Biorefinery Assistance Guaranteed Loans, 8404-8477 [2011-2473]

Agencies

• DEPARTMENT OF AGRICULTURE
• Rural Business-Cooperative Service
• Rural Utilities Service

[Federal Register Volume 76, Number 30 (Monday, February 14, 2011)]
[Rules and Regulations]
[Pages 8404-8477]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-2473]



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Vol. 76

Monday,

No. 30

February 14, 2011

Part II





Department of Agriculture





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Rural Business-Cooperative Service



Rural Utilities Service



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7 CFR Parts 4279 and 4287



Biorefinery Assistance Guaranteed Loans; Final Rule

Federal Register / Vol. 76 , No. 30 / Monday, February 14, 2011 / 
Rules and Regulations

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DEPARTMENT OF AGRICULTURE

Rural Business-Cooperative Service

Rural Utilities Service

7 CFR Parts 4279 and 4287

RIN 0570-AA73


Biorefinery Assistance Guaranteed Loans

AGENCY: Rural Business-Cooperative Service and Rural Utilities Service, 
USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This interim rule establishes a guaranteed loan program for 
the development and construction of commercial-scale biorefineries and 
for the retrofitting of existing facilities using eligible technology 
for the development of advanced biofuels.

DATES: This interim rule is effective March 16, 2011. Comments must be 
received on or before April 15, 2011.

ADDRESSES: You may submit comments to this rule by any of the following 
methods:
     Federal eRulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
     Mail: Submit written comments via the U.S. Postal Service 
to the Branch Chief, Regulations and Paperwork Management Branch, U.S. 
Department of Agriculture, STOP 0742, 1400 Independence Avenue, SW., 
Washington, DC 20250-0742.
     Hand Delivery/Courier: Submit written comments via Federal 
Express Mail or other courier service requiring a street address to the 
Branch Chief, Regulations and Paperwork Management Branch, U.S. 
Department of Agriculture, 300 7th Street, SW., 7th Floor, Washington, 
DC 20024.
    All written comments will be available for public inspection during 
regular work hours at the 300 7th Street, SW., 7th Floor address listed 
above.

FOR FURTHER INFORMATION CONTACT: Kelley Oehler, Energy Branch, 
Biorefinery Assistance Program, U.S. Department of Agriculture, 1400 
Independence Avenue, SW., Stop 3225, Washington, DC 20250-3201; 
telephone (202) 720-6819. E-mail: kelley.oehler@wdc.usda.gov.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This interim rule has been reviewed under Executive Order (EO) 
12866 and has been determined to be economically significant by the 
Office of Management and Budget. The EO defines a ``significant 
regulatory action'' as one that is likely to result in a rule that may: 
(1) Have an annual effect on the economy of $100 million or more or 
adversely affect, in a material way, the economy, a sector of the 
economy, productivity, competition, jobs, the environment, public 
health or safety, or State, local, or tribal governments or 
communities; (2) Create a serious inconsistency or otherwise interfere 
with an action taken or planned by another agency; (3) Materially alter 
the budgetary impact of entitlements, grants, user fees, or loan 
programs or the rights and obligations of recipients thereof; or (4) 
Raise novel legal or policy issues arising out of legal mandates, the 
President's priorities, or the principles set forth in this EO.
    The Agency conducted a benefit-cost analysis to fulfill the 
requirements of Executive Order 12866. In this analysis, the Agency 
identified potential benefits and costs of the Biorefinery Assistance 
Guaranteed Loan Program to lenders, borrowers, and the Agency. The 
analysis contains both quantitative estimates and qualitative 
descriptions of the expected benefits and costs of the Biorefinery 
Assistance Guaranteed Loan Program. The environmental and energy 
impacts associated with the Biorefinery Assistance Guaranteed Loan 
Program were qualitatively assessed.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act 1995 (UMRA), Public 
Law 104-4, establishes requirements for Federal agencies to assess the 
effects of their regulatory actions on State, local, and tribal 
governments and the private sector. Under section 202 of the UMRA, 
Rural Development 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 the UMRA generally requires Rural Development 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 interim 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.

Environmental Impact Statement

    This renewable energy program under Section 9003 of the Farm 
Security and Rural Investment Act of 2002 (FSRIA) (as amended by 
Section 9001 of the Food, Conservation, and Energy Act of 2008 (2008 
Farm Bill)) has been operating on an interim basis through the issuance 
of a Notice of Funds Availability (NOFA). During this initial round of 
applications, the Agency conducted National Environmental Policy Act 
(NEPA) reviews on each individual application for funding. No 
significant environmental impacts were reported, and Findings of No 
Significant Impact (FONSI) were issued for each approved application. 
Taken collectively, the applications show no potential for significant 
adverse cumulative effects.
    The Agency has prepared a programmatic environmental assessment 
(PEA), pursuant to 7 CFR part 1940, subpart G, analyzing the 
environmental effects to air, water, and biotic resources; land use; 
historic and cultural resources; and greenhouse gas emissions affected 
by the Biorefinery Assistance Guaranteed Loan Program proposed rule. 
The purpose of the PEA is to assess the overall environmental impacts 
of the programs related to the Congressional goal of advancing biofuels 
production for the purposes of energy independence and greenhouse gas 
emission reductions. The impact analyses are national in scope, but 
draw upon site-by-site analysis for each application to the program. 
Site-specific NEPA documents prepared for those facilities funded under 
Sections 9003 and 9004 of the FSRIA in FY 2008 and/or 2009 were 
utilized, as well, to forecast likely impacts under the interim rule. 
The draft PEA was made available to the public for comment on the USDA 
Rural Business-Cooperative Service's Web site on May 3, 2010. No 
comments were received on the draft PEA, and the Agency is preparing to 
publish a Finding of No Significant Impact (FONSI) for the program.

Executive Order 12988, Civil Justice Reform

    This interim rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. In accordance with this rule: (1) All State and 
local laws and regulations that are in conflict with this rule will be 
preempted; (2) no retroactive effect will be given this rule; and (3) 
administrative proceedings in accordance with the regulations of the 
Department of Agriculture's National Appeals Division (7 CFR part 11) 
must be exhausted before bringing suit in

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court challenging action taken under this rule unless those regulations 
specifically allow bringing suit at an earlier time.

