Business and Industry Guaranteed Loan Program Annual Renewal Fee, 9546-9548 [05-3775]
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Federal Register / Vol. 70, No. 38 / Monday, February 28, 2005 / Proposed Rules
U.S.C. 2302(b) (1), 29 U.S.C. 206(d), 29 U.S.C.
631, 29 U.S.C. 633a, 29 U.S.C. 791 and 42
U.S.C. 2000e–16.
If you believe that you have been the
victim of unlawful discrimination on the
basis of race, color, religion, sex, national
origin or disability, you must contact an
Equal Employment Opportunity (EEO)
counselor within 45 calendar days of the
alleged discriminatory action, or, in the case
of a personnel action, within 45 calendar
days of the effective date of the action, before
you can file a formal complaint of
discrimination with your agency. See, e.g., 29
CFR 1614. If you believe that you have been
the victim of unlawful discrimination on the
basis of age, you must either contact an EEO
counselor as noted above or give notice of
intent to sue to the Equal Employment
Opportunity Commission (EEOC) within 180
days of the alleged discriminatory action. If
you are alleging discrimination based on
marital status or political affiliation, you may
file a written complaint with the U.S. Office
of Special Counsel (OSC) (see contact
information below). In the alternative (or in
some cases, in addition), you may pursue a
discrimination complaint by filing a
grievance through your agency’s
administrative or negotiated grievance
procedures, if such procedures apply and are
available.
Whistleblower Protection Laws
A Federal employee with authority to take,
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any personnel action must not use that
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against an employee or applicant because of
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Retaliation against an employee or
applicant for making a protected disclosure
is prohibited by 5 U.S.C. 2302(b)(8). If you
believe that you have been the victim of
whistleblower retaliation, you may file a
written complaint (Form OSC–11) with the
U.S. Office of Special Counsel at 1730 M
Street NW., Suite 218, Washington, DC
20036–4505 or online through the OSC Web
site—www.osc.gov.
Retaliation for Engaging in Protected Activity
A Federal agency cannot retaliate against
an employee or applicant because that
individual exercises his or her rights under
any of the Federal antidiscrimination or
whistleblower protections laws listed above.
If you believe that you are the victim of
retaliation for engaging in protected activity,
you must follow, as appropriate, the
procedures described in the
Antidiscrimination Laws and Whistleblower
Protection Laws sections or, if applicable, the
administrative or negotiated grievance
procedures in order to pursue any legal
remedy.
VerDate jul<14>2003
22:42 Feb 25, 2005
Jkt 205001
Disciplinary Actions
Under the existing laws, each agency
retains the right, where appropriate, to
discipline a Federal employee who has
engaged in discriminatory or retaliatory
conduct, up to and including removal. If OSC
has initiated an investigation under 5 U.S.C.
1214, however, according to 5 U.S.C. 1214(f),
agencies must seek approval from the Special
Counsel to discipline employees for, among
other activities, engaging in prohibited
retaliation. Nothing in the No FEAR Act
alters existing laws or permits an agency to
take unfounded disciplinary action against a
Federal employee or to violate the procedural
rights of a Federal employee who has been
accused of discrimination.
Additional Information
For further information regarding the No
FEAR Act regulations, refer to 5 CFR 724, as
well as the appropriate offices within your
agency (e.g., EEO/civil rights office, human
resources office or legal office). Additional
information regarding Federal
antidiscrimination, whistleblower protection
and retaliation laws can be found at the
EEOC Web site—www.eeoc.gov and the OSC
Web site— www.osc.gov.
Existing Rights Unchanged
Pursuant to section 205 of the No FEAR
Act, neither the Act nor this notice creates,
expands or reduces any rights otherwise
available to any employee, former employee
or applicant under the laws of the United
States, including the provisions of law
specified in 5 U.S.C. 2302(d).
§ 724.203
Training Obligations.
(a) Each agency must develop a
written plan to train all of its employees
(including supervisors and managers)
about the rights and remedies available
under the Antidiscrimination Laws and
Whistleblower Protection Laws
applicable to them.
(b) Each agency shall have the
discretion to develop the content and
method of its training plan. Each agency
training plan shall describe:
(1) The content and method of the
training,
(2) The training schedule, and
(3) The means of documenting
completion of training.
