PART 4288—PAYMENT PROGRAMS Authority: 5 U.S.C. 301; 7 U.S.C. 1989. Source: 76 FR 7926, Feb. 11, 2011, unless otherwise noted. Subpart A—Repowering Assistance Payments to Eligible Biorefineries § 4288.1 Purpose and scope. (a) Purpose. (b) Scope. (1) The Agency will determine the amount of payments to be made to a biorefinery taking into consideration the percentage reduction in fossil fuel used by the biorefinery (including the quantity of fossil fuels a renewable biomass system is replacing), and the cost and cost-effectiveness of the renewable biomass system. (2) The Agency will determine who receives payment under this program based on the percentage reduction in fossil fuel used by the biorefinery that will result from the installation of the renewable biomass system; the cost and cost-effectiveness of the renewable biomass system; and other scoring criteria identified in § 4288.21. The above criteria will be used to determine priority for awards of 50 percent of total eligible project costs, up to the maximum award applicable for the fiscal year. § 4288.2 Definitions. The definitions set forth in this section are applicable for all purposes of program administration under this subpart. Agency. Application period. Base energy use. (1) The extended operating period must be at least 24 months of recorded usage, and requires metered utility records for electric energy, natural gas consumption, fuel oil, coal shipments and propane use, as applicable for providing heat or power for the operation of the biorefinery. (2) Utility billing, oil and coal shipments must be actual bills, with meter readings, applicable rates and tariffs, costs and usage. Billing must be complete, without gaps and arranged in chronological order. Drop shipments of coal or oil can be substituted for metered readings, provided the biorefinery documents the usage and its relationship to providing heat or power to the biorefinery. (3) A biorefinery in existence on or before June 18, 2008 with less than 24 months of actual operating data must provide at least 12 months of data supported by engineering and design calculations, and site plans, prepared by the construction engineering firm. Biobased products. (1) Composed, in whole or in significant part, of biological products, including renewable domestic agricultural materials and forestry materials; or (2) Intermediate ingredients or feedstocks. Biofuel. Biorefinery. Eligible biorefinery. Energy Information Agency (EIA). Feasibility study. Financial interest. Fiscal year. Fossil fuel. Renewable biomass. (1) Materials, pre-commercial thinnings, or invasive species from National Forest System land or public lands (as defined in section 103 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1702)) that: (i) Are byproducts of preventive treatments that are removed to reduce hazardous fuels; to reduce or contain disease or insect infestation; or to restore ecosystem health; and (ii) Would not otherwise be used for higher value products; and (iii) Are harvested in accordance with applicable law and land management plans and the requirements for old growth maintenance, restoration, and management direction as per paragraphs (e)(2), (e)(3), and (e)(4), and large tree retention as per paragraph (f), of section 102 of the Healthy Forests Restoration Act of 2003 (16 U.S.C. 6512); or (2) Any organic matter that is available on a renewable or recurring basis from non-Federal land or land belonging to an Indian or Indian Tribe that is held in trust by the United States or subject to a restriction against alienation imposed by the United States, including: (i) Renewable plant material, including feed grains; other agricultural commodities; other plants and trees; and algae; and (ii) Waste material, including crop residue; other vegetative waste material (including wood waste and wood residues); animal waste and byproducts (including fats, oils, greases, and manure); and food waste and yard waste. Rural or rural area. (1) An area that is attached to the urbanized area of a city or town with more than 50,000 inhabitants by a contiguous area of urbanized census blocks that is not more than 2 census blocks wide. Applicants from such an area should work with their Rural Development State Office to request a determination of whether their project is located in a rural area under this provision. (2) For the purposes of this definition, cities and towns are incorporated population centers with definite boundaries, local self government, and legal powers set forth in a charter granted by the State. (3) For the Commonwealth of Puerto Rico, the island is considered rural and eligible for Business Programs assistance, except for the San Juan Census Designated Place (CDP) and any other CDP with greater than 50,000 inhabitants. CDPs with greater than 50,000 inhabitants, other than the San Juan CDP, may be determined to be eligible if they are “not urban in character.” (4) For the State of Hawaii, all areas within the State are considered rural and eligible for Business Programs assistance, except for the Honolulu CDP within the County of Honolulu. (5) For the purpose of defining a rural area in the Republic of Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands, the Agency shall determine what constitutes rural and rural area based on available population data. (6) The determination that an area is “rural in character” will be made by the Under Secretary of Rural Development. The process to request a determination under this provision is outlined in paragraph (6)(ii) of this definition. (i) The determination that an area is “rural in character” under this definition will apply to areas that are within: (A) An urbanized area that has two points on its boundary that are at least 40 miles apart, which is not contiguous or adjacent to a city or town that has a population of greater than 150,000 inhabitants or the urbanized area of such a city or town; or (B) An urbanized area contiguous and adjacent to a city or town of greater than 50,000 inhabitants that is within one-quarter mile of a rural area. (ii) Units of local government may petition the Under Secretary of Rural Development for a “rural in character” designation by submitting a petition to both the appropriate Rural Development State Director and the Administrator on behalf of the Under Secretary. The petition shall document how the area meets the requirements of paragraph (6)(i)(A) or (6)(i)(B) of this definition and discuss why the petitioner believes the area is “rural in character,” including, but not limited to, the area's population density, demographics, and topography and how the local economy is tied to a rural economic base. Upon receiving a petition, the Under Secretary will consult with the applicable Governor or leader in a similar position and request comments to be