Executive Order 13132, Federalism

    It has been determined, under Executive Order 13132, Federalism, 
that this interim rule does not have sufficient federalism implications 
to warrant the preparation of a Federalism Assessment. The provisions 
contained in the 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 government levels.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-612) (RFA) generally 
requires an agency to prepare a regulatory flexibility analysis of any 
rule subject to notice and comment rulemaking requirements under the 
Administrative Procedure Act or any other statute unless the agency 
certifies that the rule will not have an economically significant 
impact on a substantial number of small entities. Small entities 
include small businesses, small organizations, and small governmental 
jurisdictions.
    In compliance with the RFA, Rural Development has determined that 
this action will not have an economically significant impact on a 
substantial number of small entities. The burden for applying for a 
Biorefinery Assistance Guaranteed Loan Program loan to any one borrower 
is estimated to be less than 0.1 percent of the estimated cost of the 
average construction or reconstruction project funded under this 
program. Further, this regulation only impacts those who choose to 
participate in the program.

Executive Order 13211, Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    The regulatory impact analysis conducted for this interim rule 
meets the requirements for Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use, Executive 
Order No. 13211, which states that an agency undertaking regulatory 
actions related to energy supply, distribution, or use is to prepare a 
Statement of Energy Effects. This analysis finds that this rule will 
not have any adverse impacts on energy supply, distribution, or use.

Executive Order 12372, Intergovernmental Review of Federal Programs

    Rural Development guaranteed loans are subject to the Provisions of 
Executive Order 12372, which require intergovernmental consultation 
with State and local officials. Rural Development will conduct 
intergovernmental consultation in the manner delineated in RD 
Instruction 1940-J, ``Intergovernmental Review of Rural Development 
Programs and Activities,'' available in any Rural Development office 
and on the Internet at https://www.rurdev.usda.gov/regs, and in 7 CFR 
part 3015, subpart V.

Executive Order 13175

    United States Department of Agriculture (USDA) will undertake, 
within 6 months after this rule becomes effective, a series of 
regulation Tribal consultation sessions to gain input by elected Tribal 
officials or their designees concerning the impact of this rule on 
Tribal governments, communities, and individuals. These sessions will 
establish a baseline of consultation for future actions, should any be 
necessary, regarding this rule. Reports from these sessions for 
consultation will be made part of the USDA annual reporting on Tribal 
Consultation and Collaboration. USDA will respond in a timely and 
meaningful manner to all Tribal government requests for consultation 
concerning this rule and will provide additional venues, such as 
webinars and teleconferences, to periodically host collaborative 
conversations with Tribal leaders and their representatives concerning 
ways to improve this rule in Indian country.
    The policies contained in this rule would not have Tribal 
implications that preempt Tribal law.

Programs Affected

    The Biorefinery Assistance Guaranteed Loan Program is listed in the 
Catalog of Federal Domestic Assistance Program under Number 10.865.

Paperwork Reduction Act

    The information collection requirements contained in the Notice of 
Funding Availability for the Section 9003 Biorefinery Assistance 
Guaranteed Loan Program published on November 20, 2008, were approved 
by the Office of Management and Budget (OMB) under emergency clearance 
procedures and assigned OMB Control Number 0570-0055. In accordance 
with the Paperwork Reduction Act of 1995, the Agency is now seeking 
standard OMB approval of the reporting requirements contained in this 
interim rule. In the publication of the proposed rule on April 16, 
2010, the Agency solicited comments on the estimated burden. The Agency 
received one comment in response to this solicitation. This information 
collection requirement will not become effective until approved by OMB. 
Upon approval of this information collection, the Agency will publish a 
rule in the Federal Register.
    Title: Biorefinery Assistance Guaranteed Loan Program.
    OMB Number: 0570-NEW.
    Type of Request: New collection.
    Abstract: The collection of information is vital for Rural 
Development to make wise decisions regarding the eligibility of 
projects and borrowers in order to ensure compliance with the 
regulations and to ensure that the funds obtained from the Government 
are used appropriately (i.e., are used for the purposes for which the 
guaranteed loans were awarded). Persons seeking loan guarantees under 
this program will have to submit applications that include specified 
information including, but not limited to, the lender's analysis and 
credit evaluation, financial statements on the borrower, a feasibility 
study, a business plan, a technical assessment, an economic analysis, 
and a description of the borrower's bioenergy experience. The 
information included in applications for loan guarantee will be used to 
determine applicant and project eligibility and to ensure that funds 
are used for projects that are likely to be financially sound.
    Once a project has been approved and the loan has been guaranteed, 
lenders must submit certain reports. Some of these reports are 
associated with the performance of the lender's loan portfolio and 
include both periodic reports on the status of that portfolio and, when 
applicable, monthly default reports. Other reports are associated with 
individual projects and include quarterly construction reports and, 
once a project has been completed, annual reports through the life of 
the guaranteed loan. In addition, lenders are required to conduct 
annual inspections of each completed project.
    The estimated information collection burden hours has not changed 
from the proposed rule, remaining at 2,920 hours.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 4.6 hours per response.
    Respondents: Individuals, entities, Indian tribes, units of State 
or local government, corporations, farm cooperatives, farmer 
cooperative organizations, associations of

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agricultural producers, National Laboratories, institutions of higher 
education, rural electric cooperatives, public power entities, and 
consortia of any of these entities.
    Estimated Number of Respondents: 23.
    Estimated Number of Responses per Respondent: 27.4.
    Estimated Number of Responses: 630.
    Estimated Total Annual Burden on Respondents: 2,920.

E-Government Act Compliance

    Rural Development is committed to complying with the E-Government 
Act, to promote the use of the Internet and other information 
technologies to provide increased opportunities for citizen access to 
Government information and services, and for other purposes.

