Transmission of gas means the moving of gas by the necessary operation and E plant to metering station from which it is distributed to consumers.

Distribution of gas means the moving of gas by the necessary operation and plant from the metering station of the transmission system to consumers

within a particular locality and also may include the facilities for local storage, regulation and consumer metering.

(2) The following gas facilities are not barred from receiving financial assistance under the Act:

(i) Facilities specifically authorized by Congress;

(ii) Local facilities servicing industrial parks or industrial or commercial areas of communities which have lost or are threatened with a loss of jobs due to the interruption or curtailment or threat thereof, of gas energy supplies or which could create new jobs through the project: Provided, the following requirements are met.

(A) The Assistant Secretary determines that project financing is not available from private lenders or other Federal agencies on terms which, in the opinion of the Assistant Secretary, would permit completion and operation of the project.

(B) The Federal or State regulatory body regulating such energy facility makes one of the following determinations:

(1) The facility to be financed would not compete with existing public utilities providing energy to the public at rates or charges subject to control by the regulatory body; or

(2) The facility to be financed would compete with existing public utilities, but the area to be served by the facility needs increased supplies of gas energy and existing public utilities are not able to meet this demand through existing facilities or are not willing to meet this demand through expansion.

(iii) Facilities for the distribution of gas as described in paragraph (b)(1) of this section.

(c) Not more than seven million dollars of the funds appropriated to carry out titles I and II of the Act may be expended annually for projects described

in paragraphs (a)(2) and (b)(2) of this section.

(Pub. L. 94-487, 90 Stat. 2331 (42 U.S.C. 3121 et seq.); Department of Commerce Organization Order 104, as amended (40 FR 56702, as amended))

[38 FR 2287, Jan. 23, 1973, as amended at 42 FR 5599, Jan. 28, 1977; 46 FR 9026, Jan. 28, 1981; 55 FR 18595, May 3, 1990; 55 FR 38313, Sept. 18, 1990]

§ 309.5 Administration, operation, and maintenance of projects.

No financial assistance under the Act will be approved unless EDA is satisfied that the project for which financial assistance is granted will be properly and efficiently administered, operated, and maintained.

§ 309.6 Labor standards-construction of projects.

fi

The construction of facilities nanced in whole or in part by loans or grants made under the Act (hereinafter in this section called projects) are subject to the following statutes and regulations:

(a) Applicants for assistance must assure EDA that all laborers and mechanics employed by contractors or subcontractors in the construction of projects shall be paid wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, as amended (40 U.S.C. 276a-276a-5). The construction work on projects will be subject to the regulations issued by the Secretary of Labor pursuant to the Davis-Bacon Act (29 CFR part 5).

(b) Contractors and subcontractors engaged in construction of projects are subject to the provisions of the Copeland Act, as amended (40 U.S.C. 276c), and the regulations issued thereunder by the Secretary of Labor (29 CFR parts 3 and 5).

(c) Contractors and subcontractors engaged in construction of projects are subject to the provisions of the Contract Work Hours and Safety Standards Act, as amended (40 U.S.C. 327-333) and the regulations issued thereunder

by the Secretary of Labor (29 CFR part 5).

[38 FR 2287, Jan. 23, 1973, as amended at 43 FR 54924, Nov. 21, 1978; 43 FR 56220, Dec. 1, 1978]

$309.7 Employment of expediters or administrative employees; compensation of persons engaged by or on behalf of applicants.

(a) No application or plan for financial assistance for any business enterprise shall be approved by EDA under sections 101, 201, 202 or 403 of the Act unless the applicant:

(1) Certifies to EDA the names of any attorneys, agents, and other persons engaged by or on behalf of such applicant for the purpose of expediting applications made to EDA for assistance of any sort, under this Act, and the fees paid or to be paid to any such person, and

(2) Executes an agreement to refrain from employing, tendering any office or employment to, or retaining for professional services, any person who, on the date such assistance or any part thereof was rendered, or within 1 year prior thereto, shall have served as an officer, attorney, agent, or employee, occupying a position or engaging in activities which EDA shall have determined involves discretion with respect to the granting of assistance under this Act. Such agreement will be binding on the applicant for a period of 2 years after EDA financial assistance is rendered.

