Unknown. Final rule
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--- schema: federal-register doc_type: fedreg source_file: FR-2007-05-30.xml --- 72 103 Wednesday, May 30, 2007 Contents Agricultural Agricultural Marketing Service RULES Grapes grown in southeastern California, 29839-29840 E7-10280 Perishable Agricultural Commodities Act; implementation: Trust protection for produce sellers when using electronic data interchange or other billing methods, 29837-29839 E7-10262 Agriculture Agriculture Department See Agricultural Marketing Service See Animal and Plant Health Inspection Service See Food Safety and Inspection Service See Forest Service See Rural Business-Cooperative Service See Rural Utilities Service Animal Animal and Plant Health Inspection Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 29942-29943 E7-10323 Census Census Bureau NOTICES Agency information collection activities; proposals, submissions, and approvals, 29958-29960 E7-10330 E7-10361 Centers Centers for Medicare & Medicaid Services NOTICES Reports and guidance documents; availability, etc.:
Health Insurance Portability and Accountability Act (HIPAA) administrative simplification; National Plan and Provider Enumeration System data dissemination, 30011-30014 07-2651 Civil Civil Rights Commission NOTICES Meetings; State advisory committees: Alabama, 29955 E7-10287 Coast Guard Coast Guard RULES Drawbridge operations: New Jersey, 29885-29886 E7-10276 Commerce Commerce Department See Census Bureau See Industry and Security Bureau See International Trade Administration See National Oceanic and Atmospheric Administration See National Telecommunications and Information Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 29955-29958 E7-10329 E7-10333 E7-10335 E7-10406 Copyright Copyright Office, Library of Congress NOTICES Meetings:
Digital phonorecords; manufacturing and distribution; statutory licenses, 30039-30042 E7-10363 Copyright Copyright Royalty Board, Library of Congress RULES Statutory licenses; rates and terms: Digital performance right in sound recordings and ephemeral recordings; rates and terms determination Technical amendment, 29886 E7-10366 Corporation Corporation for National and Community Service NOTICES Agency information collection activities; proposals, submissions, and approvals, E7-10272 29986-29987 E7-10273 Defense Defense Department NOTICES Arms sales notification; transmittal letter, etc., 29987-29992 07-2637 Meetings:
Care for America's Returning Wounded Warriors, President's Commission, 29992 07-2658 Education Education Department NOTICES Agency information collection activities; proposals, submissions, and approvals, 29992-29995 E7-10277 E7-10278 E7-10279 E7-10294 Employment Employment and Training Administration NOTICES Adjustment assistance; applications, determinations, etc.: American Manufacturing International, Inc., 30028-30029 E7-10310 Cinram Manufacturing, LLC, 30029 E7-10311 DeRoyal Textiles, Inc., 30029 E7-10309 Digitron Packaging, Inc., et al., 30029-30030 E7-10303 Ford Motor Co., 30030-30031 E7-10305 Freight Car America, 30031 E7-10307 Gibraltar DFC Strip Steel LLC, 30031 E7-10306 Troxel Co., 30031 E7-10312 Wehadkee Yarn Mills et al., 30032-30034 E7-10304 Agency information collection activities; proposals, submissions, and approvals, 30034-30035 E7-10353 Energy Energy Department See Energy Information Administration Energy Energy Information Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 29995 E7-10295 EPA Environmental Protection Agency RULES Air programs:
Stratospheric ozone protection— N-propyl bromide in solvent cleaning; listing of substitutes for ozone-depleting substances, 30142-30167 E7-9707 Air quality implementation plans; approval and promulgation; various States: California, 29886-29889 E7-10236 PROPOSED RULES Air programs: Stratospheric ozone protection— N-propyl bromide in adhesives, coatings, and aerosols; listing of substitutes for ozone-depleting substances, 30168-30207 E7-9706 Air quality implementation plans; approval and promulgation; various States; air quality planning purposes; designation of areas:
Pennsylvania, 29901-29928 E7-10351 E7-10356 Air quality implementation plans; approval and promulgation; various States: California, 29901 E7-10238 Indiana, 29897-29901 E7-10317 NOTICES Pesticide programs: Risk assessments— 4-Aminopyridine, 29995-29997 E7-10228 Ethylene oxide, 29997-29999 E7-10341 Pesticide registration, cancellation, etc.: Syngenta Seeds, Inc., 29999-30000 E7-10230 Water supply: Public water system supervision program— Indiana, 30000-30001 E7-10339 Executive Executive Office of the President See Presidential Documents FAA Federal Aviation Administration RULES Airworthiness directives:
Airbus, 29874-29879 E7-10028 Empresa Brasileira de Aeronautica S.A. (EMBRAER), 29879-29881 E7-10108 McDonnell Douglas, 29881-29884 E7-10110 E7-10111 Class E airspace, 29884-29885 E7-10256 PROPOSED RULES Airworthiness directives: Pilatus Aircraft Ltd., 29895-29897 E7-10315 FCC Federal Communications Commission RULES Radio stations; table of assignments: West Virginia, 29889 E7-10360 PROPOSED RULES Common carrier services: Local telecommunications markets; competitive networks promotion, 29928-29929 E7-10078 Wireless telecommunication services— 700 MHz spectrum service rules;
Google proposals, 29930-29933 E7-10417 Radio frequency devices: Interference temperature operation, 29929 E7-10337 NOTICES Agency information collection activities; proposals, submissions, and approvals, E7-10345 30001-30006 E7-10346 E7-10347 E7-10348 E7-10350 Meetings; Sunshine Act, 30006-30007 07-2685 FDIC Federal Deposit Insurance Corporation NOTICES Agency information collection activities; proposals, submissions, and approvals, 30007-30008 E7-10292 Federal Election Federal Election Commission NOTICES Special elections; filing dates:
Massachusetts, 30008-30009 E7-10322 Federal Highway Federal Highway Administration NOTICES Federal agency actions on proposed highways; judicial review claims: Salem to Manchester, Rockingham and Hillsborough Counties, NH; Interstate 93 highway project, 30047 E7-10357 FMC Federal Maritime Commission NOTICES Privacy Act; system of records, 30009-30011 E7-10381 Federal Motor Federal Motor Carrier Safety Administration NOTICES Motor carrier safety standards: Drivers’ hours of service; exemption applications— American Pyrotechnics Association, 30047-30049 E7-10275 Federal Reserve Federal Reserve System NOTICES Banks and bank holding companies:
Formations, acquisitions, and mergers, 30011 E7-10319 Federal Transit Federal Transit Administration NOTICES Public transportation projects; claims limitation, 30049-30050 E7-10281 Fish Fish and Wildlife Service PROPOSED RULES Endangered and threatened species: Findings on petitions, etc.— Mt. Charleston blue butterfly, 29933-29941 E7-10140 Food Food and Drug Administration NOTICES Reports and guidance documents; availability, etc.: Interim melamine and melamine analogues safety/risk assessments, 30014-30015 07-2679 Food Food Safety and Inspection Service NOTICES Meetings:
Codex Alimentarius Commission— 30th session, 29943-29944 E7-10326 Microbiological Criteria for Foods National Advisory Committee, 29944-29945 E7-10321 Reports and guidance documents; availability, etc.: Melamine and melamine-related compounds; hogs and chickens from farms identified as receiving contaminated pet food scraps and offered for slaughter, 29945-29948 07-2649 Forest Forest Service NOTICES Environmental statements; notice of intent: Caribou-Targhee National Forest, ID, 29948-29949 E7-10358 Health Health and Human Services Department See Centers for Medicare & Medicaid Services See Food and Drug Administration See Health Resources and Services Administration See National Institutes of Health Health Health Resources and Services Administration NOTICES Meetings:
Rural Health and Human Services National Advisory Committee, 30015-30016 07-2683 Homeland Homeland Security Department See Coast Guard See U.S. Immigration and Customs Enforcement RULES Immigration: Benefit application and petition fee schedule adjustment, 29851-29874 E7-10371 NOTICES Agency information collection activities; proposals, submissions, and approvals, 30024-30025 E7-10382 Industry Industry and Security Bureau NOTICES Agency information collection activities; proposals, submissions, and approvals, 29960 E7-10328 Export privileges, actions affecting:
Lopez, Rufina Sanchez, 29960-29963 07-2675 Sanchez, Jose Alberto Diaz, 29963-29965 07-2677 Winter Aircraft Products SA, 29965-29967 07-2676 Interior Interior Department See Fish and Wildlife Service See Land Management Bureau International International Trade Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 29967 E7-10340 Antidumping: Automotive replacement glass windshields from— China, 29969-29970 E7-10380 Freshwater crawfish tail meat from— China, 29970 E7-10365 Stainless steel bar from— Germany, 29970-29971 E7-10367 Antidumping and countervailing duties:
Administrative review requests, 29968-29969 E7-10369 Grants and cooperative agreements; availability, etc.: China and India; U.S. Electronic Education Fairs, 29971-29972 E7-10396 North American Free Trade Agreement (NAFTA); binational panel reviews: Softwood lumber from— Canada, E7-10283 29972-29973 E7-10284 E7-10285 International International Trade Commission NOTICES Import investigations: Alendronate salts and products containing same, 30027 E7-10320 Wireless conference calling devices, components, and devices containing same, 30027-30028 E7-10293 Justice Justice Department See National Institute of Corrections NOTICES Reports and guidance documents; availability, etc.:
Sex offender registration and notification, national guidelines, 30210-30234 E7-10210 Labor Labor Department See Employment and Training Administration See Occupational Safety and Health Administration See Veterans Employment and Training Service NOTICES Agency information collection activities; proposals, submissions, and approvals, 30028 E7-10289 Land Land Management Bureau NOTICES Alaska Native claims selection: Port Graham Corp., 30026-30027 E7-10314 Library Library of Congress See Copyright Office, Library of Congress See Copyright Royalty Board, Library of Congress National Highway National Highway Traffic Safety Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 30050 07-2678 National Institute National Institute of Corrections NOTICES Meetings:
Advisory Board, 30028 07-2660 NIH National Institutes of Health NOTICES Agency information collection activities; proposals, submissions, and approvals, 30016-30017 E7-10331 Inventions, Government-owned; availability for licensing, 30017-30018 E7-10332 Meetings: National Cancer Institute, 30018 07-2664 National Center on Minority Health and Health Disparities, 30018-30019 07-2662 National Eye Institute, 30019 07-2661 National Human Genome Research Institute, 30019 07-2663 07-2666 National Institute of Allergy and Infectious Diseases, 30020 07-2671 National Institute of General Medical Sciences, 30019-30020 07-2665 National Institute of Neurological Disorders and Stroke, 30020-30021 07-2673 National Institute on Drug Abuse, 30020 07-2672 Scientific Review Center, 30021-30022 07-2667 07-2668 07-2669 07-2670 Patent licenses; non-exclusive, exclusive, or partially exclusive:
Biosite, Inc., 30022 E7-10352 ImQuest Pharmaceuticals Inc., 30022-30023 E7-10334 Theranostics Health, LLC, 30023-30024 E7-10354 NOAA National Oceanic and Atmospheric Administration RULES Fishery conservation and management: Alaska; fisheries of Exclusive Economic Zone— Pacific cod, 29893-29894 07-2674 Northeastern United States fisheries— Atlantic sea scallop, 29889-29891 E7-10370 West Coast States and Western Pacific fisheries— Coastal pelagic species, 29891-29893 E7-10379 PROPOSED RULES Fishery conservation and management:
Alaska; fisheries of Exclusive Economic Zone— Bering Sea and Aleutian Islands groundfish, 30052-30139 E7-9828 NOTICES Endangered and threatened species: Findings on petitions, etc.— Right whales, global populations; listing as single species, 29973-29974 E7-10274 Marine mammals: Incidental taking; authorization letters, etc.— Eglin Air Force Base, FL; Gulf of Mexico; air-to-surface gunnery missions; whales and dolphins, 29974-29982 E7-10372 Taking and importing— Ecuador; yellowfin tuna harvested in eastern tropical Pacific Ocean; affirmative finding renewed, 29982-29983 E7-10373 National Telecommunications National Telecommunications and Information Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 29983-29984 E7-10344 Reports and guidance documents; availability, etc.:
Digital-to-Analog Converter Box Coupon Program; submission, testing, test report, shipping of samples, and processing guidance, 29984-29985 E7-10282 Nuclear Nuclear Regulatory Commission NOTICES Meetings; Sunshine Act, 30042-30043 07-2687 Reports and guidance documents; availability, etc.: General Electric boiling water reactors; improved banked position withdrawal sequence use; model safety evaluation and model license; correction, 30043 E7-10355 Spent nuclear fuel transportation; licenses modification order, safeguards of information and security measures, 30043-30045 E7-10349 Occupational Occupational Safety and Health Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 30035-30037 E7-10290 Presidential Presidential Documents PROCLAMATIONS Special observances:
Great Outdoors Month (Proc. 8149), 30235-30238 07-2716 Rural Rural Business-Cooperative Service RULES Rural Economic Development Loan and Grant Program, 29841-29851 07-2636 NOTICES Grants and cooperative agreements; availability, etc.: Small, Minority Producer Program, 29949-29955 E7-10301 RUS Rural Utilities Service RULES Rural Economic Development Loan and Grant Program, 29841-29851 07-2636 State State Department NOTICES Meetings: Eastern Europe and Independent States of Former Soviet Union Advisory Committee, 30045 E7-10338 International Telecommunications Advisory Committee, 30045 E7-10343 TVA Tennessee Valley Authority NOTICES Meetings;
Sunshine Act, 30045-30046 07-2691 Transportation Transportation Department See Federal Aviation Administration See Federal Highway Administration See Federal Motor Carrier Safety Administration See Federal Transit Administration See National Highway Traffic Safety Administration NOTICES Agency information collection activities; proposals, submissions, and approvals, 30046 E7-10313 Aviation proceedings: Agreements filed; weekly receipts, 30046 E7-10300 Certificates of public convenience and necessity and foreign air carrier permits; weekly applications, 30046-30047 E7-10299 Immigration U.S.
