Sec.  418.400  Penalties.

    (a) Any person who makes an expenditure prohibited herein shall be
subject to a civil penalty of not less than $10,000 and not more than
$100,000 for each such expenditure.
    (b) Any person who fails to file or amend the disclosure form (see
Appendix B) to be filed or amended if required herein, shall be subject
to a civil penalty of not less than $10,000 and not more than $100,000
for each such failure.
    (c) A filing or amended filing on or after the date on which an
administrative action for the imposition of a civil penalty is
commenced does not prevent the imposition of such civil penalty for a
failure occurring before that date. An administrative action is
commenced with respect to a failure when an investigating official
determines in writing to commence an investigation of an allegation of
such failure.
    (d) In determining whether to impose a civil penalty, and the
amount of any such penalty, by reason of a violation by any person, the
agency shall consider the nature, circumstances, extent, and gravity of
the violation, the effect on the ability of such person to continue in
business, any prior violations by such person, the degree of
culpability of such person, the ability of the person to pay the
penalty, and such other matters as may be appropriate.
    (e) First offenders under paragraphs (a) or (b) of this section
shall be subject to a civil penalty of $10,000, absent aggravating
circumstances. Second and subsequent offenses by persons shall be
subject to an appropriate civil penalty between $10,000 and $100,000,
as determined by the agency head or his or her designee.
    (f) An imposition of a civil penalty under this section does not
prevent the United States from seeking any other remedy that may apply
to the same conduct that is the basis for the imposition of such civil
penalty.

Sec.  418.405  Penalty procedures.

    Agencies shall impose and collect civil penalties pursuant to the
provisions of the Program Fraud and Civil Remedies Act, 31 U.S.C.s 3803
(except subsection (c)), 3804, 3805, 3806, 3807, 3808, and 3812,
insofar as these provisions are not inconsistent with the requirements
herein.

Sec.  418.410  Enforcement.

    The head of each agency shall take such actions as are necessary to
ensure that the provisions herein are vigorously implemented and
enforced in that agency.'

Subpart E--Exemptions

Sec.  418.500  Secretary of Defense.

    (a) The Secretary of Defense may exempt, on a case-by-case basis, a
covered Federal action from the prohibition whenever the Secretary
determines, in writing, that such an exemption is in the national
interest. The Secretary shall transmit a copy of each such written
exemption to Congress immediately after making such a determination.

    (b) The Department of Defense may issue supplemental regulations to
implement paragraph (a) of this section.

Subpart F--Agency Reports

Sec.  418.600  Semi-annual compilation.

    (a) The head of each agency shall collect and compile the
disclosure reports (see appendix B) and, on May 31 and November 30 of
each year, submit to the Secretary of the Senate and the Clerk of the
House of Representatives a report containing a compilation of the
information contained in the disclosure reports received during the
six-month period ending on March 31 or September 30, respectively, of
that year.
    (b) The report, including the compilation, shall be available for
public inspection 30 days after receipt of the report by the Secretary
and the Clerk.
    (c) Information that involves intelligence matters shall be
reported only to the Select Committee on Intelligence of the Senate,
the Permanent Select Committee on Intelligence of the House of
Representatives, and the Committees on Appropriations of the Senate and
the House of Representatives in accordance with procedures agreed to by
such committees. Such information shall not be available for public
inspection.
    (d) Information that is classified under Executive Order 12356 or
any successor order shall be reported only to the Committee on Foreign
Relations of the Senate and the Committee on Foreign Affairs of the
House of Representatives or the Committees on Armed Services of the
Senate and the House of Representatives (whichever such committees have
jurisdiction of matters involving such information) and to the
Committees on Appropriations of the Senate and the House of
Representatives in accordance with procedures agreed to by such
committees. Such information shall not be available for public
inspection.
    (e) The first semi-annual compilation shall be submitted on May 31,
1990, and shall contain a compilation of the disclosure reports
received from December 23, 1989 to March 31, 1990.
    (f) Major agencies, designated by the Office of Management and
Budget (OMB), are required to provide machine-readable compilations to
the Secretary of the Senate and the Clerk of the House of
Representatives no later than with the compilations due on May 31,
1991. OMB shall provide detailed specifications in a memorandum to
these agencies.
    (g) Non-major agencies are requested to provide machine-readable
compilations to the Secretary of the Senate and the Clerk of the House
of Representatives.
    (h) Agencies shall keep the originals of all disclosure reports in
the official files of the agency.

Sec.  418.605  Inspector General report.

    (a) The Inspector General, or other official as specified in
paragraph (b) of this section, of each agency shall prepare and submit
to Congress each year, commencing with submission of the President's
Budget in 1991, an evaluation of the compliance of that agency with,
and the effectiveness of, the requirements herein. The evaluation may
include any recommended changes that may be necessary to strengthen or
improve the requirements.
    (b) In the case of an agency that does not have an Inspector
General, the agency official comparable to an Inspector General shall
prepare and submit the annual report, or, if there is no such
comparable official, the head of the agency shall prepare and submit
the annual report.
    (c) The annual report shall be submitted at the same time the
agency submits its annual budget justifications to Congress.
    (d) The annual report shall include the following: All alleged
violations relating to the agency's covered Federal actions during the
year covered by the report, the actions taken by the head of the agency
in the year covered by the report with respect to those alleged
violations and alleged violations in previous years, and the amounts of
civil penalties imposed by the agency in the year covered by the
report.

Appendix A to Part 418--Certification Regarding Lobbying

Certification for Contracts, Grants, Loans, and Cooperative
Agreements

    The undersigned certifies, to the best of his or her knowledge
and belief, that:
    (1) No Federal appropriated funds have been paid or will be
paid, by or on behalf of the undersigned, to any person for
influencing or attempting to influence an officer or employee of an
agency, a Member of Congress, an officer or employee of Congress, or
an employee of a Member of Congress in connection with the awarding
of any Federal contract, the making of any Federal grant, the making
of any Federal loan, the entering into of any cooperative agreement,
and the extension, continuation, renewal, amendment, or modification
of any Federal contract, grant, loan, or cooperative agreement.
    (2) If any funds other than Federal appropriated funds have been
paid or will be paid to any person for influencing or attempting to
influence an officer or employee of any agency, a Member of
Congress, an officer or employee of Congress, or an employee of a
Member of Congress in connection with this Federal contract, grant,
loan, or cooperative agreement, the undersigned shall complete and
submit Standard Form-LLL, ``Disclosure Form to Report Lobbying,'' in
accordance with its instructions.
    (3) The undersigned shall require that the language of this
certification be included in the award documents for all subawards
at all tiers (including subcontracts, subgrants, and contracts under
grants, loans, and cooperative agreements) and that all
subrecipients shall certify and disclose accordingly.
    This certification is a material representation of fact upon
which reliance was placed when this transaction was made or entered
into. Submission of this certification is a prerequisite for making
or entering into this transaction imposed by section 1352, title 31,
U.S. Code. Any person who fails to file the required certification
shall be subject to a civil penalty of not less than $10,000 and not
more than $100,000 for each such failure.

Statement for Loan Guarantees and Loan Insurance

    The undersigned states, to the best of his or her knowledge and
belief, that:
    If any funds have been paid or will be paid to any person for
influencing or attempting to influence an officer or employee of any
agency, a Member of Congress, an officer or employee of Congress, or
an employee of a Member of Congress in connection with this
commitment providing for the United States to insure or guarantee a
loan, the undersigned shall complete and submit Standard Form-LLL,
``Disclosure Form to Report Lobbying,'' in accordance with its
instructions.
    Submission of this statement is a prerequisite for making or
entering into this transaction imposed by section 1352, title 31,
U.S. Code. Any person who fails to file the required statement shall
be subject to a civil penalty of not less than $10,000 and not more
than $100,000 for each such failure.

Appendix B to Part 418--Disclosure Form To Report Lobbying

BILLING CODE 6050-28-4210-67-4910-9X-3280-F5-4410-18-4710-24-3510-17-
9110-9J-9111-23-6450-01-7537-01-6560-50-6560-58-7036-01-7515-01-7536-
01-6116-01-4334-12-8320-01-4150-24-7555-01-5001-06-7510-13-8025-01-
4191-02-4810-25-3410-KS-3410-22-3410-15-3410-05-4000-01-4510-FM-3110-
01-P

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BILLING CODE 6050-28-4210-67-4910-9X-3280-F5-4410-18-4710-24-3510-17-
9110-9J-9111-23-6450-01-7537-01-6560-50-6560-58-7036-01-7515-01-7536-
01-6116-01-4334-12-8320-01-4150-24-7555-01-5001-06-7510-13-8025-01-
4191-02-4810-25-3410-KS-3410-22-3410-15-3410-05-4000-01-4510-FM-3110-
01-C

0
5. Title 2 of the Code of Federal Regulations is amended by adding part
422 to read as follows:

CHAPTER IV

PART 422--RESEARCH INSTITUTIONS CONDUCTING USDA-FUNDED EXTRAMURAL
RESEARCH; RESEARCH MISCONDUCTS

Sec.
422.1 Definitions.
422.2 Procedures.
422.3 Inquiry, investigation, and adjudication.
422.4 USDA Panel to determine appropriateness of research misconduct
policy.
422.5 Reservation of right to conduct subsequent inquiry,
investigation, and adjudication.
422.6 Notification of USDA of allegations of research misconduct.
422.7 Notification of ARIO during an inquiry of investigation.
422.8 Communication of research misconduct policies and procedures.
422.9 Documents required.

422.10 Reporting to USDA.
422.11 Research records and evidence.
422.12 Remedies for noncompliance.
422.13 Appeals.
422.14 Relationship to other requirements.

    Authority: 5 U.S.C. 301; Office of Science and Technology Policy
(65 FR 76260); USDA Secretary's Memorandum (SM) 2400-007; and USDA
OIG, 7 CFR 2610.1(c)(4)(ix).

PART 422--RESEARCH INSTITUTIONS CONDUCTING USDA FUNDED EXTRAMURAL
RESEARCH; RESEARCH MISCONDUCT

Sec.  422.1  Definitions.

    The following definitions apply to this part:
    Adjudication. The stage in response to an allegation of research
misconduct when the outcome of the investigation is reviewed, and
appropriate corrective actions, if any, are determined. Corrective
actions generally will be administrative in nature, such as termination
of an award, debarment, award restrictions, recovery of funds, or
correction of the research record. However, if there is an indication
of violation of civil or criminal statutes, civil or criminal sanctions
may be pursued.
    Agency Research Integrity Officer (ARIO). The individual appointed
by a USDA agency that conducts research and who is responsible for:
    (1) Receiving and processing allegations of research misconduct as
assigned by the USDA RIO;
    (2) Informing OIG and the USDA RIO and the research institution
associated with the alleged research misconduct, of allegations of
research misconduct in the event it is reported to the USDA agency;
    (3) Ensuring that any records, documents and other materials
relating to a research misconduct allegation are provided to OIG when
requested;
    (4) Coordinating actions taken to address allegations of research
misconduct with respect to extramural research with the research
institution(s) at which time the research misconduct is alleged to have
occurred, and with the USDA RIO;
    (5) Overseeing proceedings to address allegations of extramurally
funded research misconduct at intramural research institutions and
research institutions where extramural research occurs;
    (6) Ensuring that agency action to address allegations of research
misconduct at USDA agencies performing extramurally funded research is
performed at an organizational level that allows an independent,
unbiased, and equitable process;
    (7) Immediately notifying OIG, the USDA RIO, and the applicable
research institution if:
    (i) Public health or safety is at risk;
    (ii) USDA's resources, reputation, or other interests need
protecting;
    (iii) Research activities should be suspended;
    (iv) Federal action may be needed to protect the interest of a
subject of the investigation or of others potentially affected;
    (v) A premature public disclosure of the inquiry into or
investigation of the allegation may compromise the process;
    (vi) The scientific community or the public should be informed; or
    (vii) Behavior that is or may be criminal in nature is discovered
at any point during the inquiry, investigation, or adjudication phases
of the research misconduct proceedings;
    (8) Documenting the dismissal of the allegation, and ensuring that
the name of the accused individual and/or institution is cleared if an
allegation of research misconduct is dismissed at any point during the
inquiry or investigation phase of the proceedings;
    (9) Other duties relating to research misconduct proceedings as
assigned.
    Allegation. A disclosure of possible research misconduct through
any means of communication. The disclosure may be by written or oral
statement, or by other means of communication to an institutional or
USDA official.
    Applied research. Systematic study to gain knowledge or
understanding necessary to determine the means by which a recognized
and specific need may be met.
    Assistant Inspector General for Investigations. The individual in
OIG who is responsible for OIG's domestic and foreign investigative
operations through a headquarters office and the six regional offices.
    Basic research. Systematic study directed toward fuller knowledge
or understanding of the fundamental aspects of phenomena and of
observable facts without specific applications towards processes or
products in mind.
    Extramural research. Research conducted by any research institution
other than the Federal agency to which the funds supporting the
research were appropriated. Research institutions conducting extramural
research may include Federal research facilities.
    Fabrication. Making up data or results and recording or reporting
them.
    Falsification. Manipulating research materials, equipment, or
processes, or changing or omitting data or results such that the
research is not accurately represented in the research record.
    Finding of research misconduct. The conclusion, proven by a
preponderance of the evidence, that research misconduct occurred, that
such research misconduct represented a significant departure from
accepted practices of the relevant research community, and that such
research misconduct was committed intentionally, knowingly, or
recklessly.
    Inquiry. The stage in the response to an allegation of research
misconduct when an assessment is made to determine whether the
allegation has substance and whether an investigation is warranted.
    Intramural research. Research conducted by a Federal Agency, to
which funds were appropriated for the purpose of conducting research.
    Investigation. The stage in the response to an allegation of
research misconduct when the factual record is formally developed and
examined to determine whether to dismiss the case, recommend a finding
of research misconduct, and/or take other appropriate remedies.
    Office of Inspector General (OIG). The Office of Inspector General
of the United States Department of Agriculture.
    Office of Science and Technology Policy (OSTP). The Office of
Science and Technology Policy of the Executive Office of the President.
    Plagiarism. The appropriation of another person's ideas, processes,
results, or words without giving appropriate credit.
    Preponderance of the evidence. Proof by information that, compared
with that opposing it, leads to the conclusion that the fact at issue
is more probably true than not.
    Research. All basic, applied, and demonstration research in all
fields of science, engineering, and mathematics. This includes, but is
not limited to, research in economics, education, linguistics,
medicine, psychology, social sciences, statistics, and research
involving human subjects or animals regardless of the funding mechanism
used to support it.
    Research institution. All organizations using Federal funds for
research, including, for example, colleges and universities, Federally
funded research and development centers, national user facilities,
industrial laboratories, or other research institutes.
    Research misconduct. Fabrication, falsification, or plagiarism in
proposing, performing, or reviewing research, or in reporting research
results. Research misconduct does not include honest error or
differences of opinion.
    Research record. The record of data or results that embody the
facts resulting from scientific inquiry, and includes, but is not
limited to, research proposals,

research records (including data, notes, journals, laboratory records
(both physical and electronic)), progress reports, abstracts, theses,
oral presentations, internal reports, and journal articles.
    USDA. United States Department of Agriculture.
    USDA Research Integrity Officer (USDA RIO). The individual
designated by the Office of the Under Secretary for Research,
Education, and Economics (REE) who is responsible for:
    (1) Overseeing USDA agency responses to allegations of research
misconduct;
    (2) Ensuring that agency research misconduct procedures are
consistent with this part;
    (3) Receiving and assigning allegations of research misconduct
reported by the public;
    (4) Developing Memoranda of Understanding with agencies that elect
not to develop their own research misconduct procedures;
    (5) Monitoring the progress of all research misconduct cases; and
    (6) Serving as liaison with OIG to receive allegations of research
misconduct when they are received via the OIG Hotline.

