Unknown. Final rule

6,052 words·~28 min read·/register/2005/10/03/05-19722·

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

--- schema: federal-register doc_type: fedreg source_file: FR-2005-10-03.xml --- 70 190 Monday, October 3, 2005 Contents Agriculture Agriculture Department See Animal and Plant Health Inspection Service See Commodity Credit Corporation See Cooperative State Research, Education, and Extension Service See Grain Inspection, Packers and Stockyards Administration See Rural Business-Cooperative Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 57551 05-19672 Alcohol Alcohol, Tobacco, Firearms, and Explosives Bureau NOTICES Agency information collection activities; proposals, submissions, and approvals, 57622 05-19699 Animal Animal and Plant Health Inspection Service RULES Exportation and importation of animals and animal byproducts:

Horse import quarantine facilities; stall reservations, 57486-57487 05-19689 Army Army Department See Engineers Corps Census Census Bureau NOTICES Meetings: 2010 Census Advisory Committee, 57554-57555 05-19665 Professional Associations Census Advisory Committee, 57555 05-19747 Centers Centers for Disease Control and Prevention NOTICES Agency information collection activities; proposals, submissions, and approvals, 57599-57601 05-19681 Grant and cooperative agreement awards: Rural Center for AIDS/STD Prevention/Indiana University, 57601 05-19692 Grants and cooperative agreements; availability, etc.:

Human immunodeficiency virus (HIV)— Southern Sudan; support programs to reduce HIV impact; correction, 57601 05-19691 Public safety and health protection: Special Exposure Cohort at Iowa Army Ammunition Plant, IA; employee class designation, 57601-57602 05-19673 Special Exposure Cohort at Y-12 facility, Oak Ridge, TN; employee class designation, 57602 05-19674 Centers Centers for Medicare & Medicaid Services NOTICES Privacy Act: Systems of records, 57602-57607 05-19676 Children Children and Families Administration NOTICES Grant and cooperative agreement awards:

National Association of Child Care Resource and Referral Agencies, 57607 05-19650 Coast Guard Coast Guard PROPOSED RULES Drawbridge operations: North Carolina, 57524-57526 05-19664 NOTICES Environmental statements; availability, etc.: Integrated Anti-Swimmer System, 57612-57613 05-19662 Meetings: Recreational Boating Safety Strategic Planning Panel, 57613 05-19663 Commerce Commerce Department See Census Bureau See Foreign-Trade Zones Board See International Trade Administration See National Oceanic and Atmospheric Administration See Patent and Trademark Office Commodity Commodity Credit Corporation PROPOSED RULES Loan and purchase programs:

Noninsured Crop Disaster Assistance Program; tropical regions, 57520-57523 05-19671 NOTICES Agency information collection activities; proposals, submissions, and approvals, 57551-57552 05-19670 Commodity Commodity Futures Trading Commission NOTICES Meetings; Sunshine Act, 57569 05-19822 Cooperative Cooperative State Research, Education, and Extension Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 57552-57553 05-19677 Copyright Copyright Office, Library of Congress PROPOSED RULES Digital Millenium Copyright Act:

Circumvention of copyright protection systems for access control technologies; exemption to prohibition, 57526-57531 05-19721 Customs Customs and Border Protection Bureau NOTICES Customhouse broker license cancellation, suspension, etc.: Action International, Inc., et al, 57613-57614 05-19768 Aries International Import Services, et al., 57614 05-19767 Pioneer International Customhouse, et al., 57614 05-19769 Defense Defense Department See Engineers Corps Drug Drug Enforcement Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 57622-57623 05-19735 Education Education Department NOTICES Agency information collection activities; proposals, submissions, and approvals, 57570 05-19688 Meetings:

Institutional Quality and Integrity National Advisory Committee, 57570-57573 05-19695 Employee Employee Benefits Security Administration NOTICES Meetings: Employee Welfare and Pension Benefit Plans Advisory Council, 05-19739 57624-57625 05-19740 Employment Employment Standards Administration See Wage and Hour Division Energy Energy Department See Federal Energy Regulatory Commission Engineers Engineers Corps NOTICES Environmental statements; notice of intent: Lower Snake River Reservoirs, WA and ID; programmatic sediment management plan, 57569-57570 05-19694 EPA Environmental Protection Agency RULES Air pollutants, hazardous; national emission standards:

Secondary aluminum production; correction, 57513-57517 05-19713 Air quality implementation plans; approval and promulgation; various States: New York, 57511-57513 05-19712 PROPOSED RULES Air pollutants, hazardous; national emission standards: Secondary aluminum production; correction, 57534-57536 05-19714 Air programs; approval and promulgation; State plans for designated facilities and pollutants: Missouri, 57531-57534 05-19711 NOTICES Meetings: Ozone Transport Commission, 57598 05-19716 U.S.

