Notice of Funds Availability (NOFA) Inviting Applications for Biorefineries, 25076-25098 [2010-10249]

Agencies

• DEPARTMENT OF AGRICULTURE
• Rural Business-Cooperative Service

[Federal Register Volume 75, Number 87 (Thursday, May 6, 2010)]
[Notices]
[Pages 25076-25098]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2010-10249]



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Part III





Department of Agriculture





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Rural Business-Cooperative Service



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Notice of Funds Availability (NOFA) Inviting Applications for 
Biorefineries; Notice

Federal Register / Vol. 75, No. 87 / Thursday, May 6, 2010 / 
Notices

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DEPARTMENT OF AGRICULTURE

Rural Business-Cooperative Service


Notice of Funds Availability (NOFA) Inviting Applications for 
Biorefineries

AGENCY: Rural Business-Cooperative Service, USDA.

ACTION: Notice.

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SUMMARY: This notice announces the acceptance of applications for funds 
available under the BioRefinery Assistance Program (the ``Program'') to 
provide guaranteed loans for the development and construction of 
commercial-scale biorefineries or for the retrofitting of existing 
facilities using eligible technology for the development of advanced 
biofuels. Applications will be accepted for biorefineries that produce 
transportation fuels that meet the Renewable Fuel Standard or are 
currently undergoing an appeal to the U.S. Environmental Protection 
Agency for inclusion in the Renewable Fuel Standard, or that produce 
non-transportation renewable energy that results in a reduction in 
greenhouse gases. There will only be one application window under this 
Notice.

DATES: Applications for participating in this Program for Fiscal Year 
2010 must be received between May 6, 2010 and August 4, 2010.

ADDRESSES: Applications and forms may be obtained from:
     U.S. Department of Agriculture, Rural Development, Energy 
Branch, Attention: BioRefinery Assistance Program, 1400 Independence 
Avenue, SW., STOP 3225, Washington, DC 20250-3225.
     Agency Web site: https://www.rurdev.usda.gov. Follow 
instructions for obtaining the application and forms.
    Submit an original completed application with two copies to USDA's 
Rural Development National Office: Energy Branch, Attention: 
BioRefinery Assistance Program, 1400 Independence Avenue, SW., STOP 
3225, Washington, DC 20250-3225.

FOR FURTHER INFORMATION CONTACT: Energy Branch, Attention: BioRefinery 
Assistance Program, 1400 Independence Avenue, SW., Mail Stop 3225, 
Washington, DC 20250-3225. Telephone: 202-720-1400.

SUPPLEMENTARY INFORMATION:

Programs Affected

    This Program is listed in the Catalog of Federal Domestic 
Assistance under Number 10.865.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act (PRA), the paperwork 
burden associated with this Notice of Funds Availability (NOFA) has 
been approved by the Office of Management and Budget (OMB) under OMB 
Control Number 0570-0055.
    The PRA burden associated with the original Notice, published on 
November 20, 2008, was approved by OMB, with an opportunity to comment 
on the burden associated with the program.
    Biorefineries seeking funding under this Notice have to submit 
applications that include specified information, certifications, and 
agreements. All of the forms, information, certifications, and 
agreements required to apply for this program under this Notice have 
been authorized under OMB Control Number 0570-0055.

E-Government Act Compliance

    Rural Development is committed to complying with the E-Government 
Act, to provide increased opportunities for citizen to access 
Government information and services electronically.

I. Background

    Section 9003 of the Food, Conservation, and Energy Act of 2008 
(2008 Farm Bill) is intended to assist in the development and 
construction of commercial-scale biorefineries and the retrofitting of 
existing facilities using eligible technology for the development of 
advanced biofuels. Consistent with Congressional intent, preference 
will be given to projects where first-of-a-kind technology will be 
deployed at the commercial scale. To that end, the program will promote 
the development of the first commercial scale biorefineries that do not 
rely on corn kernel starch as the feedstock or standard biodiesel 
technology.
    The Agency will make guarantees available on loans for eligible 
projects that will provide for the development, construction, and/or 
retrofitting of commercial biorefineries using eligible technology. 
Eligible technology is:
    (a) Any technology that is being adopted in a viable commercial-
scale operation of a biorefinery that produces an advanced biofuel, and
    (b) Any technology not described in paragraph (a) above that has 
been demonstrated to have technical and economic potential for 
commercial application in a biorefinery that produces an advanced 
biofuel.
    Over the life of the program, it is likely that guarantees will be 
awarded to projects that are first-of-a-kind and that may include 
projects with commercial applications that are expanded to new regions, 
modified to utilize different feedstocks, or substantially improved 
such that they represent a significant technological risk.

A. Guaranteed Loan Funding

    This NOFA provides up to $150 million in mandatory budget authority 
for this Program in Fiscal Year 2010 to support loan guarantees.
    The maximum principal amount of a loan guaranteed under this 
Program is $250 million; there is no minimum amount. The amount of a 
loan guaranteed under this Program will be reduced by the amount of 
other direct Federal funding that the eligible borrower receives for 
eligible project costs.
    The maximum guarantee under this Program is 80 percent of the 
principal and interest due on a loan guaranteed under this Program if 
the loan amount is equal to or less than $80 million. If the loan 
amount is more than $80 million and less than $125 million, the maximum 
guarantee is 70 percent for the amount in excess of $80 million. If the 
loan amount is equal to or more than $125 million, the maximum 
guarantee is 60 percent for the entire loan amount.
    The amount of a loan guaranteed for a project under this Program 
will not exceed 80 percent of total eligible project costs. Thus, the 
amount of guaranteed loan funds that may be made available to an 
applicant for an eligible project will not exceed 64 percent of the 
total eligible project costs.
    The interest rate for the guaranteed loan will be negotiated 
between the lender and the applicant and shall be in line with interest 
rates on other similar government guaranteed loan programs. The 
interest rate may be either fixed or variable, as long as it is a legal 
rate, and shall be fully amortizing. The interest rate for both the 
guaranteed and unguaranteed portions of the loan must be of the same 
type (i.e., both fixed or both variable). The interest rate charged 
will be subject to Agency review and approval.
    The length of a loan guaranteed under this Program would be for a 
period of no more than 20 years or 85 percent of the useful life of the 
project, as determined by the lender and confirmed by the Agency, 
whichever is less. The length of the loan term would be required to be 
the same for both the guaranteed and unguaranteed portion of the loan.