I. Background

    Rural Development administers a multitude of Federal programs for 
the benefit of rural America, ranging from housing and community 
facilities to infrastructure and business development. Its mission is 
to increase economic opportunity and improve the quality of life in 
rural communities by providing the leadership, infrastructure, venture 
capital, and technical support that enables rural communities to 
prosper. To achieve its mission, Rural Development provides financial 
support (including direct loans, grants, and loan guarantees) and 
technical assistance to help enhance the quality of life and provide 
the foundation for economic development in rural areas.
    Section 9003 of the Farm Security and Rural Investment Act of 2002 
(FSRIA) (as amended by Section 9001 of the Food, Conservation, and 
Energy Act of 2008 (2008 Farm Bill)) provides for financial assistance 
in the form of grants and loan guarantees to assist in the development 
of new and emerging technologies for the development of advanced 
biofuels. At this time, Congress has not appropriated any discretionary 
funding, which would be necessary to fund program grants. Therefore, 
the interim rule only addresses loan guarantees. If and when funds for 
grants are appropriated and received by the Agency, it will be 
necessary for the Agency to promulgate a separate regulation for 
program grants.
    The interim rule establishes the Biorefinery Assistance Guaranteed 
Loan Program to provide loan guarantees for the development, 
construction, or retrofitting of commercial biorefineries using 
eligible technology, where eligible technology is defined as:
    (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.
    On April 16, 2010 [75 FR 20044], the Agency published a proposed 
rule for the Biorefinery Assistance Guaranteed Loan Program. Comments 
were requested on the proposed rule, which are summarized in Section 
III of this preamble. Most of the proposed rule's provisions have been 
carried forward into 7 CFR part 4279, subpart C, and 7 CFR part 4287, 
subpart D, although there have been several significant changes. 
Changes to the proposed rule are summarized in Section II of this 
preamble.
    Interim rule. USDA Rural Development is issuing this regulation as 
an interim rule, effective March 16, 2011. All provisions of this 
regulation are adopted on an interim final basis, are subject to a 60-
day comment period, and will remain in effect until the Agency adopts 
the final rule.

II. Summary of Changes to the Proposed Rule

    This section presents changes from the April 16, 2010, proposed 
rule. Most of the changes were the result of the Agency's consideration 
of public comments on the proposed rule. Some changes, however, are 
being made to clarify proposed provisions. Unless otherwise indicated, 
rule citations refer to those in the interim rule.

A. Highlighted Changes

    The following highlight significant changes to the rule:
     Revised the maximum percent guarantee provisions, 
including adding provisions to allow for a 90 percent guarantee for 
loan amounts of $125 million or less under certain conditions.
     Added refinancing as an eligible project purpose under 
certain conditions.
     Removed location in a rural area as a requirement for 
project eligibility; however, it is included in a scoring criterion in 
order to receive points for that criterion.
     Removed the citizenship requirement for borrowers.
     Revised the minimum retention requirement to 7.5 percent 
of total loan amount.

B. Section Specific Changes

1. Definitions
    A number of definitions were added, revised, or removed.
    The Agency added one definition:
    ``Biobased product'' was added in order to further clarify the 
biorefinery definition.
    The Agency revised several definitions as follows:
     Business plan. The Agency clarified the wording of this 
definition.
     Existing businesses. The Agency clarified the wording of 
this definition.
     Farm cooperative. The Agency revised the definition to be 
generally consistent with the definition being used in the value-added 
producer grant program.
     Feasibility study. The Agency replaced ``capabilities'' 
with ``feasibility'' to clarify the definition.
     Local owner. The Agency revised the rule to remove the 
reference to the feedstock supply area and now defines local owner as 
``an individual who owns any portion of an eligible advanced biofuel 
biorefinery and whose primary residence is located within a certain 
distance from the biorefinery as specified by the Agency in a Notice 
published in the Federal Register.''
     Material adverse change. The Agency revised the definition 
by replacing ``might'' with ``would likely'' jeopardize loan 
performance.
     Project. The Agency corrected the term ``biobased 
byproduct'' to ``biobased product.''
     Technical and economic potential. The Agency added to the 
definition the phrase ``successfully completed'' when referring to the 
12-month operating cycle.
    Lastly, the Agency revised several definitions associated with 
capital ratios to refer to the Federal Deposit Insurance Corporation 
regulations in general.
    The Agency removed several definitions--Agency, byproduct, future 
recovery, immediate family, regulated or supervised lender, and surety.
     The term ``Agency'' was removed from the definitions 
because it is defined in Sec.  4279.2 and does not need to be repeated 
in the interim rule.
     The term ``future recovery'' was removed because the term 
is not used in the interim rule.
     The term ``immediate family'' was removed because the term 
was only used for the citizenship requirement, which has been removed. 
Thus, the term is no longer used in the rule.
     The term ``regulated or supervised lender'' was removed 
because of the revision made to identify eligible lenders.

