This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations Federal Register

82225 

Vol. 88, No. 225 

Friday, November 24, 2023 

DEPARTMENT OF AGRICULTURE 

Rural Business-Cooperative Service 

7 CFR Part 4279 

[Docket No. RBS–20–BUSINESS–0016] 

RIN 0570–AB07 

Guaranteed Loanmaking and Servicing 

Regulations 

AGENCY: Rural Business-Cooperative 

Service, USDA. 

ACTION: Final rule. 

SUMMARY: The Rural BusinessCooperative Service (RB–CS) (Agency), 

a Rural Development (RD) agency of the 

United States Department of Agriculture 

(USDA), is issuing a final rule to amend 

the interim rule published on May 22, 

2020. The interim rule amended the 

Business and Industry (B&I) Guaranteed 

Loan Program to allow flexibility to 

obligate Federal funds for guaranteed 

loans pursuant to the Coronavirus Aid, 

Relief, and Economic Security Act 

(CARES Act) in response to the national 

COVID–19 Public Health Emergency. 

This final rule addresses public 

comments received on the interim rule 

and makes clarifying modifications 

identified by commenters and the 

Agency. 

DATES: 

Effective date: November 24, 2023. 

Applicability dates: This final rule 

applies to applications submitted under 

the B&I CARES Act Guaranteed Loan 

Program from May 22, 2020, and 

received no later than 11:59 p.m. 

Eastern Time on September 15, 2021, or 

until Program funding expired on 

September 30, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Mark Brodziski, Deputy Administrator, 

Rural Business and Cooperative Service, 

Rural Development, U.S. Department of 

Agriculture, 1400 Independence Avenue 

SW, Stop Washington, DC 20250–3221; 

email: mark.brodziski@usda.gov; 

telephone (202) 205–0903. 

SUPPLEMENTARY INFORMATION: 

I. Background Information 

The RD is a mission area within the 

USDA that is comprised of the RB–CS, 

the Rural Housing Service (RHS), and 

the Rural Utilities Service (RUS). Its 

mission is to increase economic 

opportunity and improve the quality of 

life in rural communities by providing 

the leadership, infrastructure, access to 

capital, and technical support that 

enables rural communities to prosper. 

To achieve its mission, the RD provides 

financial support through more than 40 

programs including direct loans, grants, 

loan guarantees, and technical 

assistance to help improve the quality of 

life and provide the foundation for 

economic development in rural areas. 

The B&I Guaranteed Loan Program 

was authorized under Section 310B of 

the Consolidated Farm and Rural 

Development Act of 1972, as amended 

by subsequent Farm Bills, with the aim 

to revitalize and develop rural areas and 

to help foster a balance between rural 

and urban America. The loans are made 

by private lenders to rural businesses for 

the purposes of creating new businesses, 

expanding existing businesses, and for 

other purposes of creating employment 

opportunities in rural America. 

Businesses located in rural areas are 

eligible for this program. Rural areas, as 

defined at 7 CFR 4279.108(c), are any 

area of a State other than a city or town 

that has a population of greater than 

50,000 inhabitants and any urbanized 

area contiguous and adjacent to such a 

city or town. The types of borrowers 

that are served by the B&I Guaranteed 

Loan Program are cooperative 

organizations, corporations, 

partnerships, or other legal entities 

organized and operated on a profit or 

nonprofit basis; Indian Tribes on a 

Federal or State reservation or other 

federally recognized Tribal group; 

public bodies; or individuals, provided 

the borrower is engaged in, or proposing 

to engage in, a business. Loans can be 

made for a variety of purposes, 

including business acquisition, 

expansion, or improvement; purchase of 

real estate, machinery and equipment, 

or supplies; limited debt refinancing; 

and working capital. The rate and term 

of the loan is negotiated between the 

business and the lender. 

On March 13, 2020, the ongoing 

Coronavirus Disease 2019 (COVID–19) 

pandemic was declared of sufficient 

severity and magnitude to warrant an 

emergency declaration for all States, 

territories, and the District of Columbia. 

With the COVID–19 Public Health 

Emergency, many businesses 

nationwide began experiencing 

economic hardship as a direct result of 

the Federal, State, and local public 

health measures that were being taken 

to minimize the public’s exposure to the 

virus. These measures, as well as advice 

to physically social distance from other 

people and to stay at home or ‘‘shelter 

in place,’’ resulted in a dramatic 

negative impact on the livelihood of 

many Americans and, in turn, 

negatively impacted the national 

economy. 

In order to provide critical financial 

relief to American families, on March 

27, 2020, the President signed the 

Coronavirus Aid, Relief, and Economic 

Security Act (the CARES Act or the Act) 

(Pub. L. 116–136) to provide emergency 

assistance and health care response for 

individuals, families, and businesses 

affected by the coronavirus pandemic. 

II. Purpose of This Regulatory Action 

This final rule updates the B&I 

CARES Act Program Loans, as 

implemented in 7 CFR part 4279— 

Guaranteed Loan Making and 7 CFR 

part 4287—Servicing and as published 

in the Federal Register on May 22, 

2020, as an interim rule. 

