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SOURCE: The provisions of this part 128 of small business enterprises, such incontained in Revision 1, 24 F.R. 7063,

formation to be channeled through SBA Sept. 1, 1959, unless otherwise noted.

for the use of national, state and local & 128.7 Statutory provision,

agencies and institutions listed in section SEC. 7(d). The Administration also is 8(b) (1) of the Small Business Act. empowered to make grants to any State (e) "Director" means the Director of Government, or any agency thereof, State the Office of Management and Research chartered development credit or finance Assistance. corporations, land-grant colleges and uni

(f) “Grant” means a grant authorized versities, and colleges and schools of business,

under section 7(d) of the Act. -engineering, commerce, or agriculture for studies, research and counseling concerning

(g) "Grant Agreement” means the the managing, financing, and operation of agreement contained in SBA Form 459 small-business enterprises and technical and and any other conditions of the grant. statistical information necessary thereto in (h) “Grantee" means an institution order to carry out the purposes of section to which a grant has been made. 8(b) (1) by coordinating such information

(i) "Institution" means any State with existing information facilities within

government or any agency thereof, any the State and by making such information

State chartered development credit or available to State and local agencies. Only one such grant shall be made within any one

financial corporation, any college, any State in any one year, and no such grant university, and any school of business, shall exceed an aggregate amount of $40,000. engineering, commerce or agriculture, Such grants shall be made from the fund either public or private. established in the Treasury by section 602(b) (j) “Project” means a proposal, or of the Small Business Investment Act of 1958.

its components when two or more areas & 128.7-1 Scope.

of research are involved, and any (a) The regulations in this part gov

amendments thereto, approved by SBA.

(k) “Project Director” means the perern the issuance of grants by the Small Business Administration for studies, re

son assigned by an institution to supersearch and counseling concerning the

vise and be responsible for a research managing, financing and operation of

program under a grant.

(1) "Proposal” means a research prosmall business enterprises authorized by section 7(d) of the Small Business Act,

gram, which may include "studies,” sub

mitted by an institution in its amended. (b) Under section 7(d) of the Act,

tion for a grant under section 7(d) of

the Act. the Small Business Administration is

(m) “Research" means authorized to make grants to finance


studies, and counseling which will rethe development and gathering of infor

sult in information to be distributed by mation relating to managing, financing

SBA, acting as a clearinghouse, to naand operation of small business enter

tional, state, and local agencies and inprises. This information will be used to

stitutions listed in section 8(b) (1) of provide managerial aids to small business

the Act. Research includes, basic and in accordance with the provisions of section 8(b) (1) of the Small Business

secondary investigations.

(n) “SBA” means the Small Business Act, as amended. (See $ 124.8 of this

Administration. chapter.) This information will be co

(0) "Small business concern” or ordinated with informational facilities

"Small business enterprise” means within the States and made available to

business concern which would qualify as State and local agencies.

a small business, as defined by SBA in 8 128.7-2 Definitions.

Part 121 of this chapter. As used in this part:

(p) "State" means the several States, (a) “Act” means the Small Business the Territories and possessions of the Act (Pub. Law 85-536), as amended United States, the Commonwealth of (Pub. Law 85-699).

Puerto Rico and the District of (b) "Administrator" means the Ad- Columbia. ministrator of SBA.

(q) "State government or agency (c) “Application" means a written thereof” means departments, divisions request for a grant on SBA Form 459. or other designated organizations con

(d) “Counseling" means consulting trolled and operated by the State includand advising with SBA for the purpose ing State government corporations. of developing information concerning (r) "Studies" means brief investigathe managing, financing and operation tions of the economic background or


problems of an industry or specific small business in its geographic locality but shall not include management or financial counseling or credit analysis.

(s) “Year” means the fiscal year beginning July 1 and ending June 30. $ 128.7–3 Organization.

(a) The grant program authorized by section 7(d) of the Act is administered through the Office of Management and Research Assistance, Small Business Administration, Washington, D.C. 20416. The Director of this office is responsible for planning and coordinating small business management and research assistance programs and coordinating the activities of the Management Research Advisory Council.

