59764 Federal Register / Vol. 69, No. 193 / Wednesday, October 6, 2004 / Rules and Regulations 

forms, provided or designated by the 

Licensing Authority, and shall be 

submitted in accordance with § 6.36(b). 

All parts of the application shall be 

completed. The application, if mailed, 

shall be postmarked no earlier than 

September 1 and no later than midnight 

October 15 of the year preceding that for 

which license application is made. The 

application, if submitted electronically, 

shall be transmitted no earlier than 

September 1 and no later than midnight 

October 15 of the year preceding that for 

which license application is made. The 

Licensing Authority will not accept 

incomplete applications or 

unpostmarked mailed applications.

(b)(1) Where the applicant seeks to 

establish eligibility on the basis of 

imports, applications shall include 

identification of entries (if submitted 

electronically) or Customs Form 7501 (if 

submitted by mail), sufficient to 

establish the applicant as the importer 

of record of entries required under 

§ 6.23, during the 12-month period 

ending August 31 prior to the quota year 

for which license is being sought.

* * * * *

(c) However, if the applicant is 

applying on the basis of more than eight 

shipments, the application, if mailed, 

shall include:

* * * * *

■ 3. Amend § 6.26 by revising paragraph 

(a) and the introductory text of paragraph 

(c) to read as follows:

§ 6.26 Surrender and reallocation. 

(a) If a licensee determines that it will 

not enter the entire amount of an article 

permitted under its license, such 

licensee shall surrender its license right 

to enter the amount that it does not 

intend to enter. Surrender shall be made 

to the Licensing Authority in writing by 

mail or electronic submission, 

postmarked or electronically submitted, 

in accordance with § 6.36(b), no later 

than October 1. Any surrender shall be 

final and shall be only for that quota 

year, except as provided in § 6.25(b). 

The amount of the license not 

surrendered shall be subject to the 

license use requirements of § 6.23(c)(1).

* * * * *

(c) Any person who has been issued 

a license for a quota year may apply to 

receive additional license, or addition to 

an existing license for a portion of the 

amount being reallocated. The 

application shall be submitted to the 

Licensing Authority by mail or 

electronic submission, in accordance 

with § 6.36(b), no earlier than 

September 1 and not later than 

September 15, and shall specify:

* * * * *

■ 4. Amend § 6.28 by revising paragraph 

(b) to read as follows:

§ 6.28 Transfer of license.

* * * * *

(b) The parties seeking transfer of 

license shall give written notice to the 

Licensing Authority of the intended sale 

or conveyance described in paragraph 

(a) of this section by mail as required in 

§ 6.36(b). The notice must be received 

by the Licensing Authority at least 20 

working days prior to the intended 

consummation of the sale or 

conveyance. Such written notice shall 

include copies of the documents of sale 

or conveyance. The Licensing Authority 

will review the documents for 

compliance with the requirements of 

paragraph (a) of this section and advise 

the parties in writing of its findings by 

the end of the 20-day period. The 

parties shall have the burden of 

demonstrating to the satisfaction of the 

Licensing Authority that the 

contemplated sale or conveyance 

complies with the requirements of 

paragraph (a) of this section. Within 15 

days of the consummation of the sale or 

conveyance, the parties shall mail 

copies of the final documents to the 

Licensing Authority, in accordance with 

§ 6.36(b). The Licensing Authority will 

not transfer the licenses unless the 

documents are submitted in accordance 

with this paragraph.

* * * * *

■ 5. Amend § 6.33 by revising 

paragraphs (b), (c), and (d) to read as 

follows:

§ 6.33 License fee.

* * * * *

(b) The license fee for each license 

issued is due and payable in full by mail 

or electronic submission, postmarked or 

electronically submitted in accordance 

with § 6.36(b), no later than May 1 of the 

year for which the license is issued. The 

fee for any license issued after May 1 of 

any quota year is due and payable in 

full by mail or electronic submission, 

postmarked or electronically submitted 

in accordance with § 6.36(b), no later 

than 30 days from the date of issuance 

of the license. Fee payments, if made by 

mail, shall be made by certified check 

or money order payable to the Treasurer 

of the United States. Fee payments, if 

made electronically, shall be made 

utilizing the electronic software 

designated for the purpose by the 

Licensing Authority. 

(c) If the license fee is not paid by the 

final payment date, a hold will be 

placed on the use of the license and no 

articles will be permitted entry under 

that license. The Licensing Authority 

shall send a warning letter by certified 

mail, return receipt requested, advising 

the licensee that if payment is not 

mailed in accordance with § 6.36(b) or 

received within 21 days from the date 

of the letter, that the license will be 

revoked. Where the license at issue is a 

historical license, this will result, 

pursuant to § 6.23(b), in the person’s 

loss of historical eligibility for such 

license. 

(d) Licensees may elect not to accept 

certain licenses issued to them; 

however, the Licensing Authority must 

be so notified by mail or electronic email, postmarked or electronically 

submitted in accordance with § 6.36(b) 

no later than May 1 of the year for 

which the license is issued.

■ 6. Amend § 6.36 by revising paragraph 

(b) to read as follows:

§ 6.36 Miscellaneous.

* * * * *

(b) All submissions required under 

this subpart shall be made either by 

registered or certified mail, return 

receipt requested, with a postmarked 

receipt, with proper postage affixed and 

properly addressed to the Dairy Import 

Licensing Group, STOP 1021, U.S. 

Department of Agriculture, 1400 

Independence Avenue SW., Washington 

DC 20250–1021, or by electronic 

submission utilizing the electronic 

software designated for this purpose by 

the Licensing Authority.

Signed at Washington, DC, on September 

24, 2004. 