RBCS received funding and authority 

through Division B, Title I of the CARES 

Act to provide additional funds for use 

under the B&I Guaranteed Loan Program 

to prevent, prepare for, and respond to 

the effects of the COVID–19 pandemic. 

The regulatory impact analysis for the 

interim rule documents the anticipated 

costs and benefits of the program against 

the benchmark of no rule (i.e., absent 

the interim final rule). In summary, the 

baseline of the cost benefit analysis for 

the interim final rule was mostly 

qualitative using existing information 

the Agency had from the B&I 

Guaranteed Loan Program and 

anticipated results of the provisions in 

the interim rule that allowed the 

flexibility to obligate Federal funds for 

guaranteed loans pursuant to the CARES 

Act in response to the nation COVID–19 

Public Health Emergency. As a result of 

these considerations and the funding 

purposes outlined in the CARES Act, 

the Agency decided to offer the 


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82226 Federal Register / Vol. 88, No. 225 / Friday, November 24, 2023 / Rules and Regulations 

following—using the interim rule— 

under the B&I CARES Act Program: (1) 

90-percent guarantees to all B&I CARES 

Act funded loans, (2) 2-percent 

guarantee fee; (3) acceptance of 

appraisals completed within 2 years of 

the date of the application; (4) no 

discounting of collateral for working 

capital loans; and (5) extension of the 

maximum term for working capital 

loans to 10 years. The regulatory impact 

analysis associated with the interim 

final rule can be viewed at 

www.regulations.gov under Docket No. 

RBS–20–BUSINESS–0016. 

The economic impacts of the final 

rule are minimal or de minimus when 

set against the benchmark for the 

interim final rule. The CARES Act 

provided $20,500,000 in budgetary 

authority, which RD anticipated would 

support an allocation of approximately 

$951,000,000 in loan guarantees, which 

supported approximately $811,645,477 

in loan guarantees. Applications for B&I 

CARES Act funds expired at the end of 

fiscal year 2021 as all available funds 

were exhausted. Though RD staff have 

successfully implemented the regulatory 

requirements, they have determined 

through their continuous interaction 

with stakeholders that changes to the 

interim rule are needed to clarify 

eligible uses of funds and to further 

improve program delivery. Eligible uses 

of funds include the ability of borrowers 

to address financial needs related to 

COVID–19 in addition to loss of income, 

related challenges directly related to 

COVID–19, and challenges businesses 

faced in order to return to normal 

operations, not just losses incurred as a 

result of COVID–19. This final rule 

provides clarification of the Agency’s 

position on the eligible use of funds for 

auditing purposes and future servicing 

actions including loss payments to 

lenders. Additionally, the Agency will 

be able to reference this final rule 

should the B&I program be utilized 

again to directly respond to and 

alleviate the issues resulting from 

another National Public Health 

Emergency. 

III. Summary of Comments and 

Responses 

On May 22, 2020 (85 FR 31035), the 

Agency published an interim rule to 

supplement the current B&I Guaranteed 

Loan Program, as implemented in 7 CFR 

part 4279, Guaranteed Loan Making, 

and 7 CFR part 4287, Servicing, with the 

new B&I CARES Act Guaranteed Loan 

Program (B&I CARES Act Program). The 

Agency received the following 

comments from one commenter: 

Comment: The commenter suggested 

that from experience, the Agency 

understands that some companies need 

to expand production due to the 

pandemic such as Personal Protective 

Equipment (PPE) and sanitary products, 

while others need to provide PPE 

inventory to staff and protective 

materials for retail clients, which creates 

a need for financial assistance for items 

that also meet the impact of the crisis. 

Agency Response: The Agency agrees 

with the commenter and clarifies in 7 

CFR 4279.190(c)(1) that the borrower 

may use the program for financial needs 

related to the COVID–19 Public Health 

Emergency in general and not just to 

address the loss of income and to 

provide funds for operating overhead 

expenses in response to the epidemic. 

Comment: One commenter stated that 

there appeared to be contradictory 

information in the interim regulation 

between the ‘‘Preamble’’ and the 

‘‘Eligible Use of Funds’’ sections. The 

commenter indicated that the Preamble 

suggests that the B&I CARES Act 

Program guaranteed loan funds may be 

used by rural businesses that require 

additional working capital to sustain 

and ramp up business operations once 

the emergency is resolved. However, the 

commenter asserted that the ‘‘Eligible 

Use of Funds’’ section states that B&I 

CARES Act Program Loans should not 

exceed the amount needed to overcome 

the financial distress caused by the 

COVID–19 Public Health Emergency. 

The commenter further specified that 

there appears to be a discrepancy 

between intent, which includes ramping 

up business operations, and the actual 

regulation which appears to only 

address a shortfall in operating capital. 

Agency Response: The Agency 

concurs with the concern raised by the 

commenter and revises 7 CFR 

4279.190(c)(1) to include language to 

address the discrepancy and clarify the 

intent of the program. 

Comment: One commenter expressed 

a concern that the B&I CARES Act 

program could be interpreted to be for 

the primary purpose of covering 

operating losses only, rather than for 

working capital in totality, and further 

encourages the Agency to recognize that 

a business may have needs now that 

were not present pre-Coronavirus, and 

the business may need more working 

capital than before the pandemic. 

