocation. (f) Administrative allocations. (g) Reserve. (h) Pooling of funds. (i) Availability of the allocation. (j) Suballocation by the State Director. (k) Other documentation. [63 FR 39458, July 22, 1998, as amended at 80 FR 9876, Feb. 24, 2015] §§ 1940.561-1940.562 [Reserved] § 1940.563 Section 502 non-subsidized guaranteed Rural Housing (RH) loans. (a) Amount available for allocations. (b) Basic formula criteria, data source and weight. (1) State's percentage of the National number of rural occupied substandard units, (2) State's percentage of the National rural population in places of less than 2,500 population, (3) State's percentage of the national number of rural households between 80 and 100 percent of the area median income, and (4) State's percentage of the national number of rural renter households paying more than 35 percent of income for rent. The data source for each criterion is specified in paragraph (b)(5) of this section. Each criterion is assigned a specific weight according to its relevance in determining need. The percentage representing each criterion is multiplied by the weight factor and summed to arrive at a basic State factor (SF) as follows: SF = (criterion 1 × weight of 30%) + (criterion 2 × weight of 10%) + (criterion 3 × weight of 30%) + (criterion 4 × weight of 30%) (5) The data source for the criteria specified in paragraphs (b)(1) and (b)(2) of this section is the most recent decennial Census. The data source for the criteria specified in paragraph (b)(3) and (b)(4) of this section is 5-year income data from the American Community Survey (ACS) or, if needed, other Census Bureau data. (c) Basic formula allocation. (d) Transition formula. (e) Base allocation. (f) Administrative allocations. (g) Reserve. (h) Pooling of funds. (1) Mid-year: If used in a particular fiscal year, available funds unobligated as of the pooling date are pooled and redistributed based on the formula used to allocate funds initially. (2) Year-end: Pooled funds are placed in a National Office reserve and are available as determined administratively. (i) Availability of the allocation. (j) Suballocation by the State Director. (k) Other documentation. [56 FR 10509, Mar. 13, 1991, as amended at 80 FR 9876, Feb. 24, 2015] § 1940.564 Section 502 subsidized guaranteed Rural Housing loans. (a) Amount available for allocations. (b) Basic formula criteria, data source and weight. (1) State's percentage of the National number of rural occupied substandard units, (2) State's percentage of the National rural population in places of less than 2,500 population, (3) State's percentage of the national number of rural households below 80 percent of the area median income, and (4) State's percentage of the national number of rural renter households paying more than 35 percent of income for rent. The data source for each criterion is specified in paragraph (b)(5) of this section. Each criterion is assigned a specific weight according to its relevance in determining need. The percentage representing each criterion is multiplied by the weight factor and summed to arrive at a basic State factor (SF) as follows: SF = (criterion 1 × weight of 30%) + (criterion 2 × weight of 10%) + (criterion 3 × weight of 30%) + (criterion 4 × weight of 30%) (5) The data source for the criteria specified in paragraphs (b)(1), (b)(2), and (b)(4) of this section is the most recent decennial Census. The data source for the criterion specified in paragraph (b)(3) of this section is 5-year income data from the American Community Survey (ACS) or, if needed, other Census Bureau data. (c) Basic formula allocation. (d) Transition formula. (e) Base allocation. (f) Administration allocations. (g) Reserve. (h) Pooling of funds. (1) Mid-year: If used in a particular fiscal year, available funds unobligated as of the pooling date are pooled and redistributed based on the formula used to allocate funds initially. (2) Year-end: Pooled funds are placed in a National Office reserve and are available as determined administratively. (i) Availability of the allocation. (j) Suballocation by the State Director. (k) Other documentation. [56 FR 10509, Mar. 13, 1991, as amended at 80 FR 9877, Feb. 24, 2015] § 1940.565 Section 502 subsidized Rural Housing loans. (a) Amount available for allocations. (b) Basic formula criteria, data source and weight. (1) State's percentage of the National number of rural occupied substandard units, (2) State's percentage of the National rural population, (3) State's percentage of the National rural population in places of less than 2,500 population, (4) State's percentage of the National number of rural households between 50 and 80 percent of the area median income, and (5) State's percentage of the National number of rural households below 50 percent of the area median income. Data source for each of these criteria is based on the latest census data available. Each criterion is assigned a specific weight according to its relevance in determining need. The percentage representing each criterion is multiplied by the weight factor and summed to arrive at a basic State factor (SF) SF = (criterion 1 × weight of 25%) + (criterion 2 × weight of 10%) + (criterion 3 × weight of 15%) + (criterion 4 × weight of 30%) + (criterion 5 × weight of 20%) (c) Basic formula allocation. (d) Transition formula. (e) Base allocation. (f) Administrative allocations. (g) Reserve. (h) Pooling of funds. (1) Mid-year: (2) Year-end: (i) Availability of the allocation. (j) Suballocation by the State Director. (k) Other documentation. § 1940.566 Section 504 Housing Repair loans. (a) Amount available for allocations. (b) Basic formula criteria, data source and weight. (1) State's percentage of the National number of rural occupied substandard units, and (2) State's percentage of the National number of rural households below 50 percent of area median income. The data source for the first criterion is the most recent decennial Census data. The data source for the second criterion is 5-year income data from the American Community Survey (ACS) or, if needed, other Census Bureau data. Each criterion is assigned a specific weight according to its relevance in determining need. The percentage representing each criterion is multiplied by the weight factor and summed to arrive at a basic State factor (SF). SF = (criterion No. 1 × weight of 50%) + (criterion No. 2 × weight of 50%) (c) Basic formula allocation. (d) Transition formula. (e) Base allocation. (f) Administrative allocations. (g) Reserve. (h) Pooling of funds. (1) Mid-year: If used in a particular fiscal year, available funds unobligated as of the pooling date are pooled and redistributed based on the formula used to allocate funds initially. (2) Year-end: Pooled funds are placed in a National Office reserve and are available as determined administratively. (i) Availability of the allocation. (j) Suballocation by the State Director. (k) Other documentation. [50 FR 24180, June 10, 1985, as amended at 80 FR 9877, Feb. 24, 2015] § 1940.567 Section 504 Housing Repair grants. (a) Amount available for allocations. (b) Basic formula criteria, data source and weight. (1) State's percentage of the National number of rural occupied substandard units, (2) State's percentage of the National rural population 62 years and older, and (3) State's percentage of the National number of rural households below 50 percent of area median income. The data source for the first two of these criteria is the most recent decennial Census data. The data source for the third criterion is the 5-year data from the American Community Survey (ACS) or, if needed, other Census Bureau data. Each criterion is assigned a specific weight according to its relevance in determining need. The percentage representing each criterion is multiplied by the weight factor and summed to arrive at a basic State factor (SF). SF = (criterion No. 1 × weight of 33 