This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

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

The Code of Federal Regulations is sold by

the Superintendent of Documents.

Rules and Regulations Federal Register

36193 

Vol. 86, No. 129 

Friday, July 9, 2021 

DEPARTMENT OF AGRICULTURE 

Rural Utilities Service 

7 CFR Parts 1710, 1714, 1717, 1718, 

1721, 1726, 1730, and 1767 

[RUS–21–ELECTRIC–0003] 

RIN 0572–AC53 

Streamlining Electric Program 

Procedures 

AGENCY: Rural Utilities Service, U.S. 

Department of Agriculture (USDA). 

ACTION: Final rule. 

SUMMARY: The Rural Utilities Service 

(RUS), a Rural Development agency of 

the United States Department of 

Agriculture (USDA), is revising several 

regulations to streamline its procedures 

for Electric Program borrowers, 

including its loan application 

requirements, approval of construction 

work plans, contract bidding 

procedures, contact approval 

procedures, system operation and 

maintenance reviews, long-range 

engineering plans and system design 

procedures. Additionally, unnecessary 

sections in the regulations will be 

removed. 

DATES: This rule is effective September 

7, 2021. 

FOR FURTHER INFORMATION CONTACT: Luis 

Bernal, Deputy Assistant Administrator, 

Office of Customer Service and 

Technical Assistance, Rural Utilities 

Service, U.S. Department of Agriculture, 

STOP 1569, 1400 Independence Ave. 

SW, Washington, DC 20250–0787, 

telephone: (202) 720–1900. Email: 

RUSElectric@usda.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Rural Development is a mission area 

within the U.S. Department of 

Agriculture (USDA) comprising the 

Rural Utilities Service, Rural Housing 

Service, and Rural Business-Cooperative 

Service. Rural Development’s mission is 

to increase economic opportunity and 

improve the quality of life for all rural 

Americans. Rural Development meets 

its mission by providing loans, loan 

guarantees, grants, and technical 

assistance through numerous programs 

aimed at creating and improving 

housing, business, and infrastructure 

throughout rural America. The Rural 

Utilities Service (RUS) loan, loan 

guarantee, and grant programs act as a 

catalyst for economic and community 

development. By financing 

improvements to rural electric, water 

and waste, and telecommunications and 

broadband infrastructure, RUS also 

plays a significant role in improving 

other measures of quality of life in rural 

America, including public health and 

safety, environmental protection and 

culture and historic preservation. 

RUS Electric Program loans, loan 

guarantees and grants finance the 

construction and improvement of rural 

electric infrastructure. In an effort by the 

RUS Electric Program to administer its 

program in an efficient and effective 

manner while improving its customer 

service and experience, and in response 

to requests from the RUS Electric 

Program borrowers, the Electric Program 

undertook a systematic review of 

regulations and procedures in place to 

administer its program. On July 9, 2019, 

Streamlining Electric Program 

Procedures (84 FR 32607) was 

published in the Federal Register. That 

regulation streamlined some pre- and 

post-loan procedures to be made more 

efficient and to reduce regulatory 

burden on Electric Program borrowers 

while still ensuring RUS loans remained 

adequately secured and ensuring that 

loan funds would be repaid in the time 

agreed upon. 

This rulemaking is part of the Electric 

Program’s continuing effort to improve 

customer service for its borrowers and 

to create a more efficient work process 

for its staff. This rulemaking will 

continue to streamline Electric Program 

procedures and revise regulations; 

including, removing unnecessary and 

outdated regulations and simplifying 

other policies and procedures that 

impose burdensome requirements on 

borrowers and applicants. 

To implement this change, the 

Agency will publish this as a final rule. 

The Administrative Procedure Act 

exempts from prior notice rules, any 

actions, ‘‘relating to agency management 

or personnel or to public property, 

loans, grants, benefits, or contracts’’ (5 

U.S.C. 553(b)(A)). 

II. Summary of Changes to Rule 

(a) Changes to 7 CFR part 1710 

‘‘General and Pre-Loan Policies and 

Procedures Common to Electric Loans 

and Guarantees’’ include: 

(1) Section 1710.109(c)(1) was 

updated to remove outdated language 

and to increase the general fund 

reimbursement period from 24 to 48 

months. This will provide borrowers 

with more flexibility for when they can 

submit a loan application. It also 

parallels with the construction 

workplan period which is typically 48 

months. 

(2) Section 1710.251 was updated to 

make conforming changes from prior 

rulemakings. Paragraph (c)(7) was 

changed to ‘‘Outdoor Lights’’ for more 

flexibility and paragraph (c)(13) was 

added to provide borrowers with more 

clarification on eligible items approved 

for RUS financing. 

(3) Section 1710.252(b) was revised to 

change the coverage period of 

construction workplans to typically 4 

years. This is a conforming change from 

a prior rulemaking that streamlined 

when construction workplans must be 

approved. 

(4) Section 1710.501(a)(3) was 

updated to clarify that the RUS Form 

740c will be used to justify the loan 

amount and not be an exclusive list of 

projects which could be financed. This 

change will provide greater financing 

flexibility to the borrowers. 

(b) Changes to 7 CFR part 1714—‘‘PreLoan Policies and Procedures for 

Insured Electric Loans’’ include 

removing outdated language and 

updating information on the fund 

advance period. The updated language 

will clarify the loan fund advance 

period to conform to the requirements of 

the Antideficiency Act, 31 U.S.C. 1341. 

(c) Changes to 7 CFR part 1717— 

‘‘Post-Loan Policies and Procedures 

Common to Insured and Guaranteed 

Electric Loans include: 

(1) Section 1717.154(c) was amended 

to increase the general funds 

reimbursement period to 48 months. 