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B. Eligibility Requirements for Guarantee Assistance

    This Notice contains eligibility requirements for borrowers, 
projects, and lenders, as discussed below.
Borrower Eligibility
    To be eligible to receive a guaranteed loan under this Program, a 
borrower must be one of the following:
     Individual,
     Indian tribe,
     Unit of State or local government,
     Corporation,
     Farm cooperative,
     Farmer cooperative organization,
     Association of agricultural producers,
     National Laboratory,
     Institution of higher education,
     Rural electric cooperative,
     Public power entity, or
     Consortium of any of those entities.
Project Eligibility
    Projects eligible for loan guarantees under this Notice must be 
located in a rural area and be for either:
     The development and construction of commercial-scale 
biorefineries that produce transportation fuels that meet the Renewable 
Fuel Standard or are currently undergoing an appeal to the U.S. 
Environmental Protection Agency for inclusion in the Renewable Fuel 
Standard, or that produce non-transportation renewable energy that will 
result in a reduction in greenhouse gases using eligible technology, or
     The retrofitting of existing facilities that produce 
transportation fuels that meet the Renewable Fuel Standard or are 
currently undergoing an appeal to the U.S. Environmental Protection 
Agency for inclusion in the Renewable Fuel Standard, or that produce 
non-transportation renewable energy that will result in a reduction in 
greenhouse gases using eligible technology.
    Eligible technology is defined as either:
     A technology that is being adopted in a viable commercial-
scale operation of a biorefinery that produces an advanced biofuel; or
     A technology not described in the previous paragraph that 
has been demonstrated to have technical and economic potential for 
commercial application in a biorefinery that produces an advanced 
biofuel.
Lender Eligibility
    Regulated or supervised lenders that meet the requirements 
specified in this Notice (see section I) may be eligible to participate 
in this Program.

C. Applications

    The lender must submit a separate application for each project for 
which a loan guarantee is sought under this Notice. It is recommended 
that applicants refer to the application guide for this program 
(``Instructions for Application for Loan Guarantee--Section 9003 
BioRefinery Assistance Loan Guarantees''), which can be found on the 
Agency's Web site at https://www.rurdev.usda.gov/rbs/busp/baplg9003.htm.
    Because of factors of cost and complexity for eligible projects 
under this Program, the lender must include with the application a 
project-specific feasibility study, as defined in this Notice. The 
feasibility study must be prepared by a qualified consultant. The 
feasibility study must address, in part, both the technical and 
economic feasibility of the project.
    As noted previously, the Agency intends to accept applications 
during Fiscal Year 2010 from May 6, 2010 and August 4, 2010.
    Ineligible or incomplete applications will be returned to the 
applicant. If an application is determined to be ineligible for any 
reason, the Agency will inform the lender, in writing, of the reasons 
and provide any applicable appeal rights. The denial or rejection of an 
application under the Program may be appealed as provided in this 
Notice.

D. Evaluation of Guaranteed Loan Applications

    Submission of an application neither reserves funding nor ensures 
funding. The Agency will evaluate each application and make a 
determination as to whether the borrower is eligible, whether the 
lender is eligible, whether the proposed project is eligible, the 
credit-worthiness and technical merit of the project, and whether the 
proposed funding request complies with all applicable statutes and 
regulations. The evaluation will be based on the information provided 
by the lender and on other sources of information, such as recognized 
industry experts in the applicable technology field, as necessary.
    The Agency will score each application in order to prioritize each 
proposed project. The evaluation criteria that the Agency will use to 
score these projects are:
     Whether the borrower has established a market for the 
advanced biofuel and the byproducts produced.
     Whether the area in which the borrower proposes to place 
the biorefinery has other similar advanced biofuel facilities.
     Whether the borrower is proposing to use a feedstock not 
previously used in the production of advanced biofuels.
     Whether the borrower is proposing to work with producer 
associations or cooperatives.
     The level of financial participation by the borrower, 
including support from non-Federal and private sources. Such financial 
participation may take the form of direct financial support, technical 
support, and contributions of in-kind resources including such kinds of 
support from state government. Any direct Federal funding for eligible 
project costs from other sources will reduce the amount of the loan 
that may be guaranteed under this program.
     Whether the borrower has established that the adoption of 
the process proposed in the application will have a positive impact on 
resource conservation, public health, and the environment.
     Whether the borrower can establish that, if adopted, the 
biofuels production technology proposed in the application will not 
have any significant negative impacts on existing manufacturing plants 
or other facilities that use similar feedstocks.
     The potential for rural economic development, including 
the number of local jobs created and inclusion of local banks or other 
capital sources in any proposed debt syndication.
     The level of local ownership proposed in the application.
     Whether the project can be replicated.
     The extent to which the project converts cellulosic 
biomass feedstocks into advanced biofuel.
     Whether the project is a first-of-a-kind technology, 
system, or process.

II. Provisions for BioRefinery Assistance Loan Guarantees

    All guaranteed loan requests for this Program are subject to the 
provisions of this Notice as laid out in this section of the Notice.

A. Definitions

    The following definitions are applicable to this Notice.
    Advanced biofuel. Fuel derived from renewable biomass, other than 
corn kernel starch to include:
    (1) Biofuel derived from cellulose, hemicellulose, or lignin;
    (2) Biofuel derived from sugar and starch (other than ethanol 
derived from corn kernel starch);
    (3) Biofuel derived from waste material, including crop residue, 
other vegetative waste material, animal waste, food waste, and yard 
waste;

