(a) Who may apply. Any firm certifiled as eligible to apply for adjustment assistance under Subpart B in this Part 610 may apply for such assistance.

(b) When application may be made. Application for adjustment assistance may be made at any time within two years after the date on which the firm is certified under Subpart B in this Part 610 as eligible to apply therefor.

(c) How to apply. Application for adjustment assistance shall be made on Form OTA-3, completed in triplicate, and forwarded to the Director.

§ 610.32

Adjustments proposals.

(a) Preparation and presentation. A firm's proposal for its economic adjustment shall be made on Form OTA-4, completed in triplicate, and, together with such supporting material as the firm or the Director may deem appropriate, forwarded to the Director. The adjustment proposal shall describe in detail the firm's plan for its economic recovery, the anticipated benefits of the plan, and the type and extent of the adjustment assistance requested to carry out the plan. The adjustment proposal shall conform with the conditions prescribed for adjustment assistance in title III, chapter 2, of the Act, and in the adjustment assistance guidelines set forth in Subpart D of this Part 610. The Director may furnish technical assistance to an eligible firm which has applied for adjustment assistance to assist it in preparing a sound adjustment proposal.

(b) Processing proposals. The Director will conduct, or order to be conducted, such investigation of the firm's adjustment proposal as he determines to be necessary and appropriate. Thereafter the Director shall promptly forward the application for adjustment assistance, the adjustment proposal, the material developed during his investigation of the proposal, and his recommendation as to the action to be taken thereon, to the Secretary.

(c) Certification. The Secretary may approve and certify an adjustment proposal as submitted by the applicant, or he may approve and certify such proposal with such modifications and upon such terms and conditions as he may deem appropriate, or he may deny such proposal. No proposal shall be certified unless the Secretary determines that the proposal:

(1) Is reasonably calculated materially to contribute to the economic adjustment of the firm,

(2) Gives adequate consideration to the interests of the workers of such firm adversely affected by such actions taken in carrying out trade agreements, and

(3) Demonstrates that the firm will make all reasonable efforts to use its own resources for economic development. Certification, unless sooner revoked, shall remain in force for such period as may be prescribed therein by the Secretary.

(d) Administration of adjustment assistance. The Director shall provide or arrange for financial and technical assistance in accordance with the provisions of the certified adjustment proposal. Such assistance shall be provided through existing Government agencies to the maximum extent practicable, and for this purpose the Director shall refer the certified adjustment proposal to such Federal agency or agencies as he determines to be appropriate to furnish the technical and financial assistance necessary to carry out such proposal. The agencies to which such proposal may be referred include the Department of Commerce and agencies thereunder. In the event and to the extent that any agency determines not to furnish this assistance, the Director, if he determines that such assistance is necessary to carry out the certified proposal, may provide such assistance on terms and conditions consistent with the guidelines set forth in Subpart D of this part and other applicable provisions of law. The Director shall be responsible for ascertaining the firm's progress toward adjustment objectives and for assuring compliance with the terms of certified adjustment proposals, including the use of funds for approved purposes.

Subpart D-Adjustment Assistance Guidelines

and other economic research, managerial advice and counseling, and training and assistance in research and development.

(b) To the maximum extent practicable, technical assistance shall be furnished through existing Federal agencies, and otherwise through private individuals, firms, or institutions.

(c) Firms receiving technical assistance, either under a certified adjustment proposal or in the preparation of an adjustment proposal, shall be required to share the cost thereof to the extent administratively determined to be appropriate.

§ 610.41 Financial assistance.

(a) Funds made available through financial assistance (direct loans, loan guarantees, or agreements for deferred participation in loans) shall be used only for acquisition, construction, installation, modernization, development, conversion, or expansion of land, plant, buildings, equipment, facilities, or machinery, or, in exceptional cases as determined by the Secretary, to supply working capital. The term "working capital" includes funds for financing technical assistance.

(b) No loan guarantee or agreement for deferred participation in a loan shall be made in an amount which exceeds 90 percent of that portion of the loan made for the purposes described in this paragraph (a).

(c) Any loan made or deferred participation taken up shall bear interest at a rate not less than the greater of:

(1) Four percent per annum, or

(2) The rate fixed by the Secretary of the Treasury under section 315(b) (2) of the Act for the year in which the loan is made or the agreement for deferred participation is entered into.

sources.

(d) Loan guarantees or agreements for deferred participation shall be made only with respect to loans bearing interest at a rate determined to be reasonable in comparison with normal terms for comparable loans from private In no event shall the guaranteed portion of any loan, or the portion covered by an agreement for deferred participation, bear interest at a rate in excess of 1 percent per annum more than the rate prescribed under paragraph (c) of this section unless it is determined that special circumstances justify a higher rate, which, however, shall not

be in excess of 2 percent per annum more than such prescribed rate.

(e) No direct loan, loan guarantee, or loan in which a deferred participation is taken shall have a maturity period in excess of 25 years including renewals and extensions except as provided in section 315(d) of the Act.

(f) No financial assistance shall be provided unless it is determined that such assistance is not otherwise available to the firm on reasonable terms from sources other than the United States, and that there is reasonable assurance of the firms's repayment of the loan.

(g) No financial assistance shall be provided to any firm unless its owners, partners, or officers shall execute an agreement binding them and the firm for a period of 2 years after such financial assistance is provided, 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 provided, or within one year prior thereto, shall have served as an officer, attorney, agent, or employee occupying a position or engaging in activities which shall have been administratively determined to involve discretion with respect to the provision of such financial assistance.

§ 610.42 Tax assistance.