(c) Each agency may contact EEOC
and/or OSC for information and/or
assistance regarding the agency’s
training program. Neither agency,
however, shall have authority under this
regulation to review or approve an
agency’s training plan.
(d) Each agency is encouraged to
implement its training as soon as
possible, but required to complete the
initial training under this subpart for all
employees (including supervisors and
managers) by the end of fiscal year 2005.
Thereafter, each agency must train all
existing employees on a training cycle
of no longer than every 2 years.
(e) After the initial training is
completed, each agency must train new
PO 00000
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Fmt 4702
Sfmt 4702
employees as part of its agency
orientation program. Any agency that
does not have a new employee
orientation program must train new
employees within 60 business days of
the new employees’ appointment.
[FR Doc. 05–3840 Filed 2–24–05; 11:34 am]
BILLING CODE 6325–39–P
DEPARTMENT OF AGRICULTURE
Rural Business-Cooperative Service
Rural Utilities Service
7 CFR Part 4279
RIN 0570–AA34
Business and Industry Guaranteed
Loan Program Annual Renewal Fee
Rural Business-Cooperative
Service, USDA.
ACTION: Proposed rule.
AGENCY:
SUMMARY: The Rural BusinessCooperative Service (RBS) proposes to
amend its regulation for Business and
Industry (B&I) Guaranteed Loans to
remove all references to a one-time,
specific loan guarantee fee and provide
the authority for the charging of an
annual renewal fee on all loans
obligated after the publication of the
final rule. The intended effect of this
rule is to reduce the subsidy rate for
guaranteed loans and its associated
budget authority dollar level, which will
result in a greater level of assistance to
the public (i.e., higher supportable loan
level). A notice will be published in the
Federal Register each fiscal year that
will establish the guarantee fee and any
annual renewal fees for loans obligated
during that fiscal year.
DATES: Written or e-mail comments
must be received on or before April 29,
2005 to be assured of consideration.
ADDRESSES: Submit written comments
via U.S. Postal Service, in duplicate, to
the Regulations and Paperwork
Management Branch, Attention: Cheryl
Thompson, Rural Development, U.S.
Department of Agriculture, STOP 0742,
1400 Independence Avenue, SW.,
Washington, DC 20250–0742. Submit
written comments via Federal Express
Mail, in duplicate, to the Regulations
and Paperwork Management Branch,
Attention: Cheryl Thompson, USDARural Development, 7th Floor, 300 7th
St., SW., Washington, DC 20546. Also,
comments may be submitted via the
Internet by addressing them to
comments@rus.usda.gov. The comment
must contain the word Fee in the subject
line. All comments will be available for
E:\FR\FM\28FEP1.SGM
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Federal Register / Vol. 70, No. 38 / Monday, February 28, 2005 / Proposed Rules
public inspection during regular work
hours at the 300 7th St., SW., address
listed above.
Rick
Bonnet, Special Projects/Programs
Oversight Division, Rural BusinessCooperative Service, U.S. Department of
Agriculture, STOP 3221, 1400
Independence Avenue, SW.,
Washington, DC 20250–3221, telephone
(202) 720–1804, or by e-mail to
rick.bonnet@usda.gov.
FOR FURTHER INFORMATION CONTACT:
SUPPLEMENTARY INFORMATION:
Classification
This proposed 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 program
impacted by this action is 10.768,
Business and Industry Loans.
Intergovernmental Review
Business and Industry Guaranteed
Loans are subject to the provisions of
Executive Order 12372, which require
intergovernmental consultation with
state and local officials. RBS will
conduct intergovernmental consultation
in the manner delineated in RD
Instruction 1940–J, ‘‘Intergovernmental
Review of Rural Development Programs
and Activities’’ and 7 CFR part 3015,
subpart V.
Civil Justice Reform
This proposed rule has been reviewed
under Executive Order 12988, Civil
Justice Reform. In accordance with this
rule, (1) all state and local laws and
regulations that are in conflict with this
rule will be preempted, (2) no
retroactive effect will be given this rule,
and (3) administrative proceedings of
the National Appeals Division (7 CFR
part 11) must be exhausted before
bringing suit in court challenging action
taken under this rule.
Environmental Impact Statement
This document has been reviewed in
accordance with 7 CFR part 1940,
subpart G, ‘‘Environmental Program.’’
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 et seq., an Environmental
Impact Statement is not required.
