3566 Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Proposed Rules

§ 1494.301 Information required for

program participation.

Before CCC will consider an offer

from an interested person, such person

must qualify for participation in the

program. Based upon information

submitted by the interested person and

available from public sources, CCC will

determine whether the interested person

is eligible for participation in the

program.

(a) Submission of documentation. An

interested person that wishes to qualify

as an eligible exporter must furnish the

following information or documentation

to CCC at the address referenced in the

Notice to Exporters—EEP Contacts:

* * * * *

(6) The following certification: ‘‘I

certify, to the best of my knowledge and

belief, that neither [name of interested

person] nor any of its principals has

been debarred, suspended, or proposed

for debarment from contracting with or

participating in programs administered

by any U.S. Government agency.

[‘‘Principals,’’ for the purpose of this

certification, means officers; directors;

owners of five percent or more of stock;

partners; and persons having primary

management or supervisory

responsibility within a business entity

(e.g., general manager, plant manager,

head of a subsidiary division or

business segment, and similar

positions).] I further agree that, should

any such debarment, suspension, or

notice of proposed debarment occur in

the future, [name of interested person]

will immediately notify CCC.’’

(b) Necessity to qualify. An interested

person may not submit an offer, and

CCC will not consider any such offer,

until CCC has notified the interested

person that such person has qualified as

an eligible exporter.

* * * * *

(d) Previous performance. CCC may

request additional information with

respect to the interested person’s

performance under any U.S.

Government programs or in connection

with any contracts or agreements with

the U.S. Government during the past

three years.

(e) Ineligibility for program

participation. A person may be

ineligible to participate in the EEP if

such person:

(1) is currently debarred, suspended

or proposed for debarment from

contracting with or participating in any

program administered by a U.S.

Government agency; or

(2) is controlled or can be controlled,

in whole or in part, by any individuals

or entities currently debarred,

suspended or proposed for debarment

from contracting with or participating in

programs administered by a U.S.

Government agency.

(f) Duty to update information

provided to CCC. An eligible exporter is

under a continuing obligation to inform

CCC of any changes in the information

or documentation submitted to CCC

pursuant to paragraph (a) of this section

and to provide current and accurate

information to CCC.

(g) Payment of bonus to exporters

without proven EEP participation. An

eligible exporter that has not yet

demonstrated its ability to participate

successfully in the EEP will be eligible

to receive a bonus payment(s) only after

the eligible commodity specified in an

EEP Agreement has entered into the

eligible country. Such an exporter must

furnish performance security under

‘‘Option B’’ of the applicable Invitation

and follow the procedure specified in

§ 1494.701(d) to request the payment of

the bonus. An eligible exporter may

demonstrate its ability to participate

successfully in the EEP by entering or

causing to be entered into the eligible

country at least 95% of the quantity of

the eligible commodity specified in any

one EEP Agreement. CCC will consider

that an exporter has proven its ability to

participate successfully in the EEP as of

the date on which CCC pays to the

exporter a bonus for entry of a quantity

that brings the total entered quantity for

any one EEP Agreement to at least 95%.

For all EEP Agreements that such

exporter enters into with CCC

subsequent to that date, the exporter

may furnish performance security under

‘‘Option A’’ of the applicable Invitation

and will be eligible to receive bonus

payments in accordance with

§ 1494.701(c).

Signed at Washington, DC, on January 11,

1995.

Christopher E. Goldthwait,

General Sales Manager and Vice President,

Commodity Credit Corporation.

[FR Doc. 95–1192 Filed 1–17–95; 8:45 am]

BILLING CODE 3410–10–P

Rural Housing and Community

Development Service

Rural Business and Cooperative

Development Service

Rural Utilities Service

Consolidated Farm Service Agency

7 CFR Parts 1948 and 1951

RIN 0575–AB83

Intermediary Relending Program

AGENCIES: Rural Housing and

Community Development Service, Rural

Business and Cooperative Development

Service, Rural Utilities Service, and

Consolidated Farm Service Agency,

USDA.

ACTION: Proposed rule.

SUMMARY: The Rural Business and

Cooperative Development Service is

proposing to amend regulations for the

Intermediary Relending Program (IRP).

This action is needed to clarify and

revise procedures and requirements

regarding a variety of issues. The

amendments are expected to clarify the

roles of the Government and

intermediaries, make the program more

responsive to the needs of

intermediaries and ultimate recipients,

and facilitate continuing expansion of

the program.

DATES: Comments must be received on

or before March 20, 1995.

ADDRESSES: Submit written comments

in duplicate to the Chief, Regulations

Analysis and Control Branch, Rural

Economic and Community Development

Service, USDA, Ag. Box 0743,

Washington, DC 20250–0743. All

written comments made pursuant to this

notice will be available for public

inspection during regular working hours

at the above office, located in room

6348, South Agriculture Building, 14th

and Independence Avenue SW,

Washington, DC.

FOR FURTHER INFORMATION CONTACT: M.

Wayne Stansbery, Business and

Industry Loan Specialist, Rural Business

and Cooperative Development Service,

USDA, Ag. Box 3221, Washington, DC

20250, Telephone (202) 720–6819.

SUPPLEMENTARY INFORMATION:

Classification

We are issuing this proposed rule in

conformance with Executive Order

12866, and have determined that it is a

‘‘significant regulatory action.’’

Programs Affected

The Catalog of Federal Domestic

Assistance program impacted by this
Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Proposed Rules 3567

action is: 10.767, Intermediary

Relending Program.

Program Administration

Due to reorganization actions within

the Department of Agriculture, the

Intermediary Relending Program is

currently administered by the Rural

Business and Cooperative Development

Service (RBCDS). The RBCDS is a

successor to the Rural Development

Administration, which was a successor

to the Farmers Home Administration.

Paperwork Reduction Act

The information collection

requirements contained in 7 CFR part

1951 subpart R have been approved by

the Office of Management and Budget

(OMB) and assigned OMB control

number 9575–0131, in accordance with

the Paperwork Reduction Act of 1980.

The revised information collection

requirements contained in 7 CFR part

1948 subpart C will be submitted to

OMB for review under Section 3504(h)

of the Paperwork Reduction Act. Public

reporting burden for this collection of

information is estimated to vary from 30

minutes to 56 hours per response with

an average of 3.27 hours per response,

including time for reviewing

instructions, searching existing data

sources, gathering and maintaining the

data needed, and completing and

reviewing the collection of information.

Please send written comments to the

Office of Information and Regulatory

Affairs, OMB, Attention: Desk Officer

for USDA, Washington, DC 20503.

Please send a copy of your comments to

Jack Holston, Agency Clearance Officer,

USDA, RECD, Ag. Box 0743,

Washington, DC 20250.

Intergovernmental Review

As set forth in the final rule and

related Notice to 7 CFR part 3015,

subpart V, 48 FR 29112, June 24, 1993,

Intermediary Relending Loans are

subject to the provisions of Executive

Order 12372 which requires

intergovernmental consultation with

State and local officials. RBCDS

conducts intergovernmental

consultation in the manner delineated

in FmHA Instruction 1940–J,

‘‘Intergovernmental Review of Farmers

Home Administration Programs and

Activities.’’

Civil Justice Reform

This document has been reviewed in

accordance with Executive Order 12778.

It is the determination of RBCDS that

this action does not unduly burden the

Federal Court System in that it meets all

applicable standards provided in

section 2 of the Executive Order.

Environmental Impact Statement

This document has been reviewed in

accordance with FmHA Instruction

1940–G, ‘‘Environmental Program.’’

RBCDS has determined that this

proposed action does not constitute a

major Federal action significantly

affecting the quality of the human

environment, and in accordance with

the National Environmental Policy Act

of 1969, Public Law 91–190, an

Environmental Impact Statement is not

required.

Background

This regulatory package is an

initiative to enhance the program

through revisions based on experience

with operation of the program. The

primary changes include the following:

1. The regulation is completely

reorganized for improved clarity.

2. Definitions are provided for

‘‘Agency IRP loan funds,’’ ‘‘IRP

revolving fund,’’ ‘‘revolved funds,’’ and

‘‘technical assistance.’’ Throughout the

document, clarifications are provided as

to which requirements apply only to

Agency IRP loan funds, which apply to

revolved funds, and which apply to

everything in the IRP revolving fund.

3. Agency State Offices are authorized

to accept and process all applications

except those from applicants located

within Washington, D.C., which will be

processed by the National Office.

4. Eligibility requirements for

intermediaries are revised to clarify that

a proposed intermediary that does not

have lending experience may still

qualify for a loan if it will arrange for

services of people with lending

experience.

5. Eligibility requirements are revised

to provide that proposed intermediaries

that have an outstanding Federal

judgement are not eligible.

6. Eligibility requirements are

provided for Ultimate recipients.

7. Eligible purposes for loans to

ultimate recipients are revised to be

more consistent with the Business and

Industry loan program, authorize loans

for refinancing and recreation facilities

(except golf courses, gambling and race

tracks).

8. Security requirements are clarified.

9. General guidelines are provided for

interest rates and terms of loans to

ultimate recipients, along with

clarification that such rates must be

within limits established in the

intermediary’s work plan.

10. Loan ceilings are revised to

provide that, subject to certain

conditions, intermediaries may receive a

series of subsequent loans of up to $1

million each to a combined total of up

to $15 million. The ceiling on loans to

an ultimate recipient is raised to

$250,000.

11. The intermediary’s

responsibilities for maintaining the

intermediary revolving fund are

clarified and a provision is added for

establishment of a reserve for bad debts

of 15 percent of the intermediary’s

portfolio.

12. Loan disbursement procedures are

revised to allow intermediaries to draw

up to 25 percent of their loan at loan

closing. The funds may be placed in an

interest bearing account if they are not

immediately needed for loans to

ultimate recipients.

13. The requirement for

intermediaries to operate in accordance

with an approved work plan is clarified

and guidelines are provided for RBCDS

approval of work plan revisions.

14. The contents of a complete

application and work plan are revised to

eliminate some unnecessary items,

provide more detail on what should be

covered regarding relending plans, add

certifications regarding debarment,

Federal debt collection policies, and

lobbying, and provide for streamlined

applications for subsequent loans.

15. The priority point scoring system

is revised to adjust the percentages

required to qualify for points based on

service area income compared to the

poverty line, provide for points based

on service area income compared to

Statewide non-metropolitan income,

provide for points based on loans to

underrepresented groups, and provide

more guidelines for the assigning of

points by the Administrator.