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    (4) Diesel-equivalent fuel derived from renewable biomass, 
including vegetable oil and animal fat;
    (5) Biogas (including landfill gas and sewage waste treatment gas) 
produced through the conversion of organic matter from renewable 
biomass;
    (6) Butanol or other alcohols produced through the conversion of 
organic matter from renewable biomass; or
    (7) Other fuel derived from cellulosic biomass.
    Agency. The Rural Business-Cooperative Service or successor Agency 
assigned by the Secretary of Agriculture to administer the BioRefinery 
Assistance Program. References to the National Office, Finance Office, 
State Office or other Agency offices or officials should be read as 
prefaced by ``Agency'' or ``Rural Development'' as applicable.
    Association of agricultural producers. An organization that 
represents independent producers directly engaged in the production of 
agricultural products, including crops (including farming); livestock 
(including ranching); forestry products; hydroponics; nursery stock; or 
aquaculture, whereby 50 percent or greater of their gross income is 
derived from the operations; and whose mission includes working on 
behalf of such producers and the majority of whose membership and board 
of directors are comprised of agricultural producers.
    Arm's-length transaction. A transaction between ready, willing, and 
able disinterested parties who are not affiliated with or related to 
each other and have no security, monetary, or stockholder interest in 
each other.
    Assignment Guarantee Agreement. A signed, Agency-approved agreement 
between the Agency, the lender, and the holder setting forth the terms 
and conditions of an assignment of a guaranteed portion of a loan or 
any part thereof.
    Assurance agreement. A signed, Agency-approved agreement between 
the Agency and the lender that assures the Agency that the lender is in 
compliance with and will continue to be in compliance with Title VI of 
the Civil Rights Act of 1964, 7 CFR part 15, and Agency regulations 
promulgated there under.
    Biofuel. A fuel derived from renewable biomass.
    Biogas. Biomass converted to gaseous fuels.
    Biorefinery. A facility (including equipment and processes) that 
converts renewable biomass into biofuels and biobased products and may 
produce electricity.
    Borrower. The person that borrows, or seeks to borrow, money from 
the lender, including any party or parties liable for the guaranteed 
loan.
    Business plan. A comprehensive document that:
    (1) Describes clearly the borrower's ownership structure and 
management, including experience and succession planning;
    (2) Discusses, if applicable, the borrower's parent, affiliates, 
and subsidiaries, including their names and a description of the 
relationship;
    (3) Discusses how the borrower will operate the proposed project, 
including, at a minimum, a description of:
    (i) The business and its strategy;
    (ii) Possible vendors and models of major system components;
    (iii) The products and services to be provided;
    (iv) The availability of the resources (e.g., labor, raw materials, 
supplies) necessary to provide those products and services;
    (v) Site location and its relation to product distribution (e.g., 
rail lines or highways) and any land use or other permits necessary to 
operate the facility; and
    (vi) The market for the product and its competition, including any 
and all competitive threats and advantages;
    (4) Presents pro forma financial statements, including:
    (i) Balance sheet and income and expense for a period of not less 
than 3 years of stabilized operation, and
    (ii) Cash flows for the life of the project; and
    (5) Describes the proposed use of funds.
    Collateral. The asset(s) pledged by the borrower in support of the 
loan.
    Conditional Commitment. An Agency-approved form provided to the 
lender indicating the loan guarantee it has requested has been approved 
subject to the completion of all conditions and requirements contained 
therein.
    Deficiency balance. The balance remaining on a loan after all 
collateral has been liquidated.
    Deficiency judgment. A monetary judgment rendered by a court of 
competent jurisdiction after foreclosure and liquidation of all 
collateral securing the loan.
    Eligible borrower. An individual, Indian tribe, or unit of State or 
local government, including a corporation, farm cooperative, farmer 
cooperative organization, association of agricultural producers, 
National Laboratory, institution of higher education, rural electric 
cooperative, public power entity, or consortium of any of those 
entities.
    Eligible project costs. Those expenses approved by the Agency for 
the project as identified in paragraphs (g)(3)(i) through (ix) of 
Section Q of this Notice.
    Eligible technology.
    (1) A technology that is being adopted in a viable commercial-scale 
operation of a biorefinery that produces an advanced biofuel; or
    (2) A technology not described in paragraph (1) of this definition 
that has been demonstrated to have technical and economic potential for 
commercial application in a biorefinery that produces an advanced 
biofuel.
    Fair market value. The price that could reasonably be expected for 
an asset in an arm's-length transaction under ordinary economic and 
business conditions.
    Farm cooperative. A farmer or rancher owned and controlled business 
from which benefits are derived and distributed equitably on the basis 
of use by each of the farmer or rancher owners.
    Farmer Cooperative Organization. A cooperative organization is a 
cooperative or an entity, not chartered as a cooperative, that operates 
as a cooperative in that it is owned and operated for the benefit of 
its members, including the manner in which it distributes its dividends 
and assets.
    Feasibility study. An analysis by a qualified consultant of the 
economic, market, technical, financial, and management capabilities of 
a proposed project or business in terms of its expectation for success.
    Finance Office. The office which maintains the Agency financial 
accounting records located in St. Louis, Missouri.
    Future recovery. Any funds collected by lender associated with a 
defaulted project, after final loss claim has been paid by USDA.
    Guaranteed loan. A loan made and serviced by a lender for which the 
Agency has issued a Loan Note Guarantee.
    Holder. A person or entity, other than the lender, who owns all or 
part of the guaranteed portion of the loan with no servicing 
responsibilities. When the single note option is used and the lender 
assigns a part of the guaranteed note to an assignee, the assignee 
becomes a holder only when the Agency receives notice and the 
transaction is completed through use of Form RD 4279-6, ``Assignment 
Guarantee Agreement,'' or predecessor form.
    Immediate family. Individuals who are closely related by blood, 
marriage, or adoption, or live within the same household, such as a 
spouse, parent, child, brother, sister, aunt, uncle,