A. Ellen Terpstra, 

Administrator, Foreign Agricultural Service.

[FR Doc. 04–22444 Filed 10–5–04; 8:45 am] 

BILLING CODE 3410–10–P

DEPARTMENT OF AGRICULTURE

Rural Utilities Service 

7 CFR Part 1776 

RIN 0572–AB93 

Household Water Well System Grant 

Program

AGENCY: Rural Utilities Service, USDA.

ACTION: Direct final rule.

SUMMARY: The Rural Utilities Service 

(RUS), an agency delivering the United 

States Department of Agriculture’s Rural 

Development Utilities Programs, is 

issuing regulations in order to establish 

the Household Water System Program as 

authorized by section 306E of the 

Consolidated Farm and Rural 

Development Act (CONACT). This 

direct final rule will establish a lending 

program for the construction, 

refurbishing, and servicing of

Federal Register / Vol. 69, No. 193 / Wednesday, October 6, 2004 / Rules and Regulations 59765

individually-owned household water 

well systems in rural areas that are or 

will be owned by the eligible 

individuals. In addition, the rule 

outlines the process by which 

applicants can apply for the program 

and how RUS will administer the grant 

program.

DATES: This rule will become effective 

November 22, 2004, unless RUS 

receives written adverse comments or a 

written notice of intent to submit 

adverse comments on or before 

November 5, 2004. If RUS receives such 

comments or notice, RUS will publish a 

timely notice in the Federal Register

withdrawing the rule. Comments 

received will be considered under the 

proposed rule published in this edition 

of the Federal Register in the proposed 

rule section. A second public comment 

period will not be held. Comments must 

be received by RUS or carry a postmark 

or equivalent no later than November 5, 

2004. 

Comments regarding the information 

collection requirements under the 

Paperwork Reduction Act must be 

received on or before December 6, 2004, 

to be assured of consideration.

ADDRESSES: Submit adverse comments 

or notice of intent to submit adverse 

comments by any of the following 

methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

online instructions for submitting 

comments. 

• Agency Web Site: http://

www.usda.gov/rus/index2/

Comments.htm. Follow the instructions 

for submitting comments. 

• E-mail: RUSComments@usda.gov. 

Include in the subject line of the 

message ‘‘7 CFR 1776.’’

• Mail: Addressed to Richard Annan, 

Acting Director, Program Development 

and Regulatory Analysis, Rural Utilities 

Service, United States Department of 

Agriculture, 1400 Independence 

Avenue, SW., STOP 1522, Washington, 

DC 20250–1522. 

• Hand Delivery/Courier: Addressed 

to Richard Annan, Acting Director, 

Program Development and Regulatory 

Analysis, Rural Utilities Service, United 

States Department of Agriculture, 1400 

Independence Avenue, SW., Room 

5168–S, Washington, DC 20250–1522. 

Instructions: All submissions received 

must include RUS and the subject 

heading ‘‘7 CFR 1776’’. All comments 

received must identify the name of the 

individual (and the name of the entity, 

if applicable) who is submitting the 

comment. All comments received will 

be posted without change to http://

www.usda.gov/rus/index2/

Comments.htm, including any personal 

information provided.

FOR FURTHER INFORMATION CONTACT:

Cheryl Francis, Loan Specialist, Water 

Programs Division, Rural Utilities 

Service, U.S. Department of Agriculture, 

1400 Independence Avenue, SW., Room 

2239–S, Stop 1570, Washington, DC 

20250–1570. Telephone (202) 720–1937. 

E-Mail: Cheryl.Francis@usda.gov.

SUPPLEMENTARY INFORMATION:

Executive Order 12866 

This rule has been determined to be 

not significant for the purposes of 

Executive Order 12866 and, therefore, 

has not been reviewed by the Office of 

Management and Budget (OMB). 

Executive Order 12372 

This program is not subject to the 

requirements of Executive Order 12372, 

‘‘Intergovernmental Review of Federal 

Programs,’’ as implemented under 

USDA’s regulations at 7 CFR part 3015. 

Executive Order 12988 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. RUS has determined that this 

rule meets the applicable standards 

provided in section 3 of the Executive 

Order. In addition, all State and local 

laws and regulations that are in conflict 

with this rule will be preempted; no 

retroactive effect will be given to the 

rule; and, in accordance with Section 

212(e) of the Department of Agriculture 

Reorganization Act of 1994 (7 U.S.C. 

section 6912(e)) administrative appeal 

procedures, if any are required, must be 

exhausted prior to initiating any action 

against the Department or its agencies. 

Regulatory Flexibility Act Certification 

It has been determined that the 

Regulatory Flexibility Act is not 

applicable to this rule since the Rural 

Utilities Service is not required by 5 

U.S.C. 551 et seq. or any other provision 

of the law to publish a notice of final 

rule making with respect to the subject 

matter of this rule. 

Information Collection and 

Recordkeeping Requirements 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

chapter 35), RUS invites comments on 

this information collection for which 

RUS intends to request approval from 

the Office of Management and Budget 

(OMB). These requirements have been 

approved by emergency clearance under 

OMB Control Number 0572–0139. 

Comments on this notice must be 

received by December 6, 2004.

Comments are invited on (a) whether 

the collection of information is 

necessary for the proper performance of 

the functions of the agency, including 

whether the information will have 

practical utility; (b) the accuracy of the 

agency’s estimate of burden including 

the validity of the methodology and 

assumption used; (c) ways to enhance 

the quality, utility and clarity of the 

information to be collected; and (d) 

ways to minimize the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated, 

electronic, mechanical, or other 

technological collection techniques or 

other forms of information technology. 

