49386 Federal Register / Vol. 73, No. 163 / Thursday, August 21, 2008 / Proposed Rules 

CERTIFICATION AND ACCREDITATION FEE LEVELS—Continued 

Training Program Accreditation Re-accreditation (every 4 years, see 40 

CFR 745.225(f)(1) for details) 

Lead-based Paint Activities—Individual Certification Re-certification (every 3 years, see 40 CFR 

745.226(e)(1) for details) 

Inspector 

Risk assessor 

Supervisor 

Worker 

Project designer 

Tribal certification (all disciplines) 

$410 

$410 

$410 

$310 

$410 

$10 

$410 

$410 

$410 

$310 

$410 

$10 

Lead-based Paint Activities—Firm Certification Re-certification (every 3 years, see 40 CFR 

745.226(f)(7) for details) 

Firm 

Tribal Firm 

$550 

$20 

$550 

$20 

* * * * * 

[FR Doc. E8–19432 Filed 8–20–08; 8:45 am] 

BILLING CODE 6560–50–S 

DEPARTMENT OF TRANSPORTATION 

Office of the Secretary 

49 CFR Part 22 

[Docket No: OST–2008–0236] 

RIN 2105–AD50 

Short-Term Lending Program (STLP) 

AGENCY: Office of the Secretary (OST), 

Office of Small and Disadvantaged 

Business Utilization. 

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: In an effort to financially 

assist Disadvantaged Business 

Enterprises (DBEs) and other certified 

small and disadvantaged business 

(SDBs) in their execution of 

transportation related contracts at the 

local, state and federal levels, the 

Department of Transportation’s (DOT) 

Office of Small and Disadvantaged 

Business Utilization (OSDBU) has 

developed the Short-Term Lending 

Program (STLP), under which DOT 

guarantees short-term lines of credit for 

said businesses. The program is 

administered through cooperative 

agreements between DOT’s OSDBU and 

Participating Lenders and under the 

STLP’s governing policies and 

procedures. This NPRM proposes new 

rules to govern the STLP. 

DATES: Comments on the proposed rules 

must be received by October 20, 2008. 

Late comments will be considered to the 

extent practicable. 

ADDRESSES: You may submit comments 

to this rule by any of the following 

methods: 

• Agency Web site: http:// 

dms.dot.gov: Follow the instructions for 

submitting comments on the Web site. 

• Mail: Docket Management Facility; 

U.S. Department of Transportation, U.S. 

Department of Transportation, 1200 

New Jersey Ave., SE., West Building 

Ground Floor, Room 140, Washington, 

DC 20590. 

• Hand Delivery: Room 140 on the 

ground floor of the West Building 

Ground Floor, 1200 New Jersey Ave., 

SE., Washington, DC, between 9 a.m. 

and 5 p.m., Monday through Friday, 

except Federal holidays. 

• Federal eRulemaking Portal: Go to 

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

instructions for submitting comments. 

FOR FURTHER INFORMATION CONTACT: 

Nancy Strine, Financial Assistance 

Division Manager, U.S Department of 

Transportation, OSDBU, 1200 New 

Jersey Ave, SE., Room W56–497, 

Washington, DC 20590. Telephone: 

(800) 532–1169 ext. 65343 or (202) 366–

5343. 

SUPPLEMENTARY INFORMATION: 

Background 

The Director of DOT’s OSDBU has 

been delegated to carry out the 

functions vested in the Secretary of 

Transportation by section 906 of the 

Railroad Revitalization and Regulatory 

Reform Act of 1976 (Pub. L. 940–210, as 

amended) known as the Minority 

Business Resource Center Program, 

which includes a guaranteed loan 

program. 49 U.S.C. 332 authorizes 

DOT’s OSDBU to establish, under the 

Minority Resource Center, programs that 

would assist DBEs and SDBs in 

acquiring access to working capital and 

to debt financing, in order to obtain 

transportation-related contracts wholly 

or partially funded by DOT. To 

implement this authority, OSDBU 

developed its Short Term Lending 

Program (STLP) which offers DBE’s and 

other certified small and disadvantaged 

businesses short term working capital 

loans at variable interest rates to 

perform on these transportation-related 

contracts. 

Initially developed in 1989 as a direct 

loan program, the STLP was converted 

in 2001 to a loan guarantee program 

under which, private sector 

Participating Lenders (PLs) offer loans 

with a government guarantee of up to 75 

percent for qualified applicants. 

These loans are revolving lines of 

credit that provide working capital 

funds to assist the borrower in financing 

the direct labor and material costs of 

completing transportation contracts. 

The contracts that are funded are 

assigned to the loan as collateral, and 

the PL advances monies up to 85% of 

eligible and approved Accounts 

Receivable that arise from the Assigned 

Contract(s). The contracts must be 

transportation-related and receive DOT 

funding. Repayment comes in the form 

of a two-party check to the borrower and 

to the PL directly from the contract 

proceeds. The total length of time that 

an eligible borrower may remain in the 

program cannot exceed a total of five 

years. 

DOT monitors these loans, which 

require contract assignments and direct 

joint payee check remittances for 

principal repayment, through its 

relationship with the transportation 

agencies and recipients that receive 

DOT funds and the Participating 

Lenders (PLs). 

The STLP has undergone an extensive 

program review to improve its business 

processes and achieve operational and 

financial efficiencies. As part of this 

effort, DOT is proposing regulations to 

replace the internal policies and 

guidelines currently used to manage the 

program. 


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In recent years the total funds 

available for full principal amount of 

loans under the STLP has been limited 

to $18,367,000 per fiscal year. 

Section-by-Section Analysis 

The proposed regulations utilize 

objective, plain language in an attempt 

to make the regulations more 

understandable to Participating Lenders, 

Small and Disadvantaged Business 

Enterprises and other small and 

disadvantaged businesses. 

Sec. 22.1 Purpose: The purpose of 

the DOT OSDBU STLP is to provide 

financial assistance in the form of a 

short-term loan from Participating 

Lenders that is guaranteed by DOT 

OSDBU, to DBE’s and other certified 

small businesses for the execution of 

DOT funded and supported 

transportation related contracts. 

Sec. 22.3 Definitions: This section 

contains definitions of common banking 

and lending terminology as included in 

STLP documents and the STLP Policy 

and Procedure Manual. 

Sec. 22.11 Eligibility Criteria: 

Paragraph (a) defines those 

requirements needed in order to qualify 

for a STLP loan. Paragraph (b) clarifies 

what instrument qualifies as a 

‘‘transportation-related contract,’’ and 

paragraph (c) explains the maximum 

length of time in which a qualified 

business may remain as an STLP 

borrower, as well as what circumstances 

and documentation are required on an 

annual basis in order to remain eligible. 

Sec. 22.13 Loan Terms and 

Conditions: Section 22.13 describes the 

parameters of the Short Term Lending 

Program, including: maximum loan 

amount, interest rates, the term and 

structure of the loan, source of funds for 

loan repayment, allowable uses of the 

loan proceeds, how loan disbursements 

are made, as well as any personal 

guarantees, collateral or insurance. 

Sec. 22.15 Delinquency on Federal, 

State, or Municipality Debt: This section 

provides that the borrower must be 

current on all federal, state, and local 

taxes to be able to participate in the 

program. 

Sec. 22.17 Compliance with Child 

Support Obligations: Indicates that 

pursuant to the Office of Management 

and Budget (OMB) Circular No. A–129, 

Revised (Policies for Federal Credit 

Programs and Non-Tax Receivables), 

individuals that are subject to 

administrative offset to collect 

delinquent child support payments are 

not eligible for Federal financial 

assistance. Therefore, STLP applicants 

must submit a negative certification to 

this effect. 

Sec. 22.19 Credit Criteria: Section 

22.19 describes the required 

creditworthiness of an STLP applicant, 

and lists those aspects of 

creditworthiness that OSDBU will 

consider in its evaluation of an STLP 

application. 

Sec. 22.21 Participation Criteria: 

Section 22.21 describes the criteria for 

banks in order to qualify as STLP 

Participating Lenders, including 

certifications, documentation, history of 

community involvement, loan 

experience, and the ability to 

implement, monitor and manage this 

loan program. 

Sec. 22.23 Agreement: Section 22.23 

describes the Cooperative Agreement 

that is executed between U.S. DOT and 

the Participating Lender that defines the 

relationship between the two, as well as 

the responsibilities and obligations of 

each party with regard to the STLP. 

Sec. 22.25 Lender Deliverables and 

Delivery Schedule: This section 

describes the obligation of the 

Participating Lenders to adhere to 

established deadlines for actions such 

as, the submission of periodic reports 

and site visits. 

Sec. 22.27 Eligible Reimbursements 

to PLs: Section 22.27 describes the fees 

and expenses that are eligible for 

reimbursement to the Participating 

Lenders. 

Sec. 22.29 DOT OSDBU Access to 

PLs’ Files: Section 22.29 describes the 

policy that governs DOT access to 

Participating Lender records and files. 

Sec. 22.31 Suspension or Revocation 

of Eligibility to Participate: This section 

describes the circumstances under 

which the STLP eligibility of a 

Participating Lender may be suspended 

or revoked, and the notification 

procedure for such an action. 

Sec. 22.33 Termination of 

Participation in STLP: Section 22.33 

explains the situations, under which the 

cooperative agreement between DOT 

OSDBU and the Participating Lender 

may be terminated, by either party, and 

the notification procedure for such 

action. 

Sec. 22.41 Application Procedures: 

Describes the complete STLP 

application process, the supporting 

documentation that must accompany 

the STLP application, and the 

submission process of the application to 

the Participating Lender. 

Sec. 22.43 Approval or Denial: 

Section 22.43 describes what will occur 

when an application is approved or 

denied, and the method of notification. 

Sec. 22.45 Allowable Fees to 

Borrowers: This section describes those 

fees that a Participating Lender may 

collect from the borrower. 

Sec. 22.51 Loan Closing: Section 

22.51 discusses the process that the 

Participating Lender must follow for the 

closing of an STLP loan. 

Sec. 22.53 Loan Monitoring and 

Servicing Requirements: Section 22.53 

describes what is required of the 

Participating Lender insofar as the 

monitoring and servicing of an STLP 

loan. 

Sec. 22.57 Loan Reporting 

Requirements: Section 22.57 clarifies 

that the STLP loan is subject to the 

Federal Credit Reform Act of 1990, and 

describes those reporting requirements 

that a Participating Lender must 

undertake to keep DOT OSDBU 

informed of the borrower’s compliance 

with the terms of the STLP loan. 

Sec. 22.59 Loan Modifications: 

Describes the procedure that the 

Participating Lender must follow for any 

proposed modifications of the terms of 

the guarantee agreement between DOT 

OSDBU and the Participating Lender. 

Sec. 22.61 Loan Guarantee 

Extensions: Section 22.61 describes the 

process under which an extension of the 

loan guarantee extension may be 

requested and granted. 

Sec. 22.63 Loan Close Outs: Section 

22. 63 describes the process for closing 

out a loan that has been fully repaid. 

Sec. 22.65 Subordination: Section 

22.65 describes the parameters of a 

subordination of the line of credit in 

which the debt guarantee of DOT 

OSDBU has priority over any other debt 

of the borrower. 

Sec. 22.67 Delinquent Loans and 

Loan Defaults: This section describes 

the notification procedure that a 

Participating Lender must undertake 

whenever an STLP loan is delinquent. 

This section also indicates the possible 

collection or litigation processes that are 

available in the event of loan 

delinquency or default. 

Sec. 22.69 Claim Process: Section 

22.69 describes the action that the 

Participating Lender may take once all 

means for the collection of a delinquent 

debt have been exhausted. 