Government Representative to Commission for Environmental Cooperation— National and Governmental Advisory Committees, 57598 05-19715 Equal Equal Employment Opportunity Commission RULES Freedom of Information Act (FOIA): Fee schedule; revision, 57510-57511 05-19649 FAA Federal Aviation Administration RULES Airworthiness directives: Airbus, 57493-57497 05-19045 McDonnell Douglas, 57491-57493 05-19438 Rolls-Royce Corp., 57487-57491 05-19693 Class E airspace, 57497-57499 05-19741 05-19742 IFR altitudes, 57499-57504 05-19744 Standard instrument approach procedures, 57504-57505 05-19746 NOTICES Advisory circulars; availability, etc.:

Aircraft engine high intensity radiated fields

(HIRF)and lightning protection features; instructions for continued airworthiness, 57642 05-19598 Agency information collection activities; proposals, submissions, and approvals, 57642 05-19743 FBI Federal Bureau of Investigation NOTICES Agency information collection activities; proposals, submissions, and approvals, 57623 05-19675 Federal Energy Federal Energy Regulatory Commission NOTICES CenterPoint Energy - Mississippi River Transmission Corp., 57588-57589 E5-5407 Complaints filed: Continental Resources, Inc., 57589 E5-5374 District of Columbia Public Service Commission, 57589-57590 E5-5367 Electric rate and corporate regulation combined filings, 57590-57592 E5-5388 E5-5389 Environmental statements; availability, etc.: Alabama Electric Cooperative, Inc., 57592 E5-5378 Port Arthur LNG, L.P., et al.; meeting canceled, 57592 E5-5412 Southern California Edison Co. et al., 57592-57593 E5-5402 Hydroelectric applications, 57593-57596 E5-5375 E5-5376 E5-5390 E5-5403 Meetings: Public Utility District No. 1 of Chelan County; technical conference, 57596-57597 E5-5377 Off-the-record communications, 57597 E5-5380 Practice and procedure: Transmission providers; standards of conduct; non-statutory deadlines extension, 57597-57598 E5-5386 *Applications, hearings, determinations, etc.:* Blue Canyon Windpower II LLC, 57573 E5-5398 California Independent System Operator Corp., 57573 E5-5370 Calpine Energy Services, LP, et al., 57573-57574 E5-5397 Colorado Interstate Gas Co., 57574 E5-5381 Columbia Gas Transmission Corp., 57574-57575 E5-5384 E5-5385 Columbia Gulf Transmission Co., 57575 E5-5383 Decker Energy International, Inc., et al., 57575-57576 E5-5364 Dominion Transmission, Inc., E5-5360 57576-57577 E5-5394 Duke Energy Corp., 57577 E5-5399 Eastern Shore Natural Gas Co., 57577 E5-5382 Energy Department et al., 57577-57578 E5-5365 Energy Transfer Fuel LP, 57578 E5-5379 Entergy Services, Inc., 57578 E5-5369 Exelon Corp. et al., 57578-57579 E5-5391 Freebird Gas Storage, LLC, 57579 E5-5372 Guardian Pipeline, L.L.C., 57579-57580 E5-5410 Gulfstream Natural Gas System, L.L.C., 57580 E5-5404 J. P. Morgan Ventures Energy Corp., 57580 E5-5358 Midwestern Gas Transmission Co., E5-5405 57581-57582 E5-5409 Midwest Independent Transmission System Operator, Inc., 57580-57581 E5-5400 New England Power Pool, 57582 E5-5392 Northwest Pipeline Corp., 57582 E5-5362 Oklahoma Municipal Power Authority, et al., 57582-57583 E5-5396 Portland General Electric Co. et al., 57583 E5-5393 Prime Energy LP, 57583-57584 E5-5366 Reliant Energy Services, Inc., 57584 E5-5395 San Diego Gas & Electric Co., 57584 E5-5363 Southern Company Services, Inc., 57584-57585 E5-5368 Stuyvesant et al., NY, 57585 E5-5401 Tennessee Gas Pipeline Co., 57585-57587 E5-5359 E5-5361 E5-5373 E5-5411 Transcontinental Gas Pipe Line Corp., 57587-57588 E5-5408 Viking Gas Transmission Co., 57588 E5-5406 Yaka Energy, LLC, 57588 E5-5371 Federal Motor Federal Motor Carrier Safety Administration NOTICES Committees; establishment, renewal, termination, etc.: Medical Review Board, 57642-57645 05-19726 Federal Railroad Federal Railroad Administration NOTICES Exemption petitions, etc. Eureka & Palisade Railroad, 57645 05-19736 Federal Reserve Federal Reserve System NOTICES Meetings; Sunshine Act, 57598-57599 05-19848 FTC Federal Trade Commission NOTICES Senior Executive Service Performance Review Board; membership, 57599 05-19660 Financial Financial Management Service See Fiscal Service Fiscal Fiscal Service NOTICES Reports and guidance documents; availability, etc.: Hurricane Katrina; Federal Emergency Management Agency disaster assistance checks and Government benefit checks; cashing and deposit guidance; correction, 57651 C5-18968 Food Food and Drug Administration RULES Public Health Security and Bioterrorism Preparedness and Response Act of 2002; implementation: Food facilities registration, 57505-57509 05-19730 NOTICES Food for human consumption: Identity standards deviation; market testing permits— Canada's Original ICEBERG Water Corp.; iceberg water, 57607 05-19728 Meetings: Center for Drug Evaluation and Research; drug safety information communication strategies, 57607-57609 05-19759 Reports and guidance documents; availability, etc.: Collection of platelets by automated