(b) Definitions as used in this section: The term Positions involving discretion means the Assistant Secretary; Deputy Assistant Secretary; Deputy Assistant Secretary for Operations; Deputy Assistant Secretary for Finance; Office Directors and Division Chiefs in the Offices of: Public Works; Special Servicing; Liquidation; Loan Management; Financial Assistance; Planning, Technical Assistance, Research, and Evaluation; and Economic Adjustment. They also include Regional Directors with respect to projects located in their regions. Clerical employees do not occupy positions involving discretion with respect to the granting of assistance under the Act. The discretionary nature of positions and activities of other employees shall

be determined by the Assistant Secretary at such times as the employee terminates his/her employment.

(c) EDA will participate in such costs of facilities receiving financial assistance under the Act as are deemed to be reasonable as fees or compensation for services actually rendered by persons engaged by or on behalf of the EDA ap plicant for the purpose of rendering professional or other services necessary, as determined by EDA, in connection with such facilities or with the extension of financial assistance by EDA. Provided that, no funds appropriated or otherwise made available under Pub. L. 99-180, December 13, 1985, and Pub. L. 99-500, October 18, 1986, may be used directly or indirectly for attorneys' or consultants' fees in connection with securing grants and contracts made by EDA, such as preparing applications for EDA financial assistance; however; attorneys' and consultants' fees for meeting grant requirements, such as conducting a title search or preparing plans and specifications, could be eligible project costs and paid for out of funds appropriated or otherwise made available under Pub. L. 99-180 and Pub. L. 99-500. No fee or compensation will be allowed if it ap pears that the person charging such fee or compensation has:

(1) Induced or attempted to induce by gifts, or offer thereof, promises, bribes or otherwise, any officer or employee of EDA to take action with respect to any matter before EDA.

(2) Made representations that imply that the service for which the fee is charged, or any portion thereof, is or will be of a political, influential, or similar nature.

(3) Charged or proposed to charge any fee contingent upon the granting of any assistance to the applicant.

(4) Shown a course of conduct which indicates that the person might submit false information or evidence to EDA or engage in corrupt practices before EDA in connection with matters on which he is employed.

(d) The requirements of this section will apply to applications filed with EDA after April 30, 1971. The requirements of paragraphs (a) and (b) of this section, will also apply to applications filed with EDA prior to April 30, 1971,

except that for the purpose of such applications positions involving discretion means the Assistant Secretary, Deputy Assistant Secretaries for Economic Development, Policy Coordination, Economic Development Planning and Economic Development Operations; Office Directors, Deputy Directors, and Division Chiefs in the Office of Public Works, Business Development, and Technical Assistance; and Director and Deputy Director of the Offices of Economic Research, Regional Development Planning, and District and Area Planning. They also include Area Office Directors with respect to projects located in their areas. Clerical employees do not occupy positions involving discretion with respect to the granting of assistance under the Act. The discretionary nature of the positions and activities of other employees shall be determined by the Assistant Secretary at such time as the employee terminates his employment.

(e) The amendments to paragraphs (a) and (b) of this section apply to applications accepted and numbered by the EDA Regional Office or EDA Washington Office after February 28, 1974.

(38 FR 2287, Jan. 23, 1973, as amended at 39 FR 3818, Jan. 30, 1974; 39 FR 44970, Dec. 30, 1974; 40 FR 49078, Oct. 21, 1975; 50 FR 20747, May 20, 1985; 52 FR 27539, July 22, 1987]

$309.8 Penalties.

(a) Pursuant to section 710(a) of the Act and 18 U.S.C. 1001, whoever makes any statement knowing it to be false, or whoever willfully overvalues any security, for the purpose of obtaining for himself or for any applicant any financial assistance under the Act or any extension thereof by renewal, deferment of action or otherwise, or the acceptance, release or substitution of security therefor, or for the purpose of influencing in any way the action of EDA or members of its staff, or for the purpose of obtaining money, property, or anything of value, under the Act, shall be punishable by a fine of not more than $10,000 or by imprisonment for not more than 5 years, or both.