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grandparent, grandchild, niece, or nephew.
    Indian tribe. This term has the meaning given it in section 4 of 
the Indian Self-Determination and Education Assistance Act (25 U.S.C. 
450b).
    Institution of higher education. This term has the meaning given it 
in section 102(a) of the Higher Education Act of 1965 (20 U.S.C. 
1002(a)).
    Intellectual property. Any and all intangible assets that consists 
of human knowledge and ideas including, without limitation, patents, 
copyrights, trademarks, service marks, and trade secrets.
    Lender. A regulated or supervised lender that meets the criteria 
specified in Section I of this Notice.
    Lender's Agreement. The Agency approved signed form between the 
Agency and the lender setting forth the lender's loan responsibilities 
under an issued Loan Note Guarantee.
    Lender's analysis. The analysis and evaluation of the credit 
factors associated with each guarantee application to ensure loan 
repayment through the use of credit document procedures and an 
underwriting process that is consistent with industry standards and the 
lender's written policy and procedures.
    Liquidation value. A monetary value given to property that is sold 
or exchanges hands under forced or limiting conditions, such as 
bankruptcy.
    Loan agreement. The Agency approved agreement between the borrower 
and lender containing the terms and conditions of the loan and the 
responsibilities of the borrower and lender.
    Loan Note Guarantee. The Agency approved form containing the terms 
and conditions of the guarantee of an identified loan.
    Loan-to-cost. The ratio of the dollar amount of a loan to the 
dollar value of the actual eligible project cost adjusted for other 
debt, project obligations, or other factors as determined by USDA.
    Loan-to-value. The ratio of the dollar amount of a loan to the 
dollar value of the collateral pledged as security for the loan.
    Market value. The amount for which property would sell for its 
highest and best use in an arm's length transaction.
    Negligent loan servicing.
    (1) The failure of a lender to perform those services that a 
reasonably prudent lender would perform in originating, servicing, and 
liquidating its own portfolio of unguaranteed loans; or
    (2) The failure of the lender to perform its origination and 
servicing responsibilities in accordance with its origination and 
servicing policies and procedures in use by the lender at the time the 
loan is made.
    (3) The term includes the concepts of failure to act, not acting in 
a timely manner, or acting in a manner contrary to the manner in which 
a reasonably prudent lender would act.
    Offtake agreement. The terms and conditions governing the sale and 
transportation of biofuels, biobased products, and electricity produced 
by the borrower to another party.
    Parity. A lien position whereby two or more lenders share a 
security interest of equal priority in collateral. In the event of 
default, each lender will be affected on a pro rata basis.
    Participation. Sale of an interest in a loan by the lender wherein 
the lender retains the note, collateral securing the note, and all 
responsibility for loan servicing and liquidation.
    Person. Any individual, corporation, company, foundation, 
association, labor organization, firm, partnership, society, joint 
stock company, group of organizations, public body, or State or local 
government.
    Promissory Note. A legal instrument that a borrower signs promising 
to pay a specific amount of money at a stated time. ``Note'' or 
``Promissory Note'' shall also be construed to include ``Bond'' or 
other evidence of debt where appropriate.
    Protective advances. Advances made by the lender for the purpose of 
preserving and protecting the collateral where the debtor has failed 
to, and will not or cannot, meet obligations to protect or preserve 
collateral.
    Qualified consultant. An independent, third-party possessing the 
knowledge, expertise, and experience to perform in an efficient, 
effective, and authoritative manner the specific task required.
    Qualified Intellectual Property. Any intellectual property included 
on current (within one year) audited balance sheets for which an audit 
opinion has been received that states the financial reports fairly 
represent the values therein and the reported value has been arrived at 
in accordance with Generally Accepted Accounting Principles (GAAP) 
standards for valuing intellectual property. The supporting work papers 
must be satisfactory to the Administrator.
    Regulated or supervised lender. A lender that is subject to 
examination or supervision by an appropriate agency of the United 
States or a State that supervises or regulates credit institutions.
    Renewable biomass.
    (1) Materials, pre-commercial thinnings, or invasive species from 
National Forest System land and public lands (as defined in section 103 
of the Federal Land Policy and Management Act of 1976 (43 U.S.C. 1702)) 
that:
    (i) Are byproducts of preventive treatments that are removed to 
reduce hazardous fuels; to reduce or contain disease or insect 
infestation; or to restore ecosystem health;
    (ii) Would not otherwise be used for higher-value products; and
    (iii) Are harvested in accordance with applicable law and land 
management plans and the requirements for old-growth maintenance, 
restoration, and management direction of paragraphs (2), (3), and (4) 
of subsection (e) of section 102 of the Healthy Forests Restoration Act 
of 2003 (16 U.S.C. 6512) and large-tree retention of subsection (f) of 
that section; or
    (2) Any organic matter that is available on a renewable or 
recurring basis from non-Federal land or land belonging to an Indian or 
Indian tribe that is held in trust by the United States or subject to a 
restriction against alienation imposed by the United States, including:
    (i) Renewable plant material, including feed grains; other 
agricultural commodities; other plants and trees; and algae; and
    (ii) Waste material, including crop residue; other vegetative waste 
material (including wood waste and wood residues); animal waste and 
byproducts (including fats, oils, greases, and manure); and food waste 
and yard waste.
    Renewable biomass agreement. The terms and conditions governing the 
sale and transportation of the renewable biomass to the borrower by 
another party.
    Retrofitting. The modification of a building or equipment to 
incorporate functions not included in the original design that allow 
for the production of advanced biofuels.
    Rural or rural area. Any area of a State not in a city or town that 
has a population of more than 50,000 inhabitants, according to the 
latest decennial census of the United States, and the contiguous and 
adjacent urbanized area. In determining which census blocks in an 
urbanized area are not in a rural area, the Agency shall exclude any 
cluster of census blocks that would otherwise be considered not in a 
rural area only because the cluster is adjacent to not more than 2 
census blocks that are otherwise considered not in a rural area under 
this definition. For the purposes of this definition, cities and towns 
are incorporated population

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centers with definite boundaries, local self government, and legal 
powers set forth in a charter granted by the State. For Puerto Rico, 
Census Designated Place, as defined by the U.S. Census Bureau, will be 
used as the equivalent to city or town. For the purpose of defining a 
rural area in the Republic of Palau, the Federated States of 
Micronesia, and the Republic of the Marshall Islands, the Agency shall 
determine what constitutes rural and rural area based on available 
population data.
    State. Any of the 50 States of the United States, the Commonwealth 
of Puerto Rico, the District of Columbia, the U.S. Virgin Islands, 
Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, 
the Republic of Palau, the Federated States of Micronesia, and the 
Republic of the Marshall Islands.
    Subordination. An agreement between the lender and borrower whereby 
lien priorities on certain assets pledged to secure payment of the 
guaranteed loan will be reduced to a position junior to, or on parity 
with, the lien position of another loan (see paragraph (h)(1) in 
section O).
    Technical and economic potential. A technology not described in 
paragraph (1) of the definition of ``eligible technology'' is 
considered to have demonstrated ``technical and economic potential'' 
for commercial application in a biorefinery that produces an advanced 
biofuel if each of the following conditions is met:
    (1) The advanced biofuel biorefinery's likely financial and 
production success is evidenced in a thorough evaluation including, but 
not limited to:
    (i) Feedstocks;
    (ii) Process engineering;
    (iii) Siting;
    (iv) Technology;
    (v) Energy production; and
    (vi) Financial and sensitivity review using an banking industry 
software analysis program with appropriate industry standards.
    (2) The evaluation in paragraph (1) of this definition is completed 
by an independent third-party expert in a feasibility study, technical 
report, or other analysis, each of which must be satisfactory to the 
Agency, that demonstrates the success of the project.
    (3) The advanced biofuel technology has a least a 12-month (four 
season) operating cycle at semi-work scale.
    Transfer and assumption. The conveyance by a debtor to an assuming 
party of the assets, collateral, and liabilities of the loan in return 
for the assuming party's binding promise to pay the outstanding debt.
    Viable commercial-scale. An operation is considered to a viable 
commercial-scale operation if it meets each of the following 
conditions:
    (1) Evidence that a proposed project's revenue will be sufficient 
to recover the full cost of the project over the term of the guaranteed 
loan, service debt, and result in an anticipated annual rate of return 
sufficient to encourage investors or lenders to provide funding for the 
project.
    (2) Such proposed project will be able to operate profitably 
without public and private sector subsidies upon completion of 
construction (volumetric excise tax is not included as a subsidy).
    (3) Contracts for feedstocks are adequate to address proposed off-
take from the biorefinery.
    (4) The proposed project demonstrates the ability to achieve market 
entry, suitable infrastructure to transport the advanced biofuel to its 
market is available, and general market competitiveness of the advanced 
biofuel technology and related products.
    (5) The project must demonstrate that it can be easily replicated 
and that replications can be sited at multiple facilities across a wide 
geographic area based on the proposed deployment plan.
    (6) The advanced biofuel technology has at least a 12-month (four 
season) operating history at semi-work scale, which demonstrates the 
ability to operate at a commercial scale.