methods; industry and FDA review staff guidance, 57609-57610 05-19727 Harmonisation International Conference— E2B(R) clinical safety data management; individual case safety reports transmission; data elements, 57610-57611 05-19655 MISSING FOR: Foreign-Trade Zones Board Foreign-Trade Zones Board NOTICES *Applications, hearings, determinations, etc.:* California Eastman Kodak Co.; x-ray film, color paper, digital media, inkjet paper, entertainment imaging, and health imaging storage and distribution facilities, 57555-57556 05-19750 Georgia Eastman Kodak Co.; x-ray film, color paper, digital media, inkjet paper, entertainment imaging, and health imaging storage and distribution facilities, 57556-57557 05-19751 Texas, 57557-57558 05-19749 GIPSA Grain Inspection, Packers and Stockyards Administration NOTICES Agency designation actions: Minnesota, 57553-57554 05-19658 Harry S. Truman Harry S. Truman Scholarship Foundation NOTICES Meetings; Sunshine Act, 57599 05-19892 Health Health and Human Services Department See Centers for Disease Control and Prevention See Centers for Medicare & Medicaid Services See Children and Families Administration See Food and Drug Administration Homeland Homeland Security Department See Coast Guard See Customs and Border Protection Bureau NOTICES Merchant Marine Act of 1920: Waiver of compliance with navigation and inspection laws, 57611-57612 05-19820 Housing Housing and Urban Development Department NOTICES Agency information collection activities; proposals, submissions, and approvals, E5-5348 57614-57616 05-19756 05-19757 Grants and cooperative agreements; availability, etc.: Discretionary programs (SuperNOFA) Housing Opportunities for Persons with AIDS Program; deadline extension due to Hurricane Katrina, 57616-57617 05-19755 Low income housing: Housing assistance payments (Section 8)— Housing Choice Voucher Program and Moderate Rehabilitation Single Room Occupancy Program (2006 FY); fair market rents, 57654-57714 05-19678 Public and Indian housing: Hurricane Katrina disaster areas; regulatory and administrative waivers granted to assist recovery and relief, 57716-57720 05-19758 Indian Indian Affairs Bureau NOTICES Tribal-State Compacts approval; Class III (casino) gambling: Thlopthlocco Tribal Town and Ponca Tribe, OK, 57617 05-19733 Interior Interior Department See Indian Affairs Bureau IRS Internal Revenue Service RULES Income taxes: Stock held by foreign insurance companies, 57509-57510 05-19622 PROPOSED RULES Income taxes: Partnerships with foreign partners; obligation to pay withholding tax on taxable income; cross reference Correction, 57523 05-19623 International International Trade Administration NOTICES Antidumping: Fresh garlic from— China, 57561-57562 05-19685 Frozen warmwater shrimp from— Ecuador, 57562-57563 05-19684 Antidumping and countervailing duties: Administrative review requests, 57558-57559 05-19754 Five year (sunset) reviews— Initiation of reviews, 57559-57561 05-19752 05-19753 Cheese quota; foreign government subsidies; quarterly update, 57563-57564 05-19686 International International Trade Commission NOTICES Import investigations: Gray portland cement and cement clinker from— Japan and Mexico, 57617-57620 05-19593 Optical disk controller chips and chipsets and products containing same, including DVD players and PC optical storage devices, 57620-57621 05-19703 Judicial Judicial Conference of the United States NOTICES Meetings: Judicial Conference Advisory Committee on— Civil Procedure Rules, 57621-57622 05-19679 Justice Justice Department See Alcohol, Tobacco, Firearms, and Explosives Bureau See Drug Enforcement Administration See Federal Bureau of Investigation See Justice Programs Office Justice Justice Programs Office NOTICES Agency information collection activities; proposals, submissions, and approvals, 57623-57624 05-19734 Labor Labor Department See Employee Benefits Security Administration See Wage and Hour Division Library Library of Congress See Copyright Office, Library of Congress National Highway National Highway Traffic Safety Administration PROPOSED RULES Motor vehicle safety standards: Rearview mirrors— Convex mirrors on commercial trucks and other vehicles; withdrawn, 57549-57550 05-19666 NOTICES Motor vehicle safety standards; exemption petitions, etc.: Michelin North America, Inc., 57645-57646 05-19667 NOAA National Oceanic and Atmospheric Administration RULES Fishery conservation and management: Alaska; fisheries of Exclusive Economic Zone— Pacific ocean perch, 57518-57519 05-19719 Northeastern United States fisheries— Emergency closure due to presence of toxin causing paralytic shellfish poisoning, 57517-57518 05-19718 NOTICES Endangered and threatened species: Anadromous fish take— Oregon Department of Fish and Wildlife; Lower Columbia River coho salmon, 57564-57565 05-19724 Marine mammals: Southern resident killer whales; conservation plan, 57565 05-19729 Meetings: South Atlantic Fishery