Unknown. Final rule

6,289 words·~29 min read·/register/2010/07/22/2010-17817

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

--- schema: federal-register doc_type: fedreg source_file: FR-2010-07-22.xml --- 75 140 Thursday, July 22, 2010 Contents Agriculture Agriculture Department See Natural Resources Conservation Service See Rural Utilities Service NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 42678 2010-17946 Air Force Air Force Department NOTICES Privacy Act; Systems of Records, 42720-42724 2010-17962 2010-17963 Alcohol Alcohol and Tobacco Tax and Trade Bureau RULES Establishment of the Sierra Pelona Valley Viticultural Area, 42601-42605 2010-17960 Increase in Tax Rates on Tobacco Products and Cigarette Papers and Tubes, etc., 42605-42607 2010-17955 PROPOSED RULES Standards for Pipe Tobacco and Roll-Your-Own Tobacco, 42659-42662 2010-17957 Centers Centers for Medicare & Medicaid Services NOTICES Medicare Program:

Hospice Wage Index (Fiscal Year 2011), 42944-42979 2010-17622 Inpatient Rehabilitation Facility Prospective Payment System (Federal Fiscal Year 2011), 42836-42884 2010-17621 Prospective Payment System and Consolidated Billing for Skilled Nursing Facilities (FY 2011), 42886-42942 2010-17628 Children Children and Families Administration NOTICES Statements of Organization, Functions, and Delegations of Authority, 2010-17942 42760-42762 2010-17958 Civil Civil Rights Commission NOTICES Meetings:

Colorado Advisory Committee, 42680 2010-17890 Meetings; Sunshine Act, 42680 2010-18132 Coast Guard Coast Guard RULES Safety Zones: Lyme Community Days, Chaumont Bay, NY, 42608-42610 2010-17854 Commerce Commerce Department See Foreign-Trade Zones Board See International Trade Administration See National Oceanic and Atmospheric Administration Commodity Commodity Futures Trading Commission PROPOSED RULES Business Continuity and Disaster Recovery, 42633-42639 2010-17606 Comptroller Comptroller of the Currency NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 42823-42826 2010-18006 2010-18007 2010-18010 2010-18014 Defense Defense Department See Air Force Department See Navy Department NOTICES 36(b)(1) Arms Sales Notifications, 42708-42718 2010-17965 Intents to Grant Exclusive Licenses: Doar, Pekuin, Sall LLC, 42718-42719 2010-17967 Education Education Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 2010-17941 42724-42726 2010-17943 2010-17944 Energy Energy Department See Energy Efficiency and Renewable Energy Office See Federal Energy Regulatory Commission RULES Energy Conservation Program for Consumer Products:

Test Procedure for Microwave Ovens; Repeal of active mode test procedure provisions, 42579-42585 2010-17773 PROPOSED RULES Energy Conservation Program for Consumer Products: Test Procedure for Microwave Ovens, 42611-42630 2010-17774 2010-17775 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 42726-42727 2010-17893 Entension of Comment Period: Implementing the National Broadband Plan, 42727 2010-18005 Energy Energy Efficiency and Renewable Energy Office NOTICES Production Incentives for Cellulosic Biofuels, 42745-42747 2010-17987 EPA Environmental Protection Agency PROPOSED RULES Approvals and Promulgations of Implementation Plans:

New Jersey; 8-hour Ozone Control Measures, 42672-42676 2010-17949 National Emission Standards for Hazardous Air Pollutants for Major Sources: Industrial, Commercial, and Institutional Boilers and Process Heaters, etc., 42676-42677 2010-17966 NOTICES Protection of Stratospheric Ozone: Request for Applications for Essential Use Allowances for 2012 and 2013, 42747-42749 2010-17964 Executive Office of the President See Presidential Documents FAA Federal Aviation Administration RULES Airworthiness Directives:

Airbus Model A330-200 and -300 Series Airplanes, and A340-200, -300, -500, and -600 Series Airplanes, 42589-42592 2010-17064 Empresa Brasileira de Aeronautica S.A. (EMBRAER) Model ERJ 170 and ERJ 190 Airplanes, 42585-42589 2010-16182 The Boeing Company Model 767-200, -300, and -300F Series Airplanes Powered by General Electric or Pratt & Whitney Engines, 42592-42597 2010-17611 Modification of Restricted Area R-3404; Crane, IN, 42598-42599 2010-17951 PROPOSED RULES Proposed Establishment of Class E Airspace:

Lancaster, NH, 42630-42631 2010-17952 Proposed Establishments of Class E Airspace: Wolfeboro, NH, 42631-42633 2010-17954 NOTICES Airborne Area Navigation Equipment Using Loran-C Inputs, 42819 2010-17940 Environmental Assessments; Availability, etc.: Proposed Airport Development; Sawyer County Airport, Hayward, WI, 42820-42821 2010-17935 Proposed Airport Traffic Control Tower, etc.; Kalamazoo/Battle Creek International Airport, Portage City, MI, 42820 2010-17938 Proposed ORD Airport Surveillance Radar, Model 9, West Chicago, IL, 42819-42820 2010-17939 Federal Emergency Federal Emergency Management Agency NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Effectiveness of a Community's Implementation of the NFIP Community Assistance Program CAC and CAV Reports, 42765-42766 2010-17974 Revisions to National Flood Insurance Program Maps, etc., 42762-42765 2010-17921 National Flood Insurance Program: Assistance to Private Sector Property Insurers, Availability of FY2011 Arrangement, 42766-42767 2010-17977 Federal Energy Federal Energy Regulatory Commission NOTICES Applications: Cellu Tissue Corp., 42729-42730 2010-17886 Copper Valley Electric Association, Inc., 42728 2010-17882 El Paso Natural Gas Co., 42727-42728 2010-17880 Goodwin Power, LLC, 42730 2010-17887 Combined Filings, 42730-42737 2010-17884 2010-17901 2010-17908 2010-17909 2010-17910 2010-17911 2010-17912 2010-17913 Complaints, 42737 2010-17914 Environmental Assessments;

Availability, etc.: Ryckman Creek Resources, LLC, 42740-42742 2010-17881 Transcontinental Gas Pipe Line Co., LLC, Mid-Atlantic Connector Expansion, 42738-42740 2010-17885 Environmental Site Reviews, etc.: Alaska Village Electric Cooperative, 42742-42743 2010-17883 Initial Market-Based Rate Filings with Blanket Section 204 Authorization Requests: Ally Energy, LLC, 42743-42744 2010-17906 East Coast Power and Gas, LLC, 42744-42745 2010-17903 Hardscrabble Wind Power LLC, 42745 2010-17902 Starion Energy NY, Inc., 42744 2010-17904 Synergics Roth Rock North Wind Energy, LLC, 42743 2010-17907 Synergics Roth Rock Wind Energy, LLC, 42744 2010-17905 Staff Attendances:

Smart Grid Update, 42747 2010-17888 Federal Highway Federal Highway Administration PROPOSED RULES National Tunnel Inspection Standards, 42643-42659 2010-17787 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 42816-42818 2010-17839 2010-17840 2010-17841 Federal Reserve Federal Reserve System NOTICES Formations of, Acquisitions by, and Mergers of Bank Holding Companies, 42749 2010-17900 FTC Federal Trade Commission NOTICES Analysis of Agreements Containing Consent Orders to Aid Public Comment:

Fidelity National Financial, Inc., 42749-42752 2010-17978 Analysis of Proposed Consent Order to Aid Public Comment: Nestl'e HealthCare Nutrition, Inc., 42752-42754 2010-17838 Fish Fish and Wildlife Service NOTICES Environmental Impact Statements; Availability, etc.: Incidental Take Permit and Associated Habitat Conservation Plan for the Beech Ridge Wind Energy Project, 42767-42770 2010-17932 Foreign Foreign Assets Control Office NOTICES Unblocking of Specially Designated Nationals and Blocked Persons Pursuant to Executive Order 12978, 42833-42834 2010-17721 Foreign Foreign-Trade Zones Board NOTICES Reorganization of Foreign-Trade Zones under Alternative Site Framework:

Foreign-Trade Zone 121, Capital District, NY, 42690-42691 2010-17971 Foreign-Trade Zone 54, Clinton County, NY, 42691 2010-17998 Health Health and Human Services Department See Centers for Medicare & Medicaid Services See Children and Families Administration See Health Resources and Services Administration See National Institutes of Health NOTICES Solicitation of Nominations: Advisory Committee on Minority Health, 42754-42755 2010-17852 Health Health Resources and Services Administration NOTICES Establishment of Negotiated Rulemaking Committee on the Designation of Medically Underserved Populations, etc., 42755-42756 2010-17837 Statement of Delegation of Authority, 42760 2010-17836 Homeland Homeland Security Department See Coast Guard See Federal Emergency Management Agency RULES Electronic Signature and Storage of Form I-9.

Employment Eligibility Verification, 42575-42579 2010-17806 Interior Interior Department See Fish and Wildlife Service See National Park Service See Reclamation Bureau IRS Internal Revenue Service NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 2010-17864 42826-42832 2010-17865 2010-17866 2010-17867 2010-17868 2010-17870 2010-17871 2010-17872 2010-17873 2010-17875 Agency Information Collection Activities; Proposals, Submissions, and Approvals:

Regulation Project, 42832-42833 2010-17869 International International Trade Administration NOTICES Amended Final Affirmative Countervailing Duty Determination and Countervailing Duty Order: Certain Potassium Phosphate Salts from the People's Republic of China, 42682-42683 2010-18093 Amended Final Determination of Sales at Less Than Fair Value and Antidumping Duty Order: Certain Potassium Phosphate Salts From the People's Republic of China, 42683-42684 2010-18098 Initiation of Anti-Circumvention Inquiry:

Steel Wire Garment Hangers from the People's Republic of China, 42685-42689 2010-18000 Meetings: Civil Nuclear Trade Advisory Committee, 42690 2010-17919 International International Trade Commission NOTICES Determinations to Conduct Full Five-Year Reviews Concerning Countervailing Duty Orders: Hot-Rolled Flat-Rolled Carbon-Quality Steel Products from Brazil, Japan, and Russia, 42782-42783 2010-17857 Determinations: Certain Potassium Phosphate Salts from China, 42783 2010-17863 Receipts of Complaints;

Solicitations of Comments Relating to Public Interest, 42783-42784 2010-17878 Terminations of Five-Year Reviews: Greige Polyester/Cotton Printcloth from China, 42784 2010-17862 Justice Justice Department NOTICES Lodging of Consent Decrees Under the Clean Air Act, 42784-42785 2010-17895 2010-18066 Lodging of Settlement Agreement Under the Comprehensive Environmental Response, Compensation, and Liability Act, 42785-42786 2010-18065 Legal Legal Services Corporation NOTICES Accounting Guide for LSC Recipients (2010 Edition), 42786-42790 2010-17737 National Archives National Archives and Records Administration NOTICES Advisory Committee on Presidential Library-Foundation Partnerships, 42790 2010-17997 NIH National Institutes of Health NOTICES Meetings:

Center for Scientific Review, 42759-42760 2010-17980 National Cancer Institute, 42758 2010-17988 National Heart, Lung, And Blood Institute, 42756 2010-17996 National Institute of General Medical Sciences, 42757, 42759 2010-17981 2010-17983 2010-17990 2010-17991 2010-17993 National Institute of Neurological Disorders and Stroke, 42758-42759 2010-17985 2010-17986 National Institute on Alcohol Abuse and Alcoholism, 42756-42757 2010-17994 NOAA National Oceanic and Atmospheric Administration RULES Fisheries Off West Coast States:

Coastal Pelagic Species Fisheries; Closure, 42610 2010-17961 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Drivers Awareness of and Response to Significant Weather Events and Correlation of Weather to Road Impacts, 42681-42682 2010-17846 Topographic and Bathymetric Data Survey, 42680-42681 2010-17842 Endangered and Threatened Species: Initiation of a 5-year Review of the Baiji/Chinese River Dolphin/Yangtze River Dolphin, 42684-42685 2010-17832 Issuance of Permits.

Marine Mammals (File Nos. 15498 and 15500), 42689-42690 2010-17830 Small Takes of Marine Mammals Incidental to Specified Activities: Exploratorium Relocation Project in San Francisco, CA, 42691-42698 2010-18002 Takes of Marine Mammals Incidental to Specified Activities: Installation of Meteorological Data Collection Facilities in the Mid-Atlantic Outer Continental Shelf, 42698-42708 2010-17968 National Park National Park Service NOTICES Inventory Completions: Denver Museum of Nature and Science, Denver, CO, 42770-42771 2010-17874 Robert S.

Peabody Museum of Archaeology, Phillips Academy, Andover, MA, 42773-42774 2010-17877 University of Colorado Museum, Boulder, CO, 42771-42773 2010-17876 NRCS Natural Resources Conservation Service NOTICES Environmental Impact Statements; Availability, etc.: Logan Northern Canal Reconstruction Project, Cache County, UT, 42678-42680 2010-17956 Navy Navy Department NOTICES Privacy Act; Systems of Records, 42719-42720 2010-17891 Nuclear Nuclear Regulatory Commission NOTICES Environmental Assessments;

Availability, etc.: Exelon Generation Co., LLC; Clinton Power Station, 42790-42791 2010-17992 Proposed Revision 1 to Standard Review Plan on Administrative Procedures—General, 42791-42792 2010-17995 Pension Pension Benefit Guaranty Corporation PROPOSED RULES Debt Collections, 42662-42672 2010-18008 Postal Postal Regulatory Commission NOTICES Meetings; Sunshine Act, 42792 2010-18032 Postal Postal Service NOTICES Meetings; Sunshine Act, 42792 2010-18124 Presidential Presidential Documents EXECUTIVE ORDERS Ocean, Coastal, and Great Lake Ecosystems;

Protection and Management (EO 13547), 43021-43027 2010-18169 ADMINISTRATIVE ORDERS Government Agencies and Employees: Protecting Workers and Ensuring Reemployment (POWER), Presidential Initiative (Memorandum of July 19, 2010), 43029-43030 2010-18176 Reclamation Reclamation Bureau NOTICES Status Report of Water Service, Repayment, and Other Water-Related Contract Actions, 42774-42782 2010-17933 Research Research and Innovative Technology Administration NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Safety Culture Data for Program Evaluation, 42818-42819 2010-17922 RUS Rural Utilities Service RULES Guarantees for Bonds and Notes Issued for Electrification or Telephone Purposes, 42571-42575 2010-17817 SEC Securities and Exchange Commission RULES Rules of Organization; Conduct and Ethics; and Information and Requests:, 42599-42601 2010-17897 PROPOSED RULES Concept Release on U.S. Proxy System, 42982-43020 2010-17615 NOTICES Self-Regulatory Organizations;