submitted within 5 business days, unless such comments were submitted with the petition. The Under Secretary will release to the public a notice of a petition filed by a unit of local government not later than 30 days after receipt of the petition by way of publication in a local newspaper and posting on the Agency's Web site, and the Under Secretary will make a determination not less than 15 days, but no more than 60 days, after the release of the notice. Upon a negative determination, the Under Secretary will provide to the petitioner an opportunity to appeal a determination to the Under Secretary, and the petitioner will have 10 business days to appeal the determination and provide further information for consideration. [76 FR 7926, Feb. 11, 2011, as amended at 80 FR 9913, Feb. 24, 2015; 87 FR 38645, June 29, 2022] § 4288.3 Review or appeal rights. A person may seek a review of an Agency decision or appeal to the National Appeals Division in accordance with 7 CFR part 11 of this title. § 4288.4 Compliance with other laws and regulations. Participating biorefineries must comply with other applicable Federal, State, and local laws, including, but not limited to, the Equal Employment Opportunities Act, the Equal Credit Opportunity Act, Title VI of the Civil Rights Act of 1964, 7 CFR Part 1901, subpart E, Section 504 of the Rehabilitation Act of 1973, and the Age Discrimination Act of 1975. Applicants must submit and will be subject to pre-award and post award compliance reviews with the terms and conditions set forth in Form RD 400-1, “Equal Opportunity Agreement” and Form RD 400-4, “Assurance Agreement.” § 4288.5 Oversight, monitoring, and reporting requirements. (a) Verification. (b) Records. (2) For the purpose of verifying compliance with the fossil fuel reduction and energy production requirements of this subpart, each biorefinery must make available and provide for the metering of all power and heat producing boilers, containment vessels, generators and any other equipment related to the production of heat or power required to displace fossil fuel loads with renewable biomass. These records must be held in one place and be available at all reasonable times for examination by the Agency. Such records include all books, papers, contracts, scale tickets, settlement sheets, invoices, and any other documents related to the program that are within the control of the biorefinery. These records must be held and made available for Agency examination for a period of not less than 3 years from the date the repowering project becomes operational. (c) Reporting. (1) Documentation regarding the usage and production of energy at the biorefinery during the previous year, including both the previous and current fossil fuel load and the renewable biomass energy production. (i) Metered data documenting the production of heat, steam, gas and power must be obtained utilizing an Agency approved measurement device. (ii) Metered data must be verifiable and subject to independent calibration testing. (2) Current utility billing data, indentifying metered loads, from the base energy use period. § 4288.6 Forms, regulations, and instructions. Copies of all forms, regulations, instructions, and other materials related to this program may be obtained from the USDA Rural Development State Office, Renewable Energy Coordinator and the USDA Rural Development Web site at http://www.rurdev.usda.gov/regs/. § 4288.7 Exception authority. The Administrator of the Agency (“Administrator”) may, with the concurrence of the Secretary of Agriculture, make an exception, on a case-by-case basis, to any requirement or provision of this subpart that is not inconsistent with any authorizing statute or applicable law, if the Administrator determines that application of the requirement or provision would adversely affect the Federal government's interest. §§ 4288.8-4288.9 [Reserved] § 4288.10 Applicant eligibility. (a) Eligible projects. (1) Timely complete application submission. (2) Multiple biorefineries. (3) Cost-effectiveness. (4) Percentage of reduction of fossil fuel use. (5) Full project financing. (b) Ineligible projects. § 4288.11 Eligible project costs. Eligible project costs will be only for project related construction costs for repowering improvements associated with the equipment, installation, engineering, design, site plans, associated professional fees, permits and financing fees. § 4288.12 Ineligible project costs. Any project costs incurred by the applicant prior to application for payment assistance under this program will be ineligible for payment assistance. § 4288.13 Payment information. (a) Maximum payment. Federal Register (b) Reimbursement payments. (c) Timing of payments. §§ 4288.14-4288.19 [Reserved] § 4288.20 Submittal of applications. (a) Address to make application. (b) Content and form of submission. https://sam.gov/. (1) Form RD 4288-4. (2) RD Instruction 1940-Q, Exhibit A-1, “Certification for Contracts, Grants and Loans.” (3) Form RD 400-1. (4) Form RD 400-4. (5) Environmental documentation in accordance with 7 CFR part 1970. (6) Certifications. The applicant must furnish the Agency all required certifications before acceptance into the program, and furnish access to records required by the Agency to verify compliance with program provisions. The applicant must submit forms or other written documentation certifying to the following: (i) AD-1047, “Certification Regarding Debarment, Suspension, and Other Responsibility Matters—Primary Covered Transactions” or other written documentation. (ii) AD-1048, “Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion—Lower Tier Covered Transactions” or other written documentation. (iii) SF-LLL, “Disclosure of Lobbying Activities.” (c) Application package contents. (1) Contact data. (2) Biorefinery data. (3) Electric use data. (4) Fuel use data. (5) Thermal loads. (6) Existing equipment. (7) Site-specific data. (8) Biofuel and biobased product production. (9) Feasibility study. (i) An executive summary, including resume of the consultant, and an introduction/project overview (brief general overview of project location, size, etc. (ii) An economic feasibility determination, including: (A) Information regarding the project site; (B) Information on the availability of trained or trainable labor; and (C) Information on the availability of infrastructure and rail and road service to the site. (iii) A technical feasibility determination, including a report that: (A) Describes the repowering project, including: ( 1 ( 2 ( 3 (B) Is based upon verifiable data and contains sufficient information and analysis so that a determination may be made on the technical feasibility of achieving the levels of energy production that are projected in the statements. The report must provide the information in a format that is responsive