Regulatory Analyses and Notices 

Executive Order 12866 (Regulatory 

Planning and Review) 

This proposed rule is not a 

‘‘significant regulatory action’’ under 

section 3(f) of Executive Order 12866, 

Regulatory Planning and Review, and 

does not require an assessment of 

potential costs and benefits under 

section 6(a)(3) of the Order, as it does 

not have an annual effect on the 

economy of $100 million or more, nor 

affect the economy adversely; does not 

interfere or cause a serious 


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49388 Federal Register / Vol. 73, No. 163 / Thursday, August 21, 2008 / Proposed Rules 

inconsistency with any action or plan of 

another agency; does not materially alter 

the impact of entitlements, grants, user 

fees or loan programs; and does raise 

novel legal or policy issues. 

Executive Order 12372 

(Intergovernmental Review) 

The STLP is not subject to the 

provisions of Executive Order 12372, 

which requires intergovernmental 

consultation with state and local 

officials that would provide the nonFederal funds for, or that would be 

directly affected by, proposed Federal 

financial assistance or direct Federal 

development, as the STLP program 

facilitates the participation of small and 

disadvantaged businesses in fully or 

partially federally funded local and state 

transportation projects. 

Regulatory Flexibility Act 

In compliance with the Regulatory 

Flexibility Act (5 U.S.C. 601–612), the 

Department certifies that this rule will 

not have a significant economic impact 

on a substantial number of small 

entities. Some provisions published as a 

part of this rule are, in fact, a benefit to 

small entities. The STLP provides a loan 

guarantee for DBEs and SDBs who 

require financial assistance to perform 

on transportation-related contracts. 

Since this rule has no significant 

economic impact on a substantial 

number of small entities, a regulatory 

flexibility analysis was not performed. 

Executive Order 13132 (Federalism) 

A rule has implications for federalism 

under Executive Order 13132, 

Federalism, if it has a substantial direct 

effect on State or local governments and 

would either preempt State law or 

impose a substantial direct cost of 

compliance on them. We have analyzed 

this proposed rule under the Order and 

have determined that it does not have 

implications for federalism, as the loan 

program creates relationships and 

obligations between a borrower (usually 

a sub-contractor), a prime contractor, a 

Participating Lender and DOT/OSDBU 

only. 

Paperwork Reduction Act 

DOT/OSDBU invites public comment 

about our intention to request the Office 

of Management and Budget’s (OMB) 

approval for a new information 

collection, which is summarized below 

under Supplementary Information. We 

are required to publish this notice in the 

Federal Register by the Paperwork 

Reduction Act (PRA) of 1995. 

It is estimated that the total burden 

hours for 100 Participating Lenders to 

qualify as such, monitor loans, comply 

with monthly reporting and retain loan 

records to be approximately 8,000 hours 

per year. It is estimated that the total 

burden hours for 100 borrowers to 

complete the STLP application, with 

supporting documentation, loan 

renewals and the submission of the 

same, to be approximately 2,700 hours. 

Title: Short Term Lending Program—

Participating Lenders—Qualifying 

Criteria 

Background: OSDBU’s Short Term 

Lending Program (STLP) offers certified 

Disadvantaged Business Enterprises 

(DBEs) and other Certified Small 

Businesses (8a, women-owned, small 

disadvantaged, HubZone, veteranowned, and service-disabled veteranowned) the opportunity to obtain shortterm working capital at prime interest 

rates for transportation-related projects. 

The STLP provides up to a 75% 

guaranteed revolving line of credit for a 

maximum of $750,000 to finance 

accounts receivable arising from 

transportation-related contracts. The 

primary collateral consists of the 

proceeds of the transportation-related 

contracts. These loans are provided 

through banks that serve as STLP 

Participating Lenders (PL). 

PL Qualifying Criteria 

As a requirement for approval as a PL, 

banks must submit documentation that 

demonstrates: 

(A) Their philosophy and history of 

lending to small and disadvantaged 

businesses in their communities. As 

part of their submission, the bank must 

show these efforts in relationship to its 

overall lending portfolio. 

Respondents: 100. 

Frequency: Once. 

Estimated Average Burden per 

Response: 3 hours. 

Estimated Total Annual Burden 

Hours: 300 hours. 

(B) Their experience in administering 

monitored lines of credit, such as 

construction loans, accounts receivable 

financing, and/or contract financing for 

at least two years. Such experience 

should be held by any PL representative 

managing, reviewing or authorizing 

STLP loan portfolios. 

Respondents: 100. 

Frequency: Once. 

Estimated Average Burden per 

Response: 1⁄2 hour. 

Estimated Total Annual Burden 

Hours: 50 hours. 

(C) At least two (2) years experience 

with other federal government lending 

programs such as U.S. Small Business 

Administration (SBA), Agriculture Rural 

Development, Bureau of Indian Affairs 

(BIA), Economic Development 

Administration (EDA), Department of 

Housing and Urban Development 

(HUD), Export Import Bank of the 

United States and/or state loan 

programs. 

Respondents: 100. 

Frequency: Once. 

Estimated Average Burden per 

Response: 1⁄2 hour. 

Estimated Total Annual Burden 

Hours: 50 hours. 

(D) At least a satisfactory or better 

Community Reinvestment Act (CRA) 

rating. 

Respondents: 100. 

Frequency: Once. 

Estimated Average Burden per 

Response: 15 minutes. 

Estimated Total Annual Burden 

Hours: 25 hours. 

(E) The ability to implement, monitor 

and manage a two-party payee check 

system, in which the PL and borrower 

are joint payees of any checks paid to 

the borrower for performance under the 

assigned contract(s). 

Respondents: 100. 

Frequency: Once. 

Estimated Average Burden per 

Response: 15 minutes. 

Estimated Total Annual Burden 

Hours: 25 hours. 

(F) That it is not currently debarred or 

suspended from participation in a 

government contract or delinquent on a 

government debt by submitting a 

current SBA Form 1624 or its 

equivalent. The SBA Form 1624 is 

available at http://www.sba.gov/ 

sbaforms/sba1624.pdf. (see Appendix E) 

Respondents: 100. 

Frequency: Once. 

Estimated Average Burden per 

Response: 15 minutes. 

Estimated Total Annual Burden 

Hours: 25 hours. 

(G) That it is a drug-free workplace by 

executing a Certification of Compliance 

concerning a drug-free workplace. The 

Certification is provided by OSDBU. 

(see Appendix C) 

Respondents: 100. 

Frequency: Once. 

Estimated Average Burden per 

Response: 15 minutes. 

Estimated Total Annual Burden 

Hours: 25 hours. 

(H) That no Federal funds will be 

utilized for lobbying by executing a 

Certificate Regarding Lobbying in 

compliance with Section 1352, Title 21, 

of the U.S. Code. The Certificate is 

provided by OSDBU. (see Appendix D) 

Respondents: 100. 

Frequency: Once. 

Estimated Average Burden per 

Response: 15 minutes. 

Estimated Total Annual Burden 

Hours: 25 hours. 


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PL Record Retention 

A PL must allow the authorized 

representatives of OSDBU, as well as 

representatives of the Office of Inspector 

General (OIG) and General 

Accountability Office (GAO), access to 

its STLP loan files to review, inspect, 

and copy all records and documents 

pertaining to OSDBU guaranteed loans. 

The PL shall retain all documents, files, 

books, and records relevant to the 

execution and implementation of the 

terms of their Cooperative Agreement 

with OSDBU for a period of not less 

than three years from the date of 

termination of the Cooperative 

Agreement or payment in full from the 

borrower; except, if any litigation, 

collection action, or audit is 

commenced. In these cases, records and 

other materials shall be retained until 

the litigation, collection action, or audit 

is judicially or administratively final. 

Respondents: 100. 

Frequency: Annually. 

Estimated Average Burden per 

Response: 1⁄2 hour. 

Estimated Total Annual Burden 

Hours: 50 hours. 

PL Reporting Requirements 

The STLP is subject to the 

requirements of the Federal Credit 

Reform Act of 1990 (FCRA) that 

includes certain budgeting and 

accounting requirements for Federal 

credit programs. The PL must undertake 

processes to activate, monitor, service 

and close-out STLP loans. To fulfill the 

requirements of FCRA, the PL must 

submit regular reports and required 

documentation to OSDBU on these 

processes. 

(A) Loan Activation: The PL must 

submit to OSDBU a Loan Activation 

Form that indicates the date in which 

the loan has been activated/funded. The 

form is provided by OSDBU. (see 

Appendix A) 

Respondents: 100. 

Frequency: Annually, up to five years. 

Estimated Average Burden per 

Response: 1⁄2 hour. 

Estimated Total Annual Burden 

Hours: 50 hours. 

(B) Loan Close-out: The PL must 

submit to OSDBU a Loan Close-out 

Form upon full repayment of the STLP 

loan, or upon expiration of the loan 

guarantee. The form is provided by 

OSDBU. (See Appendix B.) 

Respondents: 100. 

Frequency: Annually. 

Estimated Average Burden per 

Response: 1⁄2 hour. 

Estimated Total Annual Burden 

Hours: 50 hours. 

(C) Monthly Reporting Requirement: 

PL must submit each month to OSDBU 

a status report of pending loans and 

guaranteed loans including the previous 

month’s activity for these loans. The 

forms are provided by OSDBU. 

Respondents: 100. 

Frequency: Monthly. 

Estimated Average Burden per 

Response: 1 hour. 

Estimated Total Annual Burden 

Hours: 1200 hours. 

(D) Call Reports or Thrift Financial 

Reports: PLs shall provide two copies of 

their quarterly Reports of Condition and 

Income (Federal Financial Institutions 

Examination Council—FFIEC Form 

041), or quarterly Thrift Financial 

Reports (Office of Thrift Supervision— 

OTS Form 1313) within 60 days after 

the close of each calendar quarter. 

Respondents: 100. 

Frequency: Quarterly. 

Estimated Average Burden per 

Response: 15 minutes. 

Estimated Total Annual Burden 

Hours: 100 hours. 

(E) Credit verification: When a PL 

submits to OSDBU an approved loan 

package, the same must be accompanied 

by the PL’s internal credit approval 

memo, credit analysis, and any other 

third-party credit verifications obtained 

for the processing of the loan 

application. 

Respondents: 100. 

Frequency: For each loan submitted 

(minimum 1, approximate maximum 5). 

Estimated Average Burden per 

Response: 12 hours. 

Estimated Total Annual Burden 

Hours: (1200, 6000). 

(F) Loan Guarantee Extension: An 

extension of the original loan guarantee 

for a maximum period of ninety (90) 

days may be requested, in writing, by 

the PL using the STLP Extension 

Request Form. The form is provided by 

OSDBU. (See Appendix F.) 

Respondents: 100. 

Frequency: Annually. 

Estimated Average Burden per 

Response: 1⁄2 hour. 

Estimated Total Annual Burden 

Hours: 50 hours. 

Loan Application Process—Loan 

Renewal 

A current STLP participant may 

submit a guaranteed loan renewal 

application package, comprised of an 

updated loan application, with 

supporting documentation. 

(A) Updated loan application form. 

The application may be obtained 

directly from OSDBU, from a current 

PL, or online from the agency’s Web site 

currently at http://osdbu.dot.gov/ 

documents/pdf/stlp/stlpapp.pdf. 

Respondents: 100. 

Frequency: Annually, up to five years. 

Estimated Average Burden per 

Response: 8 hours. 

Estimated Total Annual Burden 

Hours: 800 hours. 

