[Federal Register Volume 83, Number 92 (Friday, May 11, 2018)]
[Rules and Regulations]
[Pages 21846-21850]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2018-10015]
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DEPARTMENT OF AGRICULTURE
National Institute of Food and Agriculture
7 CFR Part 3419
RIN 0524-AA68
Matching Funds Requirements for Agricultural Research and
Extension Capacity Funds at 1890 Land-Grant Institutions, Including
Central State University, Tuskegee University, and West Virginia State
University, and at 1862 Land-Grant Institutions in Insular Areas
AGENCY: National Institute of Food and Agriculture, USDA.
ACTION: Final rule.
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SUMMARY: This final rule amends National Institute of Food and
Agriculture (NIFA) regulations for the purpose of implementing the
statutory amendments applicable to the National Institute of Food and
Agriculture's (NIFA) matching requirements for Federal agricultural
research and extension capacity (formula) funds for 1890 land-grant
institutions (LGUs), including Central State University, Tuskegee
University, and West Virginia State University, and 1862 land-grant
institutions in insular areas, and to remove the term ``qualifying
educational activities.'' These matching requirements were amended by
the Farm Security and Rural Investment Act; the Food, Conservation, and
Energy Act of 2008; and the Agricultural Act of 2014.
DATES: This final rule is effective May 11, 2018.
FOR FURTHER INFORMATION CONTACT: Maggie Ewell, Senior Policy Advisor,
202-401-0222.
SUPPLEMENTARY INFORMATION:
I. Background and Purpose
The National Institute of Food and Agriculture (NIFA) amends part
3419 of Title 7, subtitle B, chapter XXXIV of the Code of Federal
Regulations which implements the matching requirements provided under
section 1449 of the National Agricultural Research, Extension, and
Teaching Policy Act of 1977 (NARETPA) for agricultural research and
extension capacity (formula) funds authorized for the 1890 land-grant
institutions, including Central State University, Tuskegee University,
and West Virginia State University and 1862 land-grant institutions in
insular areas. This revision is required due to the statutory
amendments of sections 7212 of the Farm Security and Rural Investment
Act of 2002 (FSRIA); section 7127 of the Food, Conservation, and Energy
Act of 2008; and section 7129 of the Agricultural Act of 2014.
Additionally, NIFA makes these changes to the Definitions and Use of
Matching Funds sections to provide clarity on allowable uses of
matching funds.
Response to Comments on the Proposed Rule and Revisions Included in
Final Rule
On November 13, 2017, NIFA published in the Federal Register a
Notice of Proposed Rulemaking entitled ``Matching Funds Requirements
for Agricultural Research and Extension Capacity Funds at 1890 Land-
Grant Institutions and 1862 Land-Grant Institutions in Insular Areas''
(82 FR 52250) with the same purpose as above. The public had 60 days to
comment, with the comment period closing January 12, 2018. NIFA
received only one comment in response to the Notice of Proposed
Rulemaking and this comment addressed issues that are outside the scope
of this rule. The commenter discussed the inhumane treatment of farm
animals in general. Because this comment is outside the scope of this
rule, no change will be made to the language of the revision based on
this comment.
Summary of Changes in Final Rule
Section 3419.1 Definitions
The definition of an eligible institution is updated to include
West Virginia State University (formerly West Virginia State College)
and Central State University. Section 753 of the Agricultural, Rural
Development, Food and Drug Administration, and Related Agencies
Appropriations Act, 2002 (Pub. L. 107-76) restored 1890 land-grant
institution status to West Virginia State College. In 2004, the West
Virginia Legislature approved West Virginia State College's transition
to University status. Central State University was recognized as an
1890 land-grant institution under section 7129 of the Agricultural Act
of 2014.
In 2014, NIFA re-branded its formula grant programs as ``capacity
grants.'' Therefore, the definition of formula funds is changed to
reflect this terminology, capacity funds, and the words ``by formula''
are inserted to clarify that capacity funds are provided by formula to
eligible institutions.