Immigration and Customs Enforcement NOTICES Agency information collection activities; proposals, submissions, and approvals, 30025-30026 E7-10296 E7-10297 Veterans Veterans Employment and Training Service NOTICES Grants and cooperative agreements; availability, etc.: Homeless Veterans’ Reintegration Program, 30037-30039 E7-10258 Separate Parts In This Issue Part II Commerce Department, National Oceanic and Atmospheric Administration, 30052-30139 E7-9828 Part III Environmental Protection Agency, 30142-30207 E7-9706 E7-9707 Part IV Justice Department, 30210-30234 E7-10210 Part V Executive Office of the President, Presidential Documents, 30235-30238 07-2716 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. 72 103 Wednesday, May 30, 2007 Rules and Regulations DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 46 [Docket Number AMS-FV-07-0009; FV05-373] RIN 0581-AC53 Amendments to Regulations Under the Perishable Agricultural Commodities Act
(PACA)To Ensure Trust Protection for Produce Sellers When Using Electronic Invoicing or Other Billing Methods AGENCY: Agricultural Marketing Service, USDA. ACTION: Final rule. SUMMARY: The Department of Agriculture
(USDA)is amending the regulations under the Perishable Agricultural Commodities Act
(PACA)to ensure that the status of sellers of perishable agricultural commodities as trust creditors is protected when electronic data interchange
(EDI)or other forms of electronic commerce are used to invoice buyers. Specifically, the amendments require that a buyer licensed under the PACA or its third party representative accept the PACA trust notice submitted to it by a seller on a paper, electronic invoice, or other billing statement. In addition, the buyer must allow sufficient data space for the required trust language regardless of the billing medium. Finally, any failure, act or omission inconsistent with this responsibility is unlawful and a violation of the PACA. DATES: *Effective Date:* June 29, 2007. FOR FURTHER INFORMATION CONTACT: Karla Whalen, Section Head, Trade Practices Section, or Phyllis Hall, Senior Marketing Specialist, Trade Practices Section, 202-720-6873. SUPPLEMENTARY INFORMATION: Background of PACA and Trust Provisions USDA's Agricultural Marketing Service
(AMS)administers and enforces the Perishable Agricultural Commodities Act (PACA). The PACA establishes a code of fair trading practices in the marketing of fresh and frozen fruits and vegetables in interstate and foreign commerce. The PACA protects growers, shippers, distributors, and retailers dealing in those commodities by prohibiting unfair and fraudulent trade practices. The law also provides a forum to adjudicate or mediate commercial disputes. Licensees who violate the PACA may have their license suspended or revoked, and principals of such a licensee are restricted from employment or operating in the produce industry for a period of time. The PACA also imposes a statutory trust for the benefit of unpaid suppliers or sellers on perishable agricultural commodities received and accepted but not yet paid for, and may encumber products derived from those commodities, and any receivables or proceeds due from the sale of those commodities or products. In the case of a business failure or bankruptcy of an entity subject to PACA, the debtor's inventory and receivables (PACA trust assets) are not property of the estate and are not available for general distribution until the claims of PACA creditors who have preserved their trust rights have been satisfied. Because of the statutory trust provision, PACA trust creditors who have preserved their trust rights with the appropriate written notices, including sellers outside of the United States, have a far greater chance of recovering the money owed to them should an entity subject to PACA go out of business. The PACA trust provisions protect producers and the majority of firms trading in fruits and vegetables as each buyer of perishable agricultural commodities in the marketing chain becomes a seller in its own turn. In 1995, the PACA was amended to provide that licensed sellers of fresh and frozen fruits and vegetables may provide notice to buyers of their intention to preserve trust benefits by including specific language on invoice and billing documentation. The required language reads: “The perishable agricultural commodities listed on this invoice are sold subject to the statutory trust authorized by section 5(c) of the Perishable Agricultural Commodities Act, 1930 (7 U.S.C. 499e(c)). The seller of these commodities retains a trust claim over these commodities, all inventories of food or other products derived from these commodities, and any receivables or proceeds from the sale of these commodities until full payment is received.” (7 U.S.C. 499e(c)(4)). Amendment of PACA Regulations To Allow for Electronic Invoicing The PACA regulations (7 CFR 46.46(a)(5)) were amended in 1997 to state that electronic communications are considered “ordinary or usual billing and invoice statements” within the meaning of Section 5(c)(4) of the PACA. Under the 1997 amendments to the PACA regulations, unpaid PACA licensed sellers or suppliers of fresh and frozen fruits and vegetables have the option of providing notice to buyers of their intention to preserve their trust rights by including the specified language contained in Section 5(c)(4) of the PACA on their billing or invoice statements, whether those statements are paper documentation or electronic transmissions. Alternatively, as provided in the PACA and regulations, sellers (licensed or non-licensed) can also satisfy the notice requirement by sending the buyer a separate detailed notice of their intent to preserve trust benefits within thirty
(30)days of payment default. Whichever method of providing notice is used to preserve trust benefits, in order to claim the benefit of the trust, payment terms may not exceed 30 days from date of acceptance. Since the amendment to the regulations, a number of produce sellers voiced concern that their PACA trust rights might not be preserved if:
(1)The buyer/buyer's agent either willfully or through oversight did not receive the entire electronic transmission (i.e., electronic invoice);
(2)the buyer/buyer's agent did not download the trust information;
(3)the buyer/buyer's agent did not opt to receive the information;
(4)the buyer/buyer's agent did not buy the data field that allows the inclusion of the trust language; or
(5)the EDI service provider did not translate the field that contains the trust language. Additional concerns were expressed that the alternate method of trust notice (i.e., separate trust notice letter) was not being accepted by some buyers who require electronic invoicing. Others in the industry expressed concern about being charged a fee by the buyer to accept the notice to preserve their trust benefits with an electronic invoice, a paper invoice, or separate trust notice. Advanced Notice of Proposed Rulemaking AMS published an Advanced Notice of Proposed Rulemaking in the **Federal Register** on January 30, 2006, (71 FR 4831) seeking comments on whether, and if so, how to amend the PACA regulations to address industry concerns regarding electronic invoicing. The Advance Notice of Proposed Rulemaking invited comments on:
(1)The types of problems that may need to be addressed by new regulatory language;
(2)any technological barriers and solutions;
(3)any additional costs likely to be associated with appropriate regulations, and opinions regarding who should bear such costs;
(4)whether the Agency should by regulation define electronic invoicing methods that must be made available by licensed buyers, (e.g., creating a separate field for trust notice language in electronic invoices);
(5)whether buyers should be required to accept separate notices (i.e., electronic or paper PACA trust) without restriction or charge; and
(6)other related issues and suggestions. The comment period ended on March 16, 2006. AMS received 65 comments. The vast majority of the comments favored amending the regulations to clarify electronic invoicing practices so that sellers have the same protection when using electronic invoicing as that afforded through traditional paper invoices. Therefore, AMS determined it was appropriate to issue a notice of proposed rulemaking. Notice of Proposed Rulemaking AMS published a Notice of Proposed Rulemaking in the **Federal Register** on November 8, 2006, (71 FR 65426) seeking comments on amending the PACA regulations to ensure that the status of sellers of perishable agricultural commodities as trust creditors is protected when electronic data interchange
(EDI)or other forms of electronic commerce are used to invoice buyers. Specifically, the amendments would require that a buyer licensed under the PACA or its third party representative accept the PACA trust notice submitted to it by a seller on a paper, electronic invoice, or other billing statement. In addition, the buyer would be required to allow sufficient data space for the required trust language regardless of the billing medium. Finally, any failure, act or omission inconsistent with this responsibility would be unlawful and a violation of the PACA. The comment period ended on January 8, 2007. We received 41 comments. All commentors supported AMS's proposal to amend the regulations. The comments indicate that the proposed amendments would remedy a very serious potential commercial problem for shippers/sellers, as well as adapt to industry practices of enhanced technology; and, thus would provide the same protections for the shippers/sellers when paper invoices or EDI transmissions are used. Therefore, for the reasons given in the proposed rule and based upon comments received, we are adopting the proposed rule as a final rule, without change. Executive Orders 12866 and 12988 This final rule has been determined to be not significant for the purposes of Executive Order 12866, and therefore, has not been reviewed by the Office of Management and Budget. This final rule has been reviewed under Executive Order 12988, Civil Justice Reform, and is not intended to have retroactive effect. This final rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule. There are no administrative procedures that must be exhausted prior to any judicial challenge to the provisions of this final rule. Effects on Small Businesses Pursuant to requirements set forth in the Regulatory Flexibility Act
(RFA)(5 U.S.C. 601 *et seq.* ), AMS has considered the economic impact of this final rule on small entities. The purpose of the RFA is to fit regulatory actions to the scale of businesses subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Small agricultural service firms have been defined by the Small Business Administration
(SBA)(13 CFR 121.601) as those whose annual receipts are less than $5,000,000. There are approximately 15,000 firms licensed under the PACA, many of which could be classified as small entities. The final rule clarifies how to preserve the trust benefit when using electronic invoicing. The use of electronic invoicing will provide companies an electronic alternative to paper documentation to give notice of intent to preserve trust rights, thereby reducing the time and expense associated with preserving trust rights under the PACA. Given the preceding discussion, AMS has made a determination that the provisions of this final rule would not have a significant economic impact on a substantial number of small entities. Paperwork Reduction Act In accordance with OMB regulations (5 CFR part 1320) that implement the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information collection and recordkeeping requirements that are covered by this final rule were approved under OMB number 0581-0031 on October 5, 2004, and expire on October 31, 2007. E-Government Act Compliance AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes. List of Subjects in 7 CFR Part 46 Agricultural commodities, Brokers, Investigations, Penalties, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, AMS amends 7 CFR part 46 as follows: PART 46—[AMENDED] 1. The authority citation for part 46 continues to read as follows: Authority: Sec. 15, 46 Stat. 537; 7 U.S.C. 499o. 2. In § 46.46, paragraph (f)(3) introductory text is revised and new paragraphs (f)(4) and
(5)are added to read as follows: § 46.46 Statutory trust.