Agency Response: The Agency 

concurs with this concern raised by the 

commenter and revises 7 CFR 

4279.190(c)(3)(viii) by adding language 

to the eligible purposes to include 

additional expenses due to challenges 

directly related to the national COVID– 

19 Public Health Emergency. 

Comment: One commenter 

commented that the Agency should 

understand the ever-changing 

environment that businesses face and 

allow the B&I CARES Act Program to 

provide working capital to get the 

business back on a strong footing. 

Agency Response: The Agency 

concurs with this statement and revises 

7 CFR 4279.190(d)(2) to clarify the 

intent of the program and the ability to 

‘‘address challenges’’ caused by the 

COVID–19 Public Health Emergency. 

IV. Summary of Changes 

The following is a summary list of 

changes to the B&I CARES Act Program 

(7 CFR 4279.190) as a result of public 

comments: 

1. Add language in the introductory text of 

§ 4279.190(a) to clarify that a loan is limited 

to the amount necessary to address a 

borrower’s financial needs related to the 

COVID–19 Public Health Emergency. 

2. In § 4279.190(c)(1) and (2), add language 

that refers to the challenges faced by 

borrowers due to the COVID–19 Public 

Health Emergency in order to clarify the use 

of the B&I CARES Act Program Loans. 

3. In § 4279.190(c)(3)(i), (iv), and (viii), 

clarify that the eligible use of loan funds for 

borrowers for challenges directly related to 

the National COVID–19 Public Health 

Emergency includes the owner’s wages and 

salaries if these costs were verifiable and 

constitute historical working capital costs. 

4. In § 4279.190(d)(1), (2), and (3), include 

language clarifying minimum loan amount 

threshold, inventory and production costs, 

and the maximum loan amount. 

The following is a summary list of the 

technical corrections and clarifications to the 

B&I CARES Act Program (7 CFR 4279.190): 

5. Correct the authority citation for 7 CFR 

part 4279 by adding 7 U.S.C. 1932(a), which 

includes 7 CFR 4287, Servicing for the B&I 

Program. 

6. In § 4279.190(c)(5), specify that the 

Agency should verify ineligibility for Farm 

Service Agency (FSA) loan programs, and 

clarify that agricultural producers must be 

located in a rural area as defined in 7 CFR 

4279.108(c) unless they meet the food 

processing provisions under 7 CFR 

4279.113(y). The interim rule only allowed 

for eligibility for B&I CARES Act Program 

Loans if the loan amount exceeded the FSA 

size limit or the applicant was otherwise 

ineligible for FSA programs. 

7. In § 4279.190(h), add language to clarify 

loan terms and provisions. 

8. In § 4279.190(k)(1) and (3), add language 

that was originally omitted from the interim 

rule regarding ‘‘tangible balance sheet 

equity.’’ 

9. In § 4279.190(k)(2), add clarifying 

language regarding borrower equity allowing 

additional sources of matching funds, which 

was inadvertently omitted from the interim 

rule. 

10. In § 4279.190(m), add introductory 

language to clarify the application 

information and priority scoring process. 

11. In § 4279.190(m)(4)), add language to 

clarify the use of a borrowers’ application 

request for the B&I CARES Act loan process. 


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Federal Register / Vol. 88, No. 225 / Friday, November 24, 2023 / Rules and Regulations 82227 

Executive Order 12866, Regulatory 

Planning and Review 

This final rule has been reviewed by 

the Office of Management and Budget 

under Executive Order 12866 and 

determined to be significant for the 

purposes of Executive Order 12866. The 

Executive Order defines a section 3(f)(1) 

‘‘significant regulatory action’’ as one 

that is likely to result in a rule that may 

(1) have an annual effect on the 

economy of $200 million or more or 

adversely affect, in a material way, the 

economy, a sector of the economy, 

productivity, competition, jobs, the 

environment, public health or safety, or 

State, local, or Tribal governments or 

communities; (2) create a serious 

inconsistency or otherwise interfere 

with an action taken or planned by 

another agency; (3) materially alter the 

budgetary impact of entitlements, 

grants, user fees, or loan programs or the 

rights and obligations of recipients 

thereof; or (4) raise novel legal or policy 

issues arising out of legal mandates, the 

President’s priorities, or the principles 

set forth in this E.O. This final rule was 

determined to be significant because the 

changes to the B&I Guaranteed Loan 

Program regulations are estimated to 

have an impact on the economy of more 

than $200 million. 

Executive Order 12988, Civil Justice 

Reform 

This final rule has been reviewed 

under Executive Order 12988, Civil 

Justice Reform. The Agency has 

determined that this final rule meets the 

applicable standards provided in 

section 3 of the Executive Order. In 

addition, all State and local laws, and 

regulations that conflict with this final 

rule will be preempted. No retroactive 

effect will be given to this final 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 must be exhausted before an 

action against the Department, or its 

agencies may be initiated. 