The term and definition for qualifying educational activities is
removed due to the fact that this term has caused confusion regarding
what constitutes an allowable qualifying educational
[[Page 21847]]
activity. NIFA follows the authorized uses of funds in NARETPA,
codified at 7 U.S.C. 3221 and 3222, for extension and research
programs. Research funds are for conducting agricultural research,
printing, disseminating the results of research, administration,
planning and direction, purchase and rental of land, and the
construction, acquisition, alteration, or repair of buildings necessary
for conducting agricultural research. Extension funds are for the
expenses of conducting extension programs and activities. 7 U.S.C.
3221(e) expressly prohibits extension funds from being spent on college
course teaching or lectures in college.
NARETPA also contains definitions that explain the difference
between education in conjunction with extension programs and education
and teaching. Extension education is defined as ``informal'' while
teaching and education is defined as ``formal classroom instruction,''
which is expressly prohibited under 7 U.S.C. 3221(e).
Because the authorized uses related to education expenses are
clearly outlined in NARETPA and in 7 U.S.C. 3221 and 3222, NIFA does
not see the value in including the term ''qualifying educational
activity'' as a term in regulation and, further, wants to ensure there
is no conflict between its regulatory authorizations and the law.
Therefore, NIFA removes the term ``qualifying educational activity''
and will allow only informal educational activities, as authorized by
statute.
Section 3419.2 Matching Funds Requirements
Revisions to this section are required due to statutory amendments
of sections 7212 of FSRIA; section 7127 of the Food, Conservation, and
Energy Act of 2008; and section 7129 of the Agricultural Act of 2014.
The information regarding Fiscal Years 2000, 2001, and 2002 are removed
as they are outdated and no longer applicable. NIFA replaces this text
with the matching requirements for 1862 land-grant institutions in
insular areas for the Smith-Lever 3(b) and (c) program (7 U.S.C.
343(e)(4)(A)) and the Hatch Act program (7 U.S.C. 361c(d)(4)(A)), which
state that insular areas will provide matching funds from non-Federal
sources in an amount equal to not less than 50 percent of the formula
funds distributed by NIFA to each of the 1862 land-grant institutions
in insular areas, respectively. NIFA replaces existing text with the
matching requirement to the Evans Allen/Section 1445 fund program (7
U.S.C. 3222d) and Extension/Section 1444 fund programs (7 U.S.C. 3221)
which state that the State will provide equal matching funds from non-
Federal sources.
Section 3419.3 Limited Waiver Authority
The section entitled, ``Determination of non-Federal sources of
funds,'' Sec. 3419.3, is removed, because it reiterated a statutory
requirement to submit, in the year 1999, a report on non-Federal funds
used as match to be submitted. There is no further statutory
requirement or authority to submit reports on the sources of non-
Federal funds. Section 3419.4 Limited Waiver Authority is re-designated
as Sec. 3419.3 and modified to include the provisions of 7 U.S.C
3222d(d): authorization of a 50% waiver of matching funds authority for
1890 land-grant institutions. Additionally, Sec. 3419.3 includes the
authority to waive up to 100% of the required match for 1862 land-grant
institutions in insular areas that is present in 7 U.S.C. 343(e)(4)(B).
NIFA also adds to this section a description of the criteria a
land-grant institution must demonstrate in order to be eligible for a
waiver. The three criteria are: Impacts from natural disaster, flood,
fire, tornado, hurricane, or drought; State and/or Institution facing a
financial crisis; or lack of matching funds after demonstrating a good
faith effort to obtain funds.
Section 3419.4 Application for Waivers for Both 1890 Land-Grant
Institutions and 1862 Land-Grant Institutions in Insular Areas
NIFA adds Sec. 3419.4 to outline how 1890 land-grant institutions
and 1862 land-grant institutions in insular areas may request a
matching waiver. To request a waiver, the president of the institution
must submit in writing a request for a waiver of the matching
requirements. The request must include the name of the eligible
institution, the type of capacity funds, which would include Section
1444 Extension, Section 1445 Research; Smith-Lever; or Hatch Act; the
fiscal year of the match; and the basis of the request, i.e., one or
more of the criteria identified in 3419.3. Requests for waivers may be
submitted with the application for funds or at any time during the
period of performance of the award. Additionally, NIFA includes a
requirement for current supporting documentation, where current is
defined as within the past two years from the date of the letter
requesting the waiver. It is critical that NIFA base its decisions for
matching waivers on the current state of affairs within the State and
institution. Using older data does not provide adequate rationale for
NIFA to waive the statutorily required match for capacity programs.