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     The specific definition for the term ``surety'' was 
removed; the rule now refers to how the term is commonly used in the 
industry.
2. Lender Eligibility Requirements
    The Agency modified Sec.  4279.202(c)(1) to make the definition of 
eligible lender similar, but not identical, to the definition of 
traditional lender in the Business and Industry Guaranteed Loan 
Program. The Agency notes that, under the interim rule, savings and 
loan associations, mortgage lenders, and other lenders (those that are 
not regulated lenders) are not eligible to participate in this program.
    The Agency modified the rule to require that the lender meet 
acceptable levels of capital at the time of application and at the time 
of issuance of loan note guarantee, thereby removing the requirement of 
maintaining acceptable capital levels at all times.
    The Agency also clarified that, if the information to calculate 
these levels of capital is not identified in the Call Reports or Thrift 
Financial Reports, the lender will be required to calculate these 
levels and provide them to the Agency.
    Lastly, the Agency added a provision addressing lenders that are 
under a cease and desist order from a Federal agency. In such 
instances, the Agency will evaluate the lender's eligibility on a case-
by-case basis given the risk of loss posed by the cease and desist 
order.
3. Independent Credit Risk Analysis
    The Agency revised ``$100,000'' to ``$125,000,000.''
4. Conditions of Guarantee
    The Agency revised the rule to indicate that both the guaranteed 
and unguaranteed portions of the entire loan must be secured by a first 
lien and that the Agency may consider a subordinate lien position on 
inventory and accounts receivable for working capital loans if certain 
conditions are met.
    The Agency also clarified that the lender remains bound by all 
obligations under the loan note guarantee, Lender's Agreement, and 
Agency program regulations even if all or a portion of the loan note 
guarantee has been sold to a holder.
    Lastly, the Agency incorporated provisions associated with rights 
and liabilities specific to this program, rather than relying on the 
corresponding provisions in the Business and Industry Guaranteed Loan 
program found at Sec.  4279.72(b), to clarify that having a holder 
purchase part of the loan note guarantee does not increase the coverage 
provided to the lender under the loan note guarantee.
5. Sale or Assignment
    The Agency revised the sale or assignment provisions to rely solely 
of the sale or assignment provisions of the Business and Industry 
Guaranteed Loan program found at Sec.  4279.75.
6. Minimum Retention
    The Agency revised the minimum retention provisions to rely on the 
minimum retention provisions of the Business and Industry Guaranteed 
Loan program found at Sec.  4279.77, except that the lender is required 
to hold 7.5 percent (rather than 5 percent) of the total loan amount in 
its own portfolio.
7. Ineligible Purposes
    As proposed, projects in excess of $1 million that would likely 
result in the transfer of jobs from one area to another and increase 
direct employment by more than 50 employees and projects in excess of 
$1 million that would increase direct employment by more than 50 
employees, if the project would result in an increase in the production 
of goods for which there is not sufficient demand, or if the 
availability of services or facilities is insufficient to meet the 
needs of the business, would have been ineligible purposes, as they are 
in the Business and Industry Guaranteed Loan program. The Agency has 
removed these types of projects as ineligible; that is, such projects 
would be eligible for a guaranteed loan under this program. The Agency 
has determined that to continue excluding such projects is unnecessary 
for this program because the program's primary focus is on the 
development of renewable energy technologies and not on job creation.
8. Fees
    The Agency removed the cross-reference to the Business and Industry 
Guaranteed Loan program and replaced it with provisions specific to 
this program. The only substantive change is the elimination of 
reference to the option to lower the guarantee fee to 1 percent, which 
was never intended to be part of this program.
    The Agency has added provisions that allow it to adjust the 
guarantee fee and the annual renewal fee through the publication of a 
Federal Register notice.
    The Agency has added a 3 percent guarantee fee for loans with a 90 
percent guarantee.
9. Borrower Eligibility
    The Agency removed the citizenship requirement. In addition, the 
Agency clarified that the borrower must have or obtain legal authority 
prior to loan closing.
10. Project Eligibility
    Changes made to project eligibility include:
     Replacing the requirement that the project must be located 
in a rural area with the requirement that the project must be located 
in a State. Note that the project must be located in a rural area to 
receive points under the ``potential for rural economic development'' 
scoring criterion.
     Clarifying that the project must use an eligible feedstock 
for the production of advanced biofuels and biobased products (at 
proposal, only advanced biofuels was identified) to be consistent with 
the authorizing legislation.
     Revising the proposed requirement that ``more than 70 
percent of the revenue generated by the biorefinery must be from the 
sale of advanced biofuel'' to now require that the majority of the 
production generated by the biorefinery must be advanced biofuels. If 
the biorefinery produces biobased products and, if applicable, 
byproduct(s) with an established BTU content, majority biofuel 
production will be based on BTU content of the advanced biofuel, the 
biobased product, and byproduct. Alternatively, if there is no 
established BTU value for the biobased product or the byproduct 
produced, then majority biofuel production would be based on output 
volume of the advanced biofuel, the biobased product, and, if 
applicable, the byproduct.
     Adding a provision that the advanced biofuel must be sold 
as a biofuel unless otherwise approved by the Agency and determined to 
be in the best financial interests of the government.
     Revising the rule to include any organic matter that is 
available on a renewable or recurring basis from non-Federal land or 
eligible tribal land, including municipal solid waste consisting of 
renewable biomass, biosolids, treated sewage sludge, and byproducts of 
the pulp and paper industry, as eligible feedstock.
     Clarifying that an advanced biofuel that is converted to 
another form of energy for sale will still be considered an advanced 
biofuel.
11. Guaranteed Loan Funding
    The Agency has made several changes in this section, including:
     Clarifying that the borrower needs to provide the 
remaining 20 percent from other non-Federal sources to complete the 
project.

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     Revising the loan guarantee amounts associated with the 
maximum percent guarantees;
     Allowing a maximum guarantee of 90 percent for loan 
requests of $125 million or less and identifying the conditions under 
which the Agency may issue a 90 percent guarantee.
     Adding a provision that loans made with the proceeds of 
any obligation the interest on which is excludable from income under 
the Internal Revenue Code are ineligible.
12. Subordination of Lien Position
    The Agency moved this provision to the servicing section and 
corrected the cross-reference (from Sec.  4279.123 to Sec.  4287.123).
13. Interest Rates
    In addition to removing the proposed provisions associated with 
blended rates and the 1 percent interest rate cap from the interim 
rule, the Agency has significantly revised this section to now rely on 
the interest provisions found in the Business and Industry Guaranteed 
Loan program at Sec.  4279.125, with several exceptions:
     The rate on the unguaranteed portion of the loan cannot 
exceed the rate on the guaranteed portion of the loan by more than 500 
basis points;
     Variable rate loans will not provide for negative 
amortization nor will they give the borrower the ability to choose its 
payment among various options; and
     Both the guaranteed and unguaranteed portions of the loan 
must be amortized over the same term.
    In addition, the interest rates provisions found in the Business 
and Industry Guaranteed Loan program at Sec.  4287.112 also apply to 
this program.
14. Terms of Loan
    The maximum repayment period has been revised from ``20 years or 85 
percent of the useful life of the project, as determined by the Agency, 
whichever is less'' to ``20 years or the useful life of the project, as 
determined by the lender and confirmed by the Agency, whichever is 
less.''
    The Agency also removed the cross-reference to Sec.  4279.126(d) 
and inserted corresponding text specific to this program (see Sec.  
4279.232(d)).
15. Credit Evaluation
    The Agency made several changes to the provisions for demonstrating 
the borrower's equity. One change allows equipment and qualified 
intellectual project (in addition to real property as was proposed) to 
be used to meet the equity requirement, but clarifying that this 
provision applies to only existing biorefineries and not to new 
biorefineries. In addition, the Agency clarified that equity cannot 
include other direct Federal funding.
    The Agency clarified that the project equity must be demonstrated 
at the time the loan is closed.
    With regard to collateral, the Agency added provisions that it may 
consider, for both existing and new biorefineries, the value of 
qualified intellectual property, arrived at in accordance with GAAP 
standards and subject to discounting. The value of intellectual 
property may not exceed 30 percent of the total value of all 
collateral.
16. Guarantee Applications
    i. Application submittal, deadlines, and process. Reference to 
paper copies has been replaced with reference to the use of the annual 
Federal Register notice to identify the applicable method(s) of 
application submittal.
    ii. Lender's analysis and credit analysis. The Agency added a 
provision requiring the lender to identify whether the loan note 
guarantee is requested prior to construction or after completion of the 
construction of the project; revised the requirement that the required 
personal credit report be from an ``acceptable'' credit reporting 
company to an ``Agency-approved'' credit reporting company; added a 
requirement that personal credit reports are required from key 
employees of the borrower; added a provision to allow the Agency to 
obtain personal credit reports when the borrower is a corporation 
listed on a major stock exchange; and deleted the provision that stated 
credit reports are not required for elected and appointed officials 
when the borrower is a public body or non-profit corporation.
    iii. Feasibility study. Several changes were made to the contents 
of the feasibility study as summarized in the following table. Note 
that only elements that were changed are shown in the table.

