Rural Energy for America Program, 21110-21167 [2011-8460]

Agencies

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

[Federal Register Volume 76, Number 72 (Thursday, April 14, 2011)]
[Rules and Regulations]
[Pages 21110-21167]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-8460]



[[Page 21109]]

Vol. 76

Thursday,

No. 72

April 14, 2011

Part II





Department of Agriculture





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Rural Business-Cooperative Service



Rural Utilities Service



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7 CFR Part 4280



Rural Energy for America Program; Final Rule

Federal Register / Vol. 76 , No. 72 / Thursday, April 14, 2011 / 
Rules and Regulations

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DEPARTMENT OF AGRICULTURE

Rural Business-Cooperative Service

Rural Utilities Service

7 CFR Part 4280

RIN 0575-AA76


Rural Energy for America Program

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

ACTION: Interim rule with request for comments.

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SUMMARY: The Rural Business-Cooperative Service (Agency) is 
establishing an interim rule for the Rural Energy for America Program 
(REAP), which is authorized under the Food, Conservation, and Energy 
Act of 2008. This interim rule modifies the existing grant and 
guaranteed loan program for renewable energy systems and energy 
efficiency improvements. In addition, it adds a grant program for 
feasibility studies for renewable energy systems and a grant program 
for energy audits and renewable energy development assistance, as 
provided in the Food, Conservation, and Energy Act of 2008.

DATES: This interim rule is effective April 14, 2011. Written comments 
on this interim rule must be received on or before June 13, 2011.

ADDRESSES: You may submit comments on this interim 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: Diane Berger, Energy Branch, U.S. 
Department of Agriculture, 1400 Independence Avenue, SW., Stop 3225, 
Washington, DC 20250-3201; telephone (202) 260-1508. E-mail: 
diane.berger@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 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 EO 12866. In this analysis, the Agency identifies 
potential benefits and costs of REAP to lenders, borrowers, and the 
Agency. The analysis contains quantitative estimates of the burden to 
the public and the Federal government and qualitative descriptions of 
the expected economic, environmental, and energy impacts associated 
with REAP.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 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

    Under this program, the Agency conducts a National Environmental 
Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et seq., review for each 
application received. To date, no significant environmental impacts 
have been reported, and Findings of No Significant Impact (FONSI) have 
been issued for each approved application. Taken collectively, the 
applications show no potential for significant adverse cumulative 
effects.
    This document has been reviewed in accordance with 7 CFR part 1940, 
subpart G, ``Environmental Program.'' Rural Development has determined 
that this action does not constitute a major Federal action 
significantly affecting the quality of the human environment, and in 
accordance with NEPA, an Environmental Impact Statement is not 
required. Grant and guaranteed loan applications will be reviewed 
individually to determine compliance with NEPA.

Executive Order 12988, Civil Justice Reform

    This interim rule has been reviewed under EO 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 to 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 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 EO 13132, 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

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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, while mostly affecting small entities, will not have a 
significant economic impact on a substantial number of these small 
entities. Rural Development made this determination based on the fact 
that this regulation only impacts those who choose to participate in 
the program. Small entity applicants will not be affected to a greater 
extent than large entity applicants.

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 EO 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 interim rule will not have any adverse impacts on energy 
supply, distribution, or use.

Executive Order 12372, Intergovernmental Review of Federal Programs

    This program is not subject to the provisions of EO 12372, which 
require intergovernmental consultation with State and local officials.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    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 will not have Tribal 
implications that preempt Tribal law.

Programs Affected

    The Rural Energy for America Program is listed in the Catalog of 
Federal Domestic Assistance under Number 10.868.

Paperwork Reduction Act

    The information collection requirements contained in this interim 
rule have been approved by the Office of Management and Budget (OMB) 
under three separate information collections. The information 
collection requirements associated with renewable energy system and 
energy efficiency improvement grants and guaranteed loans, as covered 
in this Interim Rule, has been approved by OMB under OMB Control Number 
0570-0050. The information collection requirements associated with 
energy audit and renewable energy development assistance grants and 
with renewable energy feasibility study grants have been approved by 
OMB under OMB Control Number 0570-0059 and OMB Control Number 0570-
0061, respectively.
    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 that the funds 
obtained from the Government are used appropriately (e.g., used for the 
purposes for which the guaranteed loans were awarded). The type of 
information required depends on the type of financial assistance being 
sought.