This is a conforming change to go with 

the modification made to 

§ 1710.109(c)(1). 

(2) Section 1717.604(b) was revised to 

removed outdated language that 

references the requirement that longVerDate Sep<11>2014 15:58 Jul 08, 2021 Jkt 253001 PO 00000 Frm 00001 Fmt 4700 Sfmt 4700 E:\FR\FM\09JYR1.SGM 09JYR1

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36194 Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Rules and Regulations 

range engineering plans must be 

approved by RUS. This is a conforming 

change to a prior rulemaking. 

(3) Section 1717.608(b) was amended 

to change the current approval 

requirement to a notification and to 

increase the threshold for the 

notification. This change will reduce the 

amount of oversight for the borrower. 

Paragraph (c) was amended to change 

the RUS approval of Power Supply 

Arrangements and any amendments to a 

term of 5 years. This will decrease the 

wait time for borrowers. Both of these 

changes will allow the Agency to focus 

resources on contracts with potentially 

higher risks. 

(4) Section 1717.616 introductory text 

was revised to apply to all borrowers 

and different coverage ratios will be 

reviewed on a case by case basis. 

Paragraph (b) was revised to remove the 

specific ratios with a cross reference to 

§ 1710.114(b) and ‘‘other financial 

requirements as established by their 

Mortgages, Loan Contracts and/or other 

Security Agreements’’ was added. These 

changes provide the borrowers with 

more flexibility on ratios they are 

required to meet to sell property. 

(5) Section 1717.854(c)(2) was 

amended to reduce the equity 

requirement related to RUS advance 

approval for lien sharing from 27 to 20 

percent. This will reduce the number of 

borrowers that need to obtain prior 

approval before borrowing funds from 

an outside lender. 

(d) Changes to 7 CFR part 1718— 

‘‘Loan Security Documents for Electric 

Borrowers’’ include removing appendix 

A to subpart B and appendix A to 

subpart C. These were removed because 

copies of the model mortgage and loan 

contract are available upon request as 

noted in §§ 1718.54 and 1718.104. Also, 

in § 1718.54, the reference to 

Administrative Services Division was 

removed for consistency. 

(e) Changes to 7 CFR part 1721— 

‘‘Post-Loan Policies and Procedures for 

Insured Electric Loans’’ include revising 

§ 1721.1(a) to identify those projects for 

which loan funds may be advanced and 

remove the requirement to amend an 

approved loan. This change provides 

greater financing flexibility for 

borrowers. 

(f) Changes to 7 CFR part 1726— 

‘‘Electric System Construction Policies 

and Procedures’’ include: 

(1) Section 1726.35 was revised to 

remove outdated references, allow a 

borrower to submit a certification 

statement in lieu of three copies of each 

contract (conforming change to prior 

rulemaking) and to provide for 

electronic submission of documents. 

(2) Sections 1726.51(b) and 1726.77(b) 

were revised to increase the contract 

procurement limits and to allow for 

some Cost-Plus/Hourly contracts. These 

changes will provide greater flexibility 

to the borrowers related to contracting 

as well as reduce the number of requests 

submitted to the Agency for review and 

action. 

(3) Section 1726.77(c) was revised to 

increase the limits for requiring contract 

approval and to set the contract 

approval threshold to be the same for all 

borrowers. This change simplifies the 

program regulation and potentially 

minimizes misinterpretation. 

(4) Section 1726.150(b) was revised to 

increase contract procurement limits for 

headquarters buildings. This change is 

expected to create flexibility for the 

borrower. 

(5) Section 1726.176 introductory text 

was revised to add Automated Meter 

Reading/Automated Metering 

Infrastructure to the list of items 

covered in the regulation. Paragraph 

(b)(3) was revised to set contract 

approval thresholds to be the same for 

all borrowers to simplify the program 

regulation and potentially minimize 

misinterpretation. 

(6) Section 1726.403(c)(2)(ii) was 

revised to provide that a borrower may 

now submit a certification statement in 

lieu of closeout documents. It was also 

modified to remove the instruction that 

the closeout documents are to be 

submitted through the General Field 

Representative. These changes are 

intended to create process efficiency for 

the borrower. 

(g) Changes to 7 CFR part 1730— 

‘‘Electric System Operations and 

Maintenance’’ include removing 

appendix A to subpart B and revising 

§ 1730.23 to read ‘‘The RUS Form 300 

is available from RUS and shall be used 

when required by this part.’’ RUS seeks 

to remove appendix A to subpart B to 

adapt program rules so that the program 

can be delivered effectively, efficiently 

and consistent with the current industry 

developments and technology changes. 

(h) Changes to 7 CFR part 1767— 

‘‘Accounting Requirements for RUS 

Electric Borrowers’’ include 

modifications to § 1767.41 Number 119 

‘‘Special Equipment’’ to provide 

clarification and additional guidance 

related to the treatment of Special 

Equipment. 

III. Executive Orders and Acts 

Executive Order 12866 

This final rule has been determined to 

be non-significant for purposes of 

Executive Order (E.O.) 12866 and 

therefore has not been reviewed by the 

Office of Management and Budget 

(OMB). 

Congressional Review Act 

Pursuant to the Congressional Review 

Act (5 U.S.C. 801 et seq.), the Office of 

Information and Regulatory Affairs 

designated this rule as not a major rule, 

as defined by 5 U.S.C. 804(2). 