VerDate jul<14>2003
22:42 Feb 25, 2005
Jkt 205001
Paperwork Reduction Act
In accordance with the Paperwork
Reduction Act of 1995, the Agency will
seek OMB approval of the reporting
requirements contained in this
regulation. These reporting and
recordkeeping requirements have been
previously approved under OMB
control number 0570–0017. The
estimate of burden is as follows:
Estimate of Burden: Burden per
response is 30 minutes.
Respondents: Lenders and business
owners.
Estimated Number of Respondents:
1,725.
Estimated Number of Responses per
Respondent: 1.
Estimated Number of Responses:
1,725.
Estimated Total Annual Burden of
Respondents: 863 hours.
Comments: Comments are invited on
(a) whether the proposed collection of
information is necessary for the proper
performance of the functions of RBS,
including whether the information will
have a practical utility; (b) the accuracy
of RBS’s estimate of the burden of the
proposed collection of information,
including the validity of the
methodology and assumptions used; (c)
ways to enhance the quality, utility, and
clarity of the information to be
collected; and (d) ways to minimize the
burden of the collection of information
on those who are to respond, including
through the use of appropriate
automated, electronic, mechanical, or
other technological collection
techniques or other forms of information
technology. Comments may be sent to
Cheryl Thompson, Regulations and
Paperwork Management Branch, Rural
Development, U.S. Department of
Agriculture, STOP 0742, 1400
Independence Avenue, SW.,
Washington, DC 20250–0742. All
responses to this rule will be
summarized and included in the request
for OMB approval. All comments will
also become a matter of public record.
Unfunded Mandates
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 generally must prepare a written
statement, including a cost-benefit
analysis, for proposed and final rules
with ‘‘Federal mandates’’ that may
result in expenditures to State, local, or
tribal governments, in the aggregate, or
to the private sector of $100 million or
PO 00000
Frm 00004
Fmt 4702
Sfmt 4702
9547
more in any one 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 costeffective, or least burdensome
alternative that achieves the objectives
of the rule. This rule contains no
Federal mandates (under the regulatory
provisions of Title II of the UMRA) for
State, local, and tribal governments or
the private sector. Thus, this rule is not
subject to the requirements of sections
202 and 205 of the UMRA.
Regulatory Flexibility Act
In compliance with the Regulatory
Flexibility Act, RBS has determined that
this action would not have a significant
economic impact on a substantial
number of small entities, because the
action will not affect a significant
number of small entities, as defined by
the Regulatory Flexibility Act (5 U.S.C.
601). RBS made this determination
based on the fact that this regulation
only impacts those who choose to
participate in the program. Small entity
applicants will not be impacted to a
greater extent than large entity
applicants.
Executive Order 13132
It has been determined that, under
Executive Order 13132, Federalism, this
rule does not have sufficient federalism
implications to warrant the preparation
of a Federalism Assessment. The
provisions contained in this rule will
not have a substantial direct effect on
states or their political subdivisions or
on the distribution of power and
responsibilities among the various
levels of government.
Executive Order 13175
Executive Order 13175, Consultation
and Coordination with Indian Tribal
Governments, imposes requirements on
USDA in the development of regulatory
policies that have tribal implications or
preempt tribal law. USDA has
determined that the proposed regulation
does not have a substantial direct effect
on one or more Indian tribes or on either
the relationship or the distribution of
powers and responsibilities between the
Federal Government and the Indian
Tribes. Thus, the proposed rule is not
subject to the requirements of Executive
Order 13175.
Discussion of the Proposed Rule
The cost of the B&I Guaranteed Loan
Program has gone up in recent years.
This is due to higher defaults and lower
interest rates. In the meantime, there is
still an interest in funding this program
E:\FR\FM\28FEP1.SGM
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9548
Federal Register / Vol. 70, No. 38 / Monday, February 28, 2005 / Proposed Rules
in order to improve, develop, or finance
business, industry, and employment
and improve the economic and
environmental climate in rural
communities. To do that in a cost
efficient manner for the taxpayer, RBS is
proposing to implement an annual
renewal fee. This will reduce the
subsidy but will allow us to maintain
the level of assistance that has been
historically provided for this program at
a level or even reduced cost to the
taxpayers.
