(a) Eligible Projects. Eligible Projects must meet all of the following requirements. Failure to meet one or more of these requirements means that the application will not be considered for funding.

1. (1) Rurality. All Project activities must serve individuals, Cooperatively and Mutually Owned Businesses, small businesses, or other similar entities in Rural Areas.
2. (2) Project focus. The Project must focus on establishing or operating a Center with the goals of creating jobs in Rural Areas through the development of new Rural Cooperatives, Value-Added processing, and Rural businesses.
3. (3) Amount requested. The amount requested must not exceed any maximum amounts specified in the annual notification issued on the program website.

4. (4) Matching Funds. Matching Funds may be provided in cash by the Applicant, or cash or in-kind by a third party and are required for 25 percent (or 5 percent if a 1994 Institution) of the Project Cost. For example, if an Applicant requests an award amount of $150,000, the Matching Funds contribution must be $50,000, and the overall Project Cost is $200,000.

   1. (i) Matching Funds.

      1. (A) Must be spent on eligible expenses.
      2. (B) Must be from non-Federal sources unless authorized to be used as Matching Funds by the legislation authorizing the Federal source of funding.
      3. (C) Must be spent in advance or as a pro-rata portion of grant funds being spent.

   2. (ii) In-kind contributions.

      1. (A) Cannot include over-valued, in-kind contributions.
      2. (B) You must be able to document and verify the number of hours worked and the value associated with any in-kind contribution being used to meet a Matching Funds requirement.
      3. (C) In-kind contributions provided by individuals, businesses, or Cooperatives which are being assisted by the Center cannot be provided for the direct benefit of their own Projects as USDA RD considers this to be a conflict of interest.
5. (5) Use of funds. The Project must use grant and Matching Funds for allowable purposes. See § 4284.525.
6. (6) Period of Performance. The Period of Performance cannot exceed one (1) year. The grant period should begin no earlier than October 1 (the beginning of the Federal fiscal year) and no later than January 1 (the beginning of the calendar year).

(b) Ineligible Projects. Projects are ineligible for assistance through this program if the application:

1. (1) Requests more than the maximum grant amount;
2. (2) Focuses assistance on one Cooperatively or Mutually Owned Business;
3. (3) Includes a conflict of interest (see § 4284.506) where the expenses associated with the conflict of interest exceed 10 percent of the Project Cost. If the costs associated with the conflict of interest are 10 percent or less, the process in paragraph (b)(4) of this section will be followed;
4. (4) Includes unallowable costs (see § 4284.525) totaling more than 10 percent of Project Costs. If the application includes 10 percent or less of Project Costs in unallowable costs, and the application is otherwise eligible and selected for funding, those unallowable costs must be removed. If time permits, the Agency may allow those unallowable costs to be replaced with allowable costs. Otherwise, the amount of the Award will be reduced accordingly. If we cannot determine the percentage of unallowable costs, your application will not be considered for funding.