16. The requirement for a certification

by the intermediary regarding equity is

removed.

17. Guidelines are provided for

information to be submitted to RBCDS

regarding proposed loans to ultimate

recipients and for RBCDS review and

response to the information.

In addition, a number of issues were

explored and alternatives were

considered in preparing this Proposed

Rule. An internal taskforce of State

Directors and other State Office

personnel has recommended

alternatives to some of the material in

this proposed rule and additional

changes that have not been incorporated

into this proposed rule. We invite and

encourage comments and suggestions in

these areas or in others germane to the

mission and purpose of the program. To

the extent that comments received raise

new issues or cause revision of the

proposed regulation which are outside

the scope of the subject matter area now

contemplated by this proposal, the

Agency will publish a new proposal. We
3568 Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Proposed Rules

are particularly interested in comments

in the following areas:

1. The specific mission of the IRP

program in the context of the USDA

rural development missions.

The taskforce has recommended the

following mission statement be

substituted in § 1948.101(b) of the

proposed rule: ‘‘The purpose of the

program is to alleviate poverty and

increase economic activity and

employment in rural communities,

especially disadvantaged and remote

communities, through gap financing

administered by community-based

organizations, targeted primarily

towards smaller and emerging

businesses, in partnership with other

public and private resources, and in

accordance with State and regional

strategy based on identified community

needs. This purpose is achieved through

loans made by the Agency to

intermediaries that establish programs

for the purpose of providing loans to

ultimate recipients for business

activities and community

development(s) in a rural area.’’ Would

it be helpful to have this more detailed

and descriptive mission statement in the

regulation?

2. The type of credit needs for which

IRP funding is most appropriate.

What scale of business, type of asset

financed, and range of risk should be

targeted? For example, should revolving

or seasonal lines of credit be eligible

loan purposes? The taskforce believes

there is a crucial need for revolving

credit lines for small businesses. The

Agency has been hesitant to allow IRP

funds to be used for revolving lines of

credit because of the increased risks and

special lender expertise needed. Is this

a service intermediaries should be

providing?

3. Loan size limits for ultimate

recipients.

The proposed rule would allow

intermediaries to make some loans of up

to $250,000 (§ 1948.114(b)). This

proposal was based primarily on reports

from some intermediaries of a need for

commercial credit in the $150,000 to

$250,000 range. The taskforce is

concerned that the proposed higher loan

limit to ultimate recipients might

diminish the effectiveness of the

program in providing financing for

micro-enterprise revolving loan funds

which are a target area for rural

development policy. Might it be

appropriate to retain the existing loan

limit of $150,000? How great is the need

for loans exceeding $150,000? If the

$150,000 limit is retained should

exception authority be provided to the

Administrator for higher amounts? If so,

what should the criteria be for

approving an exception.

4. Outcome and performance

measures.

There is a significant need for

information which documents the rural

community and economic development

outcome achieved as a result of IRP

activity. What are appropriate outcome

and performance measures and

reporting requirements for the

intermediary loan funds financed by the

program, and for the funded activities of

the ultimate recipients of the loans?

5. Experience requirements.

To enable more socially oriented

community-based organizations to use

the program, the taskforce has suggested

further revising the eligibility

requirements for intermediaries. They

have proposed allowing loans to

intermediaries that have experience in

assisting rural business or community

development, but not necessarily

lending experience. The proposed rule,

as well as current policy, would allow

this, but only if the Intermediary will

bring individuals with loan making and

servicing experience and expertise into

the operation (§ 1948.103(b)(2)). Would

relaxing the requirement for individuals

with lending experience achieve the

goal of bringing more socially oriented

intermediaries into the program?

6. Citizenship requirements.

The taskforce recommended further

revising the eligibility requirements for

ultimate recipients to allow

intermediaries to make loans to

businesses owned by non-U.S. citizens

if the project funded creates or retains

jobs for U.S. residents. Such loans

would be restricted to fixed assets

located in the U.S. and the business

would have to have managers that are

U.S. citizens or legally admitted to the

U.S. for permanent residence. Would

this provision significantly help to

provide jobs?

7. Management consultant fees.

The taskforce has suggested further

revising the eligible loan purposes for

loans to ultimate recipients to include

management consultant fees. Could this

enhance the likelihood of success for

ultimate recipients?

8. Technical assistance.

The taskforce has suggested further

revising the eligible loan purposes to

allow intermediaries to use IRP funds to

provide direct technical assistance to

ultimate recipients or prospective

recipients. Would this change be

valuable? Is technical assistance an

appropriate use for IRP funds?

9. Security requirements.

When the IRP was initiated in 1988,

the security required for most loans to

intermediaries was a blanket pledge of

the IRP revolving fund. In 1991, the

regulation was revised to require

assignments on all promissory notes and

security documents (§ 1948.113(a)(2)).

Intermediaries have complained from

time to time about being required to

provide the assignments and the

taskforce has suggested that the

requirement be removed. Is the

providing of assignments an inordinate

burden on the intermediary?

10. Review and concurrence for loans

to ultimate recipients.

Current regulations require

intermediaries to obtain the

Government’s review and concurrence

in the IRP loans it proposes to make to

ultimate recipients. This proposed rule

clarifies the limited scope of review

required for concurrence (§ 1948.128)

and also clarifies that the requirement

for review and concurrence applies only

to Federal loan funds and does not

apply to loans made from the revolving

fund from collections on previous loans.

The taskforce, in addition, suggests

exempting intermediaries that have

demonstrated a successful track record

of lending IRP funds and servicing loans

from the requirement. Most of the

impact of this change would be on

subsequent loans to intermediaries.

Another alternative would be to simply

not require Government review and

concurrence on loans to ultimate

recipients made from subsequent loans

to intermediaries. Should it be

necessary for intermediaries to obtain

Government concurrence on every

proposed loan from Federal funds?

11. Multiple IRP revolving funds.

Intermediaries are required to

establish separate bookkeeping accounts

and bank accounts for the IRP revolving

fund. Intermediaries that receive more

than one IRP loan are required to

establish a separate revolving fund with

separate accounts for each loan. The

proposed rule would allow the funds to

be combined with Government consent

and under certain conditions

(§ 1948.115(b)(5)). The taskforce

recommended alternate language that

would allow the funds to be combined

without Government consent unless the

purposes of the loans were significantly

different. Should intermediaries with

more than one IRP loan be required to

obtain Government consent to avoid

setting up entirely separate funds for

each?

12. Environmental assessments.

Are the intergovernmental and

environmental review requirements

referenced in the proposed rule

excessive for loan funds of this type?

How could they be streamlined?

13. Loan agreements.
Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Proposed Rules 3569

In connection with implementation of

the proposed rule the Government plans

to begin using a printed form as a loan

agreement rather than preparing a loan

agreement for each loan based on an

exhibit to the regulation. The taskforce

recommended an additional step of

having one loan agreement serve for

multiple loans to the same intermediary.

The pertinent language suggested was:

‘‘For subsequent loans with no

substantial changes to the

intermediary’s work plan, an

amendment to the existing loan

agreement shall be executed at loan

closing for each subsequent loan.’’

Should subsequent IRP loans to the

same intermediary be handled by

amendments to the original loan

agreement rather than with entirely new

loan agreements?

14. Applications.

Should there be more specific

requirements for the intermediary’s

workplan to address issues such as

mission, goals, targeting criteria for

recipients, and accompanying technical

assistance to recipients to ensure that

the IRP program achieves tangible

outcomes for rural community and

economic development and functions in

keeping with the Government

Performance and Results Act? The

taskforce recommended application

requirements be further revised, in

§ 1948.122(a)(2)(iii) of the proposed

rule, to provide that the demonstration

of need could be met through targeting

criteria and supporting evidence that

such prospective ultimate recipients

exist in sufficient numbers to justify

funding the intermediary’s request.

Would this approach be appropriate?

The taskforce recommended further

revising the application requirements by

requiring the proposed intermediary to

provide a set of goals, strategies, and

anticipated outcomes for its program

and a mechanism for evaluating the

outcome of its IRP loan program. The

taskforce also recommended requiring

each proposed intermediary to provide

specific information on how it will

ensure that technical assistance will be

made available to ultimate recipients.

Are these reasonable and worthwhile

requirements?

15. Community representation.

Should the 10 county service area

limitation (for priority points,

§ 1948.123(c)(5)) be changed to 14 as

recommended by the taskforce?

16. Targeting priorities.

Should the proposed scoring criteria

be further modified to place greater

emphasis on such factors as community

and beneficiary targeting, conformance

with regional or community

development plans, and encouragement

of smaller-size loans, with

proportionately less emphasis on the

intermediary’s own resources and its

ability to leverage funds? Specifically,

the taskforce recommended the

following: Reduce the available points

for other funds (§ 1948.123(c)(1)(i)) from

10, 20, or 30 to 5, 10, or 15; Reduce the

available points for other intermediary

funds (§ 1948.123(c)(1)(ii)) from 10, 20,

or 30 to 5, 10, or 15; Reduce the

available points for intermediary

contribution (§ 1948.123(c)(3)) from 15,

30, or 50 to 5, 10, or 15; Add a new

provision to award points based on the

average size of loans expected to be

made to ultimate recipients, with 5

points for loans over $125,000, 10

points for loans of $75,000 to $125,000,

15 points for loans of $25,000 to

$75,000, and 30 points for loans less

than $25,000; Add, to the guidelines for

justifying administrator points

(§ 1948.123 (c)(6)), reference to a

workplan in accord with a strategic

plan, particularly a plan prepared as

part of a request for an Empowerment

Zone/Enterprise Community

designation. Comments are welcomed

on each of these potential changes in the

priority system.

17. Bad debt reserve.

Is 15 percent of the IRP portfolio an

appropriate amount of bad debt reserve

for most intermediaries

(1948.115(b)(2))? If not, what level of

reserve should be suggested or required?

18. Hotels and motels.

The proposed rule removes a general

prohibition on loans for recreation and

tourism facilities, but retains a

prohibition on loans for hotels, motels,

bed and breakfast establishments, and

convention centers. This prohibition

was based on perceptions that loans on

such facilities were high risk and the

jobs created were low paying. Are these

perceptions valid? Should these

facilities be made eligible and

considered on the merits of each case?