The proposed annual renewal fee is
based on Small Business Administration
(SBA) programs and is adopted for this
program to provide additional funds to
supplement the available funds
appropriate to the program, thereby
allowing the program to reach more
potential applicants. Additionally, this
type of fee is consistent with the
recently authorized Renewable Energy
Systems and Energy Efficiency
Improvements Guaranteed Loan
Program within RBS. The borrower pool
for the B&I Guaranteed Loan is even
more likely to be able to afford this type
of fee than the other programs
mentioned because they are not
required to lack the ability to get credit
elsewhere.
The SBA 7(a) Loan Guarantee
Program and the B&I program are
similar in that they both require an
initial one-time fee; and 7(a) loans have
an annual fee similar to the one being
proposed for the B&I program. In fiscal
year 1996, SBA made major changes in
its 7(a) program by lowering the
maximum percentage of the loan which
could be guaranteed and increasing both
the initial fee and the annual fee, which
made the program more expensive and
less valuable for borrowers and lenders.
We examined changes in loan volume
and loss levels associated with these
changes, and found no convincing
evidence that the FY96 changes
decreased demand for the 7(a) program.
Subsidy rates are established using
historic loss data from the program and
other assumptions. In recent years the
subsidy rate has increased significantly,
resulting in a reduction in the amount
of loans that could be guaranteed with
the same budget authority. In the
absence of additional budgetary
authority, the proposed annual fee is
necessary to cover expected losses from
the program. The effect of the fee on the
loan demand and program activity over
the long term will depend on the size of
the fee and other factors not related to
the fee, including interest rates and
general economic growth. This
proposed change is prudent and cost
efficient and will allow us to maintain
the level of assistance going to rural
VerDate jul<14>2003
22:42 Feb 25, 2005
Jkt 205001
America at a reasonable cost to the
taxpayer.
List of Subjects in 7 CFR Part 4279
Loan programs— Business and
industry—Rural development
assistance, Rural areas.
Therefore, chapter XLII, title 7, Code
of Federal Regulations, is proposed to be
amended as follows:
PART 4279—GUARANTEED
LOANMAKING
1. The authority citation for part 4279
is revised to read as follows:
Authority: 5 U.S.C 301, 7 U.S.C 1989.
Subpart B—Business and Industry
Loans
2. Section 4279.107 is revised to read
as follows:
§ 4279.107
Guarantee fee.
(a) For all new loans there are two
types of non-refundable guarantee fees
to be paid by the borrower to the lender
and forwarded to the Agency. The fees
may be forwarded to the Agency by a
check payable to USDA/Rural
Development, using Agency Form
‘‘Annual Renewal Fee Transmittal’’ or
an USDA-approved electronic funds
transfer system. The fee rate will be
published annually by a notice in the
Federal Register.
(1) The initial fee is paid at the time
the Loan Note Guarantee is issued. The
fee may be included as an eligible loan
purpose in the guaranteed loan. The fee
will be the rate (a specified percentage)
multiplied by the principal loan
amount, multiplied by the percent of
guarantee.
(2) The annual renewal fee is paid
once a year and is required to maintain
the enforceability of the guarantee as to
the lender.
(i) The annual renewal fee is the rate
established by Rural Development in the
annual notice in the Federal Register,
multiplied by the outstanding principal
loan amount, as of December 31 of each
year. The rate of the fee is the rate in
effect at the time of original issuance of
the Conditional Commitment for the
loan and will remain in effect for the life
of the loan.
(ii) Annual renewal fees are due on
March 1. Payments not received by
April 1 are delinquent and will result in
cancellation of the guarantee to the
lender. Holders’ rights will continue in
effect as specified in the Loan Note
Guarantee. For loans where the Loan
Note Guarantee is issued between
October 1 and December 31, the first
annual guarantee fee payment is due
March 1 of the second year following
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Frm 00005
Fmt 4702
Sfmt 4702
the date the Loan Note Guarantee was
issued.
(b) Subject to specified annual limits
set by the Agency, the initial guarantee
fee may be reduced to 1 percent if the
borrower’s business supports valueadded agriculture and results in farmers
benefiting financially, or
(1) Is a high impact business
development investment in accordance
with § 4279.155(b)(5), and
(2) Is located in a rural community
that is:
(i) Experiencing long-term population
decline and job deterioration, or
(ii) Has remained persistently poor
over the last 60 years, or
(iii) Experiencing trauma as a result of
natural disaster, or
(iv) That is experiencing fundamental
structural changes in its economic base.