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.
    In response to the Farm Security and Rural Investment Act of 2002 
(FSRIA), which established the Renewable Energy Systems and Energy 
Efficiency Improvements Program under Title IX, Section 9006, the 
Agency promulgated a rule (70 FR 41264, July 18, 2005) establishing the 
RES and EEI program (7 CFR part 4280, subpart B) for making grants, 
loan guarantees, and direct loans to farmers and ranchers (agricultural 
producers) or rural small businesses to purchase renewable energy 
systems and make energy efficiency improvements. Renewable energy 
sources eligible for funding included bioenergy, anaerobic digesters, 
electric geothermal, direct geothermal, solar, hydrogen, and wind.
    Section 9001 of the Food, Conservation, and Energy Act of 2008 
(2008 Farm Bill) amended Title IX of the FSRIA. Under the 2008 Farm 
Bill and Section 9007 of the amended FSRIA, the Agency is authorized to 
continue providing to agricultural producers and rural small businesses 
loan guarantees and grants for the development and construction of RES 
and EEI projects. In addition to the current set of renewable energy 
projects eligible for funding, the 2008 Farm Bill expands the program 
to include two new renewable energy technologies: hydroelectric and 
ocean energy. Further, the 2008 Farm Bill authorizes the Agency to 
provide grants specifically for energy audits, renewable energy 
development assistance, and RES feasibility studies. This newly 
expanded program is referred to as REAP, which continues the Agency's 
assistance to the adoption of both renewable energy systems and energy 
efficiency improvements through Federal government loan guarantees and 
grants.
    REAP has been operating since 2005 under 7 CFR part 4280, subpart 
B, and, since the 2008 Farm Bill, through a series of Federal Register 
notices implementing the provisions in the 2008 Farm Bill for RES 
feasibility studies, energy audits, and renewable energy development 
assistance. For the RES feasibility studies, these notices were 
published on May 26, 2009 (74 FR 24769) and August 6, 2010 (75 FR 
47525). For energy audits and renewable energy development assistance, 
these notices were published on March 11,

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2009 (74 FR 10533) and May 27, 2010 (75 FR 29706).
    This regulation establishes a consolidated REAP program by 
including each part of the program in a single subpart. Up to now, only 
the RES and EEI grant and guaranteed loan program requirements have 
been implemented under 7 CFR part 4280, subpart B and, for requirements 
established by the 2008 Farm Bill, through Federal Register notices. 
The requirements for RES feasibility study grants and for energy audit 
and renewable energy development assistance grants have been 
implemented through a series of Federal Register notices. It is, and 
has been, the Agency's intent to consolidate each of these programs 
into one REAP program.
    Given the history of the implementation of this program, as 
described above, it is important to immediately implement a regulation 
in an effort to signal full implementation of REAP. Since 2002, the 
Agency, through its operation of the program, has developed experience 
regarding how this authority can be used to address renewable energy 
and energy efficiency issues facing agricultural producers and rural 
small businesses. The interim rule responds to these lessons learned. 
In addition, in determining to publish this regulation as an interim 
rule, the Agency is balancing the interests of not forestalling the 
implementation and administration of the program while it develops 
program regulations versus its desire to obtain public comment. For 
these reasons, the Agency chose to publish this as an interim rule as 
opposed to publishing it as a proposed rule with a separate notice of 
funding availability for the Fiscal Year 2011 funding cycle as it has 
done in previous fiscal years. By publishing an interim rule, the 
Agency is able to obtain public comment regarding the operation of the 
program for Fiscal Year 2011. The Agency believes that this approach is 
in the best interest of the public.
    Following the publication of this interim rule, the Agency will 
propose and promulgate a subsequent rule for REAP to replace this 
interim rule.
    Interim rule. USDA Rural Development is issuing this regulation as 
an interim rule, effective April 14, 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. Development of the Interim Rule for REAP