Sec.  422.2  Procedures.

    Research institutions that conduct extramural research funded by
USDA must foster an atmosphere conducive to research integrity. They
must develop or have procedures in place to respond to allegations of
research misconduct that ensure:
    (a) Appropriate separations of responsibility for inquiry,
investigation, and adjudication;
    (b) Objectivity;
    (c) Due process;
    (d) Whistleblower protection;
    (e) Confidentiality. To the extent possible and consistent with a
fair and thorough investigation and as allowed by law, knowledge about
the identity of subjects and informants is limited to those who need to
know; and
    (f) Timely resolution.

Sec.  422.3  Inquiry, investigation, and adjudication.

    A research institution that conducts extramural research funded by
USDA bears primary responsibility for prevention and detection of
research misconduct and for the inquiry, investigation, and
adjudication of research misconduct allegations reported directly to
it. The research institution must perform an inquiry in response to an
allegation, and must follow the inquiry with an investigation if the
inquiry determines that the allegation or apparent instance of research
misconduct has substance. The responsibilities for adjudication must be
separate from those for inquiry and investigation. In most instances,
USDA will rely on a research institution conducting extramural research
to promptly:
    (a) Initiate an inquiry into any suspected or alleged research
misconduct;
    (b) Conduct a subsequent investigation, if warranted;
    (c) Acquire, prepare, and maintain appropriate records of
allegations of extramural research misconduct and all related
inquiries, investigations, and findings; and
    (d) Take action to ensure the following:
    (1) The integrity of research;
    (2) The rights and interests of the subject of the investigation
and the public are protected;
    (3) The observance of legal requirements or responsibilities
including cooperation with criminal investigations; and
    (4) Appropriate safeguards for subjects of allegations, as well as
informants (see Sec.  422.6). These safeguards should include timely
written notification of subjects regarding substantive allegations made
against them; a description of all such allegations; reasonable access
to the data and other evidence supporting the allegations; and the
opportunity to respond to allegations, the supporting evidence and the
proposed findings of research misconduct, if any.

Sec.  422.4  USDA Panel to determine appropriateness of research
misconduct policy.

    Before USDA will rely on a research institution to conduct an
inquiry, investigation, and adjudication of an allegation in accordance
with this part, the research institution where the research misconduct
is alleged must provide the ARIO its policies and procedures related to
research misconduct at the institution. The research institution has
the option of providing either a written copy of such policies and
procedures or a Web site address where such policies and procedures can
be accessed. The ARIO to whom the policies and procedures were made
available shall convene a panel comprised of the USDA RIO and ARIOs
from the Forest Service, the Agricultural Research Service, and the
National Institute of Food and Agriculture. The Panel will review the
research institution's policies and procedures for compliance with the
OSTP Policy and render a decision regarding the research institution's
ability to adequately resolve research misconduct allegations. The ARIO
will inform the research institution of the Panel's determination that
its inquiry, investigation, and adjudication procedures are sufficient.
If the Panel determines that the research institution does not have
sufficient policies and procedures in place to conduct inquiry,
investigation, and adjudication proceedings, or that the research
institution is in any way unfit or unprepared to handle the inquiry,
investigation, and adjudication in a prompt, unbiased, fair, and
independent manner, the ARIO will inform the research institution in
writing of the Panel's decision. An appropriate USDA agency, as
determined by the Panel, will then conduct the inquiry, investigation,
and adjudication of research misconduct in accordance with this part.
If an allegation of research misconduct is made regarding extramural
research conducted at a Federal research institution (whether USDA or
not), it is presumed that the Federal research institution has research
misconduct procedures consistent with the OSTP Policy. USDA reserves
the right to convene the Panel to assess the sufficiency of a Federal
agency's research misconduct procedures, should there be any question
whether the agency's procedures will ensure a fair, unbiased,
equitable, and independent inquiry, investigation, and adjudication
process.

Sec.  422.5  Reservation of right to conduct subsequent inquiry,
investigation, and adjudication.

    (a) USDA reserves the right to conduct its own inquiry,
investigation, and adjudication into allegations of research misconduct
at a research institution conducting extramural research subsequent to
the proceedings of the research institution related to the same
allegation. This may be necessary if the USDA RIO or ARIO believes, in
his or her sound discretion, that despite the Panel's finding that the
research institution in question had appropriate and OSTP-compliant
research misconduct procedures in place, the research institution
conducting the extramural research at issue:
    (1) Did not adhere to its own research misconduct procedures;
    (2) Did not conduct research misconduct proceedings in a fair,
unbiased, or independent manner; or
    (3) Has not completed research misconduct inquiry, investigation,
or adjudication in a timely manner.
    (b) Additionally, USDA reserves the right to conduct its own
inquiry,

investigation, and adjudication into allegations of research misconduct
at a research institution conducting extramural research subsequent to
the proceedings of the research institution related to the same
allegation for any other reason that the USDA RIO or ARIO considers it
appropriate to conduct research misconduct proceedings in lieu of the
research institution's conducting the extramural research at issue.
This right is subject to paragraph (c) of this section.
    (c) In cases where the USDA RIO or ARIO believes it is necessary
for USDA to conduct its own inquiry, investigation, and adjudication
subsequent to the proceedings of the research institution related to
the same allegation, the USDA RIO or ARIO shall reconvene the Panel,
which will determine whether it is appropriate for the relevant USDA
agency to conduct the research misconduct proceedings related to the
allegation(s) of research misconduct. If the Panel determines that it
is appropriate for a USDA agency to conduct the proceedings, the ARIO
will immediately notify the research institution in question. The
research institution must then promptly provide the relevant USDA
agency with documentation of the research misconduct proceedings the
research institution has conducted to that point, and the USDA agency
will conduct research misconduct proceedings in accordance with the
Agency research misconduct procedures.

Sec.  422.6  Notification of USDA of allegations of research
misconduct.

    (a) Research institutions that conduct USDA-funded extramural
research must promptly notify OIG and the USDA RIO of all allegations
of research misconduct involving USDA funds when the institution
inquiry into the allegation warrants the institution moving on to an
investigation.
    (b) Individuals at research institutions who suspect research
misconduct at the institution should report allegations in accordance
with the institution's research misconduct policies and procedures.
Anyone else who suspects that researchers or research institutions
performing Federally-funded research may have engaged in research
misconduct is encouraged to make a formal allegation of research
misconduct to OIG.
    (1) OIG may be notified using any of the following methods:
    (i) Via the OIG Hotline: Telephone:<PHONE_NUMBER>,<PHONE_NUMBER>,
(202) 690-1202 (TDD).
    (ii) Email<EMAIL_ADDRESS>    (iii) U.S. Mail: United States Department of Agriculture, Office of
Inspector General, P.O. Box 23399, Washington, DC 20026-3399.
    (2) The USDA RIO may be reached at: USDA Research Integrity
Officer, 214W Whitten Building, Washington, DC 20250; telephone: 202-
720-5923; Email<EMAIL_ADDRESS>    (c) To the extent known, the following details should be included
in any formal allegation:
    (1) The name of the research projects involved, the nature of the
alleged misconduct, and the names of the individual or individuals
alleged to be involved in the misconduct;
    (2) The source or sources of funding for the research project or
research projects involved in the alleged misconduct;
    (3) Important dates;
    (4) Any documentation that bears upon the allegation; and
    (5) Any other potentially relevant information.
    (d) Safeguards for informants give individuals the confidence that
they can bring allegations of research misconduct made in good faith to
the attention of appropriate authorities or serve as informants to an
inquiry or an investigation without suffering retribution. Safeguards
include protection against retaliation for informants who make good
faith allegations, fair and objective procedures for the examination
and resolution of allegations of research misconduct, and diligence in
protecting the positions and reputations of those persons who make
allegations of research misconduct in good faith. The identity of
informants who wish to remain anonymous will be kept confidential to
the extent permitted by law or regulation.

Sec.  422.7  Notification of ARIO during an inquiry or investigation.

    (a) Research institutions that conduct USDA-funded extramural
research must promptly notify the ARIO should the institution become
aware during an inquiry or investigation that:
    (1) Public health or safety is at risk;
    (2) The resources, reputation, or other interests of USDA are in
need of protection;
    (3) Research activities should be suspended;
    (4) Federal action may be needed to protect the interest of a
subject of the investigation or of others potentially affected;
    (5) A premature public disclosure of the inquiry into or
investigation of the allegation may compromise the process;
    (6) The scientific community or the public should be informed; or
    (7) There is reasonable indication of possible violations of civil
or criminal law.
    (b) If research misconduct proceedings reveal behavior that may be
criminal in nature at any point during the proceedings, the institution
must promptly notify the ARIO.

Sec.  422.8  Communication of research misconduct policies and
procedures.

    Institutions that conduct USDA-funded extramural research are to
maintain and effectively communicate to their staffs policies and
procedures relating to research misconduct, including the guidelines in
this part. The institution is to inform their researchers and staff
members who conduct USDA-funded extramural research when and under what
circumstances USDA is to be notified of allegations of research
misconduct, and when and under what circumstances USDA is to be updated
on research misconduct proceedings.

Sec.  422.9  Documents required.

    (a) A research institution that conducts USDA-funded extramural
research must maintain the following documents related to an allegation
of research misconduct at the research institution:
    (1) A written statement describing the original allegation;
    (2) A copy of the formal notification presented to the subject of
the allegation;
    (3) A written report describing the inquiry stage and its outcome
including copies of all supporting documentation;
    (4) A description of the methods and procedures used to gather and
evaluate information pertinent to the alleged misconduct during inquiry
and investigation stages;
    (5) A written report of the investigation, including the
evidentiary record and supporting documentation;
    (6) A written statement of the findings; and
    (7) If applicable, a statement of recommended corrective actions,
and any response to such a statement by the subject of the original
allegation, and/or other interested parties, including any corrective
action plan.
    (b) The research institution must retain the documents specified in
paragraph (a) of this section for at least 3 years following the final
adjudication of the alleged research misconduct.

Sec.  422.10  Reporting to USDA.

    Following completion of an investigation into allegations of
research misconduct, the institution conducting extramural research
must provide to the

ARIO a copy of the evidentiary record, the report of the investigation,
recommendations made to the institution's adjudicating official, the
adjudicating official's determination, the institution's corrective
action taken or planned, and the written response of the individual who
is the subject of the allegation to any recommendations.

Sec.  422.11  Research records and evidence.

    (a) A research institution that conducts extramural research
supported by USDA funds, as the responsible legal entity for the USDA-
supported research, has a continuing obligation to create and maintain
adequate records (including documents and other evidentiary matter) as
may be required by any subsequent inquiry, investigation, finding,
adjudication, or other proceeding.
    (b) Whenever an investigation is initiated, the research
institution must promptly take all reasonable and practical steps to
obtain custody of all relevant research records and evidence as may be
necessary to conduct the research misconduct proceedings. This must be
accomplished before the research institution notifies the researcher/
respondent of the allegation, or immediately thereafter.
    (c) The original research records and evidence taken into custody
by the research institution shall be inventoried and stored in a secure
place and manner. Research records involving raw data shall include the
devices or instruments on which they reside. However, if deemed
appropriate by the research institution or investigator, research data
or records that reside on or in instruments or devices may be copied
and removed from those instruments or devices as long as the copies are
complete, accurate, and have substantially equivalent evidentiary value
as the data or records have when the data or records reside on the
instruments or devices. Such copies of data or records shall be made by
a disinterested, qualified technician and not by the subject of the
original allegation or other interested parties. When the relevant data
or records have been removed from the devices or instruments, the
instruments or devices need not be maintained as evidence.

Sec.  422.12  Remedies for noncompliance.

    USDA agencies' implementation procedures identify the
administrative actions available to remedy a finding of research
misconduct. Such actions may include the recovery of funds, correction
of the research record, debarment of the researcher(s) that engaged in
the research misconduct, proper attribution, or any other action deemed
appropriate to remedy the instance(s) of research misconduct. The
agency should consider the seriousness of the misconduct, including,
but not limited to, the degree to which the misconduct was knowingly
conducted, intentional, or reckless; was an isolated event or part of a
pattern; or had significant impact on the research record, research
subjects, other researchers, institutions, or the public welfare. In
determining the appropriate administrative action, the appropriate
agency must impose a remedy that is commensurate with the infraction as
described in the finding of research misconduct.

Sec.  422.13  Appeals.

    (a) If USDA relied on an institution to conduct an inquiry,
investigation, and adjudication, the alleged person(s) should first
follow the institution's appeal policy and procedures.
    (b) USDA agencies' implementation procedures identify the appeal
process when a finding of research misconduct is elevated to the
agency.

Sec.  422.14  Relationship to other requirements.

    Some of the research covered by this part also may be subject to
regulations of other governmental agencies (e.g., a university that
receives funding from a USDA agency and also under a grant from another
Federal agency). If more than one agency of the Federal Government has
jurisdiction, USDA will cooperate with the other agency(ies) in
designating a lead agency. When USDA is not the lead agency, it will
rely on the lead agency following its policies and procedures in
determining whether there is a finding of research misconduct. Further,
USDA may, in consultation with the lead agency, take action to protect
the health and safety of the public, to promote the integrity of the
USDA-supported research and research process, or to conserve public
funds. When appropriate, USDA will seek to resolve allegations jointly
with the other agency or agencies.

