Director. The State Director will also promptly inform the grantee of
its rights to appeal the decision by use of Exhibit B-3 of Subpart B of
part 1900 of this chapter.
* * * * *

0
87. Amend Exhibit A to subpart I of part 1944 by revising paragraph (i)
to read as follows:

Exhibit A to Subpart I of Part 1944--Self-Help Technical Assistance
Grant Agreement.

* * * * *
    (i) Acquisition and disposal of personal, equipment and supplies
should comply with Subpart R of 2 CFR part 200 as adopted by USDA
through 2 CFR part 400.
* * * * *

Subpart K--Technical and Supervisory Assistance Grants

0
88. Amend Sec.  1944.526 by revising paragraph (c)(2) to read as
follows:

Sec.  1944.526  Preapplication procedure.

    (c) * * *
    (2) Within 30 days of the closing date for receipt of
preapplications as published in the Federal Register, the State
Director will forward to the National Office the original
preapplication(s) and supporting documents of the selected
applicant(s), including any comments received in accordance with 2 CFR
part 200 as adopted by USDA through 2 CFR part 400. See RD Instruction
1970-I available in any Rural Development Office and

the comments and recommendations of the County Office(s), District
Office(s), and the State Office. The State Office will submit the
preapplication(s) in accordance with the annual notice provided for by
Sec.  1944.525 (b).
* * * * *

0
89. Amend Sec.  1944.529 by revising paragraph (b)(9) to read as
follows:

Sec.  1944.529  Project selection.

    (b) * * *
    (9) Any comments received in accordance with 2 CFR part 200 as
adopted by USDA through 2 CFR part 400. See RD Instruction 1970-I,
available in any Rural Development Office.
* * * * *

0
90. Amend Sec.  1944.531 by revising paragraph (c)(3) to read as
follows:

Sec.  1944.531  Applications submission.

    (c) * * *
    (3) Any comments received in accordance with 2 CFR part 200 as
adopted by USDA through 2 CFR part 400. See RD Instruction 1970-I,
available in any Rural Development Office.
* * * * *

0
91. Amend Exhibit A to subpart K of part 1944 by revising paragraph
(Part B)(8)(a), (Part C) (1), and (Part C) (14) to read as follows:

Exhibit A to Subpart K of Part 1944--Grant Agreement--Technical and
Supervisory Assistance

    Part-B Terms of agreement.
* * * * *
    (8) * * *
    (a) In accordance with Treasury Circular 1075 (fourth revision)
Part 205, Chapter II of title 31 of the Code of Federal Regulations,
grant funds will be provided by Rural Development as cash advances
on an as needed basis not to exceed one advance every 30 days. The
advance will be made by direct Treasury check to the Grantee. The
financial management system of the recipient organization shall
provide for effective control over and accountability for all
Federal funds as stated in 2 CFR part 200 as adopted by USDA through
2 CFR part 400 for State and local governments and 2 CFR part 200 as
adopted by USDA through 2 CFR part 400 for nonprofit organizations.
* * * * *
    Part--C Grantee Agrees.
    (1) To comply with property management standards for expendable
and nonexpendable personal property established by Attachment N of
OMB Circular A-102 or Attachment N of 2 CFR part 200 as adopted by
USDA through 2 CFR part 400 for State and local governments or
nonprofit organizations respectively. ``Personal property'' means
property of any kind except real property. It may be tangible--
having physical existence--or intangible-having no physical
existence, such as patents, inventions, and copyrights.
``Nonexpendable personal property'' means tangible personal property
having a useful life of more than one year and an acquisition cost
of $300 or more per unit. A Grantee may use its own definition of
nonexpendable personal property provided that such definition would
at least include all tangible personal property as defined above.
``Expendable personal property'' refers to all tangible personal
property other than nonexpendable personal property. When
nonexpendable tangible personal property is acquired by a Grantee
with project funds, title shall not be taken by the Federal
Government but shall vest in the Grantee subject to the following
conditions:
* * * * *
    (14) That the Grantee shall abide by the policies promulgated in
2 CFR part 200 as adopted by USDA through 2 CFR part 400 which
provides standards for use by Grantees in establishing procedures
for the procurement of supplies, equipment and other services with
Federal grant funds.
* * * * *

Subpart N--Housing Preservation Grants

0
92-93. Amend Sec.  1944.658 by revising paragraph (a)(3) to read as
follows:

Sec.  1944.658  Applicant eligibility.

    (a) * * *
    (3) Legally obligate itself to administer HPG funds, provide an
adequate accounting of the expenditure of such funds in compliance with
the terms of this regulation, the grant agreement, and 2 CFR part 200
as adopted by USDA through 2 CFR part 400 (available in any Rural
Development or its successor agency under Public Law 103-354 office),
as appropriate, and comply with the grant agreement and Rural
Development or its successor agency under Public Law 103-354
regulations; and
* * * * *

0
94. Amend Sec.  1944.666 by revising paragraph (e) to read as follows:

Sec.  1944.666  Administrative activities and policies.

* * * * *
    (e) The policies, guidelines and requirements of 2 CFR part 200, as
adopted by USDA through 2 CFR part 400, apply to the acceptance and use
of HPG funds.

0
95. Amend Sec.  1944.670 by revising paragraph (a) to read as follows:

Sec.  1944.670  Project income.

    (a) Project income during the grant period from loans made to
homeowners, owners of rental properties, and co-ops is governed by 2
CFR part 200 as adopted by USDA through 2 CFR part 400. All income
during the grant period, including amounts recovered by the grantee due
to breach of agreements between the grantee and the HPG recipient, must
be used under (and in accordance with) the requirements of the HPG
program.
* * * * *

0
96. Amend Sec.  1944.676 by revising paragraph (b)(1)(x) to read as
follows:

Sec.  1944.676  Preapplication procedures.

* * * * *
    (b) * * *
    (1) * * *
    (x) A copy of an indirect cost proposal as required in 2 CFR part
200 as adopted by USDA through 2 CFR part 400, when the applicant has
another source of federal funding in addition to the Rural Development
or its successor agency under Public Law 103-354 HPG program;
* * * * *

0
97. Amend Sec.  1944.688 by revising paragraph (e) to read as follows:

Sec.  1944.688  Grant evaluation, closeout, suspension, and
termination.

* * * * *
    (e) The grantee will have an audit performed upon termination or
completion of the project in accordance with 2 CFR part 200 as adopted
by USDA through 2 CFR part 400, as applicable. As part of its final
report, the grantee will address and resolve all audit findings.

0
98. Amend Sec.  1944.689 by revising paragraph (a)(3) to read as
follows:

Sec.  1944.689  Long-term monitoring by grantee.

    (a) * * *
    (3) All requirements noted in 2 CFR part 200 as adopted by USDA
through 2 CFR part 400 during the effective period of the grant
agreement.
* * * * *

0
99. Amend Exhibit A of subpart N of part 1944 by revising paragraphs
(Part A)(3), (Part B)(9), (Part B)(18)(a)(ii), and (Part C)(13) to read
as follows:

Exhibit A to Subpart N of Part 1944--Housing Preservation Grant
Agreement

* * * * *
    Part A * * *
    (3) Disallowed costs are those charges to a grant which Rural
Development or its successor agency under Public Law 103-354
determines cannot be authorized in accordance with applicable
Federal cost principles contained in Treasury Circular 74-4, ``Cost
Principles Applicable to Grants and Contracts with State and Local
Governments,'' OMB Circular A-87, ``Cost Principles for State and
Local Governments,'' OMB Circular A-122, ``Cost Principles for
Nonprofit Organizations,'' and other conditions contained in this
Agreement and OMB Circular A-102 ``Uniform Requirements

for Grants to State and Local Governments,'' and OMB Circular A-110,
``Grants and Agreements with Institutions of Higher Education,
Hospitals and Other Nonprofit Organizations, Uniform Administrative
Requirements,'' as appropriate, and 2 CFR part 200, as adopted by
USDA through 2 CFR part 400.
* * * * *
    Part B * * *
    (9) In accordance with Treasury Circular 1075 (fourth revision)
part 205, chapter II of title 31 of the Code of Federal Regulations,
grant funds will be provided by Rural Development or its successor
agency under Public Law 103-354 as cash advances on an as needed
basis not to exceed one advance every 30 days. The advance will be
made by direct Treasury check to the grantee. The financial
management system of the recipient organization shall provide for
effective control over and accountability for all Federal funds as
stated to OMB Circular A-102 (42 FR 45828, September 12, 1977) for
State and local governments and OMB Circular A-110 (41 FR 32016,
July 30, 1976) for nonprofit organizations.
* * * * *
    (18) * * *
    (a) * * *
    (ii) The grantee will furnish to Rural Development or its
successor agency under Public Law 103- 354 within 90 calendar days
after the date of completion of the grant an SF-269 and all
financial, performance, and other reports required as a condition of
the grant, including an audit report.
* * * * *
    Part C * * *
* * * * *
    (13) That the grantee shall abide by the policies promulgated in
OMB Circular A-102, Attachment O, or OMB Circular A-110, Attachment
O, as applicable, which provides standards for use by Grantees in
establishing procedures for the procurement of supplies, equipment,
and other services with Federal grant funds.

PART 1951--SERVICING AND COLLECTIONS

0
100. The authority citation for part 1951 continues to read as follows:

    Authority: 5 U.S.C. 301; 7 U.S.C. 1932 Note; 7 U.S.C. 1989; 31
U.S.C. 3716; 42 U.S.C. 1480.

Subpart E--Servicing of Community and Insured Business Program
Loans and Grants

0
101. Amend Sec.  1951.215 by revising paragraph (a) introductory text
and removing paragraph (a)(3) to read as follows:

Sec.  1951.215  Grants.

* * * * *
    (a) Applicability of requirements. Servicing actions relating to
Rural Development or its successor agency under Public Law 103-354
grants are governed by the provisions of this subpart, the terms of the
Grant Agreement and, if applicable, the provisions of 2 CFR parts 200,
400, 415, 417, 418, and 421.
* * * * *

Subpart R--Rural Development Loan Servicing

0
102. Add Sec.  1951.872 to read as follows:

Sec.  1951.872  Other regulatory requirements.

    Intergovernmental consultation. The RDLF program is subject to the
provisions of Executive Order 12372 which requires intergovernmental
consultation with State and local officials. For each ultimate
recipient to be assisted with a loan under this subpart and for which
the State in which the ultimate recipient is to be located has elected
to review the program under their intergovernmental review process, the
State Point of Contact must be notified. Notification, in the form of a
project description, can be initiated by the intermediary or the
ultimate recipient. Any comments from the State must be included with
the intermediary's request to use the loan funds for the ultimate
recipient. Prior to Rural Development's decision on the request,
compliance with the requirements of intergovernmental consultation must
be demonstrated for each ultimate recipient. These requirements should
be carried out in accordance with the requirements set forth in U.S.
Department of Agriculture regulations 2 CFR part 415, subpart C, and RD
Instruction 1970-I, `Intergovernmental Review,' available in any Agency
office or on the Agency's Web site.

PART 1980--GENERAL

0
103. The authority citation for part 1980 continues to read as follows:

    Authority:  5 U.S.C. 301 and 7 U.S.C. 1989. Subpart E also
issued under 7 U.S.C. 1932(a).

Subpart E--Business and Industrial Loan Program

0
104. Amend Sec.  1980.445 by revising paragraphs (a) and (e) to read as
follows:

Sec.  1980.445  Periodic financial statements and audits.

* * * * *
    (a) Audited financial statements. Except as provided in paragraphs
(d) and (e) of this section, all borrowers with a total principal and
interest loan balance for loans under this subpart, at the end of the
borrower's fiscal year, of more than $1 million must submit annual
audited financial statements. The audit must be performed in accordance
with generally accepted accounting principles (GAAP) and any other
requirements specified in this subpart.
* * * * *
    (e) Public bodies and nonprofit corporations. Notwithstanding other
provisions of this section, any public body or nonprofit corporation
that receives a guarantee of a loan that meets the thresholds
established by 2 CFR part 200, subpart F, as codified by 2 CFR 400.1,
must provide an audit for the fiscal year of the borrower in which the
Loan Note Guarantee is issued. If the loan is for development or
purchases made in a previous fiscal year through interim financing, an
audit will also be provided for the fiscal year in which the
development or purchases occurred. Any audit provided by a public body
or nonprofit corporation required by this paragraph will be considered
adequate to meet the requirements of this section for that year.

0
105. Amend Sec.  1980.451 by revising paragraph (f)(8) to read as
follows:

Sec.  1980.451  Filing and processing applications.

* * * * *
    (f) * * *
    (8) Intergovernmental consultation should be carried out in
accordance with 2 CFR part 415, subpart C, ``Intergovernmental Review
of Department of Agriculture Programs and Activities.''
* * * * *

CHAPTER XXXV--RURAL HOUSING SERVICE, DEPARTMENT OF AGRICULTURE

PART 3570--COMMUNITY PROGRAMS

0
106. The authority citation for part 3570 continues to read as follows:

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

Subpart B--Community Facilities Grant Program

0
107. Amend Sec.  3570.51 by revising paragraph (g) and adding paragraph
(j) to read as follows:

Sec.  3570.51  General.