1/3%) + (criterion No. 2 × weight of 33 1/3%) + (criterion No. 3 × weight of 33 1/3%) (c) Basic formula allocation. (d) Transition formula. (e) Base allocation. (f) Administrative allocations. (g) Reserve. (h) Pooling of funds. (1) Mid-year: (2) Year-end: (i) Availability of the allocation. (j) Suballocation by the State Director. (k) Other documentation. [50 FR 24180, June 10, 1985, as amended at 80 FR 9877, Feb. 24, 2015] § 1940.568 Single Family Housing programs appropriations not allocated by State. The following program funds are kept in a National Office reserve and are available as determined administratively: (a) Section 523 Self-Help Technical Assistance Grants. (b) Section 523 Land Development Fund. (c) Section 524 Rural Housing Site Loans. (d) Section 509 Compensation for Construction Defects. (e) Section 502 Nonsubsidized Funds. §§ 1940.569-1940.574 [Reserved] § 1940.575 Section 515 Rural Rental Housing (RRH) loans. (a) Amount available for allocations. (b) Basic formula criteria, data source and weight. The criteria used in the basic formula area: (1) State's percentage of National rural population, (2) State's percentage of National number of rural occupied substandard units, and (3) State's percentage of National rural families with incomes below the poverty level. The data source for the first two of these criterion is the most recent decennial Census data. The data source for the third criterion is the 5-year data from the American Community Survey (ACS) or, if needed, other Census Bureau data. Each criterion is assigned a specific weight according to its relevance in determining need. The percentage representing each criterion is multiplied by the weight assigned and summed to arrive at a State factor (SF). SF = (criterion No. 1 × weight of 33 1/3%) + (criterion No. 2 × weight of 33 1/3%) + (criterion No. 3 × weight of 33 1/3%) (c) Basic formula allocation. (d) Transition formula. (e) Base allocation. (f) Administrative allocations. (g) Reserve. (h) Pooling of funds. (i) Availability of the allocation. (j) Suballocation by the State Director. (k) Other documentation. [53 FR 26229, July 12, 1988, as amended at 80 FR 9877, Feb. 24, 2015] § 1940.576 Rental Assistance (RA) for new construction. (a) Amount available for allocations. (b) Basic formula criteria, data source and weight. (c) Basic formula allocation. (d) Transition formula. (e) Base allocation. (f) Administrative allocations. (g) Reserve. (h) Pooling of funds. (i) Availability of the allocation. (j) Suballocation by the State Director. (k) Other documentation. [53 FR 26229, July 12, 1988] § 1940.577 Rental Assistance (RA) for existing projects. (a) Amount available for allocations. (b) Basic formula criteria, data source and weight. (1) Criteria. (2) Date source. (c) Basic formula allocation. (d) Transition formula. (e) Base allocation. (f) Administrative allocation. (g) Reserve. (h) Pooling of funds. (i) Obligation of the allocation. (j) Suballocation by the State Director. (k) Other documentation. [49 FR 3727, Jan. 30, 1984, as amended at 53 FR 26229, July 12, 1988] § 1940.578 Housing Preservation Grant (HPG) program. (a) Amount available for allocations. (b) Basic formula criteria, data source and weight. (c) Basic formula allocation. (d) Transition formula. (e) Base allocation. (f) Administrative allocations. (g) Reserve. (h) Pooling of funds. (i) Availability of the allocation. (j) Suballocation by the State Director. (k) Other documentation. [53 FR 26229, July 12, 1988] § 1940.579 Multiple Family Housing appropriations not allocated by State. Funds are not allocated to States. The following program funds are kept in a National Office reserve and are available as determined administratively: (a) Section 514 Farm Labor Housing Loans. (b) Section 516 Farm Labor Housing Grants. [64 FR 24480, May 6, 1999] §§ 1940.580-1940.584 [Reserved] § 1940.585 Community Facility loans. (a) Amount available for allocations. (b) Basic formula criteria, data source and weight. (1) The criteria used in the basic formula are: (i) State's percentage of national rural population—50 percent. (ii) State's percentage of national rural population with incomes below the poverty level—25 percent. (iii) State's percentage of national nonmetropolitan unemployment—25 percent. (2) The data source for the first criterion is the most recent decennial Census data. The data source for the second and third criteria is the 5-year data from the American Community Survey (ACS). Each criterion is assigned a specific weight according to its relevance in determining need. The percentage representing each criterion is multiplied by the weight factor and summed to arrive at a State factor (SF). The SF cannot exceed 0.05. Equation 1 to Paragraph (b) SF = (criterion (b)(1)(i) × 50 percent) + (criterion (b)(1)(ii) × 25 percent) + (criterion (b)(1)(iii) × 25 percent) (c) Basic formula allocation. (d) Transition formula. (e) Base allocation. (f) Administrative allocation. (g) Reserve. (h) Pooling of funds. (i) Availability of the allocation. (j) Suballocation by the State Director. (k) Other documentation. [50 FR 24180, June 10, 1985, as amended at 58 FR 54485, Oct. 22, 1993; 80 FR 9877, Feb. 24, 2015; 89 FR 34961, May 1, 2024] §§ 1940.586-1940.587 [Reserved] § 1940.588 Business and Industry Guaranteed and Direct Loans, Rural Business Development Grants, and Intermediary Relending Program. The Agency will allocate funds to the States each Federal fiscal year for the programs identified in this section using the procedures specified in paragraph (a) of this section. If the Agency determines that it will not allocate funds to the States for a program identified in this section in a particular Federal fiscal year, the Agency will announce this decision in a notice published in the Federal Register. (a) Procedures for allocating funds to the States. (1) Amount available for allocations. (2) Basic formula criteria, data source and weight. (i) The criteria used in the basic formula are: (A) State's percentage of national rural population. (B) State's percentage of national rural population with incomes below the poverty level. (C) State's percentage of national nonmetropolitan unemployment. (ii) The data sources for each of the criteria identified in paragraph (a) of this section are: (A) For the criterion specified in paragraph (a)(2)(i)(A), the most recent decennial Census data. (B) For the criterion specified in paragraph (a)(2)(i)(B), 5-year income data from the American Community Survey (ACS) or, if needed, other Census Bureau data. (C) For the criterion specified in paragraph (a)(2)(i)(C) of this section, the 5-year data from the ACS. (iii) Each criterion is assigned a specific weight factor according to its relevance in determining need. The percentage representing each criterion is multiplied by the weight factor and summed to arrive at State Factor (SF). The SF cannot exceed 0.05. The Agency may elect to use different weight factors than those identified in this paragraph by publishing a timely notice in the Federal Register. SF = (criterion (a)(2)(i)(A) × 25 percent) + (criterion (a)(2)(i)(B) × 50 percent) + (criterion (a)(2)(i)(C) × 25 percent) (iv) The Agency will recalculate, as necessary, each criterion specified in paragraph (a)(2)(i) of this section each year. In making these recalculations, the Agency will use the most recent data available to the Agency as of October 1 of the fiscal year for which the Agency is making State allocations. Each criterion's value determined at the beginning of a fiscal year for a program will be used for that entire fiscal year, regardless of when that fiscal year's funding becomes available for the program. (3) Basic formula allocation. (4) Transition formula. (i) The transition formula will be used only when the weight factors identified in paragraph (a)(2)(iii) of this section are modified; and (ii) When the transition