Management Council, 57566 05-19717 Permits: Marine mammals, 57566 05-19732 Neighborhood Neighborhood Reinvestment Corporation NOTICES Meetings; Sunshine Act, 57625 05-19898 Nuclear Nuclear Regulatory Commission NOTICES Agency information collection activities; proposals, submissions, and approvals, E5-5349 57625-57626 E5-5355 Environmental statements; availability, etc.: Kerr McGee Cimarron Corp., 57627-57628 E5-5357 Environmental statements; notice of intent: Nuclear power plant operating license renewal; review process, 57628-57629 E5-5356 *Applications, hearings, determinations, etc.:* Pacific Gas & Electric Co., 57626-57627 E5-5387 Pacific Pacific Northwest Electric Power and Conservation Planning Council NOTICES Columbia River Basin Fish and Wildlife Program: Subbasin plan amendments, 57629-57630 05-19760 Patent Patent and Trademark Office NOTICES Agency information collection activities; proposals, submissions, and approvals, 57567-57569 05-19683 Peace Peace Corps NOTICES Privacy Act: Systems of records; correction, 57630 05-19772 Pipeline Pipeline and Hazardous Materials Safety Administration PROPOSED RULES Pipeline safety: Gas gathering line definition; alternative definition for onshore lines, 57536-57549 05-19455 Postal Postal Rate Commission NOTICES Negotiated service agreements: Bank One Corp., 57630-57631 05-19707 Public Public Debt Bureau See Fiscal Service Rural Rural Business-Cooperative Service RULES Guaranteed loanmaking: Business and Industry Guaranteed Loan Program; annual renewal fee, 57483-57486 05-19722 SEC Securities and Exchange Commission NOTICES Meetings: Smaller Public Companies Advisory Committee, 57631-57632 05-19802 Self-regulatory organizations; proposed rule changes: American Stock Exchange LLC, 57632-57635 E5-5345 E5-5347 Depository Trust Co., 57635-57636 E5-5344 National Association of Securities Dealers, Inc., 57636-57640 E5-5346 E5-5354 State State Department NOTICES Agency information collection activities; proposals, submissions, and approvals, 57640-57641 05-19748 Transportation Transportation Department See Federal Aviation Administration See Federal Motor Carrier Safety Administration See Federal Railroad Administration See National Highway Traffic Safety Administration See Pipeline and Hazardous Materials Safety Administration NOTICES Aviation proceedings: Agreements filed; weekly receipts, 57641 05-19701 Certificates of public convenience and necessity and foreign air carrier permits; weekly applications, 57641-57642 05-19700 Treasury Treasury Department See Fiscal Service See Internal Revenue Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 05-19668 57646-57648 05-19669 05-19682 05-19687 Meetings: Federal Tax Reform, President's Advisory Panel, 57648 05-19847 Veterans Veterans Affairs Department NOTICES Agency information collection activities; proposals, submissions, and approvals, 57648-57650 05-19651 05-19652 05-19653 05-19654 Wage Wage and Hour Division RULES Fair Labor Standards Act: Industries in American Samoa; minimum wage rates, 57722-57724 05-19738 Separate Parts In This Issue Part II Housing and Urban Development Department, 57654-57714 05-19678 Part III Housing and Urban Development Department, 57716-57720 05-19758 Part IV Labor Department, Wage and Hour Division, 57722-57724 05-19738 Reader Aids Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws. To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.gpo.gov and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions. 70 190 Monday, October 3, 2005 Rules and Regulations DEPARTMENT OF AGRICULTURE Rural Business-Cooperative Service 7 CFR Parts 4279 and 4287 RIN 0570-AA34 Business and Industry Guaranteed Loan Program Annual Renewal Fee AGENCY: Rural Business-Cooperative Service, USDA. ACTION: Final rule. SUMMARY: In this final rule the Rural Business-Cooperative Service (the Agency) amends its regulation for the Business and Industry (B&I) Guaranteed Loan Program to provide the authority for the charging of an annual renewal fee on all loans obligated after the publication of the final rule. This annual renewal fee is in addition to the existing one-time guarantee fee. Changes to modify the program regulations were originally proposed on February 28, 2005. The intended effect of this rule is to reduce the subsidy rate for guaranteed loans allowing the budget authority dollar level to support a greater level of assistance to the public ( *i.e.* , higher supportable loan level). A notice will be published in the **Federal Register** each fiscal year that will establish the guarantee fee rate and any annual renewal fee rate for loans obligated during that fiscal year. DATES: This rule is effective October 3, 2005. FOR FURTHER INFORMATION CONTACT: Rick Bonnet, Special Projects/Programs Oversight Division, Rural Business-Cooperative Service, U.S. Department of Agriculture, STOP 3221, 1400 Independence Avenue, SW., Washington, DC 20250-3221, telephone