TITLE 7--Agriculture

CHAPTER XXX--OFFICE OF THE CHIEF FINANCIAL OFFICER, DEPARTMENT OF
AGRICULTURE

PARTS 3015, 3016, 3018, 3019, 3022, and 3052--[REMOVED]

0
6. Remove 7 CFR parts 3015, 3016, 3018, 3019, 3022, and 3052.

Farm Service Agency

    For the reasons discussed above in the common preamble, FSA amends
7 CFR chapter VII and CCC amends 7 CFR chapter XIV as follows:

CHAPTER VII--FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE

PART 761--GENERAL PROGRAM ADMINISTRATION

0
1. The authority citation for 7 CFR 761 continues to read as follows:

    Authority: 5 U.S.C. 301 and 7 U.S.C. 1989.

Sec.  761.5  [Amended]

0
2. Amend 761.5 by removing the reference to ``7 CFR part 3018'' and
adding the reference to ``2 CFR part 418'' in its place.

PART 785--CERTIFIED STATE MEDIATION PROGRAM

0
3. The authority citation for 7 CFR 785 continues to read as follows:

    Authority: 5 U.S.C. 301; 7 as follows: U.S.C. 1989; and 7 U.S.C.
5104.

Sec.  785.4  [Amended]

0
4. Amend Sec.  785.4 as follows:
0
a. In paragraph (c)(1), remove ``as set forth or referenced in Sec.
3016.22 of this title'' and add ``in 2 CFR part 200, subpart E'' in its
place, and
0
b. In paragraph (c)(2)(iii), remove ``OMB Cost Principles found in part
3015, subpart T, of this title and OMB Circular No. A-87'' and add ``2
CFR part 200, subpart E'' in its place.
0
5. Revise Sec.  785.8(b) to read

Sec.  785.8  Reports by qualifying States receiving mediation grants.

* * * * *
    (b) Audits. Any qualifying State receiving a grant under this part
is required to submit an audit report in compliance with 2 CFR part
200, subpart F.

0
6. In Sec.  785.9, revise the introductory text to read as follows:

Sec.  785.9  Access to program records.

    The regulations in 2 CFR 200.333 through 200.337 provide general
record retention and access requirements for records pertaining to
grants. In addition, the State must maintain and provide the Government
access to pertinent records regarding services delivered by the
certified State mediation program for purposes of evaluation, audit and
monitoring of the certified State mediation program as follows:
* * * * *

Sec.  785.11  [Amended]

0
7. Amend Sec.  785.11(b) by removing ``part 3017 of this title'' and
adding ``2 CFR parts 180 and 417'' in its place.

CHAPTER XIV--COMMODITY CREDIT CORPORATION, DEPARTMENT OF AGRICULTURE

PART 1407--DEBARMENT AND SUSPENSION

0
8. The authority citation for 7 CFR 1407 continues to read as follows:

    Authority:  15 U.S.C. 714b.

Sec.  1407.2  [Amended]

0
9. Amend Sec.  1407.2(a) by removing ``7 CFR part 3017'' and adding ``2
CFR parts 180 and 417'' in its place.

PART 1485--GRANT AGREEMENTS FOR THE DEVELOPMENT OF FOREIGN MARKETS
FOR U.S. AGRICULTURAL COMMODITIES

0
10. The authority citation for 7 CFR 1485 continues to read as follows:

    Authority: 7 U.S.C. 5623, 5662-5664 and sec. 1302, Pub. L. 103-
66, 107 Stat. 330.

0
11. Amend Sec.  1485.10 as follows:
0
a. Revise paragraph (b)(1)(iv);
0
b. Remove paragraphs (b)(1)(v) and (vii) through (x);
0
c. Redesignate paragraph (b)(1)(vi) and (xi) as (b)(1)(v) and (viii)
respectively; and
0
d. Add paragraphs (b)(1)(vi) and (vii).
    The revision and additions read as follows:

Sec.  1485.10  General purpose and scope.

* * * * *
    (b)(1) * * *
    (iv) 2 CFR part 200--Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards
* * * * *
    (vi) 2 CFR part 418--New Restrictions on Lobbying
    (vii) 2 CFR part 421--Requirements for Drug-Free Workplace
(Financial Assistance)
* * * * *

Sec.  1485.19  [Amended]

0
12. Amend Sec.  1485.19 as follows:
0
a. In paragraph (b), first sentence, by removing ``set forth in the
applicable parts of this title (e.g., 7 CFR parts 3015, 3016, and
3019)'' and adding ``in 2 CFR part 200'' in their place.
0
b. In paragraph (c), second sentence, by removing ``in the applicable
parts of this title apply (e.g., 7 CFR parts 3015, 3016, and 3019)''
and adding ``in 2 CFR part 200'' in their place.

Sec.  1485.21  [Amended]

0
13. Amend Sec.  1485.21(a) by removing ``set forth in the applicable
parts of this title (e.g., 7 CFR parts 3015, 3016, and 3019)'' and
adding ``in 2 CFR part 200'' in its place.

Sec.  1485.22  [Amended]

0
14. Amend Sec.  1485.22(e), first sentence, by removing ``OMB Circular
A-133 audit in accordance with 7 CFR part 3052'' and adding ``audit in
accordance with 2 CFR part 200'' in its place.

Sec.  1485.23  [Amended]

0
15. Amend Sec.  1485.23(d), introductory text, fifth sentence, by
removing ``e.g., 7 CFR parts 3015, 3016, and 3019'' and adding ``for
example, 2 CFR part 200'' in its place.

Sec.  1485.27  [Amended]

0
16. Amend Sec.  1485.27(b) by removing ``in the applicable parts of
this title (e.g., 7 CFR parts 3015, 3016, and 3019)'' and adding ``in 2
CFR part 200'' in its place.

Sec.  1485.28  [Amended]

0
17. Amend Sec.  1485.28(a), third sentence, by removing ``in the
applicable parts of this title (e.g., 7 CFR parts 1485, 3015, 3016,
3018, 3021, 3019, and 3052)'' and adding ``in 2 CFR parts 200 and 421
and this part'' in its place.

Sec.  1485.29  [Amended]

0
18. Amend Sec.  1485.29 as follows:
0
a. In paragraph (b), first sentence, remove ``e.g., 7 CFR parts 3015,
3016, and 3019'' and add ``for example, 2 CFR part 200'' in its place,
and in the second sentence, remove ``7 CFR part 3019'' and add ``2 CFR
part 200'' in its place, and
    b. In paragraph (d), seventh sentence, remove ``set forth in the
applicable parts of this title (e.g., 7 CFR parts 3015, 306, 3019)''
and add ``in 2 CFR part 200'' in its place.

Sec.  1485.34  [Amended]

0
19. Amend Sec.  1485.34, first sentence by removing ``set forth in the
applicable parts of this title (e.g., 7 CFR parts 3015, 3016, and
3019)'' and adding ``in 2 CFR part 200'' in their place.

0
20. Revise Sec.  1485.35 to read as follows:

Sec.  1485.35  Suspension, termination, and closeout of agreements.

    A program agreement may be suspended or terminated in accordance
with the suspension and termination procedures in 2 CFR part 200. If an
agreement is terminated, the applicable regulations in 2 CFR part 200
will apply to the closeout of the agreement.

Department of Agriculture

National Institute of Food and Agriculture (NIFA)

    For the reasons stated in the preamble, NIFA amends 7 CFR Part
Chapter XXXIV as follows:

TITLE 7--AGRICULTURE

CHAPTER XXXIV--NATIONAL INSTITUTE OF FOOD AND AGRICULTURE

PART 3400--SPECIAL RESEARCH GRANTS PROGRAM

0
1. The authority for part 3400 continues to read as follows:

    Authority:  7 U.S.C. 450i(c).

Sec.  3400.6  [Amended]

0
2. In Sec.  3400.6(a) remove the words ``the Department's Uniform
Federal Assistance Regulations'' and add in their place ``2 CFR part
200.''

0
3. Revise Sec.  3400.8 to read as follows:

Sec.  3400.8  Other Federal statutes and regulations that apply.

    (a) The Office of Management and Budget (``OMB'') issued guidance
on Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards at 2 CFR part 200 on December 26, 2013.
In 2 CFR 400.1, the Department adopted OMB's guidance in subparts A
through F of 2 CFR part 200, as supplemented by 2 CFR part 400, as the
Department's policies and procedures for uniform administrative
requirements, cost principles, and audit requirements for federal
awards. As a result, this regulation contains references to 2 CFR part
200 as it has regulatory effect for the Department's programs and
activities.''
    (b) Several other Federal statutes and/or regulations apply to
grant proposals considered for review or to research project grants
awarded under this part. These include but are not limited to:
    2 CFR part 200--Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards.
    2 CFR part 180 and Part 417--OMB Guidelines to Agencies on
Government-Wide Debarment and Suspension (Nonprocurement) and USDA
Nonprocurement Debarment and Suspension.
    7 CFR part 1c--USDA Implementation of the Federal Policy for the
Protection of Human Subjects.
    7 CFR 1.1--USDA Implementation of Freedom of Information Act.
    7 CFR part 3--USDA Implementation of OMB Circular A-129 Regarding
Debt Collection.
    7 CFR part 15, subpart A--USDA Implementation of Title VI of the
Civil Rights Act of 1964.
    7 CFR part 3407--NIFA procedures to implement the National
Environmental Policy Act.
    29 U.S.C. 794, section 504--Rehabilitation Act of 1973, and 7 CFR

part 15B (USDA implementation of statute), prohibiting discrimination
based upon physical or mental handicap in Federally assisted programs.
    35 U.S.C. 200 et seq.--Bayh-Dole Act, controlling allocation of
rights to inventions made by employees of small business firms and
domestic nonprofit organizations, including universities, in Federally
assisted programs (implementing regulations are contained in 37 CFR
part 401).

PART 3401--RANGELAND RESEARCH GRANTS PROGRAM

0
4. The authority citation for part 3401 continues to read as follows:

    Authority:  Section 1470 of the National Agricultural Research,
Extension and Teaching Policy Act of 1977 (7 U.S.C. 3316).

Sec.  3401.8  [Amended]

0
5. In the last sentence of Sec.  3401.8(a) remove the words ``the
Department's Uniform Federal Assistance Regulations'' and add in their
place ``2 CFR part 200.''

0
6. Revise Sec.  3401.10 to read as follows:

Sec.  3401.10  Other Federal Statutes and Regulations that Apply.

    (a) The Office of Management and Budget (``OMB'') issued guidance
on Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards at 2 CFR part 200 on December 26, 2013.
In 2 CFR 400.1, the Department adopted OMB's guidance in subparts A
through F of 2 CFR part 200, as supplemented by 2 CFR part 400, as the
Department's policies and procedures for uniform administrative
requirements, cost principles, and audit requirements for federal
awards. As a result, this regulation contains references to 2 CFR part
200 as it has regulatory effect for the Department's programs and
activities.''
    (b) Several other Federal statutes and/or regulations apply to
grant proposals considered for review or to research project grants
awarded under this part. These include but are not limited to:
    2 CFR part 200--Uniform Administrative Requirements, Cost
Principles, And Audit Requirements For Federal Awards.
    2 CFR part 180 and Part 417--OMB Guidelines To Agencies On
Government-Wide Debarment And Suspension (Nonprocurement) And USDA
Nonprocurement Debarment And Suspension
    7 CFR part 1c--USDA implementation of the Federal Policy for the
Protection of Human Subjects.
    7 CFR 1.1--USDA implementation of Freedom of Information Act.
    7 CFR part 3--USDA implementation of OMB Circular A-129 regarding
debt collection.
    7 CFR part 15, subpart A--USDA implementation of Title VI of the
Civil Rights Act of 1964.
    7 CFR part 3407--NIFA procedures to implement the National
Environmental Policy Act;
    29 U.S.C. 794 (section 504, Rehabilitation Act of 1973) and 7 CFR
part 15B (USDA implementation of statute)--prohibiting discrimination
based upon physical or mental handicap in Federally assisted programs;
and
    35 U.S.C. 200 et seq.--Bayh-Dole Act, controlling allocation of
rights to inventions made by employees of small business firms and
domestic nonprofit organizations, including universities, in Federally
assisted programs (implementing regulations are contained in 37 CFR
part 401).

0
7. In Sec.  3401.14, add a sentence at the end of the section to read
as follows:

Sec.  3401.14  Conflicts of interest.

    * * * Administration of the peer review group must be in accordance
with the Department's conflict of interest policy, 2 CFR 400.2.

PART 3402--FOOD AND AGRICULTURAL SCIENCES NATIONAL NEEDS GRADUATE
AND POSTGRADUATE FELLOWSHIP GRANTS PROGRAM

0
8. The authority citation for part 3402 continues to read as follows:

    Authority: 7 U.S.C. 3316.

Sec.  3402.19  [Amended]

0
9. In the last sentence of Sec.  3402.19, remove the words ``the
Department's Uniform Federal assistance regulations (parts 3015 and
3019 of 7 CFR)'' and add in their place ``2 CFR part 200.''

0
10. Revise Sec.  3402.20 to read as follows:

Sec.  3402.20  Other Federal Statutes and Regulations that Apply.

    (a) The Office of Management and Budget (``OMB'') issued guidance
on Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards at 2 CFR part 200 on December 26, 2013.
In 2 CFR 400.1, the Department adopted OMB's guidance in subparts A
through F of 2 CFR part 200, as supplemented by 2 CFR part 400, as the
Department's policies and procedures for uniform administrative
requirements, cost principles, and audit requirements for federal
awards. As a result, this regulation contains references to 2 CFR part
200 as it has regulatory effect for the Department's programs and
activities.
    (b) Several other Federal statutes and/or regulations apply to
grant proposals considered for review or to research project grants
awarded under this part. These include but are not limited to:
    2 CFR part 200--Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards.
    2 CFR part 180 and Part 417--OMB Guidelines to Agencies on
Government-Wide Debarment And Suspension (Nonprocurement) And USDA
Nonprocurement Debarment And Suspension
    7 CFR part 1c--USDA Implementation of the Federal Policy for the
Protection of Human Subjects.
    7 CFR 1.1--USDA Implementation of Freedom of Information Act.
    7 CFR part 3--USDA Implementation of OMB Circular A-129 Regarding
Debt Collection.
    7 CFR part 15, subpart A--USDA Implementation of Title VI of the
Civil Rights Act of 1964.
    7 CFR part 3407--NIFA procedures to implement the National
Environmental Policy Act;
    29 U.S.C. 794 (section 504, Rehabilitation Act of 1973) and 7 CFR
part 15B (USDA implementation of statute)--prohibiting discrimination
based upon physical or mental handicap in Federally assisted programs;
and
    35 U.S.C. 200 et seq.--Bayh-Dole Act, controlling allocation of
rights to inventions made by employees of small business firms and
domestic nonprofit organizations, including universities, in Federally
assisted programs (implementing regulations are contained in 37 CFR
part 401).