Lists of Subjects

7 CFR Part 1948

Business and industry, Credit,

Economic Development, Rural areas.

7 CFR Part 1951

Loan programs—Agriculture, Rural

areas.

Accordingly, Title 7, Chapter XVIII, of

the Code of Federal Regulations is

proposed to be amended as follows:

PART 1948—RURAL DEVELOPMENT

1. The authority citation for Part 1948

continues to read as follows:

Authority: 7 U.S.C. 1932 note; 5 U.S.C.

301; 7 CFR 2.23; 7 CFR 2.70.

2. Subpart C of part 1948 is revised to

read as follows:

Subpart C—Intermediary Relending

Program (IRP)

Sec.

1948.101 Introduction.

1948.102 Definitions and abbreviations.

1948.103 Eligibility requirements—

intermediary.

1948.104 Eligibility requirements—

Ultimate recipients.

1948.105–1948.108 [Reserved]

1948.109 Loan purposes.

1948.110 Ineligible loan purposes.

1948.111 Loan terms.

1948.112 Interest rates.

1948.113 Security.

1948.114 Loan limits.

1948.115 Post award requirements.

1948.116 [Reserved]

1948.117 Other regulatory requirements.

1948.118 Loan agreements between the

Agency and the intermediary.

1948.119–1948.121 [Reserved]

1948.122 Application.

1948.123 Filing and processing applications

for loans.

1948.124 [Reserved]

1948.125 Letter of conditions.

1948.126 Loan approval and obligating

funds.

1948.127 Loan closing.

1948.128 Requests to make loans to

ultimate recipients.

1948.129–1948.142 [Reserved]

1948.143 Appeals.

1948.144–1948.147 [Reserved]

1948.148 Exception authority.

1948.149 [Reserved]

1948.150 OMB control number.

Subpart C—Intermediary Relending

Program (IRP)

§ 1948.101 Introduction.

(a) This subpart contains regulations

for loans made by the Agency to eligible

intermediaries and applies to borrowers

and other parties involved in making

such loans. The provisions of this

subpart supersede conflicting provisions

of any other subpart. The servicing and

liquidation of such loans will be in

accordance with subpart R of part 1951

of this chapter.

(b) The purpose of the program is to

finance business facilities and

community development projects in

rural areas. This purpose is achieved

through loans made to intermediaries

that establish programs for the purpose

of providing loans to ultimate recipients

for business facilities and community

developments in a rural area.

(c) Proposed intermediaries are

required to identify any known

relationship or association with an

Agency employee. Such assistance is

restricted by FmHA Instruction 2045–

BB. Any processing or servicing activity

conducted pursuant to this subpart

involving authorized assistance to
3570 Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Proposed Rules

Agency employees, members of their

families, known close relatives, or

business or close personal associates, is

subject to the provisions of subpart D of

part 1900 of this chapter.

(d) Copies of all forms, regulations,

and Instructions referenced in this

subpart are available in the National

Office or any State Office.

§ 1948.102 Definitions and abbreviations.

(a) General definitions. The following

definitions are applicable to the terms

used in this subpart.

Agency. The Federal agency within

the United States Department of

Agriculture (USDA) with responsibility

assigned by the Secretary of Agriculture

to administer the IRP.

Agency IRP loan funds. Cash proceeds

of a loan obtained from the Agency

through the IRP, including the portion

of an IRP revolving fund directly

provided by the Agency IRP loan.

Agency IRP loan funds are Federal

funds.

Intermediary. The entity requesting or

receiving Agency IRP loan funds for

establishing a revolving fund and

relending to ultimate recipients.

IRP revolving fund. A group of assets,

obtained through or related to an

Agency IRP loan and recorded by the

intermediary in a bookkeeping account

or set of accounts and accounted for,

along with related liabilities, revenues,

and expenses, as an entity or enterprise

separate from the intermediary’s other

assets and financial activities. All

Agency IRP loan funds received by an

intermediary must be deposited into an

IRP revolving fund. The intermediary

may transfer additional assets into the

IRP revolving fund. Loans to ultimate

recipients are advanced from the IRP

revolving fund. The receivables created

by making loans to ultimate recipients,

the intermediary’s security interest in

collateral pledged by ultimate

recipients, collections on the

receivables, interest, fees, and any other

income or assets derived from the

operation of the IRP revolving fund are

a part of the IRP revolving fund.

Principals of intermediary. Members,

officers, directors, and other individuals

or entities directly involved in the

operation and management of an

intermediary.

Processing office/officer. The

processing office for an IRP application

is the office within the Agency

administrative organization with

assigned authority and responsibility to

process the application. The processing

office is the primary contact for the

proposed intermediary and maintains

the official application case file. The

processing officer for an application is

the person in charge of the processing

office. The processing officer is

responsible for ensuring that all

regulations and Instructions are

complied with in regard to applications

under her/his jurisdiction.

Revolved funds. The cash portion of

an IRP revolving fund that is not Agency

loan funds, including funds that result

from loaning out the Agency IRP loan

funds and then collecting all or part of

the loans, and including fees and

interest collected on such loans.

Revolved funds shall not be considered

Federal funds.

Rural area. All territory of a State that

is not within the outer boundary of any

city having a population of 25,000 or

more, according to the latest decennial

census.

Servicing office/officer. The servicing

office for an IRP loan is the office within

the Agency administrative organization

with assigned authority and

responsibility to service the loan. The

servicing office is the primary contact

for the borrower and maintains the

official case file after the loan is closed.

The servicing officer for a loan is the

person in charge of the servicing office.

The servicing officer is responsible for

ensuring that all regulations and

Instructions are complied with in regard

to loans under her/his jurisdiction.

State. Any of the 50 States, the

Commonwealth of Puerto Rico, the

Virgin Islands of the United States,

Guam, American Samoa, and the

Commonwealth of the Northern Mariana

Islands.

Technical Assistance. A function

performed for the benefit of an ultimate

recipient or proposed ultimate recipient,

which is a problem solving activity. The

Agency will determine whether a

specific activity qualifies as technical

assistance.

Ultimate recipient. An entity or

individual that receives a loan from an

intermediary’s IRP revolving fund.

(b) Abbreviations. The following are

applicable to this subpart:

(1) B&I—Business and Industry

(2) FmHA—Farmers Home

Administration

(3) IRP—Intermediary Relending

Program

(4) OGC—Office of the General Counsel

(5) OIG—Office of the Inspector General

(6) OMB—Office of Management and

Budget

(7) RDLF—Rural Development Loan

Fund

(8) USDA—United States Department of

Agriculture

§ 1948.103 Eligibility requirements—

Intermediary.

(a) The types of entities which may

become intermediaries are:

(1) Private nonprofit corporations.

(2) Public agencies—Any State or

local government, or any branch or

agency of such government having

authority to act on behalf of that

government, borrow funds, and engage

in activities eligible for funding under

this subpart.

(3) Indian groups—Indian tribes on a

Federal or State reservation or other

federally recognized tribal groups.

(4) Cooperatives—Incorporated

associations, at least 51 percent of

whose members are rural residents,

whose members have one vote each, and

which conduct, for the mutual benefit of

their members, such operations as

producing, purchasing, marketing,

processing or other activities aimed at

improving the income of their members

as producers or their purchasing power

as consumers.

(b) The intermediary must:

(1) Have the legal authority necessary

for carrying out the proposed loan

purposes and for obtaining, giving

security for, and repaying the proposed

loan.

(2) Have a proven record of

successfully assisting rural business and

industry, or, for intermediaries that

propose to finance community

development, a proven record of

successfully assisting rural community

development projects of the type

planned.

(i) Except as provided in paragraph

(b)(2)(ii) of this section, such record will

include recent experience in loan

making and servicing with loans that are

similar in nature to those proposed for

the IRP and a delinquency and loss rate

acceptable to the Agency.

(ii) The Agency may approve an

exception to the requirement for loan

making and servicing experience

provided:

(A) The proposed intermediary has a

proven record of successfully assisting

rural business and industry or rural

community development projects of the

type planned but the assistance is other

than lending; and

(B) The proposed intermediary will,

before the loan is closed, bring

individuals with loan making and

servicing experience and expertise into

the operation of the IRP revolving fund.

(3) Have the services of a staff with

loan making and servicing expertise

acceptable to the Agency.

(4) Have capitalization acceptable to

the Agency.

(c) No loans will be extended to an

intermediary unless:

(1) There is adequate assurance of

repayment of the loan based on the

fiscal and managerial capabilities of the

proposed intermediary.
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(2) The loan is not otherwise available

on reasonable (i.e., usual and

customary) rates and terms from private

sources or other Federal, State, or local

programs.

(3) The amount of the loan, together

with other funds available, is adequate

to assure completion of the project or

achieve the purposes for which the loan

is made.

(d) At least 51 percent of the

outstanding interest or membership in

any nonpublic body intermediary must

be citizens of the United States or reside

in the United States after being legally

admitted for permanent residence.

(e) An outstanding judgment against

the proposed intermediary obtained by

the United States in a Federal court

(other than in the United States Tax

Court), which has been recorded, shall

cause the proposed intermediary to be

ineligible to receive any loan until the

judgment is paid in full or otherwise

satisfied. Agency loan funds may not be

used to satisfy the judgment.

§ 1948.104 Eligibility requirements—

Ultimate recipients.

(a) Ultimate recipients may be

individuals, public or private

organizations, or other legal entities,

with authority to incur the debt and

carry out the purpose of the loan.

(b) To be eligible to receive loans from

the IRP revolving loan fund:

(1) At least 51 percent of the

outstanding membership or ownership

of the ultimate recipient must be either

citizens of the United States or residents

of the United States after being legally

admitted for permanent residence.

(2) Must be located in a rural area.

(3) Must be unable to finance the

proposed project from its own resources

or through commercial credit or other

Federal, State, or local programs at

reasonable rates and terms.

(c) An outstanding judgment against

the proposed ultimate recipient

obtained by the United States in a

Federal court (other than in the United

States Tax Court), which has been

recorded, shall cause the proposed

ultimate recipient to be ineligible to

receive a loan from Agency IRP loan

funds until the judgment is paid in full

or otherwise satisfied. Agency IRP loan

funds may not be used to satisfy the

judgment.

§§ 1948.105–1948.108 [Reserved]

§ 1948.109 Loan purposes.