Executive Order 12372, 

Intergovernmental Review 

B&I guaranteed loans are subject to 

the Provisions of Executive Order 

12372, which require intergovernmental 

consultation with State and local 

officials. The Agency will conduct 

intergovernmental consultation in 

accordance with 2 CFR part 415, subpart 

C. 

Executive Order 13132, Federalism 

The policies contained in this final 

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 final rule impose substantial direct 

compliance costs on State and local 

governments. Therefore, the Agency has 

determined that consultation with the 

States is not required. 

Executive Order 13175, Consultation 

and Coordination With Indian Tribal 

Governments 

This final rule has been reviewed in 

accordance with the requirements of 

Executive Order 13175, ‘‘Consultation 

and Coordination with Indian Tribal 

Governments.’’ Executive Order 13175 

requires Federal agencies to consult and 

coordinate with Tribes on a 

government-to-government basis on 

policies that have Tribal implications, 

including regulations, legislative 

comments or proposed legislation, and 

other policy statements or actions that 

have substantial direct effects on one or 

more Indian Tribes, on the relationship 

between the Federal Government and 

Indian Tribes or on the distribution of 

power and responsibilities between the 

Federal Government and Indian Tribes. 

Rural Development has assessed the 

impact of this final rule on Indian 

Tribes and determined that this final 

rule does not, to our knowledge, have 

Tribal implications that require Tribal 

consultation under E.O. 13175. If a 

Tribe would like to engage in 

consultation with Rural Development 

on this rule, please contact Rural 

Development’s Tribal Coordinator at 

(720) 544–2911 or AIAN@usda.gov. 

Regulatory Flexibility Act Certification 

The Regulatory Flexibility Act (RFA) 

generally requires that when an agency 

issues a proposed rule, or a final rule 

pursuant to section 553(b) of the APA or 

another law, the agency must prepare a 

regulatory flexibility analysis that meets 

the requirements of the RFA and 

publish such analysis in the Federal 

Register in accordance with 5 U.S.C. 

603 and 604. Specifically, the RFA 

normally requires agencies to describe 

the impact of a rulemaking on small 

entities by providing a regulatory 

impact analysis. Such analysis must 

address the consideration of regulatory 

options that would lessen the economic 

effect of the rule on small entities. The 

RFA defines a ‘‘small entity’’ as (1) a 

proprietary firm meeting the size 

standards of the SBA; (2) a nonprofit 

organization that is not dominant in its 

field; or (3) a small government 

jurisdiction with a population of less 

than 50,000. Except for such small 

government jurisdictions as defined in 5 

U.S.C. 601 (5), neither State nor local 

governments are considered small 

entities. Similarly, for purposes of the 

RFA, individual persons are not small 

entities. As outlined in 5 U.S.C. 605(b), 

the requirement to conduct a regulatory 

impact analysis does not apply if the 

head of the agency ‘‘certifies that the 

rule will not, if promulgated, have a 

significant economic impact on a 

substantial number of small entities.’’ In 

addition, 5 U.S.C. 604(a) and 608(b) 

specifies that the agency must, however, 

publish the certification in the Federal 

Register at the time of publication of the 

rule, ‘‘along with a statement providing 

the factual basis for such certification.’’ 

If the agency head has not waived the 

requirements for a regulatory flexibility 

analysis in accordance with the RFA 

waiver provision, and no other RFA 

exception applies, the agency must 

prepare the regulatory flexibility 

analysis and publish it in the Federal 

Register at the time of promulgation or, 

if the rule is promulgated in response to 

an emergency that makes timely 

compliance impracticable, within 180 

days of publication of the final rule. 

Rules that are exempt from notice and 

comment are also exempt from the RFA 

requirements, including conducting a 

regulatory flexibility analysis, when 

among other things, the agency for good 

cause finds that notice and public 

procedure are impracticable, 

unnecessary, or contrary to the public 

interest. Accordingly, as authorized by 

sections 553(b)(3)(B) and 553(d) of the 

APA, as well as supported in the 

Federal agency source book published 

by the Small Business Administration’s 

Office of Advocacy, ‘‘A Guide to for 

Government Agencies, How to Comply 

with the Regulatory Flexibility,’’ Ch. 1, 

p. 9., the Agency is not required to 

conduct a regulatory flexibility analysis. 

Information Collection and 

Recordkeeping Requirements 

In accordance with the Paperwork 

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

chapter 35), the information collection 

activities associated with this final rule 

are approved under OMB Control 

Number 0570–0069 and this final rule 

contains no new reporting or 

recordkeeping burdens. 

E-Government Act Compliance 

The RB–CS is committed to the EGovernment Act, which requires 

Government agencies in general to 

provide the public the option of 

submitting information or transacting 

business electronically to the maximum 

extent possible. 


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82228 Federal Register / Vol. 88, No. 225 / Friday, November 24, 2023 / Rules and Regulations 

National Environmental Policy Act 

In accordance with the National 

Environmental Policy Act of 1969, 

Public Law 91–190, this final rule has 

been reviewed in accordance with 7 

CFR part 1970 (‘‘Environmental Policies 

and Procedures’’). The Agency has 

determined that (1) this action meets the 

criteria established in 7 CFR 1970.53(f); 

(2) no extraordinary circumstances 

exist; and (3) the action is not 

‘‘connected’’ to other actions with 

potentially significant impacts, is not 

considered a ‘‘cumulative action’’ and is 

not precluded by 40 CFR 1506.1. 