(f)* * *
(3)Licensees may choose an alternate method of preserving trust benefits from the requirements described in paragraphs (f)(1) and
(2)of this section. Licensees may use their invoice or other billing statement as defined in paragraph (a)(5) of this section, whether in documentary or electronic form, to preserve trust benefits. Alternately, the licensee's invoice or other billing statement, given to the buyer, must contain:
(i)* * *
(ii)* * *
(4)If the invoice or other billing statement is in electronic form, the licensee has met its requirement of giving the buyer notice of intent to preserve trust benefits on the face of the invoice or other billing statement if the electronic invoice or other billing statement containing the statement set forth in paragraph (f)(3)(i) is sent to the buyer and the electronic transmission can be verified. The licensee will be deemed to have given notice to the buyer of its intent to preserve trust benefits if the licensee can verify that the electronic invoice or other billing statement was sent to a third party electronic transaction vendor designated by the buyer. The licensee will have met the requirement of giving the buyer written notice of intent to preserve trust benefits using electronic means if it can verify that the electronic data invoice or other billing statement was transmitted to the buyer, or its designated electronic transaction vendor, irrespective of whether or not the buyer or third party vendor downloads or accepts the trust statement.
(5)If a buyer conducts its transactions in perishable agricultural commodities using an electronic system, the buyer or its third party electronic vendor must allow sufficient space for the seller to include the required trust statement of intent to preserve trust benefits in the buyer's electronic invoices or other billing statement forms. A buyer or its designated third party electronic vendor must accept a seller's notice of intent to preserve benefits under the trust using the required trust statement, whether in documentary or electronic form, as set forth in paragraphs
(d)and
(f)of this section. Any act or omission which is inconsistent with this responsibility is unlawful and in violation of Section 2 of the Act (7 U.S.C. 499b). Dated: May 23, 2007. Lloyd C. Day, Administrator, Agricultural Marketing Service. [FR Doc. E7-10262 Filed 5-29-07; 8:45 am] BILLING CODE 3410-02-P DEPARTMENT OF AGRICULTURE Agricultural Marketing Service 7 CFR Part 925 [Docket No. AMS-FV-07-0028; FV07-925-1 FR] Grapes Grown in a Designated Area of Southeastern California; Change in Reporting Requirements AGENCY: Agricultural Marketing Service, USDA. ACTION: Final rule. SUMMARY: This rule revises the reporting requirements established under the California desert grape marketing order, which regulates the handling of grapes grown in a designated area of Southeastern California. The marketing order is administered locally by the California Desert Grape Administrative Committee (CDGAC or committee). This rule requires handlers to provide an annual report to the committee which lists the acreages devoted to grapes for fresh shipment, the owners and locations of the acreages, and varieties produced thereon that the handler will be handling during the upcoming season. This change allows the committee to collect information on the acreage and varieties of desert grapes regulated under the marketing order, thus improving data collection and the efficient operation of the program. EFFECTIVE DATES: May 31, 2007. FOR FURTHER INFORMATION CONTACT: Terry Vawter, Marketing Specialist, or Kurt J. Kimmel, Regional Manager, California Marketing Field Office, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA; Telephone:
(559)487-5901, Fax:
(559)487-5906, or E-mail: *Terry.Vawter@usda.gov* or *Kurt.Kimmel@usda.gov.* Small businesses may request information on complying with this regulation by contacting Jay Guerber, Marketing Order Administration Branch, Fruit and Vegetable Programs, AMS, USDA, 1400 Independence Avenue, SW., STOP 0237, Washington, DC 20250-0237; Telephone:
(202)720-2491, Fax:
(202)720-8938, or E-mail: *Jay.Guerber@usda.gov.* SUPPLEMENTARY INFORMATION: This final rule is issued under Marketing Agreement and Order No. 925, both as amended (7 CFR part 925), regulating the handling of grapes grown in a designated area of southeastern California, hereinafter referred to as the “order.” The order is effective under the Agricultural Marketing Agreement Act of 1937, as amended (7 U.S.C. 601-674), hereinafter referred to as the “Act.” The Department of Agriculture
(USDA)is issuing this rule in conformance with Executive Order 12866. This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. This rule is not intended to have retroactive effect. This final rule will not preempt any State or local laws, regulations, or policies, unless they present an irreconcilable conflict with this rule. The Act provides that administrative proceedings must be exhausted before parties may file suit in court. Under section 608c(15)(A) of the Act, any handler subject to an order may file with USDA a petition stating that the order, any provision of the order, or any obligation imposed in connection with the order is not in accordance with law and request a modification of the order or to be exempted therefrom. A handler is afforded the opportunity for a hearing on the petition. After the hearing USDA would rule on the petition. The Act provides that the district court of the United States in any district in which the handler is an inhabitant, or has his or her principal place of business, has jurisdiction to review USDA's ruling on the petition, provided an action is filed not later than 20 days after the date of the entry of the ruling. This final rule changes the reporting requirements under the order by requiring handlers to file an annual acreage survey which lists the acreages devoted to grapes, the locations and owners of the acreage, and varieties produced thereon for fresh shipment that the handler will be handling during the upcoming season. The form provides information necessary for the committee to estimate annual production, determine the necessary assessment rate, and establish an annual budget of expenses. This change was unanimously recommended by the committee at a meeting on February 6, 2007. Section 925.60 provides authority for the committee, with the approval of USDA, to require handlers to furnish information to the committee. Currently, § 925.60(a) requires handlers to file reports of shipments of grapes. Under § 925.60(b), the committee is authorized, with the approval of USDA, to require handlers to furnish such other information as it may prescribe and may be necessary to enable the committee to perform its duties under the order. The acreage survey is currently an approved form authorized for use by the committee. The form was initially included so that the committee could, at some future time, recommend requiring handlers to use the form if it were determined that aggregating information on grape acreage would provide a benefit to the industry. The committee met on February 6, 2007, and discussed the grape acreage survey. At this time, the committee believes the report would provide valuable information and unanimously recommended that it be a mandatory report, such as those authorized under § 925.60. This change is intended to enhance the efficient operation of the program by permitting the committee to collect production data, which, in turn, would allow them to have more accurate information for establishing a crop estimate, determining an assessment rate, and developing an annual budget of expenses. Final Regulatory Flexibility Analysis Pursuant to requirements set forth in the Regulatory Flexibility Act (RFA), the Agricultural Marketing Service
(AMS)has considered the economic impact of this action on small entities. Accordingly, AMS has prepared this final regulatory flexibility analysis. The purpose of the RFA is to fit regulatory actions to the scale of business subject to such actions in order that small businesses will not be unduly or disproportionately burdened. Marketing orders issued pursuant to the Act, and the rules issued thereunder, are unique in that they are brought about through group action of essentially small entities acting on their own behalf. Thus, both statutes have small entity orientation and compatibility. There are approximately 50 producers of grapes in the production area and approximately 20 handlers subject to regulation under the marketing order. The Small Business Administration (13 CFR 121.201) defines small agricultural producers as those having annual receipts less than $750,000 and defines small agricultural service firms as those whose annual receipts are less than $6,500,000. Last year, six of the 20 handlers subject to regulation had annual grape sales of at least $6,500,000. In addition, 10 of the 50 producers had annual sales of at least $750,000. Therefore, a majority of handlers and producers may be classified as small entities. This final rule revises § 925.160 of the order's rules and regulations to include the requirement that handlers file an annual grape acreage survey. This final rule imposes minimal additional costs on handlers regulated under the order. The benefits of this proposed rule are not expected to be disproportionately greater or less for small handlers than for large entities. At the meeting, the committee discussed an alternative to this change, which would be to ask handlers to voluntarily report grape acreage. However, under voluntary reporting it is possible that all handlers would not report the information, making it difficult for the committee to aggregate accurate information for the committee's crop estimate, assessment rate, and budget of expenses. The committee agreed that this alternative would not be in the best interest of the committee and the industry, and unanimously recommended mandating the report. In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35), the information collection requirements that are contained in this rule are currently approved by the Office of Management and Budget (OMB), under OMB No. 0581-0189, Generic OMB Fruit Crops. USDA has not identified any relevant Federal rules that duplicate, overlap or conflict with this rule. As with other similar marketing order programs, reports and forms are periodically reviewed to reduce information requirements and duplication by industry and public sector agencies. The AMS is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes. Further, the committee's meeting on February 6, 2007, was widely publicized throughout the desert grape industry and all interested persons were encouraged to attend the meeting and participate in committee deliberations. Like all committee meetings, the February 6, 2007, meeting was a public meeting; and all entities, both large and small, were encouraged to express their views on this issue. All interested persons were invited to attend this meeting and encouraged to participate in the industry's deliberations. A proposed rule concerning this action was published in the **Federal Register** on April 16, 2007 (72 FR 18922). Copies of the rule were provided to all committee members and regulated handlers. Finally, the rule was made available through the Internet by USDA and the Office of the Federal Register. A 15-day comment period ending May 1, 2007, was provided to allow interested persons to respond to the proposal. No comments were received. Accordingly, no changes will be made to the rule as proposed. A small business guide on complying with fruit, vegetable, and specialty crop marketing agreements and orders may be viewed at: *http://www.ams.usda.gov/fv/moab.html.* Any questions about the compliance guide should be sent to Jay Guerber at the previously mentioned address in the FOR FURTHER INFORMATION CONTACT section. After consideration of all relevant matters presented, including the information and recommendation submitted by the committee and other available information, it is hereby found that this rule, as hereinafter set forth, will tend to effectuate the declared policy of the Act. It is further found that good cause exists for not postponing the effective date of this rule until 30 days after publication in the **Federal Register** (5 U.S.C. 553) because the order regulations went into effect on April 20, 2007, and the committee needs to have the information during this crop year. Further, handlers are aware of this rule, which was recommended at a public meeting. Also, a 15-day comment period was provided in the proposed rule. List of Subjects in 7 CFR Part 925 Grapes, Marketing agreements, Reporting and recordkeeping requirements. For the reasons set forth in the preamble, 7 CFR part 925 is amended as follows: PART 925—GRAPES GROWN IN A DESIGNATED AREA OF SOUTHEASTERN CALIFORNIA 1. The authority citation for 7 CFR part 925 continues to read as follows: Authority: 7 U.S.C. 601-674. 2. In § 925.160, the current paragraph is redesignated as paragraph (a), and a new paragraph
(b)is added to read as follows: § 925.160 Reports.
