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Rural Business Enterprise Grants and Television Demonstration Grants

Document Details

Information about this document as published in the Federal Register.

Published Document

This document has been published in the Federal Register. Use the PDF linked in the document sidebar for the official electronic format.

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Rural Business-Cooperative Service, USDA.


Final rule.


The Rural Business-Cooperative Service (RBS) adopts its interim rule published May 16, 2001 (66 FR 27013-27014), as a final rule without change. This action makes the revision to the definition of small and emerging private business enterprise final. The intended effect will ensure that grantees can assist small businesses in rural areas without eligibility restrictions for the use of technological innovations or commercialization of new products or processes.


October 15, 2002.

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Amy Cavanaugh, Rural Development Specialist, Specialty Lenders Division, Rural Business-Cooperative Service, U.S. Department of Agriculture, STOP 3225, 1400 Independence Ave. SW, Washington, DC 20250, Telephone (202) 690-2516. The TDD number is (800) 877-8339 or (202) 708-9300.

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This rule has been determined to be non-significant and has not been reviewed by the Office of Management and Budget.

Programs Affected

The Catalog of Federal Domestic Assistance number for the program impacted by this action is 10.769, Rural Development Grants.

Paperwork Reduction Act

There are no reporting and recordkeeping requirements associated with this rule.

Intergovernmental Review

The Rural Business Enterprise Grant (RBEG) Program is subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with State and local officials. RBS will conduct intergovernmental consultation in the manner delineated in RD Instruction 1940-J, “Intergovernmental Review of Rural Development Programs and Activities,” and in 7 CFR part 3015, subpart V.

Regulatory Flexibility Act

In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-602), the undersigned has determined and certified by signature of this document that this rule will not have a significant economic impact on a substantial number of small entities. New provisions included in this rule will not impact a substantial number of small entities to a greater extent than large entities. Therefore, a regulatory flexibility analysis was not performed.

Civil Justice Reform

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. In accordance with this rule: (1) All State and local laws and regulations that are in conflict with this rule will be preempted; (2) retroactive effect will be given to this rule starting August 11, 1988; and (3) administrative proceedings in accordance with the regulations of the Agency at 7 CFR part 11 must be exhausted before bringing suit in court challenging action taken under this rule unless those regulations specifically allow bringing suit at an earlier time.

Environmental Impact Statement

This document has been reviewed in accordance with 7 CFR part 1940, subpart G, “Environmental Program.” RBS has determined that this proposed action does not constitute a major Federal action significantly affecting the quality of the human environment, and, in accordance with the National Environmental Policy Act of 1969, 42 U.S.C. 4321 et seq, an Environmental Impact Statement is not required.

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. L. 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, RBS must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal Start Printed Page 63537mandates” that may result in expenditures to State, local or tribal governments, in the aggregate, or to the private sector, of $100 million or more in any 1 year. When such a statement is needed for a rule, section 205 of UMRA generally requires RBS to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, more cost-effective, or least burdensome alternative that achieves the objectives of the rule.

This rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) for State, local, and tribal governments or the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of UMRA.

Executive Order 13132

It has been determined under Executive Order 13132, Federalism, that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. The provisions contained in this rule will not have a substantial direct effect on States or their political subdivisions or on the distribution of power and responsibilities among the various levels of government.


This regulatory package is an RBS initiative to make the RBEG Program more effective at stimulating economic development by reducing certain eligibility requirements for small and emerging private business enterprises (small business) located in rural areas. There has been much confusion on the definition of small business since it was first published in the Federal Register on August 11, 1988. At that time, the RBEG Program was called the Industrial Development Grant Program. The name of the program was changed in 1992 and still contained the small and emerging business definition. The RBEG Program has been administered by two separate agencies since inception of the program. The Farmers Home Administration (FmHA) originally administered the RBEG Program. In 1996, it was transferred to RBS. FmHA misinterpreted the definition of small and emerging business in its regulations as only needing to meet the first two parts of the definition in order to be eligible for assistance and funded grants based on this misinterpretation. RBS has recently determined that the FmHA interpretation is not consistent with the actual regulatory language. Therefore, the Agency wants to correct the definition language and make it retroactive from August 11, 1988, so the revised definition will be applicable to existing grants. Retroactive application of the definition will validate existing grants, which might not otherwise have been eligible under a strict application of the regulatory criteria defining a small business. This will ultimately streamline the regulation and reduce the burden to the applicant in meeting the restricted definition.

Discussion of Comments

This rule was published in the Federal Register as an interim rule on May 16, 2001 (66 FR 27013-27014). There were five comments received regarding the small and emerging private business enterprise definition change. Three comments were actually requests for general program information. One comment concerned the need to do a survey to prove that those benefiting from the program were all low-income residents. There is no such regulatory requirement in the RBEG Program. This program directly benefits small businesses rather than residents. The last comment suggested that for-profit business enterprises be eligible to receive grant funds to do technical assistance services. The authorizing statute for the RBEG program, section 310B(c) of the Consolidated Farm and Rural Development Act, 7 U.S.C. 1932(c), only allows for private nonprofit corporations and public bodies, which includes Federally recognized Indian Tribes, to be eligible to receive grant funds. However, if a grantee does not have the expertise, it may contract with a for-profit business to provide the necessary technical assistance services to the benefiting small businesses.

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List of Subjects in 7 CFR Part 1942

  • Business and industry
  • Grant programs—Housing and community development
  • Industrial park
  • Rural areas
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Accordingly, the interim rule amending 7 CFR part 1942 which was published May 16, 2001 (66 FR 27013-27014), is adopted as a final rule without change.

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Dated: October 4, 2002.

Thomas C. Dorr,

Under Secretary, Rural Development.

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[FR Doc. 02-26108 Filed 10-11-02; 8:45 am]