Comments may be sent to Michele 

Brooks, Management Analyst, Program 

Development and Regulatory Analysis, 

Rural Utilities Service, U.S. Department 

of Agriculture, 1400 Independence Ave., 

SW., Stop 1522, Room 5168 South 

Building, Washington, DC 20250–1522. 

FAX: (202) 720–4120. E-mail: 

michele.brooks@usda.gov. 

Title: 7 CFR 1776, Household Water 

System Program. 

Type of Request: Extension of a 

currently approved collection. 

Abstract: The Household Water 

System program will provide grant 

funds to establish a lending program for 

the construction, refurbishing, and 

servicing of individually-owned 

household water well systems in rural 

areas that are or will be owned by the 

eligible individuals. The collection of 

information covered by this Notice 

consists of forms, certifications, and 

written materials in support of an 

application for a grant. Failure to collect 

proper information could result in 

improper determinations of eligibility, 

improper use of funds, or hindrances in 

making grant(s) authorized by the 

Household Water System Program. 

Estimate of Burden: Public reporting 

burden for this collection of information 

is estimated to average 6 hours per 

response. 

Respondents: Not for profit 

institutions and Business or other for 

profit. 

Estimated Number of Respondents: 5. 

Estimated Number of Responses per 

Respondent: 13. 

Estimated Total Annual Burden on 

Respondents: 401 hours. 

Copies of this information collection 

can be obtained from Michele Brooks, 

Program Development and Regulatory 

Analysis, at (202) 690–1078. 

All responses to this information 

collection and recordkeeping notice will 

be summarized and included in the 

request for OMB approval. All 

comments will also become a matter of 

public record.

59766 Federal Register / Vol. 69, No. 193 / Wednesday, October 6, 2004 / Rules and Regulations 

National Environmental Policy Act 

Certification 

The Administrator of RUS has 

determined that this rule will not 

significantly affect the quality of the 

human environment as defined by the 

National Environmental Policy Act of 

1969 (42 U.S.C. 4321 et seq.). Therefore, 

this action does not require an 

environmental impact statement or 

assessment. 

Catalog of Federal Domestic Assistance 

The program described by this rule is 

listed in the Catalog of Federal Domestic 

Assistance Programs under number 

10.862. This catalog is available on a 

subscription basis from the 

Superintendent of Documents, the 

United States Government Printing 

Office, Washington, DC, 20402–9325, 

telephone number (202) 512–1800. 

Unfunded Mandates 

This rule contains no Federal 

mandates (under the regulatory 

provision of Title II of the Unfunded 

Mandates Reform Act of 1995) for State, 

local, and tribal governments or the 

private sector. Thus this rule is not 

subject to the requirements of section 

202 and 205 of the Unfunded Mandates 

Reform Act of 1995. 

Executive Order 13132, Federalism 

The policies contained in this rule do 

not have any substantial direct effect on 

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. Nor does this rule 

impose substantial direct compliance 

costs on state and local governments. 

Therefore, consultation with states is 

not required. 

Background 

On May 13, 2002, the Farm Security 

and Rural Investment Act of 2002 (Farm 

Bill) was signed into law as Public Law 

107–171. The CONACT was amended 

by section 6012 of the Farm Bill, by 

adding a grant program to establish a 

lending program. For this program, the 

Secretary may make grants to private 

nonprofit organizations for the purpose 

of providing loans to eligible 

individuals for the construction, 

refurbishing, and servicing of individual 

household water well systems in rural 

areas that are or will be owned by the 

eligible individuals. 

The CONACT defines an ‘‘eligible 

individual’’ to mean an individual who 

is a member of a household the 

members of which have a combined 

income (for the most recent 12-month 

period for which the information is 

available) that is not more than 100 

percent of the median nonmetropolitan 

household income for the State or 

territory in which the individual 

resides, according to the most recent 

decennial census of the United States. 

This program is authorized to be 

appropriated $10,000,000 for fiscal 

years (FY) 2003 through 2007.

There was no funding appropriated in 

FY 2003. However, the Consolidated 

Appropriations Act, 2004, Public Law 

108–199 (Jan. 23, 2004; 118 Stat.3) 

includes $1,000,000 for the grant 

program in FY 2004. 

Due to the modest size of this program 

and the maximum dollar amount of 

loans to be made hereunder, RUS has 

determined that loans maybe serviced, if 

approved by USDA, through the USDA 

Centralized Servicing Center to enhance 

standardized servicing and minimize 

related servicing fees. To reduce 

duplicative promulgation of specific 

rules regarding grants and loans 

hereunder, RUS has referenced existing 

USDA rules to the extent practicable, 

including references to specific 

regulations and standard forms. 

A notice of inquiry was published in 

the Federal Register on February 10, 

2004 (69 FR 6251) requesting comments 

on the Household Water System grant 

program. RUS received a total of 15 

comments. All comments received were 

taken into consideration in developing 

the regulation. The following is a brief 

summary of the comments received. 

Grantees’ experience with household 

water systems. All the commenters felt 

that the grantee should have extensive 

experience with household water 

systems. Due to the complexity of 

household water systems, RUS feels that 

an organization must have extensive 

experience working with household 

water systems in order to assess 

solutions, determine cost factors, and 

how to best fulfill the needs of the rural 

residents utilizing these systems. In 

accordance with the requirements in the 

authorizing legislation of the CONACT, 

RUS will give priority to applicants 

with such experience. 

Matching funds. Half of the 

commenters felt RUS should not require 

a matching fund component while the 

other half were in favor of a matching 

fund requirement. Due to the small 

amount of funding appropriated to this 

program, RUS feels it is necessary to 

require grant recipients to contribute 

funds from sources other than the 

proceeds of a HWWS grant to pay part 

of the cost of a loan recipient’s project. 