(202)720-1804, or by e-mail to *rick.bonnet@wdc.usda.gov* . SUPPLEMENTARY INFORMATION: Classification This final rule has been determined to be non-significant and has not been reviewed by the Office of Management and Budget

(OMB)under Executive Order 12866. Programs Affected The Catalog of Federal Domestic Assistance number for the program impacted by this action is 10.768, Business and Industry Loans. Civil Justice Reform This proposed rule has been reviewed under Executive Order 12988, Civil Justice Reform. In accordance with this rule,

(1)all state and local laws and regulations that are in conflict with this rule will be preempted,

(2)no retroactive effect will be given this rule, and

(3)administrative proceedings of the National Appeals Division (7 CFR part 11) must be exhausted before bringing suit in court challenging action taken under this rule. Environmental Impact Statement This document has been reviewed in accordance with 7 CFR part 1940, subpart G, “Environmental Program.” The Agency has determined that this action does not constitute a major Federal action significantly affecting the quality of the human environment, and, in accordance with the National Environmental Policy Act of 1969, 42 U.S.C. 4321 *et seq.* , this is a categorical exclusion and therefore an Environmental Impact Statement is not required. Government Paperwork Elimination Act

(GPEA)Statement The Agency is committed to compliance with GPEA, which requires Government agencies, in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. Paperwork Reduction Act In accordance with the Paperwork Reduction Act of 1995, the information collection requirements contained in this regulation have been approved by OMB under control number 0570-0017. Unfunded Mandates Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pubic Law 104-4 establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, agencies generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, or tribal governments, in the aggregate, or to the private sector of $100 million or more in any one year. When such a statement is needed for a rule, section 205 of UMRA generally requires agencies to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, more cost-effective, or least burdensome alternative that achieves the objectives of the rule. This rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local, and tribal governments or the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of the UMRA. Regulatory Flexibility Act In compliance with the Regulatory Flexibility Act, the Agency has determined that this action would not have a significant economic impact on a substantial number of small entities, because the action will not affect a significant number of small entities, as defined by the Regulatory Flexibility Act (5 U.S.C. 601). The Agency made this determination based on the fact that this regulation only impacts those who choose to participate in the program. Small entity applicants will not be impacted to a greater extent than large entity applicants. Executive Order 13132 It has been determined that, under Executive Order 13132, Federalism, this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. The provisions contained in this rule will not have a substantial direct effect on states or their political subdivisions or on the distribution of power and responsibilities among the various levels of government. Executive Order 13175 Executive Order 13175, Consultation and Coordination with Indian Tribal Governments, imposes requirements on USDA in the development of regulatory policies that have tribal implications or preempt tribal law. USDA has determined that the proposed regulation does not have a substantial direct effect on one or more Indian tribes or on either the relationship or the distribution of powers and responsibilities between the Federal Government and the Indian Tribes. Thus, the proposed rule is not subject to the requirements of Executive Order 13175. Background The cost of the B&I Guaranteed Loan Program has gone up in recent years. This is due to higher defaults and lower interest rates. In the meantime, there is still an interest in funding this program in order to improve, develop, or finance business, industry, and employment and improve the economic and environmental climate in rural communities. To do that in a cost efficient manner for the taxpayer, the Agency is implementing its authority to impose an annual renewal fee. This will reduce the subsidy allowing the Agency, without additional costs to the taxpayer, to maintain the level of assistance that has been historically provided for this program to meet demand. The annual renewal fee is based on similar fees charged in the Small Business Administration