* * * * *
    (g). Grants made under this subpart will be administered under, and
are subject to, 2 CFR part 200 as adopted by USDA through 2 CFR part
400, as appropriate.
* * * * *
    (j). 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 part 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 Departments' 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
108-109. Amend Sec.  3570.70 by revising paragraphs (b) and (c) to read
as follows:

Sec.  3570.70  Other considerations.

* * * * *
    (b). Governmentwide debarment and suspension (nonprocurement) and
requirements for drug-free workplace are applicable to CFG grants and
grantees. See 2 CFR part 180, as implemented by USDA through 2 CFR part
417, and RD Instruction 1940-M for further guidance.
    (c). Restrictions on lobbying. Grantees must comply with the
lobbying restrictions set forth in 2 CFR part 418 subpart A.
* * * * *

0
110. Amend Sec.  3570.80 by revising paragraph (c) to read as follows:

Sec.  3570.80  Grant closing and delivery of funds.

* * * * *
    (c) Approval officials may require applicants to record liens or
other appropriate notices of record to indicate that personal or real
property has been acquired or improved with Federal grant funds and
that use and disposition conditions apply to the property as provided
by 2 CFR part 200 as adopted by USDA through 2 CFR part 400 as
subsequently modified.
* * * * *

0
111. Amend Sec.  3570.83 by revising paragraph (a) to read as follows:

Sec.  3570.83  Audits.

    (a). An audit will be conducted in accordance with 2 CFR part 200
subpart F, as adopted by USDA through 2 CFR part 400, except as
provided in this section. The audit requirements apply only to the
years in which grant funds are expended.
* * * * *

0
112. Revise Sec.  3570.84 to read as follows:

Sec.  3570.84  Grant servicing.

    Grants will be serviced in accordance with RD Instructions 1951-E
and 1951-O and 2 CFR part 200 as applicable.

0
113. Revise Sec.  3570.87 to read as follows:

Sec.  3570.87  Grant suspension, termination, and cancellation.

    Grants may be suspended or terminated for cause or convenience in
accordance with 2 CFR part 200 as adopted by USDA through 2 CFR part
400, as applicable.

0
114. Revise Sec.  3570. 91 to read as follows:

Sec.  3570.91  Regulations.

    Grants under this part will be in accordance with 2 CFR part 200 as
adopted by USDA through 2 CFR part 400, as applicable, and any
conflicts between those parts and this part will be resolved in favor
of applicable 2 CFR part 200 as adopted by USDA through 2 CFR part 400.

0
115. Add Sec.  3570.92 to read as follows:

Sec.  3570.92  Grant agreement.

    Form RD 3570-3 is a Grant Agreement which contains the procedures
for making and servicing grants made under this part. Any property
acquired or improved with CFG funds may have use and disposition
conditions which apply to the property as provided by 2 CFR 200 as
adopted by USDA through 2 CFR part 400 in effect at this time and as
may be subsequently modified.

PART 3575--GENERAL

0
116. The authority citation for part 3575 continues to read as follows:

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

Subpart A--Community Programs Guaranteed Loans

0
117. Amend Sec.  3575.1 by adding paragraph (c) to read as follows:

Sec.  3575.1  General.

* * * * *
    (c) 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 part 400, 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
Departments' policies and procedures for uniform administrative
requirement, 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
118. Amend Sec.  3575.2 by revising the definition of ``State'' to read
as follows:

Sec.  3575.2  Definitions.

* * * * *
    State. Any state of the United States, the District of Columbia,
the Commonwealth of Puerto Rico, the Virgin Islands, Guam, American
Samoa, the Commonwealth of the Northern Mariana Islands, and an agency
or instrumentality thereof exclusive of local governments.
* * * * *

0
119. Amend Sec.  3575.27 by revising paragraph (b) to read as follows:

Sec.  3575.27  Eligible lenders.

* * * * *
    (b) Conflict of interest. The lender and borrower must maintain
written standards of conduct covering conflicts of interest and
governing the performance of its employees in the selection, award and
administration of Federal awards. No employee, officer or agent may
participate in the selection, award or administration of a Federal
award if they have a real or apparent conflict of interest. Such a
conflict of interest would arise when the employee, officer, or agent,
any member of his or her immediate family, his or her partner, or an
organization which employs or is about to employ any of the parties
indicated, has a financial or other interest in or a tangible personal
benefit from a non-Federal entity considered for a Federal award. The
lender may set standards for situations in which the financial interest
is not substantial or the gift is an unsolicited item of nominal value.
The standards must provide for disciplinary actions to be applied for
violations of such standards. If the lender has a parent, affiliate, or
subsidiary organization that is not a state, local government, or
Indian tribe, the lender or borrower, written standards of conduct
covering organizational conflict of interest must also be maintained.
Organizational conflicts of interest means that because of the
relationships with a parent company, affiliate, or subsidiary
organization, the lender or borrower is unable or appears to be unable
to be impartial in conducting a Federal award action involving a
related organization. The lender or borrower must disclose such
business or ownership relationships in writing. The Agency will
determine if such relationships are likely to result in a conflict of
interest. This does not preclude lender officials from being on the
borrower's board of directors.
* * * * *

0
120. Revise Sec.  3575.37 to read as follows:

Sec.  3575.37  Insurance and fidelity bonds.

    The lender must provide evidence that the borrower has adequate
insurance and fidelity bond coverage by loan closing or start of
construction, whichever occurs first. Adequate coverage must be
maintained for the life of the loan and is subject to Agency review and
approval. Insurance is required in amounts at least equal to coverage
for real property and equipment that was obtained without an Agency
guarantee.

0
121. Amend Sec.  3575.64 by adding paragraph (f) to read as follows:

Sec.  3575.64  Issuance of Lender's Agreement, Loan Note Guarantee, and
Assignment Guarantee Agreement.

* * * * *
    (f) Cancellation of obligation. If the conditions for the loan are
rejected, cannot be met after completion of any appeal, or funds are,
in whole or in part, no longer needed, the State Director will cancel
the obligation. This can be done using the State Office terminal.
Requests for partial cancellation must be in writing and include a
reason for the partial cancellation, the effective date, and the
portion to be cancelled.
* * * * *

CHAPTER XLII--RURAL BUSINESS-COOPERATIVE SERVICE AND RURAL UTILITIES
SERVICE, DEPARTMENT OF AGRICULTURE

PART 4274--DIRECT AND INSURED LOANMAKING

0
122. The authority citation for part 4274 continues to read as follows:

    Authority:  5 U.S.C. 301; 7 U.S.C. 1932 note; 7 U.S.C. 1989.

Subpart D--Intermediary Relending Program

0
123. Amend Sec.  4274.302 by adding a definition for ``Conflict of
interest'' in alphabetical order to read as follows:

Sec.  4274.302  Definitions and abbreviations.

* * * * *
    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
124. Amend Sec.  4274.338 by revising paragraphs (b)(4)(i)(B) and
(b)(4)(ii)(C) to read as follows:

Sec.  4274.338  Loan Agreements between the Agency and the
intermediary.

* * * * *
    (b) * * *
    (4) * * *
    (i) * * *
    (B) It is not intended that audits required by this subpart be
separate and apart from audits performed in accordance with State and
local laws or for other purposes. To the extent feasible, the audit
work should be done in connection with these audits. Intermediaries
covered by 2 CFR part 200, subpart F, as codified in 2 CFR 400.1,
should submit audits made in accordance with that regulation.
    (ii) * * *
    (C) The reports will be submitted through the Agency approved
electronic system and includes information on the intermediary's
lending activity, income and expenses, financial condition and a
summary of applicable information of the ultimate recipients the
intermediary has financed.
* * * * *

0
125. Amend Sec.  4274.343 by revising paragraph (a)(13) to read as
follows:

Sec.  4274.343  Applications.

    (a) * * *
    (13) A statement on a form provided by the Agency (Appendix B to
Part 418--Disclosure Form to Report Lobbying) regarding lobbying, as
required by 2 CFR part 418.
* * * * *

PART 4279--GUARANTEED LOANMAKING

0
126. The authority citation for part 4279 continues to read as follows:

    Authority: 5 U.S.C. 301; 7 U.S.C. 1932(a); and 7 U.S.C. 1989.

Subpart A--General

0
127. Amend Sec.  4279.43 by revising paragraph (g)(1)(v) to read as
follows:

Sec.  4279.43  Certified Lender Program.

* * * * *
    (g) * * *
    (1) * * *
    (v) Intergovernmental consultation comments in accordance with 2
CFR part 415, subpart C; and
* * * * *

0
128. Revise Sec.  4279.71 to read as follows:

Sec.  4279.71  Public bodies and nonprofit corporations.

    Any public body or nonprofit corporation that receives a guaranteed
loan that meets the thresholds established by 2 CFR part 200, subpart
F, as codified by 2 CFR 400.1, must provide an audit for the fiscal
year (of the borrower) in which the Loan Note Guarantee is issued. If
the loan is for development or purchases made in a previous fiscal year
through interim financing, an audit will also be provided for the
fiscal year in which the development or purchases occurred. Any audit
provided by a public body or nonprofit corporation in compliance with
paragraph will be considered adequate to meet the audit requirements of
the B&I program for that year.

Subpart B--Business and Industry Loans

0
129. Amend Sec.  4279.161 by revising paragraph (b)(5) to read as
follows:

Sec.  4279.161  Filing preapplications and applications.

* * * * *
    (b) * * *
    (5) Intergovernmental consultation comments in accordance with 2
CFR part 415, subpart C.
* * * * *

Subpart C--Biorefinery Assistance Loans

0
130. Amend Sec.  4279.261 by revising paragraph (l) to read as follows:

Sec.  4279.261  Application for loan guarantee content.

* * * * *
    (l) Intergovernmental consultation. Intergovernmental consultation
comments in accordance with RD Instruction 1940-J and 7 CFR part 415,
subpart C.
* * * * *

PART 4280--LOANS AND GRANTS

0
131. The authority citation for part 4280 continues to read as follows:

    Authority: 5 U.S.C. 301; 7 U.S.C. 940c; 7 U.S.C. 8107.

Subpart A--Rural Economic Development Loan and Grant Programs

0
132. Amend Sec.  4280.3 by adding a definition of ``Conflict of
interest'' in alphabetical order to read as follows:

Sec.  4280.3  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
133. Revise Sec.  4280.19 to read as follows:

Sec.  4280.19  REDG Grants.

    Intermediaries receiving Grants must partially finance a Revolving
Loan Fund that the Intermediary will operate and administer, by
providing supplemental funds of at least 20 percent of the Grant.
Grants are subject to 2 CFR parts 200, 400, 415, 417, 418, 421 as
applicable.

0
134. Amend Sec.  4280.23 by revising paragraph (f) to read as follows:

Sec.  4280.23  Requirements for lending from Revolving Loan Fund.

* * * * *
    (f) Termination for cause. Rural Development will terminate the
Fund and require repayment of the Grant funds if Rural Development
determines that the Fund is not being operated according to the
approved Revolving Loan Fund Plan, this subpart, or for other good
cause determined by Rural Development, such as questionable prepayment
of initial loans. As applicable, Rural Development will follow remedies
for noncompliance, closeout and post-closeout adjustments and
continuing responsibilities in accordance with 2 CFR 200.338-200.344 as
codified by 2 CFR 400.1.
* * * * *

0
135. Amend Sec.  4280.30 by revising paragraph (a) to read as follows:

Sec.  4280.30  Restrictions on the use of REDL or REDG funds.

    (a) Conflict of interest. The Intermediary must not own or manage
any Ultimate Recipient Project, unless the Project is acquired as a
result of servicing a loan made from the Revolving Loan Fund. Conflicts
of interest and all appearances of a conflict of interest are not
permitted. The intermediary must also disclose in writing any potential
conflicts of interest to the USDA awarding agency and maintain written
standards of conduct covering conflicts of interest, including
organizational conflicts of interest in accordance with 2 CFR 400.2(b).
* * * * *

0
136. Amend Sec.  4280.36 by revising paragraphs (f), (g), (h), (i) and
(n) to read as follows:

Sec.  4280.36  Other laws that contain compliance requirements for
these Programs.

* * * * *
    (f) Drug-free workplace. Grants made under these Programs are
subject to the requirements contained in 2 CFR part 421 which
implements the Drug-Free Workplace Act of 1988 (41 U.S.C. 8101 et
seq.). An Intermediary requesting a REDG Grant will be required to
certify that it will establish and make a good faith effort to maintain
a drug-free workplace program.
    (g) Debarment and suspension. The requirements of 2 CFR part 180
and Departmental Regulations 2 CFR part 417, Nonprocurement Debarment,
and Suspension are applicable to these Programs.
    (h) Intergovernmental review of Federal programs. These Programs
are subject to the requirements of Executive Order 12372 (3 CFR 1982
Comp., p. 197) and 2 CFR part 415, subpart C, which implements
Executive Order 12372. Proposed Projects are subject to the State and
local government review process contained in 2 CFR part 415, subpart C.
    (i) Restrictions on lobbying. The restrictions and requirements
imposed by 31 U.S.C. 1352, and 2 CFR part 418, are applicable to these
Programs.
* * * * *
    (n) Audits. These Programs are subject to 2 CFR part 200, subpart
F, as codified in 2 CFR part 400.1.
* * * * *

0
137. Amend Sec.  4280.50 by revising paragraphs (c) introductory text
and (c)(2) to read as follows:

Sec.  4280.50  Disbursement of Zero-Interest Loan funds.