to the scoring criteria specified in § 4288.21(b)(1) through (5) and applicants should identify in their report the information that corresponds to each of the scoring criteria; and (C) Identifies and estimates project operation and development costs and specifies the level of accuracy of these estimates and the assumptions on which these estimates have been based. (iv) A financial feasibility determination that discusses the following: (A) Repowering project construction funding, including repayment terms and security arrangements. Attach any documents relating to the project financing; (B) The reliability of the financial projections and assumptions on which the project is based including all sources of project capital, both private and public, such as Federal funds; (C) Projected balance sheets and costs associated with project operations; (D) Cash flow projections for 3 years; (E) The adequacy of raw materials and supplies; (F) A sensitivity analysis, including feedstock and energy costs, product/co-product prices; (G) Risks related to the project; and (H) The continuity, maintenance and availability of records. (v) A management feasibility determination. (vi) Recommendations for implementation. (vii) The environmental concerns and issues of the system. (viii) The availability of feedstock, including discussions of: (A) Feedstock source management; (B) Estimates of feedstock volumes and costs; (C) Collection, pre-treatment, transportation, and storage; and (D) Impacts on existing manufacturing plants or other facilities that use similar feedstock. (ix) The feasibility/plans of project to work with producer associations or cooperatives including estimated amount of annual feedstock from those entities. (x) If woody biomass from National forest system lands or public lands is proposed as the feedstock, documentation must be provided that it cannot be used as a higher value wood-based product. [76 FR 7926, Feb. 11, 2011, as amended at 81 FR 11053, Mar. 2, 2016; 89 FR 34959, May 1, 2024] § 4288.21 Application review and scoring. The Agency will evaluate projects based on the cost, cost-effectiveness, and capacity of projects to reduce fossil fuels. The cost of the project will be taken into consideration in the context of each project's ability to economically produce energy from renewable biomass to replace its dependence on fossil fuels. Projects with higher costs that are less efficient will not score well. The scoring criteria are designed to evaluate projects on simple payback as well as the percentage of fossil fuel reduction. (a) Review. (b) Scoring. (1) Cost-effectiveness. (i) The simple payback period is calculated as follows: • Simple payback = C/S Where: C = eligible capital expenses of the repowering project S = savings in annual operating costs. Example: Eligible capital expenses of the repowering project, including handling equipment, biomass boiler, piping improvements and plant modifications, are equal to $5,300,500. The annual difference in fossil fuel cost versus the cost for renewable biomass is $990,500. Assume these costs and uses are based on a yearly operating cycle, which may include handling, storage and treatment costs. In this example, C = $5,300,500; S = $990,500; simple payback = 5.35 years (C/S = simple payback). (ii) A maximum of 20 points will be awarded as follows: (A) If the anticipated simple payback is less than or equal to 4 years, award 20 points. (B) If the anticipated simple payback is greater than 4 years but less than or equal to 6 years, award 10 points. (C) If the anticipated simple payback will be greater than 6 years but less than or equal to 10 years, award 5 points. (D) If the anticipated simple payback will be greater than 10 years, award 0 points. (2) Percentage of reduction of fossil fuel use. (i) Applicant demonstrates an anticipated annual reduction in fossil fuel use of 100 percent, award 35 points. (ii) Applicant demonstrates an anticipated annual reduction in fossil fuel use of at least 80 percent but less than 100 percent, award 25 points. (iii) Applicant demonstrates an anticipated annual reduction in fossil fuel use of at least 60 percent but less than 80 percent, award 15 points. (iv) Applicant demonstrates an anticipated annual reduction in fossil fuel use of at least 40 percent but less than 60 percent, award 5 points. (v) Applicant demonstrates an anticipated annual reduction in fossil fuel use of less than 40 percent, award 0 points. (vi) If any of the fossil fuel being replaced is natural gas, deduct 5 points. (3) Renewable biomass factors. (4) Technical review factors. (i) Qualifications of the applicant's project team. (ii) Agreements and permits. (iii) Design and engineering. (iv) Project development schedule. (v) Equipment procurement. (vi) Equipment installation. (vii) Operations and maintenance. (5) Liquid transportation fuels. (6) Rural area. § 4288.22 Ranking of applications. All scored applications will be ranked by the Agency as soon after the application deadline as possible. The Agency will consider the score an application has received compared to the scores of other applications in the priority list, with higher scoring applications receiving first consideration for payments. (a) Selection of applications for payments. (b) Availability of funds. § 4288.23 Notifications. (a) Successful applicants. (b) Unsuccessful applicants. § 4288.24 Program payment provisions. The procedure the Agency will use to make payments to eligible biorefineries is specified in paragraphs (a) through (e) of this section. (a) Payment applications. (1) Submit an original, validly signed and completed SF 271 to the Agency not more frequently than once a month with the following supporting documentation: (i) Evidence of expenditure of funds on eligible project costs which shall include paid third party invoices, receipts, bills of sale, and/or payroll records. Such records must be adequate to identify that funds to be reimbursed were spent on eligible project costs; and (ii) Evidence that construction of the repowering project is in compliance with the project development schedule. (2) Certify that the request is accurate. (3) Furnish the Agency such certifications as required in Form RD 4288-4, Part C, and access to records that verify compliance with program provisions. (b) Clarifying information. (c) Notification. (d) Refunds and interest payments. (1) An eligible biorefinery receiving payment under this program will become ineligible for payments if the Agency determines the biorefinery has: (i) Made any material fraudulent representation; (ii) Misrepresented any material fact affecting a program determination; or (iii) Upon completion of the repowering project, failed to reduce its fossil fuel consumption, produce energy from renewal biomass or otherwise operate as described in