formula is used, there will be no upper limitation on the amount that a State's allocation can increase over its previous year's allocation and the maximum percentage that funding will be allowed to decrease for a State will be 10 percent from its previous year's allocation. (5) Base allocations. (6) Administrative allocations. (7) Reserve. (8) Pooling of funds. (9) Availability of allocation. (10) Suballocation by the State Director. (b) Conditions for not allocating program funds to the States. (1) Funds allocated in a fiscal year to a program identified in this section are insufficient, as provided for in § 1940.552(a) of this subpart. (2) The Agency determines that it is in the best financial interest of the Federal Government not to make a State allocation for any program identified in this section and that the exercise of this determination is not in conflict with applicable law. [79 FR 56218, Sept. 19, 2014, as amended at 89 FR 34962, May 1, 2024] § 1940.589 Rural Energy for America Program. The Agency will allocate funds to the States each Federal fiscal year for renewable energy system and energy efficiency improvement projects under the Rural Energy for America Program (REAP) using the procedures specified in paragraph (a) of this section. If the Agency determines that it will not allocate funds to the States for REAP in a particular Federal fiscal year, the Agency will announce this decision in a notice published in the Federal Register. (a) Procedures for allocating funds to the States. (1) Amount available for allocations. (2) Basic formula criteria, data source, and weight. (i) The criteria used in the basic formula are: (A) State's percentage of national rural population. (B) State's percentage of national rural population with incomes below the poverty level. (C) State's percentage of energy cost. (ii) The data sources for each of the criteria identified in paragraph (a)(2)(i) of this section are: (A) For the criterion specified in paragraph (a)(2)(i)(A), the most recent decennial Census data. (B) For the criterion specified in paragraph (a)(2)(i)(B), 5-year income data from the American Community Survey (ACS) or, if needed, other Census Bureau data. (C) For the criterion specified in paragraph (a)(2)(i)(C), the most recent U.S. Energy Information Administration data. (iii) Each criterion is assigned a specific weight factor according to its relevance in determining need. The percentage representing each criterion is multiplied by the weight factor and summed to arrive at State Factor (SF). The SF cannot exceed 0.05. The Agency may elect to use different weight factors than those identified in this paragraph by publishing a timely notice in the Federal Register. SF = (criterion (a)(2)(i)(A) × 25 percent) + (criterion (a)(2)(i)(B) × 50 percent) + (criterion (a)(2)(i)(C) × 25 percent) (iv) The Agency will recalculate, as necessary, each criterion specified in paragraph (a)(2)(i) of this section each year. In making these recalculations, the Agency will use the most recent data available to the Agency as of October 1 of the fiscal year for which the Agency is making State allocations. Each criterion's value determined at the beginning of a fiscal year for a program will be used for that entire fiscal year, regardless of when that fiscal year's funding becomes available for the program. (3) Basic formula allocation. (4) Transition formula. (i) The transition formula will be used only when the weight factors identified in paragraph (a)(2)(iii) of this section are modified; and (ii) When the transition formula is used, there will be no upper limitation on the amount that a State's allocation can increase over its previous year's allocation and the maximum percentage that funding will be allowed to decrease for a State will be 10 percent from its previous year's allocation. (5) Base allocations. (6) Administrative allocations. (7) Reserve. (8) Pooling of funds. (9) Availability of the allocation. (10) Suballocation by the State Director. (b) Conditions for not allocating program funds to the States. (1) Funds allocated in a fiscal year to REAP are insufficient, as provided for in § 1940.552(a) of this subpart. (2) The Agency determines that it is in the best financial interest of the Federal Government not to make a State allocation for REAP and that the exercise of this determination is not in conflict with applicable law. [79 FR 56219, Sept. 19, 2014] § 1940.590 [Reserved] § 1940.591 Community Program Guaranteed loans. (a) Amount available for allocations. (b) Basic formula criteria, data source and weight. (1) The criteria used in the basic formula are: (i) State's percentage of national rural population—50 percent. (ii) State's percentage of national rural population with incomes below the poverty level—25 percent. (iii) State's percentage of national nonmetropolitan unemployment—25 percent. (2) The data source for the first criterion is the most recent decennial Census data. The data source for the second and third criteria is the 5-year data from the American Community Survey (ACS). Each criterion is assigned a specific weight according to its relevance in determining need. The percentage representing each criterion is multiplied by the weight factor and summed to arrive at a State factor (SF). The SF cannot exceed 0.05. Equation 1 to Paragraph (b) SF = (criterion (b)(1)(i) × 50 percent) + (criterion (b)(1)(ii) × 25 percent) + (criterion (b)(1)(iii) × 25 percent) (c) Basic formula allocation. (d) Transition formula. (e) Base allocation. (f) Administrative allocation. (g) Reserve. (h) Pooling of funds. (i) Availability of the allocation. (j) Suballocation by State Director. (k) Other documentation. [55 FR 11134, Mar. 27, 1990, as amended at 58 FR 54486, Oct. 22, 1993; 80 FR 9877, Feb. 24, 2015; 89 FR 34961, May 1, 2024] § 1940.592 Community facilities grants. (a) Amount available for allocations. (b) Basic formula criteria, data source, and weight. (1) The criteria used in the basic formula are: (i) State's percentage of National rural population—50 percent. (ii) State's percentage of National rural population with income below the poverty level—50 percent. (2) The data source for the first criterion is the most recent decennial Census data. The data source for the second criterion is the 5-year data from the American Community Survey (ACS) or, if needed, other Census Bureau data. Each criterion is assigned a specific weight according to its relevance in determining need. The percentage representing each criterion is multiplied by the weight factor and summed to arrive at a State factor (SF). SF (criterion (b)(1)(i) × 50 percent) + (criterion (b)(1)(ii) × 50 percent) (c) Basic formula allocation. (d) Transition formula. (e) Base allocation. (f) Administrative allocation. (g) Reserve. (h) Pooling of funds. (i) Availability of the allocation. (j) Suballocation by State Director. (k) Other documentation. [62 FR 16468, Apr. 7, 1997, as amended at 80 FR 9877, Feb. 24, 2015] § 1940.593 Other Rural Business-Cooperative Service programs. If the Agency determines that it is in the best interest of the Federal government to allocate funds to States for existing RBS programs other than those identified in §§ 1940.588 and 1940.589 of this subpart and for programs new to RBS (e.g., through new legislation), the Agency will use the process identified in paragraph (a) or (b) of this section. (a) If the Agency determines that one of the State allocation procedures in § 1940.588 and § 1940.589 is appropriate for the program, the Agency will publish a Federal Register (b) If the Agency determines that none of the procedures specified in § 1940.588 and § 1940.589 is appropriate for the program, the Agency will implement the following steps: (1) The Agency will either develop a preliminary state allocation formula and administrative procedures specific to the requirements of the new program or use whichever