(a)* * *
(b)When requested by the California Desert Grape Administrative Committee (CDGAC), each shipper who ships grapes shall furnish to the committee at such time as the committee shall require, an annual grape acreage survey (CDGAC Form 7), which shall include, but is not limited to, the following: The applicable year in which the report is requested; the names of the shipper (handler) who will handle the grapes and the grower who produces them; the location of each vineyard; the variety or varieties grown in each vineyard; and the bearing, non-bearing, and total acres of each vineyard. Dated: May 23, 2007. Lloyd C. Day, Administrator, Agricultural Marketing Service. [FR Doc. E7-10280 Filed 5-29-07; 8:45 am] BILLING CODE 3410-02-P DEPARTMENT OF AGRICULTURE Rural Utilities Service 7 CFR Part 1703 Rural Business-Cooperative Service Rural Utilities Service 7 CFR Part 4280 RIN 0570-AA19 Rural Economic Development Loan and Grant Programs AGENCIES: Rural Business-Cooperative Service and Rural Utilities Service, USDA. ACTION: Final rule. SUMMARY: This action modifies the regulations for the Rural Economic Development Loan and Grant Programs. This revised regulation is written in a format that is simpler in design and should improve ease of use by the public and program beneficiaries. EFFECTIVE DATE: June 29, 2007. FOR FURTHER INFORMATION CONTACT: Jody Raskind, Director, Specialty Lenders Division, Rural Business-Cooperative Service, U.S. Department of Agriculture, STOP 3225, 1400 Independence Ave., SW., Washington, DC 20250-3225, Telephone
(202)720-1400. SUPPLEMENTARY INFORMATION: Classification This final rule has been determined to be significant and has 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 programs impacted by this action is 10.854, Rural Economic Development Loans and Grants. Intergovernmental Review Rural Economic Development Loans and Grants are subject to the provisions of Executive Order 12372, which requires intergovernmental consultation with State and local officials. RBS has conducted intergovernmental consultation in the manner delineated in RD Instruction 1940-J, “Intergovernmental Review of Farmers Home Administration Programs and Activities,” and in 7 CFR part 3015, subpart V. Civil Justice Reform This final 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 in accordance with the regulations of the Department of Agriculture National Appeals Division (7 CFR part 11) must be exhausted before bringing suit in court challenging action taken under this rule unless those regulations specifically allow bringing suit at an earlier time. Environmental Impact Statement This document has been reviewed in accordance with 7 CFR part 1940, subpart G, “Environmental Program.” RBS 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. 4321-4374, an Environmental Impact Statement is not required. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. L. 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, RBS 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 1 year. When such a statement is needed for a rule, section 205 of UMRA generally requires RBS 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 UMRA. Regulatory Flexibility Act In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-602), the Agency has determined that this action would not have a significant economic impact on a substantial number of small entities. This regulation only impacts those who choose to participate in the loan or grant program. Small entity applicants will not be impacted to a greater extent than large entity applicants. Executive Order 13132 It has been determined under Executive Order 13132, Federalism, that this rule does not have sufficient 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. Paperwork Reduction Act The information collection and recordkeeping requirements contained in this regulation have been approved by the Office of Management and Budget
(OMB)under the provisions of 44 U.S.C. chapter 35 and were assigned OMB control number 0570-0035, in accordance with the Paperwork Reduction Act of 1995. Under the Paperwork Reduction Act of 1995, no person is required to respond to a collection of information unless it displays a valid OMB control number. The revisions in this rulemaking, for 7 CFR part 4280, required an amendment to the burden package and this modification has been approved by OMB. E-Government Act Compliance The Rural Business-Cooperative Service is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes. Background The proposed rule for the Rural Economic Development Loan and Grant (REDLG) programs was published on December 15, 1999, in the **Federal Register** , in Vol. 64, No. 240, pages 69937-69946, as 7 CFR part 4280. The proposed rule was originally structured in a format consisting of questions and answers. To provide for an easier understanding of these programs, inasmuch as it includes the participation of three distinct parties (the Federal Government, the intermediary, and the third-party ultimate recipient), this final rule has been restructured in the standardized format utilized by the Agency in its other regulations. Consequently, several section numbers and headings of the final rule have been modified due to the change in format. The existing regulations for the REDLG programs are found at 7 CFR part 1703, subpart B, and will be removed from Part 1703 upon publication of this final rule. The REDLG programs were originally implemented in 1989 as part of the rural economic development program of the Rural Electrification Administration, predecessor to the Rural Utilities Service (RUS). As a result of the United States Department of Agriculture reorganization, responsibility for these programs was transferred to Business Programs under the Rural Business-Cooperative Service (RBS), which provides financing for rural areas. These programs are administered at the State level through the Department of Agriculture's Rural Development State Offices. Since its inception in 1989, these programs have had a substantial impact on economic development in rural areas. As of September 30, 2005, the REDLG programs have provided $217.5 million in loans and $92.7 million in grants, leveraged over $2.5 billion, and directly created an estimated 35,000 new jobs for rural areas. Under these programs, loans or grants are provided to eligible electric and telecommunications utilities. The purpose of the programs is to encourage these utilities to promote rural economic development and job creation projects. The utility, previously referred to as the “RUS Borrower” now referred to as the “intermediary” can receive loans to help finance projects such as business start-up costs, business expansion, community development, and business incubator projects. The intermediary must use program loan funds to make a pass-through loan to an ultimate recipient such as a business. The intermediary is responsible for fully repaying its loan to the Government even if the ultimate recipient does not repay its loan. The intermediary must use program grant funds, along with its required contribution, to create a revolving loan fund that the intermediary utility will operate and administer. Loans to the ultimate recipient are made from the revolving loan fund for a variety of projects. Comments and Responses on the Proposed Rule A total of 22 organizations responded within the official 30-day comment period. In addition to the comments solicited from the general public through the rulemaking process, RBS held a public meeting on August 2, 2000, to hear oral presentations on the proposed rule. Four public organizations made presentations. All comments, both written and oral, were considered and some revisions in the final rule are in response to those comments. Some of these revisions include clarifications to better explain the programs. The majority of the comments centered on the selection factors established in § 4280.42(b) for Agency use in evaluating and scoring the applications. Other comments pertained to the elimination of a previously eligible purpose and to supplemental funds use. The comments have been grouped into 8 categories and are discussed below based on the applicable section number of the final rule. *Comment.* Some comments indicated that intermediaries do not want their supplemental contribution applied to the same project as funded by the Agency grant, but wanted their contribution available to lend to a separate project. *Response.* The Agency is aware that intermediaries have experienced difficulty in full utilization of supplemental funds. RBS has considered these comments and has amended the final rule to give the intermediary the option to use its supplemental contribution for the same project the Agency is financing or to fund another eligible project. If the intermediary chooses to finance a separate eligible project, the matching funds must be used within 3 years from the date of the grant agreement or the grant will be terminated. Subsequent use of revolved funds will be managed in accordance with the Agency—approved revolving loan fund plan and the interest rates on those loans will be at the discretion of the intermediary as shown in the plan, but not to exceed the prevailing prime rate. *Comment.* Some comments opposed the proposed exclusion of agricultural production as an eligible purpose. The commenting entities believe that agriculture is a vital business component of their state economy and providing for both value-added agriculture and priority markets for farmers is very important. *Response.* Historically, funding under the REDLG program has not been heavily applied for or utilized by agricultural production projects. The Agency has decided to allow agricultural production as an eligible purpose only where the project benefits farmer-owned cooperatives or a similar farmer-owned organization through which benefits are passed directly to the farmer members. *Comment.* Some comments stated that applications for advanced telecommunications or computer networks to facilitate medical, educational, or job training projects should not be eligible for priority points under two separate sections of the regulation, that is, § 4280.42(b)(1)(iii) and 4280.43(d). The comments stated that this type of project should be a priority of the programs since one of the ways rural America can be more competitive is to have advanced telecommunications systems for health care, job training, and business use. They believe, however, that there are other infrastructure and business assistance needs that must also be met. *Response.* RBS agrees that advanced telecommunications and computer network projects should be a priority. To address this, RBS had initially added five points to those projects in addition to those added under § 4280.42(b)(1)(iii). RBS now agrees that there are other program priorities that must be met and Advanced Telecommunications and computer network projects should not receive two sets of priority points. Accordingly, § 4280.43(d) will be removed. *Comment.* Some comments stated that using a selection factor that measures job creation per $100,000 of project costs is too limiting. Another comment supported the existing regulation that awards points for job creation under a subjective factor. *Response.* RBS disagrees that a measure of jobs per $100,000 is too limiting. We agree that a broader approach to job creation is helpful. Therefore, we have maintained the selection factor of jobs per $100,000, but have expanded the definitions to include “direct”, “indirect”, “full-time”, “part-time”, and “seasonal” jobs as well as a formula for determining full-time job equivalents. These definitions clarify formulaic requirements for correct calculation of program job creation statistics in accordance with Agency requirements. To calculate full-time equivalent jobs, two part-time jobs are counted as one full-time job or three seasonal jobs as one full-time job. If the total number of part-time and seasonal jobs adds up to a fraction, round up to the next whole number after combining same. *Comment.* Some comments supported the proposed elimination of the rural restrictions pointing out the positive regional aspects that projects in larger communities have over the rural economy. Other comments urged the Agency to retain these restrictions, pointing out that the Agency should give priority to very rural locations. *Response.* The Agency has revised its definition of rural to allow projects to be funded in areas with a population of 50,000 or less which is the statutory limit. However, the Agency will retain its historical practice to allow priority points to projects in rural areas with a population of less than 2,500. *Comment.* The majority of comments opposed awarding points based on the award being an initial one for the intermediary or the county rather than focusing funding on the best possible projects. *Response.* RBS has taken into consideration the fact that the majority of intermediaries that are active participants in the REDLG project are concentrated in a few states and these intermediaries have received the highest number of REDLG awards. The intermediaries in these states have access to affiliated economic development organizations that assist the intermediaries in seeking prospective business clients, providing technical assistance in promoting rural development, and in packaging applications. Not all intermediaries throughout the country have such technical expertise available. This discourages their participation in the REDLG program. To ensure that the greatest number of intermediaries has access to the benefits of the program, RBS will award priority points if the application is a first-time award for a new intermediary or if it is an award to an existing intermediary that will fund a project in a county not previously served. *Comment.* Some comments stated that the requirement for a financial plan that covers the term of the loan was excessive. *Response.* RBS has changed this section to require a 3-year financial plan from the ultimate recipient. *Comment.* One comment stated that the selection of awards should be based on points, regardless of the number of previous awards given to the intermediary in a fiscal year. *Response.