its Agency approved application. (2) All payments made to a biorefinery determined by the Agency to be ineligible must be refunded to the Agency with interest and other such sums as may become due, including, but not limited to, any interest, penalties, and administrative costs, as determined appropriate under 31 CFR 901.9. (3) When a refund is due, it must be paid promptly. If a refund is not made promptly, the Agency may use all remedies available to it, including Treasury offset under the Debt Collection Improvement Act of 1996, financial judgment against the biorefinery, and sharing information with the Department of Justice. (4) Late payment interest will be assessed on each refund in accordance with provisions and rates as determined by the Agency. (i) Interest charged by the Agency under this program will be at the rate established annually by the Secretary of the U.S. Treasury pursuant to 31 U.S.C. 3717. Interest will accrue from the date payments were received by the biorefinery to the date of repayment, and the rate will adjust in accordance with applicable regulations. (ii) The Agency may waive the accrual of interest and/or damages if the Agency determines that the cause of the erroneous determination was not due to any fraudulent or negligent action of the biorefinery. (5) A biorefinery or person receiving payment under this program will be liable for any refund or related charges associated with their project due under this program. (e) Remedies. § 4288.25 Succession and control of facilities and production. Any party obtaining a biorefinery that is participating in this program must request permission to participate in this program as a successor. The Agency may grant such request if it is determined that, the party is eligible, and permitting such succession would serve the purposes of the program. If appropriate, the Agency will require the consent of the previous party to such succession. Also, the Agency may terminate payments and demand full refund of payments made if a party loses control of a biorefinery whose production of heat or power from renewable biomass is the basis of a program payment, or otherwise fails to retain the ability to assure that all program obligations and requirements will be met. § 4288.26 Fiscal Year 2009 and Fiscal Year 2010 applications. Any entity that submitted an application for payment to the Agency under this program prior to March 14, 2011 will have their payments made and serviced in accordance with the provisions specified in this subpart. §§ 4288.27-4288.100 [Reserved] Subpart B—Advanced Biofuel Payment Program General Provisions Authority: 5 U.S.C. 301. Source: 76 FR 7967, Feb. 11, 2011, unless otherwise noted. § 4288.101 Purpose and scope. (a) Purpose. (b) Scope. § 4288.102 Definitions. The definitions set forth in this section are applicable for all purposes of program administration under this subpart. Advanced biofuel. (1) Biofuel derived from cellulose, hemicellulose, or lignin; (2) Biofuel derived from sugar and starch (other than ethanol derived from corn kernel starch); (3) Biofuel derived from waste material, including crop residue, other vegetative waste material, animal waste, food waste, and yard waste; (4) Diesel-equivalent fuel derived from renewable biomass, including vegetable oil and animal fat; (5) Biogas (including landfill gas and sewage waste treatment gas) produced through the conversion of organic matter from renewable biomass; (6) Butanol or other alcohols produced through the conversion of organic matter from renewable biomass; or (7) Other fuel derived from cellulosic biomass. Advanced biofuel producer. Agency. Alcohol. (1) For fuel use, rendered unfit for beverage use, produced at a biofuel facility and in a manner approved by the Bureau of Alcohol, Tobacco, Firearms, and Explosives for the production of alcohol for fuel; or (2) As denatured alcohol used by blenders and refiners and rendered unfit for beverage use. Alcohol producer. ATF. Bailment. Biodiesel. Biofuel. Biorefinery. (1) Converts renewable biomass or an intermediate ingredient or feedstock of renewable biomass into any 1 or more, or a combination, of— (i) Biofuels; (ii) Renewable chemicals; or (iii) Biobased products; and (2) May produce electricity. Blender. Certificate of analysis. Commodity. (1) Title I grains and oilseeds including: Wheat, corn, grain sorghum, barley, oats, and rice; sugars, and starches (other than corn kernel starch); Soybeans, sunflower seed, rapeseed, canola, safflower, flaxseed, mustard, crambe, sesame, and peanuts; as identified under Title I, Public Law 115-334, and as determined by the Secretary; (2) Other oilseeds and nuts including cottonseed, palm, camelina, coconut, and olive; and algae; (3) A cellulosic commodity grown for energy purposes, such as, hybrid poplar and other energy trees, switch grass and other energy grasses; cellulose, hemicellulose, or lignin; (4) Waste material, including crop residue/Stover, other vegetative waste material/orchard waste, animal waste/manure, food waste/food processing waste, and yard waste/biodegradable solid waste/organic matter; (5) Fats, oils, and greases, derived from an agricultural product, including: Recycled fats, oils, and greases, such as used cooking oil and reclaimed-industrial grade-distillers' corn/sorghum oil; tallow, white grease, yellow grease, and other livestock renderings; and (6) Any animal byproduct (in addition to oils, fats, and greases) that may be used to produce bioenergy, as determined by the Secretary. Contract. Derived. Eligible advanced biofuel producer. Eligible renewable biomass. Eligible renewable energy content. Enrollment application. Ethanol. (1) For fuel use, and which has been rendered unfit for beverage use and produced at an advanced biofuel facility approved by the ATF for the production of ethanol for fuel, or (2) As denatured ethanol used by blenders and energy refiners, which has been rendered unfit for beverage use. Ethanol producer. Final Product. Fiscal Year. Flared gas. Incremental production. Large producer. (i) 150,000,000 gallons of liquid advanced biofuel per year; or (ii) 15,900,000 Million British Thermal Units (MMBTU) of biogas and/or solid advanced biofuel per year. (2) The amount of gallons and MMBTUs listed in paragraphs (1)(i) and (ii) of this definition include the advanced biofuel production at all facilities, in the United States, in which the producer and/or its parent company(ies) have a 50-percent or greater ownership. Parent company. Payment application. Quarter. (1) 1st Quarter: October 1 through December 31; (2) 2nd Quarter: January 1 through March 31; (3) 3rd Quarter: April 1 through June 30; and (4) 4th Quarter: July 1 through September 30. Renewable biomass. (1) Materials, pre-commercial thinnings, or invasive species from National Forest System land