of the procedures in § 1940.588 and § 1940.589 the Agency determines most closely matches the purpose of the program. The Agency will publish in the Federal Register (2) The Agency will develop a State allocation formula and administrative provisions specific to the new program and publish them as a proposed rule change to this part in the Federal Register (3) Until the program's State allocation formula and administrative requirements are finalized, the Agency will use the preliminary State allocation formula established under paragraph (b)(1) of this section to make State allocations and administer the new program. [79 FR 56220, Sept. 19, 2014] §§ 1940.594-1940.600 [Reserved] Exhibit A to Subpart L of Part 1940 [Reserved] Exhibit B to Subpart L of Part 1940—Section 515 Nonprofit Set Aside (NPSA) I. Objective: II. Background: III. Eligible entities. A. Will own an interest in a project to be financed under this section and will materially participate in the development and the operations of the project; and B. Is a private organization that has nonprofit, tax exempt status under section 501(c)(3) or section 501(c)(4) of the Internal Revenue Code of 1986; and C. Has among its purposes the planning, development, or management of low-income housing or community development projects; and D. Is not affiliated with or controlled by a for-profit organization; and E. May be a consumer cooperative, Indian tribe or tribal housing authority. IV. Nondiscrimination. V. Amount of Set Aside. A. Small State Allocation Set Aside (SSASA). B. Large State Allocation Set Aside (LSASA). C. NPSA Rental Assistance (RA). VI. Access to NPSA funds and RA. A. SSASA: B. LSASA: VII. General Information on priority/processing of Preapplications. A. Preapplications/applications for assistance from eligible nonprofit entities under this subpart must continue to meet all loan making requirements of 7 CFR part 3560, subpart B. B. A separate processing list will be maintained for NPSA loan requests. C. The State Director may issue Form AD-622, “Notice of Preapplication Review Action”, requesting a formal application to the highest ranking preapplication(s) from eligible nonprofit entities defined in paragraph III of this exhibit as follows: 1. LSASA. 2. SSASA. D. All AD-622s issued for proposals to be funded from NPSA will be subject to the availability of NPSA funds. Form AD-622 should contain the following or similar language: “This Form AD-622 is issued subject to the availability of Nonprofit Set-Aside (NPSA) funds.” E. If a preapplication requesting NPSA funds has sufficient priority points to compete with non-NPSA loan requests based upon the District or State allocation (as applicable), the preapplication will be maintained on both the NPSA and non-NPSA rating/ranking lists. F. Provisions for providing preference to loan requests from nonprofit organizations is contained in 7 CFR 3560.56. Limited partnerships, with a nonprofit general partner, do not qualify for nonprofit preference. VIII. Exception authority. [58 FR 38950, July 21, 1993, as amended at 69 FR 69104, Nov. 26, 2004] Exhibit C to Subpart L of Part 1940—Housing in Underserved Areas I. Objective A. To improve the quality of affordable housing by targeting funds under Rural Housing Targeting Set Aside (RHTSA) to designated areas that have extremely high concentrations of poverty and substandard housing and have severe, unmet rural housing needs. B. To provide for the eligibility of certain colonias for rural housing funds. II. Background The Cranston-Gonzalez National Affordable Housing Act of 1990 (herein referred to as the “Act”) requires that Farmers Home Administration (FmHA) or its successor agency under Public Law 103-354 set aside section 502, 504, 514, 515, and 524 funds for assistance in targeted, underserved areas. An appropriate amount of section 521 new construction rental assistance (RA) is set aside for use with section 514 and 515 loan programs. Under the Act, certain colonias are now eligible for FmHA or its successor agency under Public Law 103-354 housing assistance. III. Colonias A. Colonia is defined as any identifiable community that: 1. Is in the State of Arizona, California, New Mexico or Texas; 2. Is in the area of the United States within 150 miles of the border between the United States and Mexico, except that the term does not include any standard metropolitan statistical area that has a population exceeding 1 million; 3. Is designated by the State or county in which it is located as a colonia; 4. Is determined to be a colonia on the basis of objective criteria, including lack of potable water supply, lack of adequate sewage systems, and lack of decent, safe, and sanitary housing; and 5. Was in existence and generally recognized as a colonia before November 28, 1990. B. Requests for housing assistance in colonias have priority as follows: 1. When the State did not obligate its allocation in one or more of its housing programs during the previous 2 fiscal years (FYs), priority will be given to requests for assistance, in the affected program(s), from regularly allocated funds, until an amount equal to 5 percent of the current FY program(s) allocation is obligated in colonias. This priority takes precedence over other processing priority methods. 2. When the State did obligate its allocation in one or more of its housing programs during the previous 2 FYs, priority will be given to requests for assistance, in the affected program(s), from RHTSA funds, until an amount equal to 5 percent of the current FY program(s) allocation is obligated in colonias. This priority takes precedence over other processing priority methods. C. Colonias may access pooled RHTSA funds as provided in paragraph IV G of this exhibit. IV. RHTSA A. Amount of Set Aside. B. Selection of Targeted Counties Eligibility. 2. Selection. C. State RHTSA Levels. D. Use of Funds. E. National Office RHTSA Reserve. F. Requests for Funds and RA. G. Pooling. H.-I. [Reserved] J. Requests for Assistance. 1. Issue Form AD-622, “Notice of Preapplication Review Action,” up to 150 percent of the amount shown in attachment 1 of this exhibit (available in any FmHA or its successor agency under Public Law 103-354 State Office). 2. All AD-622s issued for applicants in targeted counties will be annotated, in Item 7, under “Other Remarks,” with the following: “Issuance of this AD-622 is contingent upon receiving funds from the Rural Housing Targeting Set Aside (RHTSA). Should RHTSA funds be unavailable, or the county in which this project will be located is no longer considered a targeted county, this AD-622 will no longer be valid. In these cases, the request for assistance will need to compete with other preapplications in non-targeted counties, based upon its priority point score.” V. [Reserved] [57 FR 3924, Feb. 3, 1992] Subparts M-S [Reserved] Subpart T—System for Delivery of Certain Rural Development Programs Source: 57 FR 11559, Apr. 6, 1992, unless otherwise noted. § 1940.951 General. This subpart sets forth Rural Development policies and procedures for the delivery of certain rural development programs under a rural economic development review panel established in eligible States authorized under sections 365, 366, 367, and 368 of the Consolidated Farm and Rural Development Act (7 U.S.C. 1921 et seq. (a) If a State desires to participate in this pilot program, the Governor of the State may submit an application to the Under Secretary for Small Community and Rural Development, U.S. Department of Agriculture, room 219-A, Administration Building, Washington, DC 20250 in accordance with § 1940.954 of this subpart. (b) The Under Secretary shall designate not more than five States in which to make rural economic development review panels applicable during any established time period for the purpose of reviewing and ranking applications submitted for funding under certain rural development