------------------------------------------------------------------------
         Feasibility area                         Change(s)
------------------------------------------------------------------------
Economic..........................   Added feedstock risks.
                                     Revised documentation of
                                     woody biomass feedstock to apply
                                     only to woody biomass feedstock
                                     sourced from National Forest system
                                     lands or public lands.
                                     Added ``or sold to'' when
                                     referring to biobased by-products
                                     and producer associations and
                                     cooperatives.
Market............................   Redefined risks to address
                                     competitive threats and advantages
                                     and specific market risks.
Technical.........................   Removed ``any constraints
                                     or limitations in the financial
                                     projections and any other facility
                                     or design-related factors that
                                     might affect the success of the
                                     enterprise.''
                                     Under Risk Related to:
                                     added ``Design-related factors that
                                     may affect project success.''
Financial.........................   Added reference to ``uses
                                     of project capital.''
                                     Revised the provision of
                                     project balance sheets, income and
                                     expense statement, and cash flow
                                     statements from 3 years to over the
                                     useful life of the project.
Management........................   Added biofuel production,
                                     acquisition of feedstock, and
                                     marketing and sale of off-take to
                                     the list of areas to be covered
                                     when describing the borrower and
                                     management's previous experience.
                                     Added risks related to
                                     management strengths and
                                     weaknesses.
------------------------------------------------------------------------
Note: No changes were made to: Executive Summary and Qualifications.

    iv. Economic analysis. The elements of the economic analysis have 
been incorporated in the economic feasibility and financial feasibility 
sections of the feasibility study and proposed Sec.  4279.261(i) has 
been removed from the rule as a separate provision.
    V. Scoring information. The Agency added a paragraph requiring that 
the application must contain information in a format that is responsive 
to the scoring criteria.
17. Lender Certification
    The lender is now required to certify that ``the lender concludes 
that the project has technical merit'' rather than certify that ``the 
project is able to demonstrate technical merit.''

[[Page 8409]]

18. Scoring Criteria
    The Agency revised the date it will score each completed 
application it receives from June 1 to May 1 in the fiscal year in 
which the application is received.
    The Agency also made numerous changes to the criteria it will use 
to score applications. These changes are summarized in the following 
table. Note that only criteria that were changed are shown in the 
table.

------------------------------------------------------------------------
             Criterion                            Change(s)
------------------------------------------------------------------------
Borrower has established a market.   Added requirement for the
                                     advanced biofuel to meet an
                                     applicable renewable fuel standard
                                     in order to be awarded points.
                                     Reduced the percent
                                     commitment from 60 to 50 percent.
                                     Increased points from 5 to
                                     10.
Location of biorefinery relative     Revised to read ``any other
 other similar biorefineries.        similar advanced biofuel
                                     facilities.''
Use of feedstock not previously      No changes were made to
 used in the production of           this criterion.
 advanced biofuels.
Working with producer associations   Corrected example.
 and cooperatives.                   Instituted a two-tier
                                     system that begins awarding points
                                     at a 30 percent threshold.
                                     To be awarded points, must
                                     meet one of the three provisions,
                                     not all three as proposed.
                                     Replaced ``advanced
                                     biobased byproducts'' with
                                     ``biobased products''.
Level of financial participation     Reduced points from 20 to
 by the borrower.                    15.
Impacts on resource conservation,    Increased maximum points
 public health, and environment.     from 5 to 10 and redistributed the
                                     points.
                                     Added examples to each of
                                     the three impact areas.
                                     Added provision to deduct 5
                                     points if feedstock can be used for
                                     human or animal consumption.
Significant negative impacts on      Increased points from 5 to
 existing facilities.                10.
                                     Added provision that if the
                                     feedstock is wood pellets, no
                                     points would be awarded under this
                                     criterion.
Rural economic development           Added provision that the
 potential.                          project be located in a rural area
                                     to be awarded points under this
                                     criterion.
                                     Removed reference to the
                                     median household wage in the State
                                     such that only the County median
                                     household wage is used in awarding
                                     points.
                                     Increased points from 5 to
                                     10.
Level of local ownership..........   Decreased points from 15 to
                                     5.
Project replication...............   Increased points from 5 to
                                     10.
Use of feedstock for human or        Removed as a separate
 animal consumption deduction.       criterion and incorporated
                                     provision for deducting points
                                     under the ``Impact on resource
                                     conservation, public health, and
                                     environment'' criterion.
Use of technology, system, or        Decreased points from 15 to
 process not in operation in the     5.
 fiscal year.
Applications that promote            Added provision to award
 partnerships and other activities   Administrator bonus points.
 that further the purpose of the
 program as stated in the
 authorizing legislation.
------------------------------------------------------------------------