and public lands (as defined in section 103 of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1702)) that: (i) Are byproducts of preventive treatments that are removed to reduce hazardous fuels; to reduce or contain disease or insect infestation; or to restore ecosystem health; (ii) Would not otherwise be used for higher-value products; and (iii) Are harvested in accordance with applicable law and land management plans and the requirements for old-growth maintenance, restoration, and management direction of paragraphs (e)(2), (e)(3), and (e)(4) and large-tree retention of paragraph (f) of section 102 of the Healthy Forests Restoration Act of 2003 (16 U.S.C. 6512); or (2) Any organic matter that is available on a renewable or recurring basis from non-Federal land or land belonging to an Indian or Indian Tribe that is held in trust by the United States or subject to a restriction against alienation imposed by the United States, including: (i) Renewable plant material, including feed grains; other agricultural commodities; other plants and trees; and algae; and (ii) Waste material, including crop residue; other vegetative waste material (including wood waste and wood residues); animal waste and byproducts (including fats, oils, greases, and manure); and food waste and yard waste. Sale. Sign-up period. State. Third party production. Toll producer. USDA. [76 FR 7967, Feb. 11, 2011, as amended at 84 FR 71301, Dec. 27, 2019] § 4288.103 Review or appeal rights. A person may seek a review of an Agency decision or appeal to the National Appeals Division in accordance with 7 CFR part 11 of this title. § 4288.104 Compliance with other laws and regulations. (a) Advanced biofuel producers must comply with other applicable Federal, State, and local laws, including, but not limited to, the Equal Employment Opportunity Act, Title VI of the Civil Rights Act of 1964, Section 504 of the Rehabilitation Act of 1973, The Age Discrimination Act of 1975, the Americans with Disabilities Act of 1990, and 7 CFR part 1901, subpart E. This includes collection and maintenance of race, sex, and national origin data of the recipient's employee. (b) Producers must comply with equal opportunity and nondiscriminatory requirements in accordance with 7 CFR 15d. Rural Development will not discriminate against an applicant on the bases of race, color, religion, national origin, sex, sexual orientation, marital status, familial status, disability, or age (provided that the applicant has the capacity to contract); to the fact that all or part of the applicant's income derives from public assistance program; or to the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act. § 4288.105 Oversight and monitoring. (a) Verification. (1) Production and feedstock verification. (2) Blending verification. (3) Certificate of Analysis. (b) Records. [76 FR 7967, Feb. 11, 2011, as amended at 84 FR 71302, Dec. 27, 2019] § 4288.106 Forms, regulations, and instructions. Copies of all forms, regulations, instructions, and other materials related to this Program may be obtained from the USDA Rural Development State Office, Rural Energy Coordinator and the USDA Rural Development website at https://www.rd.usda.gov/. [84 FR 71302, Dec. 27, 2019] § 4288.107 Exception authority. The Administrator of the Agency (“Administrator”) may, with the concurrence of the Secretary of Agriculture, make an exception, on a case-by-case basis, to any requirement or provision of this subpart that is not inconsistent with any authorizing statute or applicable law, if the Administrator determines that application of the requirement or provision would adversely affect the Federal government's interest. §§ 4288.108-4288.109 [Reserved] Eligibility Provisions § 4288.110 Applicant eligibility. Sections 4288.110 through 4288.119 present the requirements associated with advanced biofuel producer eligibility, biofuel eligibility, eligibility notifications, and payment record requirements. To be eligible for this Program, the applicant must meet the requirements specified in paragraph (a) of this section and must provide additional information as may be requested by the Agency under paragraph (b) of this section. Public bodies and educational institutions are not eligible for this Program. (a) Eligible producer. (b) Eligibility determination. (1) If the applicant provides the requested information to the Agency within the specified timeframe, the Agency will determine the applicant's eligibility for the upcoming fiscal year. (2) If the applicant does not provide the requested information to the Agency within the specified timeframe, the Agency will not consider the applicant any further for participation in the upcoming fiscal year. Such applicants may elect to enroll during the next sign-up period. (c) Ineligibility determination. (1) Refuses to allow the Agency to verify any information provided by the producer under this subpart, including information for determining applicant eligibility, advanced biofuel eligibility, and application payments; (2) Fails to meet any of the conditions set out in this subpart, in the contract, or in other Program documents; or (3) Fails to comply with all applicable Federal, State, or local laws. [76 FR 7967, Feb. 11, 2011, as amended at 84 FR 71302, Dec. 27, 2019] § 4288.111 Biofuel eligibility. To be eligible for this Program, a biofuel must meet the requirements specified in paragraph (a) of this section, and must not be listed in paragraph (b) of this section, and the biofuel's producer must provide additional information as may be requested by the Agency under paragraph (c) of this section. (a) Eligible advanced biofuel. (1) The advanced biofuel must meet the definition of advanced biofuel and be produced in a State; (2) The advanced biofuel must be a solid, liquid, or gaseous advanced biofuel; (3) The advanced biofuel must be a Final Product; and (4) The advanced biofuel must be sold as an advanced biofuel through an arm's length transaction to a third party. (b) Ineligible fuels. Federal Register, (1) Flared gases; (2) Fuels derived from paper milling and other processes commonly ascribed to wood products manufacturing and generically referred to as “liquor” ( e.g., (3) Biofuels produced from solid eligible renewable biomass primarily by mechanical means, whether by hand or by machine, such as collecting, baling, bundling, chopping, screening, and chipping of the renewable biomass. Examples of ineligible biofuels that are not eligible advanced biofuels for the purposes of this subpart include, but are not limited to, baled energy grasses, chipped or chunked woody biomass, and chopped or split firewood; and (4) Any advanced biofuel produced under bailment or third-party production contract and/or any variation thereof. (c) Eligibility determination. (1) If the applicant provides