* * * * *
    (c) For a REDG loan, Rural Development will disburse Grant funds to
the Intermediary in accordance with 2 CFR 200 as adopted by USDA in 2
CFR part 400 as applicable. Specifically, Rural Development will
disburse the Grant funds in advance if the following requirements are
met:
* * * * *
    (2) The management system of the Intermediary meets the
requirements of 2 CFR part 200 as adopted by USDA in 2 CFR part 400, as
applicable;
* * * * *

0
138. Amend Sec.  4280.55 by revising paragraph (c) to read as follows:

Sec.  4280.55  Monitoring responsibilities.

* * * * *
    (c) Rural Development will review and monitor Grants in accordance
with 2 CFR part 200, as adopted by USDA in 2 CFR parts 400, 415, 417,
418, and 421 as applicable.
* * * * *

0
139. Amend Sec.  4280.56 by revising paragraphs (a) introductory text,
(b) and (c) to read as follows:

Sec.  4280.56  Submission of reports and audits.

* * * * *
    (a) In addition to any reports and audits required by 2 CFR part
200 and Subpart F as adopted by USDA in 2 CFR part 400, the
Intermediary must submit the following monitoring reports to Rural
Development:
* * * * *
    (b) If the Intermediary does not have an existing loan with RUS,
the Intermediary will submit a copy of its annual audit to Rural
Development within 90 days of its completion. All REDL audits must be
conducted in accordance with Generally Accepted Government Auditing
Standards or Generally Accepted Accounting Principles and REDG audits
in accordance with 2 CFR part 200 as adopted by USDA in 2 CFR part 400.
    (c) Rural Development may require Ultimate Recipients that receive
loans financed with Grant funds provided under the REDG Program to
submit annual audits to comply with Federal audit regulations. In
accordance with 2 CFR part 200, as adopted by USDA in 2 CFR part 400,
Ultimate Recipients that are nonprofit entities, or a State or local
government, may be required to submit an audit subject to the threshold
established in 2 CFR part 200, as adopted by in 2 CFR part 400.

Subpart B--Rural Energy for America Program

0
140. Amend Sec.  4280.103 by revising the definition of ``Departmental
regulations'' to read as follows:

Sec.  4280.103  Definitions.

* * * * *
    Departmental regulations. The Grants and Agreements regulations of
the Department of Agriculture as currently codified in 2 CFR parts 400,
415, 417, 418, 421,.
* * * * *

Subpart D--Rural Microentrepreneur Assistance Program

0
141. Amend Sec.  4280.302 by adding the definition of ``Conflict of
interest'' in alphabetical order to read as follows:

Sec.  4280.302  Definitions and abbreviations.

* * * * *
    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 a 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
142. Amend Sec.  4280.311 by revising paragraph (h)(1)(i), removing
paragraph (h)(1)(ii), and redesignating paragraph (h)(1)(iii) as
paragraph (h)(1)(ii) to read as follows:

Sec.  4280.311  Loan provisions for Agency loans to microlenders.

* * * * *
    (h) * * *
    (1) * * *
    (i) Quarterly reports, using an Agency-approved automation system,
containing such information as the Agency may require, and in
accordance with 2 CFR part 200 as adopted by USDA in 2 CFR part 400, to
ensure that funds provided are being used for the purposes for which
the loan to the microlender was made. At a minimum, these reports must
identify each microborrower under this program and should include a
discussion reconciling the microlender's actual results for the period
against its goals, milestones, and objectives as provided in the
application package; and
* * * * *

0
143. Amend Sec.  4280.320 by revising paragraphs (a)(1)(i) and
(a)(1)(ii) to read as follows and remove (a)(1)(iii):

Sec.  4280.320  Grant administration.

* * * * *
    (a) * * *
    (1) * * *
    (i) A program performance report required by 2 CFR part 200 as
adopted by USDA in 2 CFR part 400. This report will include information
on the microlender's technical assistance, training, and/or enhancement
activity, and grant expenses, milestones met, or unmet, explanation of
difficulties, observations and other such information; and
    (ii) As appropriate, SF-270.
* * * * *

0
144. Amend Sec.  4280.321 by revising paragraph (a) to read as follows:

Sec.  4280.321  Grant and loan servicing.

* * * * *
    (a) Grants. Grants will be serviced in accordance with the
Department of Agriculture regulations including, but not limited to 7
CFR part 1951, subparts E and O and 2 CFR parts 400, 415, 417, 418, and
421; and
* * * * *

0
145. Amend Sec.  4280.323 by revising paragraph (m) to read as follows:

Sec.  4280.323  Ineligible microloan purposes and uses.

* * * * *
    (m) Any lobbying activities as described in 2 CFR part 418.
* * * * *

PART 4284--GRANTS

0
146. The authority citation for part 4284 continues to read as follows:

    Authority:  5 U.S.C. 301 and 7 U.S.C. 1989. Subpart F also
issued under 7 U.S.C. 1932(e). Subpart G also issued under 7 U.S.C.
1926(a)(11). Subpart J also issued under 7 U.S.C. 1621 note. Subpart
K also issued under 7 U.S.C. 1621 note.

Subpart A--General Requirements for Cooperative Services Grant
Program

0
147. Amend Sec.  4284.3 by removing the defi1nition ``Agriculture
Producer Group,'' adding the definition ``Conflict of Interest'' in
alphabetical order, revising the definition ``Matching Funds,'' and
removing the definition ``Emerging Markets,'' to read as follows:

Sec.  4284.3  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 a 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. In cases of tribally-owned
businesses, to avoid a conflict of interest, any business assisted by a
tribe must be held through a separate entity, such as a tribal
corporation. The separate entity may be owned by the tribe and
distribute profits to the tribe. However, the entity's governing board
must be independent from the tribal government and be elected or
appointed for a specific time period. These board members must not be
subject to removal without cause by the tribal government. The entity's
board members must not, now or in the future, make up the majority of
members of the tribal council or be members of the tribal council or
other governing board of the tribe.
* * * * *
    Matching Funds--Cash or confirmed funding commitments from non-
Federal sources unless otherwise provided by law. Unless otherwise
provided, in-kind contributions that conform to the provisions of 2 CFR
part 200 as adopted by USDA in 2 CFR part 400 can be used as matching
funds. Examples of in-kind contributions include volunteer services
furnished by professional and technical personnel, donated supplies and
equipment, and donated office space. Matching funds must be provided in
advance of grant funding, such that for every dollar of grant that is
advanced, not less than the pro-rata portion of matching funds shall
have been expended prior to submitting the request for reimbursement.
Matching

funds are subject to the same use restrictions as grant funds.
* * * * *

0
148. Revise Sec.  4284.8 to read as follows:

Sec.  4284.8  Grant approval and obligation of funds.

    The following statement will be entered in the comment section of
the Request for Obligation of Funds, which must be signed by the
grantee:
    The grantee certifies that it is in compliance with and will
continue to comply with all applicable laws, regulations, Executive
Orders and other generally applicable requirements, including those
contained in the applicable 7 CFR part 4284 and the Grants and
Agreements Departmental Regulations as currently codified in 2 CFR
parts 400, 415, 417, 418, and 421, in effect on the date of grant
approval, and the approved Letter of Conditions.

0
149. Revise Sec.  4284.9 to read as follows:

Sec.  4284.9  Grant disbursement.

    The Agency will determine, based on 2 CFR part 200 as adopted by
USDA in 2 CFR part 400 whether disbursement of a grant will be by
advance or reimbursement.

0
150. Amend Sec.  4284.11 by revising paragraphs (a) and (b) to read as
follows:

Sec.  4284.11  Award requirements.

* * * * *
    (a) Enter into an Agency-approved grant agreement with RBS;
    (b) Disclose in writing any potential conflicts of interest and
maintain written standards of conduct covering conflicts of interest,
including organizational conflicts of interest in accordance with 2 CFR
400.2;
* * * * *

0
151. Amend Sec.  4284.12 by revising paragraph (a) to read as follows:

Sec.  4284.12  Reporting requirements.

* * * * *
    (a) A ``Financial Status Report'' listing expenditures according to
agreed upon budget categories, on a semi-annual basis. Reporting
periods end as identified in the grant agreement or applicable program
attachment. Reports are due 30 days after the reporting period ends.
Failure to submit the required reports within the specified time frame
is considered cause for suspension or termination of the grant.
* * * * *

0
152. Revise Sec.  4284.14 to read as follows:

Sec.  4284.14  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. Grantees will permit
periodic inspection of the program operations by a representative of
the Agency. All non-confidential information resulting from the
Grantee's activities shall be made available to the general public on
an equal basis.

0
153. Amend Sec.  4284.16 by revising paragraph (c) to read as follows:

Sec.  4284.16  Other considerations.

* * * * *
    (c) Other USDA regulations. The grant programs under this part are
subject to the provisions of the following regulations, as applicable:
    (1) 2 CFR part 400, Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards;
    (2) 2 CFR part 415, General Program Administrative Regulations;
    (3) 2 CFR part 417, Nonprocurement Debarment and Suspension;
    (4) 2 CFR part 418, New Restrictions on Lobbying; and
    (5) 2 CFR part 421, Requirements for Drug-Free Workplace (Financial
Assistance).

0
154. Revise Sec.  4284.18 to read as follows:

Sec.  4284.18  Audit requirements.

    Grantees must comply with the audit requirements of 2 CFR part 200
as adopted by USDA in 2 CFR part 400. The audit requirements apply to
the years in which grant funds are received and years in which work is
accomplished using grant funds.

Subpart G--Rural Business Opportunity Grants

0
155. Amend Sec.  4284.630 by revising paragraph (c) to read as follows:

Sec.  4284.630  Other considerations.

* * * * *
    (c) Other USDA regulations. This program is subject to the
provisions of the following regulations, as applicable;
    (1) 2 CFR part 400, Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards;
    (2) 2 CFR part 415, General Program Administrative Regulations;
    (3) 2 CFR part 417, Nonprocurement Debarment and Suspension;
    (4) 2 CFR part 418, New Restrictions on Lobbying; and
    (5) 2 CFR part 421, Requirements for Drug-Free Workplace (Financial
Assistance).

0
156. Amend Sec.  4284.638 by revising paragraph (a)(2)(vi) to read as
follows:

Sec.  4284.638  Application processing.

    (a) * * *
    (2) * * *
    (vi) Intergovernmental review comments from the State Single Point
of Contact, or evidence that the State has elected not to review the
program under Executive Order 12372 and 2 CFR part 415, subpart C.
* * * * *

0
157. Revise Sec.  4284.647 to read as follows:

Sec.  4284.647  Grant approval and obligation of funds.

    (a) The following statement will be entered in the comment section
of the Request For Obligation of Funds, which must be signed by the
grantee:
    The grantee certifies that it is in compliance with and will
continue to comply with all applicable laws; regulations; Executive
Orders; and other generally applicable requirements, including those
contained in 7 CFR part 4284, subparts A and G, and the Grants and
Agreements Departmental Regulations as currently codified in 2 CFR
parts 400, 415, 417, 418, and 421, in effect on the date of grant
approval; and the approved Letter of Conditions.
    (b) The Agency and the grantee must enter into an Agency-approved
grant agreement prior to the advance of funds.

0
158. Revise Sec.  4284.648 to read as follows:

Sec.  4284.648  Fund disbursement.

    The Agency will determine, based on 2 CFR part 200 as adopted by
USDA in 2 CFR part 400, whether disbursement of a grant will be by
advance or reimbursement. A Request for Advance or Reimbursement,
(available in any Agency office) must be completed by the grantee and
submitted to the Agency no more often than monthly to request either
advance or reimbursement of funds.

0
159. Revise Sec.  4284.657 to read as follows:

Sec.  4284.657  Audit requirements.

    Grantees must provide an annual audit in accordance with 2 CFR part
200, as adopted by USDA in 2 CFR part 400. The audit requirements apply
to the years in which grant funds are received and years in which work
is accomplished that will be paid for with grant funds.

Subpart J--Value-Added Producer Grant Program

0
160. Amend Sec.  4284.902 by revising the definition for ``Departmental
regulations'' to read as follows:

Sec.  4284.902  Definitions.

* * * * *
    Departmental regulations. The Grants and Agreements regulations of
the Department of Agriculture as currently codified in 2 CFR parts 400,
415, 417, 418, and 421.
* * * * *

0
161. Revise Sec.  4284.908 to read as follows:

Sec.  4284.908  Compliance with other regulations.