19. Ranking of Applications
    The Agency modified when it will rank applications and when 
applications are due for each of the two rankings. The Agency also 
modified slightly the process that will be used to rank applications, 
which includes allowing an application to be competed in two 
consecutive competitions. This has the effect of allowing applications 
submitted during the second application period of a fiscal year to be 
carried over to the next fiscal year. Conforming changes were made in 
the section addressing ranked applications not funded.
20. Conditions Precedent to Issuance of Loan Note Guarantee
    The Agency added to the introductory text that the lender can 
request the guarantee prior to construction, but must still certify to 
all conditions in this section. The Agency also added a new requirement 
that the lender certify that the borrower has provided the equity in 
the project identified in the conditional commitment.
21. Requirements After Project Construction
    The Agency added a requirement to report on the actual amount of 
biobased product and, if applicable, byproducts produced.
22. Servicing
    The Agency is allowing the financial statements to be submitted 
within 180 days rather than the 120 days required under Sec.  
4287.107(d).
    The Agency made a conforming change in Sec.  4287.307(d) that, for 
working capital loans, the Agency may consider a subordinate lien 
provided it is consistent with the conditional provisions specified in 
Sec.  4279.202(i)(1).
    The Agency determined that the interest rate adjustment provisions 
of Sec.  4287.112(a)(2) should not apply to this program and has 
revised the rule to exclude those provisions.
    As noted earlier, the Agency moved the provisions concerning 
subordination of lien position to this section (see Sec.  4287.307(g)).
    The Agency revised the transfer and assumption provisions to cross-
reference this rule rather than the Business and Industry Guaranteed 
Loan rule.
    The Agency revised the default by borrower provisions by removing 
the cross-reference to the corresponding Business and Industry 
Guaranteed Loan program provisions and inserting text specific to this 
program. This change was made to correct an incorrect cross-reference.
    The Agency revised the liquidation provisions to correct an 
incorrect cross-reference in Sec.  4287.157(d)(13) concerning 
appraisals.
23. Fiscal Year 2009 and Fiscal Year 2010 Loan Guarantees
    Prior to this interim rule, applications were processed and 
guaranteed loans were serviced according to the provisions in the 
November 20, 2008 (73 FR 70544), March 12, 2010 (75 FR 11840), or the 
May 6, 2010 (75 FR

[[Page 8410]]

25076) Federal Register notice, as applicable. Because of the changes 
the Agency has made to the servicing of loans guaranteed under the 
Biorefinery Assistance Guaranteed Loan Program, there may be entities 
that would prefer to have a guaranteed loan serviced under the 
provisions of the interim rule rather than under the provisions in the 
three Federal Register notices pursuant to which their guaranteed loans 
were made. The Agency has determined that such entities should be 
afforded the opportunity to access the servicing provisions of the 
interim rule. Therefore, the Agency has added a new provision to this 
effect in the interim rule.

III. Summary of Comments and Responses

    The proposed rule was published in the Federal Register on April 
16, 2010 (75 FR 20044) with a 60-day comment period that ended June 15, 
2010. Comments were received from 42 commenters yielding 352 individual 
comments on the proposed rule, which have been grouped into categories 
based on similarity. Commenters included biorefinery owner/operators, 
community development groups, industry and trade associations, 
investment banking institutions, Rural Development personnel, and 
individuals. As a result of some of the comments, the Agency made 
changes in the rule. The Agency sincerely appreciates the time and 
effort of all commenters. Responses to the comments on the proposed 
rule are discussed below.

Requested Comments-- a. Preapplications

    Comment: Two commenters state that a preapplication process that 
serves as a screening process could be very helpful to all parties. One 
of the commenters states that considerable effort is required to 
develop an application package that may ultimately not score high 
enough to meet eligibility requirements. In addition, lenders have to 
commit to the application process with no reference as to how the 
Agency will view the project. One option would be to move the 
feasibility study (Sec.  4279.261) and the evaluation scoring (Sec.  
4279.265) into a preapplication process. Screening and filtering out 
ineligible or otherwise low scoring projects would streamline the 
overall process and improve program efficiencies.
    One commenter states that the application requirements, which 
appear to be rather lengthy and burdensome, contain elements that 
should be required by any prudent commercial loan committee reviewing 
the loan itself. The commenter believes a preapplication process for 
the program will only be of benefit to lenders and borrowers if it 
includes a sign-off by the Agency as to completeness of the 
application. The commenter believes it would be a waste of time to 
review a project for acceptability and then review it again for 
guarantee issuance; the review of a partial and then complete 
application would only serve to slow down a process that we are seeking 
to expedite.
    One commenter believes that a preapplication process would only add 
another step in the program and would not further the intent and 
effectiveness of the program. Similarly, another commenter states that 
a preapplication should not be required as it increases the burden of 
required paperwork.
    One commenter recommends that, rather than preapplications, 
specialists be available to assist in evaluating how a given project 
application would likely score against the program criteria.
    One commenter encourages the Agency to consider a pre-application 
process similar to the two-phase process employed by the Department of 
Energy in its current solicitation (DE-FOA-0000140) for Title XVII loan 
guarantees, the lack of which the commenter identifies as an obstacle 
for applying for assistance. This process would be beneficial to the 
extent the ``preapplication process'' is similar to the two-phase 
process that the U.S. Department of Energy (DOE) is using in its 
current solicitation for Title XVII loan guarantees. Requiring less 
than a ``full-blown'' application in Phase I so that the Agency can 
determine eligibility and ``invite'' those applicants with a reasonable 
likelihood of success to apply in Phase II would relieve some burdens 
from applicants. Phase I could include a basic application, a letter 
commitment from the borrower to pursue Phase II if invited to apply and 
the applicant (lender) to lend a specified amount to the project if the 
Agency agrees to guarantee the loan (subject to other customary 
conditions precedent), along with an overview of the project reflective 
of the scoring criteria. This would reduce the level of diligence that 
lenders would have to conduct for Phase I and shift this diligence to 
Phase II when the success of an application is more likely. This may 
entice additional qualified lenders to participate and result in the 
Agency receiving more Phase I applications. A phased application 
process would also reduce the burden on the borrower, who, prior to 
issuance of the loan (or a greater likelihood as evidenced by an 
invitation to submit a Phase II application), may choose not to apply 
and instead allocate limited personnel resources to other tasks.
    Response: The Agency has decided not to implement a preapplication 
requirement. Because the information that would be required in the 
preapplication would be similar to that in a formal application, a 
preapplication would be duplicative and add further burden to the 
lender and Agency. The Agency can meet with the lender/potential 
borrower prior to application submission to discuss the scoring 
criteria and informally review the proposal and application material 
completed to date.
    Comment: One commenter suggests that a qualification form be 
written and posted on the Agency Web site that would be accessible to 
all. The commenter recommends that such a form would contain, at a 
minimum, scoring criteria; equity requirements and detailed examples of 
allowable equity; eligible borrowers; eligible technologies; eligible 
uses of loan proceeds; and approval timelines. The commenter also 
suggests that a blog page be implemented to make available questions 
and answers, new information, comments, and suggestions on an 
interactive basis.
    Response: The rule provides applicable eligibility criteria and so 
no changes were made to the rule based on this comment. The Agency is 
currently revising the USDA Web site and will consider the suggestions 
offered by the commenter. The Agency will also consider preparing an 
application guide.
    Comment: One commenter recommends implementing a pre-application 
process that does not require a lender-of-record. The first hurdle for 
participation in the section 9003 program is convincing a lender to 
commit resources to a project for due diligence, feasibility studies, 
term sheet development, and filing of an application. The program 
requirements are not conducive to lenders, particularly in light of the 
inherent risks associated with first-of-kind commercial advanced 
biofuel projects. Applications from several companies are being held 
back simply because a lender-of-record could not be found to begin the 
process. The structure that the Agency has created is counter to how 
private debt transactions are generally arranged. Typically, an 
investment bank represents the company/project and approaches lenders 
to underwrite the loans. Then, the lender will conduct extensive due 
diligence on the project and decide whether or not to lend and