Proposed Rule Changes: Financial Industry Regulatory Authority, Inc., 42795-42797 2010-17931 International Securities Exchange, LLC, 42801-42804, 42809-42813 2010-17925 2010-17927 2010-17928 2010-17929 NASDAQ OMX BX, Inc., 42792-42795 2010-17851 NASDAQ OMX PHLX, Inc., 42797-42801, 42804-42809 2010-17926 2010-17930 Social Social Security Administration PROPOSED RULES Amendments to Procedures for Certain Determinations and Decisions, 42639-42643 2010-17896 State State Department NOTICES Meetings:

Advisory Committee On International Economic Policy, 42813-42814 2010-17959 Surface Surface Transportation Board NOTICES Abandonment Exemptions: Boston and Maine Corp., Essex, Middlesex, and Suffolk Counties, MA, 42814 2010-17920 Central Railroad Co. of Indianapolis, Howard County, IN, 42814-42815 2010-17973 Fulton County, LLC, Fulton County, IN, 42815-42816 2010-17972 Thrift Thrift Supervision Office NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals:

Prohibited Service at Savings and Loan Holding Companies, 42833 2010-17843 Transportation Transportation Department See Federal Aviation Administration See Federal Highway Administration See Research and Innovative Technology Administration See Surface Transportation Board RULES Posting of Flight Delay Data on Web Sites, 42599 2010-17859 Treasury Treasury Department See Alcohol and Tobacco Tax and Trade Bureau See Comptroller of the Currency See Foreign Assets Control Office See Internal Revenue Service See Thrift Supervision Office NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 42821-42823 2010-17918 2010-17936 Separate Parts In This Issue Part II Health and Human Services Department, Centers for Medicare & Medicaid Services, 42836-42884 2010-17621 Part III Health and Human Services Department, Centers for Medicare & Medicaid Services, 42886-42942 2010-17628 Part IV Health and Human Services Department, Centers for Medicare & Medicaid Services, 42944-42979 2010-17622 Part V Securities and Exchange Commission, 42982-43020 2010-17615 Part VI Presidential Documents, 43021-43027, 43029-43030 2010-18169 2010-18176 Reader Aids Consult the Reader Aids section at the end of this page 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. 75 140 Thursday, July 22, 2010 Rules and Regulations DEPARTMENT OF AGRICULTURE Rural Utilities Service 7 CFR Part 1720 RIN 0572-ZA06 Guarantees for Bonds and Notes Issued for Electrification or Telephone Purposes AGENCY: Rural Utilities Service, USDA.

ACTION: Final rule. SUMMARY: The Rural Utilities Service

(RUS)is amending its regulations for the guarantee program for cooperative and other not-for-profit lenders that make loans for eligible electric and telephone purposes. These proposed amendments implement changes adopted in the Food, Conservation and Energy Act of 2008 (Pub. L. 110-246). The intended effect is to update agency regulations to reflect current statutory authority. DATES: *Effective Date:* This rule is effective August 23, 2010. FOR FURTHER INFORMATION CONTACT: Karen L. Larsen, Policy Analysis and Loan Management Staff, Office of the Assistant Administrator, Electric Programs, Rural Utilities Service, United States Department of Agriculture, 1400 Independence Avenue, SW., Room 5165-S, Washington, DC 20250-1560. Telephone

(202)720-9545; e-mail: *karen.larsen@wdc.usda.gov.* SUPPLEMENTARY INFORMATION: Executive Order 12866 This rule has been determined to be not significant for purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget. Catalog of Federal Domestic Assistance The Catalog of Federal Domestic Assistance

(CFDA)number assigned to the Electric Loan and Loan Guarantee program is 10.850 Rural Electrification Loans and Loan Guarantees. The catalog is available on the Internet and the General Services Administration's

(GSA)free CFDA Web site at *http://www.cfda.gov.* The CFDA Web site also contains a PDF file version of the Catalog that, when printed, has the same layout as the printed document that the Government Printing Office