As a result of such contributions, the 

widest number of rural residents 

practicable may benefit from this 

program. 

Percentage of financing. Many 

commenters felt the program should 

offer 100 percent financing. They also 

felt the program should be for lowincome communities and that RUS 

should not require the eligible 

individual to contribute to the cost. RUS 

will allow 100 percent financing on 

these projects; however, the project 

costs can not exceed the statutory limit. 

In situations where the costs exceed the 

statutory limit of $8,000 per household 

water well system, the eligible 

individual will be required to cover the 

additional costs. 

Administrative fees. Many 

commenters felt RUS should allow 

administrative fees, and the limit on 

those fees ranged from 8 percent to 20 

percent. RUS will allow administrative 

fees to be an eligible grant purpose; 

however, the administrative costs 

cannot exceed 10 percent of the total 

grant funds loaned annually. These 

costs also must be clearly identified in 

the workplan. 

Use of Centralized Servicing Center.

The majority of commenters were in 

favor of using the Centralized Servicing 

Center (CSC). Some felt if the grantee 

has a similar program in place, the 

servicing should remain with the 

grantee. Due to the modest size of this 

program and the maximum dollar 

amount of loans to be made hereunder, 

RUS has determined that loans may be 

serviced, if approved by USDA, through 

the USDA Centralized Servicing Center 

to enhance standardized servicing and 

minimize related servicing fees. 

Credit elsewhere. Some commenters 

felt a denial letter would be sufficient 

evidence to show an inability to acquire 

credit elsewhere. Others felt RUS 

should use the credit report and income 

verification to satisfy the credit 

elsewhere requirement. RUS will 

require the grantee to obtain sufficient 

evidence that the eligible individual is 

unable to obtain financial assistance at 

reasonable terms and conditions from 

other non-RD sources, and lacks the 

personal resources to meet their needs. 

In addition, the eligible individual must 

demonstrate adequate repayment ability 

as supported by a budget, and they must 

have a credit history that indicates 

reasonable ability and willingness to 

meet debt obligations. 

Eligible and ineligible purposes. A 

couple of commenters felt newly built 

homes and wells for uses other than 

potable water should be eligible for the 

program. Most felt the repair or 

replacement of failing well systems 

should be eligible. RUS will follow the 

authorizing legislation and require that 

grant proceeds be used solely for the 

purpose of providing loans to eligible

Federal Register / Vol. 69, No. 193 / Wednesday, October 6, 2004 / Rules and Regulations 59767

individuals for the construction, 

refurbishing, and servicing of individual 

household water well systems in rural 

areas that are or will be owned by the 

eligible individuals.

List of Subjects in 7 CFR Part 1776

Agriculture, Community 

development, Community facilities, 

Credit, Grant programs-housing and 

community development, Nonprofit 

organizations, Reporting and 

recordkeeping requirements, Rural 

areas, Waste treatment and disposal, 

Water pollution control, Water 

resources, Water supply, Watersheds.

■ For reasons set forth in the preamble, 

RUS amends 7 CFR chapter XVII of Title 

7 of the Code of Federal Regulations by 

adding a new part 1776 to read as 

follows:

PART 1776—HOUSEHOLD WATER 

WELL SYSTEM GRANT PROGRAM

Subpart A—General 

Sec. 

1776.1 Purpose. 

1776.2 Uniform Federal Assistance 

Provisions. 

1776.3 Definitions. 

1776.4 [Reserved]

Subpart B—HWWS Grants 

1776.5 Eligibility to receive a grant. 

1776.6 Notice of availability of funds. 

1776.7 Grant application process. 

1776.8 Methods for submitting 

applications. 

1776.9 Scoring applications. 

1776.10 Grant agreement. 

1776.11 Revolving loan fund. 

1776.12 Use of grant proceeds. 

1776.13 Administrative expenses.

Subpart C—HWWS Loans 

1776.14 Eligibility to receive a HWWS loan. 

1776.15 Terms of loans. 

1776.16 Loan servicing. 

1776.17 Revolving loan fund maintenance. 

1776.18 OMB control number.

Authority: 7 U.S.C. 1926e.

Subpart A—General

§ 1776.1 Purpose. 

This part sets forth the policies and 

procedures for making grants to private, 

nonprofit organizations to finance the 

construction, refurbishing and servicing 

of individually-owned household water 

well systems in rural areas for 

individuals with low or moderate 

income.

§ 1776.2 Uniform Federal Assistance 

Provisions. 

(a) This program is subject to the 

general provisions that apply to all 

grants made by USDA and that are set 

forth in 7 CFR Part 3015—Uniform 

Federal Assistance Regulations. 

(b) This program is subject to the 

uniform administrative requirements 

that apply to all grants made by USDA 

to non-profit organizations and that are 

set forth in 7 CFR Part 3019—Uniform 

Administrative Requirements for Grants 

And Agreements with Institutions of 

Higher Education, Hospitals, and Other 

Non-Profit Organizations. 

(c) This program is subject to OMB 

Circular No. A–122 (Revised): Cost 

Principles for Non-Profit Organizations.

§ 1776.3 Definitions. 

Administrative expenses means 

expenses incurred by a grant recipient 

that are of the type more particularly 

described in § 1776.13. 

Applicant means a private, nonprofit 

organization that applies for a HWWS 

grant under this part. 

Centralized Servicing Center (CSC)

means the centralized loan servicing 

center within the United States 

Department of Agriculture, Rural 

Development. CSC provides nationwide 

services for borrowers that have 

received financing from Rural 

Development programs. 

Construction means building or 

assembling a water well system or 

portion thereof, that is not a water well 

system or portion thereof being 

constructed in connection with a new 

building. 