Section 3419.5 Certification of Matching Funds
The only change in this section is changing the word ``formula'' to
``capacity,'' consistent with the current terminology used by NIFA.
Section 3419.6 Use of Matching Funds
NIFA includes minor technical changes to this section: Use of the
term ``capacity'' in place of ``formula'' and ``must'' in place of
``shall.'' These technical changes have no impact on the requirements
from the existing to the proposed regulation. Additionally, NIFA adds
clarifying language that matching funds must be used for the same
purpose as Federal dollars as well as a specific prohibition on the use
of tuition dollars and student fees as match.
The intent of the rule is to clarify two requirements. First, the
amended rule clarifies that matching funds must be used by an eligible
institution for the same purpose as Federal award dollars: Agricultural
research and extension activities that have been approved in the plan
of work. Second, the amended rule removes the end phrase: ``or for
approved qualifying educational activities.'' As discussed in Sec.
3419.1 Definitions, the use of the phrase ``qualifying educational
activities'' has caused confusion regarding what constitutes an
allowable qualifying educational activity. NIFA supports the position,
as required under 2 CFR 200.306, that all matching funds must be
necessary and reasonable for accomplishment of project or program
objectives. In other words, to be allowable as a match, the costs must
be allowable under the Federal award. This principle applies to
matching funds 1890 land-grant institutions receive for Research and
Extension programs, as well as the funds received by 1862 land-grant
institutions in insular areas for Smith-Lever and Hatch programs.
NIFA follows the authorized uses of funds in the authorizing
statutes for determining what is allowable under the Federal award. For
1862 land-grant institutions in insular areas, this is the authorized
uses under 7 U.S.C. 343 for Smith-Lever programs and 7 U.S.C. 361a for
Hatch Act programs.
For 1890 Extension and Research programs, NIFA follows the
authorizations included in NARETPA, codified at 7 U.S.C. 3221 and 3222.
Research funds are for conducting agricultural research; printing;
disseminating the results of research,
[[Page 21848]]
administration, planning and direction; purchase and rental of land;
and the construction, acquisition, alteration, or repair of buildings
necessary for conducting agricultural research. Extension funds are for
the expenses of conduction extension programs and activities. 7 U.S.C.
3221(e) expressly prohibits extension funds from being spent on college
course teaching or lectures in college.
NARETPA also contains definitions that explain the difference
between education in conjunction with extension programs versus
education and teaching. Extension education is defined as ``informal''
while teaching and education is defined as ``formal classroom
instruction,'' which is expressly prohibited under 7 U.S.C. 3221(e).
Because the authorized uses related to education expenses are
clearly outlined in NARETPA and 7 U.S.C. 3221 and 3222, NIFA does not
see value in including the term ``qualifying educational activity'' as
a term in regulation and further, wants to ensure there is no conflict
between its regulatory authorizations and the law. Therefore, NIFA
removes the term ``qualifying educational activity;'' however, the
removal is intended to prohibit expenditures related to formal
education activities. NIFA will allow only informal education
activities, as authorized by statute.
Under 7 U.S.C. 3221(a)(3), funds appropriated for extension must be
used for the expenses of conducting extension programs and activities,
and for contributing to the retirement of employees subject to the
provisions of 7 U.S.C. 331. 7 U.S.C. 3222(e) expressly prohibits
extension funds from being spent on college course teaching and
lectures in college. Section 1404(7) of NARETPA defines the term
extension to mean informal education programs conducted in the States
in cooperation with the Department of Education. Therefore, NIFA has
determined that the current authorizations allow for informal education
programs to be conducted with extension funding, but not for formal
classroom instruction.