    (a) Departmental regulations. Applicants must comply with the
Grants and Agreements regulations of the Department of Agriculture as
currently codified in 2 CFR parts 400, 415, 417, 418, and 421.
    (b) Cost principles. Applicants must comply with the applicable
cost principles found in 2 CFR part 200, as adopted by USDA in 2 CFR
part 400 and in 48 CFR 31.2.
    (c) Definitions. If a term is defined differently in the
Departmental Regulations, 2 CFR part 200, or 48 CFR 31.2 and in this
subpart, such term shall have the meaning as found in this subpart.

0
162. Amend Sec.  4284.921 by revising paragraph (a) to read as follows:

Sec.  4284.921  Ineligible applicants.

    (a) Consistent with the Departmental regulations, an applicant is
ineligible if the applicant is debarred or suspended or is otherwise
excluded from or ineligible for participation in Federal assistance
programs under Executive Order 12549, ``Debarment and Suspension,'' and
2 CFR part 180, as adopted by USDA in 2 CFR part 417.
* * * * *

0
163. Amend Sec.  4284.924 by revising paragraph (j) to read as follows:

Sec.  4284.924  Ineligible uses of grant and matching funds.

* * * * *
    (j) Fund any activities prohibited by the Departmental Regulations,
2 CFR part 200, as adopted by USDA in 2 CFR part 400 and 48 CFR 31.2.
* * * * *

PART 4285--COOPERATIVE AGREEMENTS

0
164. The authority citation for part 4285 continues to read as follows:

    Authority:  7 U.S.C. 1623; Public Law 103-111, 107 Stat. 1046; 7
U.S.C. 2201; USDA Secretary's Memorandum 1020-39, dated September
30, 1993; and Public Law 103-211, 108 Stat. 3.

Subpart A--Federal-State Research on Cooperatives Program

0
165. Amend Sec.  4285.81 by revising paragraph (a) to read as follows:

Sec.  4285.81  Cooperative agreement awards.

    (a) General. Within the limit of funds available for such purpose,
the awarding official shall make awards for cooperative agreements to
those applicants whose proposals are judged most meritorious in the
announced program areas under the evaluation criteria and procedures
set forth in this part. The date specified by the Assistant
Administrator for Cooperative Services as the beginning of the project
period shall be no later than September 30 of the Federal fiscal year
in which the project is approved and funds are appropriated for such
purpose, unless otherwise permitted by law. All funds awarded under
this part shall be expended solely in accordance with the methods
identified in approved application and budget, the regulations of this
part, the terms and conditions of the award, the Grants and Agreements
regulations of the Department of Agriculture as currently codified in 2
CFR parts 400, 415, 417, 418, and 421.
* * * * *

0
166. Amend Sec.  4285.93 by revising paragraphs (e), (f), (g), (h),
(i), (j), and (k) to read as follows:

Sec.  4285.93  Other Federal statutes and regulations that apply.

* * * * *
    (e) 2 CFR part 400, Uniform Administrative Requirements, Cost
Principles, and Audit Requirements for Federal Awards;
    (f) 2 CFR part 415, General Program Administrative Regulations;
    (g) 2 CFR part 417, Nonprocurement Debarment and Suspension;
    (h) 2 CFR part 418, New Restrictions on Lobbying;
    (i) 2 CFR part 421, Requirements for Drug-Free Workplace (Financial
Assistance);
    (j) 7 CFR part 3051--Audits of Institutions of Higher Education and
Other Nonprofit Institutions; 29 U.S.C. 794, section 504--
Rehabilitation Act of 1973, and 7 CFR part 15B prohibiting
discrimination based upon physical or mental handicap in Federally
assisted programs; and
    (k) 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
167. Revise Sec.  4285.94 to read as follows:

Sec.  4285.94  Other conditions.

    Post-award requirements. Upon awarding the cooperative agreement,
the post-award and audit requirements of 2 CFR part 200, as adopted by
USDA in 2 CFR part 400 apply.

PART 4290--RURAL BUSINESS INVESTMENT COMPANY (``RBIC'') PROGRAM

0
168. The authority citation for part 4290 continues to read as follows:

    Authority:  7 U.S.C. 1989 and 2009cc et seq.

Subpart B--Definition of Terms Used in Part 4290

0
169. Amend Sec.  4290.50 by adding the definition for ``Conflict of
interest'' in alphabetical order to read as follows:

Sec.  4290.50  Definition of terms.

* * * * *
    Conflict of interest means 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 a 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.
* * * * *

Subpart H--Recordkeeping, Reporting, and Examination Requirements
for RBICs

0
170. Amend Sec.  4290.600 by revising paragraph (d) to read as follows:

Sec.  4290.600  General requirement for RBIC to maintain and preserve
records.

* * * * *
    (d) Additional requirement. You must comply with the recordkeeping
and record retention requirements set forth in 2 CFR part 200, as
adopted by USDA in 2 CFR part 400.

0
171. Amend Sec.  4290.660 by revising paragraph (e) to read as follows:

Sec.  4290.660  Other items required to be filed by RBIC with the
Secretary.

* * * * *
    (e) Reports concerning Operational Assistance grant funds. You must
comply with all reporting requirements set forth in 2 CFR part 200,
subpart D, as codified in 2 CFR 400.1 and any grant award document
executed between you and the Secretary.
* * * * *

Subpart M--Miscellaneous

0
172. Amend Sec.  4290.1940 by revising paragraphs (a) and (f) to read
as follows:

Sec.  4290.1940  Integration of this part with other regulations
applicable to USDA's programs.

    (a) Intergovernmental review. To the extent applicable to this
part, the Secretary will comply with 2 CFR part 415, subpart C,
``Intergovernmental Review of Department of Agriculture Programs and
Activities.'' The Secretary has not delegated this responsibility to
SBA pursuant to Sec.  4290.45.
* * * * *
    (f) Conflict of interest. To the extent applicable to this part,
the Secretary will comply with 2 CFR 400.2, subpart D of 7 CFR part
1900, and RD Instruction 2045-BB. The Secretary has not delegated this
responsibility to SBA pursuant to Sec.  4290.45.
* * * * *

Jon M. Holladay,
Chief Financial Officer.

Department of State

    For the reasons set forth in the common preamble, under the
authority of 5 U.S.C. 301 and the authorities listed below, 2 CFR
Chapter VI and 22 CFR Chapter I are amended as follows:

Title 2--Grants and Agreements

CHAPTER VI--DEPARTMENT OF STATE

0
1. Part 600 is added to Title 2, Chapter XI of the Code of Federal
Regulations to read as follows:

PART 600--THE UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES,
AND AUDIT REQUIREMENTS FOR FEDERAL AWARDS

Sec.
600.101 Applicability.
600.205 Federal awarding agency review of risk posed by applicants.
600.315 Intangible property.
600.407 Prior written approval (prior approval).

    Authority: 5 U.S.C. 301; 22 U.S.C 2651a, 22 U.S.C. 2151, 22
U.S.C. 2451, 22 U.S.C. 1461, 2 CFR part 200.

Sec.  600.101  Applicability.

    Under the authority listed above, the Department of State adopts
the Office of Management and Budget (OMB) Guidance in 2 CFR part 200,
except for:
    (a) The Uniform Administrative Requirements, Cost Principles, and
Audit Requirements for Federal Awards set forth in 2 CFR part 200
(Subparts A through F) shall apply to all non-Federal entities, except
as noted below.
    (b) Subparts A through E of 2 CFR part 200 shall apply to all
foreign organizations not recognized as Foreign Public Entities and
Subparts A through D of 2 CFR part 200 shall apply to all U.S. and
foreign for-profit entities, except where the Federal awarding agency
determines that the application of these subparts would be inconsistent
with the international obligations of the United States or the statute
or regulations of a foreign government. The Federal Acquisition
Regulation (FAR) at 48 CFR part 30, Cost Accounting Standards, and Part
31 Contract Cost Principles and Procedures takes precedence over the
cost principles in Subpart E for Federal awards to U.S. and foreign
for-profit entities. Thus, this part gives regulatory effect to the OMB
guidance and supplements the guidance as needed for the Department.

Sec.  600.205  Federal awarding agency review of risk posed by
applicants.

    Use of 2 CFR 200.205 (the DOS review of risk posed by applicants)
is required for all selected competitive and non-competitive awards.

Sec.  600.315  Intangible property.

    If the DOS obtains research data solely in response to a FOIA
request, the DOS may charge the requester fees consistent with the FOIA
and applicable DOS regulations and policies.

Sec.  600.407  Prior written approval (prior approval).

    The non-Federal entity must seek the prior written approval for
indirect or special or unusual costs prior to incurring such costs
where DOS is the cognizant agency.

Title 22--Foreign Relations

CHAPTER I--DEPARTMENT OF STATE

PART 135--[REMOVED]

0
2. 22 CFR part 135 is removed.

PART 145--[REMOVED]

0
3. 22 CFR part 145 is removed.

Corey Rindner,
Procurement Executive.

Agency for International Development

    For the reasons stated in the common preamble, and under the
authority of 5 U.S.C. 301 and the authorities listed below Title 2,
Chapter VII and Title 22, Chapter II of the Code of Federal Regulations
are amended as follows:

Title 2--Grants and Agreements

CHAPTER VII--AGENCY FOR INTERNATIONAL DEVELOPMENT

0
1. Part 700 is added to read as follows:

PART 700--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS

Sec.
Subpart A--Acronyms and Definitions
700.1 Definitions
Subpart B--General Provisions
700.2 Adoption of 2 CFR part 200
700.3 Applicability
700.4 Exceptions
700.5 Supersession
Subpart C--Pre-Federal Award Requirements and Contents of Federal
Awards
700.6 Metric system of measurement
700.7 Advance Payment
Subpart D--Post Federal Award Requirements
700.8 Payment.
700.9 Property standards.
700.10 Cost sharing or matching.
700.11 Contracting with small and minority businesses, women's
business enterprises, and labor surplus area firms.
700.12 Contract provisions.
700.13 Additional Provisions for Awards to Commercial Organizations.

Remedies for Noncompliance

700.14 Termination.
700.15 Disputes.

USAID-Specific Requirements

700.16 Marking.

    Authority:  Sec. 621, Pub. L. 87-195, 75 Stat 445, (22 U.S.C.
2381) as amended, E.O. 12163, Sept 29, 1979, 44 FR 56673; 2 CFR 1979
Comp., p. 435.

Subpart A--Acronyms and Definitions

Sec.  700.1  Definitions.

    These are the definitions for terms used in this part. Different
definitions may be found in Federal statutes or regulations that apply
more specifically to particular programs or activities.

    (a) Activity mean a set of actions through which inputs--such as
commodities, technical assistance, training, or resource transfers--are
mobilized to produce specific outputs, such as vaccinations given,
schools built, microenterprise loans issued, or policies changed.
Activities are undertaken to achieve objectives that have been formally
approved and notified to Congress.
    (b) Agreement Officer means a person with the authority to enter
into, administer, terminate and/or closeout assistance agreements
subject to this part, and make related determinations and findings on
behalf of USAID. An Agreement Officer can only act within the scope of
a duly authorized warrant or other valid delegation of authority. The
term ``Agreement Officer'' includes persons warranted as ``Grant
Officers.'' It also includes certain authorized representatives of the
Agreement Officer acting within the limits of their authority as
delegated by the Agreement Officer.
    (c) Apparently successful applicant(s) means the applicant(s) for
USAID funding recommended for an award after technical evaluation, but
who has not yet been awarded a grant, cooperative agreement or other
assistance award by the Agreement Officer. Apparently successful
applicants will be requested by the Agreement Officer to submit a
Branding Strategy and Marking Plan. Apparently successful applicant
status confers no right and constitutes no USAID commitment to an
award, which still must be executed by the Agreement Officer.
    (d) Award means financial assistance that provides support or
stimulation to accomplish a public purpose. Awards include grants,
cooperative agreements and other agreements in the form of money or
property in lieu of money, by the Federal Government to an eligible
recipient. The term does not include: Technical assistance, which
provides services instead of money; other assistance in the form of
loans, loan guarantees, interest subsidies, or insurance; direct
payments of any kind to individuals; and, contracts which are required
to be entered into and administered under procurement laws and
regulations.
    (e) Branding strategy means a strategy the apparently successful
applicant submits at the specific request of a USAID Agreement Officer
after technical evaluation of an application for USAID funding,
describing how the program, project, or activity is named and
positioned, as well as how it is promoted and communicated to
beneficiaries and cooperating country citizens. It identifies all
donors and explains how they will be acknowledged. A Branding Strategy
is required even if a Presumptive Exception is approved in the Marking
Plan.
    (f) Commodities mean any material, article, supply, goods or
equipment, excluding recipient offices, vehicles, and non-deliverable
items for recipient's internal use in administration of the USAID
funded grant, cooperative agreement, or other agreement or
subagreement.
    (g) Date of completion means the date on which all work under an
award is completed or the date on the award document, or any supplement
or amendment thereto, on which USAID sponsorship ends.
    (h) Marking plan means a plan that the apparently successful
applicant submits at the specific request of a USAID Agreement Officer
after technical evaluation of an application for USAID funding,
detailing the public communications, commodities, and program materials
and other items that will visibly bear the USAID Identity. Recipients
may request approval of Presumptive Exceptions to marking requirements
in the Marking Plan.
    (i) Program mean an organized set of activities and allocation of
resources directed toward a common purpose, objective, or goal
undertaken or proposed by an organization to carry out the
responsibilities assigned to it.
    Projects include all the marginal costs of inputs (including the
proposed investment) technically required to produce a discrete
marketable output or a desired result (for example, services from a
fully functional water/sewage treatment facility).
    (j) Public communications are documents and messages intended for
distribution to audiences external to the recipient's organization.
They include, but are not limited to, correspondence, publications,
studies, reports, audio visual productions, and other informational
products; applications, forms, press and promotional materials used in
connection with USAID funded programs, projects or activities,
including signage and plaques; Web sites/Internet activities; and
events such as training courses, conferences, seminars, press
conferences and the like.
    (k) Suspension means an action by USAID that temporarily withdraws
Federal sponsorship under an award, pending corrective action by the
recipient or pending a decision to terminate the award. Suspension of
an award is a separate action from suspension under USAID regulations
implementing E.O's 12549 and 12689, ``Debarment and Suspension.'' See 2
CFR part 780.
    (l) Unrecovered indirect cost means the difference between the
amount awarded and the amount which could have been awarded under the
recipient's approved negotiated indirect cost rate.
    (m) USAID means the United States Agency for International
Development.
    (n) USAID Identity (Identity) means the official marking for the
United States Agency for International Development (USAID) comprised of
the USAID logo or seal and new brandmark with the tagline that clearly
communicates our assistance is ``from the American people.'' In
exceptional circumstances, upon a written determination by the USAID
Administrator, the definition of the USAID Identity may be amended to
include additional or substitute use of a logo or seal and tagline
representing a presidential initiative or other high level interagency
federal initiative that requires consistent and uniform branding and
marking by all participating agencies. The USAID Identity (including
any required presidential initiative or related identity) is available
on the USAID Web site at http://www.usaid.gov/branding and is provided
without royalty, license or other fee to recipients of USAID funded
grants or cooperative agreements or other assistance awards.