Therefore, the Agency has determined 

that the action does not have a 

significant effect on the human 

environment, and therefore neither an 

Environmental Assessment nor an 

Environmental Impact Statement is 

required. 

Assistance Listing 

The program described by this final 

rule is listed in the Assistance Listings 

(AL), (formerly Catalog of Federal 

Domestic Assistance (CFDA)), under 

number 10.766—Business and Industry 

Guaranteed Loan Program. 

Unfunded Mandates 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA), Public 

Law 104–4, establishes requirements for 

Federal agencies to assess the effect of 

their regulatory actions on State, local, 

and Tribal governments, and the private 

sector. Under section 202 of the UMRA, 

the Agency generally must prepare a 

written statement, including a costbenefit analysis, for proposed and final 

rules with ‘‘Federal mandates’’ that may 

result in expenditures to State, local, or 

Tribal governments, in the aggregate, or 

to the private sector, of $100 million, or 

more, in any one year. When such a 

statement is needed for a rule, section 

205 of the UMRA generally requires the 

Agency to identify and consider a 

reasonable number of regulatory 

alternatives and adopt the least costly, 

most cost-effective, or least burdensome 

alternative that achieves the objectives 

of the rule. This final rule contains no 

Federal mandates (under the regulatory 

provisions of Title II of the UMRA) for 

State, local, and Tribal governments, or 

the private sector. Therefore, this final 

rule is not subject to the requirements 

of sections 202 and 205 of the UMRA. 

Civil Rights Impact Analysis 

Rural Development has reviewed this 

final rule in accordance with USDA 

Regulation 4300–4, ‘‘Civil Rights Impact 

Analysis,’’ to identify any major civil 

rights impacts this final rule might have 

on program participants on the basis of 

age, race, color, national origin, sex, or 

disability. After review and analysis of 

the final rule and available data, it has 

been determined that based on the 

analysis of the program purpose, 

application submission and eligibility 

criteria, issuance of this final rule will 

not likely adversely or 

disproportionately impact very low, 

low, and moderate-income populations, 

minority populations, women, Indian 

Tribes, or persons with disability, by 

virtue of their race, color, national 

origin, sex, age, disability, or marital or 

familial status. 

USDA Non-Discrimination Statement 

In accordance with Federal civil 

rights laws and USDA civil rights 

regulations and policies, the USDA, its 

Mission Areas, agencies, staff offices, 

employees, and institutions 

participating in or administering USDA 

programs are prohibited from 

discriminating based on race, color, 

national origin, religion, sex, gender 

identity (including gender expression), 

sexual orientation, disability, age, 

marital status, family/parental status, 

income derived from a public assistance 

program, political beliefs, or reprisal or 

retaliation for prior civil rights activity, 

in any program or activity conducted or 

funded by USDA (not all bases apply to 

all programs). Remedies and complaint 

filing deadlines vary by program or 

incident. 

Program information may be made 

available in languages other than 

English. Persons with disabilities who 

require alternative means of 

communication to obtain program 

information (e.g., Braille, large print, 

audiotape, American Sign Language) 

should contact the responsible Mission 

Area, agency, or staff office; or 711 

Relay service. 

To file a program discrimination 

complaint, a complainant should 

complete a Form AD–3027, USDA 

Program Discrimination Complaint 

Form, which can be obtained online at 

https://www.usda.gov/sites/default/ 

files/documents/ad-3027.pdf from any 

USDA office, by calling (866) 632–9992, 

or by writing a letter addressed to 

USDA. The letter must contain the 

complainant’s name, address, telephone 

number, and a written description of the 

alleged discriminatory action in 

sufficient detail to inform the Assistant 

Secretary for Civil Rights (ASCR) about 

the nature and date of an alleged civil 

rights violation. The completed AD– 

3027 form or letter must be submitted to 

USDA by: 

(1) Mail: U.S. Department of 

Agriculture, Office of the Assistant 

Secretary for Civil Rights, 1400 

Independence Avenue SW, Washington, 

DC 20250–9410; or 

(2) Fax: (833) 256–1665 or (202) 690– 

7442; or 

(3) Email: Program.Intake@usda.gov. 

USDA is an equal opportunity 

provider, employer, and lender. 

List of Subjects for 7 CFR Parts 4279 

Loan programs-business, Reporting 

and recordkeeping requirements, Rural 

areas. 

Accordingly, for reasons set forth in 

the preamble, 7 CFR part 4279 is 

amended as set forth below: 

PART 4279—GUARANTEED 

LOANMAKING 

■ 1. The authority citation for part 4279 

is revised to read as follows: 

Authority: 5 U.S.C. 301; 7 U.S.C. 1989: 7 

U.S.C. 1932(a); and Public Law 116–136, 

Division B, Title I. 