(a) Application. Any eligible firm may apply for tax assistance, as authorized by section 317 of the Act, with respect to a net operating loss alleged to have been sustained by the applicant in a taxable year which closed not more than 24 months prior to such application. Application may be made by specific request therefor included in the application for adjustment assistance (Form OTA-3), or in the adjustment proposal (Form OTA-4) or may be made by separate letter to the Director. In each case, the applicant shall identify by its closing date the taxable year in which the net operating loss is alleged to have occurred.

(b) Notice. At such time and in such manner as may be prescribed in regulations issued by the Commissioner of Internal Revenue, the firm (and its proprietor if a sole proprietorship, its partners if a partnership, or its shareholders if an electing small business corporation under subchapter S of Chapter 1 of the Internal Revenue Code of 1954) must file with the appropriate District Di

rector of Internal Revenue notice of the application for tax assistance and, if such assistance is approved, a copy of the Secretary's certification of eligibility therefor (Form OTA-6).

(c) Certification. Eligibility for tax assistance, to carry out a firm's certified adjustment proposal, will be certified by the Secretary, if he determines that:

(1) The application for tax assistance was filed within 24 months after the close of a taxable year in which a net operating loss is alleged to have been sustained by the firm,

(2) The alleged net operating loss of

the firm arose predominantly out of carrying on a trade or buiness which was seriously injured, during the year of the loss, by the increased imports which the Tariff Commission has determined to result from concessions granted under trade agreements, and

(3) The tax assistance requested will materially contribute to the economic adjustment of the firm.

NOTE: The record keeping and reporting requirements of this part have been approved by the Bureau of the Budget in accordance with the Federal Reports Act of 1942.

§700.1 Scope of part.

(a) The Act. The State Technical Services Act of 1965 (hereafter referred to as the "Act") became law on September 14, 1965.

(b) Purpose of the Act. The purpose of the Act is to provide a national program of incentives and support for the several States individually and in cooperation with each other in their establishing and maintaining State and interstate technical service programs in order that the benefits of federally-financed research, as well as other research, may be placed more effectively in the hands of American business, commerce and industrial establishments throughout the country. As stated in the Act, this program is essential to the growth of the economy, to higher levels of employment, and to the competitive position of U.S. products in world markets.

(c) Application of part. This part applies to any technical services program for which Federal financial assistance is authorized under the Act.

(d) Delegation of authority. The authority of the Secretary of Commerce under the Act was delegated to the Director, Office of State Technical Services, subject to such policies and directives as the Assistant Secretary of Commerce for Science and Technology may prescribe, by Department Order 7-A, effective November 19, 1965 (30 F.R. 15042, Dec. 4, 1965).

(c) "State" means one of the States of the United States, the District of Columbia, the Commonwealth of Puerto Rico or the Virgin Islands.

(d) "Technical services" means activities or programs designed to enable businesses, commerce and industrial establishments to acquire and use scientific and engineering information more effectively through such means as

(1) Preparing and disseminating technical reports, abstracts, computer tapes, microfilm, reviews, and similar scientific or engineering information, including the establishment of State or interstate technical information centers for this purpose;

(2) Providing a reference service to identify sources of engineering and other scientific expertise; and

(3) Sponsoring industrial workshops, seminars, training programs, extension courses, demonstrations, and field visits designed to encourage the more effective application of scientific and engineering information.

(e) "Designated agency" means the institution or agency which has been designated as administrator of the program for any State or States under section 3 or section 7 of the Act.

(f) "Participating institution" means each qualified institution in a State which participates in the administration or execution of the State technical services program as provided by the Act.

(g) "Matching funds" means funds that are provided to a qualified institution by the State or by other nonFederal sources and may include fees, contributions, donations, gifts of money, the fair market value of services of personnel, the fair market value for the use for real or personal property, special user charges and tuition fees, received from persons and private profit or nonprofit firms or institutions. Matching funds may include non-Federal funds expended on existing technical services programs of the State constituting a part of the State's annual program as approved under the Act and these regulations. See § 700.15.

(h) "Advisory council" means the council appointed by the designated agency under section 9 of the Act and § 700.7.

(1) "Planning grant" means a grant awarded to a designated agency, other than that designated under section 7 of the Act, to assist in the preparation of

the 5-year plan and the initial annual technical services programs.

(j) "State program" means the annual technical services program submitted by the designated agency on behalf of a State or on behalf of two or more States jointly, but does not refer to a program element.

(k) "Program element” means an individual activity included as part of the annual technical services program.

(1) "Special merit program” means a program determined by the Secretary to be entitled to Federal financial assistance under section 10 (c) of the Act to accomplish the purposes of the Act.

(m) "Designee" means the person designated by the Governor of a State to furnish the certifications required under section 5 of the Act. The designee may not be an officer or employee of the designated agency or of a participating institution nor a member of the advisory council.

(n) "Qualified institution” means an agency, institution or organization meeting criteria in § 700.10.

(o) "Recipient" means the designated agency, participating institution, qualified institution receiving assistance under the Act, or person authorized to receive payments in support of each approved program.

§ 700.3 Approval by Director.

The Director shall review the 5-year plan and each annual program submitted by a designated agency under sections 4 or 7 of the Act and shall approve only those which

(a) Bear the certification required by the Governor or his designee under section 5 of the Act;

(b) Comply with the regulations in this part; and

(c) Otherwise accomplish the purposes of the Act. § 700.4

Planning grant.

(a) Purpose and use. The purpose of the planning grant is to assist each designated agency, other than a designated agency under section 7 of the Act, to prepare the 5-year plan and the State's initial annual technical services programs. The funds provided by the planning grant shall be used for any legitimate purpose directly related to the preparation of such plans and programs. The Director shall be notified of the nature and amount of any contract which the designated agency makes for