the requested information to the Agency within the specified timeframe, the Agency will determine the biofuel's eligibility for the upcoming fiscal year. (2) If the applicant does not provide the requested information to the Agency within the specified timeframe, the biofuel will not be eligible for payment under this Program in the upcoming fiscal year. Applicants may elect to include such biofuels in the application form submitted during the next sign-up period. [76 FR 7967, Feb. 11, 2011, as amended at 84 FR 71302, Dec. 27, 2019] § 4288.112 Eligibility notifications. (a) Applicant eligibility. (b) Ineligibility notifications. (c) Subsequent ineligibility determinations. § 4288.113 Payment record requirements. To be eligible for Program payments, an advanced biofuel producer must maintain records for all relevant fiscal years and fiscal year quarters for each advanced biofuel facility indicating: (a) The type of eligible renewable biomass used in the production of advanced biofuel; (b) The quantity of advanced biofuel produced from eligible renewable biomass at each advanced biofuel facility; (c) The quantity of eligible renewable biomass used at each advanced biofuel facility to produce the advanced biofuel; and (d) All other records required to establish Program eligibility and compliance. §§ 4288.114-4288.119 [Reserved] Enrollment Provisions § 4288.120 Enrollment. In order to participate in the Program, a producer of advanced biofuels must be approved by the Agency and enter into a contract with the Agency. The process for enrolling in the Program is presented in this section. Advanced biofuel producers who expect to produce eligible advanced biofuels at any time during a fiscal year must enroll in the Program as described in this section. (a) Enrollment. www.sam.gov/SAM. (1) Eligible advanced biofuel producers must submit enrollment applications during each sign-up period in order to continue participating in this Program. If a participating producer fails to submit the enrollment application during a fiscal year's applicable sign-up period, the producer's contract will be terminated and the producer will be ineligible to receive payments for that fiscal year. Such a producer must reapply, and sign a new contract, to participate in the Program for future fiscal years. (2) Eligible advanced biofuel producers may submit an enrollment application during a fiscal year's sign-up period even if the advanced biofuel facility is not currently producing, but is scheduled to start producing advanced biofuel in that fiscal year. (3) The producer must furnish the Agency all required certifications before acceptance into the Program, and furnish access to the advanced biofuel producer's records required by the Agency to verify compliance with Program provisions. The required certifications depend on the type of biofuel produced. Certifications specified in paragraphs (a)(3)(i) through (a)(3)(iv) of this section are to be completed and provided by an accredited independent third party. (i) Alcohol. (A) The Alcohol Fuel Producers Permit (TTB F 5110.74) or (B) The registration of Distilled Spirits Plant (TTB F 5110.41) and Operating Permit (TTB F 5110.25). (ii) Hydrous ethanol. (A) The hydrous ethanol producer, then the advanced biofuel producer shall include with the contract an affidavit, acceptable to the Agency, from the distiller stating that the: ( 1 ( 2 (B) The distiller that upgrades hydrous ethanol to anhydrous ethyl alcohol, then the advanced biofuel producer shall include with the contract an affidavit, acceptable to the Agency, from the hydrous ethanol producer stating that the hydrous ethanol producer will not include the applicable ethanol in any payment requests that may be made under this Program. (iii) Biodiesel, biomass-based diesel, and liquid hydrocarbons derived from biomass. (iv) Gaseous advanced biofuel. (v) Woody biomass feedstock. (4) Applicants must submit the forms specified in this paragraph (a)(4) with the enrollment application when applying for participation under this subpart and as needed when re-enrolling in the program. (i) RD Instruction 1940-Q, Exhibit A-1, “Certification for Contracts, Grants and Loans.” (ii) SF-LLL, “Disclosure of Lobbying Activities.” (iii) Form RD 400-4, “Assurance Agreement.” (b) Sign-up period. Federal Register [76 FR 7967, Feb. 11, 2011, as amended at 84 FR 71302, Dec. 27, 2019] § 4288.121 Contract. Advanced biofuel producers determined to be eligible to receive payments must then enter into a contract with the Agency in order to participate in this Program. (a) Contract. (b) Length of contract. (c) Contract review. (d) Contract termination. (1) At the mutual agreement of the parties; (2) In accordance with applicable Program notices and regulations; (3) The advanced biofuel producer withdraws from the Program and so notifies the Agency, in writing; (4) The advanced biofuel producer fails to submit the enrollment application during a sign-up period; (5) The Program is discontinued or not funded; (6) All of a participating advanced biofuel producer's advanced biofuel facilities no longer exist or no longer produce any eligible advanced biofuel; or (7) The Agency determines that the advanced biofuel producer is ineligible for participation. §§ 4288.122-4288.129 [Reserved] Payment Provisions § 4288.130 Payment applications. Sections 4288.130 through 4288.189 identify the process and procedures the Agency will use to make payments to eligible advanced biofuel producers. In order to receive payments under this Program, eligible advanced biofuel producers with valid contracts must submit a payment application, as required under paragraph (a) of this section. The Agency will review the payment application and, if necessary, may request additional information, as specified under paragraph (b) of this section. (a) Applying for payment. (1) After a quarter has been completed, submit a payment application covering the quarter; (2) Certify that the request is accurate; (3) Furnish the Agency such certification, and access to such records, as the Agency considers necessary to verify compliance with Program provisions; and (4) Provide documentation as requested by the Agency of the net production of advanced biofuel at all advanced biofuel facilities during the relevant quarter. (b) Review of payment applications. (1) Review factors. (i) Contract validity. (ii) Biofuel eligibility. (iii) Calculations. (2) Additional documentation. (c) Payment application eligibility. (d) Submittal information. Federal Register, (1) Any payment application form that is received by the Agency after October 31 of the calendar year for the preceding fiscal year is ineligible for payment. (2) If the actual deadline falls on a weekend or a Federally-observed holiday, the deadline is the next Federal business day. [76 FR 