* To ensure that the greatest numbers of intermediaries have access to the benefits of the programs, the Agency will retain the proposed provision that the Agency may limit an intermediary to one selected grant application and two selected loan applications in a fiscal year, depending upon availability of funds. Other Clarifications to Final Rule Section 4280.2: the reference to “loan” was changed to “REDG Zero-Interest Loan” and “REDL Zero-Interest Loan” to better reflect that REDLG encompasses two separate and distinct programs; the definition for “project” was revised to add “ultimate recipient activity” for clarification purposes; the nomenclature “RUS Borrower” was eliminated replaced with “intermediary.” A definition was provided for “intermediary” to meet the requirements of the programs. The definition indicates that RUS remains the final determinant of an intermediary's eligibility for participation in the programs; a definition of “rural area” was added; and the definition for an “ultimate recipient” was revised to list all eligible entities. Sections 4280.3 and 4280.15(a), are revised to clarify the definition of “start-up venture costs.” Section 4280.15(g), clarifies that zero-interest loans are allowable for REDG projects in accordance with § 4280.21. Section 4280.17, clarifies that payments on zero-interest loans are due in monthly installments; and provides guidance regarding disposition of partial loan payments made by ultimate recipients. Sections 4280.19 and 4280.50, state that administration and termination of grants will be subject, where applicable, to 7 CFR parts 3015 and 3019. Section 4280.21, a reference to Federally-recognized Indian tribes was inserted to clarify the definition of eligible ultimate recipients in connection with § 4280.3. Section 4280.23:, clarifies the intended use of the Intermediary's contribution to the revolving loan fund and the reasons that will result in termination of the fund. Provisions previously stated under Section 4280.24 have been combined with Section 4280.23 to maintain consistency in subject matter. The nomenclature “Non-Federal Funds” has been changed to “Revolved Funds” for clarification of the true nature of the funding. Section 4280.24 now clarifies “Revolved Funds.” Section 4280.27, clarifies that program funds cannot be used to refinance existing indebtedness of the ultimate recipient project; and cites those instances where program funds may be eligible for agricultural production purposes. Section 4280.29, reflects that either the intermediary or the ultimate recipient may provide the 20 percent supplemental financing required for the Ultimate Recipient Project. Section 4280.36: clarifies Equal Employment Opportunity, nondiscrimination and civil rights requirements; clarifies that loans made from the revolving loan fund, when funds are derived from repayments or interest earnings, and not directly from the Government, are not subject to the Agency's environmental clearance process; clarifies the need to comply with flood hazard insurance requirements; and provides audit requirements for assistance under this program. Section 4280.42(b)(5), the economic factor used has been changed to per capita personal income rather than median household income. Per capita personal income is a more appropriate indicator of current wages and economic wealth of the county where the project is located and has historically been used in the REDLG programs. List of Subjects 7 CFR Part 1703 Community development, Grant programs—housing and community development, loan programs—housing and community development, Reporting and recordkeeping requirements, Rural areas. 7 CFR Part 4280 Business and industry, Community development, Economic development, Grant programs—housing and community development, loan programs—housing and community programs, Reporting and recordkeeping requirements, Rural areas. Therefore, chapters XVII and XLII, title 7, Code of Federal Regulations, are amended as follows: CHAPTER XVII—RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE PART 1703—RURAL DEVELOPMENT 1. The authority citation for part 1703 continues to read as follows: Authority: 7 U.S.C. 901, *et seq.* and 950aaa, *et seq.* Subpart B—[Removed] 2. Subpart B of part 1703 is removed and reserved. CHAPTER XLII—RURAL BUSINESS—COOPERATIVE SERVICE AND RURAL UTILITIES SERVICE, DEPARTMENT OF AGRICULTURE PART 4280—LOANS AND GRANTS 3. Subpart A (§§ 4280.1 through 4280.100), is added to part 4280 to read as follows: Subpart A—Rural Economic Development Loan and Grant Programs Sec. 4280.1 Purpose. 4280.2 Policy. 4280.3 Definitions. 4280.4-4280.12 [Reserved] 4280.13 Applicant eligibility. 4280.14 [Reserved] 4280.15 Ultimate Recipient Projects eligible for Rural Economic Development Loan funding. 4280.16 REDL and REDG Loan terms. 4280.17 Additional REDL terms. 4280.18 [Reserved] 4280.19 REDG Grants. 4280.20 [Reserved] 4280.21. Eligible REDG initial Ultimate Recipients and Projects. 4280.22 [Reserved] 4280.23 Requirements for lending from Revolving Loan Fund. 4280.24 Revolved funds. 4280.25 Revolving Loan Fund Plan. 4280.26 Administration and operation of the Revolving Loan Fund. 4280.27 Ineligible purposes. 4280.28 [Reserved] 4280.29 Supplemental financing required for the Ultimate Recipient Project. 4280.30 Restrictions on the use of REDL or REDG funds. 4280.31-4280.35 [Reserved] 4280.36 Other laws that contain compliance requirements for these Programs. 4280.37 Application forms and filing dates. 4280.38 Maximum amount of loans and Grants. 4280.39 Contents of an application. 4280.40 [Reserved] 4280.41 Environmental review of the application. 4280.42 Application evaluation and selection. 4280.43 Discretionary points. 4280.44 Limitation on the number of loans or Grants to an Intermediary. 4280.45-4280.46 [Reserved] 4280.47 Non-selection of applications. 4280.48 Post-selection period. 4280.49 [Reserved] 4280.50 Disbursement of Zero-Interest Loan funds. 4280.51-4280.52 [Reserved] 4280.53 Loan payments. 4280.54 Construction procurement requirements. 4280.55 Monitoring responsibilities. 4280.56 Submission of reports and audits. 4280.57-4280.61 [Reserved] 4280.62 Appeals. 4280.63 Exception authority. 4280.64-4280.99 [Reserved] 4280.100 OMB control number. Authority: 5 U.S.C. 301: 7 U.S.C. 940c. Subpart A—Rural Economic Development Loan and Grant Programs § 4280.1 Purpose. The Rural Economic Development Loan
(REDL)and Grant
(REDG)Programs provide financing to eligible Rural Utilities Service
(RUS)electric or telecommunications borrowers (Intermediaries) to promote rural economic development and job creation projects. § 4280.2 Policy.
(a)*REDL Program.* REDL Zero-Interest Loans are made to Intermediaries, to relend, at a zero-interest rate, to Ultimate Recipients. Ultimate Recipients are responsible for repayment to the Intermediary. The Intermediary must transmit Ultimate Recipient loan repayments to Rural Development.
(b)*REDG Program.* Grants are made to Intermediaries to establish Revolving Loan Funds. REDG Zero-Interest Loans are made by the Intermediary from the Revolving Loan Fund to Ultimate Recipients for the purpose of financing specific, approved Projects. Ultimate Recipients are responsible for repayment to the Intermediary. The Ultimate Recipient's loan repayments are to be retained in the Revolving Loan Fund, which is maintained by the Intermediary, to finance other rural economic development Projects. Only the initial loan made by the Intermediary from the Revolving Loan Fund has to be at zero interest. § 4280.3 Definitions. The following definitions are applicable to this subpart: *Advanced Telecommunications.* Using communications equipment for purposes, such as the simultaneous transmission of images and voice or the electronic transmission of data between multiple sites that do not consist primarily of providing local exchange voice or other routine communications. *Agricultural Production.* The cultivation, production, growing, raising, feeding, housing, breeding, hatching, or managing of crops, plants, animals, fish, or birds, either for fiber, food for human consumption, or livestock feed. *Business Incubator.* A facility in which small businesses can share premises, support staff, computers, software or hardware, telecommunications terminal equipment, machinery, janitorial services, utilities, or other overhead expenses, and where such businesses can receive Technical Assistance, financial advice, business planning services or other support. *Community Facilities Project.* An eligible community facility under the Community Facility Direct or Guaranteed programs. *Cushion of Credit.* The amount contributed by the Intermediary pursuant to 7 U.S.C. 940c. *Direct Job.* A job that is created or saved by an Ultimate Recipient employer as a result of funding received from these Programs. *Established Operation.* An entity that has engaged in the nature of the Project for more than one year. *Full-Time Job.* A job for which a worker is scheduled to work 35 hours per week, or more, on a regular basis. *Grant.* For the REDG Program only; a transfer of monies other than a loan, from Rural Development to an Intermediary for specific use in funding a Revolving Loan Fund from which loans are made to Ultimate Recipients. Grant funds must be repaid by the Intermediary to Rural Development in the event the Fund is unused for more than one year, misused, no longer needed for its intended purposes, or the Grant is terminated. *Independent Provider.* An entity or individual, other than the Intermediary or the Ultimate Recipient that is not owned by a subsidiary or an affiliate of the Intermediary or Ultimate Recipient or would otherwise have an interest in the Intermediary or Ultimate Recipient that would be a conflict of interest or have the appearance of a conflict of interest. *Indirect Job.* A job that is created or saved as a result of a funded Project, but is not with the Ultimate Recipient. *Infrastructure.* Facilities required to support private sector economic activity such as: Highways, streets, roads, and bridges; public transit; water supply; wastewater treatment; water resources; solid waste; and hazardous waste services. *Intermediary.* An entity that is identified by RUS as an eligible borrower under the Rural Electrification Act and obtains a REDG Grant or a REDL Loan. *Part-Time Job.* A job for which a worker is scheduled to work less than 35 hours per week, on a regular basis. *Programs.* The Rural Economic Development Loan
(REDL)and the Rural Economic Development Grant
(REDG)Programs. *Project.* The facility, equipment, or activity of the Ultimate Recipient that is funded under one of the Programs. *REDG.* The Rural Economic Development Grant Program. *REDL.* The Rural Economic Development Loan Program. *Revolving Loan Fund (or Fund).* A revolving loan fund that is created with Grant funds and the Intermediary's supplemental contribution under the REDG Program that makes loans and uses the loan repayments and interest earnings to make subsequent loans until the Fund is terminated. *Revolving Loan Fund Plan.* A plan developed by the Intermediary and approved by Rural Development that governs the use of the Revolving Loan Fund. The plan must at least include a detailed explanation of the Intermediary's Fund administration policies and procedures and planned Fund use after the funds in the Revolving Loan Fund have revolved. Fund administration policies and procedures must at least include information regarding the review and approval of loans from the Fund. *Rural Area.* This information will be taken from the most recent census data. Any area other than:
(1)A city or town that has a population of greater than 50,000 inhabitants; and
(2)The urbanized area contiguous and adjacent to such a city or town. *Rural Business-Cooperative Service (RBS).* The Rural Business-Cooperative Service, an agency within the Rural Development mission area of the USDA. *Rural Development.* For purposes of this regulation, The Rural Business-Cooperative Service (RBS), an Agency of the United States Department of Agriculture, or a successor Agency, will be referred to as Rural Development. *Rural Utilities Service (RUS).* The Rural Utilities Service, an Agency within the Rural Development mission area of the USDA. *Seasonal Job.* A job whether Part-Time or Full-Time that begins and ends in accordance with a specified time period of less than a year and generally within a range less than four months. *Start-Up Venture(s).* An entity that has engaged in the nature of the Project for less than one year. An entity that has operated in excess of one year, but which is about to enter into a new line of business, would be considered a Start-Up Venture. *State.* Any of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Marianas Islands, the Republic of Palau, the Federated States of Micronesia, and the Republic of the Marshall Islands. *Technical Assistance.* Managerial, financial and operational analysis and consultation by Independent Providers to assist Project owners in identifying and evaluating problems or potential problems and to provide training that enables Project owners to successfully implement, manage, operate and maintain viable Projects. *Ultimate Recipient.* An entity or individual that receives a loan from an Intermediary. The Ultimate Recipient may be a for profit or not-for-profit entity such as, but not limited to, a sole proprietorship, a corporation, a cooperative, a partnership, or a Limited Liability Company. The Ultimate Recipient may also be a public body, such as, but not limited to, a political subdivision of a State or locality, or a Federally-recognized Indian tribe. *Uniform Act.* The Uniform Relocation Assistance and Real Property Acquisition Act of 1970 (42 U.S.C. 4601-4655). *USDA.* The United States Department of Agriculture. *Zero-Interest Loan.* A loan made by the Intermediary to the Ultimate Recipient with no interest and which will be repaid to the Intermediary by the Ultimate Recipient. §§ 4280.4-4280.12 [Reserved] § 4280.13 Applicant eligibility. Applicants that are not delinquent on any Federal debt or otherwise disqualified from participation in these Programs are eligible to apply. An applicant must be eligible under 7 U.S.C. 940c. § 4280.14 [Reserved] § 4280.15 Ultimate Recipient Projects eligible for Rural Economic Development Loan funding. An Intermediary may receive REDL funds only when it has a pre-approved Ultimate Recipient and Project that have an immediate need for the Zero-Interest Loan. REDL funds may only be used by the Intermediary to make a Zero-Interest Loan to the Ultimate Recipient to finance financially viable economic development or job creation Projects in a Rural Area. Funds may only be used to provide the following assistance:
(a)Start-Up Venture costs, including, but not limited to financing fixed assets such as real estate, buildings (new or existing), equipment, or working capital;
(b)Business expansion;
(c)Business Incubators;
(d)Technical Assistance;
(e)Project feasibility studies;
(f)Advanced Telecommunications services and computer networks for medical, educational, and job training services;
(g)Other Projects eligible under § 4280.21; or
(h)Community Facilities Projects. § 4280.16 REDL and REDG Loan terms. REDL and REDG loans made by the Intermediary are governed by the following terms:
(a)The maximum term of a loan is 10 years, including any principal deferment period. The Intermediary may choose a shorter term if desired.