PART 3403--SMALL BUSINESS INNOVATION RESEARCH GRANTS PROGRAM

0
11. The authority citation for part 3403 continues to read as follows:

    Authority: 15 U.S.C. 638.

Sec.  3403.1  [Amended]

0
12. In the last sentence of Sec.  3403.1(a), remove the words ``the
Office of Extramural Programs,'' before ``NIFA.''

Sec.  3403.12  [Amended]

0
13. In the last sentence of Sec.  3403.12, remove the words ``the
Department's Uniform Federal Assistance Regulations (7 CFR part 3015)''
and add in their place ``2 CFR part 200.''

0
14. Revise Sec.  3403.15 to read as follows:

Sec.  3403.15  Other Federal statutes and regulations that apply.

    (a) The Office of Management and Budget (``OMB'') issued guidance
on Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards at 2 CFR part 200 on December 26, 2013.
In 2 CFR 400.1, the Department adopted OMB's guidance in subparts A
through F of 2 CFR part 200, as supplemented by 2 CFR part 400, as the
Department's policies and procedures for uniform administrative
requirements, cost principles, and audit requirements for federal
awards. As a result, this regulation contains references to 2 CFR part
200 as it has regulatory effect for the Department's programs and
activities.''
    (b) Several other Federal statutes and/or regulations apply to
grant proposals considered for review or to research project grants
awarded under this part. These include but are not limited to:
    2 CFR part 200--Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards.
    2 CFR part 180 and Part 417--OMB Guidelines to Agencies on
Government-Wide Debarment and Suspension (Nonprocurement) and USDA
Nonprocurement Debarment And Suspension
    7 CFR part 1c--USDA Implementation of the Federal Policy for the
Protection of Human Subjects.
    7 CFR 1.1--USDA Implementation of Freedom of Information Act.
    7 CFR part 3--USDA Implementation of OMB Circular A-129 Regarding
Debt Collection.
    7 CFR part 15, subpart A--USDA Implementation of Title VI of the
Civil Rights Act of 1964.
    7 CFR part 3407--NIFA Procedures to Implement the National
Environmental Policy Act;
    29 U.S.C. 794 (section 504, Rehabilitation Act of 1973) and 7 CFR
part 15B (USDA implementation of statute)--prohibiting discrimination
based upon physical or mental handicap in Federally assisted programs;
and
    35 U.S.C. 200 et seq.--Bayh-Dole Act, controlling allocation of
rights to inventions made by employees of small business firms and
domestic nonprofit organizations, including universities, in Federally
assisted programs (implementing regulations are contained in 37 CFR
part 401).

PART 3405--HIGHER EDUCATION CHALLENGE GRANTS PROGRAM

0
15. The authority citation for part 3405 continues to read as follows:

    Authority: Sec. 1470, National Agricultural Research, Extension,
and Teaching Policy Act of 1977, as amended (7 U.S.C. 3316).

Sec.  3405.9  [Amended]

0
16. In the second sentence of Sec.  3405.9, remove the words ``OMB
Circular No. A-21'' and add in their place ``2 CFR part 200.''

Sec.  3405.11  [Amended]

0
17. In Sec.  3405.11(g)(2)(v), remove the words ``OMB Circulars A-110,
`Uniform Administrative Requirements for Grants and Agreements with
Institutions of Higher Education, Hospitals and Other Non-Profit
Organizations,' and A-21 `Cost Principles for Educational
Institutions''' and add in their place ``2 CFR part 200 and Part 400.''

Sec.  3405.17  [Amended]

0
18. In Sec.  3405.17(a), remove the words ``the Department's Uniform
Administrative Requirements for Grants and Agreements with Institutions
of Higher Education, Hospitals and Other Non-Profit Organizations (7CFR
part 3019)'' and replace with ``2 CFR part 200.''

0
19. Revise Sec.  3405.20 to read as follows:

Sec.  3405.20  Other Federal statutes and regulations that apply.

    (a) The Office of Management and Budget (``OMB'') issued guidance
on Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards at 2 CFR part 200 on December 26, 2013.
In 2 CFR 400.1, the Department adopted OMB's guidance in subparts A
through F of 2 CFR part 200, as supplemented by 2 CFR part 400, as the
Department's policies and procedures for uniform administrative
requirements, cost principles, and audit requirements for federal
awards. As a result, this regulation contains references to 2 CFR part
200 as it has regulatory effect for the Department's programs and
activities.''
    (b) Several other Federal statutes and/or regulations apply to
grant proposals considered for review or to research project grants
awarded under this part. These include but are not limited to:
    2 CFR part 200--Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards.
    2 CFR part 180 and Part 417--OMB Guidelines to Agencies on
Government-Wide Debarment and Suspension (Nonprocurement) and USDA
Nonprocurement Debarment and Suspension
    7 CFR part 1c--USDA Implementation of the Federal Policy for the
Protection of Human Subjects.
    7 CFR 1.1--USDA Implementation of Freedom of Information Act.
    7 CFR part 3--USDA Implementation of OMB Circular A-129 Regarding
Debt Collection.
    7 CFR part 15, subpart A--USDA Implementation of Title VI of the
Civil Rights Act of 1964.
    7 CFR part 3407--NIFA Procedures To Implement The National
Environmental Policy Act;
    29 U.S.C. 794 (section 504, Rehabilitation Act of 1973) and 7 CFR
part 15B (USDA implementation of statute)--prohibiting discrimination
based upon physical or mental handicap in Federally assisted programs;
and
    35 U.S.C. 200 et seq.--Bayh-Dole Act, controlling allocation of
rights to inventions made by employees of small business firms and
domestic nonprofit organizations, including universities, in Federally
assisted programs (implementing regulations are contained in 37 CFR
part 401).

PART 3406--1890 INSTITUTION CAPACITY BUILDING GRANTS PROGRAM

0
20. The authority citation for part 3406 continues to read as follows:

    Authority:  Sec. 1470, National Agricultural Research,
Extension, and Teaching Policy Act of 1977, as amended (7 U.S.C.
3316).

Sec.  3406.10  [Amended]

0
21. In Sec.  3406.10, remove the words ``OMB Circular No. A-21'' and
add in their place ``2 CFR part 200''.

Sec.  3406.24  [Amended]

0
22. In Sec.  3406.24(a), remove the words ``the Department's Uniform
Administrative Requirements for Grants and Agreements with Institutions
of Higher Education, Hospitals and Other Non-Profit Organizations(7 CFR
part 3019)'' and add in their place ``2 CFR part 200 and Part 400.''

0
23. Revise Sec.  3406.27 to read as follows:

Sec.  3406.27  Other Federal Statutes and Regulations that Apply.

    (a) The Office of Management and Budget (``OMB'') issued guidance
on Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards at 2 CFR part 200 on December 26, 2013.
In 2 CFR 400.1, the Department adopted OMB's guidance in subparts A
through F of 2 CFR part 200, as supplemented by 2 CFR part 400, as the
Department's policies and procedures for uniform

administrative requirements, cost principles, and audit requirements
for federal awards. As a result, this regulation contains references to
2 CFR part 200 as it has regulatory effect for the Department's
programs and activities.''
    (b) Several other Federal statutes and/or regulations apply to
grant proposals considered for review or to research project grants
awarded under this part. These include but are not limited to:
    2 CFR part 200--Uniform Administrative Requirements, Cost
Principles, And Audit Requirements For Federal Awards.
    2 CFR part 180 and Part 417--OMB Guidelines To Agencies On
Government-Wide Debarment And Suspension (Nonprocurement) And USDA
Nonprocurement Debarment And Suspension
    7 CFR part 1c--USDA implementation of the Federal Policy for the
Protection of Human Subjects.
    7 CFR 1.1--USDA implementation of Freedom of Information Act.
    7 CFR part 3--USDA implementation of OMB Circular A-129 regarding
debt collection.
    7 CFR part 15, subpart A--USDA implementation of Title VI of the
Civil Rights Act of 1964.
    7 CFR part 3407--NIFA procedures to implement the National
Environmental Policy Act;
    29 U.S.C. 794 (section 504, Rehabilitation Act of 1973) and 7 CFR
part 15B (USDA implementation of statute)--prohibiting discrimination
based upon physical or mental handicap in Federally assisted programs;
and
    35 U.S.C. 200 et seq.--Bayh-Dole Act, controlling allocation of
rights to inventions made by employees of small business firms and
domestic nonprofit organizations, including universities, in Federally
assisted programs (implementing regulations are contained in 37 CFR
part 401).

PART 3407--IMPLEMENTATION OF NATIONAL ENVIRONMENTAL POLICY ACT

0
24. The authority citation for part 3407 continues to read as follows:

    Authority:  National Environmental Policy Act of 1969, as
amended, 42 U.S.C. 4321 et seq.; E.O. 11514, 34 FR 4247, as amended
by E.O. 11991, 42 FR 26927; E.O. 12144, 44 FR 11957; 5 U.S.C. 301;
40 CFR parts 1500-1508; and 7 CFR part 1b.

Sec.  3407.4  [Amended]

0
25. In the introductory text of Sec.  3407.4, correct the word
``responsibe'' to read ``responsible''.

PART 3415--BIOTECHNOLOGY RISK ASSESSMENT RESEARCH GRANTS PROGRAM

0
26. The authority citation for part 3415 continues to read as follows:

    Authority: 5 U.S.C. 301 and 7 U.S.C. 5921.

Sec.  3415.6  [Amended]

0
27. In Sec.  3415.6(a), remove the words ``and the Department's
assistance regulations (part 3015 and part 3016 of this title)'' and
add in their place ``2 CFR part 200.''

0
28. Revise Sec.  3415.8 to read as follows:

Sec.  3415.8  Other Federal statutes and regulations that apply.

    (a) The Office of Management and Budget (``OMB'') issued guidance
on Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards at 2 CFR part 200 on December 26, 2013.
In 2 CFR 400.1, the Department adopted OMB's guidance in subparts A
through F of 2 CFR part 200, as supplemented by 2 CFR part 400, as the
Department's policies and procedures for uniform administrative
requirements, cost principles, and audit requirements for federal
awards. As a result, this regulation contains references to 2 CFR part
200 as it has regulatory effect for the Department's programs and
activities.''
    (b) Several other Federal statutes and/or regulations apply to
grant proposals considered for review or to research project grants
awarded under this part. These include but are not limited to:
    2 CFR part 200--Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards.
    2 CFR part 180 and Part 417--OMB Guidelines to Agencies on
Government-Wide Debarment And Suspension (Nonprocurement) and USDA
Nonprocurement Debarment And Suspension
    7 CFR part 1c--USDA Implementation of the Federal Policy for the
Protection of Human Subjects.
    7 CFR 1.1--USDA Implementation of Freedom of Information Act.
    7 CFR part 3--USDA Implementation of OMB Circular A-129 Regarding
Debt Collection.
    7 CFR part 15, subpart A--USDA Implementation of Title VI of the
Civil Rights Act of 1964.
    7 CFR part 3407--NIFA Procedures To Implement the National
Environmental Policy Act;
    29 U.S.C. 794 (section 504, Rehabilitation Act of 1973) and 7 CFR
part 15B (USDA implementation of statute)--prohibiting discrimination
based upon physical or mental handicap in Federally assisted programs;
and
    35 U.S.C. 200 et seq.--Bayh-Dole Act, controlling allocation of
rights to inventions made by employees of small business firms and
domestic nonprofit organizations, including universities, in Federally
assisted programs (implementing regulations are contained in 37 CFR
part 401).

PART 3430--COMPETITIVE AND NONCOMPETITIVE NON-FORMULA FEDERAL
ASSISTANCE PROGRAMS--GENERAL AWARD ADMINISTRATIVE PROVISIONS

0
29. The authority citation for part 3430 continues to read as follows:

    Authority:  7 U.S.C. 3316; Pub. L. 106-107 (31 U.S.C. 6101
note).

Sec.  3430.1  [Amended]

0
30. In Sec.  3430.1(a), remove the words ``7 CFR parts 3016 (State,
local, and tribal governments), 3019 (institutions of higher education,
hospitals, and nonprofits), and 3015 (all others)'' and add in their
place ``2 CFR part 200, Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards.''

Sec.  3430.2  [Amended]

0
31. In Sec.  3430.2, remove the definitions of the terms ``State'' and
``Third party in-kind contributions.''

0
32. Revise Sec.  3430.4 to read as follows:

Sec.  3430.4  Other Federal statutes and regulations that apply.

    (a) The Office of Management and Budget (``OMB'') issued guidance
on Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards at 2 CFR part 200 on December 26, 2013.
In 2 CFR 400.1, the Department adopted OMB's guidance in subparts A
through F of 2 CFR part 200, as supplemented by 2 CFR part 400, as the
Department's policies and procedures for uniform administrative
requirements, cost principles, and audit requirements for federal
awards. As a result, this regulation contains references to 2 CFR part
200 as it has regulatory effect for the Department's programs and
activities.''
    (b) Several other Federal statutes and/or regulations apply to
grant proposals considered for review or to research project grants
awarded under this part. These include but are not limited to:
    2 CFR part 200--Uniform Administrative Requirements, Cost
Principles, And Audit Requirements For Federal Awards.
    2 CFR part 180 and Part 417--OMB Guidelines to Agencies on
Government-

Wide Debarment and Suspension (Nonprocurement) and USDA Nonprocurement
Debarment and Suspension
    7 CFR part 1c--USDA Implementation of the Federal Policy for the
Protection of Human Subjects.
    7 CFR 1.1--USDA Implementation of Freedom of Information Act.
    7 CFR part 3--USDA Implementation of OMB Circular A-129 Regarding
Debt Collection.
    7 CFR part 15, subpart A--USDA implementation of Title VI of the
Civil Rights Act of 1964.
    7 CFR part 3407--NIFA Procedures to Implement the National
Environmental Policy Act;
    29 U.S.C. 794 (section 504, Rehabilitation Act of 1973) and 7 CFR
part 15B (USDA implementation of statute)--prohibiting discrimination
based upon physical or mental handicap in Federally assisted programs;
and
    35 U.S.C. 200 et seq.--Bayh-Dole Act, controlling allocation of
rights to inventions made by employees of small business firms and
domestic nonprofit organizations, including universities, in Federally
assisted programs (implementing regulations are contained in 37 CFR
part 401).