programs. The following time periods have been established for participation in this pilot program: First period—Balance of fiscal year (FY) 1992 to September 30, 1993; Second period—October 1, 1993 to September 30, 1994; Third period—October 1, 1994 to September 30, 1995; and Fourth period—October 1, 1995 to September 30, 1996. The State will be bound by the provisions of this pilot program only during the established time period(s) for which the State is designated. If a designated State does not remain an eligible State during the established time period(s) for which the State was designated, the State will not be eligible to participate in this program and cannot revert to the old ranking and applicant selection process. (c) Assistance under each designated rural development program shall be provided to eligible designated States for qualified projects in accordance with this subpart. (d) Federal statutes provide for extending Rural Development financially supported programs without regard to race, color, religion, sex, national origin, marital status, age, familial status, or physical/mental handicap (provided the participant possesses the capacity to enter into legal contracts.) § 1940.952 [Reserved] § 1940.953 Definitions. For the purpose of this subpart: Administrator. Area plan. Designated agency. Designated rural development program. (1) Water and Waste Disposal Insured or Guaranteed Loans; (2) Development Grants for Community Domestic Water and Waste Disposal Systems; (3) Technical Assistance and Training Grants; (4) Emergency Community Water Assistance Grants; (5) Community Facilities Insured and Guaranteed Loans; (6) Business and Industry Guaranteed Loans; (7) Industrial Development Grants; (8) Intermediary Relending Program; (9) Drought and Disaster Relief Guaranteed Loans; (10) Disaster Assistance for Rural Business Enterprises; (11) Nonprofit National Rural Development and Finance Corporations. Designated State. Eligible State. Nondesignated State. Qualified project. (2) To which the Administrator is required to provide assistance. State. State coordinator. State Director. State rural economic development review panel or “panel”. Under Secretary. § 1940.954 State participation. (a) Application. (1) A narrative signed by the Governor including reasons for State participation in this program and reasons why a project review and ranking process by a State panel will improve the economic and social conditions of rural areas in the State. The narrative will also include the time period(s) for which the State wishes to participate. (2) A proposal outlining the method for meeting all the following eligibility requirements and the timeframes established for meeting each requirement: (i) Establishing a rural economic development review panel in accordance with § 1940.956 of this subpart. When established, the name, title, and address of each proposed member should be included and the chairperson and vice chairperson should be identified. (ii) Governor's proposed designation of a State agency to support the State coordinator and the panel. The name, address, and telephone number of the proposed agency's contact person should be included. (iii) Governor's proposed selection of a State coordinator in accordance with § 1940.957 of this subpart, including the title, address, and telephone number. (iv) Development of area development plans for all areas of the State that are eligible to receive assistance from designated rural development programs. (v) The review and evaluation of area development plans by the panel in accordance with § 1940.956 of this subpart. (vi) Development of written policy and criteria used by the panel to review and evaluate area plans in accordance with § 1940.956 of this subpart. (vii) Development of written policy and criteria the panel will use to evaluate and rank applications in accordance with § 1940.956 of this subpart. (3) Preparation of a proposed budget that includes 3 years projections of income and expenses associated with panel operations. If funds from other sources are anticipated, sources and amounts should be identified. (4) Development of a financial management system that will provide for effective control and accountability of all funds and assets associated with the panel. (5) A schedule to coordinate the submission, review, and ranking process of preapplications/applications in accordance with § 1940.956(a) of this subpart. (6) Other information provided by the State in support of its application. (b) Selecting States. (c) Notification of selection. (2) A copy of the notification to the Governor will be submitted to the Administrator along with a copy of the State's application and other material submitted in support of the application. (d) Determining State eligibility. (2) The Under Secretary will review the material submitted by the Governor in sufficient detail to determine if a State has complied with all eligibility requirements of this subpart. The panel will not begin reviewing and ranking applications until the Governor has been notified in writing by the Under Secretary that the State has been determined eligible and is designated to participate in this program. A copy of the notification will be sent to the Administrator. The Under Secretary's decision is not appealable. (e) Eligibility requirements. (i) The State has established a rural economic development review panel that meets the requirements of § 1940.956 of this subpart; (ii) The Governor has appointed an officer or employee of the State government to serve as State coordinator to carry out the responsibilities set forth in § 1940.957 of this subpart; and (iii) The Governor has designated an agency of the State government to provide the panel and State coordinator with support for the daily operation of the panel. (2) If a State is determined eligible initially and desires to participate in additional time periods established for this program, the Governor will submit documents and information not later than September 1 of each subsequent FY in sufficient detail for the Under Secretary to determine, prior to the beginning of the additional time period, that the State is still in compliance with all eligibility requirements of this subpart. § 1940.955 Distribution of program funds to designated States. (a) States selected to participate in the first established time period will receive funds from designated rural development programs according to applicable program regulations until the end of FY 1992, if necessary for States to have sufficient time to meet the eligibility requirements of this subpart, and to be designated to participate in this program. No funds will be administered under this subpart to an ineligible State. (b) If a State becomes an eligible State any time prior to the end of FY 1992, any funds remaining unobligated from a State's FY 1992 allocation, may be administered under this subpart. (c) Beginning in FY 1993 and for each established time period thereafter, all designated rural development program funds received by a designated State will be administered in accordance with §§ 1940.961 through 1940.965 of this subpart, provided the State is determined eligible prior to the beginning of each FY in accordance with § 1940.954 of this subpart. No assistance will be provided under any designated rural development program in any designated State that is not an eligible State. § 1940.956 State rural economic development review panel. (a) General. (1) Timeframes should assure that applications selected for funding from the current FY's allocation of funds can be processed by Rural Development and funds obligated prior to the July 15 pooling established in § 1940.961(c) of this subpart; (2) Initial submission of preapplications/applications from Rural Development to the panel and any subsequent submissions during the first year; (3) How often during each FY thereafter