Catalog of Federal Domestic Assistance 

The Catalog of Federal Domestic 

Assistance (CFDA) number assigned to 

the Rural Electrification Loans and Loan 

Guarantees Program is 10.850. The 

Catalog is available on the internet at 

https://beta.sam.gov/. The Government 

Publishing Office (GPO) prints and sells 

the CFDA to interested buyers. For 

information about purchasing the 

Catalog of Federal Domestic Assistance 

from GPO, call the Superintendent of 

Documents at (202) 512–1800 or toll free 

at (866) 512–1800, or access GPO’s 

online bookstore at https://

bookstore.gpo.gov. 

Executive Order 12372, 

Intergovernmental Review of Federal 

Programs 

This rule is excluded from the scope 

of Executive Order 12372, 

Intergovernmental Consultation, which 

may require a consultation with State 

and local officials. See the final rule 

related notice entitled, ‘‘Department 

Programs and Activities Excluded from 

Executive Order 12372’’ (50 FR 47034) 

advising that RUS loans and loan 

guarantees were not covered by 

Executive Order 12372. 

Executive Order 13175, Consultation 

and Coordination With Indian Tribal 

Governments 

The Agency has determined that this 

final rule does not have a substantial 

direct effect on one or more Indian 

tribe(s) or on either the relationship or 

the distribution of powers and 

responsibilities between the Federal 

Government and Indian tribes. Thus, 

this final rule is not subject to the 

requirements of Executive Order 13175. 

Consequently, the Agency will not 

conduct tribal consultation sessions. If a 

Tribe determines that this rule has 

implications of which RUS is not aware 

and would like to request governmentto-government consultation on this rule, 

please contact USDA Rural 

Development’s Native American 

Coordinator at (720) 544–2911 or 

AIAN@usda.gov. 

Executive Order 12988, Civil Justice 

Reform 

This final rule has been reviewed 

under Executive Order 12988, Civil 


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Justice Reform. In accordance with this 

final rule: (1) All State and local laws 

and regulations that are in conflict with 

this rule will be preempted; (2) No 

retroactive effect will be given to this 

rule; and (3) Administrative proceedings 

of the National Appeals Division (7 CFR 

part 11) must be exhausted before 

bringing suit in court challenging action 

taken under this rule. 

National Environmental Policy Act 

In accordance with the National 

Environmental Policy Act of 1969, 

Public Law 91–190, this final rule has 

been reviewed in accordance with 7 

CFR part 1970 (‘‘Environmental Policies 

and Procedures’’). The Agency has 

determined that (i) this action meets the 

criteria established in 7 CFR 1970.53(f); 

(ii) no extraordinary circumstances 

exist; and (iii) the action is not 

‘‘connected’’ to other actions with 

potentially significant impacts, is not 

considered a ‘‘cumulative action’’ and is 

not precluded by 40 CFR 1506.1. 

Therefore, the Agency has determined 

that the action does not have a 

significant effect on the human 

environment, and therefore neither an 

Environmental Assessment nor an 

Environmental Impact Statement is 

required. 

Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA), Public 

Law 104–4, establishes requirements for 

Federal agencies to assess the effects of 

their regulatory actions on State, local, 

and tribal governments and the private 

sector. Under section 202 of the UMRA, 

RUS generally must prepare a written 

statement, including a cost-benefit 

analysis, for proposed and final rules 

with Federal mandates that may result 

in expenditures to State, local, or tribal 

governments, in the aggregate, or to the 

private sector, of $100 million or more 

in any one year. When such a statement 

is needed for a rule, section 205 of the 

UMRA generally requires RUS to 

identify and consider a reasonable 

number of regulatory alternatives and 

adopt the least costly, most costeffective, or least burdensome 

alternative that achieves the objectives 

of the rule. 

This final rule contains no Federal 

mandates (under the regulatory 

provisions of title II of the UMRA) for 

State, local, and tribal governments or 

the private sector. Therefore, this final 

rule is not subject to the requirements 

of sections 202 and 205 of the UMRA. 

Regulatory Flexibility Act 

The Regulatory Flexibility Act (5 

U.S.C. 601 et seq.) generally requires an 

agency to prepare a regulatory flexibility 

analysis of any rule subject to notice 

and comment rulemaking requirements 

under the Administrative Procedure Act 

(APA) or any other statute. This final 

rule; however, is not subject to the APA 

under 5 U.S.C. 553(a)(2) and 5 U.S.C. 

553(b)(3)(A) nor any other statute. 

Executive Order 13132, Federalism 

It has been determined, under E.O. 

13132, Federalism, that the policies 

contained in this final rule do not have 

any substantial direct effect on states, on 

the relationship between the National 

Government and the states, or on the 

distribution of power and 

responsibilities among the various 

levels of government. Nor does this final 

rule impose substantial direct 

compliance costs on state and local 

governments. Therefore, consultation 

with the states is not required. 

E-Government Act Compliance 

The Agency is committed to 

complying with the E-Government Act 

of 2002, Public Law 107–347, which 

requires Government agencies in general 

to provide the public the option of 

submitting information or transacting 

business electronically to the maximum 

extent possible and to promote the use 

of the internet and other information 

technologies to provide increased 

opportunities for citizen access to 

Government information and services, 

and for other purposes. 

Information Collection and 

Recordkeeping Requirements 

The information collection and 

record-keeping requirements contained 

in this rule are approved by the Office 

of Management and Budget (OMB) 

under OMB Control Numbers 0572– 

0003, 0572–0025, 0572–0032, 0572– 

0100, 0572–0114, 0572–0107, and 0572– 

0123. 