Sec.  3430.12  [Amended]

0
33. In Sec.  3430.12(a), remove the words ``the Office of Management
and Budget (OMB) policy directive 68 FR 37370-37379 (June 23, 2003)''
and replace with ``Appendix I to 2 CFR part 200''.

Sec.  3430.41  [Amended]

0
34. In Sec.  3430.41:
0
a. In paragraph (a), remove the words ``parts 3015, 3016, 3019 of 7
CFR'' and add in their place``2 CFR part 200.''
0
b. In paragraph (b) introductory text, remove ``including, at a
minimum, the following:'' and add in its place ``noted in section 210
of 2 CFR part 200.''
0
c. Remove paragraphs (b)(1) through (10).

Sec.  3430.54  [Amended]

0
35. In Sec.  3430.54, remove the words ``the applicable assistance
regulations and cost principles'' and add in their place ``2 CFR part
200''.

Sec.  3430.59  [Amended]

0
36. Amend Sec.  3430.59 as follows:
0
a. Remove all references to ``the Office of Extramural Programs'' or
``OEP'' and add in their place ``NIFA.''
0
b. In the last sentence of paragraph (c), remove the words ``subject to
7 CFR part 3052'' and add in their place ``2 CFR 200.521.''
0
c. In paragraph (e), remove all references to ``OEP Assistant
Director'' and add in their place ``Office of Grants and Financial
Management (OGFM) Deputy Director.''

Sec.  3430.62  [Amended]

0
37. In Sec.  3430.62(c), remove all references to ``OEP Assistant
Director'' and add in their place ``Office of Grants and Financial
Management (OGFM) Deputy Director.''

PART 3431--VETERINARY MEDICINE LOAN REPAYMENT PROGRAM

0
38. The authority citation for part 3431 continues to read as follows:

    Authority:  7 U.S.C. 3151a; Pub. L. 106-107 (31 U.S.C. 6101
note).

Sec.  3431.20  [Amended]

0
39. In Sec.  3431.20, in the first sentence remove the words ``Office
of Extramural Programs (OEP)'' after ``NIFA,'' and in the second
sentence remove ``OEP'' and add in its place ``NIFA.''

Department of Agriculture

Rural Development

    For the reasons set forth in the common preamble, chapters XVII,
XVIII, XXXV and XLII of Subtitle B, title 7, Code of Federal
Regulations are amended as follows:

CHAPTER XVII--RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE

PART 1703--RURAL DEVELOPMENT

0
1. The authority citation for part 1703 continues to read as follows:

    Authority:  7 U.S.C. 901 et seq. and 950aaa et seq.

Subpart D--Distance Learning and Telemedicine Loan and Grant
Program--General

0
2. Amend Sec.  1703.106 by revising paragraph (a) to read as follows:

Sec.  1703.106  Disbursement of loans and grants.

    (a) For financial assistance of $100,000 or greater, prior to the
disbursement of a grant and a loan, the recipient, if it is not a unit
of government, will provide evidence of fidelity bond coverage as
required by 2 CFR part 200, which is adopted by USDA through 2 CFR part
400.
* * * * *

0
3. Amend Sec.  1703.108 by revising paragraph (b) to read as follows:

Sec.  1703.108  Audit requirements.

* * * * *
    (b) If the recipient is a State or local government, or non-profit
organization, the recipient shall provide an audit in accordance with
subpart F of 2 CFR part 200, as adopted by USDA through 2 CFR part 400.

Subpart E--Distance Learning and Telemedicine Grant Program

0
4. Amend Sec.  1703.125 by revising paragraphs (i)(5), (i)(6), (i)(7)
and (l) to read as follows:

Sec.  1703.125  Completed application.

    (i) * * *
    (5) Drug-Free Workplace Act of 1998 (41 U.S.C. 8101 et. seq.), 2
CFR part 421;
    (6) E.O.s 12549 and 12689, Debarment and Suspension, 2 CFR part
180, which is adopted by USDA through 2 CFR part 417;
    (7) Byrd Anti-Lobbying Amendment (31 U.S.C. 1352), 2 CFR part 418.
* * * * *
    (l) Federal debt certification. The applicant must provide a
certification that it is not delinquent on any obligation owed to the
government (31 U.S.C. 3720B).
* * * * *

0
5. Amend Sec.  1703.127 by revising paragraph (g) to read as follows:

Sec.  1703.127  Application selection provisions.

* * * * *
    (g) Grantees shall comply with all applicable provisions of 2 CFR
part 200, as adopted by USDA through 2 CFR part 400.

Subpart F--Distance Learning and Telemedicine Combination Loan and
Grant Program

0
6. Amend Sec.  1703.134 by revising paragraphs (g)(5), (g)(6), (g)(7)
and (j) to read as follows:

Sec.  1703.134  Completed application.

* * * * *
    (g) * * *
    (5) Drug-Free Workplace Act of 1998 (41 U.S.C. 8101 et. seq.), 2
CFR part 421;
    (6) E.O.s 12549 and 12689, Debarment and Suspension, 2 CFR part
180, which is adopted by USDA through 2 CFR part 417;
    (7) Byrd Anti-Lobbying Amendment (31 U.S.C. 1352), 2 CFR part 418.
* * * * *
    (j) Federal debt certification. The applicant must provide evidence
that it is not delinquent on any obligation owed to the government (31
U.S.C. 3720B).
* * * * *

Subpart G--Distance Learning and Telemedicine Loan Program

0
7. Amend Sec.  1703.144 by revising paragraphs (g)(5), (g)(6), (g)(7)
and (j) to read as follows:

Sec.  1703.144  Completed application.

* * * * *
    (g) * * *
    (5) Drug-Free Workplace Act of 1998 (41 U.S.C. 8101 et. seq.), 2
CFR part 421;
    (6) E.O.s 12549 and 12689, Debarment and Suspension, 2 CFR part
180, which is adopted by USDA through 2 CFR part 417;
    (7) Byrd Anti-Lobbying Amendment (31 U.S.C. 1352), 2 CFR part 418.
* * * * *
    (j) Federal debt certification. The applicants must provide a
certification that it is not delinquent on any obligation owed to the
government (31 U.S.C. 3720B).
* * * * *

PART 1709--ASSISTANCE TO HIGH ENERGY COST COMMUNITIES

0
8. The authority citation for part 1709 continues to read as follows:

    Authority:  5 U.S.C. 301, 7 U.S.C. 901 et seq.

Subpart A--General Requirements

0
9. Amend Sec.  1709.12 by revising the introductory text to read as
follows:

Sec.  1709.12  Reporting requirements.

    To support Agency monitoring of project performance and use of
grant funds, Grantees shall file periodic reports, required under 2 CFR
part 200, as adopted by USDA through 2 CFR part 400, as provided in
this part, and the grant agreement as follows:
* * * * *

0
10. Amend Sec.  1709.13 by revising the second sentence to read as
follows:

Sec.  1709.13  Grant administration.

    * * * Administration of RUS grants is governed by the provisions of
this subpart and subpart B of this part, the terms of the grant
agreement and, as applicable, the provisions of 2 CFR part 200, as
adopted by USDA through 2 CFR part 400.

0
11. Amend Sec.  1709.16 by revising the second sentence to read as
follows:

Sec.  1709.16  Performance reviews.

    * * * If the grantee does not comply with or does not meet the
performance criteria set out in the grant agreement, the Administrator
may require amendment of the grant agreement, or may suspend or
terminate the grant pursuant to 2 CFR part 200, as adopted by USDA
through 2 CFR part 400.

0
12. Amend Sec.  1709.19 by revising paragraph (a) through (e) and
removing paragraph (f), to read as follows:

Sec.  1709.19  Other USDA regulations.

* * * * *
    (a) Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards, 2 CFR part 200, as adopted by USDA
through 2 CFR part 400;
    (b) Drug-Free Workplace Act of 1998 (41 U.S.C. 8101 et. seq.), 2
CFR part 421;
    (c) E.O.s 12549 and 12689, Debarment and Suspension, 2 CFR part
180, which is adopted by USDA through 2 CFR part 417;
    (d) Byrd Anti-Lobbying Amendment (31 U.S.C. 1352), 2 CFR part 418;
and
    (e) Subpart F of 2 CFR 200, as adopted by USDA through 2 CFR 400.

0
13. Amend Sec.  1709.21 by revising paragraph (b) to read as follows:

Sec.  1709.21  Audit requirements.

* * * * *
    (b) If the grantee is a State or local government, or a non-profit
corporation (other than an RUS Electric or Telecommunication Borrower),
the recipient shall provide an audit in accordance with subpart F of 2
CFR part 200, as adopted by USDA through 2 CFR part 400.

Subpart B--RUS High Cost Energy Grant Program

0
14. Amend Sec.  1709.102 by revising paragraph (a) to read as follows:

Sec.  1709.102  Policy.

    (a) All high energy cost grants will be awarded competitively
subject to the limited exceptions in 2 CFR 415.1(d).
* * * * *

Subpart G--Recovery of Financial Assistance Used for Unauthorized
Purposes

0
15. Amend Sec.  1709.601 by revising the last sentence to read as
follows:

Sec.  1709.601  Policy.

    * * * The Agency shall make full use of available authority and
procedures, including but not limited to those available under 2 CFR
part 200, as adopted by USDA through 2 CFR part 400.

PART 1710--GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO
ELECTRIC LOANS AND GUARANTEES

0
16. The authority citation for part 1710 continues to read as follows:

    Authority:  7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

Subpart C--Loan Purposes and Basic Policies

0
17. Revise Sec.  1710.123 to read as follows:

Sec.  1710.123  Debarment and Suspension.

    Borrowers are required to comply with certain requirements on
debarment and suspension as set forth in 2 CFR part 180, as adopted by
USDA through 2 CFR part 417.

0
18. Revise Sec.  1710.125 to read as follows:

Sec.  1710.125  Restrictions on lobbying.

    Borrowers are required to comply with certain requirements with
respect to restrictions on lobbying activities. See 2 CFR part 418.

0
19. Revise Sec.  1710.127 to read as follows:

Sec.  1710.127  Drug free workplace.

    Borrowers are required to comply with the Drug Free Workplace Act
of 1988 (41 U.S.C. 8101 et. seq.) and the Act's implementing
regulations (2 CFR part 421) when a borrower receives a Federal grant
or enters into a procurement contract awarded pursuant to the
provisions of the Federal Acquisition Regulation (title 48 CFR) to sell
to a Federal agency property or services having a value of $25,000 or
more.

Subpart I--Application Requirements and Procedures for Loans

0
20. Amend Sec.  1710.501 by revising paragraphs (a)(10) and (a)(12) to
read as follows:

Sec.  1710.501  Loan applications documents.

    (a) * * *
    (10) Form AD-1047, Certification Regarding Debarment, Suspension,
and Other Responsibility Matters--Primary Covered Transactions. This
statement certifies that the borrower will comply with certain
regulations on debarment and suspension required by Executive Order
12549, Debarment and Suspension (3 CFR, 1986 Comp., p. 189). See 2 CFR
417, and Sec.  1710.123.
* * * * *
    (12) Lobbying. The following information on lobbying is required
pursuant to 2 CFR 418, and Sec.  1710.125. Borrowers applying for both
insured and guaranteed financing should consult RUS before submitting
this information.

PART 1717--POST-LOAN POLICIES AND PROCEDURES COMMON TO INSURED AND
GUARANTEED ELECTRIC LOANS

0
21. The authority citation for part 1717 continues to read as follows:

    Authority:  7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

Subpart R--Lien Accommodations and Subordinations for 100 Percent
Private Financing

0
22. Amend Sec.  1717.855 by revising paragraph (k) to read as follows:

Sec.  1717.855  Application contents: Advance approval--100 percent
private financing of distribution, sub-transmission and headquarters
facilities, and certain other community infrastructure.

* * * * *
    (k) Form AD-1047, Certification Regarding Debarment, Suspension,
and Other Responsibility Matters--Primary Covered Transactions, as
required by 2 CFR part 180, as adopted by USDA through 2 CFR part 417;
* * * * *

0
23. Amend Sec.  1717.857 by revising paragraph (c)(7) to read as
follows:

Sec.  1717.857  Refinancing of existing secured debt--distribution and
power supply borrowers.

    (c) * * *
    (7) Form AD-1047, Certification Regarding Debarment, Suspension,
and Other Responsibility Matters--Primary Covered Transactions, as
required by 2 CFR part 417:
* * * * *

0
24. Amend Sec.  1717.858 by revising paragraph (c)(9) to read as
follows:

Sec.  1717.858  Lien subordination for rural development investments.

    (c) * * *
    (9) Form AD-1047, Certification Regarding Debarment, Suspension,
and Other Responsibility Matters--Primary Covered Transactions, as
required by 2 CFR part 180, as adopted by USDA through 2 CFR part 417;
* * * * *

0
25. Amend Sec.  1717.860 by revising paragraph (c)(2)(vi)(C) to read as
follows:

Sec.  1717.860  Lien accommodations and subordinations under section
306E of the RE Act.

    (c) * * *
    (2) * * *
    (vi) * * *
    (C) Form AD-1047, Certification Regarding Debarment, Suspension,
and Other Responsibility Matters--Primary Covered Transactions, as
required by 2 CFR part 180, adopted by USDA through 2 CFR part 417;
* * * * *

PART 1724--ELECTRIC ENGINEERING, ARCHITECTURAL SERVICES AND DESIGN
POLICIES AND PROCEDURES

0
26. The authority citation for part 1724 continues to read as follows:

    Authority:  7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

Subpart A--General

0
27. Revise Sec.  1724.7 to read as follows:

Sec.  1724.7  Debarment and suspension.

    Borrowers shall comply with the requirements on debarment and
suspension in connection with procurement activities set forth in 2 CFR
part 180, as adopted by USDA through 2 CFR part 417, particularly with
respect to lower tier transactions, e.g., procurement contracts for
goods or services.

0
28. Revise Sec.  1724.8 to read as follows:

Sec.  1724.8  Restrictions on lobbying.

    Borrowers shall comply with the restrictions and requirements in
connection with procurement activities as set forth in 2 CFR part 418.