(GPO)provides. GPO prints and sells the CFDA to interested buyers. For information about purchasing the Catalog of Federal Domestic Assistance from GPO, call the Superintendent of Documents at 202-512-1800 or toll free at 866-512-1800, or access GPO's on-line bookstore at *http://bookstore.gpo.gov.* Executive Order 12372 This rule is excluded from the scope of Executive Order 12372, Intergovernmental Consultation, which may require consultation with State and local officials. *See* the final rule related notice entitled, “Department Programs and Activities Excluded from Executive Order 12372,” (50 FR 47034) advising that RUS loans and loan guarantees are not covered by Executive Order 12372. Information Collection and Recordkeeping Requirements This rule contains no new reporting or recordkeeping burdens that would require approval under the Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35). National Environmental Policy Act Certification The Administrator of RUS has determined that this rule will not significantly affect the quality of the human environment as defined by the National Environmental Policy Act of 1969 (42 U.S.C. 4321 *et seq.* ). Therefore, this action does not require an environmental impact statement or assessment. Regulatory Flexibility Act Certification It has been determined that the Regulatory Flexibility Act is not applicable to this rule since the Agency is not required by 5 U.S.C. 551 *et seq.* or any other provision of law to publish a notice of proposed rulemaking with respect to the subject matter of this rule. Executive Order 12988 This rule has been reviewed under Executive Order 12988, Civil Justice Reform. The Agency has determined that this rule meets the applicable standards in section 3 of the Executive Order. Unfunded Mandates This rule contains no Federal mandates (under the regulatory provisions of Title II of the Unfunded Mandates Reform Act of 1995) for State, local, and tribal governments for the private sector. Thus, this rule is not subject to the requirements of section 202 and 205 of the Unfunded Mandates Reform Act of 1995. Executive Order 13132, Federalism The policies contained in this rule do not have any substantial direct effect on States, on the relationship between the national government and the States, or on the distribution of power and responsibilities among the various levels of government. Nor does this rule impose substantial direct compliance costs on state and local governments. Therefore, consultation with the States is not required. Executive Order 13175, Consultation and Coordination With Indian Tribal Governments This executive order imposes requirements on Federal agencies in the development of regulatory policies that have tribal implications or preempt tribal laws. The RUS has determined that this rule relating to loan guarantees for non-profit lenders does not pre-empt tribal laws, or have a substantial direct effect on either one or more Indian tribe(s) or on the relationship or the distribution of powers and responsibilities between the Federal Government and the Indian tribes. Thus, this final rule is not subject to the requirements of Executive Order 13175. Executive Order 13211 This rule does not have any adverse effects on energy supply, distribution, or use should the proposal be implemented. The Agency has determined that the preparation of Statement of Energy Effects under Executive Oder 13211 is not required. E-Government Act Compliance The Agency 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 On February 5, 2010, the Rural Utilities Service

(RUS)published a proposed rule, 7 CFR Part 1720, Guarantees for Bonds and Notes issued for Electrification and Telephone Purposes (75 FR 5902). This rule amends the Agency's policies and procedures for granting guarantees to eligible cooperatives and other not-for-profit lenders that make loans for eligible electric and telephone purposes under the Rural Electrification Act of 1936 (the “RE Act”) (7 U.S.C. 901 *et seq.* ). The amendments to part 1720 revise the current regulations to implement changes made by the 2008 Farm Bill and to clarify existing provisions. The public was invited to submit comments on or before April 6, 2010. Two comments were received and are addressed in the Discussion of Comments section of this rule. The RE Act authorizes the Secretary to guarantee and make loans to persons, corporations, States, territories, municipalities, and cooperative, non-profit, or limited-dividend associations for the purpose of furnishing or improving electric and telephone service in rural areas. Responsibility for administering electrification and telecommunications loan and guarantee programs along with other functions the Secretary deemed appropriate have been assigned to RUS under the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6941 *et seq.* ). The Administrator of RUS has been delegated responsibility for administering the programs and activities of RUS, *see* 7 CFR 1700.25. Section 6101 of the Farm Security and Rural Investment Act of 2002 (Pub. L. 107-171) (FSRIA) amended the RE Act to add section 313A (7 U.S.C. 940c-1) entitled “Guarantees for Bonds and Notes Issued for Electrification or Telephone Purposes.” This section created a new loan guarantee program (313A program) for eligible non-profit lenders. Final regulations implementing the program were published in the **Federal Register** on October 29, 2004, 69 FR 63045. Section 6106(a)(1)(A) of the Food, Conservation, and Energy Act of 2008 (Pub. L. 110-246) amended section 313A of the RE Act extending the program authorization from September 30, 2007, to September 30, 2012, expanding eligible loan purposes, and setting an annual limit of $1,000,000,000 on the total amount of guarantees approved by the Secretary during a fiscal year, subject to the availability of funds. Prior to the 2008 amendment the total amount of a lender's bonds and notes that could be guaranteed under this section was limited to the total amount of loans made by the lender concurrently with a loan approved by the Secretary under the RE Act. Section 6106(a)(1)(B) further amended section 313A of the RE Act by removing the provision prohibiting the recipient from using any amount obtained from the reduction in funding costs as a result of a guarantee under section 313A to reduce the interest rate charged on a new or concurrent loan. New loan guarantees will not be subject to this limitation. Discussion of Comments The proposed rule was published on February 5, 2010, at 75 FR 5902. Comments were due on April 6, 2010. RUS received two written public comments via the Regulations.gov portal on the proposed rule amending 7 CFR part 1720, the regulations implementing section 313A of the RE Act (7 U.S.C. 940c-1). CoBank, ACB (CoBank), a member of Farm Credit System overseen by the Farm Credit Administration