B. Exception Authority

    Except as specified in paragraphs (a) through (d) of this section, 
the Administrator may, on a case-by-case basis, make exceptions to any 
requirement or provision of this Notice only when such an exception is 
in the best financial interests of the Federal Government and is 
otherwise not in conflict with applicable law.
    (a) Lender and borrower eligibility. No exception to lender or 
borrower eligibility can be made.
    (b) Project eligibility. No exception to project eligibility can be 
made.
    (c) Term length. No exception to the maximum length of the loan 
term can be made with respect to loan originations.
    (d) Rural area definition. No exception to the definition of rural 
area, as defined in this Notice, can be made.

C. Review or Appeals

    A person has review or appeal rights in accordance with 7 CFR part 
11.

D. Conflicts of Interest

    No conflict of interest or appearance of conflict of interest will 
be allowed. For purposes of this Notice, conflict of interest includes, 
but is not limited to, distribution or payment of guaranteed loan funds 
or award of project contracts to an individual owner, partner, 
stockholder, or beneficiary of the lender or borrower or an immediate 
family member of such an individual.

E. Oversight and Monitoring

    (a) General. The lender will cooperate fully with Agency oversight 
and monitoring of all lenders involved in any manner with any guarantee 
under this Program to ensure compliance with the provisions in this 
Notice. Such oversight and monitoring will include, but is not limited 
to, reviewing lender records and meeting with lenders.
    (b) Reports and notifications. The Agency will require lenders to 
submit to the Agency reports and notifications to facilitate the 
Agency's oversight and monitoring. These reports and notifications 
include, but are not necessarily limited to:
    (1) During construction, the lender will submit quarterly 
construction progress reports to the Agency. These reports will 
contain, at a minimum, construction milestone attainment, loan 
advances, and personnel hiring, training, and retention.
    (2) Periodic reports, to be submitted quarterly unless otherwise 
specified in the Conditional Commitment, regarding the condition of its 
Agency guaranteed loan portfolio (including borrower status and loan 
classification) and any material change in the general financial 
condition of the borrower since the last periodic report was submitted.
    (3) Monthly default reports, including borrower payment history, 
for each loan in monetary default using a form approved by the Agency.
    (4) Notification within 15 days of:
    (i) Any loan agreement violation by any borrower, including when a 
borrower is 30 days past due or is otherwise in default;
    (ii) Any permanent or temporary reduction in interest rate; and
    (iii) Any change in the loan classification of any loan made under 
this Notice.
    (5) If a lender receives a final loss payment, an annual report on 
its collection activities for each unsatisfied account for 3 years 
following payment of the final loss claim.

F. Forms, Regulations, and Instructions

    Copies of all forms, regulations, and instructions referenced in 
this Notice may be obtained through the Agency.

[[Page 25081]]

Basic Eligibility Requirements

G. Borrower Eligibility

    To be eligible for a guaranteed loan under this Program, a borrower 
must meet each of the conditions specified in the following paragraphs, 
as applicable.
    (a) The borrower must be one of the following:
    (1) An individual;
    (2) An Indian tribe;
    (3) A unit of State or local government;
    (4) A corporation;
    (5) A farm cooperative;
    (6) A farmer cooperative organization;
    (7) An association of agricultural producers;
    (8) A National Laboratory;
    (9) An institution of higher education;
    (10) A rural electric cooperative;
    (11) A public power entity; or
    (12) A consortium of any of the above entities.
    (b) Individual borrowers must either:
    (1) Be citizens of the United States (U.S.), the Republic of Palau, 
the Federated States of Micronesia, the Republic of the Marshall 
Islands, or American Samoa, or
    (2) Reside in the U.S. after legal admittance for permanent 
residence.
    (c) Entities other than individuals must be at least 51 percent 
owned by persons who are either citizens as identified above or legally 
admitted permanent residents residing in the U.S. When an entity owns 
an interest in the borrower, its citizenship will be determined by the 
citizenship of the individuals who own an interest in the entity or any 
sub-entity based on their ownership interest.
    (d) Each borrower must have, or obtain, the legal authority 
necessary to construct, operate, and maintain the proposed facility and 
services and to obtain, give security for, and repay the proposed loan.
    (e) A borrower will be considered ineligible for a guarantee under 
this Program if either the borrower or any owner with more than 20 
percent ownership interest in the borrower
    (i) Has an outstanding judgment obtained by the U.S. in a Federal 
Court (other than U.S. Tax Court),
    (ii) Is delinquent on the payment of Federal income taxes,
    (iii) Is delinquent on Federal debt, or
    (iv) Is debarred or suspended from receiving Federal assistance.

H. Project Eligibility

    Projects eligible for loan guarantees under this Program must meet 
the criteria specified in this section.
    (a) The project must be located in a rural area.
    (b) The project must be for either:
    (1) The development and construction of commercial-scale 
biorefineries using eligible technology or
    (2) The retrofitting of existing facilities, including, but not 
limited to, wood products facilities and sugar mills, with eligible 
technology.
    (c) The project must be for the production of advanced biofuels 
that are either:
    (1) Transportation fuels that meet the Renewable Fuel Standard or 
are currently undergoing an appeal to the U.S. Environmental Protection 
Agency for inclusion in the Renewable Fuel Standard, or
    (2) Non-transportation renewable energy that will result in a 
reduction in greenhouse gases.
    (d) The project must meet the financial metric criteria specified 
in paragraphs (d)(1) through (d)(3) of this section. These financial 
metric criteria shall be calculated from the realistic information in 
the pro forma statements or borrower financial statements of a typical 
operating year after the project is completed and stabilized.
    (1) A debt coverage ratio of 1.0 or higher;
    (2) A debt-to-tangible net worth ratio of 4:1 or lower for start-up 
businesses and of 9:1 or lower for existing businesses.
    (3) A loan-to-value ratio of no more than 1.0.

I. Lender Eligibility

    To be eligible to participate in this Program under this Notice, a 
lender must be a regulated or supervised lender and must maintain at 
all times the following minimum acceptable levels of capital:
     Total Risk-Based Capital ratio of 10 percent or higher;
     Tier 1 Risk-Based Capital ratio of 6 percent or higher; 
and
     Tier 1 Leverage Capital ratio of 5 percent or higher.
    If the regulated or supervised lender is a commercial bank or 
thrift, these levels would be based on those reflected in Call Reports 
and Thrift Financial Reports.
    Further, the Agency will approve loan guarantees only for lenders 
with adequate experience with similar projects and the expertise to 
make, secure, service, and collect loans approved under this Notice. 
Lenders debarred from other Federal credit programs will not be 
eligible under this program.