PART 1726--ELECTRIC SYSTEM CONSTRUCTION POLICIES AND PROCEDURES

0
29. The authority citation for part 1726 continues to read as follows:

    Authority:  7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

0
30. Revise Sec.  1726.16 to read as follows:

Sec.  1726.16  Debarment and suspension.

    Borrowers are required to comply with certain requirements on
debarment and suspension in connection with procurement activities set
forth in 2 CFR part 180, as adopted by USDA through 2 CFR part 417,
particularly with respect to lower tier transactions, e.g., procurement
contracts for goods or services.

0
31. Revise Sec.  1726.17 to read as follows:

Sec.  1726.17  Restrictions on lobbying.

    Borrowers are required to comply with certain restrictions and
requirements in connection with procurement activities as set forth in
2 CFR part 418.

PART 1737--PRE-LOAN POLICIES AND PROCEDURES COMMON TO INSURED AND
GUARANTEED TELECOMMUNICATIONS LOANS

0
32. The authority citation for part 1737 continues to read as follows:

    Authority:  7 U.S.C. 901 et seq., 1921 et seq.; Pub. L. 103-354,
108 Stat. 3178 (7 U.S.C. 6941 et seq.).

Subpart C--The Loan Application

0
33. Amend Sec.  1737.22 by revising paragraph (b)(6) to read as
follows:

Sec.  1737.22  Supplementary information.

* * * * *
    (b) * * *
    (6) Executed copy of Form AD-1047, ``Certification Regarding
Debarment, Suspension, and Other Responsibility Matters--Primary
Covered Transactions.''
* * * * *

Subpart E--Interim Financing of Construction of Telephone
Facilities

0
34. Amend Sec.  1737.41 by revising paragraph (b)(2)(vi) to read as
follows:

Sec.  1737.41  Procedure for obtaining approval.

* * * * *
    (b) * * *
    (2) * * *
    (vi) Executed copy of Form AD-1047, ``Certification Regarding
Debarment, Suspension, and Other Responsibility Matters--Primary
Covered Transactions.''
* * * * *

Subpart F--Review of Application Procedures

0
35. Amend Sec.  1737.50 by revising paragraphs (a)(2) and (b) to read
as follows:

Sec.  1737.50  Loan approval requirements.

    (a) * * *
    (2) A completed certification Form AD-1047, ``Certification
Regarding Debarment, Suspension, and Other Responsibility Matters--
Primary Covered Transactions;''
* * * * *
    (b) RUS shall review the completed loan application, particularly
noting subscriber data, grades of service, extended area service (EAS),
connecting company commitments, commercial facilities, system and
exchange boundaries, and proposed acquisitions. RUS shall review the LD
to determine that the system design is acceptable to RUS, that the
design is technically correct, that the cost estimates are reasonable,
and that the design provides

for area coverage service. RUS shall also review the population and
incorporation status of all communities served or to be served by the
borrower to determine if any nonrural areas are served and if municipal
franchises are required. Any RUS lending for nonrural areas must be in
accordance with 7 CFR part 1735. RUS shall also check the ``List of
Parties Excluded from Federal Procurement of Nonprocurement Programs'',
compiled, maintained and distributed by General Services
Administration, to determine whether the borrower is debarred,
suspended, ineligible, or voluntarily excluded (see 2 CFR 180.430).
* * * * *

PART 1738--RURAL BROADBAND ACCESS LOANS AND LOAN GUARANTEES

0
36. The authority citation for part 1738 continues to read as follows:

    Authority:  Pub. L. 107-171, 7 U.S.C. 901 et seq.

Subpart D--Direct Loan Terms

0
37. Amend Sec.  1738.156 to revise paragraphs (a)(10) and (11) to read
as follows:

Sec.  1738.156  Other Federal requirements.

* * * * *
    (a) * * *
    (10) The regulations implementing E.O. 12549, Debarment and
Suspension (2 CFR part 180, which is adopted by USDA through 2 CFR part
417, including subpart C of 2 CFR part 417, ``Responsibilities of
Participants Regarding Transactions,'' and 2 CFR 417.332.
    (11) The requirements regarding lobbying for Contracts, Grants,
Loans and Cooperative Agreements in 31 U.S.C. 1352 (2 CFR part 418).
* * * * *

PART 1739--BROADBAND GRANT PROGRAM

0
38. The authority citation for part 1739 continues to read as follows:

    Authority:  Title III, Pub. L. 108-199, 118 Stat. 3.

Subpart A--Community Connect Grant Program

0
39. Amend Sec.  1739.15 as follows:
0
a. Revise the first sentence of the introductory text;
0
b. Revise paragraph (l)(2);
0
c. Revise paragraph (l)(4);
    The revisions read as follows:

Sec.  1739.15  Completed application.

    Applications should be prepared in conformance with the provisions
of this part and all applicable regulations, including 2 CFR part 200,
as adopted by USDA through 2 CFR part 400.
* * * * *
    (l) * * *
    (2) 2 CFR part 200, as adopted by USDA through 2 CFR part 400.
* * * * *
    (4) 2 CFR part 418--New Restrictions on Lobbying;
* * * * *

0
40. Amend Sec.  1739.20 by revising paragraph (b) to read as follows:

Sec.  1739.20  Audit requirements.

* * * * *
    (b) If the recipient is a Tribal, State or local government, or
non-profit organization, the recipient shall provide an audit in
accordance with subpart F of 2 CFR part 200, as adopted by USDA through
2 CFR part 400.

PART 1740--PUBLIC TELEVISION STATION DIGITAL TRANSITION GRANT
PROGRAM

0
41. The authority citation for part 1740 continues to read as follows:

    Authority:  Consolidated Appropriations Act, 2005; Title III:
Rural Development Programs; Rural Utilities Service; Distance
Learning, Telemedicine, and Broadband Program; Public Law 108-447.

Subpart A--Public Television Station Digital Transition Grant
Program

0
42. Amend Sec.  1740.9 by revising paragraphs (j)(5), (j)(6), and
(j)(7) to read as follows:

Sec.  1740.9  Grant application.

* * * * *
    (j) * * *
    (5) Drug-Free Workplace Act of 1998 (41 U.S.C. 8101 et. seq.), 2
CFR part 421;
    (6) Executive Orders 12549 and 12689, Debarment and Suspension, 2
CFR part 180, which is adopted by USDA through 2 CFR part 417; and
    (7) Byrd Anti-Lobbying Amendment (31 U.S.C. 1352), 2 CFR part 418.
* * * * *

PART 1773--POLICY ON AUDITS OF RUS BORROWERS

0
43. The authority citation for part 1773 continues to read as follows:

    Authority:  7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

Subpart B--RUS Audit Requirements

0
44. Amend Sec.  1773.3 by revising paragraphs (d) and (e) to read as
follows:

Sec.  1773.3  Annual audit.

* * * * *
    (d) A borrower that qualifies as a unit of state or local
government or Indian tribe as such terms are defined in the Single
Audit Act of 1984 (31 U.S.C. 7501 et seq.), the Single Audit Act
Amendments of 1996 (31 U.S.C. 7505 et seq.) and OMB Circular A-133,
Audits of States and Local Government, and Non Profit Organizations
(which applies for audits of fiscal years beginning prior to December
26, 2014) and Subpart F of 2 CFR 200, Uniform Administrative
Requirements, Cost Principles, and Audit Requirements, as adopted by
USDA though 2 CFR 400 (which applies for fiscal years beginning on or
after December 26, 2014) must comply with this part as follows:
    (1) A borrower that expends $500,000 under OMB Circular A-133 (for
audits of fiscal years beginning prior to December 26, 2014) and
$750,000 under Subpart F of 2 CFR part 200, as adopted by USDA through
2 CFR part 400 (for audits for fiscal years beginning after December
26, 2014) or more in a year in Federal awards must have an audit
performed and submit an auditor's report meeting the requirements of
the respective Single Audit Act requirements
    (2) An entity with loans less than $500,000 under OMB Circular A-
133 (for audits of fiscal years beginning prior to December 26, 2014)
and $750,000 under Subpart F of 2 CFR part 200, as adopted by USDA
through 2 CFR part 400 (for audits for fiscal years beginning on or
after December 26, 2014) in Federal awards during the year must have an
audit performed in accordance with the requirements of this part.
    (3) A borrower must notify RUS, in writing, within 30 days of the
as of audit date, of the total Federal awards expended during the year
and must state whether it will have an audit performed in accordance
with OMB Circular A-133 (for audits of fiscal years beginning prior to
December 26, 2014) or Subpart F of 2 CFR part 200, as adopted by USDA
through 2 CFR part 400 (for audits for fiscal years beginning on or
after December 26, 2014) or this part.
    (i) A borrower that elects to comply with this part must select a
CPA that meets the qualifications set forth in Sec.  1773.5.
    (ii) If an audit is performed in accordance with OMB Circular A-133
(for audits of fiscal years beginning prior to December 26, 2014) or
Subpart F of 2 CFR part 200, as adopted by USDA through 2 CFR part 400
(for audits for fiscal years beginning after December 26, 2014, an
auditor's report that meets

the requirements of the respective single Audit Act requirements, will
be sufficient to satisfy that borrower's obligations under this part.
    (e) OMB Circular A-133 and Subpart F of 2 CFR part 200, as adopted
by USDA through 2 CFR part 400 do not apply to audits of RUS electric
and telecommunications cooperatives and commercial telecommunications
borrowers.

PART 1774--SPECIAL EVALUATION ASSISTANCE FOR RURAL COMMUNITIES AND
HOUSEHOLDS PROGRAM (SEARCH)

0
45. The authority citation for part 1774 continues to read as follows:

    Authority:  7 U.S.C. 1926(a)(2)(C)

Subpart A--General Provisions

0
46. Amend Sec.  1774.8 by revising paragraphs (f) through (j) and
removing paragraphs (k) and (l) to read as follows:

Sec.  1774.8  Other Federal Statutes.

* * * * *
    (f) 2 CFR part 200, as adopted by USDA through 2 CFR part 400,
Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal.
    (g) 2 CFR part 180, as adopted by USDA through 2 CFR part 417,
Nonprocurement Debarment and Suspension, implementing Executive Order
12549 on debarment and suspension.
    (h) 2 CFR part 418, New Restrictions on Lobbying, prohibiting the
use of appropriated funds to influence Congress or a Federal agency in
connection with the making of any Federal grant and other Federal
contracting and financial transactions.
    (i) 2 CFR part 421, Requirements for Drug-Free Workplace (Financial
Assistance), implementing the Drug-Free Workplace Act of 1988 (41 U.S.C
8101 et. seq.).
    (j) 29 U.S.C. 794, section 504--Rehabilitation Act of 1973, and 7
CFR part 15B (USDA implementation of statute), prohibiting
discrimination based upon physical or mental handicap in Federally
assisted programs.

Subpart B--Grant Application Processing

0
47. Amend Sec.  1774.13 by revising paragraph (g) to read as follows:

Sec.  1774.13  Limitations.

* * * * *
    (g) Pay for any other costs that are not allowable under 2 CFR part
200, as adopted by USDA through 2 CFR part 400.
* * * * *

PART 1775--TECHNICAL ASSISTANCE GRANTS

0
48A. The authority citation for part 1775 continues to read as follows:

    Authority:  5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.

Subpart A--General Provisions

0
48B. Amend Sec.  1775.5 by revising paragraph (h) to read as follows:

Sec.  1775.5  Limitations.

* * * * *
    (h) Pay for any other costs that are not allowable under 2 CFR part
200, as adopted by USDA through 2 CFR part 400.
* * * * *

0
49. Amend Sec.  1775.8 by revising paragraphs (f) and (h) through (j),
and by removing and reserving paragraphs (g) and (k) to read as
follows:

Sec.  1775.  8 Other Federal statutes.

    (f) 2 CFR part 200, as adopted by USDA through 2 CFR part 400,
Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal.
    (g) [Reserved]
    (h) 2 CFR part 180, as implemented by USDA through 2 CFR part 417,
Nonprocurement Debarment and Suspension, implementing Executive Order
12549 on debarment and suspension.
    (i) 2 CFR part 418, New Restrictions on Lobbying, prohibiting the
use of appropriated funds to influence Congress or a Federal agency in
connection with the making of any Federal grant and other Federal
contracting and financial transactions.
    (j) 2 CFR 421, Requirements for Drug-Free Workplace (Financial
Assistance), implementing the Drug-Free Workplace Act of 1988 (41 U.S.C
701).
    (k) [Reserved]
* * * * *

Subpart B--Grant Application Processing

0
50. Amend Sec.  1775.10 by revising paragraph (c)(9) to read as
follows:

Sec.  1775.10  Applications.

* * * * *
    (c) * * *
    (9) Indirect cost documentation such as cost rate proposals, cost
allocation plans, or other election for indirect costs and appropriate
certification of indirect costs in accordance with Cost Principles in 2
CFR 200, subpart E, as adopted by USDA through 2 CFR part 400.
* * * * *

0
51. Amend Sec.  1775.20 by revising paragraphs (b) and (c) to read as
follows:

Sec.  1775.20  Reporting.

* * * * *
    (b) SF-425,'' Federal Financial Report,'' and a project performance
activity report will be required of all grantees on a quarterly basis,
due 30 days after the end of each calendar quarter.
    (c) A final project performance report will be required with the
last SF-425 due 90 days after the end of the last quarter in which the
project is completed. The final report may serve as the last quarterly
report.
* * * * *

0
52. Amend Sec.  1775.21 by revising paragraphs (a) and (b) as follows:

Sec.  1775.21  Audit or financial statement.

* * * * *
    (a) Grantees expending $750,000 or more Federal funds per fiscal
year will submit an audit conducted in accordance with Subpart F of 2
CFR part 200, as adopted by USDA through 2 CFR part 400. The audit will
be submitted with 9 months of the grantee's fiscal year. Additional
audits may be required if the project period covers more than one
fiscal year.
    (b) Grantees expending less than $750,000 will provide annual
financial statement covering the grant period, consisting of the
organization's statement of income and expense and balance sheet signed
by an appropriate official of the organization. Financial statement
will be submitted within 90 days after the grantees fiscal year.

PART 1776--HOUSEHOLD WATER WELL SYSTEM GRANT PROGRAM

0
53. The authority citation for part 1776 continues to read as follows:

    Authority:  7 U.S.C. 1926e.

0
54. Revise Sec.  1776.2 to read as follows:

Sec.  1776.2  Uniform Federal Assistance Provisions.

    This program is subject to the general provisions that apply to all
grants made by USDA and that are set forth in 2 CFR part 200, Uniform
Administrative Requirements, Cost Principles, and Audit Requirements
for Federal Awards, as adopted by USDA through 2 CFR part 400.