(a) Intermediaries. Agency IRP loan

funds must be placed in the

intermediary’s IRP revolving fund and

used by the intermediary to provide

direct loans to eligible ultimate

recipients.

(b) Ultimate recipients. Loans from

the intermediary to the ultimate

recipient using the IRP revolving fund

must be for community development

projects, the establishment of new

businesses, expansion of existing

businesses, creation of employment

opportunities, and/or saving existing

jobs. Such loans may include, but are

not limited to:

(1) Business and industrial

acquisitions when the loan will keep the

business from closing, prevent the loss

of employment opportunities, or

provide expanded job opportunities.

(2) Business construction, conversion,

enlargement, repair, modernization, or

development.

(3) Purchase and development of

land, easements, rights-of-way,

buildings, facilities, leases, or materials.

(4) Purchase of equipment, leasehold

improvements, machinery, or supplies.

(5) Pollution control and abatement.

(6) Transportation services.

(7) Start-up operating costs and

working capital.

(8) Interest (including interest on

interim financing) during the period

before the facility becomes income

producing, but not to exceed 3 years.

(9) Feasibility studies.

(10) Debt refinancing.

(i) A complete review will be made by

the intermediary to determine whether

the loan will restructure debts on a

schedule that will allow the ultimate

recipient to operate successfully rather

than merely take over an unsound loan.

The intermediary will obtain the

proposed ultimate recipient’s complete

debt schedule which should agree with

the proposed ultimate recipient’s latest

balance sheet; and

(ii) Refinancing debts may be allowed

only when it is determined by the

intermediary that the project is viable

and refinancing is necessary to create

new or save existing jobs or create or

continue a needed service; and

(iii) On any request for refinancing of

existing secured loan(s), the

intermediary is required, as a minimum,

to obtain the previously held collateral

as security for the loan(s) and must not

pay off a creditor in excess of the value

of the collateral. Additional collateral

will be required when refinancing of

unsecured loans is unavoidable to

accomplish the necessary strengthening

of the ultimate recipient’s position.

(11) Reasonable fees and charges only

as specifically listed in this paragraph.

Authorized fees include loan packaging

fees, environmental data collection fees,

and other fees for services rendered by

professionals. Professionals are

generally persons licensed by States or

accreditation associations, such as

Engineers, Architects, Lawyers,

Accountants, and Appraisers. The

maximum amount of fee will be what is

reasonable and customary in the

community or region where the project

is located. Any such fees are to be fully

documented and justified.

(12) Aquaculture including

conservation, development, and

utilization of water for aquaculture.

Aquaculture is defined as the culture or

husbandry of aquatic animals or plants

by private industry for commercial

purposes including the culture and

growing of fish by private industry for

the purpose of granting or augmenting

publicly-owned or regulated stocks of

fish.

(13) Tourist and recreational facilities

except as prohibited by § 1948.110 of

this subpart.

§ 1948.110 Ineligible loan purposes.

Agency IRP loan funds may not be

used for payment of the intermediary’s

own administrative costs or expenses.

The IRP revolving fund may not be used

for:

(a) Assistance in excess of what is

needed to accomplish the purpose of the

ultimate recipient’s project.

(b) Distribution or payment to the

owner, partners, shareholders, or

beneficiaries of the ultimate recipient or

members of their families when such

persons will retain any portion of their

equity in the ultimate recipient.

(c) Charitable and educational

institutions, churches, organizations

affiliated with or sponsored by

churches, and fraternal organizations.

(d) Assistance to government

employees, military personnel or

principals or employees of the

intermediary or organizations for which

such persons are directors or officers or

have major ownership (20 percent or

more).

(e) A loan to an ultimate recipient

which has an application pending with

or a loan outstanding from another

intermediary involving an IRP revolving

fund.

(f) Any line of credit.

(g) Agricultural production, which

means the cultivation, production

(growing), harvesting, either directly or

through integrated operations, of

agricultural products (crops, animals,

birds, and marine life, either for fiber or

food for human consumption, and

disposal or marketing thereof, and the

raising, housing, feeding, breeding,

hatching, control, and/or management

of farm and domestic animals).

Exceptions to this definition are:

(1) Aquaculture as identified under

§ 1948.109(b) of this subpart.
3572 Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Proposed Rules

(2) Commercial nurseries primarily

engaged in the production of

ornamental plants and trees and other

nursery products such as bulbs, florists’

greens, flowers, shrubbery, flower and

vegetable seeds, sod, or the growing of

vegetables from seed to the transplant

stage.

(3) Forestry, which includes

establishments primarily engaged in the

operation of timber tracts, tree farms,

forest nurseries, and related activities

such as reforestation.

(4) The growing of mushrooms or

hydroponics.

(h) The transfer of ownership unless

the loan will keep the business from

closing, or prevent the loss of

employment opportunities in the area,

or provide expanded job opportunities.

(i) Community antenna television

services or facilities.

(j) Any illegal activity.

(k) Any project that is in violation of

either a Federal, State or local

environmental protection law or

regulation or an enforceable land use

restriction unless the assistance given

will result in curing or removing the

violation.

(l) Hotels, motels, tourist homes, bed

and breakfast establishments, or

convention centers.

(m) Lending and investment

institutions and insurance companies.

(n) Golf courses, race tracks, or

gambling facilities.

§ 1948.111 Loan terms.

(a) No loans to intermediaries shall be

extended for a period exceeding 30

years. Interest and principal payments

will be scheduled at least annually. The

initial principal payment may be

deferred (during the period before the

facility becomes income producing) by

the Agency, but not more than 3 years.

(b) Loans made by an intermediary to

an ultimate recipient from the IRP

revolving fund will be scheduled for

repayment over a term negotiated by the

intermediary and ultimate recipient.

The term must be reasonable and

prudent considering the purpose of the

loan, expected repayment ability of the

ultimate recipient, and the useful life of

collateral, and must be within any limits

established by the intermediary’s work

plan.

§ 1948.112 Interest rates.

(a) Loans made by the Agency

pursuant to this subpart shall bear

interest at a fixed rate of 1 percent per

annum over the term of the loan.

(b) Interest rates charged by

intermediaries to ultimate recipients on

loans from the IRP revolving fund shall

be negotiated by the intermediary and

ultimate recipient. The rate must be

within limits established by the

intermediary’s work plan approved by

the Agency. The rate should normally

be the lowest rate sufficient to cover the

loan’s proportional share of the IRP

revolving fund’s debt service costs,

reserve for bad debts, and

administrative costs.

§ 1948.113 Security.

(a) Intermediaries. Security for all

loans to intermediaries must be such

that the repayment of the loan is

reasonably assured, when considered

along with the intermediary’s financial

condition, work plan, and management

ability. It is the responsibility of the

intermediary to make loans to ultimate

recipients in such a manner that will

fully protect the interests of the

intermediary and the Government.

(1) Security for such loans may

include, but is not limited to:

(i) Any realty, personalty, or

intangibles capable of being mortgaged,

pledged, or otherwise encumbered by

the intermediary in favor of the Agency;

and

(ii) Any realty, personalty, or

intangibles capable of being mortgaged,

pledged, or otherwise encumbered by an

ultimate recipient in favor of the

Agency.

(2) Security will normally consist of a

lien on the IRP revolving fund. The

Agency will obtain assignments of

security pledged by ultimate recipients

including an assignment of the

promissory notes given by the ultimate

recipients and take possession of the

promissory notes.

(i) The assignment documents will

not be filed or recorded in the public

records unless the intermediary is in

default on its IRP loan. They will be

held by the Agency and may be filed at

the sole discretion of the Agency, after

an event of default, if the Agency

determines the filing is necessary to

protect the Government’s interest.

(ii) The perfection of assignments

when intermediaries close loans is not

required. Assignment documents will be

obtained and held to facilitate the

perfection of assignments at a later date

if the intermediary fails to meet its

obligations.

(3) The Agency may require

additional security or additional

documents needed to perfect liens at

any time during the term of a loan to an

intermediary if, after review and

monitoring, an assessment indicates the

need for such security or documentation

to protect the Government’s interest.

(b) Ultimate recipients. Security for a

loan from an intermediary’s IRP

revolving fund to an ultimate recipient

will be negotiated by the intermediary

and ultimate recipient, within the

general security policies established by

the intermediary and approved by the

Agency.

§ 1948.114 Loan limits.

(a) Intermediary.

(1) No loan to an intermediary will

exceed the maximum amount the

intermediary can reasonably be

expected to relend to eligible ultimate

recipients, in an effective and sound

manner, within 1 year after loan closing.

(2) The first IRP loan to an

intermediary will not exceed $2 million.

(3) Intermediaries that have received

one or more IRP loans may apply for

and be considered for subsequent IRP

loans provided:

(i) At least 80 percent of the Agency

IRP loan funds the intermediary was

approved for have been disbursed to

eligible ultimate recipients.

(ii) The intermediary is promptly

relending all collections from loans

made from its IRP revolving fund in

excess of what is needed for required

debt service, reasonable administrative

costs approved by the Agency, and a

reasonable reserve for debt service and

uncollectible accounts.

(iii) The outstanding loans of the

intermediary’s IRP revolving fund are

generally sound.

(iv) The intermediary is in

compliance with all applicable

regulations and its loan agreement(s)

with the Agency.

(4) Subsequent loans will not exceed

$1 million each and not more than one

loan will be approved for an

intermediary in any one fiscal year.

(5) Total outstanding IRP

indebtedness of an intermediary to

Agency will not exceed $15 million at

any time.

(b) Ultimate recipients. Loans from

intermediaries to ultimate recipients

using the IRP revolving fund will not

exceed the lessor of:

(1) $250,000; or

(2) 75% of the total cost of the

ultimate recipient’s project for which

the loan is being made.

(c) Portfolio. No more than 25 percent

of an IRP loan approved for an

intermediary may be used for loans to

ultimate recipients that exceed

$150,000. This limit does not apply to

revolved funds.

§ 1948.115 Post award requirements.

(a) Applicability. Intermediaries

receiving loans under this program shall

be governed by these regulations, the

loan agreement, the approved work

plan, security interests, and any other

conditions which the Agency may
Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Proposed Rules 3573

impose in awarding a loan. Whenever

this subpart imposes a requirement on

loans made from the ‘‘IRP revolving

fund,’’ such requirement shall apply to

all loans made by an intermediary to an

ultimate recipient from the

intermediary’s IRP revolving fund, as

defined in § 1948.102(a) of this subpart,

so long as any portion of the

intermediary’s IRP loan from the

Agency remains unpaid. Whenever this

subpart imposes a requirement on loans

made by intermediaries from ‘‘Agency

IRP loan funds,’’ without specific

reference to the IRP revolving fund,

such requirement shall apply only to

loans made by an intermediary using

Agency IRP loan funds, as defined in

§ 1948.102(a) of this subpart, and will

not apply to loans made from revolved

funds.