Eligible individual means an 

individual who is a member of a 

household the members of which have 

a combined income (for the most recent 

12-month period for which the 

information is available) that is not 

more than 100 percent of the median 

nonmetropolitan household income for 

the State of territory in which the 

individual resides, according to the 

most recent decennial census of the 

United States. 

Grant agreement means the contract 

between RUS and the grant recipient 

which sets forth the terms and 

conditions governing a particular grant 

awarded under this part. 

Grant recipient means an applicant 

that has been awarded a HWWS grant 

under this part. 

HWWS means household water well 

system. 

HWWS grant means a grant awarded 

by RUS to a grant recipient under this 

part. 

HWWS loan means a loan made by a 

grant recipient to a loan recipient using 

the direct or indirect proceeds of a 

HWWS grant awarded under this part. 

Loan recipient means an eligible 

individual who has received a HWWS 

loan. 

Refurbishing means to renovate or to 

restore a water well system or portion 

thereof to near new condition. 

Revolved funds means the cash 

portion of the revolving loan fund that 

is not composed of HWWS grant funds, 

including repayments of revolving 

HWWS loans, fees and interest collected 

on HWWS loans. 

Revolving loan fund means the loan 

fund established by the grant recipient 

to carry out the purposes of this part, 

such fund comprising the proceeds of a 

HWWS grant and other related assets. 

Rural area means any area other than 

a city or town that has a population of 

greater than 50,000 inhabitants; and the 

urbanized area contiguous and adjacent 

to such city or town. 

RUS means the Rural Utilities 

Service, a Federal agency delivering the 

United States Department of 

Agriculture’s Rural Development 

Utilities Program. 

Servicing means making repairs or 

performing maintenance on a water well 

system or portion thereof. 

USDA means the United States 

Department of Agriculture.

§ 1776.4 [Reserved]

Subpart B—HWWS Grants

§ 1776.5 Eligibility to receive a grant. 

(a) The applicant must be a private 

organization. 

(b) The applicant must be organized 

as a non-profit organization. 

(c) The applicant must have legal 

capacity and lawful authority to perform 

the obligations of a grant recipient 

under this part.

Example 1 to paragraph (c): If the 

organization is incorporated as a non-profit 

corporation, it must have corporate authority 

under state law and its corporate charter to 

engage in the practice of making loans to 

individuals.

Example 2 to paragraph (c): If the 

organization is an unincorporated 

association, state law may prevent the 

organization from entering into binding 

contracts, such as a grant agreement.

(d) The applicant must have sufficient 

expertise and experience in lending and 

in promoting the safe and productive 

use of individually-owned household 

water well systems and ground water to 

assure the likelihood that the objectives 

of this part can be achieved.

§ 1776.6 Notice of availability of funds. 

(a) In Fiscal Year 2004, applications 

will be accepted for this program from 

October 6, 2004, until December 6, 

2004, at which time the initial 

application period shall close. An 

applicant may withdraw, substitute, 

amend or supplement its application at 

any time prior to the closing of the 

initial application period. Once the

59768 Federal Register / Vol. 69, No. 193 / Wednesday, October 6, 2004 / Rules and Regulations 

initial application period has closed, all 

applications shall be considered final. 

(b) For subsequent fiscal years, if any 

funds for this program are available, the 

Secretary will publish a notice to that 

effect. The notice will establish the 

period during which applications for 

such funds may be submitted for 

consideration.

§ 1776.7 Grant application process. 

(a) The applicant must complete and 

submit the following standard forms to 

RUS to apply for a HWWS grant under 

this part: 

(1) Application for Federal 

Assistance: Standard Form 424, 

(2) Budget Information—NonConstruction Programs: Standard Form 

424A, and 

(3) Assurances—Non-Construction 

Programs: Standard Form 424B. 

(b) The applicant must submit a 

written work plan that demonstrates the 

feasibility of the applicant’s lending 

program to meet the objectives of this 

part. 

(c) The applicant should submit a 

narrative establishing the basis for any 

claims that it has substantial expertise 

in promoting the safe and productive 

use of individually-owned household 

water well systems. The Secretary will 

give priority to an applicant that 

demonstrates it has substantial 

experience of this type. 

(d) The applicant must submit: 

(1) A pro forma balance sheet at startup and projected balance sheets for at 

least 3 additional years, 

(2) Financial statements for the last 3 

years, or from inception of the 

operations of the grant recipient if less 

than 3 years, and

(3) Projected cash flow and earnings 

statements for at least 3 years, supported 

by a list of assumptions showing the 

basis for the projections. The projected 

earnings statement and balance sheets 

must include one set of projections 

specific to the revolving loan fund, and 

a separate set of projections that detail 

the proposed applicant organization’s 

total operations. 

(e) The applicant may submit such 

additional information as it elects to 

support and describe its plan for 

achieving the objectives of this part.

§ 1776.8 Methods for submitting 

applications. 

(a) Applications for HWWS grants 

may be submitted by U.S. Mail. 

Applications submitted by mail must be 

addressed as follows: Rural Utilities 

Service, U.S. Department of Agriculture, 

1400 Independence Avenue, SW., STOP 

1548, Washington, DC 20250–1548. The 

outside of the application should be 

marked: ‘‘Attention: Assistant 

Administrator, Water and 

Environmental Programs.’’ Applications 

submitted by mail must be postmarked 

not later than the filing deadline to be 

considered during the period for which 

the application was submitted. 