(SBA)programs. Additionally, this type of fee is consistent with the recently authorized Renewable Energy Systems and Energy Efficiency Improvements Guaranteed Loan Program within the Agency. The borrower pool for the B&I Guaranteed Loan Program is even more likely to be able to afford this type of fee compared to other programs mentioned because the amount of the fee is anticipated to be less. The SBA 7(a) Loan Guarantee Program and the B&I program are similar in that they both require an initial one-time fee; and 7(a) loans have an annual fee similar to the one being implemented for the B&I program. In fiscal year

(FY)1996, SBA made major changes in its 7(a) program by lowering the maximum percentage of the loan which could be guaranteed and increasing both the initial fee and the annual fee, which made the program more expensive and less valuable for borrowers and lenders. We examined changes in loan volume and loss levels associated with these changes, and found no convincing evidence that the FY 1996 changes decreased demand for the 7(a) program. Subsidy rates are established using historic loss data from the program and other assumptions. In recent years the subsidy rate has increased significantly, resulting in a reduction in the amount of loans that could be guaranteed with the same budget authority. In the absence of additional budgetary authority, the proposed annual fee is necessary to cover expected losses from the program. The effect of the fee on the loan demand and program activity over the long term will depend on the size of the fee and other factors not related to the fee, including interest rates and general economic growth. This change is prudent and cost efficient and will allow us to maintain the level of assistance going to rural America at a reasonable cost to the taxpayer. The Agency is waiving the 30-day waiting period between publication of the rule and when it will take effect. The reason is to make all loans obligated in FY 2006 subject to the same fee structure. Having loans obligated with different fee structures in the same fiscal year could cause confusion and impose an additional administrative burden on lenders. Also, because lenders will not need to make the first renewal fee payments to the Agency until January of 2007, and because the Final Rule makes only minor changes to the Proposed Rule, program participants are not expected to be disadvantaged by this rule's earlier implementation. For these reasons, the Agency finds that good cause exists for this rule's immediate implementation. Comments on the Proposed Rule and Responses The following paragraphs summarize the comments received and the Agency responses. We received 11 responses of which 8 were from the lending community (3 from the same bank), 2 were from Agency employees, and one was from a national association. Generally, the comments were negative. The only positive comment was that the annual renewal fee was the best alternative to reduced funding levels in the short term. Several changes were made to the final rule as a result of comments received. The most significant change was to give the Agency discretion in canceling the guarantee for nonpayment of the renewal fee and to charge lenders interest on any unpaid renewal fees. Seven respondents felt an annual fee would be a financial burden/hardship on the borrowers, especially new businesses and those with more limited recourses. The Agency acknowledges that the fee will most likely represent an increased cost to the borrower. However, because the B&I Guaranteed Loan Program is intended only for credit-worthy businesses, the Agency feels the additional financing cost will not jeopardize the success of the businesses assisted. Agencies, in accordance with the Federal Credit Reform Act of 1990 and guidance provided in OMB Circular A-129, Appendix A(II)(4)(b)(1), are to establish fees structures at levels that minimize subsidy costs while supporting achievement of program objectives. The Agency is taking measures to improve the quality of its portfolio and reduce loan losses. Nevertheless, the Agency is required to further minimize subsidy costs. The Agency feels the renewal fee is the most equitable solution to increased costs without jeopardizing the achievement of program objectives. Six respondents felt the renewal fee would make the B&I Guaranteed Loan Program more complicated and difficult to market. The uncertainty of the amount of the fee percentage rate would make it especially difficult to market, which would discourage lenders from marketing the program. USDA could lose its competitive advantage with SBA if additional SBA-like fees are imposed. One respondent commented that the fee rate could change if the initial application was received in a fiscal year, but not obligated until the next fiscal year, which would further hamper marketing activities. The Agency acknowledges the program complexity and marketing challenges the renewal fee will add, but a reduction in the subsidy cost is needed to maintain the level of assistance that has been historically provided for this program. As described in § 4279.107(b)(1) of the rule, the Agency will publish the fee percentage rate in a **Federal Register** notice each fiscal year. The Agency will publish the notice as soon as the fee percentage rate has been determined to provide as much advanced notice as possible. All loans obligated that fiscal year will be subject to that same fee percentage rate for the full term of the loan. Four respondents felt the increased cost of the program would result in fewer loans and businesses being assisted, thereby hindering economic development and job creation. The Agency had a Regulatory Impact Analysis completed to determine the impact that a renewal fee would likely have on loan demand. As mentioned earlier in this document, in FY 1996, SBA made major changes in its 7(a) program by lowering the maximum percentage of the loan which could be guaranteed and increasing both the initial fee and the annual fee, which made the program more expensive and less valuable for borrowers and lenders. A review of the changes in loan volume and loss levels associated with these changes revealed no convincing evidence that the FY 1996 changes decreased demand for the 7(a) program. Due to the similarities of the programs, the Agency believes the results will be similar. One respondent felt the additional cost of the program would undermine worthwhile projects and discourage the more credit-worthy businesses from participating in the program. This could result in a decline in the quality of the overall portfolio over time, which would tend to increase costs to the government. The Regulatory Impact Analysis revealed that there was no convincing evidence that the changes in the SBA program resulted in a decrease in the quality of the SBA 7(a) loan portfolio. Due to the