[Federal Register Volume 72, Number 10 (Wednesday, January 17, 2007)]
[Notices]
[Page 1979]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-504]



[[Page 1979]]

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DEPARTMENT OF AGRICULTURE

Rural Business-Cooperative Service


Guarantee Fee Rates for Guaranteed Loans for Fiscal Year 2007; 
Maximum Portion of Guarantee Authority Available for Fiscal Year 2007

AGENCY: Rural Business-Cooperative Service, USDA.

ACTION: Notice.

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SUMMARY: As set forth in 7 CFR 4279.107(b) and 4280.126(c), Rural 
Development (the Agency) has the authority to charge an annual renewal 
fee for loans made under the Business and Industry (B&I) Guaranteed 
Loan Program and the Renewable Energy and Energy Efficiency 
Improvements (9006) Guaranteed Loan Program. Pursuant to that 
authority, the Agency is establishing the renewal fee rate at one-
fourth of 1 percent for the B&I Guaranteed Loan Program and one-eighth 
of 1 percent for the 9006 Guaranteed Loan Program. These rates will 
apply to all loans obligated in fiscal year (FY) 2007 that are made 
under the cited programs. As established in 7 CFR 4279.107 and 
4280.126, the amount of the fee on each guaranteed loan will be 
determined by multiplying the fee rate by the outstanding principal 
loan balance as of December 31, multiplied by the percent of guarantee.
    As set forth in 7 CFR 4280.126(a), each fiscal year the Agency 
shall establish the initial guarantee fee rate for loans made under the 
9006 Guaranteed Loan Program. Pursuant to that authority, the Agency is 
establishing the initial guarantee fee rate at 1 percent for loans made 
in FY 2007.
    As set forth in 7 CFR 4279.107(a) and 4279.119(b)(4), each fiscal 
year the Agency shall establish a limit on the maximum portion of B&I 
guarantee authority available for that fiscal year that may be used to 
guarantee loans with a B&I guarantee fee of 1 percent or guaranteed 
loans with a guarantee percentage exceeding 80 percent.
    Allowing the guarantee fee to be reduced to 1 percent or exceeding 
the 80 percent guarantee on certain B&I guaranteed loans that meet the 
conditions set forth in 7 CFR 4279.107 and 4279.119 will increase the 
Agency's ability to focus guarantee assistance on projects which the 
Agency has found particularly meritorious. For 1 percent fees, the 
borrower's business supports value-added agriculture and results in 
farmers benefiting financially, or such projects are high impact as 
defined in 7 CFR 4279.155(b)(5) and located in rural communities that 
remain persistently poor, which experience long-term population decline 
and job deterioration, are experiencing trauma as a result of natural 
disaster, or are experiencing fundamental structural changes in its 
economic base. For guaranteed loans exceeding 80 percent, such projects 
must be a high-priority project in accordance with 7 CFR 4279.155.
    Not more than 12 percent of the Agency's quarterly apportioned B&I 
guarantee authority will be reserved for loan requests with a guarantee 
fee of 1 percent, and not more than 15 percent of the Agency's 
quarterly apportioned guarantee authority will be reserved for 
guaranteed loan requests with a guaranteed percentage exceeding 80 
percent. Once the respective quarterly limits are reached, all 
additional loans for that quarter will be at the standard fee and 
guarantee limits in 7 CFR part 4279. As an exception to this paragraph 
and for the purposes of this notice, loans developed by the North 
American Development Bank (NADBank) Community Adjustment and Investment 
Program (CAIP) will not count against the 15 percent limit. Up to 50 
percent of CAIP loans may have a guaranteed percentage exceeding 80 
percent. The funding authority for CAIP loans is not derived carryover 
or recovered funding authority of the B&I Guaranteed Loan Program.
    Written requests by the Rural Development State Office for approval 
of a guaranteed loan with a 1 percent guarantee fee or a guaranteed 
loan exceeding 80 percent must be forwarded to the National Office, 
Attn: Director, Business and Industry Division, for review and 
consideration prior to obligation of the guaranteed loan. The 
Administrator will provide a written response to the State Office 
confirming approval or disapproval of the request.

EFFECTIVE DATE: January 17, 2007.

FOR FURTHER INFORMATION CONTACT: Fred Kieferle, USDA, Rural 
Development, Business Programs, Business and Industry Division, Stop 
3224, 1400 Independence Avenue, SW., Washington, DC 20250-3224, 
telephone (202) 720-7818.

SUPPLEMENTARY INFORMATION: This action has been reviewed and determined 
not to be a rule or regulation as defined in Executive Order 12866 as 
amended by Executive Order 13258.

    Dated: January 5, 2007.
Jackie J. Gleason,
Administrator, Rural Business-Cooperative Service.
[FR Doc. E7-504 Filed 1-16-07; 8:45 am]
BILLING CODE 3410-XY-P