[[Page 8411]]

on what terms. The proposed structure, however, requires the lender to 
be identified from the beginning, without any indication from the 
Agency as to whether or not there will be a guarantee from the Agency.
    The commenter recommends phasing in applications in two parts as 
follows:
    Part I (Pre-application)--The investment bank representing the 
project submits an application (similar to the current application) 
along with the project company. The Part I application contains the 
level of due diligence required by the Agency and gives the Agency 
comfort that an accredited, U.S. Securities and Exchange Commission 
(SEC)-regulated entity is representing the project and attesting to the 
project's attributes and risks. The Agency reviews that application and 
makes a determination, based on its review, whether a project should 
receive a ``Letter of Intent'' to proceed to Part II.
    Part II--Once a Letter of Intent is issued, the project then seeks 
a lender for the guaranteed portion of the debt and a lender/investor 
for the unguaranteed portion of the debt. The latter is going to be the 
key participant and the one who will conduct a significant amount of 
due diligence to decide whether or not to take the risk on investing/
lending for the unguaranteed portion of the debt. The result of that 
due diligence and a decision to invest should then be submitted to the 
Agency as a Part II ``application,'' which is really more of a 
collection of due diligence findings. The company and the original 
investment bank could even certify as to its accurateness and then the 
Agency can review that final deliverable prior to issuing a guarantee 
and closing the transaction.
    The commenter recognizes that a potential Agency concern is that 
the appropriate level of due diligence would not be conducted unless a 
lender is on the hook for some portion of the unguaranteed portion of 
the loan. However, the fact that there is an unguaranteed note means 
that an investor or lender will do a tremendous amount of due diligence 
prior to agreeing to lend/invest in the unguaranteed portion, which is 
a condition precedent for the Agency to issue a final loan guarantee 
and close a deal. If the Agency's concern is that proper due diligence 
is being done, the Agency should be confident that it will be done 
prior to the closing of the transaction and the issuance of a loan 
guarantee, because there is an unguaranteed portion of the debt that 
has to be placed. But by requiring the ``Lender of Record,'' as defined 
to mean the holder of a portion of the unguaranteed debt, to conduct 
all of that due diligence up front is both unnecessary and unfeasible 
in this market. To protect the Agency from outstanding conditional 
commitments, without the ability to close on the guarantee, a 6-month 
time limit could be placed on submitting a Part II application.
    Response: With regard to a pre-application process, for the reasons 
noted in an earlier response, the Agency is not implementing a pre-
application process.
    As a matter of practice, the Agency is available to meet with 
potential borrowers and/or lenders prior to the submittal of an 
application for a specific project.
    The Agency further requires that a formal application be submitted 
from an eligible lender. From the formal application forward, the 
eligible lender will be the primary point of contact for the project 
with the Agency.

Requested Comments--b. Feedstock

    Comment: One commenter recommends removing the restriction, ``no 
corn feedstock,'' from tandem USDA and DOE programs in the instance of 
biobased chemicals, products, and materials only. The commenter states 
that corn has long given the U.S. a competitive advantage in the 
biofuel industry and that it may be our country's only advantage in the 
clean energy sector. The Agency should not eliminate the advantage of a 
highly efficient industrial product, engineered specifically for use in 
industry and not for food consumption. The Agency should, instead, 
advocate for any advantage in reaching our country's goals to achieve 
both renewable fuel standards and U.S. government biobased product 
procurement program goals.
    One commenter believes that feedstock currently used for the 
production of food, other on-site energy production, and in other 
industries should not be diverted to new energy production, and that 
the current proposal to exclude cellulosic feedstock and ``corn kernel 
starch'' is sound and reasonable, and fits within the Agency's 
guidelines, purpose, and intent.
    Response: The Agency notes that the exclusion of corn kernel starch 
is a statutory requirement and cannot be changed by this regulation. 
However, cellulosic feedstock is eligible under this program.
    Comment: One commenter believes that all biorefineries using any 
eligible feedstock should be eligible for the program because the 
purpose of this program is the creation of advanced biofuel 
biorefineries and limiting feedstock eligibility would not further the 
program's purposes.
    One commenter recommends allowing byproducts from pulp and paper if 
they can be upgraded to higher value products compared to power 
generation, and scoring them equally to other feedstock. Another 
commenter also recommends that byproducts from the paper and pulp 
industry be eligible, if the byproducts meet the criteria of not being 
consumed in a higher value use.
    Response: The program allows for a variety of feedstock. The 
feedstock must be renewable biomass, other than corn kernel starch, as 
defined in the statute. The statute requires that the materials, pre-
commercial thinnings, or invasive species from National Forest System 
land or public lands cannot be used for higher value products. This 
``higher value'' criterion does not apply to byproducts of the paper 
and pulp industry.
    Comment: Six commenters note that the proposed rule limits the 
types of feedstock that can be used to produce biofuels under the 
program. The House Conference Report for the 2008 Farm Bill--House 
Report 110-627, p. 1048, lines 3-8--specifically provides that: 
``Examples of lignocellulosic or hemicellulosic matter that is 
available on a renewable or recurring basis include dedicated energy 
crops and trees, wood and wood residues, plants, grasses, agricultural 
residues, fibers, animal wastes and other waste materials, and 
municipal solid wastes.'' The commenters believe that the Conference 
Managers undoubtedly intended that municipal solid waste can be used as 
a feedstock and state that the Agency has chosen to ignore this letter. 
Instead, the Agency notes in the proposed rule: ``The Agency believes 
that the statute clearly defines eligible feedstock and no further 
clarification is needed in the proposed rule.''
    The commenters believe that the public interest is not served by 
limiting the number and types of technologies that can be used to build 
biorefineries, or in limiting the types of feedstock that are available 
for use and can provide an economic benefit to rural America. The 
commenters urge the Agency to modify the proposed rule to specifically 
state that municipal solid waste can be used as a feedstock, in 
conformity with the express intent of the House Conference Report for 
the 2008 Farm Bill.
    One commenter also recommends stating that municipal solid waste 
can be used as a feedstock and treating municipal solid waste materials 
as a