Basic Application Provisions

J. Loan Applications

    Applications for loan guarantees, which are to be filed with the 
USDA Rural Development National Office's Energy Branch as shown under 
ADDRESSES, must contain the items identified in the paragraphs (b)(1) 
through (18), organized pursuant to a Table of Contents in a chapter 
format.
    (a) Table of Contents.
    (b) Project Summary. Provide a concise summary of the proposed 
project and application information, project purpose and need, and 
project goals, including the following:
    (1) Title. Provide a descriptive title of the project.
    (2) Borrower eligibility. Describe how the borrower meets the 
eligibility criteria identified in Section II.G of this Notice.
    (3) Project eligibility. Describe how the project meets the 
eligibility criteria identified in Section II.H of this Notice. This 
description is to provide the reader with a frame of reference for 
reviewing the rest of the application. Clearly state whether the 
application is for the construction and development of a biorefinery or 
for the retrofitting of an existing facility and provide a brief 
description of the project. Provide results from demonstration or pilot 
facilities that prove the technology proposed to be used meets the 
definition of eligible technology. Additional project description 
information will be needed later in the application.
    (4) Matching funds. Submit a spreadsheet identifying sources, 
amounts, and status of matching funds. The spreadsheet must also 
include a directory of matching funds source contact information. 
Attach any applications, correspondence, or other written communication 
between applicant and matching fund source.
    (5) Application for Loan Guarantee. Completed Form RD 4279-1, 
``Application for Loan Guarantee'' (or successor form).
    (6) Environmental information. Form RD 1940-20, ``Request for 
Environmental Information;'' omit the attachments specified in the 
instructions to the form; and attach an environmental information 
document completed pursuant to 7 CFR part 1940, subpart G, Exhibit H.
    (i) Civil Rights Impact Analysis. The Agency is responsible for 
ensuring that all requirements of RD Instruction 2006-P, ``Civil Rights 
Impact Analysis,'' with the addition of Executive Order 12898, 
Environmental Justice, are met and will complete the appropriate level

[[Page 25082]]

of review in accordance with that instruction. When guaranteed loans 
are proposed, Agency employees will conduct a Civil Rights Impact 
Analysis (CRIA) with regard to environmental justice. The CRIA must be 
conducted and the analysis documented utilizing Form RD 2006-38, 
``Civil Rights Impact Analysis Certification.'' This must be done prior 
to loan approval, obligation of funds, or other commitments of agency 
resources, including issuance of a Conditional Commitment, whichever 
occurs first.
    (ii) Intergovernmental consultation. Intergovernmental consultation 
comments in accordance with RD Instruction 1940-J and 7 CFR, part 3015, 
subpart V.
    (7) Credit reports.
    (i) A personal credit report from an acceptable credit reporting 
company for a proprietor (owner), each partner, officer, director, key 
employee, and stockholder owning 20 percent or more interest in the 
applicant, except for those corporations listed on a major stock 
exchange. Credit reports are not required for elected and appointed 
officials when the applicant is a public body.
    (ii) Commercial credit reports obtained by the lender on the 
borrower and any parent, affiliate, and subsidiary firms.
    (8) Appraisals. Appraisals, accompanied by a copy of a Phase I 
Environmental Site Assessment (ESA) in accordance with ASTM standards. 
If the appraisal has not been completed when the application is filed, 
an estimated appraisal must be submitted with the application. In all 
cases, a completed appraisal consistent with paragraph (c) in section N 
must be submitted prior to the loan being closed.
    (9) Financial information. For all businesses, a current (not more 
than 90 days old) balance sheet; a pro forma balance sheet at startup; 
projected balance sheets and income and expense statements for a period 
of not less than 3 years of stabilized operation; and cash flow 
statements for the life of the project. Projections should be supported 
by a list of assumptions showing the basis for the projections.
    (10) Credit rating. For loans of $125 million or more, an 
evaluation and credit rating of the total project's indebtedness, 
without consideration for a government guarantee, from a nationally-
recognized rating agency.
    (11) Lender's analysis. Lender's complete written analysis of the 
project, including:
    (i) A summary of the technology to be used in the project;
    (ii) The viability of such technology for the particular project 
application;
    (iii) Whether the project is retrofit or Greenfield;
    (iv) Borrower's management;
    (v) Repayment ability (including a cash-flow analysis);
    (vi) Sponsor's history of debt repayment;
    (vii) Necessity of any debt refinancing;
    (viii) The credit reports of the borrower, its principals, and any 
parent, affiliate, or subsidiary; and
    (ix) The credit analysis specified in Section II.N of this Notice.
    (12) Loan Agreement. A proposed loan agreement or a sample loan 
agreement with an attached list of the proposed loan agreement 
provisions. The loan agreement must be executed by the lender and 
borrower before the Agency issues a Loan Note Guarantee. The following 
requirements must be addressed in the loan agreement:
    (i) Prohibition against assuming liabilities or obligations of 
others;
    (ii) Restriction on dividend payments;
    (iii) Limitation on the purchase or sale of equipment and fixed 
assets;
    (iv) Limitation on compensation of officers and owners;
    (v) Financial covenants regarding working capital or current ratio 
requirement, and maximum debt-to-net worth ratio;
    (vi) Borrower change of control;
    (vii) Repayment and amortization of the loan;
    (viii) List of collateral and lien priority for the loan;
    (ix) Type and frequency of financial statements to be required for 
the duration of the loan.
    (x) A section for the later insertion of any additional 
requirements imposed by the Agency in its Conditional Commitment; and
    (xi) A section for the later insertion of any necessary mitigation 
measures by the borrower to avoid or reduce adverse environmental 
impacts from this proposal's construction or operation.
    (13) Business plan. Submit a business plan. Any or all of the 
requirements in the business plan may be omitted if the information is 
included in the feasibility study.
    (14) Feasibility study. Submit a feasibility study on the proposed 
project. Elements in an acceptable feasibility study include, but are 
not limited to, the elements outlined in Table 1. In addition, as part 
of the feasibility study, both a technical assessment and economic 
analysis of the project are required. These two assessments are 
discussed in detail in paragraphs (d) and (e) of this section.