(b) Maintenance of IRP revolving

fund. So long as any part of an IRP loan

to an intermediary remains unpaid, the

intermediary must maintain the IRP

revolving fund in accordance with the

definition of IRP revolving fund found

in § 1948.102(a) of this subpart. The

portion of the IRP revolving loan fund

that is Agency IRP loan funds may only

be used for making loans in accordance

with § 1948.109 of this subpart. The

portion that is revolved funds as defined

in § 1948.102(a) of this subpart may be

used for debt service, reasonable

administrative costs, or reserves in

accordance with this section, or for

making additional loans.

(1) The intermediary must submit an

annual budget of proposed

administrative costs for Agency

approval. The amount removed from the

IRP revolving fund for administrative

costs in any year must be reasonable,

must not exceed the actual cost of

operating the IRP revolving fund,

including loan servicing and providing

technical assistance, and must not

exceed the amount approved by the

Agency in the budget.

(2) A reasonable amount of revolved

funds should 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 intermediary’s

portfolio of loans. Unless the

intermediary provides loss and

delinquency records that, in the opinion

of the Agency, justifies different

amounts, a reserve for bad debts of 15

percent of outstanding loans should be

accumulated over 5 years and then

maintained.

(3) Any cash in the IRP revolving fund

from any source that is not needed for

debt service, approved administrative

costs, or reasonable reserves must be

available for additional loans to ultimate

recipients.

(4) All reserves and other cash in the

IRP revolving loan fund not

immediately needed for loans to

ultimate recipients or other authorized

uses should be deposited in an interest

bearing account in a bank or other

financial institution covered by a form

of Federal deposit insurance. Such

accounts and any interest earned

thereon remain a part of the IRP

revolving fund.

(5) If an intermediary receives more

than one IRP loan, a separate IRP

revolving fund must be established and

maintained for each loan unless the

Agency gives written permission for the

IRP revolving funds to be combined.

The Agency may give such permission

only if there are no significant

differences in the loan agreements and

other requirements imposed by Agency

for the loans or if the intermediary

agrees in writing to operate the

combined revolving funds in

accordance with the most stringent loan

agreements and requirements.

§ 1948.116 [Reserved]

§ 1948.117 Other regulatory requirements.

(a) Intergovernmental consultation.

The IRP is subject to the provisions of

Executive Order 12372 which requires

intergovernmental consultation with

State and local officials. The approval of

a loan to an intermediary will be the

subject of intergovernmental

consultation. For each ultimate

recipient to be assisted with a loan from

Agency IRP loan funds and for which

the State in which the ultimate recipient

is to be located has elected to review the

program under their intergovernmental

review process, the State Single Point of

Contact must be notified. Notification,

in the form of a project description, can

be initiated by the intermediary or the

ultimate recipient. Any comments from

the State must be included with the

intermediary’s request to use the

Agency loan funds for the ultimate

recipient. Prior to the Agency’s decision

on the request, compliance with the

requirements of intergovernmental

consultation must be demonstrated for

each ultimate recipient. These

requirements should be carried out in

accordance with FmHA Instruction

1940–J.

(b) Environmental requirements.

(1) Unless specifically modified by

this section, the requirements of subpart

G of part 1940 of this chapter apply to

this subpart. Intermediaries and

ultimate recipients must consider the

potential environmental impacts of their

projects at the earliest planning stages

and develop plans to minimize the

potential to adversely impact the

environment. Both the intermediaries

and the ultimate recipients must

cooperate and furnish such information

and assistance as the Agency needs to

make any of its environmental

determinations.

(2) For each application for a loan to

an intermediary, the Agency will review

the application, supporting materials,

and any required Forms FmHA 1940–

20, ‘‘Request for Environmental

Information,’’ and complete a Class II

environmental assessment. This

assessment will focus on the potential

cumulative impacts of the projects as

well as any environmental concerns or

problems that are associated with

individual projects that can be

identified at this time.

Neither the completion of the

environmental assessment nor the

approval of the application is an Agency

commitment to the use of loan funds for

a specific project; therefore, no public

notification requirements for a Class II

assessment will apply to the

application. The affected public has not

been sufficiently identified at this stage

of the Agency review.

(3) For each proposed loan from an

intermediary to an ultimate recipient

using Agency IRP loan funds, the

Agency will complete the

environmental review required by

subpart G of part 1940 of this chapter

including public notification

requirements. The results of this review

will be used by the Agency in making

its decision on concurrence in the

proposed loan. The Agency will prepare

an Environmental Impact Statement for

any application for a loan from Agency

IRP loan funds determined to have a

significant effect on the quality of the

human environment.

(c) Equal opportunity and

nondiscrimination requirements.

(1) In accordance with Title V of Pub.

L. 93–495, the Equal Credit Opportunity

Act, and Section 504 of the

Rehabilitation Act for Federally

Conducted Programs and Activities,

neither the intermediary nor the Agency

will discriminate against any proposed

intermediary or proposed ultimate

recipient on the basis of sex, marital

status, race, color, religion, natural

origin, age, physical or mental handicap

(provided the proposed intermediary or

proposed ultimate recipient has the

capacity to contract), because all or part

of the proposed intermediary’s or

proposed ultimate recipient’s income is

derived from public assistance of any

kind, or because the proposed

intermediary or proposed ultimate

recipient has in good faith exercised any
3574 Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Proposed Rules

right under the Consumer Credit

Protection Act, with respect to any

aspect of a credit transaction anytime

Agency loan funds are involved.

(2) The regulations contained in

subpart E of part 1901 of this chapter

apply to this program.

(3) The Administrator will assure that

equal opportunity and

nondiscrimination requirements are met

in accordance with Title VI of the Civil

Rights Act of 1964, ‘‘Nondiscrimination

in Federally Assisted Programs,’’ 42

U.S.C. 2000d–4, Section 504 of the

Rehabilitation Act for Federally

Conducted Programs and Activities, and

the Age Discrimination Act of 1975, as

amended.

§ 1948.118 Loan agreements between the

Agency and the intermediary.

A loan agreement must be executed

by the intermediary and the Agency at

loan closing for each loan. The loan

agreement will be prepared by the

Agency using Form FmHA 1948–4,

‘‘Intermediary Relending Program Loan

Agreement,’’ and reviewed by OGC and

the intermediary prior to loan closing.

The loan agreement, as a minimum,

must contain the following provisions:

(a) The loan agreement will set out:

(1) The amount of the loan.

(2) The interest rate.

(3) The term and repayment schedule.

(4) The provisions for late charges.

The intermediary shall pay a late charge

of 4 percent of the payment due of

principal and/or interest if payment for

either of these is not received within 15

calendar days following the due date.

The late charge shall be considered

unpaid if not received within 30

calendar days of the missed due date for

which it was imposed. Any unpaid late

charge shall be added to principal and

be due as an extra payment at the end

of the term. Acceptance of a late charge

by the Agency does not constitute a

waiver of default.

(5) Disbursement procedure.

Disbursement of loan funds by the

Agency to the intermediary shall take

place after the loan agreement and

promissory note are executed, and any

other conditions precedent to

disbursement of funds are fully

satisfied. The date of each draw down

shall constitute the date the funds are

advanced under the loan agreement for

purposes of computing interest.

(i) The intermediary may initially

draw up to 25 percent of the loan funds.

If the intermediary does not have loans

to ultimate recipients ready to close

sufficient to use the initial draw, the

funds should be deposited in an interest

bearing account in accordance with

§ 1948.115 (b)(4) of this subpart until

needed for such loans. The initial draw

must be used for loans to ultimate

recipients before any additional Agency

IRP loan funds may be drawn by the

intermediary. Any funds from the initial

draw that have not been used for loans

to ultimate recipients within 1 year from

the date of the draw must be returned

to the Agency as an extra payment on

the loan. Agency IRP loan funds must

not be used for administrative expenses

of the intermediary.

(ii) After the initial draw of funds, an

intermediary may draw down only such

funds as are necessary to cover a 30-day

period in implementing its approved

work plan. Advances will be requested

by the intermediary in writing. The

intermediary may use Form FmHA 440–

11, ‘‘Estimate of Funds Needed for 30-

day Period Commencing lllll,’’ to

request the funds.

(6) Provisions regarding default. On

the occurrence of any event of default,

the Agency may declare all or any

portion of the debt and interest to be

immediately due and payable and may

proceed to enforce its rights under the

loan agreement or any other instruments

securing or relating to the loan and in

accordance with the applicable law and

regulations. Any of the following may

be regarded as an ‘‘event of default’’ in

the sole discretion of the Agency:

(i) Failure of the intermediary to carry

out or comply with the specific

activities in its loan application as

approved by the Agency, or loan terms

and conditions, or any terms or

conditions of the loan agreement, or any

applicable Federal or State laws, or with

such USDA or Agency regulations as

may become generally applicable at any

time.

(ii) Failure of the intermediary to pay

within 15 calendar days of its due date

any installment of principal or interest

on its promissory note to the Agency.

(iii) The occurrence of:

(A) The intermediary’s becoming

insolvent, or ceasing, being unable, or

admitting in writing its inability to pay

its debts as they mature, or making a

general assignment for the benefit of, or

entering into any composition or

arrangement with creditors; or,

(B) proceedings for the appointment

of a receiver, trustee, or liquidator of the

intermediary, or of a substantial part of

its assets, being authorized or instituted

by or against it.

(iv) Submission or making of any

report, statement, warranty, or

representation by the intermediary or

agent on its behalf to USDA or the

Agency in connection with the financial

assistance awarded hereunder which is

false, incomplete, or incorrect in any

material respect.

(v) Failure of the intermediary to

remedy any material adverse change in

its financial or other condition (such as

the representational character of its

board of directors or policymaking

body) arising since the date of the

Agency’s award of assistance hereunder,

which condition was an inducement to

Agency’s original award.

(7) Insurance requirements.