(b) In lieu of submitting an 

application by U.S. Mail, an applicant 

may file its application electronically by 

using the Federal Government’s eGrants 

Web site (Grants.gov) at http://

www.grants.gov. Applicants should refer 

to instructions found on the Grants.gov 

Web site for procedures for registering 

and using this facility. Applicants who 

have not previously registered on 

Grants.gov should allow a sufficient 

number of business days to complete 

the process necessary to be qualified to 

apply for Federal Government grants 

using electronic submissions. Electronic 

submissions must be filed not later than 

the filing deadline to be considered 

during the period for which the 

application was submitted. 

(c) The methods of submitting 

applications may be changed from time 

to reflect changes in addresses and 

electronic submission procedures. 

Applicants should refer to the most 

recent notice of funding availability for 

notice of any such changes. In the event 

of any discrepancy, the notice must be 

followed.

§ 1776.9 Scoring applications. 

(a) Applications that are incomplete 

or ineligible will be returned to the 

applicant, accompanied by a statement 

explaining why the application is being 

returned. 

(b) Promptly after an application 

period closes, all applications that are 

complete and eligible will be ranked 

competitively based on the following 

scoring criteria: 

(1) Degree of expertise and experience 

in promoting the safe and productive 

use of individually-owned household 

water well systems and ground water. 

Up to 30 points 

(2) Degree of expertise and successful 

experience in making and servicing 

loans to individuals. Up to 20 points 

(3) Percentage of applicant 

contributions. Points allowed under this 

paragraph will be based on written 

evidence of the availability of funds 

from sources other than the proceeds of 

a HWWS grant to pay part of the cost 

of a loan recipient’s project. In-kind 

contributions will not be considered. 

Funds from other sources as a 

percentage of the HWWS grant and 

points corresponding to such 

percentages are as follows: 

(i) Less than 25 percent—ineligible; 

(ii) Greater than 25 percent but not 

more than 30 percent of the total project 

costs—5 points; 

(iii) Greater than 30 percent but not 

more than 50 percent of the total project 

costs—10 points; and 

(iv) Over 50 percent of the total 

project costs—20 points. 

(4) Extent to which the work plan 

demonstrates a well thought out, 

comprehensive approach to 

accomplishing the objectives of this 

part, clearly defines who will be served 

by the project, and appears likely to be 

sustainable. Up to 20 points 

(5) Extent to which the goals and 

objectives are clearly defined, tied to the 

work plan, and are measurable. Up to 10 

points 

(6) Lowest ratio of projected 

administrative expenses to loans 

advanced. 10 points 

(7) Administrator’s discretion, 

considering such factors as creative 

outreach ideas for marketing HWWS 

loans to rural residents, the amount of 

funds requested in relation to the 

amount of needs demonstrate in the 

work plan, previous experiences 

demonstrating excellent utilization of a 

revolving loan fund grant, and 

optimizing the use of agency resources. 

Up to 10 points 

(c) All qualifying applications under 

this part will be scored based on the 

criteria contained in this section. 

Awards will be made based on the 

highest ranking applications and the 

amount of financial assistance available 

for HWWS grants. Each applicant will 

be notified in writing of the score its 

application receives.

§ 1776.10 Grant agreement. 

RUS and the grant recipient will enter 

into a contract setting forth the terms 

and conditions governing a particular 

HWWS grant award. RUS will furnish 

the form of grant agreement. No funds 

awarded under this part shall be 

disbursed to the grant recipient before 

the grant agreement is binding and RUS 

has received a fully executed 

counterpart of the grant agreement.

§ 1776.11 Revolving loan fund. 

The grant recipient shall establish and 

maintain a revolving loan fund for the 

purposes set forth in § 1776.12. All 

loans made to loan recipients shall be 

drawn from the revolving loan fund. 

Such loans shall be serviced, and the 

revolving loan fund shall be maintained, 

as set forth in § 1776.17.

§ 1776.12 Use of grant proceeds. 

(a) Except as otherwise provided in 

paragraph (b) of this section, HWWS 

grant proceeds shall be used solely for

Federal Register / Vol. 69, No. 193 / Wednesday, October 6, 2004 / Rules and Regulations 59769

the purpose of providing loans to 

eligible individuals for the construction, 

refurbishing, and servicing of individual 

household water well systems in rural 

areas that are or will be owned by the 

eligible individuals. 

(b) A grant recipient may use HWWS 

grant funds to pay administrative 

expenses associated with providing the 

assistance described in paragraph (a) of 

this section. 

(c) A grant recipient may not use grant 

funds in any manner inconsistent with 

the terms of the grant agreement.

§ 1776.13 Administrative expenses. 

(a) Subject to the limitations provided 

in the paragraphs (b), (c) and (d) of this 

section, the grant recipient may use 

grant funds to pay administrative 

expenses associated with providing 

HWWS loans. 

(b) Administrative expenses incurred 

in any calendar year which exceed ten 

percent of the HWWS loans made by the 

grant recipient during that same period 

do not qualify for reimbursement. 

(c) Administrative expenses incurred 

prior to the execution of the grant 

agreement by RUS do not qualify for 

reimbursement. 

(d) Allowability of administrative 

expense costs shall be determined in 

accordance with 7 CFR 3019.27.

Subpart C—HWWS Loans

§ 1776.14 Eligibility to receive a HWWS 

loan. 

(a) The loan recipient must be an 

eligible individual. 

(b) The loan recipient must either 

own and occupy the home being 

improved with the proceeds of the 

HWWS loan, or be occupying the home 

as the purchaser under a legally 

enforceable land purchase contract 

which is not in default by either the 

seller or the purchaser. 

(c) The home using the water well 

system being funded from proceeds of 

the HWWS loan must be located in a 

rural area. 

(d) The water well system being 

funded from the proceeds of the HWWS 

loan may not be associated with the 

construction of a new dwelling.