Civil Rights Impact Analysis 

Rural Development, a mission area for 

which RUS is an agency, has reviewed 

this rule in accordance with USDA 

Regulation 4300–4, Civil Rights Impact 

Analysis,’’ to identify any major civil 

rights impacts the rule might have on 

program participants on the basis of age, 

race, color, national origin, sex, or 

disability. After review and analysis of 

the rule and available data, it has been 

determined that based on the analysis of 

the program purpose, application 

submission and eligibility criteria, 

issuance of this final rule is not likely 

to negatively impact very low, low and 

moderate-income populations, minority 

populations, women, Indian tribes or 

persons with disability, by virtue of 

their race, color, national origin, sex, 

age, disability, or marital or familial 

status. No major civil rights impact is 

likely to result from this rule. 

USDA Non-Discrimination Statement 

In accordance with Federal civil 

rights law and U.S. Department of 

Agriculture (USDA) civil rights 

regulations and policies, the USDA, its 

Agencies, offices, and employees, and 

institutions participating in or 

administering USDA programs are 

prohibited from discriminating based on 

race, color, national origin, religion, sex, 

gender identity (including gender 

expression), sexual orientation, 

disability, age, marital status, family/ 

parental status, income derived from a 

public assistance program, political 

beliefs, or reprisal or retaliation for prior 

civil rights activity, in any program or 

activity conducted or funded by USDA 

(not all bases apply to all programs). 

Remedies and complaint filing 

deadlines vary by program or incident. 

Persons with disabilities who require 

alternative means of communication for 

program information (e.g., Braille, large 

print, audiotape, American Sign 

Language, etc.) should contact the 

responsible Agency or USDA’s TARGET 

Center at (202) 720–2600 (voice and 

TTY) or contact USDA through the 

Federal Relay Service at (800) 877–8339. 

Additionally, program information may 

be made available in languages other 

than English. 

To file a program discrimination 

complaint, complete the USDA Program 

Discrimination Complaint Form, AD– 

3027, found online at https://

www.usda.gov/oascr/how-to-file-aprogram-discrimination-complaint and 

at any USDA office or write a letter 

addressed to USDA and provide in the 

letter all of the information requested in 

the form. To request a copy of the 

complaint form, call (866) 632–9992. 

Submit your completed form or letter to 

USDA by: (1) Mail: U.S. Department of 

Agriculture Office of Adjudication, 1400 

Independence Avenue SW, Washington, 

DC 20250–9410; (2) Fax: (202) 690– 

7442; or (3) Email: OAC@usda.gov 

USDA is an equal opportunity provider, 

employer, and lender. 

List of Subjects 

7 CFR Part 1710 

Electric power, Grant programs— 

energy, Loan programs—energy, 

Reporting and recordkeeping 

requirements, Rural areas. 

7 CFR Part 1714 

Electric power, Loan programs— 

energy, Rural areas. 


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36196 Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Rules and Regulations 

7 CFR Part 1717 

Administrative practice and 

procedure, Electric power, Electric 

power rates, Electric utilities, 

Intergovernmental relations, 

Investments, Loan programs—energy, 

Reporting and recordkeeping 

requirements, Rural areas. 

7 CFR Part 1718 

Administrative practice and 

procedure, Electric power, Electric 

utilities, Loan programs—energy, 

Reporting and recordkeeping, Rural 

areas. 

7 CFR Part 1721 

Electric power, Loan programs— 

energy, Rural areas. 

7 CFR Parts 1726 and 1730 

Electric power, Loan programs— 

energy, Reporting and recordkeeping 

requirements, Rural areas. 

7 CFR Part 1767 

Electric power, Loan programs— 

energy, Rural areas, Uniform System of 

Accounts. 

For the reasons set forth in the 

preamble, RUS amends 7 CFR parts 

1710, 1714, 1717, 1718, 1721, 1726, 

1730, and 1767 as follows: 

PART 1710—GENERAL AND PRELOAN POLICIES AND PROCEDURES 

COMMON TO ELECTRIC LOANS AND 

GUARANTEES 

■ 1. The authority citation for part 1710 

continues to read as follows: 

Authority: 7 U.S.C. 901 et seq., 1921 et 

seq., 6941 et seq. 

Subpart C—Loan Purposes and Basic 

Policies 

■ 2. Amend § 1710.109 by revising 

paragraph (c) to read as follows: 

§ 1710.109 Reimbursement of general 

funds and interim financing. 

* * * * * 

(c) The period immediately preceding 

the current loan period for which 

reimbursement and replacement of 

interim financing is authorized under 

paragraph (b) of this section is 48 

months. Policies for reimbursement of 

general funds and interim financing 

following certain mergers, 

consolidations, and transfers of systems 

substantially in their entirety are set 

forth in 7 CFR 1717.154. 

* * * * * 

Subpart F—Construction Work Plans 

and Related Studies 

■ 3. Amend § 1710.251 by: 

■ a. Revising the first sentence of 

paragraph (b); 

■ b. Revising paragraph (c)(7); 

■ c. Revising the last sentence of 

paragraph (c)(11); 

■ d. Revising paragraph (c)(12); and 

■ e. Adding paragraph (c)(13). 

The revisions and addition read as 

follows: 

§ 1710.251 Construction work plans— 

distribution borrowers. 

* * * * * 

(b) A distribution borrower’s CWP 

shall typically cover a construction 

period of 4 years and includes all 

facilities to be constructed which are 

eligible for RUS financing, whether or 

not RUS financial assistance will be 

sought or be available for certain 

facilities. * * * 

(c) * * * 

(7) Outdoor lights; 

* * * * * 

(11) * * * To be eligible for 

financing, such equipment must be 

owned by the borrower, although it may 

be located inside or outside a 

consumer’s premises; 

(12) The cost of engineering, 

architectural, environmental, and other 

studies and plans needed to support the 

construction of facilities, when such 

cost is capitalized as part of the cost of 

the facilities; and 

(13) Other items that are specifically 

determined by RUS as being eligible for 

financing prior to inclusion in the CWP. 