(i) Hazard insurance with a standard

mortgage clause naming the

intermediary as beneficiary will be

required by the intermediary on every

ultimate recipient’s project funded from

the IRP revolving fund in an amount

that is at least the lesser of the

depreciated replacement value of the

property being insured or the amount of

the loan. Hazard insurance includes fire,

windstorm, lightning, hail, business

interruption, explosion, riot, civil

commotion, aircraft, vehicle, marine,

smoke, builder’s risk, public liability,

property damage, flood or mudslide, or

any other hazard insurance that may be

required to protect the security. The

intermediary’s interest in the insurance

will be assigned to the Agency.

(ii) Ordinarily, life insurance, which

may be decreasing term insurance, is

required for the principals and key

employees of the ultimate recipient

funded from the IRP revolving fund and

will be assigned or pledged to the

intermediary and subsequently to the

Agency. A schedule of life insurance

available for the benefit of the loan will

be included as part of the application.

(iii) Workmen’s compensation

insurance on ultimate recipients is

required in accordance with the State

law.

(iv) The intermediary is responsible

for determining if an ultimate recipient

funded from the IRP revolving fund is

located in a special flood or mudslide

hazard area anytime. If the ultimate

recipient is in a flood or mudslide area,

then flood or mudslide insurance must

be provided in accordance with subpart

B of part 1806 of this chapter (FmHA

Instruction 426.2).

(v) Intermediaries will provide

fidelity bond coverage for all persons

who have access to intermediary funds.

Coverage may be provided either for all

individual positions or persons, or

through ‘‘blanket’’ coverage providing

protection for all appropriate employees

and/or officials. The Agency may also

require the intermediary to carry other

appropriate insurance, such as public

liability, workers compensation, and/or

property damage.

(A) The amount of fidelity bond

coverage required by the Agency will

normally approximate the total annual
Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Proposed Rules 3575

debt service requirements for the

Agency loans.

(B) Form FmHA 440–24, ‘‘Position

Fidelity Schedule Bond Declarations,’’

may be used. Similar forms may be used

if determined acceptable to the Agency.

Other types of coverage may be

considered acceptable if it is determined

by the Agency that they fulfill

essentially the same purpose as a

fidelity bond.

(C) Intermediaries must provide

evidence of adequate fidelity bond and

other appropriate insurance coverage by

loan closing. Adequate coverage in

accordance with this section must then

be maintained for the life of the loan. It

is the responsibility of the intermediary

and not that of the Agency to assure and

provide evidence that adequate coverage

is maintained. This may consist of a

listing of policies and coverage amounts

in annual reports required by paragraph

(b)(4) of this section or other

documentation.

(8) Authority to operate. The loan

agreement will provide that the

intermediary has permission and

authority to collect on all notes given to

it, service all loans it makes, and

manage the relending program as if the

Agency had not taken assignments on

security pledged by ultimate recipients.

It is the responsibility of the

intermediary to make and service loans

to ultimate recipients in such a manner

that will fully protect the interests of the

intermediary and the Government. After

an event of default by the intermediary,

the Agency may terminate this

permission and authority by providing

the intermediary with written notice.

(9) That if any part of the loan has not

been used in accordance with the

intermediary’s work plan by a date 3

years from the date of the loan

agreement, the Agency may cancel the

approval of any funds not yet delivered

to the intermediary and demand the

return, as an extra payment on the loan,

any funds delivered to the intermediary

that have not been used by the

intermediary in accordance with the

work plan. The Agency, at its sole

discretion, may allow the intermediary

additional time to use the loan funds by

delaying cancellation of the funds by

not more than 3 additional years. If any

loan funds have not been used by 6

years from the date of the loan

agreement, the approval will be

cancelled of any funds that have not

been delivered to the intermediary and

the intermediary will return, as an extra

payment on the loan, any funds it has

received and not used in accordance

with the work plan. In accordance with

Form FmHA 1948–3, ‘‘Intermediary

Relending Program Promissory Note,’’

regular loan payments will be based on

the amount of funds actually drawn by

the intermediary.

(b) The intermediary will agree:

(1) Not to make any changes in the

intermediary’s articles of incorporation,

charter, or by-laws without the

concurrence of the Agency.

(2) Not to make a loan commitment to

an ultimate recipient to be funded from

Agency IRP loan funds without first

receiving the Agency’s written

concurrence.

(3) To maintain a separate ledger and

segregated account for the IRP revolving

fund.

(4) To Agency reporting requirements

by providing:

(i) An annual audit.

(A) Dates of audit report period need

not necessarily coincide with other

reports on the IRP. Audits shall be due

90 days following the audit period.

Audits must cover all of the

intermediary’s activities. Audits will be

performed by an independent certified

public accountant or by an independent

public accountant licensed and certified

on or before December 31, 1970, by a

regulatory authority of a State or other

political subdivision of the United

States. An acceptable audit will be

performed in accordance with generally

accepted Government auditing

standards and include such tests of the

accounting records as the auditor

considers necessary in order to express

an opinion on the financial condition of

the intermediary. The Agency does not

require an unqualified audit opinion as

a result of the audit. Compilations or

reviews do not satisfy the audit

requirement.

(B) It is not intended that audits

required by this subpart be separate and

apart from audits performed in

accordance with State and local laws or

for other purposes. To the extent

feasible, the audit work should be done

in connection with these audits.

Intermediaries covered by OMB Circular

A–128 or A–133 should submit audits

made in accordance with those

circulars.

(ii) Quarterly reports (due 30 days

after the end of the period).

(A) The Agency at its option may

change this requirement to semiannual

reports. These reports shall contain

information only on the IRP revolving

loan fund, or if other funds are

included, the IRP loan program portion

shall be segregated from the others; and

in the case where the intermediary has

more than one IRP loan from the Agency

a separate report shall be made for each

of these IRP loans unless the Agency has

given permission for the IRP revolving

funds to be combined.

(B) The reports will include Form

FmHA 1951–4, ‘‘Report of IRP/RDLF

Lending Activity.’’ This report will

include information on the

intermediary’s lending activity, income

and expenses, and financial condition

and a summary of names and

characteristics of the ultimate recipients

the intermediary has financed.

(iii) Annual proposed budget for the

following year.

(iv) Other reports as the Agency may

require from time to time.

(5) Before the first relending of

Agency funds to an ultimate recipient,

to obtain written Agency approval of:

(i) All forms to be used for relending

purposes, including application forms,

loan agreements, promissory notes, and

security instruments.

(ii) Intermediary’s policy with regard

to the amount and form of security to be

required.

(6) To obtain written approval of the

Agency before making any significant

changes in forms, security policy, or the

work plan. The servicing officer may

approve changes in forms, security

policy, or work plans at any time upon

a written request from the intermediary

and determination by the Agency that

the change will not jeopardize

repayment of the loan or violate any

requirement of this subpart or other

Agency regulations. The intermediary

must comply with the workplan

approved by the Agency so long as any

portion of the intermediary’s IRP loan is

outstanding.

(7) To secure the indebtedness by

pledging its portfolio of investments

derived from the proceeds of the loan

award, including providing assignments

to the Agency of security pledged by

ultimate recipients including the

promissory notes of ultimate recipients

and transferring possession to the

Agency of promissory notes given by

ultimate recipients, and/or pledging its

real and personal property, and other

rights and interests as the Agency may

require.

(8) To provide additional security and

execute any additional lien instruments

as the Agency may require at any time

during the term of the loan if, after

review and monitoring, an assessment

indicates the need for such security to

protect the Government’s interest.

§§ 1948.119–1948.121 [Reserved]

§ 1948.122 Application.

(a) An application will consist of:

(1) Form FmHA 1948–1, ‘‘Application

for Loan (Intermediary Relending

Program).’’

(2) A written work plan and other

evidence the Agency requires to
3576 Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Proposed Rules

demonstrate the feasibility of the

intermediary’s program to meet the

objectives of this program. The plan

must, at a minimum:

(i) Document the intermediary’s

ability to administer an IRP in

accordance with the provisions of this

subpart. In order to adequately

demonstrate the ability to administer

the program, the intermediary must

provide a complete listing of all

personnel responsible for administering

this program along with a statement of

their qualifications and experience. The

personnel may be either members or

employees of the intermediary’s

organization or contract personnel hired

for this purpose. If the personnel are to

be contracted for, the contract between

the intermediary and the entity

providing such service will be

submitted for Agency review and the

terms of the contract and its duration

must be sufficient to adequately service

the Agency loan through to its ultimate

conclusion. If the Agency determines

the personnel lack the necessary

expertise to administer the program, the

loan request will not be approved.

(ii) Document the intermediary’s

ability to commit financial resources

under the control of the intermediary to

the establishment of an IRP. This should

include a statement of the source(s) of

non-Agency funds for administration of

the the intermediary’s operations and

financial assistance for projects.

(iii) Demonstrate a need for loan

funds. As a minimum, the intermediary

should identify a sufficient number of

proposed and known ultimate recipients

it has on hand to justify Agency funding

of its loan request.

(iv) Include a list of proposed fees and

other charges it will assess the ultimate

recipients it funds.

(v) Demonstrate to Agency satisfaction

that the intermediary has secured

commitments of significant financial

support from public agencies and

private organizations.

(vi) Provide evidence to Agency

satisfaction that the intermediary has a

proven record of obtaining private and/

or philanthropic funds for the operation

of similar programs to the one contained

in this subpart.

(vii) Include the intermediary’s plan

(specific loan purposes) for relending

the loan funds. The plan must be of

sufficient detail to provide the Agency

with a complete understanding of what

the intermediary will accomplish by

lending the funds to the ultimate

recipient and the complete mechanics of

how the funds will get from the

intermediary to the ultimate recipient.

The service area, eligibility criteria, loan

purposes, fees, rates, terms, collateral

requirements, limits, priorities,

application process, method of

disposition of the funds to the ultimate

recipient, monitoring of the ultimate

recipient’s accomplishments, and

reporting requirements by the ultimate

recipient’s management are some of the

items that must be addressed by the

intermediary’s relending plan.

(3) Form FmHA 1940–20 for all

projects positively identified as

proposed ultimate recipient loans that

are Class I or Class II actions under

subpart G of part 1940 of this chapter.

(4) Comments from the State single

point of contact, if the State has elected

to review the program under Executive

Order 12372.