(FCA)and a major lender to electric cooperatives, including many RUS borrowers, expressed its concerns that part 1720 as proposed, if implemented without change or clarification “could be read to preclude entities such as CoBank from participating in the program as a guaranteed lender.” CoBank commented on an unchanged section of the existing rule (7 CFR 1720.4(b)(1)) relating to restrictions on patronage and dividend distributions in the event of a decline in credit quality of a participating lender and requested clarification of lender eligibility under 7 CFR 1720.5(a)(1). The National Rural Utilities Cooperative Finance Corporation (CFC), an existing participant in the program, commented on two proposed additions to the evaluation criteria in 7 CFR 1720.7(b) that the Agency would use to consider applications competitively. Senior Secured Debt *Comment:* CoBank seeks clarification on the applicability of 7 CFR 1720.4(b)(1) of the existing regulation which limits payments of cash patronage and dividends by a participating lender when the credit rating on its senior secured debt has fallen below an “A__” rating. CoBank contends that the limitation imposed by existing section 1720.4(b)(1) on the payment of cash patronage and dividends to guaranteed lenders having a credit rating below “A__” on senior secured debt (without regard to the guarantee) is problematic because CoBank does not issue senior secured debt and, accordingly, could never be in compliance with this condition as it could never obtain a senior secured debt rating. In its comments, CoBank seeks clarification that this regulation does not apply to institutions that do not issue senior secured debt. *Response:* RUS does not read existing 7 CFR 1720.4(b)(1) as requiring a guaranteed lender to have senior secured debt in order to avoid the patronage and dividend limitations imposed by such provision. RUS reads this provision as only being applicable to entities that have senior secured debt. Therefore, no change is being made to existing section 1720.4(b)(1). Pre-Existing Contractual Commitments To Pay Dividends *Comment:* CoBank also contends that existing 7 CFR 1720.4(b)(1) should be modified because it places a restriction on CoBank's ability to make dividend payments despite CoBank's pre-existing contractual commitments to pay dividends on its preferred stock. *Response:* As stated above, section 1720.4(b)(1) only applies to entities that issue senior secured debt. While section 1720.4(b)(1) is inapplicable to entities not having senior secured debt, this does not mean that RUS is indifferent to the risks that a borrower's unrestricted discretion to make distributions present to a creditor. However, in the case of CoBank, CoBank has pointed out that the risk has been addressed through regulations of the FCA. FCA directly regulates CoBank's ability to issue cash patronage refunds and dividends. RUS agrees that the regulations of the FCA are helpful in addressing the concerns reflected in section 1720.4(b)(1), however, RUS does not believe it is necessary to remove the restriction as CoBank has suggested since, for reasons already stated, the provision would not apply in CoBank's circumstances. RUS reserves the right to incorporate suitable alternatives to section 1720.4(b)(1) in the transaction documents of borrowers such as CoBank, and no change is being made in this rule. Lender Eligibility *Comment:* CoBank suggests that 7 CFR 1720.5(a)(1), as RUS proposed to revise it, establishes the eligibility criteria in an overly narrow manner by stating that eligible entities may be “organized on a non-profit basis.” CoBank suggests that this language may be construed to mean that an eligible entity needs to be a non-profit entity organized under State law and that this result was not contemplated by Congress. In CoBank's view, this reading of the proposed regulation may serve to exclude from participation in the section 313A guarantee program entities that are not organized as non-profit entities under State law. In its comments, CoBank seeks confirmation that this regulation requires applicants to have substantive non-profit status, and that this regulation does not require that applicants be created as non-profit entities under State law. *Response:* RUS does not read the language of proposed section 1720.5(a)(1) as requiring an entity to be organized as a non-profit entity under State law in order to be an eligible applicant under the 313A guarantee program. Furthermore, it finds nothing in the legislative history that would support such an interpretation that results in a policy excluding entities on the basis of whether they have been organized under State laws or Federal laws. RUS notes that similar language in section 306 of the RE Act (7 U.S.C. 936) establishing the core RUS guaranteed loan programs has for many years been interpreted to include CoBank. Therefore, RUS confirms that the final rule requires substantive non-profit status, not particular types of State law entities. The language itself has not been changed. Application Evaluation Factor Involving Supervision, Examination, and Safety and Soundness Regulation of Applicant by an Independent Federal Agency *Comment:* CFC contends that the new evaluation criterion proposed to be included in 7 CFR 1720.7(b)(4) would disadvantage entities like CFC that are not regulated by an independent Federal agency. The proposed section 1720.7(b)(4) would allow RUS to consider the extent to which an applicant is subject to “supervision, examination, and safety and soundness regulation by an independent federal agency” as an evaluation factor in connection with the awarding of guarantees under the 313A program. CFC contends that it is not subject to an established regulatory scheme and, as a result, will not be able to satisfy this evaluation criterion. Moreover, CFC essentially contends that although it is not regulated by a Federal agency, CFC's compliance with certain reporting requirements, their submission of financial statements