7967, Feb. 11, 2011, as amended at 84 FR 71302, Dec. 27, 2019] § 4288.131 Payment provisions. Payments to advanced biofuel producers for eligible advanced biofuel production will be determined in accordance with the provisions of this section. (a) Actual production. (b) Amount of payment funds available. (c) Quarterly allocations. (d) Determination of payment rate. (1) Based on the information provided in each payment application, the Agency will determine the eligible advanced biofuel production. If the Agency determines that the amount of advanced biofuel production reported in a payment application is not supported by the documentation submitted with the payment application, the Agency may revise the reported production to an amount that is commensurate with the submitted documentation. (2) For each producer, the Agency will convert the production determined to be eligible under paragraph (c) of this section into British Thermal Unit (BTU) equivalent using factors published by the Energy Information Administration (EIA) (or successor organization). If the Energy Information Administration does not publish such conversion factor for a specific type of advanced biofuel, the Agency will use a conversion factor developed by another appropriate entity. If no such conversion factor exists, the Agency, in consultation with other Federal agencies, will establish and use a conversion formula as appropriate, until the Energy Information Administration or other appropriate entity publishes a conversion factor for said advanced biofuel. The Agency will then calculate the total eligible BTUs across all eligible applications. (3) For each quarter, the Agency will determine the actual production payment rate ($/BTU) based on paragraphs (b), (c), and (d) of this section. The rate will be calculated such that all quarterly funds for actual production will be distributed, subject to the payment provisions specified in paragraph (e) of this section. (4) Using the actual production payment rate determined and the actual production for each type of advanced biofuel produced at a biorefinery, the Agency will calculate each quarter payment for each eligible advanced biofuel producer for that quarter. (e) Other payment provisions. (1) Notwithstanding any other provisions in this section, the Agency will provide payments to one or more eligible advanced biofuel producers from a single eligible Commodity, including intermediate ingredients of that single Commodity or use of that single Commodity and its intermediate ingredients in combination with another Commodity, of not more than one-third of available program funds in each quarter. (i) Payments to producers for advanced biofuel derived from a commodity listed in Title I grains and oilseeds (as defined paragraph (1) of the defintion of commodity in § 4288.102), are subject to the one-third limitation as tracked individually for each commodity. For example, with respect to the Title I grains and oilseeds commodity—grain sorghum, all payments for the quarter to producers of advanced biofuel derived from grain sorghum are tabulated and subject to the one-third payment limitation. This is similarly true for each commodity listed under Title I grains and oilseeds—barley, oats, rice, soybeans, etc. (ii) Payments to producers for advanced biofuel derived from a commodity listed in paragraphs (2) through (6) of the defintion of commodity in § 4288.102, inclusively, are subject to the one-third limitation as tracked cumulatively with each commodity group. For example, with respect to the commodity in paragraph (2) of the definition of commodity (other oilseeds and nuts including cottonseed, palm, camelina, coconut, and olive and algae), all payments for the quarter to producers of fuel derived from “other oilseeds, nuts and algae” are tabulated cumulatively (all are tracked as “other oilseeds, nuts, and algae” whether olive, or coconut, or camelina, etc.) and subject cumulatively to the one-third payment limitation. This is similarly true for the commodity in paragraphs (3) through (6) of the definition of commodity. (2) Notwithstanding any other provision of this section, the Agency will provide payments to large producers of not more than five (5) percent of available program funds in any fiscal year. At any time during the year, if the limit on payments to large producers would be reached, the Agency will pro-rate payments to large producers based on the BTU content of their eligible advanced biofuel production so as not to exceed the limit. (3) Notwithstanding any other provision of this section, the Agency will provide payments to any eligible advanced biofuel producer, that is not a large producer, of not more than eight (8) percent of available funds in any fiscal year. At any time during the year, if the eight percent to the advanced biofuel producer would be reached, the Agency will pro-rate payments based on the BTU content of the eligible advanced biofuel production so as not to exceed the limit. (4) Advanced biofuel producers will be paid based on the amount of eligible renewable energy content of the advanced biofuels only if the producer provides sufficient documentation, including a Certificate of Analysis, for the Agency to determine the eligible renewable energy content for which payment is being requested, and quantity produced through such documentation as, but not limited to, records of sale and calibrated flow meter records. (5) Payment will be made to only one eligible advanced biofuel producer per biorefinery. If a producer owns more than one facility, the Agency's tracking system will add all actual BTUs and calculate one payment amount. For facilities owned by more than one producer, only one payment will be issued per facility. (6) Subject to other provisions of this section, advanced biofuel producers shall be paid any sum due. (7) A producer will be paid only for the advanced biofuels identified in the enrollment application submitted during the sign-up period and which are produced during the fiscal year. If the producer starts producing a new advanced biofuel or changes the type of advanced biofuel during the fiscal year, the producer will not receive any payments for those new advanced biofuels. However, during each sign-up period, a producer may identify new advanced biofuels and production levels compared to the previous year. (8) When determining the quantity of eligible advanced biofuel, if an applicant is blending its advanced biofuel using ineligible feedstocks ( e.g., [84 FR 71302, Dec. 27, 2019] § 4288.132 Payment adjustments. The Agency will adjust the payments otherwise payable to the advanced biofuel producer if there is a difference between the amount actually produced and the amount determined by the Agency to be eligible for payment. § 4288.133 Payment liability. Any