(B) Application supporting 

documentation. Supporting 

documentation may include, but is not 

limited to, the following items: 

a. Current job performance reference 

letter (within the past 12 months); 

b. Evidence of current DBE and/or 

other eligible certification; 

c. Business tax returns for the most 

recent fiscal year; 

d. Business financial statements for 

the most recent fiscal year; 

e. If the business’ last fiscal year has 

ended longer than 90 days at the time 

of application, then applicant must 

submit interim business financial 

statements to include balance sheet, 

P&L and updated aging reports of both 

receivables and payables; 

f. Current work in progress schedule 

or statement; 

g. Personal income tax returns; 

h. Personal financial statements; 

i. Signed and dated copy of 

transportation-related contracts to be 

used as collateral; and 

j. Updated cash flow projections; 

Respondents: 100. 

Frequency: Annually, up to five years. 

Estimated Average Burden per 

Response: 4 hours. 

Estimated Total Annual Burden 

Hours: 400 hours. 

New Loan Application Process 

A potential STLP participant must 

submit a guaranteed loan application 

package, comprised of a loan 

application, with supporting 

documentation. 

(A) Completed loan application form. 

The application may be obtained 

directly from OSDBU, from a current 

PL, or online from the agency’s Web site 

currently at http://osdbu.dot.gov/ 

documents/pdf/stlp/stlpapp.pdf. 

Respondents: 100. 

Frequency: Once. 

Estimated Average Burden per 

Response: 2 hours. 

Estimated Total Annual Burden 

Hours: 200 hours. 

(B) New loan application supporting 

documentation may include, but is not 

limited to, the following items: 

a. Business, trade or job performance 

reference letters; 

b. DBE or other eligible certification 

letters; 

c. Signed and dated borrower 

certification that all federal, state and 

local taxes are current; 

d. Business tax returns; 

e. Business financial statements; 

f. Personal income tax returns; 


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49390 Federal Register / Vol. 73, No. 163 / Thursday, August 21, 2008 / Proposed Rules 

g. personal financial statements; 

h. Schedule of work in progress; 

i. Signed and dated copy of 

transportation-related contracts to be 

used as collateral; 

j. Business debt schedule; 

k. Income and cash flow projections; 

l. Evidence of bonding and insurance. 

Respondents: 100. 

Frequency: Once. 

Estimated Average Burden per 

Response: 12 hours. 

Estimated Total Annual Burden 

Hours: 1200 hours. 

(e) Loan package submission: 

Application packages are submitted 

directly to a PL in the applicant’s 

geographic area. The list of PLs is 

available on the OSDBU Web site: 

http://osdbu.dot.gov/ 

Default.aspx?tabid=72. In the event that 

there is no PL in the applicant’s 

geographic area, the loan application 

package may be sent directly to OSDBU 

at 400 Seventh Street, SW., Room 9414, 

S–40, Attention STLP, Washington, DC 

20590. 

Respondents: 100. 

Frequency: Once. 

Estimated Average Burden per 

Response: 1 hour. 

Estimated Total Annual Burden 

Hours: 100 hours. 

Public Comments Invited: You are 

asked to comment on any aspect of this 

information collection, including: (1) 

Whether the proposed collection is 

necessary for the OSDBU’s performance; 

(2) the accuracy of the estimated 

burdens; (3) ways for OSDBU to 

enhance the quality, usefulness, and 

clarity of the collected information; and 

(4) ways that the burdens could be 

minimized without reducing the quality 

of the collected information. The agency 

will summarize and/or include your 

comments in the request for OMB’s 

clearance of this information collection. 

Authority: The Paperwork Reduction Act 

of 1995; 44 U.S.C. Chapter 35, as amended; 

and 49 CFR 1.48. 

List of Subjects in 49 CFR Part 22 

Loan programs—Business and 

Industry, Programs, Small Business, 

Transportation, Commerce. 

Issued this 24th day of July, 2008, at 

Washington, DC. 

Mary E. Peters, 

Secretary of Transportation. 

For the reasons set forth in the 

preamble, 49 CFR part 22 is proposed to 

be added to read as follows: 

PART 22—SHORT-TERM LENDING 

PROGRAM (STLP) 

Subpart A—General 

Sec. 

22.1 Purpose. 

22.3 Definitions. 

Subpart B—Policies Applying to STLP 

Loans 

22.11 Eligibility criteria. 

22.13 Loan terms and conditions. 

22.15 Delinquency on Federal, State, and 

municipal debt. 

22.17 Compliance with child support 

obligations. 

22.19 Credit criteria. 

Subpart C—Participating Lenders 

22.21 Participation criteria. 

22.23 Agreements. 

22.25 Lender deliverables and delivery 

schedule. 

22.27 Eligible reimbursements to PLs. 

22.29 DOT OSDBU access to PL files. 

22.31 Suspension or revocation of 

eligibility to participate. 

22.33 Termination of participation in the 

STLP. 

Subpart D—Loan Application Process 

22.41 Application procedures. 

22.43 Approvals and denials. 

22.45 Allowable fees to borrowers. 

Subpart E—Loan Administration 

22.51 Loan closings. 

22.53 Loan monitoring & servicing 

requirements. 

22.57 Loan reporting requirements. 

22.59 Loan modifications. 

22.61 Loan guarantee extensions. 

22.63 Loan close outs. 

22.65 Subordination. 

22.67 Delinquent loans and loan defaults. 

22.69 Claims process. 

Appendix A to Part 22—Bank Verification 

Loan Activation Form 

Appendix B to Part 22—Bank 

Acknowledgement Loan Close-out Form 

Appendix C to Part 22—Drug-Free Workplace 

Act Certification 

Appendix D to Part 22—Certification 

Regarding Lobbying 

Appendix E to Part 22—Certification 

Regarding Debarment, Suspension 

Appendix F to Part 22—Bank Verification 

Extension Request Form 

Appendix G to Part 22—Cooperative 

Agreement 

Appendix H to Part 22—Guarantee 

Agreement 

Authority: 49 U.S.C. 332. 

Subpart A—General 

§ 22.1 Purpose. 

The purpose of the DOT OSDBU 

STLP is to provide financial assistance 

in the form of a short-term loan from 

Participating Lenders that is guaranteed 

by DOT OSDBU, to DBE’s and SDBs for 

the execution of DOT funded and 

supported transportation related 

contracts. 

§ 22.3 Definitions. 

Accounts Receivable means monies 

that are due to the borrower for work 

performed or services rendered under a 

contract, subcontract, or purchase order. 

Activation Date means the date that 

the STLP loan is established on the PL’s 

books and recorded as an open loan. It 

is also the date that the borrower can 

begin to drawn funds form the line of 

credit. Activation date is also the date 

in which the DOT OSDBU guarantee 

becomes effective. 

Assigned Contract means the 

transportation-related contract(s), 

subcontract(s), and/or purchase order(s) 

that has been pledged as collateral to a 

STLP loan and perfected through an 

assignment form executed by all 

appropriate parties. 

Borrower is the obligor of a DOT 

OSDBU guaranteed loan. 

Cooperative agreement is the written 

agreement between DOT OSDBU and a 

PL that outlines the terms and 

conditions under which the lender may 

submit eligible loan requests to DOT 

OSDBU for consideration of its loan 

guarantee. The cooperative agreement 

further outlines the responsibilities and 

requirements of the lender in order to 

participate in the STLP. 

Director means Director, Office of 

Small and Disadvantaged Business 

Utilization, U.S. Department of 

Transportation. 

Disadvantaged business enterprise or 

DBE means a business that is certified 

as such by a recipient of DOT financial 

assistance as provided in 49 CFR part 23 

or 49 CFR part 26. 

Guarantee Agreement means DOT 

OSDBU’s written agreement with a PL 

that provides the terms and conditions 

under which DOT OSDBU will 

guarantee a STLP loan. It is not a 

contract to make a direct loan to the 

borrower. 

Loan Guarantee means the agreement 

of DOT OSDBU to issue a guarantee of 

payment of a specified portion of an 

approved STLP loan to the PL, under 

DOT OSDBU stated terms and 

conditions, in the event that the 

borrower defaults on the loan. 

Loan purpose means the approved 

uses for STLP loan proceeds. That is, 

only for short-term working capital 

needs related to the direct costs of an 

eligible transportation-related contract. 

Other Eligible Certifications mean the 

following certifications obtained by a 

borrower through the U.S. Small 

Business Administration (SBA): Small 

Disadvantaged Business (SDB); Section 

8(a) Program participant; HUBZONE 

Empowerment Contracting Program; 

and Service-Disabled Veteran Program 

(SDV). 

Participating Lender (PL) is a bank or 

other lending institution that has agreed 

to the terms of a cooperative agreement 

and has been formally accepted into the 

STLP by DOT OSDBU. 


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Small and disadvantaged business 

(SDB) includes 8(a); small 

disadvantaged business; women-owned 

business, HubZone, and servicedisabled veteran-owned business. 

Socially and economically 

disadvantaged individual has the same 

meaning as stated in 49 CFR 26.5. 

Technical Assistance means service 

provided by the PL to the DBE or SDB 

that will enable the DBE or SDB to 

become more capable of managing its 

transportation-related contracts. 

Technical assistance can be provided by 

collaborating with agencies that offer 

small business management counseling 

such as the SBA, the U.S. Department of 

Commerce’s Minority Business 

Development Centers (MBDCs), the 

Service Corps of Retired Executives 

(SCORE), Procurement Technical 

Assistance Centers (PTACs), and Small 

Business Development Centers (SBDCs). 

Transportation-related contract 

means a contract, subcontract, or 

purchase order, at any tier, for the 

maintenance, rehabilitation, 

restructuring, improvement, or 

revitalization of any of the nation’s 

modes of transportation that receive 

DOT funding. 

Work-out means a plan that offers 

options to avoid loan default or 

collateral foreclosure and/or liquidation 

that is intended to resolve delinquent 

loans or loans in imminent default, 

which may include, but not limited to: 

deferring or forgiving principal or 

interest, reducing the borrower’s interest 

rate, extending the loan maturity and 

the government guarantee to the PL, or 

postponing collection action. 

Subpart B—Policies Applying to STLP 

Loans 

§ 22.11 Eligibility criteria. 

(a) Eligible borrower. To be eligible to 

apply for a STLP loan guarantee, a 

borrower must meet the following 

requirements: 

(1) Be a for-profit entity; 

(2) Have an eligible transportationrelated contract; 

(3) Demonstrate an eligible use for the 

desired credit; 

(4) Be an established business with 

experience in the transportation 

industry and trade for which the STLP 

loan is sought; 

(5) Be certified as a DBE or have 

another eligible certification issued by 

the SBA; and 

(6) Be current on all federal, state, and 

local tax liabilities. 

(b) Eligible Transportation-related 

Contract. Any fully-executed 

transportation-related contract, 

subcontract, or purchase order held 

directly with DOT or with grantees and 

recipients receiving federal funding 

from DOT for the maintenance, 

rehabilitation, restructuring, 

improvement or revitalization of any of 

the nation’s modes of transportation 

shall be considered an eligible contract. 

(c) Eligibility Period. A borrower is 

eligible for participation in the STLP for 

a period up to a total of five (5) years. 

The STLP renewal is not automatic. The 

borrower has to demonstrate its 

continued eligibility and 

creditworthiness for STLP and must 

submit a complete application package. 

(1) The continued eligibility of any 

borrower who would exceed the period 

limit in paragraph (c) of this section will 

be determined on a case-by-case basis 

by the OSDBU Director and is subject to 

the following provisions: 

(i) The STLP loan guarantee may be 

reduced; and 

(ii) The STLP loan interest rate may 

be increased. 