Subpart B--General Provisions

Sec.  700.2  Adoption of 2 CFR part 200.

    Under the authority listed above the Agency for International
Development adopts the Office of Management and Budget (OMB) guidance
Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards to Non-Federal Entities (subparts A
through F of 2 CFR 200), as supplemented by this part, as the Agency
for International Development (USAID) policies and procedures for
financial assistance administration. This part satisfies the
requirements of 2 CFR 200.110(a) and gives regulatory effect to the OMB
guidance as supplemented by this part.

Sec.  700.3  Applicability.

    Uniform administrative requirements and cost principles (Subparts A
through E of 2 CFR part 200 as supplemented by this part) apply to for-
profit entities.

Sec.  700.4  Exceptions.

    (a) Consistent with 2 CFR 200.102(b):
    (1) Exceptions on a case-by-case basis for individual non-Federal
entities may

be authorized by USAID's Senior Deputy Assistant Administrator, Bureau
for Management, except where otherwise required by law or where OMB or
other approval is expressly required by this Part. No case-by-case
exceptions may be granted to the provisions of Subpart F--Audit
Requirements of this Part.
    (2) USAID's Senior Deputy Assistant Administrator, Bureau for
Management is also authorized to approve exceptions, on a class or an
individual case basis, to USAID program specific assistance regulations
other than those which implement statutory and executive order
requirements.
    (3) The Federal awarding agency may apply more restrictive
requirements to a class of Federal awards or non-Federal entities when
approved by OMB, required by Federal statutes or regulations except for
the requirements in Subpart F--Audit Requirements of this part. A
Federal awarding agency may apply less restrictive requirements when
making awards at or below the simplified acquisition threshold, or when
making fixed amount awards as defined in Subpart A--Acronyms and
Definitions of this part, except for those requirements imposed by
statute or in Subpart F--Audit Requirements of this part.

Sec.  700.5  Supersession.

    Effective December 26, 2014, this part supersedes the following
regulations under Title 22 of the Code of Federal Regulations: 22 CFR
part 226, ``Administration of Assistance Awards To U.S. Non-
Governmental Organizations.''

Subpart C--Pre-Federal Award Requirements and Contents of Federal
Awards

Sec.  700.6  Metric system of measurement.

    (a) The Metric Conversion Act, as amended by the Omnibus Trade and
Competitiveness Act (15 U.S.C. 205) declares that the metric system is
the preferred measurement system for U.S. trade and commerce.
    (b) Wherever measurements are required or authorized, they must be
made, computed, and recorded in metric system units of measurement,
unless otherwise authorized by the agreement officer in writing when it
has been found that such usage is impractical or is likely to cause
U.S. firms to experience significant inefficiencies or the loss of
markets. Where the metric system is not the predominant standard for a
particular application, measurements may be expressed in both the
metric and the traditional equivalent units, provided the metric units
are listed first.

Sec.  700.7  Advance payment.

    (a) Advance payment mechanisms include, but are not limited to,
Letter of Credit, Treasury check and electronic funds transfer and
should comply with applicable guidance in 31 CFR part 208.

Subpart D--Post Federal Award Requirements

Sec.  700.8  Payment.

    (a) Use of resources before requesting advance payments. To the
extent available, the non-Federal entity must disburse funds available
from program income (including repayments to a revolving fund),
rebates, refunds, contract settlements, audit recoveries, and interest
earned on such funds before requesting additional cash payments. This
paragraph is not applicable to such earnings which are generated as
foreign currencies.
    (b) Standards governing the use of banks and other institutions as
depositories of advance payments under Federal awards are as follows:
    (1) Except for situations described in paragraph (b)(2) of this
section, USAID does not require separate depository accounts for funds
provided to a non-Federal entity or establish any eligibility
requirements for depositories for funds provided to the non-Federal
entity. However, the non-Federal entity must be able to account for
receipt, obligation and expenditure of funds.
    (2) Advance payments of Federal funds must be deposited and
maintained in insured accounts whenever possible.

Sec.  700.9  Property standards.

    (a) Real property. Unless the agreement provides otherwise, title
to real property will vest in accordance with 2 CFR 200.311.
    (b) Equipment. Unless the agreement provides otherwise, title to
equipment will vest in accordance with 2 CFR 200.313.

Sec.  700.10  Cost sharing or matching.

    Unrecovered indirect costs, including indirect costs on cost
sharing or matching may be included as part of cost sharing or
matching. Unrecovered indirect cost means the difference between the
amount charged to the Federal award and the amount which would have
been charged to the Federal award under the non-Federal entity's
approved negotiated indirect cost rate.

Sec.  700.11  Contracting with small and minority businesses, women's
business enterprises, and labor surplus area firms.

    (a) Make information on forthcoming opportunities available and
arrange time frames for purchases and contracts to encourage and
facilitate participation by small businesses, minority-owned firms, and
women's business enterprises. To permit USAID, in accordance with the
small business provisions of the Foreign Assistance Act of 1961, as
amended, to give United States small business firms an opportunity to
participate in supplying commodities and services procured under the
award, the recipient must to the maximum extent possible provide the
following information to the Office of Small Disadvantaged Business
Utilization (OSDBU), USAID Washington, DC 20523, at least 45 days prior
to placing any order or contract in excess of the simplified
acquisition threshold:
    (1) Brief general description and quantity of goods or services;
    (2) Closing date for receiving quotations, proposals or bids; and
    (3) Address where solicitations or specifications can be obtained.
    (b) [Reserved]

Sec.  700.12  Contract provisions.

    (a) The non-Federal entity's contracts must contain the applicable
provisions described in Appendix II to Part 200--Contract Provisions
for non-Federal Entity Contracts Under Federal Awards.
    (b) All negotiated contracts (except those for less than the
simplified acquisition threshold) awarded by the non-Federal entity
must include a provision to the effect that the non-Federal Entity,
USAID, the Comptroller General of the United States, or any of their
duly authorized representatives, must have access to any books,
documents, papers and records of the contractor which are directly
pertinent to a specific program for the purpose of making audits,
examinations, excerpts and transcriptions.

Sec.  700.13  Additional Provisions for Awards to Commercial
Organizations.

    (a) This paragraph contains additional provisions that apply to
awards to commercial organizations. These provisions supplement and
make exceptions for awards to commercial organizations from other
provisions of this part.
    (1) Prohibition against profit. No funds will be paid as profit to
any non-Federal entity that is a commercial organization. Profit is any
amount in excess of allowable direct and indirect costs.
    (2) [Reserved]

    (b) [Reserved]

Remedies for Noncompliance

Sec.  700.14  Termination.

    If at any time USAID determines that continuation of all or part of
the funding for a program should be suspended or terminated because
such assistance would not be in the national interest of the United
States or would be in violation of an applicable law, then USAID may,
following notice to the recipient, suspend or terminate the award in
whole or in part and prohibit the recipient from incurring additional
obligations chargeable to the award other than those costs specified in
the notice of suspension. If a suspension is put into effect and the
situation causing the suspension continues for 60 calendar days or
more, then USAID may terminate the award in whole or in part on written
notice to the recipient and cancel any portion of the award which has
not been disbursed or irrevocably committed to third parties.

Sec.  700.15  Disputes.

    (a) Any dispute under or relating to a grant or agreement will be
decided by the USAID Agreement Officer. The Agreement Officer must
furnish the recipient a written copy of the decision.
    (b) Decisions of the USAID Agreement Officer will be final unless,
within 30 calendar days of receipt of the decision, the recipient
appeals the decision to USAID's Senior Deputy Assistant Administrator,
Bureau for Management. Appeals must be in writing with a copy
concurrently furnished to the Agreement Officer.
    (c) In order to facilitate review of the record by the USAID's
Senior Deputy Assistant Administrator, Bureau for Management, the
recipient will be given an opportunity to submit written evidence in
support of its appeal. No hearing will be provided.
    (d) Decisions by the Senior Deputy Assistant Administrator, Bureau
for Management, will be final.

USAID--Specific Requirements

Sec.  700.16  Marking.

    (a) USAID policy is that all programs, projects, activities, public
communications, and commodities, specified further at paragraphs (c)-
(f) of this section, partially or fully funded by a USAID grant or
cooperative agreement or other assistance award or subaward must be
marked appropriately overseas with the USAID Identity, of a size and
prominence equivalent to or greater than the recipient's, other donor's
or any other third party's identity or logo.
    (1) USAID reserves the right to require the USAID Identity to be
larger and more prominent if it is the majority donor, or to require
that a cooperating country government's identity be larger and more
prominent if circumstances warrant; any such requirement will be on a
case-by-case basis depending on the audience, program goals and
materials produced.
    (2) USAID reserves the right to request pre-production review of
USAID funded public communications and program materials for compliance
with the approved Marking Plan.
    (3) USAID reserves the right to require marking with the USAID
Identity in the event the recipient does not choose to mark with its
own identity or logo.
    (4) To ensure that the marking requirements ``flow down'' to
subrecipients of subawards, recipients of USAID funded grants and
cooperative agreements or other assistance awards are required to
include a USAID-approved marking provision in any USAID funded
subaward, as follows: As a condition of receipt of this subaward,
marking with the USAID Identity of a size and prominence equivalent to
or greater than the recipient's, subrecipient's, other donor's or third
party's is required. In the event the recipient chooses not to require
marking with its own identity or logo by the subrecipient, USAID may,
at its discretion, require marking by the subrecipient with the USAID
Identity.
    (b) Subject to Sec.  700.15 (a), (h), and (j), program, project, or
activity sites funded by USAID, including visible infrastructure
projects (for example, roads, bridges, buildings) or other programs,
projects, or activities that are physical in nature (for example,
agriculture, forestry, water management), must be marked with the USAID
Identity. Temporary signs or plaques should be erected early in the
construction or implementation phase. When construction or
implementation is complete, a permanent, durable sign, plaque or other
marking must be installed.
    (c) Subject to Sec.  700.15 (a), (h), and (j), technical
assistance, studies, reports, papers, publications, audio-visual
productions, public service announcements, Web sites/Internet
activities and other promotional, informational, media, or
communications products funded by USAID must be marked with the USAID
Identity.
    (1) Any ``public communications'' as defined in Sec.  700.1, funded
by USAID, in which the content has not been approved by USAID, must
contain the following disclaimer:

    This study/report/audio/visual/other information/media product
(specify) is made possible by the generous support of the American
people through the United States Agency for International
Development (USAID). The contents are the responsibility of [insert
recipient name] and do not necessarily reflect the views of USAID or
the United States Government.