(b)Deferments on Zero-Interest Loans will automatically be granted by Rural Development upon request of the Intermediary as follows:
(1)A deferral for up to 1 year for Projects involving an Established Operation; or
(2)A deferral for up to 2 years for Projects involving a Start-Up venture or a Community Facilities Project whether or not such Project also receives funding under USDA Community Facilities funding programs.
(c)The Intermediary must provide the Ultimate Recipient with the same loan terms as the Intermediary receives from Rural Development.
(d)The Intermediary is solely responsible for the financial approval of Fund loans and all other Fund decisions and actions. § 4280.17 Additional REDL terms.
(a)The Intermediary is responsible for fully repaying the Zero-Interest Loan to RBS even if the Ultimate Recipient does not repay the Intermediary.
(b)The Intermediary is responsible for remitting any partial or full payment to RBS at the time the Ultimate Recipient pays the Intermediary.
(c)Unless deferred pursuant to § 4280.16(b) of this subpart, loan payments to Rural Development under the REDL Program are due monthly.
(d)If the Intermediary does not have an outstanding loan with RUS, the Intermediary must immediately provide, as security for any REDL loan it receives, a Rural Development-approved irrevocable letter of credit that remains in effect until the loan is repaid. § 4280.18 [Reserved] § 4280.19 REDG Grants. Intermediaries receiving Grants must partially finance a Revolving Loan Fund that the Intermediary will operate and administer, by providing supplemental funds of at least 20 percent of the Grant. Grants are subject to 7 CFR parts 3015, 3019, and 3052, as applicable. § 4280.20 [Reserved] § 4280.21 Eligible REDG Ultimate Recipients and Projects. The Intermediary may only make loans from the Revolving Loan Fund to entities located in a Rural area of a State. Eligible entities are as follows:
(a)Non-profit entities, public bodies, or Federally-recognized Indian tribes Ultimate Recipients for:
(1)Community development or Community Facility Projects that:
(i)will create or save employment; and
(ii)are open to and serve all Rural residents, and are owned by the Ultimate Recipient;
(2)Business Incubators;
(3)Facilities and equipment to provide education and training to residents of Rural Areas that will facilitate economic development;
(4)Facilities and equipment to provide medical care to residents of Rural Areas. Equipment and facilities may be funded to enable eligible entities to provide medical training and related professional health care skills to rural health care providers;
(5)Projects that utilize Advanced Telecommunications or computer networks to facilitate medical or educational services or job training; or
(6)Project feasibility studies and Technical Assistance. A qualified Independent Provider must perform feasibility studies or Technical Assistance.
(b)For-profit Ultimate Recipients for Projects under paragraphs (a)(3), (4), (5), or
(6)of this section. § 4280.22 [Reserved] § 4280.23 Requirements for lending from Revolving Loan Fund.
(a)*Supplemental contribution.* The Intermediary must establish a Revolving Loan Fund and contribute an amount equal to at least 20 percent of the Grant. The supplemental contribution must come from Intermediary's funds which may not be from other Federal Grants, unless permitted by law.
(b)*Use of supplemental contribution.* The Intermediary's contribution will only be used to make REDG loans and not other investment purposes. The Intermediary's contribution must remain a permanent part of the Revolving Loan Fund until the Fund is terminated.
(c)*REDG Zero-Interest Loan Requirements.* The Fund is made up of Rural Development and Intermediary contributions and must be loaned in accordance with one of the following 2 options:
(1)The contribution may be used to fund the same Project that Rural Development is funding. The interest rate on that portion of the financing using Rural Development funds will be at zero percent. The interest rate on that portion of the financing using the Intermediary's contribution may be greater than zero percent but must be less than, or equal to, the prevailing prime rate. Using this option, loan security and recovery of loan losses must provide for the pro rata recovery and distribution between the Intermediary and Rural Development based on the respective amounts of each contribution to the total loan amount for the Project.
(2)The Intermediary's contribution may be used to fund Projects separate from the Project financed with Rural Development funds, provided that the Project is eligible in accordance with § 4280.21.
(3)Whether the Intermediary chooses the option under paragraph (c)(1) or paragraph (c)(2) of this section, its contribution must be used to fund an eligible Project within 3 years from the date of the Grant agreement. If the Intermediary fails to use its contribution within this 3-year period, Rural Development will terminate the Grant.
(d)*Intermediary's supplemental funds.* Once revolved, monies from the Fund may be loaned at an interest rate called for in the Revolving Loan Fund Plan, not to exceed the prevailing prime rate.
(e)*Eligible purposes only.* Until the total amount in the Fund has been loaned, all loans must be made for eligible purposes as stated in § 4280.21. After the Fund has been loaned, in accordance with § 4280.21 of this subpart, the Intermediary shall make loans to finance rural economic development purposes in accordance with the Revolving Loan Fund Plan. All loan repayments, including interest earned, must be deposited into the Fund.
(f)*Termination for cause.* Rural Development will terminate the Fund and require repayment of the Grant funds in accordance with 7 CFR parts 3015 and 3019 if Rural Development determines that the Fund is not being operated according to the approved Revolving Loan Fund Plan, this subpart, or for other good cause determined by Rural Development, such as questionable prepayment of initial loans.
(g)All REDG Loans must be made to Rural Ultimate Recipients. § 4280.24 Revolved funds. Rural Development and the Intermediary's supplemental funds will be considered revolved after they have been loaned to Ultimate Recipients and subsequently repaid. Loans made from revolved funds will not require prior approval of Rural Development for creditworthiness or environmental clearance purposes. All other Federal compliance requirements, including those in this subpart, remain in effect. § 4280.25 Revolving Loan Fund Plan. Each REDG Intermediary must adopt a Rural Development-approved plan that specifies that:
(a)The initial loan made from the Fund will be at zero percent interest and have a maximum term of 10 years;
(b)Loans made from loan repayments may carry an interest rate less than, or equal to, the prevailing prime rate. The Intermediary determines repayment terms and security arrangements on these loans.
(c)Loans made from repayments of REDG loans must be for eligible Program purposes;
(d)The Intermediary is solely responsible for the financial approval of Fund loans and all other Fund decisions and actions; and
(e)No changes will be made to a Rural Development-approved Revolving Loan Fund Plan without the prior written approval of Rural Development. § 4280.26 Administration and operation of the Revolving Loan Fund.
(a)The Intermediary will operate and administer the Revolving Loan Fund. The Intermediary may contract with a third party for administrative services regarding the Fund. However, the Intermediary must permanently retain all Project review, approval, and monitoring authority and responsibility. This authority and responsibility cannot be delegated to any other person or entity.
(b)Up to 10 percent of Rural Development Grant funds may be applied toward operating expenses over the life of the Fund. Operating expenses include the costs of administering the Fund and Technical Assistance provided to Project owners by Independent Providers.
(c)In cases where the Intermediary uses its supplemental contribution to the Revolving Loan Fund for a Project other than the Project that resulted in the Intermediary being awarded the Grant, the loan terms must not exceed 10 years and the interest rate must be less than, or equal to, the prevailing prime rate. § 4280.27 Ineligible purposes. Zero-Interest Loans may not be used:
(a)For activities that would adversely affect the environment, or activities that limit the choice of reasonable alternatives prior to satisfying Rural Development environmental requirements;
(b)To pay off or refinance any existing indebtedness or costs of the Project that were incurred prior to Rural Development receipt of the Intermediary's completed application;
(c)For any electric or telecommunications purpose or for the Intermediary's electric or telecommunications operations, for affiliated operations of the Intermediary, or for the benefit of other Intermediaries or their affiliated operations, except those purposes contained in § 4280.15(f);
(d)To pay the salaries of any employee or owner of the Intermediary, its subsidiaries, or affiliates, except for salaries incurred in administering a Revolving Loan Fund established under the REDG Program;
(e)For community antenna or cable television systems or facilities;
(f)For residential purposes such as residential dwellings and land sites; facilities to provide entertainment television; to transfer property between owners without making improvements that will promote or sustain economic development in Rural Areas; or for personal, non-business related vehicles;
(g)Where there is directly or indirectly a conflict of interest or the appearance of a conflict of interest in the Project; for Intermediaries this would include a situation in which the Intermediary, its officers, managers, Board of Directors, employees, their spouses, children, or close relatives, have a financial or ownership interest in the Project being funded, including its construction or development;
(h)For any purpose when receipt of loan funds is conditioned upon the requirement that the Ultimate Recipient acquire electric or telecommunications service from the Intermediary or its affiliates;
(i)For any gambling activity;
(j)For a Project that would result in the transfer of existing employment or business activity more than 25 miles from its existing location;
(k)For proposed Projects located in areas covered by the Coastal Barrier Resources Act (16 U.S.C. 3501-3510);
(l)For any illegal activity or any activity involving prostitution;
(m)For Agricultural Production, except where the Project is a farmer-owned cooperative or similar organization where the benefits of the Project are passed on to the farmer-owners, and the Agricultural Production is part of an integrated business that processes the agricultural products, and the Agricultural Production portion of the loan will not exceed 50% of the loan amount;
(n)For any pass-through Grant funding activity (a Grant by the Intermediary to the Ultimate Recipient);
(o)Provision of only local exchange voice telephone service; or
(p)for any other purpose announced in a notice by Rural Development. This will not affect Grants that have already been awarded. § 4280.28 [Reserved] § 4280.29 Supplemental financing required for the Ultimate Recipient Project.
(a)For REDL loans, either the Ultimate Recipient or the Intermediary must provide supplemental funds for the Project equal to at least 20 percent of the loan to the Intermediary. For REDG grants, the Intermediary must provide supplemental funds, to capitalize the Revolving Loan Fund, equal to at least 20 percent of the Grant to the Intermediary.