(2) Should any borrower currently in 

the STLP become ineligible per 

paragraph (a) of this section during the 

term of a STLP loan, the failure to 

comply with a specific requirement 

must be brought to the immediate 

attention of all remaining parties. 

(3) Borrower ineligibility may result 

in a termination of the current 

guarantee. 

§ 22.13 Loan terms and conditions. 

(a) Amount. The maximum face 

amount for an individual STLP loan 

may not exceed seven hundred and fifty 

thousand ($750,000) dollars, unless the 

requested increased amount is 

authorized by the OSDBU Director. 

(b) Interest Rates. All STLP loans 

shall have a variable interest rate. 

(1) Initial Interest Rate. The base rate 

guideline for STLP loans is the prime 

rate in effect on the first business day of 

the month in which the STLP loan 

guarantee is approved by DOT OSDBU. 

The prime rate is the rate printed in a 

national financial newspaper published 

each business day. The PL may increase 

the base rate by the maximum allowable 

percentage points currently allowed by 

STLP policies and procedures and as 

communicated in subsequent DOT 

OSDBU notices. 

(2) Frequency of Change. The first 

change may occur on the first calendar 

day of the month following the initial 

loan disbursement, using the above base 

rate in effect on the first business day of 

the month. Subsequent interest rate 

changes may occur no more than 

monthly. 

(c) Loan Structure and Term. A STLP 

loan shall be set up as a revolving line 

of credit. The line permits the borrower 

to request principal advances, pay them 

back, and then re-borrow, not to exceed 

the face value of the line of credit. PLs 

are required to provide DOT OSDBU 

written notification of the activation 

date of each line of credit under the 

STLP. The term of the federal guarantee 

of the line of credit commences on the 

activation date. 

(d) Repayment. Interest payments 

must be made monthly. The principal of 

the loan is repaid as payment from 

approved accounts receivable are 

received by the PL through a joint payee 

check system. The assigned contract 

supporting the STLP loan is the primary 

source of repayment. 

(e) Use of Loan Proceeds. STLP loans 

must be used to finance short-term 

working capital needs, specifically 

direct costs generated by the assigned 

contract. Proceeds may not be used for 

the following purposes: 

(1) For long term working capital; 

(2) To repay delinquent State or 

Federal withholding taxes, local taxes, 

sales taxes or similar funds that should 

be held in trust or escrow; and/or 

(3) To provide funds for the 

distribution or payment to the owners, 

partners or shareholders of the business; 

and/or 

(4) To retire short or long-term debt. 

(f) Non-compliance by the DBE in 

using the STLP loan for purposes not 

consistent with these regulations will 

result in a non-renewal of the STLP loan 

and in forfeiture of the STLP loan 

guarantee to the PL on any ineligible 

principal advances requested by the 

borrower and made by the PL. 

(g) Disbursements. STLP funds may 

only be released to an eligible borrower 

upon the submission and verification of 

a valid written accounts receivable 

invoice, showing labor and/or materials 

amounts due for completed work on the 

contract. The PL must verify the 

accuracy of the invoice with the paying 

transportation government agency, if the 

borrower is a prime contractor, and/or 

with the prime contractor, if the 

borrower is a subcontractor. This 

verification must be obtained by the PL 

prior to advancing funds. No more than 

85% of an approved accounts receivable 

invoice shall be advanced to the 

borrower by the PL. 

(1) Processing time. Disbursement of 

STLP funds to the borrower should be 

accomplished within three (3) business 

days of an accounts receivable invoice 

approval by the paying agency and/or 

prime contractor. 

(2) Electronic funds transfer. If the 

disbursement of STLP funds is being 

sent to the borrower through a local 

participating PL, the disbursement 

should be made by electronic funds 


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transfer with the preferred method of 

payment being the Automated Clearing 

House (ACH) system. 

(3) Wire transfers. Wire transfers can 

be used if the ACH system is not 

available or if a same day disbursement 

is required. 

(4) Joint payee check system. A twoparty payee check system is required in 

which the PL and the borrower will be 

the co-payees of any checks paid to the 

borrower for performance under the 

assigned contract. Alternative payment 

methods must have prior written 

approval by DOT OSDBU. 

(h) Personal Guarantees. Individuals 

who own at least a 20% ownership 

interest in the borrower shall personally 

guarantee the STLP loan. DOT OSDBU, 

in its discretion and in consulting with 

the PL, may require other appropriate 

guarantees for the loan as well. 

(i) Collateral. All advances under the 

STLP loan must be secured, at a 

minimum, by the assignment of the 

proceeds due under the transportationrelated contract(s) being funded with 

loan proceeds (the Assigned Contract). 

The PL must have first lien position on 

the Accounts Receivable generated by 

the Assigned Contract. The PL and/or 

DOT OSDBU may request additional 

collateral on any loan request or loan 

guarantee request in order to mitigate 

the credit risk and reduce potential 

defaults and loan losses. 

(j) Key person life insurance. The 

assignment of existing life insurance 

policies of personal guarantors or other 

individuals critical to the borrower’s 

operations may be required by the PL 

and/or DOT OSDBU in certain 

instances; and it is encouraged for those 

business applicants that do not have a 

management succession plan clearly in 

place or where a personal guarantee 

provides nominal financial strength to 

the credit. 

§ 22.15 Delinquency on Federal, State, or 

municipality debt. 

(a) The borrower must not be 

delinquent on any Federal, State, or 

municipality debt, including tax debts. 

Further, none of the principals and/or 

owners of the borrower can be 

delinquent on any federal, state, or 

municipality debt, including personal 

tax debt. The borrower must 

acknowledge its status in writing as part 

of any STLP loan guarantee application. 

PLs and the DOT OSDBU must verify 

the borrower’s status through the use of 

business and personal credit reports, as 

well as other appropriate federal and 

state databases. 

(b) If any delinquencies are 

determined during the application 

process, consideration of the request 

must be suspended until the 

delinquency is satisfactorily resolved, as 

determined and approved by the 

Director. If the delinquency cannot be 

resolved within a reasonable amount of 

time, the loan request must be declined. 

§ 22.17 Compliance with child support 

obligations. 

Any holder of 50% or more of the 

ownership interest in the recipient of a 

STLP Loan must certify that he or she 

is not more than 60 days delinquent on 

any obligation to pay child support 

arising under: 

(a) An administrative order; 

(b) A court order; 

(c) A repayment agreement between 

the holder and a custodial parent; or 

(d) A repayment agreement between 

the holder and a State agency providing 

child support enforcement services. 

§ 22.19 Credit criteria. 

An applicant for a STLP loan must be 

creditworthy and demonstrate an ability 

to repay the loan as well as satisfactory 

handling of the repayment of past and 

current debts. The PL and DOT OSDBU 

shall consider: 

(a) Character, reputation, and credit 

history of the applicant, its principals 

and owners, and all other guarantors; 

(b) Experience and depth of key 

management in the industry; 

(c) Financial strength of the business; 

(d) Past earnings, projected earnings 

and cash flow, and work in progress; 

(e) Ability to repay the loan; 

(f) Sufficient equity to operate on a 

sound financial basis; and 

(g) Capacity to perform under the 

transportation-related contract(s). 

Subpart C—Participating Lenders 

§ 22.21 Participation criteria. 

A lender who participates in the STLP 

must meet the following criteria: 

(a) It must operate as a lending 

institution certified by the Federal 

Deposit Insurance Corporation (FDIC), 

Federal Reserve Board, Office of the 

Comptroller of the Currency, Office of 

Thrift Supervision, Community 

Development Corporation (CDC), or 

Community Development Financial 

Institution (CDFI), for at least five (5) 

years; 

(b) It must demonstrate a philosophy 

and history of lending to small, 

disadvantaged and women-owned 

businesses in their communities. 

Information will be requested by the 

Director on the number of short-term 

loans made to companies listed in 

§ 22.11(a)(5). The PL shall submit 

information showing its efforts in 

relationship to its overall portfolio; 

(c) It must demonstrate experience in 

administering monitored lines of credit, 

such as construction loans, accounts 

receivable financing, and/or contract 

financing. for at least two years. Such 

experience should be held by any PL 

representative managing, reviewing or 

authorizing STLP loan portfolios; 

(d) It must have at least two (2) years 

experience with other federal 

government lending programs such as 

U.S. Small Business Administration 

(SBA), Agriculture Rural Development, 

Bureau of Indian Affairs (BIA), 

Economic Development Administration 

(EDA), Department of Housing and 

Urban Development (HUD), Export 

Import Bank of the United States and/ 

or state loan programs. 

(e) It must have at least a satisfactory 

or better Community Reinvestment Act 

(CRA) rating; 

(f) It must designate a PL 

representative to effectively administer 

the STLP loan portfolio; 

(g) It must have the ability to evaluate, 

process, close, disburse, service and 

liquidate STLP loans; 

(h) It must demonstrate the ability to 

implement, monitor and manage a twoparty payee check system, in which the 

PL and borrower are joint payees of any 

checks paid to the borrower for 

performance under the assigned 

contract(s); 

(i) It must submit a current SBA Form 

1624 or equivalent, stating that the 

lender is not currently debarred or 

suspended from participation in a 

government contract or delinquent on a 

government debt (see appendix E to part 

22); 

(j) It must execute a certification of 

compliance concerning a drug-free 

workplace (see Appendix C to Part 22); 

and 

(k) It must execute a Certificate 

Regarding Lobbying in compliance with 

Section 1352, Title 21, U.S. Code (see 

appendix D to part 22). 

§ 22.23 Agreements. 

(a) DOT OSDBU may enter into a 

cooperative agreement with a lender 

that meets the criteria defined in § 22.21 

in order for the lender to become a 

participant in the STLP. Such an 

agreement does not obligate DOT 

OSDBU to participate in any specific 

proposed loan that a lender may submit. 

The existence of a cooperative 

agreement does not limit the rights of 

DOT OSDBU to deny a specific loan or 

establish general policies. (See appendix 

G to part 22 ). 

(b) The cooperative agreement is 

generally for a minimum period of 

twenty-four (24) months. DOT OSDBU 

will consider the cooperative agreement 

for renewal at the end of the designated 

term. If a cooperative agreement has 


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expired, no further applications for the 

STLP shall be submitted to DOT OSDBU 

by the PL until a new cooperative 

agreement is executed by both parties. 

(c) Unless instructed otherwise by 

DOT OSDBU, after the expiration of the 

cooperative agreement, the PL will 

complete the documentation of any 

loans which have been given final DOT 

OSDBU approval prior to expiration of 

the cooperative agreement. 

(d) Following the expiration of the 

cooperative agreement, the PL may, 

subject to the written concurrence of 

DOT OSDBU, sell its STLP loans to 

another bank or to another PL that 

assumes the original rights and 

responsibilities to fund, service and 

collect the loan or loans. 

§ 22.25 Lender deliverables and delivery 

schedule. 

All PLs must adhere to certain 

required periodic reports, submissions, 

and other actions that are outlined in 

the cooperative agreement and the loan 

guarantee agreements, as well as to the 

required due dates to DOT OSDBU. 

§ 22.27 Eligible reimbursements to PLs. 

PLs will be reimbursed by DOT 

OSDBU for reasonable expenses and 

costs that are incurred in the processing, 

administration, and monitoring of a 

STLP loan. The PL will be reimbursed 

as follows: 

(a) Processing/Underwriting fee. A fee, 

as specified in the cooperative 

agreement will be reimbursed by DOT 

OSDBU, with a minimum fee of not less 

than one thousand ($1,000), per 

approved STLP loan guarantee, 

provided that DOT OSDBU receives 

proper notification of the activation date 

of the STLP loan. 