similarities of the programs, the Agency believes the impact on the B&I Guaranteed Loan Program will be similar. Six respondents felt it would be a significant administrative burden for the lenders. The Agency appreciates the burden this change will impose. In an effort to keep the burden to a minimum, the Agency is combining the lender's existing semiannual reporting requirement with the renewal fee payment process. Currently, lenders are required to report the principal and interest balances, amount advanced, interest rate, loan status, and amount ahead or behind schedule on each guarantee loan, semiannually. The Agency is web-enabling this process where the lender will be required to enter a secure website, enter the currently required information, as of December 31 of each year, and the system will calculate the annual fee due on that loan. The fee will then be drawn from a specified account in the lender's bank on a specified date. This action will satisfy both the annual renewal fee payment and the semi-annual status report to the Agency. The due date of the renewal fee was also changed from March 1 to January 31 to correspond with the due date of the lender's semiannual status reporting requirement, but the date any unpaid fee was considered delinquent remained April 1. One respondent suggested a change in the name of the form used to collect the renewal fee. The final rule is revised to remove the name of the form to provide maximum flexibility in the mechanism used to collect the fee. One respondent thought the renewal fee should be paid monthly or quarterly to reduce the financial impact from one annual payment. The Agency acknowledges the language in the proposed rule suggested the borrower was expected to pay the renewal fee once a year. The Agency anticipates lenders will likely factor the renewal fee into their interest rate structure, and collect the renewal fee as a part of the regular borrower payments. The language is therefore revised to give the lender maximum flexibility in establishing a rate structure. The final rule does not stipulate who is responsible for the fee. The lender actually pays the fee, but may pass the fee on to the borrower. One respondent felt the fee should be restricted to the guaranteed portion of the loan. The Agency agrees, and the fee will be charged only on the guaranteed portion of the loan. One respondent felt the Agency should refund the “unearned” portion of the renewal fee when the borrower prepays its loan before the end of the year, after the renewal fee has been paid for the year. The Agency is not adopting this suggestion as the administrative burden on lenders and the Agency would be prohibitive. The amount of the fee on the average B&I loan is relatively small. With the proposed annual renewal fee rate of 1/8 of one percent for FY 2006, the amount of the fee on a $1 million B&I loan for a full year would be only $1,250. Depending on how a lender structures the loan payments, the borrower may not benefit from the return of “unearned” fees. Section 4279.107 states the guarantee fees are non-refundable, and this has been the policy in the B&I Guaranteed Loan Program for many years. One respondent felt there could be significant servicing and legal issues for the Agency if a guarantee is cancelled for non-payment of the renewal fee. The Agency agrees and is changing the language to state that the Agency may, at its discretion, cancel the guarantee to the lender for nonpayment of the renewal fee. Language is also added where the Agency will charge the lender interest on any delinquent renewal fees and will deduct any unpaid renewal fees from any loss payment made to the lender. One respondent suggested alternatives to the renewal fee, such as varying the amount of initial fee, based on the size of the loan. The Agency has statutory limitations on the maximum initial fee that may be charged and is charging the maximum initial fee allowed, with certain limited exceptions. The Agency feels the annual renewal fee approach is the most equitable alternative. Two respondents felt the proposed rule change would be a violation of statute. The Farm Security and Rural Investment Act of 2002 (Farm Bill) gives the Secretary authority to assess a 1-time fee in an amount that does not exceed 2 percent of the guaranteed principal portion of the loan. One respondent indicated that the proposed rule eliminates the language concerning the cap, which could result in a perceived conflict with the terms of the Farm Bill. The Agency is replacing the language concerning the 2 percent cap. The other respondent suggested the renewal fee violates statute because the combined fees will very likely exceed 2 percent cap established in the statute. The Rural Development Manager's Report to the 2002 Farm Bill states that the 2 percent initial fee limit established by statute does not prevent the Secretary from imposing annual fees which may be needed to preserve an appropriation level. One respondent stated that § 4279.107(b)(2) states the holder's rights will continue in effect as specified in the Loan Note Guarantee, and suggested the reference should be to the Assignment Guarantee Agreement instead. The final rule references both the Loan Note Guarantee and the Assignment Guarantee Agreement. Several technical changes not made in the proposed rule were made in the final rule to help Agency employees and lenders administer the program. Language was also added to the B&I loan servicing regulation (7 CFR Part 4287, subpart B) to reference the annual renewal fee requirements described in § 4279.107. Section 4279.107(a)(2)(i) of the proposed rule stated the rate of the fee is the rate in effect at the time of the original issuance of the Conditional Commitment for the loan and will remain in effect for the life of the loan. It is very unlikely, but possible, for the Conditional Commitment and loan obligation to occur in different fiscal years. Because the fee rate and obligation are tied to the fiscal year in the Agency's accounting system, the controlling event was changed to the date of obligation. List of Subjects in 7 CFR Parts 4279 and 4287 Loan programs—Business and industry—Rural development assistance, Rural areas. Therefore, chapter XLII, title 7, Code of Federal Regulations, is amended as follows: PART 4279—GUARANTEED LOANMAKING 1. The authority citation for part 4279 is revised to read as follows: Authority: 5 U.S.C. 301; 7 U.S.C. 1989. Subpart B—Business and Industry Loans 2. Section 4279.107 is revised to read as follows: § 4279.107 Guarantee fees. For all new loans there are two types of non-refundable guarantee fees to be paid by the lender. The fees may be passed on to the borrower. The fees may be forwarded to the Agency through an electronic funds transfer system or, at the Agency's discretion, by a check payable to USDA using a USDA-approved form.