(e) The water well system being 

funded from the proceeds of the HWWS 

loan may not be used to substitute for 

water service available from collective 

water systems. Example: Loan recipient 

wishes to restore an old well which had 

been abandoned when the dwelling was 

connected to a water line belonging to 

a water district. 

(f) A loan recipient must not be 

suspended or debarred from 

participation in Federal programs.

§ 1776.15 Terms of loans. 

(a) HWWS loans under this part—

(1) Shall have an interest rate of 1 

percent; 

(2) Shall have a term not to exceed 20 

years; and 

(3) Shall not exceed $8,000 for each 

household water well system. 

(b) The grant recipient must set forth 

the HWWS loan terms in written 

documentation signed by the loan 

recipient. 

(c) Grant recipients must develop and 

use HWWS loan documentation that 

conforms to the terms of this part, the 

grant agreement, and the laws of the 

state or states having jurisdiction.

§ 1776.16 Loan servicing. 

(a) If RUS determines that HWWS 

loans may be serviced by CSC, then the 

grant recipient will enter into an 

agreement with the Centralized 

Servicing Center for servicing all 

HWWS loans made from the revolving 

loan fund. All HWWS loan payments 

will be received by and processed at the 

Centralized Servicing Center. The grant 

recipient will be charged a fee for this 

service, and such fee should be 

included in the projected financial 

statements and work plan submitted as 

part of the grant application. This fee 

may be reimbursed as an administrative 

expense as provided in § 1776.13. 

(b) If RUS determines that CSC is not 

able to service HWWS loans, then the 

grant recipient shall be responsible for 

servicing, or causing to be serviced, all 

HWWS loans. Servicing will include 

preparing loan agreements, processing 

loan payments, reviewing financial 

statements and debt reserves balances, 

and other responsibilities such as 

enforcement of loan terms. Loan 

servicing will be in accordance with the 

work plan approved by RUS when the 

grant is awarded for as long as any loan 

made in whole or in part with RUS 

grant funds is outstanding.

§ 1776.17 Revolving loan fund 

maintenance. 

For as long as any part of the HWWS 

grant remains available for lending, and 

loans made from the revolving loan 

fund have an outstanding balance due, 

the grant recipient must maintain the 

revolving loan fund for the purposes set 

forth in § 1776.13. 

(a) All HWWS grant funds received by 

a grant recipient must be deposited into 

the revolving loan fund. 

(b) The grant recipient may transfer 

additional assets into the revolving loan 

fund. 

(c) All cash and other assets of the 

revolving loan fund shall be deposited 

in a separate bank account or accounts. 

(d) No cash or other assets of any 

other fund maintained by the grant 

recipient shall be commingled with the 

cash and other assets of the revolving 

loan fund. 

(e) All moneys deposited in such bank 

account or accounts shall be money of 

the revolving loan fund. 

(f) Loans to loan recipients are 

advanced from the revolving loan fund. 

(g) The receivables created by making 

loans, the grant recipient’s security 

interest in collateral pledged by loan 

recipients, collections on the 

receivables, interest, fees, and any other 

income or assets derived from the 

operation of the revolving loan fund are 

a part of the revolving loan fund.

(h) The portion of the revolving loan 

fund that consists of HWWS grant 

funds, on a last-in-first-out basis, may 

only be used for those purposes set forth 

in this part. 

(i) The grant recipient must submit an 

annual budget of proposed 

administrative costs for RUS approval. 

The amount removed from the revolving 

loan fund for administrative costs in any 

year must be reasonable, must not 

exceed the actual cost of operating the 

revolving loan fund, including loan 

servicing and providing technical 

assistance, and must not exceed the 

amount approved by RUS in the grant 

recipient’s annual budget. 

(j) A reasonable amount of revolved 

funds must be used to create a reserve 

for bad debts. Reserves should be 

accumulated over a period of years. The 

total amount should not exceed 

maximum expected losses, considering 

the quality of the grant recipient’s 

portfolio of loans. Unless the grant 

recipient provides loss and delinquency 

records that, in the opinion of RUS, 

justifies different amounts, a reserve for 

bad debts of 6 percent of outstanding 

loans must be accumulated over 3 years 

and then maintained as set forth in the 

grant agreement. 

(k) Any cash in the revolving loan 

fund from any source that is not needed 

for debt service, approved 

administrative costs, or reasonable 

reserves must be available for additional 

loans to loan recipients. 

(l) All reserves and other cash in the 

revolving loan fund not immediately 

needed for loans to loan recipients or 

other authorized uses must be deposited 

in accounts in banks or other financial 

institutions. Such accounts must be 

fully covered by Federal deposit 

insurance or fully collateralized with 

U.S. Government obligations, and must 

be interest bearing. Any interest earned 

thereon remains a part of the revolving 

loan fund.

59770 Federal Register / Vol. 69, No. 193 / Wednesday, October 6, 2004 / Rules and Regulations 

§ 1776.18 OMB control number. 

The information collection 

requirements in this part are approved 

by the Office of Management and 

Budget (OMB) and assigned OMB 

control number 0572–0139.

Dated: September 2, 2004. 

Curtis M. Anderson, 

Acting Administrator, Rural Utilities Service.

[FR Doc. 04–22448 Filed 10–5–04; 8:45 am] 

BILLING CODE 3410–15–P

DEPARTMENT OF AGRICULTURE

Rural Utilities Service 

7 CFR Part 1783 

RIN 0572–AB95 

Grant Program To Establish a Fund for 

Financing Water and Wastewater 

Projects (Revolving Fund Program 

(RFP))

AGENCY: Rural Utilities Service, USDA.

ACTION: Direct final rule.