(b) Additional Administrative fee: For 

total loan amounts of $150,000.00 or 

less, the PL can request an additional 

one-half (1⁄2) percent administrative fee 

for the increased loan monitoring and 

administrative assistance required to 

process the loan. The request must be 

supported with the information 

specified in the cooperative agreement. 

(c) Travel expenses. For any preapproved travel expenses, the PL will be 

reimbursed for certain costs, provided 

that paragraphs (c)(1), (2), and (3) of this 

section are met: 

(1) A written request for travel, along 

with a statement of the purpose of the 

travel and proposed cost estimate, is 

submitted for DOT OSDBU for its 

approval no less than ten (10) business 

days prior to travel; and 

(2) A travel invoice accompanied by 

a written report explaining the findings 

of the travel is submitted to DOT 

OSDBU no later than thirty (30) days 

following the approved travel. 

(3) Payment or reimbursement for 

travel shall be in accordance with the 

Joint Travel Regulations, Federal Travel 

Regulations and DOD FAR 31.205.46. 

(d) Attorney fees. Legal fees incurred 

by the PL may be eligible for 

reimbursement. Prior written approval 

from DOT OSDBU is required. Attorney 

fees will be reimbursed on a pro-rata 

basis in proportion to the percentage of 

the government loan guarantee in 

relation to the total loan amount. 

§ 22.29 DOT OSDBU access to PLs files. 

A PL must allow the authorized 

representatives of DOT OSDBU, as well 

as representatives of the Office of 

Inspector General (OIG) and General 

Accountability Office (GAO), access to 

its STLP loan files to review, inspect, 

and copy all records and documents 

pertaining to DOT OSDBU guaranteed 

loans. Record retention of all relevant 

documents and other materials is 

specified in the cooperative agreement 

between DOT OSDBU and the PL. 

§ 22.31 Suspension or revocation of 

eligibility to participate. 

(a) DOT OSDBU may suspend or 

revoke the eligibility of a PL to 

participate in the STLP by giving 

written notice in accordance with the 

terms and conditions cited in the 

cooperative agreement. Such notice may 

be given because of a violation of DOT 

OSDBU regulations; a breach of any 

agreement with DOT OSDBU; a change 

of circumstance resulting in the PL’s 

inability to meet operational 

requirements; or a failure to engage in 

prudent lending practices. A suspension 

or revocation will not invalidate a loan 

guarantee previously approved by DOT 

OSDBU, providing that the specific loan 

was handled in accordance with its 

guarantee agreement, the cooperative 

agreement and/or these regulations. 

(b) The written notice to suspend or 

revoke participation in the STLP will 

specify the corrective actions that the PL 

must take, as well as the time period 

allowed for cure, prior to DOT OSDBU 

considering a termination of the 

cooperative agreement. 

§ 22.33 Termination of participation in the 

STLP. 

(a) DOT OSDBU Termination for 

Convenience. DOT OSDBU may 

terminate a cooperative agreement for 

the convenience of the government, and 

without cause, upon prior written notice 

of thirty (30) days of its intent to 

terminate. Upon termination, DOT 

OSDBU shall remain liable on the prorata share of the loan guarantee(s) 

received by the PL which received the 

Director’s final approval, prior to the 

effective date of termination. 

(b) Participating Lender’s 

Termination. The PL may terminate a 

cooperative agreement with written 

notice of sixty (60) days to DOT OSDBU 

of its intent to terminate. Upon 

termination, DOT OSDBU shall remain 

liable on the pro-rata share of the loan 

guarantee(s) received by the PL which 

received the Director’s final approval, 

prior to the effective date of termination. 

(c) DOT OSDBU Termination for 

Cause. DOT OSDBU may terminate a 

cooperative agreement, in whole or in 

part, at any time before the expiration of 

the term of the cooperative agreement or 

the expiration of any renewal term of 

the cooperative agreement, and without 

allowing any cure period as described in 

§ 22.23 of this part, if it determines that 

the PL failed to comply with any terms 

and conditions of its cooperative 

agreement and such failure cannot be 

reasonably addressed. DOT OSDBU 

shall promptly notify the PL in writing 

of this determination and the reasons for 

the termination, together with the 

effective date of termination. 

(d) DOT OSDBU may also terminate 

for cause any cooperative agreement 

with a PL that fails to comply with the 

corrective actions requested in a written 

notice of suspension of revocation 

within the specified cure period, in 

accordance with the terms and 

conditions further described in the 

cooperative agreement. 

Subpart D—Loan Application Process 

§ 22.41 Application procedures. 

(a) A STLP loan guarantee request 

application package shall consist of the 

DOT OSDBU Application for Loan 

Guarantee and supporting 

documentation as outlined below at (b). 

The application can be obtained directly 

from the office of DOT OSDBU, from a 

current PL, or online from the agency’s 

Web site currently at http:// 

osdbu.dot.gov/documents/pdf/stlp/ 

stlpapp.pdf. 

(b) Supporting documentation may 

include, but is not limited to, the 

following items: Business, trade or job 

performance reference letters; current 

DBE or SDB eligibility certification 

letters and/or affidavit; signed and dated 

borrower certification that all federal, 

state and local taxes are current; 

business tax returns; business financial 

statements; personal income tax returns; 

personal financial statements; schedule 

of work in progress; signed and dated 

copy of transportation-related contracts; 

business debt schedule; income and 

cash flow projections; and evidence of 

bonding and insurance. It also includes, 

from the PL, the lender’s internal credit 


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approval memo and analysis; and other 

third-party credit verifications obtained. 

(c) Application packages are 

submitted directly to a PL, which will 

perform its own credit review. The PL 

must initially approve or decline the 

loan based upon its internal analysis of 

the request. Loans approved by the PL 

are then forwarded to DOT OSDBU for 

its STLP eligibility review and 

independent credit review, and for 

presentation to the DOT OSDBU Loan 

Committee. All loan approvals shall 

require the final approval of the 

Director, or the Director’s designee, for 

the issuance of a Government Loan 

Guarantee. 

§ 22.43 Approval or denial. 

If a loan guarantee is approved by 

DOT OSDBU, a Guarantee Agreement 

will be issued to the PL. If a loan 

guarantee is declined by the PL, the PL 

is responsible for communicating the 

reasons for the decline to the applicant. 

If a loan guarantee is declined by the 

DOT OSDBU, DOT OSDBU will be 

responsible for communicating the 

reasons for the decline to the applicant. 

The PL must notify the applicant, in 

writing, the reasons for the decline; and 

a copy of this notification must be sent 

to DOT OSDBU. (see form DOT # F 

2314–1) 

§ 22.45 Allowable fees to borrowers. 

(a) Application fees. The PL may 

charge the applicant a non-refundable 

loan application fee, as determined from 

time to time by DOT OSDBU, for each 

STLP loan application processed, 

whether a new loan request or a renewal 

request. 

(b) Reasonable closing expenses. The 

PL may collect reasonable closing 

expenses from the borrower, provided 

that full disclosure of such fees is made 

to the borrower prior to the loan closing 

date. These expenses include necessary 

out-of-pocket expenses to third parties 

such as filing and recordation fees, as 

well as loan closing document 

preparation fees, whenever the PL 

charges similar fees to its non STLP 

borrowers. 

Subpart E—Loan Administration 

§ 22.51 Loan closings. 

(a) The PL must promptly close all 

STLP loans in accordance with the 

terms and conditions approved by DOT 

OSDBU in its Guarantee Agreement. 

The PL must report circumstances 

concerning any STLP loans not closed 

within a reasonable time period after 

DOT OSDBU approval. 

(b) The PL uses its own internal loan 

closing documents and must use 

standard banking practices and 

procedures to ensure proper execution 

of the debt and perfection of the 

collateral. The PL must forward copies 

of all executed closing documents and 

filings to DOT OSDBU within the time 

period specified in the cooperative 

agreement. 

§ 22.53 Loan monitoring and servicing 

requirements. 

The PL must review STLP principal 

advance requests, process loan 

disbursements, and payments, and 

maintain contact with the borrower 

during the term of the loan. The PL 

must monitor the progress of the project 

being financed and the borrower’s 

continued compliance with the terms 

and conditions of the loan. The PL must 

promptly report any material adverse 

change in the financial condition or 

business operations of the borrower to 

DOT OSDBU. 

§ 22.57 Loan reporting requirements. 

The STLP is subject to the 

requirements of the Federal Credit 

Reform Act of 1990 (FCRA) that 

includes certain budgeting and 

accounting requirements for Federal 

credit programs. To fulfill the 

requirements of FCRA, the PL must 

provide DOT OSDBU prompt written 

notification of the activation date (form 

# DOT F 2302–1), and the date the loan 

is repaid and closed (form # DOT F 

2304–1). To fulfill this requirement, the 

PL must submit a monthly report to the 

DOT OSDBU covering the previous 

month’s STLP loans in process and 

those that are active. 

§ 22.59 Loan modifications. 

Any modification to the terms of the 

DOT OSDBU guarantee agreement must 

have prior written approval of the 

Director, and executed in writing as an 

Addendum to the original guarantee 

agreement. 

§ 22.61 Loan guarantee extensions. 

An extension of the original loan 

guarantee may be requested, in writing, 

by the PL using form # DOT F 2310–1. 

The request must comply with the terms 

and conditions described in the 

guarantee agreement and with the STLP 

policies and procedures. All extension 

requests must be approved by the 

Director. The maximum extension 

period for a loan guarantee is ninety (90) 

days. 

§ 22.63 Loan close outs. 

Upon full repayment of the STLP 

loan, or upon expiration of the loan 

guarantee, the PL must submit an 

executed loan guarantee close-out form 

# DOT F 2304–1 to DOT OSDBU. 

§ 22.65 Subordination. 

DOT OSDBU must not be placed in a 

subordinate position to any other debt. 

§ 22.67 Delinquent loans and loan 

defaults. 

(a) The PL must bring to the 

immediate attention of the Director and 

delinquent STLP loans. The PL and 

DOT OSDBU are jointly responsible for 

establishing collection procedures and 

must exercise due diligence with 

respect to collection of delinquent debt. 

The PL is responsible for initiating 

actions to recover such debt. DOT 

OSDBU must approve any compromise 

of a claim, resolution of a dispute, 

suspension or termination of collection 

action, or referral for litigation. A workout solution will only be considered if 

it is expected to minimize the cost to the 

federal government in resolving 

repayment delinquencies and/or loan 

default. They must only be used when 

the borrower is likely to be able to repay 

the loan under the terms of the workout, and if the cost of establishing the 

work-out plan is less than the costs of 

loan default and/or foreclosure. 

(b) In an appropriate situation, DOT 

OSDBU may authorize the PL to 

undertake legal action deemed 

necessary to collect delinquent loans 

and DOT will reimburse the PL on a pro 

rata basis in proportion to the loan 

guarantee percentage for the associated 

fees and costs, with prior authorization 

from the Director. Penalties and late fees 

are not eligible for reimbursement. Any 

legal action undertaken by the PL 

without OSDBU authorization, will not 

be eligible for a pro rata basis 

reimbursement of the associated fees 

and costs. Net recoveries applicable to 

accrued interest must be applied on a 

pro rata basis in proportion to the 

formula used during the term of the 

loan. 

§ 22.69 Claim process. 

After reasonable efforts have been 

exhausted to collect on a delinquent 

debt, the PL may demand in writing that 

DOT OSDBU honor its loan guarantee, 

provided however that the maximum 

liability of DOT OSDBU shall not at any 

time exceed the guaranteed amount. The 

borrower must be in default for no less 

than thirty (30) days, and the PL must 

have made written demand for payment 

from the borrower, in accordance with 

the guarantee agreement. 