(b) The Management Research Advisory Council is an advisory group established to examine and make recommendations with respect to the merits of an application for a grant and to furnish advice on the grant program. The function of said Council is purely advisory. The members of the Council are selected and appointed by the Administrator and serve at his pleasure and without compensation.

(c) All recommendations of the Management Research Advisory Council are submitted to the Administrator, who, in his discretion, shall determine which proposals shall be approved and which suggestions shall be put into practice. $ 128.7-4Who is eligible for a grant.

Any State government or any agency thereof, any State chartered development credit or finance corporation, any university, any college and any school of business, engineering, commerce or agriculture, either public or private, is eligible to receive a grant. & 128.7–5 Purpose of a grant.

(a) A grant will be made by SBA only to finance research concerning the managing, financing and operation of small business enterprises to develop information or techniques which can be used by public or private organizations to aid small business enterprises, or to develop information which improves knowledge of the economy through research on the small business sector.

(b) No proposal nor portion of a proposal will be approved if its primary purpose is to provide information to be used to urge industry and trade located in one State to move to another.

§ 128.7–6 Amount of a grant.

No grant may exceed an aggregate amount of $40,000. Only one such grant may be made within any one State in any one year. SBA is not authorized to commit itself in any year to make a

nt during subsequent years. § 128.7–7 Application for a grant.

(a) Applications (SBA Form 459) and instructions (SBA Form 459A) are available at SBA field offices and at the SBA Washington, D.C. office.

(b) An application may be initiated by any institution described in § 128.7-6. Prior to submission, the application and the proposal to perform research under the grant contained therein, may be discussed informally with SBA staff members. When appropriate, SBA staff members may suggest a new proposal or modification of a proposal submitted. If two or more institutions within a State desire to cooperate in carrying out proposals, such combined proposals may be considered. However, only one grant may be authorized. Therefore, the application must designate which of the cooperating institutions is to be the grantee. This institution will be responsible to SBA for carrying out the project in its entirety and SBA will not be obligated in any way to any institution other than the grantee.

(c) Applications must be received by SBA on or before the 31st day of October of the fiscal year for which the grant is requested. Applications received after that date will not be considered.

(d) Six copies of the application shall be submitted to the Director, Ofice of Management and Research Assistance, Small Business Administration, Washington, D.C., 20416. Applications received by SBA will not be returned to the applicant. $ 128.7-8 Method of evaluating and

selecting an application, (a) An application will be reviewed by the Office of Management and Research Assistance for eligibility and other requirements set forth in this part. An application containing a proposal which, on its face, appears eligible and meritorious shall be submitted to the Management Research Advisory Council for a further examination of the merits of the application. The Council will recommend to the Administrator an application which merits a grant. The Administrator may, within his discretion, approve or reject this recommendation,

(b) An application shall be evalu- ports required herein and that inspection ated on the basis of the current need and and audit by representatives of SBA and priority of importance of the anticipated the United States General Accounting results of the proposal contained therein; Office of expenditures under the grant the qualifications and experience of the shall be permitted during the life of the Project Director and staff; the practi- grant and for three years thereafter; cability and utility of the proposal; the (5) That written reports of the progress amount of total direct expenses as com- of the project and of the expenditure of pared with overhead expenses; and the funds under the grant will be furnished amount of added funds to be contributed every six months after the grant has been or arranged for by the institution itself. awarded, or more frequently as SBA may

(c) Although matching funds are not reasonably require; that the project shall required, the competing application in be completed and the final report subany State which is approved will be the mitted to SBA by the date specified one with the greatest amount of match- herein; that at least 500 copies of the ing funds, when other conditions are final report shall be furnished to SBA approximately equal. These matching in such form as SBA may approve; and funds can be measured either in terms of that a typewritten summary statement dollar value of services performed (not of not more than 3,000 words covering included as such in the grant) or supple- the major findings of the project shall be mentary contributions of cash to be used prepared and submitted in triplicate; in the conduct of the research project. (6) That the grant may be revoked in 8 128.7-9 Administration of a grant.

whole or in part at any time by the Ad

ministrator of the SBA provided that (a) Conditions of a grant. The grant such action shall not affect commitments agreement as set forth in SBA Form 459

of funds made prior to the effective date contains express conditions, which when of the revocation if such obligations were accepted will bind the grantee. The made solely for the purposes set forth conditions contained in the grant agree- in this application. If the grant is rement may be amended by mutual agree- voked because of a substantial deviation, ment of the parties but the amount of

not approved by SBA, from the project the original grant may not be increased

or this agreement then the amount of the as a result of any such amendments to

grant then paid may be recovered by an amount in excess of $40,000.