Dated: February 16, 2005.
Gilbert Gonzalez,
Acting Under Secretary, Rural Development.
[FR Doc. 05–3775 Filed 2–25–05; 8:45 am]
BILLING CODE 3410–XY–P
NUCLEAR REGULATORY
COMMISSION
10 CFR Part 72
RIN 3150–AH63
List of Approved Spent Fuel Storage
Casks: NUHOMS–24PT4 Revision
Nuclear Regulatory
Commission.
ACTION: Proposed rule.
AGENCY:
SUMMARY: The Nuclear Regulatory
Commission (NRC) is proposing to
amend its regulations revising the
Transnuclear, Inc., Standardized
Advanced NUHOMS System listing
within the ‘‘List of Approved Spent Fuel
Storage Casks’’ to include Amendment
No. 1 to Certificate of Compliance
Number (CoC No.) 1029. Amendment
No. 1 would add another Dry Shielded
Canister, designated NUHOMS–24PT4,
to the authorized contents of the
Standardized Advanced NUHOMS
System. Also, the NRC staff is proposing
that changes be made to the rule to
correct a typographical error that
incorrectly states the expiration date of
the CoC.
DATES: Comments on the proposed rule
must be received on or before March 30,
2005.
ADDRESSES: You may submit comments
by any one of the following methods.
Please include the following number
(RIN 3150–AH63) in the subject line of
your comments. Comments on
rulemakings submitted in writing or in
E:\FR\FM\28FEP1.SGM
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]]>Agencies
[Federal Register Volume 70, Number 38 (Monday, February 28, 2005)]
[Proposed Rules]
[Pages 9546-9548]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-3775]
=======================================================================
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Rural Business-Cooperative Service
Rural Utilities Service
7 CFR Part 4279
RIN 0570-AA34
Business and Industry Guaranteed Loan Program Annual Renewal Fee
AGENCY: Rural Business-Cooperative Service, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: The Rural Business-Cooperative Service (RBS) proposes to amend
its regulation for Business and Industry (B&I) Guaranteed Loans to
remove all references to a one-time, specific loan guarantee fee and
provide the authority for the charging of an annual renewal fee on all
loans obligated after the publication of the final rule. The intended
effect of this rule is to reduce the subsidy rate for guaranteed loans
and its associated budget authority dollar level, which will result in
a greater level of assistance to the public (i.e., higher supportable
loan level). A notice will be published in the Federal Register each
fiscal year that will establish the guarantee fee and any annual
renewal fees for loans obligated during that fiscal year.
DATES: Written or e-mail comments must be received on or before April
29, 2005 to be assured of consideration.
ADDRESSES: Submit written comments via U.S. Postal Service, in
duplicate, to the Regulations and Paperwork Management Branch,
Attention: Cheryl Thompson, Rural Development, U.S. Department of
Agriculture, STOP 0742, 1400 Independence Avenue, SW., Washington, DC
20250-0742. Submit written comments via Federal Express Mail, in
duplicate, to the Regulations and Paperwork Management Branch,
Attention: Cheryl Thompson, USDA-Rural Development, 7th Floor, 300 7th
St., SW., Washington, DC 20546. Also, comments may be submitted via the
Internet by addressing them to comments@rus.usda.gov. The comment must
contain the word Fee in the subject line. All comments will be
available for
[[Page 9547]]
public inspection during regular work hours at the 300 7th St., SW.,
address listed above.
FOR FURTHER INFORMATION CONTACT: Rick Bonnet, Special Projects/Programs
Oversight Division, Rural Business-Cooperative Service, U.S. Department
of Agriculture, STOP 3221, 1400 Independence Avenue, SW., Washington,
DC 20250-3221, telephone (202) 720-1804, or by e-mail to
rick.bonnet@usda.gov.
SUPPLEMENTARY INFORMATION:
Classification
This proposed 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 program
impacted by this action is 10.768, Business and Industry Loans.
Intergovernmental Review
Business and Industry Guaranteed Loans are subject to the
provisions of Executive Order 12372, which require intergovernmental
consultation with state and local officials. RBS will conduct
intergovernmental consultation in the manner delineated in RD
Instruction 1940-J, ``Intergovernmental Review of Rural Development
Programs and Activities'' and 7 CFR part 3015, subpart V.