SUMMARY: The Rural Utilities Service 

(RUS or the Agency) is issuing a 

regulation to establish the Grant 

Program to Establish a Fund for 

Financing Water and Wastewater 

Projects (Revolving Fund Program 

(RFP)) as authorized by the 

Consolidated Farm and Rural 

Development Act (CONACT), as 

amended by section 6002 of the Farm 

Security and Rural Investment Act of 

2002 (Farm Bill). The Secretary may 

make grants to qualified, private, nonprofit entities. Grant Recipients will 

make loans to eligible entities to finance 

pre-development costs associated with 

proposed water and wastewater projects 

or with existing water and wastewater 

systems, and short-term costs incurred 

for replacement equipment, small-scale 

extension of services, or other small 

capital projects that are not part of the 

regular operations and maintenance 

activities of existing water and 

wastewater systems.

DATES: This rule will become effective 

November 22, 2004, unless RUS 

receives written adverse comments or a 

written notice of intent to submit 

adverse comments on or before 

November 5, 2004. If RUS receives such 

comments or notice, the Agency will 

publish a timely notice in the Federal 

Register withdrawing the rule. 

Comments received will be considered 

under the proposed rule published in 

this edition of the Federal Register in 

the proposed rule section. A second 

public comment period will not be held. 

Comments must be received by RUS or 

carry a postmark or equivalent no later 

than November 5, 2004. Comments 

regarding the information collection 

requirements under the Paperwork 

Reduction Act must be received on or 

before December 6, 2004, to be assured 

of consideration.

ADDRESSES: Submit adverse comments 

or notice of intent to submit adverse 

comments by any of the following 

methods: 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

online instruction for submitting 

comments. 

• Agency Web Site: http://www.

usda.gov/rus/index2.Comments.htm.

Follow the instructions for submitting 

comments. 

• E-mail: RUSComments@usda.gov.

Include in the subject line of the 

message ‘‘7 CFR 1783.’’

• Mail: Addressed to Richard Annan, 

Acting Director, Program Development 

and Regulatory Analysis, Rural Utilities 

Service, United States Department of 

Agriculture, 1400 Independence 

Avenue, STOP 1522, Washington, DC 

20250–1522. 

• Hand Delivery/Courier: Addressed 

to Richard Annan, Acting Director, 

Program Development and Regulatory 

Analysis, Rural Utilities Service, United 

States Department of Agriculture, 1400 

Independence Avenue, SW., Room 

5168–S, Washington, DC 20250–1522. 

Instructions: All submissions received 

must include ‘‘Rural Utilities Service’’

and the subject heading ‘‘7 CFR 1783.’’

All comments received must identify 

the name of the individual (and the 

name of the entity, if applicable) who is 

submitting the comment. All comments 

received will be posted without change 

to http://www.usda.gov.rus.index2.

Comments.htm, including any personal 

information provided.

FOR FURTHER INFORMATION CONTACT:

Stephen Saulnier, Loan Specialist, 

Water Programs Division, Rural Utilities 

Service, U.S. Department of Agriculture, 

1400 Independence Avenue, SW., Room 

2235–S, Stop 1570, Washington, DC 

20250–1570. Telephone (202) 690–2526. 

E-Mail: stephen.saulnier@usda.gov.

SUPPLEMENTARY INFORMATION: 

Executive Order 12866

This direct final rule has been 

determined to be not significant for the 

purposes of Executive Order 12866 and, 

therefore, has not been reviewed by the 

Office of Management and Budget 

(OMB). 

Executive Order 12372 

This rule is not subject to the 

requirements of Executive Order 12372, 

‘‘Intergovernmental Review of Federal 

Programs’’, as implemented under 

USDA’s regulations at 7 CFR Part 3015. 

Executive Order 12988 

This direct final rule has been 

reviewed under Executive Order 12988, 

Civil Justice Reform. RUS has 

determined that this proposed rule 

meets the applicable standards provided 

in section 3 of the Executive Order. In 

addition all State and local laws and 

regulations that are in conflict with this 

rule will be preempted; no retroactive 

effect will be given to the rule; and, in 

accordance with Section 212(e) of the 

Department of Agriculture 

Reorganization Act of 1994 (7 U.S.C. 

6912(e)) administrative appeal 

procedures, if any are required, must be 

exhausted prior to initiating any action 

against the Department or its agencies. 

Regulatory Flexibility Act Certification 

Pursuant to 5 U.S.C. 553(a)(2), this 

proposed rule related to grants is 

exempt from the rulemaking 

requirements of the Administrative 

Procedure Act, 5 U.S.C. 551 et seq., 

including the requirement to provide 

prior notice and an opportunity for 

public comment. Because this proposed 

rule is not subject to a requirement to 

provide prior notice and an opportunity 

for public comment pursuant to 5 U.S.C. 

553, or any other law, the analytical 

requirements of the Regulatory 

Flexibility Act, 5 U.S.C. 601 et seq. are 

inapplicable. 

Executive Order 13132, Federalism 

The policies contained in this rule do 

not have any substantial direct effect on 

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. Nor does this rule 

impose substantial direct compliance 

costs on states and local governments. 

Therefore, consultation with states is 

not required. 

Information Collection and 

Recordkeeping Requirements 

In accordance with the Paperwork 

Reduction Act of 1995 (44 U.S.C. 

chapter 35) RUS is requesting comments 

on the information collection 

incorporated in this proposed rule. 

Comments on this information 

collection must be received by 

December 6, 2004. 

Comments are invited on: (a) Whether 

the collection of information is 

necessary for the proper performance of 

the functions of the agency, including 

whether the information will have 

practical utility; (b) the accuracy of the