(5) A pro forma balance sheet at startup and for at least 3 additional projected

years; financial statements for the last 3

years, or from inception of the

operations of the intermediary if less

than 3 years; and 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 sheet must include one set of

projections that shows the IRP revolving

fund only and a separate set of

projections that shows the proposed

intermediary organization’s total

operations. Also, if principal repayment

on the IRP loan will not be scheduled

during the first 3 years, the projections

for the IRP revolving fund must extend

to include a year with a full annual

installment on the IRP loan.

(6) A written agreement will be signed

by the intermediary to assure that there

is not misunderstanding concerning

Agency audit requirements.

(7) Form FmHA 400–4, ‘‘Assurance

Agreement.’’

(8) Complete organizational

documents, including evidence of

authority to conduct the proposed

activities.

(9) Evidence that the loan is not

available at reasonable rates and terms

from private sources or other Federal,

State, or local programs.

(10) Latest audit report, if available.

(11) Form FmHA 1910–11,

‘‘Applicant Certification Federal

Collection Policies for Consumer or

Commercial Debts.’’

(12) Form AD–1047, ‘‘Certification

Regarding Debarment, Suspension, and

Other Responsibility Matters—Primary

Covered Transactions.’’

(13) Exhibit A–1 of FmHA Instruction

1940–Q.

(b) Applications from intermediaries

that already have an active IRP loan may

be streamlined as follows:

(1) The material required by

paragraphs (a)(6), (a)(8), and (a)(10) of

this section may be omitted.

(2) A statement that the new loan

would be operated in accordance with

the work plan on file for the previous

loan may be submitted in lieu of a new

work plan.

(3) The financial information required

by paragraph (a)(5) of this section may

be limited to projections for the

proposed new IRP revolving loan fund.

§ 1948.123 Filing and processing

applications for loans.

(a) Intermediaries’ contact.

Intermediaries desiring the assistance in

this subpart may file applications with

the State Office for the State in which

the intermediary’s headquarters is

located. Intermediaries headquartered in

the District of Columbia may file the

application with the National Office,

B&I Division, Washington, DC 20250–

3221.

(b) Filing applications. Intermediaries

must file the complete application, in

one package. Applications received by

the Agency will be reviewed and ranked

quarterly and funded in the order of

priority ranking. The Agency will retain

unsuccessful applications for

consideration in subsequent reviews,

through a total of four quarterly reviews.

(c) Loan priorities. Priority

consideration will be given to proposed

intermediaries based on the following

factors. Points will be allowed only for

factors indicated by well documented,

reasonable plans which, in the opinion

of the Agency, provide assurance that

the items have a high probability of

being accomplished. The points

awarded will be as specified in

paragraphs (c)(1) through (c)(6) of this

section. If an application does not fit

one of the categories listed, it receives

no points for that paragraph or

subparagraph.

(1) Other funds. Points allowed under

this paragraph should be based on

documented successful history or

written evidence that the funds are

available.

(i) The intermediary will obtain nonFederal loan or grant funds to pay part

of the cost of the ultimate recipients’

projects. The amount of funds from

other sources will average:

(A) At least 10% but less than 25% of

the total project cost—10 points.

(B) At least 25% but less than 50% of

the total project cost—20 points.

(C) 50% or more of the total project

cost—30 points.

(ii) The intermediary will provide

loans to the ultimate recipient from its

own funds (not loan or grant) to pay part

of the costs of the ultimate recipients’
Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Proposed Rules 3577

projects. The amount of non-Agency

derived intermediary funds will

average:

(A) At least 10% but less than 25% of

the total project costs—10 points.

(B) At least 25% but less than 50% of

total project costs—20 points.

(C) 50% or more of total project

costs—30 points.

(2) Employment. For computations

under this paragraph, income data

should be from the latest decennial

census of the United States, updated

according to changes in consumer price

index (CPIU). The poverty line used will

be as defined in Section 673 (2) of the

Community Services Block Grant Act

(42 U. S. C. 9902 (2)). Unemployment

data used will be that published by the

Bureau of Labor Statistics, U.S.

Department of Labor.

(i) The median household income in

the service area of the proposed

intermediary equals the following

percentage of the poverty line for a

family of four:

(A) At least 150% but not more than

175%—5 points.

(B) At least 125% but less than

150%—10 points.

(C) Below 125%—15 points.

(ii) The intermediary certifies that the

following percentage of the loans it

makes from Agency IRP loan funds will

be in counties with median household

income below 80 percent of the

statewide non-metropolitan median

household income. (To receive priority

points under this category, the

intermediary must provide a list of

counties in the service area that have

qualifying income.)

(A) At least 50% but less than 75%—

5 points.

(B) At least 75% but less than 100%—

10 points.

(C) 100%—15 points.

(iii) The unemployment rate in the

intermediary’s service area equals the

following percentage of the national

unemployment rate:

(A) At least 100% but less than

125%—5 points.

(B) At least 125% but less 150%—10

points.

(C) 150% or more—15 points.

(iv) The intermediary will require, as

a condition of eligibility for a loan to an

ultimate recipient from Agency IRP loan

funds, that the ultimate recipient certify

in writing that it will employ the

following percentage of its workforce

from members of families with income

below the poverty line.

(A) At least 10% but less than 20% of

the workforce—5 points.

(B) At least 20% but less than 30% of

the workforce—10 points.

(C) 30% of the workforce or more—15

points.

(v) The intermediary has a

demonstrated record of providing

assistance to members of

underrepresented groups, has a realistic

plan for targeting loans to members of

underrepresented groups, and, based on

the intermediary’s record and plans, it

is expected that the following

percentages of its loans made from

Agency IRP loan funds will be made to

entities owned by members of

underrepresented groups.

(A) At least 10% but less than 20%—

5 points.

(B) At least 20% but less than 30%—

10 points.

(C) 30% or more—15 points.

(3) Intermediary contribution. All

assets of the IRP revolving fund will

serve as security for the IRP loan and

the intermediary will contribute funds

not derived from the Agency into the

IRP revolving fund along with the

proceeds of the IRP loan. The amount of

non-Agency derived funds contributed

to the IRP revolving fund will equal the

following percentage of the Agency IRP

loan:

(i) At least 5% but less than 15%—15

points.

(ii) At least 15% but less than 25%—

30 points.

(iii) 25% or more—50 points.

(4) Experience. The intermediary has

actual experience in making and

servicing commercial loans, with a

successful record, for the following

number of full years:

(i) At least 1 but less than 3 years—

5 points.

(ii) At least 3 but less than 5 years—

10 points.

(iii) At least 5 but less than 10 years—

20 points.

(iv) 10 or more years—30 points.

(5) Community representation. The

service area is not more than 10

counties and the intermediary utilizes

local opinions and experience by

including community representatives on

its board of directors or equivalent

oversight board. For purposes of this

section, community representatives are

people, such as civic leaders, business

representatives, or bankers, who reside

in the service area and are not

employees of the intermediary.

(i) At least 10% but less than 40% of

the board members are community

representatives—5 points.

(ii) At least 40% but less than 75% of

the board members are community

representatives—10 points.

(iii) At least 75% of the board

members are community

representatives—15 points.

(6) Administrative. The Administrator

may assign up to 35 additional points to

an application to account for items not

adequately covered by the other priority

criteria set out in this section. Such

items may include, but are not limited

to, a particularly successful business

development record, a service area with

no other IRP coverage, a service area

with severe economic problems, a

service area with emergency conditions

caused by a natural disaster or loss of

a major industry, or excellent utilization

of a previous IRP loan.

§ 1948.124 [Reserved]

§ 1948.125 Letter of conditions.

If the Agency is able to provide the

loan, it will provide the intermediary a

letter of conditions listing all

requirements for such loan. Immediately

after reviewing the conditions and

requirements in the letter of conditions,

the intermediary should complete, sign

and return the Form FmHA 1942–46,

‘‘Letter of Intent To Meet Conditions,’’

to the Agency. If certain conditions

cannot be met, the borrower may

propose alternate conditions to the

Agency. The Agency loan approval

official must concur with any changes

made to the initially issued or proposed

letter of conditions.

§ 1948.126 Loan approval and obligating

funds.

The loan will be considered approved

on the date the signed copy of Form

FmHA 1940–1 is mailed to the

intermediary. The approving official

may request an obligation of funds

when available and according to the

following:

(a) Form FmHA 1940–1, authorizing

funds to be reserved, may be executed

by the loan approving official providing

the intermediary has the legal authority

to contract for a loan, and to enter into

required agreements and has signed

Form FmHA 1940–1.

(b) An obligation of funds established

for an intermediary may be transferred

to a different (substituted) intermediary

provided:

(1) The substituted intermediary is

eligible to receive the assistance

approved for the original intermediary;

(2) The substituted intermediary bears

a close and genuine relationship to the

original intermediary; and

(3) The need for and scope of the

project and the purpose(s) for which

Agency IRP loan funds will be used

remain substantially unchanged.

§ 1948.127 Loan closing.

(a) At loan closing, the intermediary

must certify to the following:

(1) No major changes have been made

in the work plan except those approved

in the interim by the Agency.
3578 Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Proposed Rules

(2) All requirements of the letter of

conditions have been met.

(3) There has been no material

adverse change in the intermediary nor

its financial condition since the

issuance of the letter of conditions. If

there have been adverse changes, they

must be explained. The adverse changes

may be waived, at the sole discretion of

the Agency. Financial data must not be

more than 60 days old at loan closing.

(b) Agency personnel shall not sign

any documents other than those

specifically provided for in this subpart.

(c) The processing officer will review

any requests for changes to the letter of

conditions. The processing officer will

approve only minor changes which do

not materially affect the project, its

capacity, employment, original

projections, or credit factors. Changes in

legal entities or where tax consideration

are the reason for change will not be

approved.

(d) At loan closing the intermediary

will provide sufficient evidence to

enable Agency to ascertain that no claim

or liens of laborers, materialmen,

contractors, subcontractors, suppliers of

machinery and equipment, or other

parties are against the security of the

intermediary, and that no suits are

pending or threatened that would

adversely affect the security of the

intermediary when the security

instruments are filed.

§ 1948.128 Requests to make loans to

ultimate recipients.

(a) When an intermediary proposes to

use Agency IRP loan funds to make a

loan to an ultimate recipient, and prior

to final approval of such loan, the

intermediary must submit the following

material to the Agency:

(1) A request for Agency concurrence

in approval of the proposed loan.