7 U.S.C. 3222(a)(3) states that: ``research funding must be used
for the expenses of conducting agricultural research, printing,
disseminating the results of such research, contributing to the
retirement of employees subject to the provisions of 7 U.S.C. 331 of
this title, administrative planning and direction, and purchase and
rental of land and the construction, acquisition, alteration, or repair
of buildings necessary for conducting agricultural research.''
Because the authorizing statutes so clearly identify authorized
uses and prohibitions, NIFA believes that no further explanation or
inclusion of qualifying educational activities is needed in this
regulation.
Finally, Section 1473 of NARETPA, 7 U.S.C. 3319, prohibits grantee
institutions from using capacity funds for tuition remission.
Therefore, NIFA revises this section to clarify that this prohibition
also applies to student fees, as they are related to tuition. Further 7
U.S.C. 3221 and 3222 do not include tuition or student fees as
authorized uses of funds. As provided in 7 U.S.C. 3221(e) and 3222(d),
no portion of the funds provided to an 1890 institution for extension
and research shall be applied, directly or indirectly, to any purpose
other than those specified in the authorizing statutes. Therefore, NIFA
clarifies that tuition dollars and student fees are not to be used as
matching funds.
Section 3419.7 Reporting of Matching Funds
This revision adds a section on reporting of matching funds to
clarify an existing requirement that 1890 land-grant institutions and
1862 land-grant institutions in insular areas report all capacity funds
expended on an annual basis using Standard Form (SF) 425, in accordance
with 7 CFR part 3430. This ensures that the information on matching
funds is reported to NIFA.
Section 3419.8 Redistribution of Funds
This revision removes the first sentence of the existing provision
as the timing of reapportionment may vary. Removing this sentence does
not change the statutory requirements for reapportionment. The only
significance of the deletion is to remove the July 1 date for action.
Additionally, one other technical correction changes ``shall'' to
``must,'' consistent with the plain English provisions relating to
rulemaking.
Executive Order 12866 and Executive Order 13563
Executive Orders 12866 and 13563 direct agencies to assess all
costs and benefits of available regulatory alternatives and, if
regulation is necessary, to select regulatory approaches that maximize
net benefits (including potential economic, environmental, public
health and safety effects, distributive impacts, and equity). Executive
Order 13563 emphasizes the importance of quantifying the costs and
benefits of simplifying and harmonizing rules, and of promoting
flexibility. This rule has been determined to be not significant for
purposes of Executive Order 12866.
Executive Order 13771
This final rule is not expected to be an E.O. 13771 regulatory
action because this rule is not significant under E.O. 12866.
Regulatory Flexibility Act
This final rule has been reviewed in accordance with the Regulatory
Flexibility Act of 1980, as amended by the Small Business Regulatory
Enforcement Fairness Act of 1996, (5 U.S.C. 601-612). The Director of
the NIFA certifies that this regulation will not have a significant
economic impact on a substantial number of small entities. This
regulation will affect institutions of higher education receiving
Federal funds under this program. The U.S. Small Business
Administration Size Standards define institutions as ``small entities''
if they are for-profit or nonprofit institutions with total annual
revenue below $5,000,000 or if they are institutions controlled by
governmental entities with populations below 50,000. The rule does not
involve regulatory and informational requirements regarding businesses,
organizations, and governmental jurisdictions subject to regulation.
Catalogue of Federal Domestic Assistance
The programs affected by this final rule are listed in the
Catalogue of Federal Domestic Assistance under 10.500, Cooperative
Extension Service; 10.511, Smith-Lever Funding; 10.512, Agriculture
Extension at 1890 Land-grant Institutions, and 10.205, Payments to 1890
Land-Grant Colleges and Tuskegee University Evans-Allen Research and/or
Agricultural Research at 1890 Land-grant institutions, including
Tuskegee University, West Virginia State University, and Central State
University; and 10.203, Payments to Agricultural Experiment Stations
Under the Hatch Act (The Hatch Act of 1887).