(b)Funds provided by the Ultimate Recipient must be:
(1)Cash or its equivalent;
(2)Provided after Rural Development receives the completed application; and
(3)Disbursed for an eligible Project within a three year period that begins on the day the Intermediary signs the Grant agreement.
(c)Satisfactory evidence of the Ultimate Recipient's funds must be provided to Rural Development before it will advance any funds to the Intermediary. § 4280.30 Restrictions on the use of REDL or REDG funds.
(a)*Conflict of interest.* The Intermediary must not own or manage any Ultimate Recipient Project, unless the Project is acquired as a result of servicing a loan made from the Revolving Loan Fund. Conflicts of interest and all appearances of a conflict of interest are not permitted.
(b)*Fees.* The Intermediary may charge reasonable loan servicing fees, which are limited to one percent per year of the principal amount outstanding on the loan; reasonable professional service fees that are customary for the service being provided and in accordance with any standard fee schedules that have been established for the service; and reasonable expenses the Intermediary has incurred from Independent Providers.
(c)*Interest earnings.* Any interest earned by the Intermediary on advances of Rural Development REDG or REDL funds prior to the disbursement for the Project, must be returned to Rural Development. §§ 4280.31-4280.35 [Reserved] § 4280.36 Other laws that contain compliance requirements for these Programs.
(a)*Equal employment opportunity.* For all construction contracts and Grants in excess of $10,000, the contractor must comply with Executive Order 11246, as amended by Executive Order 11375, and as supplemented by applicable Department of Labor regulations (41 CFR part 60). The applicant is responsible for ensuring that the contractor complies with these requirements.
(b)*Equal opportunity and nondiscrimination.* Rural Development will ensure that equal opportunity and nondiscriminatory requirements are met in accordance with the Equal Credit Opportunity Act and 7 CFR part 15d, conducted by USDA. Rural Development will not discriminate against applicants on the bases of race, color, religion, national origin, sex, marital status, or age (provided that the applicant has the capacity to contract); to the fact that all or part of the applicant's income derives from public assistance program; or to the fact that the applicant has in good faith exercised any right under the Consumer Credit Protection Act.
(c)*Civil rights compliance.* Recipients of Grants must comply with the Americans with Disabilities Act of 1990, Title VI of the Civil Rights Act of 1964, and Section 504 of the Rehabilitation Act of 1973. This includes collection and maintenance of data on the race, sex, and national origin of the recipient's membership/ownership and employees. These data must be available to conduct compliance reviews in accordance with 7 CFR part 1901 subpart E, § 1901.204. Initial compliance reviews will be conducted with the Intermediary when Form RD 400-4, “Assurance Agreement,” is signed. For each loan or Grant an Intermediary receives, a new Form RD 400-4 must be completed. Each Ultimate Recipient must go through the same pre-award compliance review process and must also sign Form RD 400-4. For loans and Grants, a pre-award review is required before loan or Grant approval or any disbursement of funds. For Intermediaries, a post-award compliance review is required 90 days after closing the loan or Grant. This review is not required for Ultimate Recipients. Subsequent compliance reviews will be conducted 3 years from the date the post-award compliance review is completed for Intermediaries and 3 years from the date the pre-award compliance review is completed for Ultimate Recipients. Where Grant funds are used for a Revolving Loan Fund, compliance reviews are required for the Intermediaries for as long as the Fund is in operation. For Ultimate Recipients, compliance reviews are conducted until the loan is repaid to the Fund.
(d)*Architectural barriers.* All facilities financed with Zero-Interest Loans that are open to the public or in which persons may be employed or reside must be designed, constructed, or altered to be readily accessible to and usable by disabled persons. Standards for these facilities must comply with the Architectural Barriers Act of 1968 (42 U.S.C. 4151-4157) and the “Uniform Federal Accessibility Standards”, (41 CFR part 101-19.6, Appendix A).
(e)*Uniform relocation assistance.* Relocations in connection with these Programs are subject to 49 CFR part 24 as referenced by 7 CFR part 21 except that the provisions in title III of the Uniform Act do not apply to these Programs.
(f)*Drug-free workplace.* Grants made under these Programs are subject to the requirements contained in 7 CFR part 3021 which implements the Drug-Free Workplace Act of 1988 (41 U.S.C. 701-706). An Intermediary requesting a REDG Grant will be required to certify that it will establish and make a good faith effort to maintain a drug-free workplace program.
(g)*Debarment and suspension.* The requirements of 7 CFR part 3017 are applicable to these Programs.
(h)*Intergovernmental review of Federal programs.* These Programs are subject to the requirements of Executive Order 12372 (3 CFR 1982 Comp., p. 197) and 7 CFR part 3015, subpart V which implements Executive Order 12372. Proposed Projects are subject to the State and local government review process contained in 7 CFR part 3015.
(i)*Restrictions on lobbying.* The restrictions and requirements imposed by 31 U.S.C. 1352, and 7 CFR part 3018, are applicable to these Programs.
(j)*Earthquake hazards.* These Programs are subject to the seismic requirements of the Earthquake Hazards Reduction Act of 1977 (42 U.S.C. 7701-7706).
(k)*Environmental requirements.* The requirements of 7 CFR part 1940, subpart G, are applicable to these Programs and to the loans made from the Revolving Loan Fund using Rural Development funds. Financial assistance from the Revolving Loan Fund, when funds are derived from repayments by third parties, is not considered Federal assistance for purposes of meeting the compliance requirements of 7 CFR part 1940, subpart G.
(l)*Affirmative fair housing.* If applicable, the Intermediary will be required to comply with the Affirmative Fair Housing Act (42 U.S.C. 3601-3631).
(m)*Flood hazard insurance.* These Programs are subject to the National Flood Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, as amended by 42 U.S.C. 4001-4129.
(n)*Audits.* These Programs are subject to 7 CFR part 3052. § 4280.37 Application forms and filing dates.
(a)The Intermediary may obtain forms that supplement the written narrative sections of its application from the Rural Development State Office for the State where the Intermediary is located.
(b)An original copy only of the application is to be filed with the Rural Development State Office. No other copies are required. § 4280.38 Maximum amount of loans or Grants. During any given fiscal year, Rural Development will publish an announcement of available loan and Grant funds and will indicate the maximum loan and Grant amounts for which an Intermediary or prospective Intermediary may apply. This announcement will also include contact information and application deadlines. All pending applications on file at RBS, including both loan and Grant applications, from the same Intermediary or prospective Intermediary for the same Project will be considered to be one application in determining that the maximum size of the application is in accordance with this section. § 4280.39 Contents of an application. An application for a loan or a Grant must contain the following:
(a)Required forms and certifications:
(1)Standard Form 424, “Application for Federal Assistance,” signed by an authorized representative of the Intermediary.
(2)A Resolution of the Board of Directors signed by the directors and certified by the Intermediary's board secretary. The board resolution must indicate whether the Intermediary is requesting a loan or Grant, agree to the provisions of this subpart and the loan or Grant agreement including the Intermediary's 20 percent Fund contribution, and state that the Intermediary has the legal authority to enter into a loan or Grant agreement under these Programs;
(3)Form AD 1047, “Certification Regarding Debarment, Suspension, and other Responsibility Matters—Primary Covered Transactions,” and Form AD-1048, “Certification Regarding Debarment, Suspension, Ineligibility and Voluntary Exclusion—Lower Tier Transactions.”
(4)Assurance statement for the Uniform Act signed by the Ultimate Recipient. This statement provides Rural Development with the required assurance statement that any relocations of persons or acquisitions of real property, as part of completing the Ultimate Recipient Project, will be handled in accordance with this statute.
(5)RD Instruction 1940-Q, Exhibit A-1, applies if the loan is greater than $150,000 or the Grant is greater than $100,000;
(6)SF LLL, “Disclosure of Lobbying Activities,” (if the Intermediary or the Ultimate Recipient engages in lobbying activities);
(7)Form AD 1049, “Certification Regarding Drug-Free Workplace Requirements,” for Grants only;
(8)Seismic certification if construction of a building is proposed. The Project owner certifies that any building constructed will comply with standards that reduce the damage caused by earthquakes;
(9)Form RD 1940-20, “Request for Environmental Information”; and
(10)RUS Form 7, “Financial and Statistical Report” and RUS Form 7a “Investments, Loan Guarantees, and Loans,” or similar information.
(b)A written narrative section must be provided. This section consists of the following:
(1)A Project description, including details of the work to be performed with Rural Development funds, and a business plan, including a discussion of management and prior experience of the Ultimate Recipient.
(2)A discussion of how the Project meets each selection factor in § 4280.42(b).
(3)A Revolving Loan Fund Plan is required if the Intermediary is applying for a Grant to establish a Revolving Loan Fund. § 4280.40 [Reserved] § 4280.41 Environmental review of the application.
(a)Rural Development will conduct a review for the potential of any environmental impacts resulting from the proposed Project identified in the application and inform the Intermediary of any additional information Rural Development needs and any subsequent environmental requirements necessary for Rural Development to make a finding.
(b)Rural Development will conduct all necessary environmental reviews as prescribed in 7 CFR part 1940, subpart G. These reviews must be completed before the application can be considered for approval. § 4280.42 Application evaluation and selection.
(a)Rural Development will evaluate the application and score it based on the selection factors in this section. All applications will be ranked on a nationwide basis, based on the total points scored.
(b)The application will be evaluated and scored using the information provided in accordance with § 4280.39(b)(2) of this subpart.
(1)*Nature of the Project.* Rural Development will award up to 60 points based on whether the Project:
(i)Is a for-profit business, Business Incubator, industrial building or park, or an infrastructure connection project (such as streets or utilities)—20 points;
(ii)Provides Technical Assistance to rural businesses or rural residents, or educates or provides medical care to rural residents—20 points;
(iii)Will enhance rural economic development by providing Advanced Telecommunications services and computer networks for medical, educational, and job training services. This review will be based on the application's telecommunications design—20 points.
(2)*Number of direct full-time equivalent jobs created or saved within a 3-year period.* To calculate full-time equivalent Direct-Jobs, count two part-time jobs as one full-time job or three part-time or seasonal jobs as one full-time job. If the total numbers of part-time and seasonal jobs add up to a fraction, round up to the next whole number after combining same. Indirect-Jobs or non-Rural jobs cannot be used for this calculation. If the number of Rural full-time equivalent direct-jobs jobs created or saved per $100,000 of total, Project cost is: Then Rural Development will award:
(i)Greater than five 25 points.
(ii)From one to five 15 points.
(3)*Supplemental funds for the Project.* Points will be based on a calculation of the amount of supplemental funds to be provided to the Project. All supplemental funds used in the following calculation must be disbursed to the Project between the date of Rural Development receipt of the application and 1 year after the first advance of funds by Rural Development: If supplemental funds as a percentage of the Rural Development loan or grant to be provided to the Project are: Then Rural Development will award:
(i)Greater than 200% 20 points.
(ii)From 100% to 200% 10 points.
(iii)From 50% to less than 100% 5 points.
(4)*Unemployment rate for the county(ies) where the Project is physically located.* Rural Development will compare the current unemployment rate(s) in the county(ies) to the State and national unemployment rates, and, if applicable, award points under the following categories, whichever is greater: If the unemployment rate(s) in the county(ies) where the Project will be located: Then Rural Development will award:
(i)Exceeds the national unemployment rate by 30% or more 15 points.
(ii)Is greater than the national unemployment rate, but exceeds it by less than 30% 5 points.