    (2) The recipient must provide the Agreement Officer's
Representative (AOR) or other USAID personnel designated in the grant
or cooperative agreement with at least two copies of all program and
communications materials produced under the award. In addition, the
recipient must submit one electronic and/or one hard copy of all final
documents to USAID's Development Experience Clearinghouse.
    (d) Subject to Sec.  700.15(a), (h), and (j), events financed by
USAID such as training courses, conferences, seminars, exhibitions,
fairs, workshops, press conferences and other public activities, must
be marked appropriately with the USAID Identity. Unless directly
prohibited and as appropriate to the surroundings, recipients should
display additional materials such as signs and banners with the USAID
Identity. In circumstances in which the USAID Identity cannot be
displayed visually, recipients are encouraged otherwise to acknowledge
USAID and the American people's support.
    (e) Subject to Sec.  700.15(a), (h), and (j), all commodities
financed by USAID, including commodities or equipment provided under
humanitarian assistance or disaster relief programs, and all other
equipment, supplies and other materials funded by USAID, and their
export packaging, must be marked with the USAID Identity.
    (f) After technical evaluation of applications for USAID funding,
USAID Agreement Officers will request apparently successful applicants
to submit a Branding Strategy, defined in Sec.  700.1. The proposed
Branding Strategy will not be evaluated competitively. The Agreement
Officer will review for adequacy the proposed Branding Strategy, and
will negotiate, approve and include the Branding Strategy in the award.
Failure to submit or negotiate a Branding Strategy within the time
specified by the Agreement Officer will make the apparently successful
applicant ineligible for award.
    (g) After technical evaluation of applications for USAID funding,
USAID Agreement Officers will request apparently successful applicants
to submit a Marking Plan, defined in Sec.  700.1. The Marking Plan may
include requests for approval of Presumptive Exceptions, paragraph (h)
of this

section. All estimated costs associated with branding and marking USAID
programs, such as plaques, labels, banners, press events, promotional
materials, and the like, must be included in the total cost estimate of
the grant or cooperative agreement or other assistance award, and are
subject to revision and negotiation with the Agreement Officer upon
submission of the Marking Plan. The Marking Plan will not be evaluated
competitively. The Agreement Officer will review for adequacy the
proposed Marking Plan, and will negotiate, approve and include the
Marking Plan in the award. Failure to submit or negotiate a Marking
Plan within the time specified by the Agreement Officer will make the
apparently successful applicant ineligible for award. Agreement
Officers have the discretion to suspend the implementation requirements
of the Marking Plan if circumstances warrant. Recipients of USAID
funded grant or cooperative agreement or other assistance award or
subaward should retain copies of any specific marking instructions or
waivers in their project, program or activity files. Agreement
Officer's Representatives will be assigned responsibility to monitor
marking requirements on the basis of the approved Marking Plan.
    (h) Presumptive exceptions: (1) The above marking requirements in
Sec.  700.15(a) through (e) may not apply if marking would:
    (i) Compromise the intrinsic independence or neutrality of a
program or materials where independence or neutrality is an inherent
aspect of the program and materials, such as election monitoring or
ballots, and voter information literature; political party support or
public policy advocacy or reform; independent media, such as television
and radio broadcasts, newspaper articles and editorials; public service
announcements or public opinion polls and surveys.
    (ii) Diminish the credibility of audits, reports, analyses,
studies, or policy recommendations whose data or findings must be seen
as independent.
    (iii) Undercut host-country government ``ownership'' of
constitutions, laws, regulations, policies, studies, assessments,
reports, publications, surveys or audits, public service announcements,
or other communications better positioned as ``by'' or ``from'' a
cooperating country ministry or government official.
    (iv) Impair the functionality of an item, such as sterilized
equipment or spare parts.
    (v) Incur substantial costs or be impractical, such as items too
small or other otherwise unsuited for individual marking, such as food
in bulk.
    (vi) Offend local cultural or social norms, or be considered
inappropriate on such items as condoms, toilets, bed pans, or similar
commodities.
    (vii) Conflict with international law.
    (2) These exceptions are presumptive, not automatic and must be
approved by the Agreement Officer. Apparently successful applicants may
request approval of one or more of the presumptive exceptions,
depending on the circumstances, in their Marking Plan. The Agreement
Officer will review requests for presumptive exceptions for adequacy,
along with the rest of the Marking Plan. When reviewing a request for
approval of a presumptive exception, the Agreement Officer may review
how program materials will be marked (if at all) if the USAID identity
is removed. Exceptions approved will apply to subrecipients unless
otherwise provided by USAID.
    (i) In cases where the Marking Plan has not been complied with, the
Agreement Officer will initiate corrective action. Such action may
involve informing the recipient of a USAID grant or cooperative
agreement or other assistance award or subaward of instances of
noncompliance and requesting that the recipient carry out its
responsibilities as set forth in the Marking Plan and award. Major or
repeated non-compliance with the Marking Plan will be governed by the
uniform suspension and termination procedures set forth at 2 CFR
200.338 through 2 CFR 200.342, and 2 CFR 700.13.
    (j)(1) USAID Principal Officers, defined for purposes of this
provision at Sec.  700.1, may at any time after award waive in whole or
in part the USAID approved Marking Plan, including USAID marking
requirements for each USAID funded program, project, activity, public
communication or commodity, or in exceptional circumstances may make a
waiver by region or country, if the Principal Officer determines that
otherwise USAID required marking would pose compelling political,
safety, or security concerns, or marking would have an adverse impact
in the cooperating country. USAID recipients may request waivers of the
Marking Plan in whole or in part, through the AOR. No marking is
required while a waiver determination is pending. The waiver
determination on safety or security grounds must be made in
consultation with U.S. Government security personnel if available, and
must consider the same information that applies to determinations of
the safety and security of U.S. Government employees in the cooperating
country, as well as any information supplied by the AOR or the
recipient for whom the waiver is sought. When reviewing a request for
approval of a waiver, the Principal Officer may review how program
materials will be marked (if at all) if the USAID Identity is removed.
Approved waivers are not limited in duration but are subject to
Principal Officer review at any time due to changed circumstances.
Approved waivers ``flow down'' to recipients of subawards unless
specified otherwise. Principal Officers may also authorize the removal
of USAID markings already affixed if circumstances warrant. Principal
Officers' determinations regarding waiver requests are subject to
appeal to the Principal Officer's cognizant Assistant Administrator.
Recipients may appeal by submitting a written request to reconsider the
Principal Officer's waiver determination to the cognizant Assistant
Administrator.
    (2) Non-retroactivity. Marking requirements apply to any obligation
of USAID funds for new awards as of January 2, 2006. Marking
requirements also will apply to new obligations under existing awards,
such as incremental funding actions, as of January 2, 2006, when the
total estimated cost of the existing award has been increased by USAID
or the scope of effort is changed to accommodate any costs associated
with marking. In the event a waiver is rescinded, the marking
requirements will apply from the date forward that the waiver is
rescinded. In the event a waiver is rescinded after the period of
performance as defined in 2 CFR 200.77 but before closeout as defined
in 2 CFR 200.16., the USAID mission or operating unit with initial
responsibility to administer the marking requirements must make a cost
benefit analysis as to requiring USAID marking requirements after the
date of completion of the affected programs, projects, activities,
public communications or commodities.
    (k) The USAID Identity and other guidance will be provided at no
cost or fee to recipients of USAID grants, cooperative agreements or
other assistance awards or subawards. Additional costs associated with
marking requirements will be met by USAID if reasonable, allowable, and
allocable under 2 CFR part 200, subpart E. The standard cost
reimbursement provisions of the grant, cooperative agreement, other
assistance award or subaward must be followed when applying for
reimbursement of additional marking costs.

Title 22--Foreign Relations

CHAPTER II--AGENCY FOR INTERNATIONAL DEVELOPMENT

PART 226--[REMOVED]

0
1. Remove part 226.

Angelique M. Crumbly,
Agency Regulatory Official.

Department of Veterans Affairs

    For the reasons set out in the preamble, under the authority of 5
U.S.C. 301; 38 U.S.C. 501, the Department of Veterans Affairs amends 2
CFR part 802 and 38 CFR parts 41 and 43 as follows:

Title 2--Grants and Agreements

CHAPTER VIII--DEPARTMENT OF VETERANS AFFAIRS

0
1. Add 2 CFR part 802 to read as follows:

PART 802--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS

    Authority: 5 U.S.C. 301; 38 U.S.C. 501, 2 CFR part 200, and as
noted in specific sections.

Sec.  802.101  Applicable regulations.

    The Uniform Administrative Requirements, Cost Principles, and Audit
Requirements for Federal Awards set forth in 2 CFR part 200 shall apply
to the Department of Veterans Affairs.

Title 38--Pensions, Bonuses, and Veterans' Relief

CHAPTER I--DEPARTMENT OF VETERANS AFFAIRS

PART 41--[REMOVED]

0
1. Remove Part 41.

PART 43--[REMOVED]

0
2. Remove Part 43.

Jose D. Riojas,
Chief of Staff.

Department of Energy

    For the reasons set forth in the common preamble, under the
authority of 5 U.S.C. 301 and the authorities listed below, 2 CFR
chapter IX and 10 CFR chapters II and III are amended as follows:

0
1. Part 910 of Title 2, Chapter IX of the Code of Federal Regulations
is added to read as follows:

PART 910--UNIFORM ADMINISTRATIVE REQUIREMENTS, COST PRINCIPLES, AND
AUDIT REQUIREMENTS FOR FEDERAL AWARDS

Subpart A--[Reserved]
Subpart B--General Provisions
Sec.
910.120 Adoption of 2 CFR part 200.
910.122 Applicability.
910.124 Eligibility.
910.126 Competition.
910.128 Disputes and appeals.
910.130 Cost sharing (EPACT).
910.132 Research misconduct.
Subpart C [Reserved]
Subpart D--Post Award Federal Requirements for For-Profit Entities
910.350 Applicability of 2 CFR part 200.
910.352 Cost principles.
910.354 Payments.
910.356 Audits.
910.358 Profit or fee for SBIR/STTR.
910.360 Real property and equipment.
910.362 Intellectual property.

Appendix A to Subpart D--Patents and Data Provisions for For-Profit
Organizations

Subpart E--Cost Principles
910.401 Application to M&O's.
Subpart F--Audit Requirements for For-Profit Entities

General

910.500 Purpose.

Audits

910.501 Audit requirements.
910.502 Basis for determining DOE awards expended.
910.503 Relation to other audit requirements.
910.504 Frequency of audits.
910.505 Sanctions.
910.506 Audit costs.
910.507 Program-specific audits.

Auditees

910.508 Auditee responsibilities.
910.509 Auditor selection.
910.510 Financial statements.
910.511 Audit findings follow-up.
910.512 Report submission.

Federal Agencies

910.513 Responsibilities.

Auditors

910.514 Scope of audit.
910.515 Audit reporting.
910.516 Audit findings.
910.517 Audit documentation.
910.518 Major program determination. (Not applicable).
910.519 Criteria for Federal program risk.
910.520 Criteria for a low-risk auditee.

Management Decisions

910.521 Management decision.

    Authority: 42 U.S.C. 7101, et seq.; 31 U.S.C. 6301-6308; 50
U.S.C. 2401 et seq.; 2 CFR part 200.

Subpart A--[Reserved]

Subpart B--General Provisions

Sec.  910.120  Adoption of 2 CFR part 200.

    (a) Under the authority listed above, the Department of Energy
adopts the Office of Management and Budget (OMB) Guidance in 2 CFR part
200, with the following additions. Thus, this part gives regulatory
effect to the OMB guidance and supplements the guidance as needed for
the Department.
    (b) The additions include: Expanding the definition of non-Federal
entity for DOE to include For-profit entities; adding back additional
coverage from 10 CFR part 600 required by DOE statute; adding back
coverage specific for For-Profit entities which existed in 10 CFR part
600 which still applies.

Sec.  910.122  Applicability.

    (a) For DOE, unless otherwise noted in Part 910, the definition of
Non-Federal entity found in 2 CFR 200.69 is expanded to include for-
profit organizations in addition to states, local governments, Indian
tribes, institutions of higher education (IHE), and nonprofit
organizations.
    (b) A for-profit organization is defined as one that distributes
any profit not reinvested into the business as profit or dividends to
its employees or shareholders.

Sec.  910.124  Eligibility.