Subpart B—Business and Industry 

Loans 

■ 2. Amend § 4279.190 by: 

■ a. Revising and republishing 

paragraph (a); 

■ b. Revising and republishing 

paragraphs (c)(1), (2), (3), and (5); 

■ c. Revising and republishing 

paragraphs (d)(1), (2), and (3); 

■ d. Revising and republishing 

paragraph (h); 

■ e. Revising and republishing 

paragraphs (k)(1), (2), and (3); 

■ f. Adding introductory text to 

paragraph (m); and 

■ g. Revising paragraph (m)(4). 

The revisions, republications, and 

addition read as follows: 

§ 4279.190 Business and Industry national 

COVID–19 Public Health Emergency Loans. 

(a) Introduction. This section contains 

regulations for the Business and 

Industry National COVID–19 Public 

Health Emergency loan program (B&I 

CARES Act Program Loans). The 

purpose of the program is to provide 

loan guarantees under the authority of 

the Coronavirus Aid, Relief, and 

Economic Security Act (CARES Act) 

(Pub. L. 116–136). These B&I CARES 

Act Program Loans cover costs to 

prevent, prepare for, and respond to the 

coronavirus limited to the amount 

necessary to address the borrower’s 

financial needs related to the COVID–19 

Public Health Emergency. Consistent 

with the purposes of the CARES Act, the 

Agency has determined that the most 

effective use of these program funds is 

to support the cost of guaranteed loans 

to rural businesses to respond to the 

coronavirus. No B&I CARES Act 

Program Loan guarantee will be 


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Federal Register / Vol. 88, No. 225 / Friday, November 24, 2023 / Rules and Regulations 82229 

approved after September 30, 2021. All 

provisions of subparts A and B of this 

part and subpart B of part 4287 of this 

chapter apply to B&I CARES Act 

Program Loans, except as provided in 

this section. All forms used in 

connection with a B&I CARES Act 

Program Loan will be those used with 

other Business and Industry (B&I) loans, 

except as provided in this section. 

* * * * * 

(c) * * * 

(1) Purpose. The purpose of any B&I 

CARES Act Program Loan must be to 

cover costs to prevent, prepare for, and 

respond to the coronavirus pandemic, 

limited to the amount necessary to 

address the borrower’s financial needs 

related to the COVID–19 Public Health 

Emergency, in accordance with 

paragraph (a) of this section. B&I CARES 

Act Program Loans should not exceed 

the amount needed to overcome the 

financial distress or related challenges 

caused by the COVID–19 Public Health 

Emergency. 

(2) Use of loan proceeds. 

Notwithstanding the provisions of 

§ 4279.113, B&I CARES Act Program 

guaranteed loans will be limited to 

loans for working capital loan purposes 

in accordance with paragraph (c)(3) of 

this section. Loan proceeds may be used 

only to support facilities and business 

operations in rural areas and the 

Borrower must have been in operation 

on February 15, 2020. Loan proceeds 

must be disbursed through multiple 

draws on an as-needed monthly basis. 

Loan proceeds issued in full at loan 

closing must be evidenced by 

documented need provided by the 

lender and with concurrence of the 

Agency. 

(3) Eligible working capital uses. 

Eligible working capital uses of B&I 

CARES Act Program Loan funds are 

limited to: 

(i) Wages, salaries, sales commissions 

to employees, group healthcare benefits, 

and other employee benefits; owner’s 

wages and salaries may be considered if 

these costs are verifiable and constitute 

historical working capital costs; 

(ii) Administrative expenses and 

administrative service contracts; 

(iii) Property insurance, hazard 

insurance, and other business 

insurance; 

(iv) Principal and interest payments 

on outstanding debt excluding owner/ 

stockholder debt and related-party 

debts; payments may include existing 

Business & Industry loan payments to 

bring loans current as loan payments to 

a creditor are a working capital expense; 

(v) Rent, payments on leases, and 

routine maintenance; 

(vi) Utilities; 

(vii) Inventory, feed, seed, fertilizer 

and chemicals, livestock (excluding 

livestock for breeding) and supplies; 

(viii) Marketing, shipping, and other 

expenses incurred through normal 

business operations or such additional 

expenses due to challenges directly 

related to the national COVID–19 Public 

Health Emergency; 

(ix) Taxes; and 

(x) Loan costs and essential loanrelated expenses. 

* * * * * 

(5) Agricultural production. The 

provisions of § 4279.113(q) do not apply 

to B&I CARES Act Program Loans. 

Loans for working capital to support 

agricultural production, including 

independent agricultural production, is 

an eligible use of funds when the 

applicant’s loan request exceeds the 

maximum loan available through FSA 

guaranteed loan programs or the 

applicant’s request is otherwise 

ineligible for FSA loans. The Agency 

should verify ineligibility for FSA loan 

programs. Agricultural producers must 

be located in a rural area as defined in 

7 CFR 4279.108(c) unless they meet the 

requirements provided for under 7 CFR 

4279.113(y). 