should Rural Development submit preapplications/applications to the panel for review and ranking; (4) Number of working days needed by the panel to review and rank preapplications/applications; (5) Number of times during the FY the panel will submit a list of ranked preapplications/applications to Rural Development for funding consideration; (6) Consider the matching of available loan and grant funds to assure that all allocated funds will be used; (7) How to consider ranked preapplications/applications at the end of the FY that have not been funded; and (8) How to consider requests for additional funds needed by an applicant to complete a project that already has funds approved; i.e. (b) Duties and responsibilities. (1) Establish policy and criteria to review and evaluate area plans and to review and rank preapplications/applications. Area plan. (ii) Applications. (A) The policy and criteria used to rank applications for business related projects will include the following, which are not necessarily in rank order: ( 1 ( 2 ( 3 ( 4 ( 5 ( 6 ( 7 ( 8 ( 9 ( 10 (B) The policy and criteria used to rank preapplications/applications for infrastructure and all other community facility-type projects will include the following which are not necessarily in rank order: ( 1 ( 2 ( 3 ( 4 ( 5 ( 6 ( 7 ( 8 ( 9 (2) Review and evaluate area plans. (i) The panel will accept any area plan that meets established criteria unless the plan is incompatible with any other area plan for that area that has been accepted by the panel; or (ii) The panel will return any area plan that is technically or economically inadequate, not feasible, is unlikely to be successful, or is not compatible with other panel-accepted area plans for that area. When an area plan is returned, the panel will include an explanation of the reasons for the return and suggest alternative proposals. (iii) The State coordinator will notify the State Director, in writing, of the panel's decision on each area plan reviewed. (3) Review and rank preapplications/applications. (i) Review preapplications/applications. (A) Accept any preapplication/application determined to be compatible with such area plan; or (B) Return to the State Director any preapplication/application determined not to be compatible with such area plan. The panel will notify the applicant when preapplication/applications are returned to the State Director. (ii) Rank preapplications/applications. (A) Priority ranking for projects addressing health emergencies. In addition to the criteria established in paragraph (b)(1)(ii) of this section, preapplications/applications for projects designed to address a health emergency declared so by the appropriate Federal or State agency, will be given priority by the panel. (B) Priority based on need. If two or more preapplications/applications ranked in accordance with this subpart are determined to have comparable strengths in their feasibility and potential for growth, the panel will give priority to the applications for projects with the greatest need. (C) If additional ranking criteria for use by a panel are required in any designated rural development program regulation, the panel will give consideration to the criteria when ranking preapplications/applications submitted under that program. (iii) Transmit list of ranked preapplications/applications. (4) Public availability of list. (c) Membership Voting members. (i) One of whom is the Governor of the State or the person designated by the Governor to serve on the panel, on behalf of the Governor, for that year; (ii) One of whom is the director of the State agency responsible for economic and community development or the person designated by the director to serve on the panel, on behalf of the director, for that year: (iii) One of whom is appointed by a statewide association of banking organizations; (iv) One of whom is appointed by a statewide association of investor-owned utilities; (v) One of whom is appointed by a statewide association of rural telephone cooperatives; (vi) One of whom is appointed by a statewide association of noncooperative telephone companies; (vii) One of whom is appointed by a statewide association of rural electric cooperatives; (viii) One of whom is appointed by a statewide association of health care organizations; (ix) One of whom is appointed by a statewide association of existing local government-based planning and development organizations; (x) One of whom is appointed by the Governor of the State from either a statewide rural development organization or a statewide association of publicly-owned electric utilities, neither of which is described in any of paragraphs (c)(1)(iii) through (ix); (xi) One of whom is appointed by a statewide association of counties; (xii) One of whom is appointed by a statewide association of towns and townships, or by a statewide association of municipal leagues, as determined by the Governor; (xiii) One of whom is appointed by a statewide association of rural water districts; (xiv) The State director of the Federal small business development center or, if there is no small business development center in place with respect to the State, the director of the State office of the Small Business Administration; (xv) The State representative of the Economic Development Administration of the Department of Commerce; and (xvi) One of whom is appointed by the State Director from among the officers and employees of Rural Development. (2) Nonvoting members. (i) One from names submitted by the dean or the equivalent official of each school or college of business, from colleges and universities in the State; (ii) One from names submitted by the dean or the equivalent official of each school or college of engineering, from colleges and universities in the State; (iii) One from names submitted by the dean or the equivalent official, of each school or college of agriculture, from colleges and universities in the State; and (iv) The director of the State agency responsible for extension services in the State. (3) Qualifications of panel members appointed by the Governor. (4) Notification of selection. (5) Appointment of members representative of statewide organization in certain cases. (ii) If a State has more than one of any of the statewide associations or organizations of the entities described in paragraph (c)(1) of this section, the Governor will select one of the like organizations to name a member to serve during no more than one established time period. Thereafter, the Governor will rotate selection from among the remaining like organizations to name a member. (d) Failure to appoint panel members. (e) Panel vacancies. (f) Chairperson and vice chairperson. (g) Compensation to panel members Federal members. (2) NonFederal members. (h) Rules governing panel meetings Quorum. (2) Frequency of meetings. (3) First meeting. (4) Records of meetings. (i) Federal Advisory Committee Act. (j) Liability of members. § 1940.957 State coordinator. The Governor will appoint an officer or employee of State government as State coordinator in order for a State to become and remain an eligible State under this subpart. The State coordinator will have the following duties and responsibilities: (a) Manage, operate, and carry out the instructions of the panel; (b) Serve as liaison between the panel and the Federal and State agencies involved in rural development; (c) Coordinate the efforts of interested rural residents with the panel and ensure that all rural residents in the State are informed about the manner in which assistance under designated rural development programs is provided to the State pursuant to this subpart, and if requested, provide information to State residents; and (d) Coordinate panel activities with Rural Development. § 1940.958 Designated agency. The Governor will appoint a State agency to provide the panel and the State coordinator with support for the daily