                  Table 1--Feasibility Study Components
------------------------------------------------------------------------
 
-------------------------------------------------------------------------
(A) Executive Summary:
    Introduction/Project Overview (Brief general overview of project
     location, size, etc.)
    Economic feasibility determination.
    Technical feasibility determination.
    Market feasibility determination.
    Financial feasibility determination.
    Management feasibility determination.
    Recommendations for implementation.
(B) Economic Feasibility:
    Information regarding project site.
    Availability of trained or trainable labor.
    Availability of infrastructure, including utilities, and rail, air
     and road service to the site.
    Feedstock:
        Feedstock source management.
        Estimates of feedstock volumes and costs.
        Collection, Pre-Treatment, Transportation, and Storage.
    Document that any and all woody biomass feedstock cannot be used as
     a higher value wood-based product.
    Impacts on existing manufacturing plants or other facilities that
     use similar feedstock if the applicant's proposed biofuel
     production technology is adopted.
    Project impact on resource conservation, public health, and the
     environment.
    Overall economic impact of the project including any additional
     markets created for agricultural and forestry products and
     agricultural waste material and potential for rural economic
     development.

[[Page 25083]]

 
    Feasibility/plans of project to work with producer associations or
     cooperatives including estimated amount of annual feedstock and
     biofuel and byproduct dollars from producer associations and
     cooperatives.
(C) Market Feasibility:
    Information on the sales organization and management.
    Nature and extent of market and market area.
    Marketing plans for sale of projected output--principle products and
     by-products.
    Extent of competition including other similar facilities in the
     market area.
    Commitments from customers or brokers--principle products and by-
     products.
    Risks Related to the Advanced Biofuel Industry, including industry
     status.
(D) Technical Feasibility:
    Suitability of the selected site for the intended use including the
     information documents Form RD 1940-20 and required narrative in the
     7 CFR part 1940, subpart G Exhibit H format.
    Report shall be based upon verifiable data and contain sufficient
     information and analysis so that a determination may be made on the
     technical feasibility of achieving the levels of income or
     production that are projected in the financial statements. Describe
     the scale of development for which the process technology has been
     proven, i.e. lab (or bench), pilot, or demonstration scale; and the
     specific volume of the process (expressed either as volume of
     feedstock processed--tons per unit of time, or as product--gallons
     per unit of time).
    Report shall also identify any constraints or limitations in these
     financial projections and any other facility or design-related
     factors which might affect the success of the enterprise.
    Report shall also identify and estimate project operation and
     development costs and specify the level of accuracy of these
     estimates and the assumptions on which these estimates have been
     based.
    The Project engineer or architect is considered an independent party
     provided neither the principal of the firm nor any individual of
     the firm who participates in the technical feasibility report has a
     financial interest in the project if no other individual or firm
     with the expertise necessary to make such a determination is
     reasonably available to perform the function, an individual or firm
     that is not independent may be used.
    Ability of the proposed system to be Commercially Replicated.
    Supports the Renewable Fuel Standards of the U.S. Environmental
     Protection Agency.
    Risks Related to:
        Construction of the Advanced Biofuel Plant,
        Advanced Biofuel Production, and
        Regulation and Governmental Action.
(E) Financial Feasibility:
    Reliability of the financial projections and assumptions on which
     the financial statements are based including all sources of project
     capital both private or public, such as Federal funds. Three Years
     (minimum) projected Balance Sheets and Income Statements. Cash Flow
     projections for the life of the project.
    Ability of the business to achieve the projected income and cash
     flow.
    Assessment of the cost accounting system.
    Availability of short-term credit or other means to meet seasonable
     business costs.
    Adequacy of raw materials and supplies.
    Sensitivity Analysis--including feedstock and energy costs, product/
     co-product prices.
    Risks Related to:
        The Project,
        Applicant Financing Plan,
        The operational units, and
        Tax Issues.
(F) Management Feasibility:
    Continuity and adequacy of management.
    Projected total supply from members and non-members.
    Projected competitive demand for raw materials.
    Procurement plan and projected procurement costs.
    Form of commitment of raw materials (marketing agreements, etc.).
    Identify applicant and/or management's previous experience
     concerning the receipt of federal financial assistance, including
     amount of funding, date received, purpose, and outcome.
        Risks Related to:
        Applicant as a Company (i.e. Development-Stage) and Conflicts of
         Interest.
(G) Qualifications:
    A resume or statement of qualifications of the author of the
     feasibility study, including prior experience, should be submitted.
------------------------------------------------------------------------

     (15) Lender certifications.
    (i) A certification by the lender stating that it has completed a 
comprehensive analysis of the proposal, the borrower is eligible, the 
loan is for an eligible project, and there is reasonable assurance of 
repayment ability based on the borrower's history, projections and 
equity, and the collateral to be obtained.
    (ii) A certification by the lender that the proposed project will 
be in compliance with all applicable State and Federal environmental 
laws and regulations.
    (16) DUNS Number. A Dun and Bradstreet Universal Numbering System 
(DUNS) number.
    (17) Bioenergy experience. Identify applicant, including 
principals, prior experience in bioenergy projects and the receipt of 
Federal financial assistance, including amount of funding, date 
received, purpose, and outcome, for such projects.
    (18) Each applicant must provide documentation from an Agency-
approved recognized published source quantifying the reduction in 
greenhouse gas emissions that results from the displacement of fossil 
fuels.
    (19) Other. Any additional information required by the Agency.
    (c) Form modifications. The BioRefinery Assistance Program will be 
using the same forms as the Business and Industry and Section 9006 
programs with the understanding that:
    (1) All references in those forms to the Business and Industry 
program or the Section 9006 program in whatever

[[Page 25084]]