(b) Whoever, being connected in any capacity with EDA in the administration of this Act:

(1) Embezzles, abstracts, purloins, or willfully misapplies any moneys, funds,

securities, or other things of value, whether belonging to him or pledged or otherwise entrusted to him, or

(2) With intent to defraud EDA or any other body politic or corporate, or any individual, or to deceive any officer, auditor, or examiner, makes any false entry in any book, report, or statement of or to EDA, or without being duly authorized draws any order or issues, puts forth, or assigns any note, debenture, bond, or other obligation, or draft, bill of exchange, mortgage, judgment, or decree thereof, or

(3) With intent to defraud participates or shares in or receives directly or indirectly any money, profit, property, or benefit through any transaction, loan, grant, commission, contract, or any other act of EDA, or

(4) Willfully gives any unauthorized information concerning any future action or plan of EDA which might affect the value of securities, or having such knowledge invests or speculates, directly or indirectly, in the securities or property of any company or corporation receiving loans, grants, or other assistance from the Assistant Secretary,

shall be punished by a fine of not more than $10,000 or by imprisonment for not more than 5 years, or both.

[38 FR 2287, Jan. 23, 1973, as amended at 39 FR 3818, Jan. 30, 1974]

§ 309.9 Records and audit.

(a) Each recipient of assistance under the Act shall keep such records as EDA shall prescribe, including records which fully disclose the amount and the disposition by such recipient of the proceeds of such assistance, the total cost of the project or undertaking in connection with which such assistance is given or used, the amount and nature of that portion of the cost of the project or undertaking supplied by other sources, and such other records as will facilitate an effective audit. Records shall be kept for a period of three (3) years after the date of the final expenditure report or, for projects which are renewed annually, after the date of the submission of the annual expenditure report except that:

(1) If audit findings have not been resolved, these records are to be retained beyond the three (3) year period;

(2) Records for nonexpendable property shall be retained for three (3) years after its final disposition;

(3) When grant records are transferred to or maintained by EDA, the three (3) year retention requirement is not applicable.

(b) The Assistant Secretary, the Comptroller General of the United States, or any of their duly authorized representatives shall have access for the purpose of audit and examination to any books, documents, papers, and records of the recipient that are pertinent to assistance received under the Act.

[38 FR 2287, Jan. 23, 1973, as amended at 40 FR 13204, Mar. 25, 1975]

§ 309.10 Assurance of job opportunities for the unemployed.

(a) Applicants for business development loans under section 202 of the Act and direct and substantial beneficiaries of title IX grants and EDA assisted public works project must submit to EDA assurances of compliance with the EDA policy of assuring job opportunities for the unemployed and underemployed, unless in the case of business development loans under section 202 of the Act, EDA determines that the applicant shall obtain for EDA such assurances from other parties. The assurances shall indicate the intention of the applicant to give preferential consideration for employment, wherever possible, to the long term unemployed and underemployed residing in the project area, in connection with the project assisted by EDA.

Secretary, provide all or part of the justification of the project.

[38 FR 2287, Jan. 23, 1973, as amended at 38 FR 18870, July 16, 1973; 39 FR 44970, Dec. 30, 1974]

§ 309.11 Special-purpose units of local

government.

(a) When both special-purpose units of local government and units of general local government are eligible to receive financial assistance under the Act, in absence of substantial reasons to the contrary, such assistance shall be made to units of general local government rather than to special-purpose units of local government, as required by section 4232 of the "Intergovernmental Cooperation Act of 1968" (40 U.S.C. 531-535; 42 U.S.C. 4201, 4211, 4214, 4221-4225, 4231-4233, 4241, 4244).

(b) Definitions. As used in this section:

Unit of general local government means any city, county, town, parish, village or other general purpose political subdivision of a State.