■ 4. Amend § 1710.252(b) by revising 

the first sentence to read as follows: 

§ 1710.252 Construction work plans— 

power supply borrowers. 

* * * * * 

(b) Typically a power supply 

borrower’s CWP shall cover a period of 

4 years. * * * 

* * * * * 

Subpart I—Application Requirements 

and Procedures for Loans 

■ 5. Amend § 1710.501 by revising 

paragraph (a)(3) introductory text to 

read as follows: 

§ 1710.501 Loan application documents. 

* * * * * 

(a) * * * 

(3) RUS Form 740c, Cost Estimates 

and Loan Budget for Electric Borrowers. 

This form together with its attachments 

lists the construction, equipment, 

facilities, and other cost estimates from 

the construction work plan or 

engineering and cost studies. The 

projects and related costs, included on 

this form, shall be used to justify the 

loan amount and are not meant to be an 

exclusive list of those projects that 

could receive funds under this loan. In 

addition, to be included on this form, 

the project must have received written 

documentation of RUS concluding its 

environmental review. The advance of 

loan funds for projects shall be governed 

by 7 CFR part 1721. The date on page 

one (1) of the RUS Form 740c is the 

beginning date of the loan period. RUS 

Form 740c also includes the following 

information, exhibits, and attachments: 

* * * * * 

PART 1714—PRE-LOAN POLICIES 

AND PROCEDURES FOR INSURED 

ELECTRIC LOANS 

■ 6. The authority citation for part 1714 

continues to read as follows: 

Authority: 7 U.S.C. 901 et seq.; 1921 et 

seq.; and 6941 et seq. 

Subpart B—Terms of Insured Loans 

■ 7. Amend § 1714.56 by revising 

paragraphs (a) and (b) to read as follows: 

§ 1714.56 Fund advance period. 

(a) The fund advance period begins on 

the date of the loan note and will last 

no longer than five years after 

September 30 of the fifth year after the 

fiscal year of obligation. The fiscal year 

of obligation is identified in loan 

documentation associated with each 

loan. The Administrator may extend the 

fund advance period on any loan if the 

borrower meets the requirements of 

paragraph (b) of this section. However, 

under no circumstances shall the RUS 

ever make or approve an advance, 

regardless of the last day for an advance 

on the loan note or any extension by the 

Administrator, later than September 30 

of the fifth year after the fiscal year of 

obligation if such date would result in 

the RUS obligating or permitting 

advance of funds contrary to the 

Antideficiency Act, 31 U.S.C. 1341. 

(b) The Administrator may agree to an 

extension of the fund advance period for 

loans if the borrower demonstrates, to 

the satisfaction of the Administrator, 

that the loan funds continue to be 

needed for approved loan purposes (i.e., 

facilities included in a RUS approved 

construction work plan). Policies for 

extension of the fund advance period 

following certain mergers, 

consolidations, and transfers of systems 

substantially in their entirety are set 

forth in 7 CFR 1717.156. 

* * * * * 


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PART 1717—POST-LOAN POLICIES 

AND PROCEDURES COMMON TO 

INSURED AND GUARANTEED 

ELECTRIC LOANS 

■ 8. The authority citation for part 1717 

continues to read as follows: 

Authority: 7 U.S.C. 901 et seq., 1921 et 

seq., 6941 et seq. 

Subpart D—Mergers and 

Consolidations of Electric Borrowers 

§ 1717.154 [Amended] 

■ 9. Amend § 1717.154(c)(1) by 

removing the number ‘‘24’’ in the 

second sentence and adding ‘‘48’’ in its 

place. 

Subpart M—Operational Controls 

■ 10. Amend § 1717.604 by revising 

paragraphs (b) and (c) to read as follows: 

§ 1717.604 Long-range engineering plans 

and construction work plans. 

* * * * * 

(b) Applications for financing from 

RUS must be supported by a CWP 

approved by RUS. 

(c) RUS approval is not required for 

CWPs if the borrower does not intend to 

seek RUS financing for any of the 

facilities, equipment, or other purposes 

included in those plans. However, if 

requested by RUS, a borrower must 

provide an informational copy of such 

plans to RUS. 

■ 11. Amend § 1717.608 by revising 

paragraphs (b) and (c)(1) to read as 

follows: 

§ 1717.608 RUS approval of contracts. 

* * * * * 

(b) Large retail power contracts. RUS 

is required to be notified of contracts to 

sell electric power to retail customers if 

the contract is for longer than 5 years 

and the kWh sales or kW demand for 

any year covered by the contract 

exceeds 25 percent of the borrower’s 

total kWh sales or maximum kW 

demand for the year immediately 

preceding execution of the contract. The 

requirement in this paragraph (b) 

applies regardless of the source of 

funding of any plant extensions, 

additions or improvements that may be 

involved in connection with the 

contract. 

(c) * * * 

(1) Power supply contracts (including 

but not limited to economy energy sales 

and emergency power and energy sales), 

interconnection agreements, interchange 

agreements, wheeling agreements, 

pooling agreements, and any other 

similar power supply arrangements 

subject to approval by RUS are deemed 

approved if they have a term of 5 years 

or less. Amendments to said power 

supply arrangements are also deemed 

approved provided that the amendment 

does not extend the term of the 

arrangement for more than 5 years 

beyond the date of the amendment. 