payment, or portion thereof, made under this subpart shall be made without regard to questions of title under State law and without regard to any claim or lien against the advanced biofuel, or proceeds thereof, in favor of the owner or any other creditor except agencies of the U.S. Government. § 4288.134 Refunds and interest payments. An eligible advanced biofuel producer who receives payments under this subpart may be required to refund such payments as specified in this section. If the Agency suspects fraudulent representation through its site visits and records inspections under § 4288.105(b), it will be referred to the Office of Inspector General for appropriate action. (a) An eligible advanced biofuel producer receiving payments under this subpart shall become ineligible if the Agency determines the advanced biofuel producer has: (1) Made any fraudulent representation; or (2) Misrepresented any material fact affecting a Program determination. (b) If an Agency determination that a producer is not eligible for participation under this subpart is appealed and overturned, the Agency will make appropriate and applicable payments to the producer from Program funds, to the extent such funds are available, that remain from the fiscal year in which the original adverse Agency decision was made. (c) All payments made to an entity determined by the Agency to be ineligible shall be refunded to the Agency with interest and other such sums as may become due, including, but not limited to, any interest, penalties, and administrative costs as determined appropriate under 31 CFR 901.9. (d) When a refund is due, it shall be paid promptly. If a refund is not made promptly, the Agency may use all remedies available to it, including Treasury offset under the Debt Collection Improvement Act of 1996, financial judgment against the producer, and referral to the Department of Justice. (e) Late payment interest shall be assessed on each refund in accordance with the provisions and rates as established by the United States Treasury. (1) Interest charged by the Agency under this subpart shall be established by the United States Treasury. Such interest shall accrue from the date such payments were made by the Agency to the date of repayment by the producer. (2) The Agency may waive the accrual of interest or damages if the Agency determines that the cause of the erroneous payment was not due to any action of the advanced biofuel producer. (f) Any advanced biofuel producer or person engaged in an act prohibited by this section and any advanced biofuel producer or person receiving payment under this subpart shall be jointly and severally liable for any refund due under this subpart and for related charges. § 4288.135 Unauthorized payments and offsets. When unauthorized assistance has been made to an advanced biofuel producer under this Program, the Agency reserves the right to collect from the recipient the sum that is determined to be unauthorized. If the recipient fails to pay the Agency the unauthorized assistance plus other sums due under this section, the Agency reserves the right to offset that amount against Program payments. (a) Unauthorized assistance. (1) Notification to the producer. (i) Specify the amount of unauthorized assistance, including any accrued interest to be repaid, and the standards for imposing accrued interest; (ii) State the amount of penalties and administrative costs to be paid, the standards for imposing them and the date on which they will begin to accrue; (iii) Provide detailed reason(s) why the assistance was determined to be unauthorized; (iv) State the amount is immediately due and payable to the Agency; (v) Describe the rights the producer has for seeking review or appeal of the Agency's determination pursuant to 7 CFR part 11; (vi) Describe the Agency's available remedies regarding enforced collection, including referral of debt delinquent after due process for Federal salary, benefit and tax offset under the Department of Treasury Offset Program; and (vii) Provide an opportunity for the producer to meet with the Agency and to provide to the Agency facts, figures, written records, or other information that might refute the Agency's determination. (A) If the producer meets with the Agency, the producer will be given an opportunity to provide information to refute the Agency's findings. (B) When requested by the producer, the Agency may grant additional time for the producer to assemble documentation. Such extension of time for payment will be valid only if the Agency documents the extension in writing and specifies the period in days during which period the payment obligation created by the demand letter (but not the ongoing accrual of interest) will be suspended. Interest and other charges will continue to accrue pursuant to the initial demand letter during any extension period unless the terms of the demand letter are modified in writing by the Agency. (2) Payment in full. (3) Promissory note. (i) The producer did not provide false information; (ii) It would be highly inequitable to require prompt repayment of the unauthorized assistance; and (iii) Failure to collect the unauthorized assistance immediately will not adversely affect the Agency's interests. (4) Appeals. (b) Offsets. (1) Any debtor who wishes to reach a written agreement to repay the debt as an alternative to administrative offset must submit a written proposal for repayment of the debt, which must be received by the Agency within 20 calendar days of the date the notice was delivered to the debtor. In response, the Agency will notify the debtor in writing whether the proposed agreement is acceptable. In exercising its discretion, the Agency will balance the Government's interest in collecting the debt against fairness to the debtor. (2) When the Agency receives a debtor's proposal for a repayment agreement, the offset is stayed until the debtor is notified as to whether the initial agreement is acceptable. If a Government payment will be made before the end of the fiscal year and the review is not yet completed, payment will be deferred pending resolution of the review. § 4288.136 Remedies. In addition to the steps available under the provisions of §§ 4288.134 and 4288.135, if the Agency has determined that a producer has misrepresented the information or defrauded the Government, the Agency will take one of the following steps in accordance with 2 CFR part 417: (a) Suspend payments on the Contract until the violation has been reconciled; (b) Terminate the Contract; or (c) Debarment to participate in any Federal Government program. [76 FR 7967, Feb. 11, 2011, as amended at 85 FR 31939, May 28, 2020] § 4288.137 Succession and loss of control of advanced biofuel facilities and production. (a) Contract succession. (b) Loss of control. §§ 4288.138-4288.200 [Reserved]