Paperwork Reduction Act
The Department certifies that this final rule has been assessed in
accordance with the requirements of the Paperwork Reduction Act (PRA),
44 U.S.C. 3501 et seq. The Department concludes that this rule does not
impose any new information collection requirements or change the burden
estimate on existing information collection requirements. In addition
to the SF-424 form families (i.e., Research
[[Page 21849]]
and Related and Mandatory) and the SF-425 Federal Financial Report
(FFR) No. 0348-0061, NIFA has three currently approved OMB information
collections associated with this rulemaking: OMB Information Collection
No. 0524-0042, NIFA REEport; No. 0524-0041, NIFA Application Review
Process; and No. 0524-0026, Organizational Information.
Unfunded Mandates Reform Act of 1995 and Executive Order 13132
The Department has reviewed this final rule in accordance with the
requirements of Executive Order No. 13132 and the Unfunded Mandates
Reform Act of 1995, 2 U.S.C. 1501 et seq., and has found no potential
or substantial direct effects on the States, on the relationship
between the national government and the States, or on the distribution
of power and responsibilities among the various levels of government.
As there is no Federal mandate contained herein that could result in
increased expenditures by State, local, or tribal governments, or by
the private sector, the Department has not prepared a budgetary impact
statement.
Clarity of This Regulation
Executive Order 12866 and the President's Memorandum of June 1,
1998, require each agency to write all rules in plain language. The
Department invites comments on how to make this rule easier to
understand.
List of Subjects in 7 CFR Part 3419
1890 land-grant institutions, Agricultural extension, Agricultural
research, Grant programs-agriculture, Insular areas, Land-grant
institutions, Matching funds.
For the reasons discussed in the preamble, the Department of
Agriculture, National Institute of Food and Agriculture, amends 7 CFR
part 3419 as follows:
PART 3419--MATCHING FUNDS REQUIREMENT FOR AGRICULTURAL RESEARCH AND
EXTENSION CAPACITY FUNDS AT 1890 LAND-GRANT INSTITUTIONS, INCLUDING
CENTRAL STATE UNIVERSITY, TUSKEGEE UNIVERSITY, AND WEST VIRGINIA
STATE UNIVERSITY AND AT 1862 LAND-GRANT INSTITUTIONS IN INSULAR
AREAS
0
1. The authority citation for part 3419 is revised to read as follows:
Authority: 7 U.S.C. 3222d; 7 U.S.C. 343(e); 7 U.S.C. 361c; Pub.
L. 107-171; Pub. L. 110-234; Pub. L. 113-79.
0
2. Revise the heading of part 3419 to read as set forth above.
0
3. Amend Sec. 3419.1 as follows:
0
a. Add a definition for ``Capacity funds'' in alphabetical order;
0
b. Revise the definition of ``Eligible institution'';
0
c. Remove the definition of ``Formula funds'';
0
d. Revise the definition of ``Matching funds''; and
0
e. Remove the definition of ``Qualifying educational activities''.
The addition and revision read as follows:
Sec. 3419.1 Definitions.
* * * * *
Capacity funds means agricultural extension and research funds
provided by formula to the eligible institutions under sections 1444
and 1445 of the National Agricultural Research, Extension, and Teaching
Policy Act of 1977 (NARETPA), as amended, or under sections 3(b) and
(c) of the Smith-Lever Act, 7 U.S.C. 343(b) and (c) or under section 3
of the Hatch Act of 1887, 7 U.S.C. 361c.
Eligible institution means a college or university eligible to
receive funds under the Act of August 30, 1890 (7 U.S.C. 321 et seq.)
(commonly known as the Second Morrill Act), including Central State
University, Tuskegee University, and West Virginia State University
(1890 land-grant institutions), and a college or university designated
under the Act of July 2, 1862 (7 U.S.C. 301, et seq.) (commonly known
as the First Morrill Act) and located in the Commonwealth of Puerto
Rico and the insular areas of American Samoa, Guam, Micronesia,
Northern Marianas, and the U.S. Virgin Islands (1862 land-grant
institutions in insular areas).
Matching funds means funds from non-Federal sources, including
those made available by the State to the eligible institutions, for
programs or activities that fall within the purposes of agricultural
research and cooperative extension under: sections 1444 and 1445 of
NARETPA; the Hatch Act of 1887; and the Smith-Lever Act.
* * * * *
0
4. Amend Sec. 3419.2 as follows:
0
a. Revise the section heading;
0
b. Remove the introductory text; and
0
c. Revise paragraphs (a) and (b).