* * * * * 

■ 12. Amend § 1717.616 by revising the 

introductory text and paragraph (b) to 

read as follows: 

§ 1717.616 Sale, lease, or transfer of 

capital assets. 

A borrower may, without the prior 

approval of RUS, sell, lease, or transfer 

any capital asset if the following 

conditions are met: 

* * * * * 

(b) In the most recent year for which 

data is available, the borrower has met 

its coverage ratios as set in 7 CFR part 

1710.114(b) or other financial 

requirements as established by their 

Mortgages, Loan Contracts, and/or other 

Security Agreements; 

* * * * * 

Subpart R—Lien Accommodations and 

Subordinations for 100 Percent Private 

Financing 

§ 1717.854 [Amended] 

■ 13. Amend § 1717.854(c)(2) by 

removing the number ‘‘27’’ and adding 

‘‘20’’ in its place. 

PART 1718—LOAN SECURITY 

DOCUMENTS FOR ELECTRIC 

BORROWERS 

■ 14. The authority citation for part 

1718 continues to read as follows: 

Authority: 7 U.S.C. 901 et seq., 1921 et 

seq., 6941 et seq. 

Subpart B—Mortgage for Distribution 

Borrowers 

§ 1718.54 [Amended] 

■ 15. Amend § 1718.54 introductory text 

by removing ‘‘Administrative Services 

Division.’’ 

Appendix A to Subpart B [Removed] 

■ 16. Remove appendix A to subpart B. 

Subpart C—Loan Contracts With 

Distribution Borrowers 

Appendix A to Subpart C [Removed] 

■ 17. Remove appendix A to subpart C. 

PART 1721—POST-LOAN POLICIES 

AND PROCEDURES FOR INSURED 

ELECTRIC LOANS 

■ 18. The authority citation for part 

1721 continues to read as follows: 

Authority: 7 U.S.C. 901 et seq.; 1921 et 

seq.; and 6941 et seq. 

Subpart A—Advance of Funds 

■ 19. Amend § 1721.1 by revising 

paragraph (a) to read as follows: 

§ 1721.1 Advances. 

(a) Purpose and amount. With the 

exception of minor projects which are 

addressed in paragraph (b) of this 

section and generation projects which 

need to be included on a RUS Form 

740c or an amendment to a RUS Form 

740c, loan funds will be advanced for 

projects which are included in a RUS 

approved construction work plan 

(CWP), Energy Efficiency and 

Conservation Program work plan 

(EEWP), or approved amendment to 

either, have received written 

documentation of RUS concluding its 

environmental reviews and have 

complied with all Contracting and 

Bidding Procedures included in 7 CFR 

part 1726. Loan fund advances can be 

requested in an amount representing 

actual costs incurred. 

* * * * * 

PART 1726—ELECTRIC SYSTEM 

CONSTRUCTION POLICIES AND 

PROCEDURES 

■ 20. The authority citation for part 

1726 continues to read as follows: 

Authority: 7 U.S.C. 901 et seq., 1921 et 

seq., 6941 et seq. 

Subpart A—General 

■ 21. Amend § 1726.35 by revising 

paragraphs (a), (c) introductory text, 

(c)(3), and (d) to read as follows: 

§ 1726.35 Submission of documents to 

RUS. 

(a) Where to send documents. 

Documents required to be submitted to 

RUS under this part are to be sent 

electronically to RUS, unless otherwise 

directed. 

* * * * * 

(c) Contracts requiring RUS approval. 

The borrower shall submit to RUS, one 

copy of each contract that is subject to 

RUS approval under subparts B through 

F of this part. Any contract submitted by 

the borrower contract must be 

accompanied by: 

* * * * * 

(3) One copy of an executed 

contractor’s bond on RUS approved 

bond forms as required in the contract 

form and one copy of the bid bond or 

copy of the certified check. 

* * * * * 

(d) Contract amendments requiring 

RUS approval. The borrower must 


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36198 Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Rules and Regulations 

submit to RUS, one copy of each 

contract amendment which is subject to 

RUS approval under § 1726.24(b). Each 

contract amendment submittal to RUS 

must be accompanied by a bond 

extension, where necessary. 

* * * * * 

Subpart B—Distribution Facilities 

■ 22. Amend § 1726.51 by revising 

paragraph (b) to read as follows: 

§ 1726.51 Distribution line construction. 

* * * * * 

(b) Procurement procedures. (1) It is 

the responsibility of each borrower to 

determine the procurement method that 

best meets its needs to award contracts 

in amounts of up to a cumulative total 

of $750,000 or three percent of NUP (not 

to exceed $6,000,000), whichever is 

greater, per calendar year of distribution 

line construction (including minor 

modifications or improvements), 

exclusive of the cost of owner furnished 

materials and equipment. Borrowers 

may award Cost-Plus/Hourly contracts 

as part of these borrower responsibility 

limits up to a cumulative total of 

$250,000 or one percent of NUP (not to 

exceed $2,000,000), whichever is 

greater, per calendar year of distribution 

line construction (including minor 

modifications or improvements), 

exclusive of the cost of owner furnished 

materials and equipment. 

(2) The borrower shall use formal 

competitive bidding for all other 

distribution line contract construction 

unless the RUS specifically approves an 

alternative method. The dollar amounts 

of contracts bid using the formal 

competitive bidding procedure do not 

apply to the cumulative total stipulated 

in paragraph (b)(1) of this section. 