0
55. Amend Sec.  1776.13 by revising paragraph (d) to read as follows:

Sec.  1776.13  Administrative expenses.

* * * * *

    (d) Allowability of administrative expense costs shall be
determined in accordance with 2 CFR part 200, as adopted by USDA
through 2 CFR part 400.

PART 1778--EMERGENCY AND IMMINENT COMMUNITY WATER ASSISTANCE GRANTS

0
56. The authority citation for part 1778 continues to read as follows:

    Authority:  5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.

0
57. Amend Sec.  1778.14 by revising paragraphs (e) and (f) to read as
follows:

Sec.  1778.14  Other considerations.

* * * * *
    (e) Governmentwide debarment and suspension (nonprocurement) and
requirements for drug-free work place. All projects must comply with
the requirements set forth in the U.S. Department of Agriculture
regulations 2 CFR part 417, 2 CFR part 421, and RD Instruction 1940-M.
    (f) Intergovernmental review. All projects funded under this part
are subject to Executive Order 12372 (3 CFR, 1983 Comp., p. 197), which
requires intergovernmental consultation with State and local officials.
These requirements are found at 2 CFR part 415, subpart C,
``Intergovernmental Review of Department of Agriculture Programs and
Activities'' and RD Instruction 1970-I, `Intergovernmental Review,'
available in any Agency office or on the Agency's Web site.

PART 1779--WATER AND WASTE DISPOSAL PROGRAMS GUARANTEE LOANS

0
58. The authority citation for part 1779 continues to read as follows:

    Authority:  5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.

0
59. Amend Sec.  1779.42 by revising paragraph (e) to read as follows:

Sec.  1779.42  Design and construction requirements.

* * * * *
    (e) Administrative. When the Agency reviews the preliminary
architectural and engineering reports or plans, they must also consider
all applicable Federal laws such as the seismic requirements of
Executive Order 12699 (55 FR 835, 3 CFR, 1990 Comp., p. 269), the
debarment requirements of 2 CFR part 417, and the Copeland Anti-
Kickback Act (18 U.S.C. 874).

0
60. Amend Sec.  1779.63 by adding a sentence to the end of paragraph
(b) to read as follows:

Sec.  1779.69  Loan servicing.

* * * * *
    (b) * * * Additionally, when applicable, the lender will require an
audit in accordance with subpart F of 2 CFR part 200, as adopted by
USDA through 2 CFR part 400.

PART 1780--WATER AND WASTE LOANS AND GRANTS

0
61. The authority citation for part 1780 continues to read as follows:

    Authority:  5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.

Subpart A--General Policies and Requirements

0
62. Amend Sec.  1780.1 by adding paragraph (l) and (m) to read as
follows:

Sec.  1780.1  General.

* * * * *
    (l) Applicants for grant assistance will be required to comply with
the following requirements as applicable:
    (1) 2 CFR part 200, as adopted by USDA through 2 CFR part 400, ''
Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards''.
    (2) 2 CFR part 415--General Program Administrative Regulations.
    (3) 2 CFR part 416- General Program Administrative Regulations for
Grants and Cooperative Agreements to State and Local Governments.
    (4) 2 CFR part 417--Nonprocurement Debarment and Suspension.
    (5) 2 CFR part 418--New Restrictions on Lobbying.
    (m) Applicants for loan assistance will be required to comply with
Subpart F of 2 CFR part 200, ``Audit Requirements.''

0
63. Amend Sec.  1780.47 by revising paragraphs (d) and (g) as follows:

Sec.  1780.47  Borrower accounting methods, management reporting and
audits.

* * * * *
    (d) Audits. All audits are to be performed in accordance with the
latest revision of the generally accepted government auditing standards
(GAGAS), issued by the Comptroller General of the United States. In
addition, the audits are also to be performed in accordance with
subpart F of 2 CFR part 200, as adopted by USDA through 2 CFR part 400.
The type of audit each borrower is required to submit will be
designated by RUS. Further guidance on preparing an acceptable audit
can be obtained from RUS. It is not intended that audits required by
this part be separate and apart from audits performed in accordance
with State and local laws. To the extent feasible, the audit work
should be done in conjunction with those audits. Audits must be
performed annually except as allowed under the provisions for biennial
audits provided in subpart F of 2 CFR part 200. Audits are to be
submitted to the processing office as soon as possible after receipt of
the auditor's report but no later than nine months after the end of the
audit period
* * * * *
    (g) Substitute for management reports. When RUS loans are secured
by the general obligation of the public body or tax assessments which
total 100 percent of the debt service requirements, the State program
official may authorize an annual audit to substitute for other
management reports if the audit is received within nine months after
the end of the audit period.

PART 1782--SERVICING OF WATER AND WASTE PROGRAMS

0
64. The authority citation for part 1782 continues to read as follows:

    Authority:  5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.

0
65. Revise Sec.  1782.7 to read as follows:

Sec.  1782.7  Grants.

    Servicing actions relating to Agency grants are governed by the
provisions of several regulations and executive orders, including, but
not limited to, 2 CFR part 200 as adopted by 2 CFR part 400, and 2 CFR
parts 415, 416, 417, and 418 and Executive Order (E.O.) 12803. Grantees
remain responsible for property acquired with grant funds in accordance
with terms of a grant agreement and applicable regulations.

0
66. Revise Sec.  1782.10 to read as follows:

Sec.  1782.10  Audit requirements.

    Audits for loans will be required in accordance with Sec.  1780.47
of this chapter. If the borrower becomes delinquent or is experiencing
problems, the servicing official will require an audit or other
documentation deemed necessary to resolve the delinquency. The
provisions of Subpart F of 2 CFR part 200, as adopted by USDA through 2
CFR part 400, address audit requirements for recipients of Federal
assistance.

PART 1783--REVOLVING FUNDS FOR FINANCING WATER AND WASTEWATER
PROJECTS (REVOLVING FUND PROGRAM)

0
67. The authority citation for part 1783 continues to read as follows:

    Authority:  7 U.S.C. 1926 (a)(2)(B).

0
68. Revise Sec.  1783.2 to read as follows:

Sec.  1783.2  What Uniform Federal Assistance Provisions apply to the
Revolving Fund Program?

    (a) This program is subject to the general provisions that apply to
all grants made by USDA and that are set forth in 2 CFR part 200, as
adopted by USDA through 2 CFR part 400.
    (b) This program is subject to the uniform administrative
requirements that apply to all grants made by USDA to non-profit
organizations and that are set forth in 2 CFR part 415.

CHAPTER XVIII--RURAL HOUSING SERVICE, RURAL BUSINESS-COOPERATIVES
SERVICE, RURAL UTILITIES SERVICE AND FARM SERVICE AGENCY

PART 1942--ASSOCIATIONS

0
69. The authority citation for part 1942 continues to read as follows:

    Authority: 5 U.S.C. 301; 7 U.S.C. 1989.

Subpart A--Community Facility Loans

0
70. Amend Sec.  1942.1 by adding paragraph (e) to read as follows:

Sec.  1942.1  General.

* * * * *
    (e) The Office of Management and Budget (OMB) issued guidance on
Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards at 2 CFR part 200 on December 26, 2013.
In 2 CFR 400.1, the Department adopted OMB's guidance in subparts A
through F of 2 CFR part 200 as the Department's policies and procedures
for uniform administrative requirements, cost principles, and audit
requirements for federal awards. As a result, this regulation contains
references to 2 CFR part 200 as it has regulatory effect for the
Department's programs and activities.

0
71. Amend Sec.  1942.2 by revising the paragraph (a)(1)(iii) to read as
follows:

Sec.  1942.2  Processing applications.

    (a) * * *
    (1) * * *
    (iii) State intergovernmental review comments and recommendations
(clearinghouse comments), as outlined in 2 CFR part 400, if applicable.
* * * * *

0
72. Amend Sec.  1942.5 by revising paragraph (b)(1)(ii)(B) to read as
follows:

Sec.  1942.5  Application review and approval.

* * * * *
    (b) * * *
    (1) * * *
    (ii) * * *
    (B) Applicable State Intergovernmental Review comments, if the
program or activity has been selected under the State. RD Instruction
1970-I, available in any Rural Development office.
* * * * *

0
73. Amend Sec.  1942.17 by revising paragraphs (j)(3)(iii) and
(n)(2)(xi); adding paragraph (j)(3)(ii)(C); and revising paragraph (q)
to read as follows:

Sec.  1942.17  Community facilities.

* * * * *
    (j) * * *
    (3) * * *
    (ii) * * *
    (C) Fidelity bonds must be obtained from companies holding
certificates of authority as acceptable sureties, as prescribed in 31
CFR part 223, ``Surety Companies doing Business with the United
States.''
    (iii) Insurance. The following types of coverage must be maintained
if appropriate for the type of project and entity involved. Insurance
must be in amounts acceptable to the Agency and at least equivalent to
coverage for real property and equipment acquired without Federal
funds.
* * * * *
    (n) * * *
    (2) * * *
    (xi)(A) To place the proceeds of the loan on deposit in a manner
approved by the Government. Funds must be deposited and maintained in
insured accounts whenever possible. Funds must be maintained in
interest bearing accounts, unless the following apply:
    (1) The borrower receives less than $120,000 in Federal awards per
year;
    (2) The best reasonably available interest-bearing account would
not be expected to earn interest in excess of $500 per year on Federal
cash balances;
    (3) The depository would require an average or minimum balance so
high that it would not be feasible within the expected Federal and non-
Federal cash resources; and,
    (4) A foreign government or banking system prohibits or precludes
interest bearing accounts.
    (B) Interest earned on Federal payments deposited in interest-
bearing accounts must be remitted annually to the Department of Health
and Human Services, Payment Management System, Rockville, MD 20852.
Interest amounts up to $500 per year may be retained by the non-Federal
entity for administrative expense.
* * * * *
    (q) Borrower accounting methods, management reporting and audits.
(1) Annual financial statements. Borrowers are required to provide the
Agency with annual financial statements for the life of the loan as
outlined in the Letter of Conditions issued by the Agency. The
financial statements are the responsibility of the borrower's governing
body. The type of statement required is dependent on the amount of
Federal financial assistance received during the borrower's fiscal
year. Federal financial assistance includes Federal assistance that a
non-Federal entity received or administered during the entity's fiscal
year in the form of grants, loans, and loan guarantees. A Federal award
is Federal financial assistance a non-Federal entity received directly
from Federal awarding agencies or indirectly from pass-through
entities. Federal awards expended generally pertain to events that
require the non-Federal entity to comply with Federal Statues,
regulations, and terms and conditions of federal awards, such as:
expenditure/expense transactions associated with grants, cost-
reimbursement contracts, cooperative agreements, and direct
appropriations; the disbursement of funds passed through to sub-
recipients; the use of loan proceeds under loan and loan guarantee
programs; the receipt of property; the receipt of surplus property; the
receipt or use of program income; the distribution or consumption of
food commodities; the disbursement of amounts entitling the non-Federal
entity to an interest subsidy; and, the period when insurance is in
force.
    (2) Method of accounting and preparation of financial statements.
Annual organization-wide financial statements must be prepared on the
accrual basis of accounting, in accordance with Generally Accepted
Accounting Principles (GAAP), unless State statute, tribal law or
regulatory agencies provide otherwise, or an exception is granted by
the Agency. An organization may maintain its accounting records on a
basis other than accrual accounting, and make the necessary adjustments
so that annual financial statements are presented on the accrual basis.
    (3) Record retention. Each Applicant will retain all records,
books, and supporting material for 3 years after the issuance of the
audit or management reports, or for a time period required by other
agencies or common business practice, whichever is longer. Upon
request, this material will be made available to Rural Development,
OIG, USDA, the Comptroller General, or to their assignees.
    (4) Audits. Any applicant that expends $750,000 or more in Federal
financial assistance during their fiscal

year must submit an audit report conducted in accordance with 2 CFR
part 200, subpart F, ``Audit Requirements.'' Applicants expending less
than $750,000 in Federal financial assistance per fiscal year are
exempt from 2 CFR part 200 audit requirements. All audits are to be
performed in accordance with the latest revision of the Generally
Accepted Government Accounting Standards (GAGAS), developed by the
Comptroller General of the United States. Further guidance on preparing
an acceptable audit can be obtained from any Agency office. It is not
intended that audits required by this part be separate and apart from
audits performed in accordance with State and local laws. To the extent
feasible, the audit work should be done in conjunction with those
audits. Audits should be supplied to the Processing Official within the
timeframes stated in paragraph (f) of this section. OMB Circulars and
Agency Compliance Supplements are available in any USDA/Agency office
or OMB's Web site. Any state, local government, or Indian tribe that is
required by constitution or state statute, in effect on January 1,
1987, to undergo its audits less frequently than annually, is permitted
to undergo its audits biennially, pursuant to 2 CFR 200.504(a). This
requirement must still be in effect for the biennial period. Any
nonprofit organization that had biennial audits for all biennial
periods ending between July 1, 1992, and January 1, 1995, is permitted
to undergo its audits biennially, pursuant to 2 CFR 200.504(b). All
biennial audits must cover both years within the biennial period.
    (5) Exemption from audits. Except as noted in 2 CFR 200.503,
Relation to other audit requirement, public bodies or nonprofits
expending less than $750,000 in Federal awards during its fiscal year,
whose payments are current, and are having no signs of operational or
financial difficulty may submit a management report. A management
report, at a minimum, will include a balance sheet and income and
expense statement. Financial information may be reported on Form RD
442-2, ``Statement of Budget, Income and Equity'' and RD Form 442-3,
``Balance Sheet'', or similar. The following management data will be
submitted by the borrower to the servicing office. Records must be
available for review or audit by appropriate officials of the Federal
agency, pass-through entity, and Government Accountability Office
(GAO).
    (i) Annual management reports. Thirty days prior to the beginning
of each fiscal year the following will be submitted to the Servicing
Official:
    (A) One copy of the proposed annual budget. The borrower will
submit two copies of Form RD 442-2, or equivalent, Statement of Budget,
Income and Equity, Schedule 1, page 1; and Schedule 2, Projected Cash
Flow. The only data required at this time is Schedule 1, page 1, Column
3, annual budget, and all of Schedule 2, Projected Cash Flow.
    (B) An annual audit report may be submitted in lieu of Forms RD
442-2 and 442-3.
    (ii) [Reserved]
    (6) Deadlines for submitting audits and management reports. In
accordance with 2 CFR part 200, audits must be submitted no later than
9 months after the end of the fiscal year or 30 days after the
borrower's receipt of the auditor's reports, whichever is earlier.
Management reports must be submitted no later than 2 months after the
end of the borrower's fiscal year.
    (7) Additional information to be submitted with audits and
management reports. (i) Insurance. Agency borrowers will maintain
adequate insurance coverage as required by the loan resolution and
Sec.  1942.17(j)(3). The servicing official is required to monitor
insurance annually after the initial insurance verification.
    (ii) Reserve account(s). Borrowers will provide documentation that
the Agency required reserve account(s) is properly funded;
    (iii) Property tax information. If applicable, documentation that
property taxes have been paid and are current.
    (iv) A list of directors and officers.
    (8) Quarterly reports. A quarterly management report will be
required for the first full year of operations for new borrowers, and
existing borrowers operating a new facility, starting a new type of
operation or proposing a significant expansion of an existing facility.
Borrowers should submit the following to the Servicing Official:
    (i) One copy of Form RD 442-2, or equivalent, Schedule 1, page 1,
columns 4-6, as appropriate, and page 2. This information should be
received in the Servicing Office 30 days after the end of each of the
first three quarters of the fiscal year.
    (ii) The Servicing Office may request a borrower experiencing
financial or management problems to submit quarterly copies of Form RD
442-2, or equivalent, Schedule 1, pages 1 and 2.
0
74A. Amend Sec.  1942.18 by revising paragraph (k)(1) to read as
follows:

Sec.  1942.18  Community Facilities--Planning, Bidding, Contracting,
Constructing.