to RUS, and the inclusion of a financial expert on its board of directors at the request of the U.S. Treasury Department serve to provide disclosure and oversight comparable to or exceeding that required by Federal regulation. *Response:* RUS believes that the fact that an applicant is regulated by an independent Federal agency provides a substantial benefit in that the additional oversight provided by a Federal agency tasked with the regulation of lending institutions provides RUS with an additional layer of security. Accordingly, the factor is appropriate for RUS to consider since regulatory oversight benefits RUS because it serves to lessen RUS' financial risk as the guarantor in the 313A program. The examples that CFC references are not comparable to the comprehensive regulatory scheme of the FCA. Therefore, no change is being adopted in the final rule. RUS notes that the degree of regulation is not an eligibility factor. Application Evaluation Factor Involving Concentration of Financial Risk Resulting From Previous Guarantees *Comment:* CFC contends that the new evaluation criterion proposed in 7 CFR 1720.7(b)(5) would serve to penalize entities that have previously received guarantees made under section 313A of the RE Act. Proposed section 1720.7(b)(5) provides that RUS take into consideration “[t]he extent of concentration of financial risk that RUS may have resulting from previous guarantees made under section 313A of the RE Act.” CFC suggests that prior RUS guarantees made under the 313A program are sufficiently secured by CFC's underlying credit strength and its pledged loan collateral. Accordingly, CFC contends that financial risk to RUS is already minimized and suggests that if RUS seeks to further minimize its risk, it could modify this proposed language to limit a guaranteed lender's ability to make loans to a single entity in an amount that exceeds ten percent of the total section 313A guaranteed loans outstanding to RUS. *Response:* RUS believes that a legitimate purpose is served by considering the concentration of outstanding section 313A guarantees. Although there are existing protections in place to minimize RUS' risk with respect to the existing guaranteed lender, RUS believes that it is still prudent risk management to consider the amount of its existing exposure to each guaranteed lender under the 313A program when acting on applications for additional guarantees. Therefore, no change is being made in the final rule. List of Subjects in 7 CFR Part 1720 Electric power, Electric utilities, Loan programs—energy, Reporting and recordkeeping requirements, Rural areas. For reasons set out in the preamble, RUS amends chapter XVII of title 7 of the Code of Federal Regulations by amending part 1720 to read as follows: PART 1720—GUARANTEES FOR BONDS AND NOTES ISSUED FOR ELECTRIFICATION OR TELEPHONE PURPOSES 1. The authority citation for part 1720 continues to read as follows: Authority: 7 U.S.C. 901 *et seq.;* 7 U.S.C. 940c-1. 2. Revise § 1720.1 to read as follows: § 1720.1 Purpose. This part prescribes regulations implementing a guarantee program for bonds and notes issued for electrification or telephone purposes authorized by section 313A of the Rural Electrification Act of 1936 (7 U.S.C. 940c-1). 3. Revise § 1720.2 to read as follows: § 1720.2 Background. The Rural Electrification Act of 1936 (the “RE Act”) (7 U.S.C. 901 *et seq.* ) authorizes the Secretary to guarantee and make loans to persons, corporations, States, territories, municipalities, and cooperative, non-profit, or limited-dividend associations for the purpose of furnishing or improving electric and telephone service in rural areas. Responsibility for administering electrification and telecommunications loan and guarantee programs along with other functions the Secretary deemed appropriate have been assigned to RUS under the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6941 *et seq.* ). The Administrator of RUS has been delegated responsibility for administering the programs and activities of RUS, *see* 7 CFR 1700.25. Section 6101 of the Farm Security and Rural Investment Act of 2002 (Pub. L. 107-171) (FSRIA) amended the RE Act to include a new program under section 313A entitled Guarantees for Bonds and Notes Issued for Electrification or Telephone Purposes. This measure directed the Secretary of Agriculture to promulgate regulations that carry out the Program. The Secretary published the regulations for the program in the **Federal Register** as a final rule on October 29, 2004, adding Part 1720 to Title 7 of the Code of Federal Regulations. Section 6106(a)(1)(A) of the Food, Conservation, and Energy Act of 2008 (Pub. L. 110-246) amended section 313A of the RE Act by replacing the level of “concurrent loans” as a factor limiting the amount of bonds and notes that could be guaranteed and inserted “for eligible electrification or telephone purposes” as the limitation on the amount of bonds and notes that can be guaranteed under section 313A up to an annual program limit of $1,000,000,000, subject to availability of funds. Section 6106(a)(1)(B) further amended section 313A of the RE Act by removing the prohibition against the recipient using an amount obtained from the reduction in funding costs as a result of a new guarantee under section 313A to reduce the interest rate charged on a new or concurrent loan. 4. Amend § 1720.3 by revising the definition of “Borrower” and adding the definition of “Eligible Loan” as follows: § 1720.3 Definitions. *Borrower* means any organization that has an outstanding loan made or guaranteed by RUS for rural electrification or rural telephone under the RE Act, or that is eligible for such financing. *Eligible Loan* means a loan that a guaranteed lender extends to a borrower for up to 100 percent of the cost of eligible electrification or telephone purposes consistent with the RE Act. 5. Amend § 1720.4 by revising paragraphs (a)(2), (3), and (4), and revising paragraph (b)(2) to read as follows: § 1720.4 General standards.