    (a) Purpose and scope. This section implements section 2306 of the
Energy Policy Act of 1992, 42 U.S.C. 13525, and sets forth a general
statement of policy, including procedures and interpretations, for the
guidance of implementing DOE officials in making mandatory pre-award
determinations of eligibility for financial assistance under Titles XX
through XXIII of that Act.
    (b) Definitions. The definitions in Subpart A of 2 CFR part 200,
including the definition of the term ``Federal financial assistance,''
are applicable to this section. In addition, as used in this section:
    Act means the Energy Policy Act of 1992.
    Company means any business entity other than an organization of the
type described in section 501(c) (3) of the Internal Revenue Code of
1954 (26 U.S.C. 501(c)(3)).
    Covered program means a program under Titles XX through XXIII of
the Act. (A list of covered programs, updated periodically as
appropriate, is

maintained and published by the Department of Energy.)
    Parent company means a company that:
    (1) Exercises ultimate ownership of the applicant company either
directly, by ownership of a majority of that company's voting
securities, or indirectly, by control over a majority of that company's
voting securities through one or more intermediate subsidiary companies
or otherwise, and
    (2) Is not itself subject to the ultimate ownership control of
another company.
    United States means the several States, the District of Columbia,
and all commonwealths, territories, and possessions of the United
States.
    United States-owned company means:
    (1) A company that has majority ownership by individuals who are
citizens of the United States, or
    (2) A company organized under the laws of a State that either has
no parent company or has a parent company organized under the laws of a
State.
    Voting security has the meaning given the term in the Public
Utility Holding Company Act (15 U.S.C. 15b(17)).
    (c) What must DOE determine. A company shall be eligible to receive
an award of financial assistance under a covered program only if DOE
finds that--
    (1) Consistent with Sec.  910.124(d), the company's participation
in a covered program would be in the economic interest of the United
States; and
    (2) The company is either--
    (i) A United States-owned company; or
    (ii) Incorporated or organized under the laws of any State and has
a parent company which is incorporated or organized under the laws of a
country which--
    (A) Affords to the United States-owned companies opportunities,
comparable to those afforded to any other company, to participate in
any joint venture similar to those authorized under the Act;
    (B) Affords to United States-owned companies local investment
opportunities comparable to those afforded to any other company; and
    (C) Affords adequate and effective protection for the intellectual
property rights of United States-owned companies.
    (d) Determining the economic interest of the United States. In
determining whether participation of an applicant company in a covered
program would be in the economic interest of the United States under
Sec.  910.124(c)(1), DOE may consider any evidence showing that a
financial assistance award would be in the economic interest of the
United States including, but not limited to--
    (1) Investments by the applicant company and its affiliates in the
United States in research, development, and manufacturing (including,
for example, the manufacture of major components or subassemblies in
the United States);
    (2) Significant contributions to employment in the United States by
the applicant company and its affiliates; and
    (3) An agreement by the applicant company, with respect to any
technology arising from the financial assistance being sought--
    (i) To promote the manufacture within the United States of products
resulting from that technology (taking into account the goals of
promoting the competitiveness of United States industry); and
    (ii) To procure parts and materials from competitive suppliers.
    (e) Information an applicant must submit.
    (1) Any applicant for Federal financial assistance under a covered
program shall submit with the application for Federal financial
assistance, or at such later time as may be specified by DOE, evidence
for DOE to consider in making findings required under Sec.  910.124
(c)(1) and findings concerning ownership status under Sec.
910.124(c)(2).
    (2) If an applicant for Federal financial assistance is submitting
evidence relating to future undertakings, such as an agreement under
Sec.  910.124(d)(3) to promote manufacture in the United States of
products resulting from a technology developed with financial
assistance or to procure parts and materials from competitive
suppliers, the applicant shall submit a representation affirming
acceptance of these undertakings. The applicant should also briefly
describe its plans, if any, for any manufacturing of products arising
from the program-supported research and development, including the
location where such manufacturing is expected to occur.
    (3) If an applicant for Federal financial assistance is claiming to
be a United States-owned company, the applicant must submit a
representation affirming that it falls within the definition of that
term provided in Sec.  910.124(b).
    (4) DOE may require submission of additional information deemed
necessary to make any portion of the determination required by Sec.
910.124(b) 2.
    (f) Other information DOE may consider.
    In making the determination under Sec.  910.124(c)(2)(ii), DOE
may--
    (1) Consider information on the relevant international and domestic
law obligations of the country of incorporation of the parent company
of an applicant;
    (2) Consider information relating to the policies and practices of
the country of incorporation of the parent company of an applicant with
respect to:
    (i) The eligibility criteria for, and the experience of United
States-owned company participation in, energy-related research and
development programs;
    (ii) Local investment opportunities afforded to United States-owned
companies; and
    (iii) Protection of intellectual property rights of United States-
owned companies;
    (3) Seek and consider advice from other federal agencies, as
appropriate; and
    (4) Consider any publicly available information in addition to the
information provided by the applicant.

Sec.  910.126  Competition.

    (a) General. DOE shall solicit applications for Federal financial
assistance in a manner which provides for the maximum amount of
competition feasible.
    (b) Restricted eligibility. If DOE restricts eligibility, an
explanation of why the restriction of eligibility is considered
necessary shall be included in the notice of funding opportunity or,
program rule. Such restriction of eligibility shall be:
    (1) Supported by a written determination initiated by the program
office and;
    (2) Concurred in by legal counsel and the Contracting Officer.
    (c) Noncompetitive Federal financial assistance. DOE may award a
grant or cooperative agreement on a noncompetitive basis only if the
application satisfies one or more of the follow selection criteria:
    (1) The activity to be funded is necessary to the satisfactory
completion of, or is a continuation or renewal of, an activity
presently being funded by DOE or another Federal agency, and for which
competition for support would have a significant adverse effect on
continuity or completion of the activity.
    (2) The activity is being or would be conducted by the applicant
using its own resources or those donated or provided by third parties;
however, DOE support of that activity would enhance the public benefits
to be derived and DOE knows of no other entity which is conducting or
is planning to conduct such an activity.
    (3) The applicant is a unit of government and the activity to be

supported is related to performance of a governmental function within
the subject jurisdiction, thereby precluding DOE provision of support
to another entity.
    (4) The applicant has exclusive domestic capability to perform the
activity successfully, based upon unique equipment, proprietary data,
technical expertise, or other such unique qualifications.
    (5) The award implements an agreement between the United States
Government and a foreign government to fund a foreign applicant.
    (6) Time constraints associated with a public health, safety,
welfare or national security requirement preclude competition.
    (7) The proposed project was submitted as an unsolicited proposal
and represents a unique or innovative idea, method, or approach that
would not be eligible for financial assistance under a recent, current,
or planned notice of funding opportunity, and if, as determined by DOE,
a competitive notice of funding opportunity would not be appropriate.
    (d) Approval requirements. Determinations of noncompetitive awards
shall be:
    (1) Documented in writing;
    (2) Concurred in by the responsible program technical official and
local legal counsel; and
    (3) Approved, prior to award, by the Contracting Officer and an
approver at least one level above the CO.
    (e) Definitions. For purposes of this section, the following
definitions are applicable:
    Continuation Award--A financial assistance award authorizing a
second or subsequent budget period within an existing project period.
    Renewal Award--A financial assistance award authorizing the first
budget period of an extended project period.

Sec.  910.128  Disputes and appeals.

    (a) Informal dispute resolution. Whenever practicable, DOE shall
attempt to resolve informally any dispute over the award or
administration of Federal financial assistance. Informal resolution,
including resolution through an alternative dispute resolution
mechanism, shall be preferred over formal procedures, to the extent
practicable.
    (b) Alternative dispute resolution (ADR). Before issuing a final
determination in any dispute in which informal resolution has not been
achieved, the Contracting Officer shall suggest that the other party
consider the use of voluntary consensual methods of dispute resolution,
such as mediation. The DOE dispute resolution specialist is available
to provide assistance for such disputes, as are trained mediators of
other federal agencies. ADR may be used at any stage of a dispute.
    (c) Final determination. Whenever a dispute is not resolved
informally or through an alternative dispute resolution process, DOE
shall mail (by certified mail) a brief written determination signed by
a Contracting Officer, setting forth DOE's final disposition of such
dispute. Such determination shall contain the following information:
    (1) A summary of the dispute, including a statement of the issues
and of the positions taken by DOE and the party or parties to the
dispute; and
    (2) The factual, legal and, if appropriate, policy reasons for
DOE's disposition of the dispute.
    (d) Right of appeal. Except as provided in paragraph (f)(1) of this
section, the final determination under paragraph (c) of this section
may be appealed to the cognizant Senior Procurement Executive (SPE) for
either DOE or the National Nuclear Security Administration (NNSA). The
appeal must be received by DOE within 90 days of the receipt of the
final determination. The mailing address for the DOE SPE is Office of
Acquisition and Project Management, 1000 Independence Ave., SW.,
Washington, DC 20585. The mailing address for the NNSA SPE is Office of
Acquisition Management, National Nuclear Security Administration
(NNSA), 1000 Independence Ave. SW., Washington, DC 20585.
    (e) Effect of appeal. The filing of an appeal with the SPE shall
not stay any determination or action taken by DOE which is the subject
of the appeal. Consistent with its obligation to protect the interests
of the Federal Government, DOE may take such authorized actions as may
be necessary to preserve the status quo pending decision by the SPE, or
to preserve its ability to provide relief in the event the SPE decides
in favor of the appellant.
    (f) Review on appeal. (1) The SPE shall have no jurisdiction to
review:
    (i) Any preaward dispute (except as provided in paragraph
(f)(2)(ii) of this section), including use of any special restrictive
condition pursuant to 2 CFR 200.207 Specific Conditions ;
    (ii) DOE denial of a request for an Exception under 2 CFR 200.102;
    (iii) DOE denial of a request for a budget revision or other change
in the approved project under 2 CFR 200.308 or 200.403 or under another
term or condition of the award;
    (iv) Any DOE action authorized under 2 CFR 200.338, Remedies for
Noncompliance, or such actions authorized by program rule;
    (v) Any DOE decision about an action requiring prior DOE approval
under 2 CFR 200.324 or under another term or condition of the award;
    (2) In addition to any right of appeal established by program rule,
or by the terms and conditions (not inconsistent with paragraph (f)(1)
of this section) of an award, the SPE shall have jurisdiction to
review:
    (i) A DOE determination that the recipient has failed to comply
with the applicable requirements of this part, the program statute or
rules, or other terms and conditions of the award;
    (ii) A DOE decision not to make a continuation award based on any
of the determinations described in paragraph (f)(2)(i) of this section;
    (iii) Termination of an award, in whole or in part, by DOE under 2
CFR 200.339 (a)(1)-(2);
    (iv) A DOE determination that an award is void or invalid;
    (v) The application by DOE of an indirect cost rate; and
    (vi) DOE disallowance of costs.
    (3) In reviewing disputes authorized under paragraph (f)(2) of this
section, the SPE shall be bound by the applicable law, statutes, and
rules, including the requirements of this part, and by the terms and
conditions of the award.
    (4) The decision of the SPE shall be the final decision of DOE.

Sec.  910.130  Cost sharing (EPACT).

    In addition to the requirements of 2 CFR 200.306 the following
requirements apply to research, development, demonstration and
commercial application activities:
    (a) Cost sharing is required for most financial assistance awards
for research, development, demonstration and commercial applications
activities initiated after the enactment of the Energy Policy Act of
2005 on August 8, 2005. This requirement does not apply to:
    (1) An award under the small business innovation research program
(SBIR) or the small business technology transfer program (STTR); or
    (2) A program with cost sharing requirements defined by other than
Section 988 of the Energy Policy Act of 2005 including other sections
of the 2005 Act and the Energy Policy Act of 1992.
    (b) A cost share of at least 20 percent of the cost of the activity
is required for

research and development except where:
    (1) A research or development activity of a basic or fundamental
nature has been excluded by an appropriate officer of DOE, generally an
Under Secretary; or
    (2) The Secretary has determined it is necessary and appropriate to
reduce or eliminate the cost sharing requirement for a research and
development activity of an applied nature.
    (c) A cost share of at least 50 percent of the cost of a
demonstration or commercial application activity is required unless the
Secretary has determined it is necessary and appropriate to reduce the
cost sharing requirements, taking into consideration any technological
risk relating to the activity.
    (d) Cost share shall be provided by non-Federal funds unless
otherwise authorized by statute. In calculating the amount of the non-
Federal contribution:
    (1) Base the non-Federal contribution on total project costs,
including the cost of work where funds are provided directly to a
partner, consortium member or subrecipient, such as a Federally Funded
Research and Development Center;
    (2) Include the following costs as allowable in accordance with the
applicable cost principles:
    (i) Cash;
    (ii) Personnel costs;
    (iii) The value of a service, other resource, or third party in-
kind contribution determined in accordance with Subpart E--Cost
Principles--of 2 CFR part 200. For recipients that are for-profit
organizations as defined by 2 CFR 910.122, the Cost Principles which
apply are contained in 48 CFR 31.2. See Sec.  910.352 for further
information;
    (iv) Indirect costs or facilities and administrative costs; and/or
    (v) Any funds received under the power program of the Tennessee
Valley Authority (except to the extent that such funds are made
available under an annual appropriation Act);
    (3) Exclude the following costs:
    (i) Revenues or royalties from the prospective operation of an
activity beyond the time considered in the award;
    (ii) Proceeds from the prospective sale of an asset of an activity;
or
    (iii) Other appropriated Federal funds.
    (iv) Repayment of the Federal share of a cost-shared activity under
Section 988 of the Energy Policy Act of 2005 shall not be a condition
of the award.
    (e) For purposes of this section, the following definitions are
applicable:
    Demonstration means a project designed to determine the technical
feasibility and economic potential of a technology on either a pilot or
prototype scale.
    Development is defined in 2 CFR 200.87.
    Research is also defined in 2 CFR 200.87.

Sec.  910.132  Research misconduct.