SBA. (b) Grant agreement. The grant

(c) Establishing the amount of a agreement as set forth in SBA Form 459

grant. In considering the budget for a is as follows:

grant, SBA will recognize that substanIt is understood and agreed by the tial contributions may be made by the applicant:

grantee in such form as space, equip(1) That the project will be performed ment, library facilities, and, in many substantially as described in this appli

cases, as payment of the salaries or parts cation and as approved by SBA, and that of the salaries of the Project Director and the funds granted as a result of your re- staff. SBA normally will include in the quest are to be expended for the purposes grant, funds for such items as the salset forth herein; (2) That if the project aries of personnel, materials, necessary proceeds in accordance with the schedule

travel, publication and other direct costs. contained in this application, then the

(d) Grant period. The Act limits SBA grant funds shall be paid in advance on

to making one grant within any one a semi-annual basis in amounts based

States in any one year; however, the on the estimated requirements for the

project does not have to be completed subsequent six month period, up to 90

within the year but may be for a period percent of the grant, and the balance upon completion of the project and re

of longer duration as provided in the ceipt by this Agency of a satisfactory

grant agreement. When progress of refinal report; (3) That the project shall

search under the grant is delayed and be directed and supervised by the Project

circumstances make it necessary to reDirector named herein and no other quest an extension of the grant period Project Director shall be appointed with

without additional funds, SBA may, upon out the approval of SBA; (4) That such written request of the grantee, permit accounts shall be kept (in accordance extensions in time. Such an extension, with accepted accounting practices) as however, may require a spread out of the are necessary to prepare the financial re- remaining payments under the grant.

(e) Payment of a grant. In general, payment will be made in advance to the grantee only, based on the estimated requirements for the subsequent six month period, up to 90 per cent of the grant, and the balance upon completion of the project and approval and acceptance by SBA of the final report.

(f) Accounting procedures and audit. While no particular classification of accounts is required, a grantee shall keep such accounts for each project (in accordance with generally accepted accounting practices) as are necessary to permit it to prepare the required financial reports as required in paragraph (g) of this section, and to make possible a determination by SBA that the grant has been used for the purposes for which the grant was made. All accounting records relating to expenditures under the grant are subject to inspection and audit by representatives of SBA and the United States General Accounting Office during the life of the grant and for three years thereafter.

(g) Reports. (1) Progress and financial reports must be made to SBA on work financed by the grant. Specific conditions regarding frequency of submission and nature of reports will be set forth in each grant agreement.

(2) The final report on the project must be submitted to SBA within the time allowed. From time to time, SBA representatives may visit the project sites and, at such time, verbal reports will be expected. § 128.7-10 Revocation of a grant.

Each grant will be made subject to a condition that it may be revoked in whole or in part. A revocation shall not affect any commitment of funds made by the grantee which was made in accordance with the project prior to the effective date of revocation. Any substantial deviation from the project not approved by SBA will be deemed to be a breach of the grant agreement and grounds for termination of the grant in its entirety. In this event SBA assumes no responsibility for any commitment of funds made by the grantee.


NOTE: The Area Redevelopment Act expired on August 31, 1965 and the Economic Development Administration succeeded to, among other things, certain responsibilities of the Area Redevelopment Administration, including liquidation thereof.

Part 301 302 303 305 306

Establishment and organization.
Designation of areas.
Economic Development District Program.
Grants, loans, and guarantees.
Technical assistance, planning and administrative grants-in-aid, and re-

Regional action planning commissions.


131 F.R. 8, Jan. 4, 1966.


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