(2) Certification by the intermediary

that:

(i) The proposed ultimate recipient is

eligible for the loan.

(ii) The proposed loan is for eligible

purposes.

(iii) The proposed loan complies with

all applicable statutes and regulations.

(iv) The ultimate recipient is unable

to finance the proposed project through

commercial credit or other Federal,

State, or local programs at reasonable

rates and terms.

(v) The intermediary and its principal

officers (including immediate family)

hold no legal or financial interest or

influence in the ultimate recipient, and

the ultimate recipient and its principal

officers (including immediate family)

hold no legal or financial interest or

influence in the intermediary.

(3) For projects that meet the criteria

for a Class I or Class II environmental

assessment or environmental impact

statement as provided in subpart G of

part 1940 of this chapter, a completed

and executed Form FmHA 1940–20.

(4) All comments obtained in

accordance with § 1948.117 (a) of this

subpart, regarding intergovernmental

consultation.

(5) Copies of sufficient material from

the ultimate recipient’s application and

the intermediary’s related files, to allow

the Agency to determine:

(i) The name and address of the

ultimate recipient.

(ii) The loan purposes.

(iii) The interest rate and term.

(iv) The location, nature, and scope of

the project being financed.

(v) The other funding included in the

project.

(vi) The nature and lien priority of the

collateral.

(6) Such other information as the

Agency may request on specific cases.

(b) Upon receipt of a request for

concurrence in a loan to an ultimate

recipient from Agency IRP loan funds

the Agency will:

(1) Review the material required by

paragraph (a) of this section for

completeness and compliance with

regulations.

(2) Complete an environmental review

in accordance with subpart G of part

1940 of this chapter, including public

notice requirements and provisions for

mitigation measures as appropriate.

This review will be conducted by the

Agency in the same manner it would be

conducted if the Agency were

considering a direct loan to the ultimate

recipient. The results of the

environmental review will be used by

the Agency in making its decision on

the request for loan concurrence.

(3) Consider any comments received

through the intergovernmental

consultation process. Prior to the

Agency’s decision on loan concurrence,

compliance with the requirements of

intergovernmental consultation in

accordance with FmHA Instruction

1940–J must be demonstrated.

(4) When all requirements have been

met, issue a letter concurring in the

loan.

(5) If the Agency determines it is

unable to concur in the loan, the

intermediary will be notified in writing,

given the reasons for denial, and

informed of its rights for review and

appeal in accordance with subpart B of

part 1900 of this chapter.

§§ 1948.129–1948.142 [Reserved]

§ 1948.143 Appeals.

Any appealable adverse decision

made by the Agency which affects the

intermediary may be appealed upon

written request of the aggrieved party in

accordance with subpart B of part 1900

of this chapter.

§§ 1948.144–1948.147 [Reserved]

§ 1948.148 Exception authority.

The Administrator may in individual

cases grant an exception to any

requirement or provision of this subpart

which is not inconsistent with an

applicable law or opinion of the

Comptroller General, provided the

Administrator determines that

application of the requirement or

provision would adversely affect the

Government’s interest. The basis for this

exception will be fully documented.

The documentation will: Demonstrate

the adverse impact; identify the

particular requirement involved; and

show how the adverse impact will be

eliminated.

§ 1948.149 [Reserved]

§ 1948.150 OMB control number.

The reporting and recordkeeping

requirements contained in this

regulation have been approved by the

Office of Management and Budget and

have been assigned OMB control

number 0575–0130. Public reporting

burden for this collection of information

is estimated to vary from 1 to 120 hours

per response, with an average of 12

hours per response including time for

reviewing instructions, searching

existing data sources, gathering and

maintaining the data needed, and

completing and reviewing the collection

of information. Send comments

regarding this burden estimate or any

other aspect of this collection of

information, including suggestions for

reducing this burden, to Department of

Agriculture, Clearance Officer, OIRM,

Ag. Box 7630, Washington, DC 20250;

and to the Office of Management and

Budget, Paperwork Reduction Project

(OMB# 0575–0130), Washington, DC

20503.

PART 1951—SERVICING AND

COLLECTIONS

3. The authority citation for part 1951

continues to read as follows:

Authority: 7 U.S.C. 1989; 7 U.S.C. 1932

Note; 42 U.S.C. 1480; 5 U.S.C. 301; 7 C.F.R.

2.23 and 2.70.

Subpart R—Rural Development Loan

Servicing

4. Section 1951.853 is amended by

revising paragraph (b)(2)(ix) to read as

follows:
Federal Register / Vol. 60, No. 11 / Wednesday, January 18, 1995 / Proposed Rules 3579

§ 1951.853 Loan purposes for undisbursed

RDLF loan funds from HHS.

* * * * *

(b) * * *

(2) * * *

(ix) Reasonable fees and charges only

as specifically listed in this

subparagraph. Authorized fees include

loan packaging fees, environmental data

collection fees, and other professional

fees rendered by professionals generally

licensed by individual State or

accreditation associations, such as

Engineers, Architects, Lawyers,

Accountants, and Appraisers. The

amount of fee will be what is reasonable

and customary in the community or

region where the project is located. Any

such fees are to be fully documented

and justified.

* * * * *

Dated: December 9, 1994.

Bob J. Nash,

Under Secretary, Rural Economic and

Community Development.

[FR Doc. 95–1193 Filed 1–17–95; 8:45 am]

BILLING CODE 3410–32–U

NUCLEAR REGULATORY

COMMISSION

10 CFR Part 50

RIN 3150–AE97

Shutdown and Low-Power Operations

for Nuclear Power Reactors

AGENCY: Nuclear Regulatory

Commission.

ACTION: Proposed rule: Extension of the

public comment period.

SUMMARY: On October 19, 1994 (59 FR

52707–52714), the Nuclear Regulatory

Commission published for public

comment a proposed rule regarding

Shutdown and Low-Power Operations

for Nuclear Power Reactors. The

comment period for this proposed rule

was to have expired on January 3, 1995.

On December 2, 1994, Yankee Atomic

Electric Company requested a sixty-day

extension of the comment period on the

basis that the technical issues associated

with the proposed rule are complex in

nature and may warrant additional time

to address the comments adequately. In

view of the importance of the proposed

rule and the desirability of developing

a final rule with adequate consideration

of all comments to the extent

practicable, the NRC has decided to

extend the comment period by thirty

days. The extended comment period

now expires on February 3, 1995. To

facilitate NRC responses to comments it

would be appreciated if commenters

could provide their comments

electronically on a diskette, as well as

by hard copy.

DATES: The comment period has been

extended and now expires on February

3, 1995. Comments received after this

date will be considered if it is practical

to do so but the Commission is able to

assure consideration only for comments

received on or before this date.

ADDRESSES: Send written comments or

suggestions to the Secretary of the

Commission, U.S. Nuclear Regulatory

Commission, Washington, DC 20555–

0001, Attention: Docketing and Service

Branch. Copies of comments received

may be examined at the NRC Public

Document Room, 2120 L Street NW

(Lower Level), Washington, DC.

FOR FURTHER INFORMATION CONTACT: Gary

M. Holahan, Director, Division of

Systems Safety and Analysis, Office of

Nuclear Reactor Regulation, U.S.

Nuclear Regulatory Commission,

Washington, DC 20555–0001, telephone

(301) 504–2884.

Dated at Rockville, Maryland, this 11th day

of January, 1995.

For the Nuclear Regulatory Commission.

John C. Hoyle,

Acting Secretary of the Commission.

[FR Doc. 95–1172 Filed 1–17–95; 8:45 am]

BILLING CODE 7590–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 91–CE–25–AD]

Airworthiness Directives; Alexander

Schleicher GmbH & Co. Model ASK 21

Gliders

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Notice of proposed rulemaking

(NPRM).

SUMMARY: This document proposes to

adopt a new airworthiness directive

(AD) that would apply to Alexander

Schleicher GmbH & Co. (Alexander

Schleicher) Model ASK 21 gliders. The

proposed action would require

replacing the parallel rocker with a part

of improved design, and incorporating

flight manual revisions. Two incidents

of the parallel rocker breaking at the

elevator connection on the affected

gliders prompted the proposed action.

The actions specified by the proposed

AD are intended to prevent possible loss

of elevator control that could result from

a broken parallel rocker.

DATES: Comments must be received on

or before March 27, 1995.

ADDRESSES: Submit comments in

triplicate to the Federal Aviation

Administration (FAA), Central Region,

Office of the Assistant Chief Counsel,

Attention: Rules Docket No. 91–CE–25–

AD, Room 1558, 601 E. 12th Street,

Kansas City, Missouri 64106. Comments

may be inspected at this location

between 8 a.m. and 4 p.m., Monday

through Friday, holidays excepted.

Service information that applies to the

proposed AD may be obtained from

Alexander Schleicher GmbH &

Company, D–36163, PopppenhausenWasserkuppe, Germany; or Eastern

Sailplane, Heath Stage Route Shelburne

Falls, Massachusetts 01370; telephone

(413) 625–6059. This information also

may be examined at the Rules Docket at

the address above.

FOR FURTHER INFORMATION CONTACT: Mr.

Herman C. Belderok, Project Officer,

Sailplanes, Small Airplane Directorate,

Aircraft Certification Service, FAA,

1201 Walnut, suite 900, Kansas City,

Missouri 64106; telephone (816) 426–

6932; facsimile (816) 426–2169.

SUPPLEMENTARY INFORMATION:

Comments Invited

Interested persons are invited to

participate in the making of the

proposed rule by submitting such

written data, views, or arguments as

they may desire. Communications

should identify the Rules Docket

number and be submitted in triplicate to

the address specified above. All

communications received on or before

the closing date for comments, specified

above, will be considered before taking

action on the proposed rule. The

proposals contained in this notice may

be changed in light of the comments

received.

Comments are specifically invited on

the overall regulatory, economic,

environmental, and energy aspects of

the proposed rule. All comments

submitted will be available, both before

and after the closing date for comments,

in the Rules Docket for examination by

interested persons. A report that

summarizes each FAA-public contact

concerned with the substance of this

proposal will be filed in the Rules

Docket.

Commenters wishing the FAA to

acknowledge receipt of their comments

submitted in response to this notice

must submit a self-addressed, stamped

postcard on which the following

statement is made: ‘‘Comments to

Docket No. 91–CE–25–AD.’’ The

postcard will be date stamped and

returned to the commenter.