(d) * * * 

(1) The provisions of § 4279.119(a) do 

not apply to B&I CARES Act Program 

Loans. The total amount of B&I and B&I 

CARES Act Program Loans to one 

borrower (including the guaranteed and 

unguaranteed portions, the outstanding 

principal and interest balance of any 

existing B&I guaranteed loans, and the 

new loan request) cannot exceed $25 

million. There is no minimum threshold 

for B&I CARES Act Program loans. 

(2) The amount of the B&I CARES Act 

Program Loan shall be based on a cash 

flow analysis and must not be greater 

than the amount needed to address 

challenges caused by the COVID–19 

emergency, including those related to 

inventory and production costs, so that 

the business is reestablished on a 

successful basis. Losses and business 

operating expenses that were adequately 

paid by insurance or by loans or grants 

from other sources will not be covered 

by B&I CARES Act Program Loans. The 

B&I CARES Act Program Loans may be 

used to supplement insurance payments 

or assistance from other sources when 

the insurance coverage or other 

assistance is insufficient. The amount of 

the B&I CARES Act Program loan will 

be reduced by any SBA Paycheck 

Protection Program (PPP) loans received 

by the borrower. 

(3) The maximum loan amount of the 

B&I CARES Act Program Loan for 

working capital purposes may not 

exceed 12 times the borrower’s total 

average monthly costs of eligible 

working capital loan purposes less the 

total amount of covered loans received 

under the provisions of sections 1102 

and 1110(a)(2) of the CARES Act and 

other Federal emergency assistance 

received. Annual tax returns may be 

utilized to calculate the maximum loan 

amount under the B&I CARES Act 

Program. It is the Agency’s preference to 

review the last three full years of 

operations to calculate average working 

capital expenses for the borrower. If 

three years of financial information is 

not available, then actual working 

capital expenses for the business 

duration may be evaluated. Borrowers, 

who have not been in operation for a 

full year may estimate an average 

monthly cost of eligible working capital 

based on available historical months as 

long as they were in operation as of 

February 15, 2020. 

* * * * * 

(h) Loan terms. Notwithstanding the 

provisions of § 4279.126, the maximum 

allowable repayment term of loans for 

working capital purposes is 10 years. 

Loan repayment may defer principal 

payments or principal and interest 

payments for a period up to 12 months 

from loan closing and may extend 

deferral of principal payments up to a 

total of three years with a maximum 

repayment term of 10 years from the 

date of loan closing. B&I CARES Act 

Program Loans must be paid in full 

since the B&I CARES Act Program 

provides no loan forgiveness. 

* * * * * 

(k) * * * 

(1) A minimum of 10 percent balance 

sheet equity or tangible balance sheet 

equity (including subordinated debt 

when subject to a standstill agreement); 

or a maximum debt-to-balance sheet 

equity ratio of 9 to 1. 

(2) A Borrower investment of equity 

or other funds into the project equal to 

10 percent or more of total eligible 

project costs, (such investment may 

include grants or subordinated debt 

when subject to a standstill agreement). 

Additional sources of matching funds 

may be derived from other loan funds; 

however, such funds must be in the 

form of cash. In-kind contributions are 

not eligible to meet equity requirements; 

or 

(3) The balance sheet equity or 

tangible balance sheet equity includes 

owner-contributed capital of 10 percent 

or more of total fixed assets (net total 

fixed assets plus depreciation). 

* * * * * 


ddrumheller on DSK120RN23PROD with RULES1
82230 Federal Register / Vol. 88, No. 225 / Friday, November 24, 2023 / Rules and Regulations 

(m) * * * Applications are to be 

received and processed in the State 

Office in the State where the business is 

located. Funds will be maintained in a 

National Office Reserve account. The 

Agency will consider applications in the 

order they are received by the Agency 

on a first come, first served basis. 

Priority scoring will not be needed 

initially, however towards the end of 

the funding period the Agency will need 

to assign priority points for the limited 

remaining funds and for this purpose 

the Agency will score and compare an 

application to other pending 

applications that are competing for 

funding in accordance with 7 CFR 

4279.166. 

* * * * * 

(4) A lender or borrower may combine 

applications for a B&I CARES Act 

Program loan for working capital with 

an application for B&I appropriated 

fiscal year funds. State Offices are 

allowed to use the same lender’s 

analysis for each request. The existing 

Conditional Commitment template can 

be used for B&I CARES Act Program 

loans and deletion of certain provisions 

that do not impact the borrower or 

credit quality can be removed. Business 

Program Directors are encouraged to 

contact the National Office Program 

Processing Division with any questions 

regarding borrower eligibility, use of 

B&I loan proceeds, calculations of the 

loan amount or borrower equity, and 

any other questions related to a specific 

project. The provisions of this section 

do not apply to applications for B&I 

appropriated fiscal year funds. 

Karama Neal, 

Administrator, Rural Business-Cooperative 

Service. 

[FR Doc. 2023–25908 Filed 11–22–23; 8:45 am] 

BILLING CODE 3410–XY–P 

DEPARTMENT OF AGRICULTURE 

Agricultural Marketing Service 

7 CFR Chapter IX 

[Doc. No. AMS–SC–22–0051] 

Nomenclature Changes; Technical 

Amendments 

AGENCY: Agricultural Marketing Service, 

Department of Agriculture (USDA). 