(iii)Exceeds the State unemployment rate by 30% or more 10 points.
(iv)Is greater than the State unemployment rate but exceeds it by less than 30% 5 points.
(5)*Per capita personal income for the county(ies) where the Project is physically located.* Rural Development will compare the per capita personal income in the county(ies) where the Project will be located to the national and State per capita personal income levels, and, if applicable, award points under the following categories, whichever is greater: If the per capita personal income level in the county(ies) is: Then Rural Development will award:
(i)Less than or equal to 90% of the national level 15 points.
(ii)Between 90 and 100% of the national level 5 points.
(iii)Less than or equal to 90% of the State level 10 points.
(iv)Between 90 and 100% of the State level 5 points.
(6)*Rural Area location.*
(i)If the Project is physically located in an incorporated city or town or equivalent having a population of 1,249 or less, or if it is physically located in an unincorporated area, Rural Development will award 20 points.
(ii)If the Project is physically located in an incorporated area having a population of 1,250 to 2500, Rural Development will award 10 points.
(7)*Decline in population for the county where the Project is physically located.* If there has been a decline in population in the county where the Project will be located over the time period covered by the two most recent decennial censuses of the United States to the present, Rural Development will award 10 points.
(8)*Cushion of Credit Payments.* Rural Development will determine the level of Cushion of Credit Payments on deposit by the Intermediary, as follows: If the Intermediary's Cushion of Credit account level is: Then Rural Development will award:
(i)In excess of $300,000, or a dollar amount in excess of 3 percent of the Intermediary's total assets, whichever is less 15 points.
(ii)Within the range of $100,000 to $299,999.99, or a dollar amount that is within the range of one percent to 2.99 percent of Intermediary's total assets, whichever is less 10 points.
(iii)Within the range of $10,000 to $99,999.99, or a dollar amount that is within the range of 0.5 percent to .99 percent of Intermediary's total assets, whichever is less 5 points.
(9)*Initial loan and Grant.* If the loan or Grant application will result in the first award to an Intermediary under these Programs, Rural Development will award 10 points.
(10)*County participation.* If the Project will be the first REDLG Project financed in a county Rural Development will award 10 points.
(11)The business plan for the Applicant's Ultimate Recipient will be evaluated by Rural Development and must include:
(i)A description of the business or Project plans, its management, and, if applicable, its products and operating plans. (The business plan evaluated by Rural Development for Advanced Telecommunications will be its telecommunications and engineering design)—up to 15 points; and
(ii)An appropriate financial plan, including actual balance sheets and income statements covering the most recent 3-year period (for applicants who have been in business this long), and projected balance sheets, income statements, and cash flow statements for the ensuing 3-year period, supported by assumptions showing the basis for the projections—up to 20 points. § 4280.43 Discretionary points. The RBS Administrator has the discretion to designate up to 25 points (no more than 5 points for each of the following elements) based on whether the Project:
(a)Is located in a Rural Empowerment Zone, Rural Economic Area Partnership Zone, Rural Enterprise Community, or Champion Community;
(b)Is located in a county that has experienced the loss, removal, or closing of a major source or sources of employment in the last 3 years which causes an increase of 2 percentage points or more in the county's most recent unemployment rate compared with the same period immediately before the dislocation;
(c)Is located in a county that has experienced chronic or long-term economic deterioration;
(d)Is located in a county that was designated a disaster area by the President of the United States that significantly affected rural economic development and job creation. The county must have been designated within 3 years prior to filing of the completed application with Rural Development; or
(e)Is consistent with the Rural Development State Office's approved strategic plan and mission area objectives and is identified as a priority area for assistance in the States' plan. § 4280.44 Limitation on number of loans or Grants to an Intermediary. Depending on the amount of funds available, Rural Development may publish an announcement limiting an Intermediary to one selected Grant application and two selected loan applications in a fiscal year. §§ 4280.45-4280.46 [Reserved] § 4280.47 Non-selection of applications. Provided the application requirements have not changed, an application not selected will be reconsidered in 3 subsequent funding competitions for a total of four funding competitions. If an application is withdrawn, it can be resubmitted and will be evaluated as a new application. § 4280.48 Post selection period. Rural Development will notify the Intermediary in writing if the application is selected. The documents to be executed by the Intermediary will include:
(a)For a loan:
(1)A Letter of Conditions with Project-specific terms and conditions;
(2)A loan agreement with general terms and conditions;
(3)A note covering the repayment terms of the loan; and
(4)A legal opinion concerning the authority of the Intermediary to engage in the Project.
(b)For a Grant:
(1)A Letter of Conditions with Project-specific terms and conditions;
(2)A Grant agreement with general terms and conditions; and
(3)A legal opinion concerning the authority of the Intermediary to participate in the Revolving Loan Fund and to engage in the Project. § 4280.49 [Reserved] § 4280.50 Disbursement of Zero-Interest Loan funds.
(a)For a REDL loan, Rural Development will disburse Zero-Interest Loan funds to the Intermediary in accordance with the terms of the executed loan agreement. All loan funds will be disbursed either as an advance to the Intermediary, in multiple advances, or as a reimbursement for eligible project costs, once the Intermediary has complied with Rural Development requirements.
(b)The Intermediary must provide to the Ultimate Recipient all loan funds that the Intermediary receives from Rural Development within one year of receiving them. If the Intermediary does not re-lend Rural Development funds within one year, the loan funds, and all interest earned on the loan funds, must be returned to the Agency.
(c)For a REDG loan, Rural Development will disburse Grant funds to the Intermediary in accordance with 7 CFR parts 3015 and 3019, as applicable. Specifically, Rural Development will disburse the Grant funds in advance if the following requirements are met:
(1)The Intermediary has established written procedures that will minimize the time elapsing between the transfer of funds from Rural Development and their disbursement to the Ultimate Recipient;
(2)The management system of the Intermediary meets the requirements of 7 CFR parts 3015 and 3019, as applicable;
(3)All necessary supplemental funds for the Project have been obligated or committed to the Revolving Loan Fund; and
(4)The requests for cash advances made by the Intermediary are limited to the minimum amounts needed and timed to be in accordance with the actual immediate cash needs of the Ultimate Recipient for carrying out the Project. §§ 4280.51-4280.52 [Reserved] § 4280.53 Loan payments. The Intermediary must make all REDL payments to Rural Development by electronic funds transfer or other means as specified in the loan documents. § 4280.54 Construction procurement requirements. Construction, including bidding and awarding of contracts, must be conducted in a manner that provides maximum open and free competition. § 4280.55 Monitoring responsibilities.
(a)The Intermediary must monitor the Project to ensure that:
(1)Funds are used only for the approved purposes as specified in the legal documents;
(2)Disbursements and expenditures of funds are properly supported with certifications, invoices, contracts, bills of sale, or other forms of evidence, which are maintained on the premises of the Intermediary;
(3)Project time schedules are being met, projected work by time periods is being accomplished, and other performance objectives are being achieved; and
(4)The Project is in compliance with all applicable regulations.
(b)Rural Development may inspect and copy records and documents that pertain to the Project. The Intermediary must retain these records for the term of the Project loan plus 2 years. In addition, Rural Development may also perform Project site visits and reviews of the use of loan or Grant proceeds.
(c)Rural Development will review and monitor Grants in accordance with 7 CFR parts 3015, 3017, 3018, 3019, 3021, and 3052. § 4280.56 Submission of reports and audits.
(a)In addition to any reports required by 7 CFR parts 3015 and 3019, the Intermediary must submit the following monitoring reports to Rural Development:
(1)*Loan.* The Intermediary must submit Form RD 4280-1 “Survey of Recipients of Rural Economic Development Loan and Grant Program” to Rural Development on an annual basis until it no longer owes money to USDA under the REDLG Program.
(2)*Grant (Revolving Loan Fund).* The Intermediary must submit the Form RD 4280-1 to Rural Development on an annual basis until all projects financed with Rural Development Grant proceeds have been repaid or are otherwise retired, whichever occurs last. Thereafter, on a triennial basis until the fund is terminated, the Intermediary will submit to Rural Development the Form RD 4280-1, reporting on the activity of all loans made from the Revolving Loan Fund.
(b)If the Intermediary does not have an existing loan with RUS, the Intermediary will submit a copy of its annual audit to Rural Development within 90 days of its completion. All REDL audits must be conducted in accordance with Generally Accepted Government Auditing Standards or Generally Accepted Accounting Principles and REDG audits in accordance with 7 CFR part 3052.
(c)Rural Development may require Ultimate Recipients that receive loans financed with Grant funds provided under the REDG Program to submit annual audits to comply with Federal audit regulations. In accordance with 7 CFR part 3052, Ultimate Recipients that are nonprofit entities, or a State or local government, may be required to submit an audit subject to the threshold established in OMB Circular No. A-133. §§ 4280.57-4280.61 [Reserved] § 4280.62 Appeals. An Intermediary may appeal any appealable adverse decision made by Rural Development that affects the Intermediary in accordance with 7 CFR part 11. § 4280.63 Exception authority. Except as specified in paragraphs
(a)through
(c)of this section, the RBS Administrator may, on a case-by-case basis, make exceptions to any requirement or provision of this subpart, if such exception is necessary to implement the intent of the authorizing statute in a time of national emergency or in accordance with a Presidentially-declared disaster, or when such an exception is in the best interests of the Federal Government and is otherwise not in conflict with applicable law.
(a)*Applicant eligibility.* No exception to applicant eligibility can be made.
(b)*Project eligibility.* No exception to project eligibility can be made.
(c)*Rural area definition.* No exception to the definition of rural area, as defined, can be made. §§ 4280.64-4280.99 [Reserved] § 4280.100 OMB control number. The information collection requirements contained in this regulation have been approved by the Office of Management and Budget
(OMB)and have been assigned OMB control number 0575-0035. A person is not required to respond to this collection of information unless it displays a currently valid OMB control number. Dated: May 17, 2007. Douglas L. Faulkner, Deputy Under Secretary, Rural Development. [FR Doc. 07-2636 Filed 5-29-07; 8:45 am]
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U.S. Code
- Liability to persons injured§ 499e
- Definitions§ 601
- Rules, regulations, and orders; appointment, removal, and compensation of officers and employees; expenditures; authorization of appropriations; abrogation of inconsistent statutes§ 499o
- Unfair conduct§ 499b
- Rule making§ 553
- Short title§ 901
- Departmental regulations§ 301
- Cushion of credit payments program§ 940c
- Limitation on use of appropriated funds to influence certain Federal contracting and financial transactions§ 1352
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32 references not yet in our index
- 7 CFR 46
- 7 CFR 46.46(a)(5)
- 5 CFR 1320
- 46 Stat. 537
- 7 CFR 925
- 7 USC 601-674
- 7 CFR 1703
- 7 CFR 4280
- 7 CFR 3015
- 7 CFR 11
- 7 CFR 1940
- 42 USC 4321-4374
- Pub. L. 104-4
- 5 USC 601-602
- 42 USC 4601-4655
- 16 USC 3501-3510
- 41 CFR 60
- 7 CFR 15
- 7 CFR 1901
- 42 USC 4151-4157
- 41 CFR 101
- 49 CFR 24
- 7 CFR 21
- 7 CFR 3021
- 41 USC 701-706
- 7 CFR 3017
- 3 CFR 1982
- 7 CFR 3018
- 42 USC 7701-7706
- 42 USC 3601-3631
- 42 USC 4001-4129
- 7 CFR 3052
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