(a)* * *

(2)At the time the guarantee is executed, the total principal amount of guaranteed bonds outstanding would not exceed the principal amount of outstanding eligible loans previously made by the guaranteed lender;

(3)The proceeds of the guaranteed bonds will not be used directly or indirectly to fund projects for the generation of electricity; and

(4)The guaranteed lender will not use any amounts obtained from the reduction in funding costs provided by a loan guarantee issued prior to June 18, 2008, to reduce the interest rates borrowers are paying on new or outstanding loans, other than new concurrent loans as provided in part 1710 of this chapter.

(b)* * *

(2)Maintain sufficient collateral equal to the principal amount outstanding, for guaranteed lenders having a credit rating below “A−” on its senior secured debt without regard to the guarantee, or in the case of a lender that does not have senior secured debt, a corporate (counterparty) credit rating below “A−” without regard to the guarantee. Collateral shall be in the form of specific and identifiable unpledged securities equal to the value of the guaranteed amount. In the case of a guaranteed lender's default, the U.S. government claim shall not be subordinated to the claims of other creditors, and the indenture must provide that in the event of default, the government has first rights on the asset. Upon application and throughout the term of the guarantee, guaranteed lenders not subject to collateral pledging requirements shall identify, with the concurrence of the Secretary, specific assets to be held as collateral should the credit rating of its senior secured debt, or its corporate credit rating, as applicable, without regard to the guarantee fall below “A−.” The Secretary has discretion to require collateral at any time should circumstances warrant. 6. Amend § 1720.5 by revising paragraphs (a)(1) and (b)(1) to read as follows: § 1720.5 Eligibility criteria.

(a)* * *

(1)A bank or other lending institution organized as a private, not-for-profit cooperative association, or otherwise organized on a non-profit basis; and

(b)* * *

(1)The guaranteed lender must furnish the Secretary with a certified list of the principal balances of eligible loans then outstanding and certify that such aggregate balance is at least equal to the sum of the proposed principal amount of guaranteed bonds to be issued, and any previously issued guaranteed bonds outstanding; and 7. Amend § 1720.6 by revising paragraph (a)(7) to read as follows: § 1720.6 Application process.

(a)* * *

(7)Evidence of a credit rating, from a Rating Agency, on its senior secured debt or its corporate credit rating, as applicable, without regard to the government guarantee and satisfactory to the Secretary; and 8. Amend § 1720.7 by revising paragraphs (b)(3) and (4), adding new paragraphs (b)(5) and (6), and revising paragraph

(d)to read as follows: § 1720.7 Application evaluation.

(b)* * *

(3)The applicant's demonstrated performance of financially sound business practices as evidenced by reports of regulators, auditors and credit rating agencies;

(4)The extent to which the applicant is subject to supervision, examination, and safety and soundness regulation by an independent federal agency;

(5)The extent of concentration of financial risk that RUS may have resulting from previous guarantees made under section 313A of the RE Act; and

(6)The extent to which providing the guarantee to the applicant will help reduce the cost and/or increase the supply of credit to rural America, or generate other economic benefits, including the amount of fee income available to be deposited into the Rural Economic Development Subaccount, maintained under section 313(b)(2)(A) of the RE Act (7 U.S.C. 940c(b)(2)(A)), after payment of the subsidy amount.

(d)*Decisions by the Secretary.* The Secretary shall approve or deny applications in a timely manner as such applications are received; provided, however, that in order to facilitate competitive evaluation of applications, the Secretary may from time to time defer a decision until more than one application is pending. The Secretary may limit the number of guarantees made to a maximum of five per year, to ensure a sufficient examination is conducted of applicant requests. RUS shall notify the applicant in writing of the Secretary's approval or denial of an application. Approvals for guarantees shall be conditioned upon compliance with 7 CFR 1720.4 and 1720.6 of this part. The Secretary reserves the discretion to approve an application for an amount less than that requested. 9. Amend § 1720.8 by revising paragraphs

(a)(3), (4), and

(8)to read as follows: § 1720.8 Issuance of the guarantee.

(a)* * *

(3)Prior to the issuance of the guarantee, the applicant must certify to the Secretary that the proceeds from the guaranteed bonds will be applied to fund new eligible loans under the RE Act, to refinance concurrent loans, or to refinance existing debt instruments of the guaranteed lender used to fund eligible loans;

(4)The applicant provides a certified list of eligible loans and their outstanding balances as of the date the guarantee is to be issued;

(8)The applicant shall provide evidence of a credit rating on its senior secured debt or its corporate credit rating, as applicable, without regard to the guarantee and satisfactory to the Secretary; and 10. Amend § 1720.12 by revising paragraph (a)(5) to read as follows: § 1720.12 Reporting requirements.

(a)* * *

(5)Credit rating, by a Rating Agency, on its senior secured debt or its corporate credit rating, as applicable, without regard to the guarantee and satisfactory to the Secretary; and 11. Revise § 1720.13 to read as follows: § 1720.13 Limitations on guarantees. In a given year the maximum amount of guaranteed bonds that the Secretary may approve will be subject to budget authority, together with receipts authority from projected fee collections from guaranteed lenders, the principal amount of outstanding eligible loans made by the guaranteed lender, and Congressionally-mandated ceilings on the total amount of credit. The Secretary may also impose other limitations as appropriate to administer this guarantee program. Jonathan Adelstein, Administrator, Rural Utilities Service. [FR Doc. 2010-17817 Filed 7-21-10; 8:45 am]

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