* * * * *
    (k) * * *
    (1) Small purchase procedures. Small purchase procedures are those
relatively simple and informal procurement methods for securing
services, supplies or other property, costing in the aggregate not more
than the Simplified Acquisition Threshold. If small purchase procedures
are used for a procurement, written price or rate quotations shall be
obtained from an adequate number of qualified sources.
* * * * *

Subpart B--Housing Application Packaging Grants

0
74B. Amend Sec.  1944.66 by revising paragraphs (b), (d), (e)(1),
(e)(2), and (f) to read as follows:

Sec.  1944.66  Administrative requirements.

* * * * *
    (b) The policies and regulations contained in RD Instruction 1940-Q
(available in any Agency office), Departmental Regulation 2400-5, 2 CFR
part 200 as adopted by USDA through 2 CFR part 400 apply to grantees
under this subpart.
* * * * *
    (d) The grantee will retain records for 3 years from the date
Standard Form (SF)-269A, ``Financial Status Report (Short Form),'' is
submitted. These records will be accessible to RHS and other Federal
officials in accordance with 2 CFR part 200 as adopted by USDA through
2 CFR part 400.
    (e) * * *
    (1) States, State agencies, or units of general local government
will complete an audit in accordance with 2 CFR part 200 as adopted by
USDA through 2 CFR part 400 and OMB Circular A-128.
    (2) Nonprofit organizations will complete an audit in accordance
with 2 CFR part 200 as adopted by USDA through 2 CFR part 400.
    (f) Performance reports, as required, will be submitted in
accordance with 2 CFR part 200 as adopted by USDA through 2 CFR part
400.

Subpart G--RBEG and Television Demonstration Grants

0
75. Amend Sec.  1942.304 by adding the definition for ``Conflict of
interest'' in alphabetical order to read as follows:

Sec.  1942.304  Definitions.

    Conflict of interest. A situation in which a person or entity has
competing personal, professional, or financial interests that make it
difficult for the person or business to act impartially. Regarding use
of both grant and matching funds, Federal procurement standards
prohibit transactions that

involve a real or apparent conflict of interest for owners, employees,
officers, agents, their immediate family members, partners, or an
organization which is about to employ any of the parties indicated
herein, having a financial or other interest in or tangible personal
benefit from the outcome of the project; or that restrict open and free
competition for unrestrained trade. Specifically, project funds may not
be used for services or goods going to, or coming from, a person or
entity with a real or apparent conflict of interest, including, but not
limited to, owner(s) and their immediate family members.
* * * * *

0
76. Amend Sec.  1942.310 by revising paragraphs (d), (f), and (i) and
adding paragraphs (j) and (k) to read as follows:

Sec.  1942.310  Other considerations.

* * * * *
    (d) Project Management. Grant recipients will be supervised as
necessary to assure that projects are completed in accordance with
approved plans and specifications and that funds are expended for
approved purposes. Grants made under this subpart will be administered
under and are subject to 2 CFR part 200, subpart D, as codified in 2
CFR 400.1 and established Rural Development guidelines.
* * * * *
    (f) Uniform Relocation and Real Property Acquisition Policies Act.
All projects must comply with the requirements set forth in Title 49
CFR part 24, which are the implementing regulations for the Uniform
Relocation Assistance and Real Property Acquisition Policies Act of
1970, as amended (42 U.S.C. 4601 et seq.) and are referenced by 7 CFR
part 21.
* * * * *
    (i) Close Out. The award will be closed out in accordance with 2
CFR part 200 as codified in 2 CFR part 400. When the project purpose is
for revolving loan funds, the grantee must maintain the fund into
perpetuity. Once the grantee has provided loan assistance to projects,
in an amount equal to the grant provided by Rural Development, the
Agency will no longer consider the eligibility of new projects
thereafter financed from the revolving fund as required by Sec.
1942.313(b).
    (j) Intergovernmental Review. RBE/Television Demonstration grant
projects are subject to the provisions of Executive Order 12372 and 2
CFR 415, Subpart C, which requires intergovernmental consultation with
State and local officials.
    (k) Conflict of Interest Policy for Non-Federal Entities. In
accordance with 2 CFR 400.2 (b), the non-Federal entities (recipients)
must disclose in writing any potential conflicts of interest to the
USDA awarding agency or pass-through entity and maintain written
standards of conduct covering conflicts of interest, including
organizational conflicts of interest.

0
77. Amend Sec.  1942.311 by revising paragraph (a)(1) to read as
follows:

Sec.  1942.311  Application processing.

    (a) * * *
    (1) The application review and approval procedures outlined in
Sec.  1942.2 will be followed as appropriate. The applicant shall use
Standard Form (SF) 424, ``Application for Federal Assistance,'' and SF
424-A, ``Budget Information for Non-Construction Programs,'' and SF
424-B, ``Assurance Agreement for Non-Construction Programs,'' or SF
424-C, ``Budget Information for Construction Programs,'' and SF 424-D,
``Assurance Agreement for Construction Programs,'' as applicable, when
requesting financial assistance under this program.
* * * * *

0
78. Amend Sec.  1942.314 by adding paragraphs (f)(4) and (f)(5) to read
as follows:

Sec.  1942.314  Grants to provide financial assistance to third
parties, television demonstration projects, and technical assistance
programs.

* * * * *
    (f) * * *
    (4) Form RD 400-1, ``Equal Opportunity Agreement.''
    (5) Form RD 400-4, ``Assurance Agreement (Under Title VI, Civil
Rights Act of 1966).''
* * * * *

0
79. Amend Sec.  1942.315 by revising paragraph (b) to read as follows:

Sec.  1942.315  Docket preparation and Letter of Conditions.

* * * * *
    (b) The State Director or the State Director's designated
representative will prepare a Letter of Conditions outlining the
conditions under which the grant will be made. It will include those
matters necessary to assure that the proposed development is completed
in accordance with approved plans and specifications, that grant funds
are expended for authorized purposes, and that the terms of the Scope
of Work and requirements as prescribed in the Grant Agreement and
Departmental Regulations, as currently codified in 2 CFR parts 400,
415, 417, 418, and 421 are complied with. The Letter of Conditions will
be addressed to the applicant, signed by the State Director or other
designated Rural Development representative, and mailed or handed to
appropriate applicant officials. Each Letter of Conditions will contain
the following paragraphs.
    ``This letter establishes conditions which must be understood and
agreed to by you before further consideration may be given to the
application.''
    ``This letter is not to be considered as grant approval nor as a
representation as to the availability of funds. The docket may be
completed on the basis of a grant not to exceed $________--.''
    ``Please complete and return the attached Form RD 1942-46, `Letter
of Intent to Meet Conditions,' if you desire further consideration be
given your application.''
    Form RD 400-1, ``Equal Opportunity Agreement,'' if applicable.
    Form RD 400-4, ``Assurance Agreement (Under Title VI, Civil Rights
Act of 1966).''

0
80. Amend Sec.  1942.316 by revising the section heading and adding
paragraph (d) to read as follows:

Sec.  1942.316  Grant approval, fund obligation, third party financial
assistance and grant servicing.

* * * * *
    (d) Grant servicing. Grants will be serviced in accordance with 7
CFR part 1951, subparts E and O and the Departmental Grants and
Agreements Regulations as currently codified in 2 CFR parts 400, 415,
417, 418, and 421. The only exception is that the delegation of post-
award servicing does not require the prior approval of the
Administrator.

PART 1944--HOUSING

0
81. The authority citation for part 1944 continues to read as follows:

    Authority:  5 U.S.C. 301; 42 U.S.C 1480.

Subpart I--Self-Help Technical Assistance Grants

0
82. Amend Sec.  1944.406 by revising paragraph (d) to read as follows:

Sec.  1944.406  Prohibited use of grant funds.

* * * * *
    (d) Paying for training of an employee as authorized by 2 CFR part
200 as adopted by USDA through 2 CFR part 400.
* * * * *

0
83. Amend Sec.  1944.410 by revising paragraphs (a)(6) and (e)(8) to
read as follows:

Sec.  1944.410  Processing preapplications, applications, and
completing grant dockets.

    (a) * * *
    (6) A proposed budget which will be prepared on SF-424A, ``Budget

Information (Non-Construction Programs)'' will be completed to address
applicable assurances as outlined in 2 CFR part 200 as adopted by USDA
through 2 CFR part 400. State and local Government will include an
assurance that the grantee shall comply with all applicable Federal
statutes and regulations in effect with respect to the periods for
which it receives grant funding. The State and local governments shall
also comply with 2 CFR part 200 as adopted by USDA through 2 CFR part
400.
* * * * *
    (e) * * *
    (8) Indirect or direct cost policy and proposed indirect cost rate
developed in accordance with 2 CFR part 200 as adopted by USDA through
2 CFR part 400.
* * * * *

0
84. Amend Sec.  1944.411 by revising paragraphs (c) and (e) to read as
follows:

Sec.  1944.411  Conditions for approving a grant.

* * * * *
    (c) The grantee furnishes a signed statement that it complies with
the requirements of the Departmental Regulations found in 2 CFR part
200 as adopted by USDA through 2 CFR part 400.
    (d) * * *
    (e) The grantee has fidelity bonding as covered in 2 CFR part 200
as adopted by USDA through 2 CFR part 400 if a nonprofit organization
or, if a State or local government, to the extent required in 2 CFR
part 200 as adopted by USDA through 2 CFR part 400.
* * * * *

0
85. Amend Sec.  1944.422 by revising the introductory text and
paragraphs (a), (b) introductory text, (b)(1) and (b)(2) to read as
follows:

Sec.  1944.422  Audit and other report requirements.

    The grantee must submit an audit to the appropriate Rural
Development District Office annually (or biennially if a State or local
government with authority to do a less frequent audit requests it) and
within 90 days of the end of the grantee's fiscal year, grant period,
or termination of the grant. The audit, conducted by the grantee's
auditors, is to be performed in accordance with Generally Accepted
Government Auditing Standards (GAGAS), using the publication
``Standards for Audit of Governmental Organizations, Programs,
Activities and Functions'' developed by the Comptroller General of the
United States in 1981, and any subsequent revisions. In addition, the
audits are also to be performed in accordance with 2 CFR part 200 as
adopted by USDA through 2 CFR part 400 and Rural Development
requirements as specified in this subpart. Audits of borrower loan
funds will be required. The number of borrower accounts audited will be
determined by the auditor. In incidences where it is difficult to
determine the appropriate number of accounts to be audited, auditors
should be authorized by the State Director to audit the lesser of 10
loans or 10 percent of total loans.
    (a) Nonprofit organizations and others. If determined necessary,
these organizations are to be audited in accordance with Rural
Development requirements in accordance with 2 CFR part 200 as adopted
by USDA through 2 CFR part 400. These requirements also apply to public
hospitals, public colleges, and universities if they are excluded from
the audit requirements of paragraph (b) of this section.
* * * * *
    (b) State and local governments and Indian tribes. These
organizations are to be audited in accordance with this subpart and 2
CFR part 200 as adopted by USDA through 2 CFR part 400. The grantee
will forward completed audits to the appropriate Federal Cognizant
agency and a copy to the Rural Development District Director.
``Cognizant agency'' for audits is defined at 2 CFR 200.18 as the
Federal agency designated to carry out the responsibilities described
in Sec.  200.513 Responsibilities, paragraph (a). The cognizant agency
for audit is not necessarily the same as the cognizant agency for
indirect costs. A list of cognizant agencies for audit may be found at
the FAC Web site. Within USDA, the OIG shall fulfill cognizant agency
responsibilities. Smaller grantees not assigned a cognizant agency by
OMB should contact the Federal agency that provided the most funds.
When USDA is designated as the cognizant agency or when it has been
determined by the borrower that Rural Development provided the major
portion of Federal financial assistance, the State Director will
contact the appropriate USDA OIG Regional Inspector General. Rural
Development and the borrower shall coordinate all proposed audit plans
with the appropriate USDA OIG.
    (1) State and local governments and Indian tribes that receive
$25,000 or more a year in Federal financial assistance shall have an
audit made in accordance with 2 CFR part 200 as adopted by USDA through
2 CFR part 400.
    (2) State and local and Indian tribes that receive less than
$25,000 a year in Federal financial assistance shall be exempt from 2
CFR part 200 as adopted by USDA through 2 CFR part 400.
* * * * *

0
86. Amend Sec.  1944.426 by revising paragraph (c) to read as follows:

Sec.  1944.426  Grant closeout.

* * * * *
    (c) Grant suspension. When the grantee has failed to comply with
the terms of the agreement, the District Director will promptly report
the facts to the State Director. The State Director will consider
termination or suspension of the grant usually only after a Grantee has
been classified as ``high risk'' in accordance with Sec.
1944.417(b)(2). When the State Director determines that the grantee has
a reasonable potential to correct deficiencies the grant may be
suspended. The State Director will request written authorization from
the National Office to suspend a grantee. The suspension will adhere to
2 CFR part 200 as adopted by USDA through 2 CFR part 400. The grantee
will be notified of the grant suspension in writing by the State