ACTION: Final rule; technical 

amendments. 

SUMMARY: This rule revises the general 

regulations for Federal marketing orders 

covering fruits, vegetables, and specialty 

crops by updating the section regarding 

information collections. Further, this 

rule updates nomenclature in the 

general regulations, numerous Federal 

marketing orders, the import 

regulations, the domestic hemp program 

regulations, and the peanut handling 

regulations administered by the 

Agricultural Marketing Service (AMS). 

Finally, this rule corrects typographical 

errors found in the AMS marketing 

order and import regulations and 

removes regulations no longer in effect. 

These changes are necessary to provide 

more accurate information in the 

regulations moving forward. 

DATES: Effective November 24, 2023. 

FOR FURTHER INFORMATION CONTACT: 

Matthew Pavone, Branch Chief, 

Rulemaking Services Branch, or Andrew 

Hatch, Deputy Director of Operations, 

Market Development Division, 

Agricultural Marketing Service, USDA; 

phone: (202) 720–2491 or email: 

Matthew.Pavone@usda.gov or 

Andrew.Hatch@usda.gov. 

SUPPLEMENTARY INFORMATION: This 

action, pursuant to 5 U.S.C. 553, makes 

updates and corrections to regulations 

issued to carry out marketing orders as 

defined in 7 CFR 900.2(j). This rule 

revises the General Regulations (7 CFR 

part 900) and the marketing orders in 

numerous other parts of chapter IX that 

regulate the handling of fruits, 

vegetables, nuts, and specialty crops 

(parts 905, 906, 915, 917, 920, 929, 930, 

932, 945, 948, 955, 958, 959, 966, 981, 

982, 983, 985, 987, 989, and 993) and 

imported products (parts 944, 980, and 

999). These parts are effective under the 

Agricultural Marketing Agreement Act 

of 1937, as amended (7 U.S.C. 601–674), 

hereinafter referred to as the ‘‘Act.’’ In 

addition, this rule corrects 

typographical errors in the domestic 

hemp program regulations (part 990), 

which are effective under the 

Agricultural Marketing Act of 1946, as 

amended. Finally, this rule makes 

corrections to the peanut handling 

regulations (part 996), which are 

effective under Public Law 107–171, the 

Farm Security and Rural Investment Act 

of 2002, as amended (7 U.S.C. 7958). 

This action falls within a category of 

regulatory actions that the Office of 

Management and Budget (OMB) 

exempted from Executive Order 12866 

review. Additionally, AMS is issuing 

this final rule in conformance with 

Executive Orders 12988, 13175, and 

13563. 

Section 553(b)(3)(B) of the 

Administrative Procedure Act (APA), 

provides that, when an agency for good 

cause finds that notice and public 

procedure are impracticable, 

unnecessary, or contrary to the public 

interest, the agency may issue a rule 

without providing notice and an 

opportunity for public comment. AMS 

has determined that there is good cause 

for making this technical amendment 

final without prior proposal and 

opportunity for comment because the 

revisions are not substantive and will 

have no impact on the regulatory 

requirements in the affected parts. In 

addition, AMS has determined that 

public comment on such administrative 

changes is unnecessary and that there is 

good cause under the APA for 

proceeding with a final rule. 

Further, because a notice of proposed 

rulemaking and opportunity for public 

comment is not required to be given for 

this rule under the APA or any other 

law, the analytical requirements of the 

Regulatory Flexibility Act (5 U.S.C. 601 

et seq.) are not applicable. Accordingly, 

this rule is issued in final form. 

Overview of Changes 

This final rule makes technical 

amendments to regulations in 7 CFR 

parts 900, 905, 906, 915, 917, 920, 929, 

930, 932, 944, 945, 948, 955, 958, 959, 

966, 980, 981, 982, 983, 985, 987, 989, 

990, 993, 996, and 999. USDA has 

determined that this action is only 

administrative in nature. This action 

updates the information collection 

provisions in § 900.601 to remove 

obsolete references and to align current 

Office of Management and Budget 

(OMB) control numbers and 

descriptions with the appropriate 

programs. This rule also revises 

outdated nomenclature in the general 

regulations pertaining to marketing 

agreements and marketing orders in 7 

CFR part 900; in Federal marketing 

orders in 7 CFR parts 905, 915, 932, 945, 

958, 966, 987, and 989; in the import 

regulations contained in 7 CFR parts 

944, 980, and 999; and in the peanut 

handling regulations in 7 CFR part 996 

to reflect current nomenclature. For 

example, the name of the Marketing 

Order and Agreement Division has been 

changed to Market Development 

Division, so references to the former 

name have been changed to reflect the 

current name. Additionally, this rule 

removes obsolete language and some 

regulatory sections (§§ 982.254 through 

982.255; and §§ 985.234 through 

985.236) that are no longer in effect. 

Lastly, this action corrects typographical 

errors throughout 7 CFR chapter IX. The 

final rule does not add to or amend any 

existing program requirements. 

List of Subjects 

7 CFR Part 900 

Administrative practice and 

procedure, Freedom of information, 


ddrumheller on DSK120RN23PROD with RULES1