The revisions read as follows:
Sec. 3419.2 Matching funds requirement.
(a) 1890 land-grant institutions. The distribution of capacity
funds are subject to a matching requirement. Matching funds will equal
not less than 100% of the capacity funds to be distributed to the
institution.
(b) 1862 land-grant institutions in insular areas. The distribution
of capacity funds are subject to a matching requirement. Matching funds
will equal not less than 50% of the capacity funds to be distributed to
the institution.
* * * * *
Sec. 3419.3 [Removed]
0
5. Remove Sec. 3419.3.
0
6. Redesignate Sec. 3419.4 as Sec. 3419.3 and revise newly designated
Sec. 3419.3 to read as follows:
Sec. 3419.3 Limited waiver authority.
(a) 1890 land-grant institutions: The Secretary may waive the
matching funds requirement in Sec. 3419.2 above the 50% level for any
fiscal year for an eligible institution of a State if the Secretary
determines that the State will be unlikely to satisfy the matching
requirement.
(b) 1862 land-grant institutions in insular areas: The Secretary
may waive up to 100% of the matching funds requirements in Sec. 3419.2
for any fiscal year for an eligible institution in an insular area.
(c) The criteria to waive the applicable matching requirement for
1890 land-grant institutions and 1862 land-grant institutions in
insular areas is demonstration of one or more of the following:
(1) Impacts from natural disaster, flood, fire, tornado, hurricane,
or drought;
(2) State and/or institution facing a financial crisis; or
(3) Lack of matching funds after demonstration of good faith
efforts to obtain funds.
(d) Approval or disapproval of the request for a waiver will be
based on the application submitted, as defined under Sec. 3419.4.
0
7. Add a new Sec. 3419.4 to read as follows:
Sec. 3419.4 Applications for waivers for both 1890 land-grant
institutions and 1862 land-grant institutions in insular areas.
Application for waivers for both 1890 land-grant institutions and
1862 land-grant institutions in insular areas. The president of the
eligible institution must submit any request for a waiver for matching
requirements. A waiver application must include the name of the
eligible institution, the type of Federal capacity funds (i.e.
research, extension, Hatch, etc.), appropriate fiscal year, the basis
for the request (e.g. one or more of the criteria identified in Sec.
3419.3); current supporting documentation, where current is
[[Page 21850]]
defined as within the past two years from the date of the letter
requesting the waiver; and the amount of the request.
Sec. 3419.5 [Amended]
0
8. Amend Sec. 3419.5 by removing the word ``formula'' and adding, in
its place, the word ``capacity''.
0
9. Revise Sec. 3419.6 to read as follows:
Sec. 3419.6 Use of matching funds.
The required matching funds for the capacity programs must be used
by an eligible institution for the same purpose as Federal award
dollars: Agricultural research and extension activities that have been
approved in the plan of work required under sections 1445(c) and
1444(d) of the National Agricultural Research, Extension, and Teaching
Policy Act of 1977, section 7 of the Hatch Act of 1887, and section 4
of the Smith-Lever Act. For all programs, tuition dollars and student
fees may not be used as matching funds.
0
10. Redesignate Sec. 3419.7 as Sec. 3419.8 and revise newly
redesignated Sec. 3419.8 to read as follows:
Sec. 3419.8 Redistribution of funds.
Unmatched research and extension funds will be reapportioned in
accordance with the research and extension statutory distribution
formulas applicable to the 1890 and 1862 land-grant institutions in
insular areas, respectively. Any redistribution of funds must be
subject to the same matching requirement under Sec. 3419.2.
0
11. Add a new Sec. 3419.7 to read as follows:
Sec. 3419.7 Reporting of matching funds.
Institutions will report all capacity matching funds expended
annually using Standard Form (SF) 425, in accordance with 7 CFR
3430.56(a).
Done at Washington, DC, this 7th day of May 2018.
Meryl Broussard,
Associate Director for Programs, National Institute of Food and
Agriculture.
[FR Doc. 2018-10015 Filed 5-10-18; 8:45 am]
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