Civil Justice Reform
This proposed rule has been reviewed under Executive Order 12988,
Civil Justice Reform. In accordance with this rule, (1) all state and
local laws and regulations that are in conflict with this rule will be
preempted, (2) no retroactive effect will be given this rule, and (3)
administrative proceedings of the National Appeals Division (7 CFR part
11) must be exhausted before bringing suit in court challenging action
taken under this rule.
Environmental Impact Statement
This document has been reviewed in accordance with 7 CFR part 1940,
subpart G, ``Environmental Program.'' 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 et seq.,
an Environmental Impact Statement is not required.
Paperwork Reduction Act
In accordance with the Paperwork Reduction Act of 1995, the Agency
will seek OMB approval of the reporting requirements contained in this
regulation. These reporting and recordkeeping requirements have been
previously approved under OMB control number 0570-0017. The estimate of
burden is as follows:
Estimate of Burden: Burden per response is 30 minutes.
Respondents: Lenders and business owners.
Estimated Number of Respondents: 1,725.
Estimated Number of Responses per Respondent: 1.
Estimated Number of Responses: 1,725.
Estimated Total Annual Burden of Respondents: 863 hours.
Comments: Comments are invited on (a) whether the proposed
collection of information is necessary for the proper performance of
the functions of RBS, including whether the information will have a
practical utility; (b) the accuracy of RBS's estimate of the burden of
the proposed collection of information, including the validity of the
methodology and assumptions used; (c) ways to enhance the quality,
utility, and clarity of the information to be collected; and (d) ways
to minimize the burden of the collection of information on those who
are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology. Comments may be sent to Cheryl
Thompson, Regulations and Paperwork Management Branch, Rural
Development, U.S. Department of Agriculture, STOP 0742, 1400
Independence Avenue, SW., Washington, DC 20250-0742. All responses to
this rule will be summarized and included in the request for OMB
approval. All comments will also become a matter of public record.
Unfunded Mandates
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
generally must prepare a written statement, including a cost-benefit
analysis, for proposed and final rules with ``Federal mandates'' that
may result in expenditures to State, local, or tribal governments, in
the aggregate, or to the private sector of $100 million or more in any
one year. When such a statement is needed for a rule, section 205 of
UMRA generally requires 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 the UMRA.
Regulatory Flexibility Act
In compliance with the Regulatory Flexibility Act, RBS has
determined that this action would not have a significant economic
impact on a substantial number of small entities, because the action
will not affect a significant number of small entities, as defined by
the Regulatory Flexibility Act (5 U.S.C. 601). RBS made this
determination based on the fact that this regulation only impacts those
who choose to participate in the program. Small entity applicants will
not be impacted to a greater extent than large entity applicants.
Executive Order 13132
It has been determined that, under Executive Order 13132,
Federalism, this rule does not have sufficient federalism implications
to warrant the preparation of a Federalism Assessment. The provisions
contained in this rule will not have a substantial direct effect on
states or their political subdivisions or on the distribution of power
and responsibilities among the various levels of government.
Executive Order 13175
Executive Order 13175, Consultation and Coordination with Indian
Tribal Governments, imposes requirements on USDA in the development of
regulatory policies that have tribal implications or preempt tribal
law. USDA has determined that the proposed regulation does not have a
substantial direct effect on one or more Indian tribes or on either the
relationship or the distribution of powers and responsibilities between
the Federal Government and the Indian Tribes. Thus, the proposed rule
is not subject to the requirements of Executive Order 13175.
Discussion of the Proposed Rule
The cost of the B&I Guaranteed Loan Program has gone up in recent
years. This is due to higher defaults and lower interest rates. In the
meantime, there is still an interest in funding this program
[[Page 9548]]
in order to improve, develop, or finance business, industry, and
employment and improve the economic and environmental climate in rural
communities. To do that in a cost efficient manner for the taxpayer,
RBS is proposing to implement an annual renewal fee. This will reduce
the subsidy but will allow us to maintain the level of assistance that
has been historically provided for this program at a level or even
reduced cost to the taxpayers.