(3) An amendment which increases 

the scope of the contract by adding a 

project is not considered competitively 

bid, therefore, the dollar amount of that 

amendment does apply to the 

cumulative total stipulated in paragraph 

(b)(1) of this section. 

* * * * * 

Subpart C—Substation and 

Transmission Facilities 

■ 23. Amend § 1726.77 by revising 

paragraphs (b) and (c) to read as follows: 

§ 1726.77 Substation and transmission 

line construction. 

* * * * * 

(b) Procurement procedures. (1) It is 

the responsibility of each borrower to 

determine the procurement method that 

best meets its needs to award contracts 

in amounts of up to a cumulative total 

of $750,000 or three percent of NUP (not 

to exceed $6,000,000), whichever is 

greater, per calendar year of substation 

and transmission line construction 

(including minor modifications or 

improvements), exclusive of the cost of 

owner furnished materials and 

equipment. Borrowers may award CostPlus/Hourly contracts as part of these 

borrower responsibility limits up to a 

cumulative total of $250,000 or one 

percent of NUP (not to exceed 

$2,000,000), whichever is greater, per 

calendar year of substation and 

transmission line construction 

(including minor modifications or 

improvements), exclusive of the cost of 

owner furnished materials and 

equipment. 

(2) The borrower shall use formal 

competitive bidding for all other 

contract construction unless RUS 

specifically approves an alternative 

method. The dollar amount of contracts 

bid using the formal competitive 

bidding procedure do not apply to the 

cumulative total stipulated in paragraph 

(b)(1) of this section. 

(3) An amendment which increases 

the scope of the contract by adding a 

project is not considered competitively 

bid, therefore, the dollar amount of that 

amendment does apply to the 

cumulative total stipulated in paragraph 

(b)(1) of this section. 

(c) Contract approval. Individual 

contracts in the amount of $750,000 or 

more or three percent of NUP (not to 

exceed $6,000,000), whichever is 

greater, exclusive of the cost of owner 

furnished materials and equipment, are 

subject to RUS approval. 

Subpart E—Buildings 

■ 24. Amend § 1726.150 by revising 

paragraph (b) to read as follows: 

§ 1726.150 Headquarters buildings. 

* * * * * 

(b) Procurement procedures. A 

borrower may use Multiparty Lump 

Sum Quotations to award contracts in 

amounts of up to a cumulative total of 

$1,500,000 or three percent of NUP (not 

to exceed $10,000,000), whichever is 

greater, per calendar year of 

headquarters construction (including 

minor modifications or improvements). 

The borrower shall use formal 

competitive bidding for all other 

headquarters contract construction 

unless RUS specifically approves an 

alternative method. 

* * * * * 

Subpart F—General Plant 

■ 25. Amend § 1726.176 by revising the 

introductory text and paragraph (b)(3) to 

read as follows: 

§ 1726.176 Communications and control 

facilities. 

This section covers the purchase of 

microwave, fiber, power line carrier, 

and other communications technologies 

or systems, including load control and 

supervisory control and data acquisition 

(SCADA) systems, automated meter 

reading/automated metering 

infrastructure (AMR/AMI), or other 

smart grid technologies. Mobile radio 

systems are covered as general plant 

materials in § 1726.175. 

* * * * * 

(b) * * * 

(3) Contract approval. Individual 

contracts in amounts of $750,000 or 

more or one percent of NUP (not to 

exceed $5,000,000 for all borrowers), 

whichever is greater, exclusive of the 

cost of owner furnished materials and 

equipment, are subject to RUS approval. 

Subpart J—Contract Closeout 

■ 26. Amend § 1726.403 by revising 

paragraph (c)(2)(ii) introductory text to 

read as follows: 

§ 1726.403 Project construction contract 

closeout. 

* * * * * 

(c) * * * 

(2) * * * 

(ii) For contracts subject to RUS 

approval, the borrower will submit 

either a certification or the following 

closeout documents for RUS approval: 

* * * * * 

PART 1730—ELECTRIC SYSTEM 

OPERATIONS AND MAINTENANCE 

■ 27. The authority citation for part 

1730 continues to read as follows: 

Authority: 7 U.S.C. 901 et seq., 1921 et 

seq., 6941 et seq. 

Subpart B—Operations and 

Maintenance Requirements 

■ 28. Revise § 1730.23 to read as 

follows: 

§ 1730.23 Review rating summary, RUS 

Form 300. 

The RUS Form 300 is available from 

RUS and shall be used when required 

by this part. 

Appendix A to Subpart B [Removed] 

■ 29. Remove appendix A to subpart B. 

PART 1767—ACCOUNTING 

REQUIREMENTS FOR RUS ELECTRIC 

BORROWERS 

■ 30. The authority citation for part 

1767 continues to read as follows: 

Authority: 7 U.S.C. 901 et seq., 1921 et 

seq., 6941 et seq. 


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Federal Register / Vol. 86, No. 129 / Friday, July 9, 2021 / Rules and Regulations 36199 

Subpart B—Uniform System of 

Accounts 

■ 31. Amend § 1767.41 by revising entry 

119 to read as follows: 

§ 1767.41 Accounting methods and 

procedures required of all RUS borrowers. 

* * * * * 

119 Special Equipment 

Special Equipment items are 

classified separately from work order 

items. The USoA provides accounting 

that differs from that used for other 

types of materials. The cost of new, 

special equipment items shall be 

capitalized at the time of purchase; it 

shall not be charged to Account 154 as 

is the case with other materials. The 

first installation cost, as well as all 

incidental costs necessary to prepare the 

equipment for use, shall be capitalized 

with the material upon purchase. All 

subsequent costs of removing, resetting, 

changing, renewing oil, and repairing 

constitute operations and maintenance 

expenses. The capitalized cost of special 

equipment items, including the first 

installation, shall be removed from the 

electric plant accounts only when the 

items are abandoned or retired from the 

system. Borrowers may request a waiver 

from the special equipment accounting 

requirements as described later in this 

section. 