Special-purpose unit of local gover ment means any special district, public purpose corporation, or other strictly limited purpose political subdivision of a State, but does not include a school district.

§ 309.12 Preapproval construction.

It is the policy of EDA to discourage the undertaking of any construction prior to the submission of an application for financial assistance. Commencement of a project prior to approval of the application for assistance is not prohibited but may jeopardize the favorable consideration of such application since, among other things, it raises a rebuttable presumption that funds necessary for the accomplishment of the project are otherwise available and that proper contracting procedures and labor standards have not been followed.

§309.13 EDA assistance additional to other Federal assistance.

All financial assistance under the Act shall be in addition to any other Federal assistance previously authorized. No assistance under the Act will be used to reduce or diminish the proportional amount of any such other

Federal assistance to which any eligible applicant for EDA assistance would otherwise be entitled under the provisions of any other act.

§309.14 Design, construction, and alteration of buildings to accommodate the physically handicapped.

(a) Any building or facility financed in whole or in part with assistance under the Act must be designed, constructed, or altered, so as to insure ready access to, and use of, such building or facility by the physically handicapped, as required by Pub. L. 90-480 (42 U.S.C. 4151-4156) and the regulations promulgated thereunder (41 CFR subpart 101-19.6).

(b) Except as otherwise provided in paragraph (c) of this section, every such building, except a residential structure or a facility designed, constructed, or altered after September 2, 1969, shall be designed, constructed, or altered in accordance with the minimum standards contained in the "American National Standard Specifications for Making Buildings and Facilities Accessible To, and Usable By, the Physically Handicapped," Number A 117.1 (1971) approved by and available from the American National Standards Institute, Inc., 1430 Broadway, New York, NY 10018.

(c) The standards established in paragraph (b) of this section shall not apply to:

(1) The design, construction, or alteration of any portion of a building or facility which need not, because of its intended use, be made accessible to, or usable by, the public or by physically handicapped persons;

(2) The alteration of an existing building if the alteration does not involve the installation of, or work on, existing stairs, doors, elevators, toilets, entrances, drinking fountains, floors, telephone locations, curbs, parking areas, or any other facilities susceptible of installations or improvements to accommodate the physically handicapped.

(3) The alteration of an existing building or facility, or of such portions thereof, to which application of the standards is not structurally possible.

(4) The construction or alteration of a building or facility, for which bids

have already been solicited, or plans and specification have been completed, or substantially completed on or before September 2, 1969.

(d) The standards established in paragraph (b) of this section may be modified or waived on a case-by-case basis: Provided, That upon application of EDA the Administrator of the General Services Administration determines that such waiver or modification is clearly necessary.

[38 FR 2287, Jan. 23, 1973, as amended at 42 FR 23146, May 6, 1977]

§309.15 Flood hazard.

(a) In accordance with Executive Order 11988, all applications for financial assistance will be reviewed by EDA for the purposes of avoiding to the extent possible, the long and short term adverse impacts associated with the occupancy and modification of floodplains, and to avoid direct or indirect support of floodplain development wherever there is a practicable alternative, minimizing exposure of the proposed project to potential flood damage; any subsequent need for future Federal expenditures for flood protection and flood disaster relief; and the potential to impact the natural values and functions of the flood-plain under Executive Order 11988.

(b) EDA shall make no initial, interim, or final disbursement of any financial assistance on projects approved on and after March 2, 1974, under Titles I and II of the Act for acquisition or construction purposes for use in any area identified by the Federal Emergency Management Agency (FEMA) as having special flood hazards and in which the sale of flood insurance has been made available under the National Flood Insurance Act of 1968, as amended, unless the building or any personal property to which such financial assistance relates is, during the anticipated economic or useful life of the project, covered by flood insurance in an amount at least equal to its development or project cost (less estimated land cost) or to the maximum limit of coverage made available with respect to the particular type of property under the National Flood Insurance Act of 1968, as amended, whichever is less; provided that if the finan