BILLING CODE 4910–9X–P 


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Attachment G to Part 22—Cooperative 

Agreement 

COOPERATIVE AGREEMENT 

BETWEEN THE UNITED STATES 

DEPARTMENT OF 

TRANSPORTATION AND [BANK]____ 

1. Recital of Purpose 

The principal purpose of this Agreement is 

to carry out the United States Department of 

Transportation (DOT)’s Short Term Lending 

Program (STLP), a loan guarantee program to 

enhance the lending opportunities for 

disadvantaged business enterprises (DBEs) 

and other certified small and disadvantaged 

businesses (SDBs) in order to increase the 

number of DBEs and SDBs that engage in 

transportation-related contracts and to 

strengthen the competitive and productive 

capabilities of the DBEs and SDBs that 

currently do business with DOT, its grantees, 

recipients, their contractors and 

subcontractors. This Agreement is not 

intended to and does not create any rights in 

third parties to receive loans or any other 

funds from [BANK] or DOT. All rights and 

obligations under the Agreement run only to 

the parties. 

This Agreement is intended by the parties 

to be construed as a Cooperative Agreement, 

under 31 United States Code (U.S.C.), Section 

6305, and shall be in no way construed as a 

procurement contract. 

2. Authority 

DOT is authorized under 49 U.S.C. 332, to 

develop support mechanisms, including 

financial assistance programs that will enable 

DBEs and SDBs to take advantage of 

transportation-related business opportunities. 

[BANK] is authorized under its charter and 

by-laws to enter into this Cooperative 

Agreement. 

3. Definitions 

3.1 For the purpose of this Agreement, 

the term ‘‘Disadvantaged Business 

Enterprise’’ (‘‘DBE’’), includes a for profit 

small business concern that is owned and 

controlled by a socially and economically 

disadvantaged individual, including women 

and, is set forth at 49 Code of Federal 

Regulations (CFR) (23 and 26); Safe, 

Accountable, Flexible, Efficient 

Transportation Equity Act: A Legacy for 

Users (SAFETEA–LU); and corresponding 

sections of the Aviation Investment and 

Reform Act for the 21st Century, as amended 

by any regulations and interpretations issued 

there-under. For the purpose of the 

Agreement, the term Small and 

Disadvantaged Business (‘‘SDB’’) includes: 

Small disadvantaged business (SDB), Section 

8 (a) program; HUBZONE Empowerment 

Contracting Program, and Service Disabled 

Veteran owned business, under the U.S. 

Small Business Administration. 

3.2 For the purpose of this Agreement, 

the term ‘‘transportation-related contract’’ is 

defined as a contract for the maintenance, 

rehabilitation, restructuring, improvement, or 

revitalization of any of the nation’s modes of 

transportation with any public or commercial 

provider of transportation through any 

Federal, State or local transportation agency. 

The transportation contract can be a prime 

contract or subcontract at any tier, awarded 

by DOT or by a State or local recipient of 

DOT funds. 

3.3 For the purpose of this Agreement, 

the term ‘‘Participating Lender’’ (PL) is 

defined as a banking or lending institution, 

or other approved organization which has 

agreed to and has been formally accepted as 

a Participating Lender in the DOT ShortTerm Lending Program. 

4. Terms 

4.1 The [BANK] shall make loans to 

qualifying DBEs and SDBs that request 

financial assistance to perform 

transportation-related contracts. The 

maximum loan face amount for any 

individual loan or line of credit will be 

$750,000.00 unless the written consent of the 

Director, OSDBU, is received. Loans will be 

secured at a minimum by assignment of the 

proceeds of the transportation-related 

contracts supporting the loan request and by 

a recorded first lien security position in such 

proceeds. (See Section 11 regarding 

maintenance of DOT funds in a first lien 

position.) Other collateral may be required 

based upon assessments of risk and collateral 

availability performed by [BANK] and DOT. 

4.2 The [BANK] agrees to review and give 

due consideration to all loan applications 

submitted directly by the applicant or 

forwarded by DOT. Generally DOT will refer 

the application to the Participating Lender 

located closest to the applicant; however, 

DOT may at its sole discretion forward 

applications to any Participating Lender. 

4.3 DOT will guarantee up to seventy-five 

(75) percent of the outstanding and unpaid 

principal amount of the loan, interest on the 

principal amount of the loan, and interest on 

any due and unpaid amounts owing by the 

Borrower to the Bank, provided however that 

the maximum liability of DOT shall not at 

any time exceed the guaranteed amount. In 

the event a DBE or SDB defaults on a loan 

made under this Agreement, the loss will be 

borne on the same pro rata basis of 

distribution. 

4.4 The [BANK] agrees that in any and all 

matters concerning the DOT Short Term 

Lending Program it will conform to the 

policy and procedures as described in the 

DOT STLP Loan Policies and Procedures 

Manual and subsequent regulations 

implementing this manual. [BANK] and DOT 

will be responsible for decisions as to which 

DBE or SDB applicants will or will not 

receive loans. All decisions will require the 

final approval of the OSDBU Director, or the 

Director’s designee, after the loan application 

has been recommended for approval by 

[BANK]’s loan committee or by its designated 

senior official. Funds shall be loaned at the 

Prime Rate that is defined as New York Prime 

and published daily in the Wall Street 

Journal, adjusted on the first day of each 

calendar month for the ensuing month. Up to 

an additional two (2) points can be added to 

the Prime Rate to cover administrative fees of 

managing the STLP Program. 

4.5 The DBE or SDB borrower shall be 

able to make draws against the line of credit 

during the term of the loan and shall be 

required to repay all remaining principal and 

interest no later than the date of receipt of 

the final payment under its transportationrelated contract(s). In the event that the 

contract is terminated for any reason, 

maturity of the loan will be accelerated and 

no further advances will be made. 

4.6 The use of the two-payee check 

system will be required in which the [BANK] 

and the DBE or SDB will be the payees of any 

relevant check paid to the DBE or SDB for 

work performed under a secured 

transportation-related contract(s). 

4.7 Application forms required for DOT 

guaranteed loans can be obtained from the 

Participating Lender, and are also available 

on the OSDBU webpage: http:// 

osdbu.dot.gov/documents/pdf/stlp/ 

stlpapp.pdf. Applications should be 

submitted directly to [BANK]. The [BANK] 

will perform the loan application review and 

process the loan for completeness. The 

[BANK] must initially approve or decline the 

loan based upon its independent review. 

Loans approved by the [BANK] will then be 

forwarded to DOT and will require the final 

approval of the OSDBU Director, or the 

Director’s designee for a DOT guarantee. 

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policy will be referred to OSDBU for 

resolution. Any DBEs or SDBs rejected for a 

loan will be sent a letter of explanation, with 

a copy to OSDBU. 

4.8 Determination that the final loan 

documents conform to the terms of the loan 

approval; that loan documentation is 

complete and has been properly executed; 

and that loan disbursement is completed is 

the sole right and responsibility of the 

[BANK]. The [BANK] will promptly close the 

loans in accordance with conditions 

specified by DOT in the transmittal of its 

approval and any other conditions upon 

which the DOT and the [BANK] may have 

agreed in writing. The [BANK] shall report 

the circumstances behind any loans not 

closed within 15 business days after receipt 

of final approval by OSDBU. The [BANK] 

must execute applications which have been 

finally approved by DOT and the [BANK] 

and must ensure the necessary completion 

and perfection of documents under standard 

banking practice and procedure. These 

documents will include as applicable; the 

note, assignment of payments, notice of 

assignment of payments, personal guaranties, 

necessary UCC filings, and any other 

collateral or security documents completed 

during the execution of the loan. 

Additionally, each borrower for which the 

DOT guarantee exceeds $150,000 must 

execute a Certification Regarding Lobbying 

concurrent with execution of the closing 

documents. This certification is incorporated 

into this Cooperative Agreement as 

Attachment B. 

4.9 The [BANK] will forward copies of all 

executed closing documents and filings to 

DOT no later than 15 business days after 

execution of closing documents and filings. 

4.10 [BANK] may only release loan funds 

to a certified applicant (DBE or SDB, as 

defined in Section 3.1) upon the award of a 

transportation-related contract as determined 

by DOT. 

4.11 [BANK] shall be in a first position on 

any contract proceeds and receivables that 

the STLP line has financed. STLP funds shall 

not be placed in a subordinate position to 

any other debt, except if so required by a 

DOT authorized surety bonding company 

and approved by the OSDBU Director, or his/ 

her designee. It shall be the responsibility of 

the [BANK] to ensure that the security 

interests in the proceeds of any contract 

funded under this Agreement are properly 

recorded as minimum security for the loan. 

The [BANK] is also responsible for 

maintaining regular and sufficient contact 

with the borrower in order to monitor and 

ensure the progress of the project being 

financed and compliance with the terms of 

the financing, and to detect any material 

adverse change in the condition of the 

borrower, and shall be reported in the 

monthly report to OSDBU. 

4.12 [BANK] may collect an application 

fee of $150.00 from the applicant for each 

loan application or renewal. 

4.13 For each loan successfully executed, 

DOT will pay [BANK[] an underwriting fee 

of one (1) percent of the face amount of the 

approved loan with a minimum fee of not 

less than $1,000.00 per approved loan. 

[BANK] can charge the applicant not more 

than Prime plus two (2) percent for the 

interest rate on the loan. For total loan 

amounts of $150,000.00 or less, the PL may 

charge an additional half (1/2) percent 

administration fee for the monitoring and 

technical assistance required. Payment of the 

underwriting fees will be made upon a 

written request for payment by the [BANK] 

and receipt by OSDBU of a copy of a signed 

loan activation form and a copy of the 

executed note. 

4.14 [BANK] must fully fund each loan. 

If a second bank has participated in the loan, 

the distribution of the underwriting fee shall 

be negotiated by the banks. 

4.15 DOT’s guarantee shall be established 

by a Guarantee Agreement executed by the 

[BANK] and DOT for each new loan, loan 

modification, or loan renewal. 

4.16 The [BANK] and DOT shall be 

jointly responsible for establishing collection 

procedures and shall exercise due diligence 

with respect to collection of delinquent debt. 

The [BANK] will be responsible for initiating 

actions to recover such debt. DOT must 

approve in writing any compromise of a 

claim, resolution of a dispute, suspension or 

termination of collection action, or referral 

for litigation. In an appropriate situation, 

DOT may authorize the [BANK] to undertake 

any legal action to collect unpaid loans and 

the DOT will reimburse [BANK] on a pro rata 

basis in proportion to the loan guarantee for 

the associated fees and costs with prior 

written authorization from the OSDBU 

Director. Should litigation become necessary, 

the Department of Justice shall be responsible 

for its conduct, and the [BANK] and DOT 

shall cooperate in providing evidence and 

other support to its efforts. Net recoveries 

applicable to principal and accrued interest 

shall be applied on a pro rata basis in 

proportion to the loan guarantee 

commitments. 

4.17 The [BANK] shall maintain a 

fiduciary duty to administer all loans 

approved under STLP in a manner that is 

consistent with the terms of this Agreement 

and the procedures established thereunder. 

5. Deliverables and Delivery Schedule 

5.1 Within five (5) business days of the 

activation of a guaranteed loan, [BANK] will 

submit a completed and signed Loan 

Activation Form to OSDBU). 

5.2 Within five (5) business days of the 

close-out or renewal of a guaranteed loan, 

[BANK] will submit a completed and signed 

Loan Close-out Form to OSDBU. 