operation of the panel. In addition to providing support, the designated agency is responsible for identifying: (a) Alternative sources of financial assistance for project preapplications/applications reviewed and ranked by the panel, and (b) Related activities within the State. § 1940.959 Area plan. Each area plan submitted to the panel for review in accordance with § 1940.956 of this subpart shall identify the geographic boundaries of the area and shall include the following information: (a) An overall development plan for the area with goals, including business development and infrastructure development goals, and time lines based on a realistic assessment of the area, including, but not limited to, the following: (1) The number and types of businesses in the area that are growing or declining; (2) A list of the types of businesses that the area could potentially support; (3) The outstanding need for water and waste disposal and other public services or facilities in the area; (4) The realistic possibilities for industrial recruitment in the area; (5) The potential for development of tourism in the area; (6) The potential to generate employment in the area through creation of small businesses and the expansion of existing businesses; and (7) The potential to produce value-added agricultural products in the area. (b) An inventory and assessment of the human resources of the area, including, but not limited to, the following: (1) A current list of organizations in the area and their special interests; (2) The current level of participation of area residents in rural development activities and the level of participation required for successful implementation of the plan; (3) The availability of general and specialized job training in the area and the extent to which the training needs of the area are not being met; (4) A list of area residents with special skills which could be useful in developing and implementing the plan; and (5) An analysis of the human needs of the area, the resources in the area available to meet those needs, and the manner in which the plan, if implemented, would increase the resources available to meet those needs. (c) The current degree of intergovernmental cooperation in the area and the degree of such cooperation needed for the successful implementation of the plan. (d) The ability and willingness of governments and citizens in the area to become involved in developing and implementing the plan. (e) A description of how the governments in the area apply budget and fiscal control processes to the plan. This process is directed toward costs associated with carrying out the planned development. When plans are developed, the financial condition of all areas covered under the plan should be fully recognized and planned development should realistically reflect the area's immediate and long-range financial capabilities. (f) The extent to which public services and facilities need to be improved to achieve the economic development and quality of life goals of the plan. At a minimum, the following items will be considered: (1) Law enforcement; (2) Fire protection; (3) Water, sewer, and solid waste management; (4) Education; (5) Health care; (6) Transportation; (7) Housing; (8) Communications; and (9) The availability of and capability to generate electric power. (g) Existing area or regional plans are acceptable provided the plan includes statements that indicate the degree to which the plan has met or is meeting all the requirements in paragraphs (a) through (f) of this section. § 1940.960 Federal employee panel members. (a) The State Director will appoint one Rural Development employee to serve as a voting member of the panel established in § 1940.956(c)(1) of this subpart. (b) The Administrator may appoint, temporarily and for specific purposes, personnel from any department or agency of the Federal Government as nonvoting panel members, with the consent of the head of such department or agency, to provide official information to the panel. The member(s) appointed shall have expertise to perform a duty described in § 1940.956(b) of this subpart that is not available among panel members. (c) Federal panel members will be paid per diem or otherwise reimbursed by the Federal Government for expenses incurred each day the employee is engaged in the actual performance of a duty of the panel. Reimbursement will be in accordance with Federal travel regulations. § 1940.961 Allocation of appropriated funds. (a) Initial allocations. (2) Each FY, and normally within 30 days after the date Rural Development receives an appropriation of designated rural development program funds, the Governor of each designated State will be notified of the amounts allocated to the State under each designated program for such FY. The Governor will also be notified of the total amounts appropriated for the FY for each designated rural development program. (3) The State Director will fund projects from a designated State's allocation of funds, according to appropriate program regulations giving great weight to the order in which the preapplications/applications for projects are ranked and listed by the panel in accordance with § 1940.956(b)(3) of this subpart. (b) Reserve. (c) Pooling. (2) Funds pooled from designated States can be requested by designated States, pursuant to subsection (d) of this section. The designated States' pool; however, will not be available to nondesignated States until September 1 of each year. (d) Request for funds. (2) Designated States may request funds from the nondesignated reserve account when: (i) All allocated and reserve funds to designated states have been used, or (ii) Sufficient funds do not remain in any designated State allocation and in the designated States' reserve account to fund a project. § 1940.962 Authority to transfer direct loan amounts. (a) Transfer of funds. (b) Limitation on amounts transferred. (2) Amounts transferred on a National basis. The amount of direct loan funds transferred in a FY, among the designated States, from a program under this subpart (after accounting for any offsetting transfers into such program) shall not exceed $9 million, or an amount otherwise authorized by law. (c) National Office concurrence. § 1940.963 Authority to transfer guaranteed loan amounts. (a) Transfer of funds. (b) Limitation on amounts transferred. (c) National Office concurrence. § 1940.964 [Reserved] § 1940.965 Processing project preapplications/applications. Except for the project review and ranking process established in this subpart, all requests for funds from designated rural development programs will be processed, closed, and serviced according to applicable Rural Development regulations, available in any Rural Development office. (a) Preapplications/applications. (b) Rural Development review. (c) Applicant notification. Your application has been submitted to the State coordinator for review and ranking by the State rural economic development review panel. If you have questions regarding this review process, you should contact the State coordinator. The address and telephone number are: (insert). You will be notified at a later date of the decision reached by the panel and whether or not you can proceed with the proposed project. You are advised against incurring obligations which cannot be fulfilled without Rural Development funds. These statements should be included in notifications to applicants with preapplications/applications on hand that had not been selected for further processing prior to the time a State was selected to participate in this program. (d) Information to State coordinator. (e) The Rural Development review of priority funding list. (f) Obligation of funds. (1) Panel. (2) National Office. (i) Committee on Agriculture of the House of Representatives, Washington, DC. (ii) Committee on Agriculture, Nutrition, and Forestry of the