Special Equipment Items include the 

following: 

1. Reclosers and Sectionalizers 

recorded in Account 365, Conductor 

and Devices 

2. Transformers, Capacitors and 

Voltage Regulators recorded in Account 

368, Line Transformers 

3. Meters, Meter Sockets, current and 

potential transformers, and other 

metering equipment recorded in 

Account 379, Meters 

4. Load Control Devices recorded in 

Account 371, Installations on 

Customers’ Premises (See Interpretation 

No. 118) 

Note: Equipment installed in a substation 

is not considered special equipment. 

Special equipment items which are 

classified as nonusable shall be 

segregated in the warehouse and retired 

from service. The Summary of Special 

Equipment Costs shall be retitled 

Summary of Special Equipment Costs 

Retired and used for this purpose. A 

journal entry reflecting this information 

shall be prepared and posted to the 

books. Since loan funds for special 

equipment, including first installation 

costs, are approved for advance by the 

Rural Development upon receipt of the 

borrower’s written estimate of funds 

required, and not on the basis of an 

Inventory of Work Orders, it is improper 

to take a credit for any salvage involved 

in the retirement of special equipment 

on the Inventory of Work Orders. 

Electric borrowers that wish to receive 

a waiver from the special equipment 

accounting requirements should submit 

a letter request to Rural Development. In 

order to expedite these requests the 

letter to Rural Development should state 

that the borrower will adhere to the 

following requirements to account for 

special equipment using the work order 

procedure rather than the special 

equipment accounting procedures 

prescribed by Rural Development: 

1. New purchases of special 

equipment items are to be charged to 

Account 154, Materials and Supplies, 

upon purchase. 

2. Labor, material and overhead costs 

associated with the initial installation 

and all subsequent installations of 

special equipment are recorded on 

construction work orders and charged to 

the appropriate plant accounts upon 

closeout of the construction work order. 

3. Labor and overhead costs 

associated with the removal of special 

equipment items, whether the items 

removed are placed in inventory or 

permanently retired and disposed of, are 

recorded on retirement work orders and 

charged or credited to the depreciation 

reserve account upon closeout of the 

retirement work order. 

4. The special equipment items 

retired and salvaged for reuse are 

returned to the materials and supplies 

account at the average material cost in 

the materials and supplies account and 

credited to the depreciation reserve 

upon closeout of the retirement work 

order. 

In addition to recognition of the 

requirements noted above, the borrower 

should indicate how it plans to account 

for the items of special equipment that 

have been charged to the plant accounts 

but not installed (in inventory). Two 

acceptable methods to account for this 

equipment are: (1) Leave the equipment 

in the plant accounts until the inventory 

is depleted and charge only new 

purchases to materials and supplies, or 

(2) credit the plant accounts for the 

installed cost of the equipment in 

inventory, charge the equipment cost to 

materials and supplies, and charge the 

installation cost to the appropriate 

operations expense account. Also, under 

the second method, the borrower must 

submit a ‘‘negative’’ special equipment 

summary to Rural Development to 

return to the balance in reserve for the 

current loan the installed cost of special 

equipment in inventory on the date of 

transition. 

* * * * * 

Christopher A. McLean, 

Acting Administrator, Rural Utilities Service. 

[FR Doc. 2021–14358 Filed 7–8–21; 8:45 am] 

BILLING CODE 3410–15–P 

FEDERAL HOUSING FINANCE 

AGENCY 

12 CFR Part Chapter XII 

[No. 2021–N–7] 

Policy Statement on Fair Lending 

AGENCY: Federal Housing Finance 

Agency. 

ACTION: Notification of approval and 

adoption of policy statement; request for 

comment. 

SUMMARY: The Federal Housing Finance 

Agency (FHFA or agency) is issuing a 

policy statement on Fair Lending 

(Policy Statement) to communicate the 

agency’s general position on monitoring 

and information gathering, supervisory 

examinations, and administrative 

enforcement related to the Equal Credit 

Opportunity Act, the Fair Housing Act, 

and the Federal Housing Enterprises 

Financial Safety and Soundness Act, 

and is soliciting comments on its 

application. 

DATES: The Policy Statement becomes 

effective on July 9, 2021. Comments 

must be received on or before 

September 7, 2021. 

FOR FURTHER INFORMATION CONTACT: 

Annalyce Shufelt, Senior Attorney 

Advisor (Fair Lending), Office of Fair 

Lending Oversight, (202) 649–3416, 

Annalyce.Shufelt@fhfa.gov, Federal 

Housing Finance Agency, Constitution 

Center, 400 7th Street SW, Washington, 

DC 20219; or Ming-Yuen Meyer-Fong, 

Associate General Counsel, Office of 

General Counsel, (202) 649–3078 (not 

toll-free numbers), Ming-Yuen.MeyerFong@fhfa.gov. The 

Telecommunications Device for the Deaf 

is (800) 877–8339. 

ADDRESSES: FHFA welcomes comments 

about application of the principles set 

out in the policy statement to specific 

policies and practices. You may submit 

your comments to FHFA, identified by 

‘‘Policy Statement; Comment Request: 

(2021–N–7)’’, by any one of the 

following methods: 

• Agency website: www.fhfa.gov/ 

open-for-comment-or-input. 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. If 


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