manner, and whether referenced singularly or jointly, shall be deemed 
to be references to the BioRefinery Assistance Program described in 
this Notice, and
    (2) All references to the Business and Industry or Section 9006 
regulations in those forms in whatever manner, whether general or 
specific, whether singularly or jointly, and whether or not specific 
Code of Federal Regulation citations are used, shall be deemed to be a 
reference to the requirements of the BioRefinery Assistance Program 
described in this Notice. In addition, the following modifications are 
to be used for this Program.
    (i) Application for Loan Guarantee (Form RD 4279-1) is modified as 
described below.
    (A) Part A, Block 10, Type of Borrower, do not fill out if your 
entity is not listed.
    (B) Part A, Block 11. Instead of the Standard Industrial 
Classification (SIC) Code, fill in your North American Industry 
Classification System (NAICS).
    (C) Part A, Block 22 is not applicable.
    (D) Part A, Block 29, Financial Statements. Comply with the 
financial statement requirements in this Notice rather than in Block 
29.
    (E) Part A, Block 30, which deals with guarantors, is not 
applicable.
    (F) Part A, Block 33, Technical Report. Replace Technical Report 
with Feasibility Study, which will include a technical assessment of 
the project.
    (G) Part B, Block 17, which addresses equity. Do not fill in this 
block, but instead provide similar information according to the equity 
requirements contained in this Notice.
    (H) Part B, Block 22, which addresses the lender's analysis. Attach 
the lender's analysis as described in this Notice.
    (3) Lender's Agreement (Form RD 4279-4), Section I, Item B, is 
applicable with the addition that negligent servicing includes any 
instance where a lender fails to ensure that all environmental laws are 
being complied with by any person receiving guaranteed loan funds under 
this Program.
    (4) Loan Note Guarantee (Form RD 4279-5), Section 3, Full Faith and 
Credit, under Conditions of Guarantee is applicable with the addition 
that negligent servicing includes any instance where a lender fails to 
ensure that all environmental laws are being complied with by a person 
receiving guaranteed loan funds under this Program.
    (d) Technical Assessment. As part of the feasibility study, a 
detailed technical assessment is required for each project. The 
technical assessment must demonstrate that the project design, 
procurement, installation, startup, operation and maintenance of the 
project will operate or perform as specified over its useful life in a 
reliable and a cost effective manner, and must identify what the useful 
life of the project is. The technical assessment must also identify all 
necessary project agreements, demonstrate that those agreements will be 
in place on or before the time of loan closing, and demonstrate that 
necessary project equipment and services will be available over the 
useful life. All technical information provided must follow the format 
specified in paragraphs (d)(1) through (9) below. Supporting 
information may be submitted in other formats. Design drawings and 
process flow charts are encouraged as exhibits. A discussion of each 
topic identified in paragraphs (d)(1) through (9) is not necessary if 
the topic is not applicable to the specific project. Questions 
identified in the Agency's technical review of the project must be 
answered to the Agency's satisfaction before the application will be 
approved. All projects require the services of a professional engineer 
(PE).
    (1) Qualifications of project team. The project team will vary 
according to the complexity and scale of the project. The project team 
must have demonstrated expertise in similar advanced biofuel technology 
development, engineering, installation, and maintenance. Authoritative 
evidence that project team service providers have the necessary 
professional credentials or relevant experience to perform the required 
services for the development, construction, and retrofitting, as 
applicable, of technology for producing advanced biofuels must be 
provided. In addition, authoritative evidence that vendors of 
proprietary components can provide necessary equipment and spare parts 
for the biorefinery to operate over its useful life must be provided. 
The application must:
    (i) Discuss the proposed project delivery method. Such methods 
include a design, bid, build where a separate engineering firm may 
design the project and prepare a request for bids and the successful 
bidder constructs the project at the borrower's risk, and a design 
build method, often referred to as turnkey, where the borrower 
establishes the specifications for the project and secures the services 
of a developer who will design and build the project at the developer's 
risk;
    (ii) Discuss the advanced biofuels technology equipment 
manufacturers of major components being considered in terms of the 
length of time in business and the number of units installed at the 
capacity and scale being considered;
    (iii) Discuss the project team members' qualifications for 
engineering, designing, and installing advanced biofuels refineries 
including any relevant certifications by recognized organizations or 
bodies. Provide a list of the same or similar projects designed, 
installed, or supplied and currently operating and with references if 
available; and
    (iv) Describe the advanced biofuels refinery operator's 
qualifications and experience for servicing, operating, and maintaining 
such equipment or projects. Provide a list of the same or similar 
projects designed, installed, or supplied and currently operating and 
with references if available.
    (2) Agreements and permits. All necessary agreements and permits 
required for the project and the status and schedule for securing those 
agreements and permits, including the items specified in paragraphs 
(2)(i) through (vi), must be identified in the application.
    (i) Advanced biofuels refineries must be installed in accordance 
with applicable local, State, and national codes and regulations. 
Identify zoning and code issues, and required permits and the schedule 
for meeting those requirements and securing those permits.
    (ii) Identify licenses where required and the schedule for 
obtaining those licenses.
    (iii) Identify land use agreements required for the project and the 
schedule for securing the agreements and the term of those agreements.
    (iv) Identify any permits or agreements required for solid, liquid, 
and gaseous emissions or effluents and the schedule for securing those 
permits and agreements.
    (v) Identify available component warranties for the specific 
project location and size.
    (vi) Identify all environmental issues, including environmental 
compliance issues, associated with the project.
    (3) Resource assessment. Adequate and appropriate evidence of the 
availability of the feedstocks required for the advanced biofuels 
refinery to operate as designed must be provided in the application. 
Indicate the type and quantity of the feedstock including storage, 
where applicable. Indicate shipping or receiving method and required 
infrastructure for shipping, and other appropriate transportation 
mechanisms. For proposed projects with an established resource, provide 
a summary of the resource.

[[Page 25085]]

    (4) Design and engineering. Authoritative evidence that the 
advanced biofuels refinery will be designed and engineered so as to 
meet its intended purposes, will ensure public safety, and will comply 
with applicable laws, regulations, agreements, permits, codes, and 
standards must be provided in the application. Projects shall be 
engineered by a qualified entity. Biorefineries must be engineered as a 
complete, integrated facility. The engineering must be comprehensive 
including site selection, systems and component selection, and systems 
monitoring equipment. Biorefineries must be constructed by a qualified 
entity.
    (i) The application must include a concise but complete description 
of the project including location of the project; resource 
characteristics, including the kind and amount of feedstocks; 
biorefinery specifications; kind, amount, and quality of the output; 
and monitoring equipment. Address performance on a monthly and annual 
basis. Describe the uses of or the market for the advanced biofuels 
produced by the biorefinery. Discuss the impact of reduced or 
interrupted feedstock availability on the biorefinery's operations.
    (ii) The application must include a description of the project site 
and address issues such as site access, foundations, backup equipment 
when applicable, and the environmental information documents Form RD 
1940-20 and required narrative in the 7 CFR part 1940, subpart G, 
Exhibit H format. Identify any unique construction and installation 
issues.
    (iii) Sites must be controlled by the eligible borrower for at 
least the proposed project life or for the financing term of any 
associated federal loans or loan guarantees.
    (5) Project development schedule. Each significant task, its 
beginning and end, and its relationship to the time needed to initiate 
and carry the project through startup and shakedown must be provided in 
the application. Provide a detailed description of the project timeline 
including resource assessment, project and site design, permits and 
agreements, equipment procurement, and project construction from 
excavation through startup and shakedown.
    (6) Equipment procurement. A demonstration that equipment required 
by the biorefinery is available and can be procured and delivered 
within the proposed project development schedule must be provided in 
the application. Biorefineries may be constructed of components 
manufactured in more than one location. Provide a description of any 
unique equipment procurement issues such as scheduling and