[[Page 8412]]

homogeneous feedstock eligible to be used in biofuels production, 
consistent with standard recycling practices.
    One commenter recommends including biosolids, or treated sewage 
sludge and its byproducts, as an eligible feedstock, and that 
facilities producing advanced biofuels, solid and liquid, from 
biosolids be allowed to apply for program funds.
    One commenter recommends including all biodegradable solid wastes 
to further expand the types of feedstock that can be utilized.
    One commenter recommends expanding the traditional definition of 
biomass to take advantage of new technologies that convert additional 
organic matters into energy--such as biosolids. Such an expanded 
definition of ``renewable biomass'' would take account of population 
growth in our rural communities and the environmental impacts of the 
traditional methods of biosolids disposal on such rural communities. 
Additionally, the Agency would be encouraging the recycling and reuse 
of a substantial renewable organic feedstock--biosolids, further 
expanding our nation's sources of energy. Specifically, the commenter 
proposes that the definition of ``renewable biomass'' be expanded as 
follows to include: ``(iii) Renewable waste materials and byproducts 
resulting from the treatment of sewage, including biosolids, fats, 
oils, and grease and other byproducts.''
    Similarly, one commenter recommends expanding the definition of 
``Advanced biofuel'' as follows to include: ``(iii) Biofuel (solid or 
liquid) derived from waste material, including crop residue, other 
vegetative waste material, animal waste, food waste, yard waste, and 
treated sewage waste, residues and byproducts.'' According to the 
commenter, specifically including biosolids in the definition of 
``renewable biomass'' as an eligible feedstock, and qualifying the 
definition of ``advanced biofuels'' to include treated human sewage 
waste materials, will encourage the wide-spread adoption of sewage-to-
energy technologies and further efforts by Congress and the 
Administration to develop all sources of renewable energy and create 
jobs in green technologies.
    One commenter states there should be no restriction on feedstock 
used and that the definition of feedstock needs to be expanded to 
include municipal sludge as an acceptable feedstock. The commenter 
states that, with the current need and demand for biofuels, it is 
imperative that there should not be a restriction on the type of 
feedstock used. In addition to producing advanced biofuels in a 
sustainable, efficient manner, it is imperative that waste materials be 
used to produce other advanced products and be utilized in the greatest 
way to achieve energy production and reduce greenhouse gases (GHG).
    Response: The Agency partially agrees with the commenters. The 
Agency has revised the rule to clarify that municipal solid waste is an 
eligible feedstock, but only to the extent that it meets the statutory 
definition of renewable biomass. It is unlikely that homogeneous, 
unsegregated municipal solid waste would meet this definition. The 
Agency has also revised the rule to include as eligible feedstock any 
organic matter that is available on a renewable or recurring basis from 
non-Federal land or eligible tribal land, including biosolids, treated 
sewage sludge, and byproducts of the pulp and paper industry. The 
Agency notes that ``black liquor,'' a byproduct of the pulp and paper 
industry, is not an eligible feedstock, because it includes inorganic 
material and, therefore, does not meet the definition of renewable 
biomass.
    Comment: One commenter states that their technology is 
complementary to recycling and will not use paper that is commonly 
recycled. However, if paper is mixed with municipal solid waste instead 
of being collected separately, it cannot be recycled and should, thus, 
be considered a waste material for the production of biofuels. 
Therefore, the commenter urges the Agency to broadly define waste 
material, consistent with common recycling practices. Further, the 
commenter requests that the Agency not establish separate compliance 
obligations for various component parts of the waste stream, such as 
paper. The commenter, instead, recommends that the Agency provide 
additional guidance on the eligibility of paper, so that soiled paper, 
which is not recyclable, be included in the definition of waste 
material.
    Response: The Agency considers soiled paper mixed with other 
organic municipal solid waste to be eligible renewable biomass. In 
Sec.  4279.228(c), the phrase ``consisting of renewable biomass'' was 
added after the term ``municipal solid waste'' in the description of 
eligible feedstocks.
    Comment: One commenter encourages the Agency to refrain from 
limiting feedstock eligibility for the program unless a particular 
feedstock is prohibited by Section 9003. The commenter agrees that 
``the statute clearly defines eligible feedstock and no further 
clarification is required.'' The commenter states that both Section 
9001(3) and 9001(12) of the 2008 Farm Bill contain lists of feedstock 
that are included, but that these lists should not be construed as 
limiting these definitions to those feedstock listed, but rather as 
examples of the term being defined.
    The commenter asserts that any fuel derived from algae, whether 
blue-green, cyanobacteria, or seaweeds, meets the definition of 
``advanced biofuel'' in all respects, perhaps limited only by Section 
9001(12)(B). Algae are not corn starch, and it is explicitly included 
as an example of ``renewable biomass.'' The commenter would object to 
any efforts by the Agency or other stakeholders to exclude algae by 
administrative discreti