5.3 For loans in excess of $100,000.000, 

a personal site inspection of the facilities of 

the loan applicant must be conducted by the 

[BANK] prior to disbursement of funds. 

5.4 Monthly Reports. [BANK] shall 

provide a report by the 10th of each month 

covering the previous month’s activity, 

according to the attached templates 

(Attachments C1 and C2). The report will 

include: (a) A status of the review of all 

pending applications; (b) a summary of loans 

executed and outstanding, including the 

borrowers’ name, loan amount, maturity date, 

balance outstanding, and accrued interest; (c) 

a statement for each loan as to whether the 

loan is current and performing satisfactorily; 

(d) for each loan determined delinquent and 

not performing properly, a summary of action 

taken; and, (e) the date(s) of any loans that 

have closed out; and, (f) any relevant 

information that DOT may request. 

5.5 Call Reports or Thrift Financial 

Reports. [BANK] shall provide two copies of 

its quarterly Reports of Condition and 

Income (Federal Financial Institutions 

Examination Council—FFIEC Form 041), or 

quarterly Thrift Financial Reports (Office of 

Thrift Supervision—OTS Form 1313) within 

60 days after the close of each calendar 

quarter. 

5.6 Regulatory Enforcement Actions. The 

[BANK] shall promptly notify the OSDBU 

Director, of any regulatory enforcement 

actions involving the Bank. 

5.7 Community Reinvestment Act (CRA). 

[BANK] shall provide the OSDBU Director a 

copy of its current CRA rating and shall 

promptly advise of any negative changes 

thereto. Delivery of all items or other notices 

or correspondence relevant to this Agreement 

shall be addressed as follows: Director, Office 

of Small and Disadvantaged Business 

Utilization, U.S. Department of 

Transportation, 1200 New Jersey Avenue SE, 

S–40, W56–497, Washington, DC 20590. 

5.8 The PL shall notify OSDBU within 10 

(ten) business days of any personnel changes 

regarding signatory officials of the PL, as well 

as any significant occurrences within the 

PL’s organization which may affect this 

agreement, such as mergers, buyouts, or 

expansions. 

6. Audit, Investigation and Review 

DOT’s Inspector General and the 

Comptroller General of the United States 

and/or Director, OSDBU, or Director’s 

designee may at all reasonable times 

investigate, audit and review in the offices of 

[BANK]. [BANK] shall provide to such 

parties access to all documents, papers, 

books, and records relevant to such audit or 

review. 

7. Record Retention 

The [BANK] shall retain all documents, 

files, books, and records relevant to the 

execution and implementation of the terms of 

this Agreement for a period of not less than 

three years from the date of termination of 

this Agreement or payment in full from the 

borrower; except, if any litigation, collection 

action, or audit is commenced. In these cases, 

records and other materials shall be retained 

until the litigation, collection action, or audit 

is judicially or administratively final. 

8. Duration of Agreement 

This Agreement shall be in effect for a 

period of two (2) years from the date of the 

execution of this Agreement. An annual 

option to renew the Agreement for additional 

periods, not to exceed two (2) years, may be 

granted at the discretion of DOT. 

9. Expiration of Agreement 

Except in the event that DOT has offered 

its annual option to renew this Agreement for 

additional periods and the [BANK] has 

accepted such an offer, after expiration of 

this Agreement, no further applications will 

be furnished by DOT for approval. Unless 

instructed otherwise by DOT, after expiration 

of the Agreement, [BANK] shall complete the 


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documentation of any loans which have been 

recommended to DOT for approval and in 

which DOT has given final approval prior to 

expiration of the Agreement. Following 

expiration of the Agreement, [BANK] may, 

subject to the written concurrence of DOT, 

sell its loans to another bank or to another 

Participating Lender which shall assume the 

original [BANK] ’s rights and responsibilities 

to fund, service and collect the loan or loans. 

10. Suspension of Agreement 

DOT may suspend this Agreement by 

giving a Notice of Suspension in writing to 

[BANK] and by instructing [BANK] in writing 

not to disburse funds (including the granting 

of additional loans and the making of loan 

commitments), pending [BANK] ’s action to 

correct violations of the terms and conditions 

of this Cooperative Agreement. Failure by 

[BANK] to take corrective actions specified in 

the Notice of Suspension within thirty (30) 

days of the date of receipt of said notice may 

result in termination of the Agreement. 

11. Termination 

11.1 DOT Termination for Cause. DOT 

may terminate this Cooperative Agreement, 

in whole or in part, at any time before the 

expiration of the one year term of the 

Agreement or the expiration of any renewal 

term of the Agreement, and without affording 

a thirty (30) day cure period under the 

Suspension provision, if it determines that 

the [BANK] failed to comply with terms and 

conditions of the Agreement and such failure 

cannot be reasonably addressed. DOT shall 

promptly notify [BANK] in writing of the 

determination and the reasons for the 

termination, together with the effective date 

of termination. 

11.2 DOT Termination for Convenience. 

DOT may terminate this Cooperative 

Agreement for the convenience of the 

Government and without cause, upon prior 

written notice of thirty (30) days to [BANK] 

of DOT’s intention to terminate. Upon 

termination, DOT shall remain liable on the 

pro rata share of the loan guarantee(s) made 

by [BANK] , which have been finally 

approved by DOT prior to the effective date 

of termination. 

11.3 Bank Termination. [BANK] may 

terminate the Agreement with written notice 

of sixty (60) days to DOT of [BANKS]’s 

intention to terminate. Upon termination, 

DOT shall remain liable only as to loan 

guarantee(s) written by [BANK] which have 

been approved by DOT, prior to the effective 

date of termination. 

12. DOT’s Representative 

The Director, OSDBU, shall represent DOT 

under the Agreement and may exercise all 

rights secured to DOT by the Agreement. 

Decisions by the Director to exercise DOT’s 

rights under this Agreement shall be final 

and binding on DOT. The Director may 

delegate these responsibilities to any other 

DOT employee on written notice to [BANK]. 

[BANK’S REPRESENTATIVE] shall 

represent [BANK] under the Agreement and 

may exercise all rights secured to [BANK] by 

the Agreement. Decisions by this 

representative to exercise [BANK]’s rights 

under this Agreement shall be final and 

binding on [BANK]. [BANK] may delegate 

these responsibilities to any other [BANK] 

employee upon written notice to DOT. 

[BANK]’s address for receipt of notices and 

other correspondence for the purpose of this 

Agreement will be: 

13. Miscellaneous Conditions 

13.1 As a condition of receipt of any DOT 

guarantee under the Agreement, [BANK] 

assures DOT that they will abide by the 

provisions of Title VI of the Civil Rights Act 

of 1964, 42 U.S.C. 2000d et seq., and DOT’s 

implementing regulations, 49 CFR 21; 

Section 504 of the Rehabilitation Act of 1973, 

29 U.S.C. 794, and DOT’s implementing 

regulations, 49 CFR 27; the Age 

Discrimination Act of 1975, 42 U.S.C. 6101–

7, and any Federal implementing regulations; 

and Section 905 of the Railroad 

Revitalization and Regulatory Reform Act of 

1976, 45 U.S.C. 803 (re-codified in 49 U.S.C. 

332). [BANK] also assures DOT that they will 

comply with all other applicable Federal 

laws and regulations. 

13.2 In order to enter into this 

Agreement, [BANK] shall be designated as a 

depository and financial agent of the 

Government under 31 CFR Part 202. 

13.3 All notices, approvals, reports, or 

other correspondence contemplated by this 

Agreement must be in writing and served 

personally, by facsimile, by e-mail, or by first 

class mail. If given by personal service, the 

notice shall be effective on the date of 

delivery; if given by mail, the notice shall be 

effective upon receipt. Either party may 

change its mailing address by giving notice 

of such change. 

13.4 [BANK] shall execute a Drug-Free 

Workplace Act certification concurrent with 

execution of this Cooperative Agreement. 

13.5 [BANK] shall maintain a written 

code of standards of conduct governing the 

performance of their employees engaged in 

the award and administration of DOT loan 

guarantee, a copy of which must be made 

available to DOT upon request. No employee, 

officer or agent of the [BANK] shall 

participate in the selection, or in the award 

or administration of a contract supported by 

DOT funds if a conflict of interest, real or 

apparent, would be involved. Such a conflict 

would arise when: 

(a) The employee, officer or agent, 

(b) Any member of his or her immediate 

family, 

(c) His or her partner, or 

(d) An organization which employs, or is 

about to employ, any of the above, has a 

financial or other interest in the firm selected 

for award. 

[BANK]’s officers, employees or agents 

shall neither solicit nor accept gratuities, 

favors or anything of monetary value from 

loan applicants or potential applicants, or 

parties applying for any DOT short term 

loans. To the extent permitted by State or 

local law or regulations, such standards of 

conduct shall provide for penalties, 

sanctions, or other disciplinary actions for 

violations of such standards by [BANK] 

agents. 

13.6 In accordance with Section 319 of 

Public Law 101–121, [BANK] shall be 

prohibited from using Federal appropriated 

funds for lobbying the Executive or 

Legislative Branches of the Federal 

Government in connection with a specific 

contract, grant, or loan and shall disclose 

lobbying activities. [BANK] shall execute a 

Certificate Regarding Lobbying concurrent 

with execution of this Cooperative 

Agreement. 

13.7 This document embodies the entire 

Agreement between [BANK] and DOT. This 

Agreement may be amended, altered, or any 

of its provisions waived only in writing and 

signed by both parties. 

This Cooperative Agreement is entered into 

this ll day of llll 20ll, by the 

United States Department of Transportation 

at Washington, District of Columbia. 

By: lllllllllllllllllll

Director, Office of Small and 

Disadvantaged Business Utilization 

U.S. Department of Transportation 

This Cooperative Agreement is entered into 

by [BANK] and in witness whereof, the 

undersigned has caused the signature of its 

officer below-named and its corporate seal 

duly attested to be affixed hereto this ll 

day of llll, 20ll, intending to be 

legally bonding hereby. 

[BANK] 

(SEAL) 

(Bank ABA/RTN#) llll/llll 

By: lllllllllllllllllll

Title: llllllllllllllllll

Appendix H to Part 22—Guarantee 

Agreement 

DEPARTMENT OF TRANSPORTATION 

OFFICE OF SMALL AND 

DISADVANTAGED BUSINESS 

UTILIZATION SHORT TERM LENDING 

PROGRAM 

GUARANTEE AGREEMENT 

This GUARANTEE AGREEMENT dated as 

of [DATE] (this Agreement) is made by the 

United States Department of Transportation 

(DOT) and [NAME OF BANK], a National 

Banking Corporation, its successors and 

permitted assigns [NAME OF BANK] 

concerning the Bank’s extension of a 

[AMOUNT OF LOAN/WORDS] ($LOAN 

AMOUNT) Loan (Loan) to [NAME OF 

BORROWER], [STATE IN WHICH 

INCORPORATED] Corporation, (Borrower). 

Section 1. Guarantee 

1.01 The Guarantee. Subject to the terms 

and conditions set forth in this Agreement, 

DOT hereby guarantees, irrevocably and 

unconditionally (except to the extent 

expressly provided in Sections 1.02, 1.03, 

1.04, 1.05 or by applicable law) to the Bank 

payment of seventy five percent (75%) of the 

outstanding and unpaid principal amount of 

the loan, interest on the principal amount of 

the loan and interest on any due and unpaid 

amounts owing by the Borrower to the Bank, 

provided however that the maximum liability 

of DOT shall not at any time exceed 

[GUARANTEE AMOUNT/WORDS], the 

Guaranteed Amount. 