Senate, Washington, DC. §§ 1940.966-1940.967 [Reserved] § 1940.968 Rural Economic Development Review Panel Grant (Panel Grant). (a) General. (b) Objective. (c) Authorities, delegations, and redelegations. (d) Joint funds. (e) Eligibility. (f) Purpose. (1) Travel and lodging expenses; (2) Salaries for State coordinator and support staff; (3) Reasonable fees and charges for professional services necessary for establishing or organizing the panel. Services must be provided by individuals licensed in accordance with appropriate State accreditation associations; (4) Office supplies, and (5) Other costs that may be necessary for panel operations. (g) Limitations. (1) Pay costs incurred prior to the effective date of the grant authorized under this subpart; (2) Recruit preapplications/applications for any designated rural development loan or grant program or any loan or grant program; (3) Duplicate activities associated with normal execution of any panel member's occupation; (4) Fund political activities; (5) Pay costs associated with preparing area development plans; (6) Pay for capital assets; purchase real estate, equipment or vehicles; rent, improve, or renovate office space; or repair and maintain State or privately owned property; (7) Pay salaries to panel members; or (8) Pay per diem or otherwise reimburse panel members unless distance traveled exceed 50 miles. (h) Other considerations Equal opportunity requirements. (2) Environmental review requirements. (3) Management assistance. (4) Drug-free work place. (i) Application processing. (2) After the Governor has been notified that the State has been designated to participate in this program and the State has met all eligibility requirements of this subpart, the State may file an original and one copy of SF 424.1 with the State Director. The following information will be included with the application: (i) State's financial or in-kind resources, if applicable, that will maximize the use of Panel Grant funds; (ii) Proposed budget. The financial budget that is part of SF 424.1 may be used, if sufficient, for all panel income and expense categories; (iii) Estimated breakdown of costs, including costs to be funded by the grantee or from other sources; (iv) Financial management system in place or proposed. The system will account for grant funds in accordance with State laws and procedures for expending and accounting for its own funds. Fiscal control and accounting procedures of the State must be sufficient to permit preparation of reports required by Federal regulations and permit the tracing of funds to a level of expenditures adequate to establish that grant funds are used solely for authorized purposes; (v) Method to evaluate panel activities and determine if objectives are met; (vi) Proposed Scope-of-Work detailing activities associated with the panel and time frames for completion of each task, and (vii) Other information that may be needed by Rural Development to make a grant award determination. (3) The applicable provisions of § 1942.5 of subpart A of part 1942 of this chapter relating to preparation of loan dockets will be followed in preparing grant dockets. The docket will include at least the following: (i) Form RD 400-4, “Assurance Agreement;” (ii) Scope-of-work prepared by the applicant and approved by Rural Development; (iii) Form RD 1940-1, “Request for Obligation of Funds,” with exhibit A, and (iv) Certification regarding a drug-free workplace in accordance with RD Instruction 1940-M (available in any Rural Development office). (j) Grant approval, obligation of funds, and grant closing. (2) Exhibit A of this subpart (available from any Rural Development State Office) shall be attached to and become a permanent part of Form RD 1940-1 and the following paragraphs will appear in the comment section of that form: The Grantee understands the requirements for receipt of funds under the Panel Grant program. The Grantee assures and certifies that it is in compliance with all applicable laws, regulations, Executive Orders, and other generally applicable requirements, including those set out in 7 CFR, part 1940, subpart T, and 7 CFR, parts 3016 and 3017, including revisions through ______ (date of grant approval). The Grantee further agrees to use grant funds for the purposes outlined in the Scope-of-Work approved by Rural Development. Exhibit A is incorporated as a part hereof. (3) Grants will be approved and obligated in accordance with the applicable parts of § 1942.5(d) of subpart A of part 1942 of this chapter. (4) An executed copy of the Scope-of-Work will be sent to the State coordinator on the obligation date, along with a copy of Form RD 1940-1 and the required exhibit. Rural Development will retain the original of Form RD 1940-1 and the exhibit. (5) Grants will be closed in accordance with the applicable parts of subpart A of part 1942 of this chapter, including § 1942.7. The grant is considered closed on the obligation date. (6) A copy of Form RD 1940-1, with the required exhibit, and the Scope-of-Work will be submitted to the National Office when funds are obligated. (7) If the grant is not approved, the State coordinator will be notified in writing of the reason(s) for rejection. The notification will state that a review of the decision by Rural Development may be requested by the State under subpart B of part 1900 of this chapter. (k) Fund disbursement. (1) SF 270, “Request for Advance or Reimbursement,” will be completed by the State coordinator and submitted to the State Director not more frequently than monthly. (2) Upon receipt of a properly completed SF 270, the State Director will request funds through the Automated Discrepancy Processing System. Ordinarily, payment will be made within 30 days after receipt of a properly prepared request for reimbursement. (3) States are encouraged to use minority banks (a bank which is owned by at least 50 percent minority group members) for the deposit and disbursement of funds. A list of minority owned banks can be obtained from the Office of Minority Business Enterprises, Department of Commerce, Washington, DC 20230. (l) Title. (m) Costs. (n) Budget changes. (o) Programmatic changes. (p) Financial reporting. (1) A comparison of actual accomplishments to the objectives established for that period; (2) Reasons why established objectives were not met; (3) Problems, delays, or adverse conditions which will affect the ability to meet the objectives of the grant during established time periods. This disclosure must include a statement of the action taken or planned to resolve the situation; and (4) Objectives and timetable established for the next reporting period. (q) Audit requirements. (r) Grant cancellation. (s) Grant servicing. (t) Subsequent grants. [57 FR 11559, Apr. 6, 1992, as amended at 81 FR 11030, Mar. 2, 2016; 85 FR 31938, May 28, 2020] § 1940.969 Forms, exhibits, and subparts. Forms, exhibits, and subparts of this chapter (all available in any Rural Development office) referenced in this subpart, are for use in establishing a State economic development review panel and for administering the Panel Grant program associated with the panel. § 1940.970 [Reserved] § 1940.971 Delegation of authority. The authority authorized to the State Director in this subpart may be redelegated. §§ 1940.972-1940.999 [Reserved] § 1940.1000 OMB control number. The collection of information requirements contained in this regulation has been approved by the Office of Management and Budget and assigned OMB control number 0575-0145. Public reporting burden for this collection of information is estimated to vary from 30 minutes to 48 hours per response with an average of 4 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to Department of Agriculture, Clearance Officer, OIRM, Room 404-W, Washington, DC 20250; and to the Office of Information and Regulatory Affairs, Office of Management and Budget, Washington, DC 20503.