    (a) A recipient is responsible for maintaining the integrity of
research of any kind under an award from DOE including the prevention,
detection, and remediation of research misconduct, and the conduct of
inquiries, investigations, and adjudication of allegations of research
misconduct in accordance with the requirements of this section.
    (b) For purposes of this section, the following definitions are
applicable:
    Adjudication means a formal review of a record of investigation of
alleged research misconduct to determine whether and what corrective
actions and sanctions should be taken.
    Fabrication means making up data or results and recording or
reporting them.
    Falsification means 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 means a determination, based on a
preponderance of the evidence, that research misconduct has occurred.
Such a finding requires a conclusion that there has been a significant
departure from accepted practices of the relevant research community
and that it be knowingly, intentionally, or recklessly committed.
    Inquiry means information gathering and initial fact-finding to
determine whether an allegation or apparent instance of misconduct
warrants an investigation.
    Investigation means the formal examination and evaluation of the
relevant facts.
    Plagiarism means the appropriation of another person's ideas,
processes, results, or words without giving appropriate credit.
    Research misconduct means fabrication, falsification, or plagiarism
in proposing, performing, or reviewing research, or in reporting
research results, but does not include honest error or differences of
opinion.
    Research record means the record of all data or results that embody
the facts resulting from scientists' inquiries, including, but not
limited to, research proposals, laboratory records, both physical and
electronic, progress reports, abstracts, theses, oral presentations,
internal reports, and journal articles.
    (c) Unless otherwise instructed by the Contracting Officer, the
recipient must conduct an initial inquiry into any allegation of
research misconduct. If the recipient determines that there is
sufficient evidence to proceed to an investigation, it must notify the
Contracting Officer and, unless otherwise instructed, the recipient
must:
    (1) Conduct an investigation to develop a complete factual record
and an examination of such record leading to either a finding of
research misconduct and an identification of appropriate remedies or a
determination that no further action is warranted;
    (2) Inform the Contracting Officer if an initial inquiry supports
an investigation and, if requested by the Contracting Officer
thereafter, keep the Contracting Officer informed of the results of the
investigation and any subsequent adjudication. When an investigation is
complete, the recipient will forward to the Contracting Officer a copy
of the evidentiary record, the investigative report, any
recommendations made to the recipient's adjudicating official, and the
adjudicating official's decision and notification of any corrective
action taken or planned, and the subject's written response to the
recommendations (if any).
    (3) If the investigation leads to a finding of research misconduct,
conduct an adjudication by a responsible official who was not involved
in the inquiry or investigation and is separated organizationally from
the element which conducted the investigation. The adjudication must
include a review of the investigative record and, as warranted, a
determination of appropriate corrective actions and sanctions.
    (d) DOE may elect to act in lieu of the recipient in conducting an
inquiry or investigation into an allegation of research misconduct if
the Contracting Officer finds that:
    (1) The research organization is not prepared to handle the
allegation in a manner consistent with this section;
    (2) The allegation involves an entity of sufficiently small size
that it cannot reasonably conduct the inquiry;
    (3) DOE involvement is necessary to ensure the public health,
safety, and security, or to prevent harm to the public interest; or,
    (4) The allegation involves possible criminal misconduct.
    (e) DOE reserves the right to pursue such remedies and other
actions as it deems appropriate, consistent with the terms and
conditions of the award instrument and applicable laws and regulations.
However, the recipient's

good faith administration of this section and the effectiveness of its
remedial actions and sanctions shall be positive considerations and
shall be taken into account as mitigating factors in assessing the need
for such actions. If DOE pursues any such action, it will inform the
subject of the action of the outcome and any applicable appeal
procedures.
    (f) In conducting the activities in paragraph (c) of this section,
the recipient and DOE, if it elects to conduct the inquiry or
investigation, shall adhere to the following guidelines:
    (1) Safeguards for information and subjects of allegations. The
recipient shall provide safeguards to ensure that individuals may bring
allegations of research misconduct made in good faith to the attention
of the recipient without suffering retribution. Safeguards include:
Protection against retaliation; fair and objective procedures for
examining and resolving allegations; and diligence in protecting
positions and reputations. The recipient shall also provide the
subjects of allegations confidence that their rights are protected and
that the mere filing of an allegation of research misconduct will not
result in an adverse action. Safeguards include timely written notice
regarding substantive allegations against them, a description of the
allegation and reasonable access to any evidence submitted to support
the allegation or developed in response to an allegation and notice of
any findings of research misconduct.
    (2) Objectivity and expertise. The recipient shall select
individual(s) to inquire, investigate, and adjudicate allegations of
research misconduct who have appropriate expertise and have no
unresolved conflict of interest. The individual(s) who conducts an
adjudication must not be the same individual(s) who conducted the
inquiry or investigation, and must be separate organizationally from
the element that conducted the inquiry or investigation.
    (3) Timeliness. The recipient shall coordinate, inquire,
investigate and adjudicate allegations of research misconduct promptly,
but thoroughly. Generally, an investigation should be completed within
120 days of initiation, and adjudication should be complete within 60
days of receipt of the record of investigation.
    (4) Confidentiality. To the extent possible, consistent with fair
and thorough processing of allegations of research misconduct and
applicable law and regulation, knowledge about the identity of the
subjects of allegations and informants should be limited to those with
a need to know.
    (5) Remediation and sanction. If the recipient finds that research
misconduct has occurred, it shall assess the seriousness of the
misconduct and its impact on the research completed or in process. The
recipient must take all necessary corrective actions. Such action may
include but are not limited to, correcting the research record and as
appropriate imposing restrictions, controls, or other parameters on
research in process or to be conducted in the future. The recipient
must coordinate remedial actions with the Contracting Officer. The
recipient must also consider whether personnel sanctions are
appropriate. Any such sanction must be consistent with any applicable
personnel laws, policies, and procedures, and must take into account
the seriousness of the misconduct and its impact, whether it was done
knowingly or intentionally, and whether it was an isolated event or
pattern of conduct.
    (g) By executing this agreement, the recipient provides its
assurance that it has established an administrative process for
performing an inquiry, mediating if possible, investigating, and
reporting allegations of research misconduct; and that it will comply
with its own administrative process and the requirements and
definitions of 10 CFR part 733 for performing an inquiry, possible
mediation, investigation and reporting of allegations of research
misconduct.
    (h) The recipient must insert or have inserted the substance of
this section, including paragraph (g), in subawards at all tiers that
involve research.

Subpart C--[RESERVED]

Subpart D--Post Award Federal Requirements for For-Profit Entities

Sec.  910.350  Applicability of 2 CFR part 200.

    (a) As stated in 2 CFR 910.122, unless otherwise noted in part 910,
the definition of Non-Federal entity found in 2 CFR 200.69 is expanded
for DOE to include for-profit organizations in addition to states,
local governments, Indian tribes, institutions of higher education
(IHE), and nonprofit organizations.
    (b) A for-profit organization is defined as one that distributes
any profit not reinvested into the business as profit or dividends to
its employees or shareholders.
    (c) Subpart D of 2 CFR part 910 contains specific changes to 2 CFR
part 200 that apply only to For-Profit Recipients and, unless otherwise
specified, subrecipients. In some cases, the coverage in Subpart D will
replace the language in a specific section of 2 CFR part 200.

Sec.  910.352  Cost Principles.

    For For-Profit Entities, the Cost Principles contained in 48 CFR
31.2 (Contracts with Commercial Organizations) must be followed in lieu
of the Cost principles contained in 2 CFR 200.400 through 200.475,
except that patent prosecution costs are not allowable unless
specifically authorized in the award document. This applies to For-
Profit entities whether they are recipients or subrecipients.

Sec.  910.354  Payment.

    (a) For-Profit Recipients are an exception to 2 CFR 200.305(b)(1)
which requires that non-Federal entities be paid in advance as long as
certain conditions are met.
    (b) For For-Profit Recipients who are paid directly by DOE,
reimbursement is the preferred method of payment. Under the
reimbursement method of payment, the Federal awarding agency must
reimburse the non-Federal entity for its actual cash disbursements.
When the reimbursement method is used, the Federal awarding agency must
make payment within 30 calendar days after receipt of the billing,
unless the Federal awarding agency reasonably believes the request to
be improper.

Sec.  910.356  Audits.

    See Subpart F of this part (Sections 910.500 through 910.521) for
specific DOE regulations which apply to audits of DOE's For-Profit
Recipients. For-Profit entities are an exception to the Single Audit
requirements contained in Subpart F of 2 CFR 200 and therefore the
regulations contained in 2 CFR 910 Subpart F apply instead.

Sec.  910.358  Profit or fee for SBIR/STTR.

    (a) As authorized by 2 CFR 200.400 (g), DOE may expressly allow
non-federal entities to earn a profit or fee resulting from Federal
financial assistance.
    (b) DOE allows a profit or fee to be paid under two of its
financial assistance programs only: Small Business Innovation Research
(SBIR) and Small Business Technology Transfer Research (STTR).
    (c) Awards under these programs will contain a specific provision
which allows a profit or fee to be paid.
    (d) Profit or Fee is unallowable for all other DOE programs which
award grants and cooperative agreements.

Sec.  910.360  Real property and equipment.

    (a) Prior approvals for acquisition with Federal funds. Recipients
may purchase real property or equipment in whole or in part with
Federal funds under an award only with the prior approval of the
contracting officer.
    (b) Title. Unless a statute specifically authorizes and the award
specifies that title to property vests unconditionally in the
recipient, title to real property or equipment vests in the recipient
subject to the conditions that the recipient:
    (1) Use the real property or equipment for the authorized purposes
of the project until funding for the project ceases, or until the
property is no longer needed for the purposes of the project;
    (2) Not encumber the property without approval of the contracting
officer; and
    (3) Use and dispose of the property in accordance with paragraphs
(d) and (e) of this section.
    (c) Federal interest in real property or equipment offered as cost-
share. A recipient may offer the full value of real property or
equipment that is purchased with recipient's funds or that is donated
by a third party to meet a portion of any required cost sharing or
matching, subject to the requirements in 2 CFR 200.306 and 2 CFR
910.360. If a resulting award includes such property as a portion of
the recipient's cost share, the Government has a financial interest in
the property, (i.e., a share of the property value equal to the Federal
participation in the project). The property is considered as if it had
been acquired in part with Federal funds, and is subject to the
provisions of paragraphs (b)(1), (b)(2), and (b)(3) of this section and
to the provisions of 2 CFR 200.313(d)(1) through (3).
    (d) Insurance. Recipients must, at a minimum, provide the
equivalent insurance coverage for real property and equipment acquired
with DOE funds as provided to property owned by the recipient.
    (e) Use. If real property or equipment is acquired in whole or in
part with Federal funds under an award and the award does not specify
that title vests unconditionally in the recipient, the real property or
equipment is subject to the following:
    (1) During the time that the real property or equipment is used on
the project or program for which it was acquired, the recipient must
make it available for use on other projects or programs, if such other
use does not interfere with the work on the project or program for
which the real property or equipment was originally acquired. Use of
the real property or equipment on other projects is subject to the
following order of priority:
    (i) Activities sponsored by DOE grants, cooperative agreements, or
other assistance awards;
    (ii) Activities sponsored by other Federal agencies' grants,
cooperative agreements, or other assistance awards;
    (iii) Activities under Federal procurement contracts or activities
not sponsored by any Federal agency. If so used, use charges must be
assessed to those activities. For real property or equipment, the use
charges must be at rates equivalent to those for which comparable real
property or equipment may be leased.
    (2) After Federal funding for the project ceases or if the real
property or equipment is no longer needed for the purposes of the
project, the recipient may use the real property or equipment for other
projects, insofar as:
    (i) There are Federally sponsored projects for which the real
property or equipment may be used. If the only use for the real
property or equipment is for projects that have no Federal sponsorship,
the receipt must proceed with disposition of the real property or
equipment, in accordance with paragraph (f) of this section.
    (ii) The recipient obtains written approval from the contracting
officer to do so. The contracting officer must ensure that there is a
formal change of accountability for the real property or equipment to a
currently funded, Federal award.
    (iii) The recipient's use of the real property or equipment for
other projects is in the same order of priority as described in
paragraph (e)(1) of this section.
    (f) Disposition. If an item of real property or equipment is no
longer needed for Federally sponsored projects, the recipient has the
following options:
    (i) If the property is equipment with a current per unit fair
market value of less than $5,000, it may be retained, sold, or
otherwise disposed of with no further obligation to DOE.
    (ii) If the property that is no longer needed is equipment (rather
than real property), the recipient may wish to replace it with an item
that is needed currently for the project by trading in or selling to
offset the costs of the replacement equipment, subject to the approval
of the contracting officer.
    (iii) The recipient may elect to retain title, without further
obligation to the Federal Government, by compensating the Federal
Government for that percentage of the current fair market value of the
real property or equipment that is attributable to the Federal
participation in the project.
    (iv) If the recipient does not elect to retain title to real
property or equipment or does not request approval to use equipment as
trade-in or offset for replacement equipment, the recipient must
request disposition instructions from the responsible agency.
    (2) If a recipient requests disposition instructions, the
contracting officer must issue instructions to the recipient for
disposition of the property no later than 120 calendar days after the
recipient's request. The contracting officer's options for disposition
are to direct the recipient to:
    (i) Transfer title to the real property or equipment to the Federal