(a)*Initial guarantee fee.* The initial fee is paid at the time the Loan Note Guarantee is issued. The fee may be included as an eligible loan purpose in the guaranteed loan. The fee will be the rate (a specified percentage not to exceed 2 percent) multiplied by the principal loan amount, multiplied by the percent of guarantee. Subject to specified annual limits set by the Agency, the initial guarantee fee may be reduced to 1 percent if the borrower's business supports value-added agriculture and results in farmers benefiting financially, or

(1)Is a high impact business development investment in accordance with § 4279.155(b)(5), and

(2)Is located in a rural community that:

(i)Is experiencing long-term population decline and job deterioration, or

(ii)Has remained persistently poor over the last 60 years, or

(iii)Is experiencing trauma as a result of natural disaster, or

(iv)Is experiencing fundamental structural changes in its economic base.

(b)*Annual renewal fee.* The annual renewal fee is paid once a year and is required to maintain the enforceability of the guarantee as to the lender.

(1)The rate of the annual renewal fee (a specified percentage) is established by Rural Development in an annual notice published in the **Federal Register** , multiplied by the outstanding principal loan balance as of December 31 of each year, multiplied by the percent of guarantee. The rate is the rate in effect at the time the loan is obligated, and will remain in effect for the life of the loan.

(2)Annual renewal fees are due on January 31. Payments not received by April 1 are considered delinquent and, at the Agency's discretion, may result in cancellation of the guarantee to the lender. Holders' rights will continue in effect as specified in the Loan Note Guarantee and Assignment Guarantee Agreement. Any delinquent annual renewal fees will bear interest at the note rate and will be deducted from any loss payment due the lender. For loans where the Loan Note Guarantee is issued between October 1 and December 31, the first annual renewal fee payment will be due January 31 of the second year following the date the Loan Note Guarantee was issued. PART 4287—SERVICING 3. The authority citation for part 4287 continues to read as follows: Authority: 5 U.S.C. 301; 7 U.S.C. 1989. Subpart B—Servicing Business and Industry Guaranteed Loans § 4287.107 [Amended] 4. Section 4287.107(a) is revised to read as follows:

(a)*Lender reports and annual renewal fee.* The lender must report the outstanding principal and interest balance on each guaranteed loan semiannually using a USDA-approved status report or other approved format. The lender will transmit the annual renewal fee to the Agency simultaneously with the December 31 semiannual status report in accordance with 7 CFR part 4279, subpart B, § 4279.107. Dated: September 27, 2005. Thomas C. Dorr, Under Secretary, Rural Development. [FR Doc. 05-19722 Filed 9-30-05; 8:45 am]

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