The proposed annual renewal fee is based on Small Business
Administration (SBA) programs and is adopted for this program to
provide additional funds to supplement the available funds appropriate
to the program, thereby allowing the program to reach more potential
applicants. Additionally, this type of fee is consistent with the
recently authorized Renewable Energy Systems and Energy Efficiency
Improvements Guaranteed Loan Program within RBS. The borrower pool for
the B&I Guaranteed Loan is even more likely to be able to afford this
type of fee than the other programs mentioned because they are not
required to lack the ability to get credit elsewhere.
The SBA 7(a) Loan Guarantee Program and the B&I program are similar
in that they both require an initial one-time fee; and 7(a) loans have
an annual fee similar to the one being proposed for the B&I program. In
fiscal year 1996, SBA made major changes in its 7(a) program by
lowering the maximum percentage of the loan which could be guaranteed
and increasing both the initial fee and the annual fee, which made the
program more expensive and less valuable for borrowers and lenders. We
examined changes in loan volume and loss levels associated with these
changes, and found no convincing evidence that the FY96 changes
decreased demand for the 7(a) program.
Subsidy rates are established using historic loss data from the
program and other assumptions. In recent years the subsidy rate has
increased significantly, resulting in a reduction in the amount of
loans that could be guaranteed with the same budget authority. In the
absence of additional budgetary authority, the proposed annual fee is
necessary to cover expected losses from the program. The effect of the
fee on the loan demand and program activity over the long term will
depend on the size of the fee and other factors not related to the fee,
including interest rates and general economic growth. This proposed
change is prudent and cost efficient and will allow us to maintain the
level of assistance going to rural America at a reasonable cost to the
taxpayer.
List of Subjects in 7 CFR Part 4279
Loan programs-- Business and industry--Rural development
assistance, Rural areas.
Therefore, chapter XLII, title 7, Code of Federal Regulations, is
proposed to be amended as follows:
PART 4279--GUARANTEED LOANMAKING
1. The authority citation for part 4279 is revised to read as
follows:
Authority: 5 U.S.C 301, 7 U.S.C 1989.
Subpart B--Business and Industry Loans
2. Section 4279.107 is revised to read as follows:
Sec. 4279.107 Guarantee fee.
(a) For all new loans there are two types of non-refundable
guarantee fees to be paid by the borrower to the lender and forwarded
to the Agency. The fees may be forwarded to the Agency by a check
payable to USDA/Rural Development, using Agency Form ``Annual Renewal
Fee Transmittal'' or an USDA-approved electronic funds transfer system.
The fee rate will be published annually by a notice in the Federal
Register.
(1) The initial fee is paid at the time the Loan Note Guarantee is
issued. The fee may be included as an eligible loan purpose in the
guaranteed loan. The fee will be the rate (a specified percentage)
multiplied by the principal loan amount, multiplied by the percent of
guarantee.
(2) The annual renewal fee is paid once a year and is required to
maintain the enforceability of the guarantee as to the lender.
(i) The annual renewal fee is the rate established by Rural
Development in the annual notice in the Federal Register, multiplied by
the outstanding principal loan amount, as of December 31 of each year.
The rate of the fee is the rate in effect at the time of original
issuance of the Conditional Commitment for the loan and will remain in
effect for the life of the loan.
(ii) Annual renewal fees are due on March 1. Payments not received
by April 1 are delinquent and will result in cancellation of the
guarantee to the lender. Holders' rights will continue in effect as
specified in the Loan Note Guarantee. For loans where the Loan Note
Guarantee is issued between October 1 and December 31, the first annual
guarantee fee payment is due March 1 of the second year following the
date the Loan Note Guarantee was issued.
(b) Subject to specified annual limits set by the Agency, the
initial guarantee fee may be reduced to 1 percent if the borrower's
business supports value-added agriculture and results in farmers
benefiting financially, or
(1) Is a high impact business development investment in accordance
with Sec. 4279.155(b)(5), and
(2) Is located in a rural community that is:
(i) Experiencing long-term population decline and job
deterioration, or
(ii) Has remained persistently poor over the last 60 years, or
(iii) Experiencing trauma as a result of natural disaster, or
(iv) That is experiencing fundamental structural changes in its
economic base.
Dated: February 16, 2005.
Gilbert Gonzalez,
Acting Under Secretary, Rural Development.
[FR Doc. 05-3775 Filed 2-25-05; 8:45 am]
BILLING CODE 3410-XY-P