1.02 Coverage of the Guarantee and 

Compliance with STLP Cooperative 

Agreement and STLP Policies and 

Procedures Manual. 


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(a) The Guarantee is entitled to the full 

faith and credit of the United States of 

America. The Guarantee constitutes a 

guarantee of payment and not of collection. 

In no event shall the liability of the DOT on 

the Guarantee exceed the Guaranteed 

Amount. 

(b) If the [NAME OF BANK] fails to comply 

with this Guarantee Agreement and STLP 

Cooperative Agreement and STLP Policies 

and Procedures Manual in the making or 

servicing of any STLP loan, the Guarantee 

shall not be effective and shall automatically 

terminate. Denial of liability on the 

Guarantee shall only occur if DOT 

determines that the [NAME OF BANK] has 

engaged in negligence, misconduct, or failed 

to comply with this Guarantee Agreement the 

STLP Cooperative Agreement, or STLP 

Policies and Procedures Manual. 

1.03 Term of the Guarantee. The 

Guarantee will be effective for one year from 

the Date of Activation of the Loan. Any 

requests for renewals or extensions of the 

expiration date must be sent by the [NAME 

OF BANK], in writing, to the DOT no later 

than thirty (30) days prior to the original 

expiration date. Renewal periods of one year 

may be considered; however, they will be 

handled as a new loan guaranty request. 

Extension periods up to ninety (90) days may 

be granted with reason and at the DOT’s sole 

discretion incorporating any addendums that 

contain conditions on the loan approval. If a 

renewal is not in place by the end of the 90 

day extension, the Guarantee will expire on 

the last day of the extension period. It is 

further agreed that all principal advances 

made to the Borrower by [NAME OF BANK] 

in accordance with Paragraph 1.02 (b.) and 

prior to the Expiration Date will be 

guaranteed by the DOT until collected. 

1.04 Timely Demand. In the event that 

the [NAME OF BANK] fails to make demand 

on DOT within the time period required in 

Section 2.02(vi), the Guarantee of the unpaid 

installment of principal and/or interest as to 

which such timely demand was not made 

shall automatically terminate with respect 

thereto. This termination shall be without 

prejudice to the right of the [NAME OF 

BANK] to make demand on DOT under this 

Agreement in respect of any other due and 

unpaid installment(s) of principal or interest. 

1.05 Prohibited Amendment or Transfers. 

In the event that the Bank, without DOT’s 

prior written consent, agrees to any material 

amendment, modification, or waiver or 

assigns, conveys, sells, or otherwise transfers 

any interest in or right or obligation under 

this Agreement or the Loan, or any Note, then 

DOT shall have the right to terminate the 

Guarantee by providing written notice to the 

Bank. 

1.06 No Acceleration. In the event that, 

without the prior written consent of DOT, the 

Bank declares all or any part of the 

Borrower’s indebtedness under the Loan to 

be immediately due and payable or to be due 

and payable upon the demand of the Bank, 

then DOT shall have the right to terminate 

the Guarantee with respect to all or a portion 

of the Guaranteed Amount. The automatic 

acceleration of the Loan or any Note as a 

result of a bankruptcy or insolvency event 

does not constitute such an event. Any 

termination of the Guarantee by DOT shall be 

deemed effective as of the date of the 

declaration by the Bank. 

Section 2. Claim Procedures 

2.01 Failure to Pay. In the event that (i) 

the Borrower for any reason fails to pay in 

full any installment of principal (other than 

any proposed voluntary prepayment) or 

interest under the Loan or any Note for more 

than thirty (30) calendar days after the due 

date of such installment; and (ii) a period of 

fifteen (15) calendar days has elapsed since 

written demand for payment was made by 

the Bank on the Borrower (which demand 

may be omitted only if and to the extent that 

the making thereof would be prohibited by 

any applicable law), then the Bank may make 

demand on DOT under this agreement for 

payment (subject to Sections 1.03., 1.04, 1.05) 

of the Guaranteed Amount. 

2.02 Demand on DOT. The Bank’s 

demand on DOT must: (i) Be in writing; (ii) 

be made only by the Bank; (iii) identify the 

installment(s) of principal and/or interest 

unpaid as of the date of such demand; (iv) 

include a copy of the Bank’s written demand 

for payment on the Borrower (or in the event 

that such demand was omitted in accordance 

with law, evidence of the applicable law); (v) 

include an Assignment and Certification in 

the form of Annex A; (vi) be made not later 

than sixty (60) calendar days from the due 

date of the unpaid installment(s) of principal 

and /or interest on which the Bank’s demand 

for payment is based. 

2.03 Assignment to DOT. On and as of the 

date on which DOT pays the Guaranteed 

Amount, DOT shall become subrogated to, 

and the Bank shall be deemed to have 

assigned to DOT, without recourse and 

without need for any further action, the 

Guaranteed Percentage of the Bank’s right, 

title, and interest in and to the principal of 

and interest on the Loan and each Note in 

respect thereof and to such extent, DOT shall 

have the right to enforce or participate in any 

claim (including without limitation, any 

claim in bankruptcy), right or remedy that 

the Bank then has or may thereafter acquire 

against the Borrower under the Loan or the 

Note. In addition to the Assignment and 

Certification required, the Bank shall, upon 

request by DOT, promptly execute and 

deliver such documents and take such other 

actions as DOT may reasonably request to 

evidence or give effect to such subrogation 

and assignment, it being understood and 

agreed that the execution and delivery of any 

such document or the taking of any such 

action shall not be a condition to DOT’s 

obligation to pay the Guaranteed Amount. 

2.04 Payment by DOT. 

(a) Within forty-five (45) Business Days 

after the date on which the Bank shall have 

properly documented its demand on DOT for 

payment pursuant to Section 2.02 (the 

‘‘Demand Date’’), the DOT shall, subject to 

Sections 1.03, 1.04 and 1.05, pay the 

Guaranteed Amount to the Bank in a single 

payment calculated as of the date of actual 

payment thereof by DOT. 

(b) Payment of the Guaranteed Amount due 

under this Agreement shall be made by DOT 

to the Bank, and such payment to the Bank 

shall discharge fully and completely DOT’s 

liability under this Agreement. After the 

Demand Date, any funds received by the 

Bank or DOT from or on behalf of the 

Borrower in respect of any of the Borrower’s 

obligations under the Loan Agreement or 

Note shall be applied in accordance with the 

terms of the Loan Agreement or Note. 

2.05 DOT Payment Does Not Discharge 

Borrower. Any statute or judicial decision to 

the contrary notwithstanding, no payment by 

DOT to the Bank under this Agreement shall 

be deemed to reduce, discharge, satisfy or 

terminate any obligation of Borrower under 

the Loan Agreement or any Note. 

Section 3. Miscellaneous 

3.01 Governing Law. THIS AGREEMENT 

SHALL BE GOVERNED BY AND 

CONSTRUED IN ACCORDANCE WITH THE 

FEDERAL LAW OF THE UNITED STATES 

OF AMERICA IF AND TO THE EXTENT 

SUCH FEDERAL LAW IS APPLICABLE, AND 

OTHERWISE IN ACCORDANCE WITH THE 

LAW OF THE STATE OF [STATE WHERE 

BANK LOCATED]. 

3.02 Benefit of Agreement. This 

Agreement shall be binding upon and inure 

to the benefit of and be enforceable by the 

respective successors and permitted assigns 

of the parties hereto. 

3.03 Entire Agreement. This Agreement 

contains the entire agreement among the 

parties hereto regarding the subject matter 

hereof. In the event that any term of the Loan 

Agreement or any Note conflicts with any 

term of this Agreement, the terms and 

provisions of this Agreement shall control to 

the extent of such conflict. 

3.04 Amendment or Waiver. This 

Agreement may not be changed, discharged 

or terminated (except as expressly provided 

herein) without the written consent of the 

parties hereto, and no provision hereof may 

be waived without the written consent of the 

party to be bound thereby. 

3.05 Counterparts. This Agreement may 

be signed in separate counterparts, each of 

which shall be deemed to be an original and 

all of which together shall constitute one and 

the same instrument. 

3.06 Severability. To the extent 

permitted by applicable law, the illegality or 

unenforceability of any provision of this 

Agreement shall not in any way affect or 

impair the legality or enforceability of the 

remaining provisions of this Agreement. 

IN WITNESS WHEREOF, the parties hereto 

have caused this Agreement to be duly 

executed, in duplicate, this [DAY] of 

[MONTH], [YEAR]. 

lllllllllllllllllllll

[NAME OF BANK] 

United States Department of Transportation 

[NAME OF OFFICIAL] 

[TITLE OF OFFICIAL] 

Annex A—Form of Assignment and 

Certification 

This Assignment and Certification is made 

pursuant to the terms of the Guarantee 

Agreement dated as of [DATE] (the 

‘‘Agreement’’) between the United States 

Department of Transportation (DOT) and 

[NAME OF BANK], a National Banking 

Corporation (Bank). Capitalized terms used 

herein and not otherwise defined herein shall 

have the meanings assigned in the 

Agreement. 


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1. Assignment. For value received, the 

Bank hereby assigns to DOT, without 

recourse, all of its right, title and interest in 

and to the principal of and interest on the 

Loan and under the Loan Agreement and 

each Note in respect thereof, to the extent, 

and only to the extent, of the Bank’s 

Guaranteed Percentage of the Loan 

represented by the Guaranteed Amount paid 

by DOT to the Bank. 

2. Certifications. The Bank hereby certifies 

that (a) the Guaranteed Amount demanded to 

be paid by DOT to the Bank is properly 

calculated and due and owing to the Bank 

under the terms of the Agreement and (b) it 

has not, without the prior written consent of 

DOT: 

(i) Agreed to any material amendment, 

written modification or written waiver in 

violation of Section 1.04 of the Agreement; or 

(ii) Assigned, conveyed, sold or otherwise 

transferred any interest in or right or 

obligation under this Agreement, or any Note 

in violation of Section 1.05 the Agreement; 

or 

(iii) Accelerated or caused the Agent to 

accelerate all or any part of the Loan or any 

Note in violation of Section 1.06 of the 

Agreement; 

3. Acknowledgment. The Bank 

acknowledges and agrees that this 

Assignment and Certification is subject to the 

terms of the Agreement, including, without 

limitation, the following: 

(a) Any funds received by the Bank or DOT 

from or on behalf of the Borrower in respect 

of any of the Borrower’s obligations under 

the Loan Agreement or Note shall be applied 

in accordance with the terms of the Loan 

Agreement or Note. 

(b) The Bank shall, upon request by DOT, 

execute and deliver such documents and take 

such other actions as DOT may reasonably 

request to establish, preserve or enforce the 

rights, title and interest of DOT in, to and 

under the Loan Agreement and each Note, 

and any right or remedy that DOT has or may 

acquire against the Borrower thereunder, it 

being understood and agreed that the 

execution and delivery of any such document 

or the taking of any such action shall not be 

a condition to DOT’s obligation to pay the 

Guaranteed Amount. 

IN WITNESS WHEREOF, the Bank has 

caused this instrument to be duly executed 

and delivered this [DAY] of [MONTH], 

[YEAR]. 

By: lllllllllllllllllll

(Signature) 

(SEAL) Name: llllllllllllll

(Print) 

Attest llllllllllllllllll

Title: llllllllllllllllll

Secretary 

lllllllllllllllllllll

[NAME OF BANK] 

[FR Doc. E8–19049 Filed 8–20–08; 8:45 am] 

BILLING CODE 4910–9X–C 


sroberts on PROD1PC70 with PROPOSALS