    As noted above, this interim rule establishes a consolidated REAP 
program by including each part of the program in a single subpart. The 
provisions in the interim rule are based on the following:
    1. The existing program found at 7 CFR part 4280, subpart B, for 
renewable energy systems and energy efficiency improvements as modified 
by the 2008 Farm Bill and the Fiscal Year 2010 notice.
    2. The Fiscal Year 2010 notices that implement the 2008 Farm Bill 
provisions for RES feasibility studies, energy audits, and renewable 
energy development assistance.
    3. The inclusion of flexible fuel pumps that dispense blended 
liquid transportation fuel as an important new component of the Federal 
government's strategy for encouraging the use of renewable fuels. 
Section 9007(a)(2) authorizes the Agency to fund parts of renewable 
energy systems as well as renewable energy systems in whole. The Agency 
has determined that a flexible fuel pump is a uniquely critical aspect 
of a biofuel renewable energy system defined as the conversion of the 
biomass through the dispensing of the biofuel to a vehicle.
    The policy rationale for the Agency to include flexible fuel pumps 
in REAP is to address a barrier that the Agency has determined impedes 
the broader use of biofuels as a liquid transportation fuel in the 
United States. For example, one major aspect of this barrier derives 
from two scenarios. The first is one of an insufficient availability of 
higher ethanol-blend fuels in the market place that discourages 
Americans from purchasing flexible fuel vehicles that can burn such 
higher ethanol-blend fuels and does not provide a sufficient level of 
higher ethanol-blend fuel to supply the existing flexible fuel vehicle 
fleet to fully take advantage of the fleet's ability to consume 
additional biofuel. The second is one of an insufficient number of 
flexible fuel vehicles on the road to encourage fuel station owners to 
expend the capital necessary to install flexible fuel pumps in response 
to market forces. By allowing REAP to provide financing through grants 
and loan guarantees to encourage the installation of flexible fuel 
pumps in rural areas, the Agency believes it can help overcome this 
barrier. The Agency acknowledges that there are other similar biofuel 
examples, including barriers to biodiesel.
    The Agency recognizes that REAP is designed to address a variety of 
renewable energy and energy efficiency goals. With the inclusion of 
flexible fuel pumps for REAP funding, the Agency will ensure that it 
will not ignore the other important goals and purposes of the program.
    4. The removal of citizenship requirements which the Agency has 
determined is in the best interest of furthering the Administration's 
goal of increasing the use of renewable energy systems and energy 
efficiency improvements to include applicants who are not U.S. 
citizens, provided the proposed project is located in a State and the 
applicant has a place of business located in a State. In addition, this 
change is consistent with recent litigation.
    5. The modification of the rural area requirement for projects 
proposed by agricultural producers to allow such projects to be located 
in non-rural areas. The Agency determined to remove the rural area 
requirement as it applies to agricultural producers under REAP for 
several reasons. First, the Agency wanted REAP to be consistent with 
the Biorefinery Assistance Program, the Repowering Assistance Program, 
and the Advanced Biofuel Payment Program. The three programs do not 
include a rural area requirement in their respective interim rules 
published in February 2011. Second, the Agency has determined that 
there are a number of agricultural producers that operate in non-rural 
areas that can benefit from REAP. Such agricultural producers may 
include commercial nurseries and truck farms (the growing of one or 
more crops on a scale necessary for shipment to distant markets) that 
are located near urban areas.
    6. The addition of a new paragraph to clarify how the Agency 
addresses changes in equipment for energy efficiency improvements for 
determining eligible project costs.
    7. The replacement of ``return on investment'' with ``simple 
payback.'' Using the term ``return on investment'' was creating 
confusion because the calculations used for this scoring criterion are 
not typically understood as return on investment. Therefore, we are 
clarifying the calculations and using the phrase ``simple payback'' 
because that is what we are calculating.
    8. The correction of several inconsistencies in the previous 
implementation of 7 CFR part 4280, subpart B and in the Fiscal Year 
2010 notices implementing REAP.
    By taking into consideration each of the above factors, the Agency 
has developed an interim rule for REAP.

The Rural Energy for America Program

    The following paragraphs discuss the interim rule in terms of 
changes from the current program as it relates to:
     General Provisions;

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     RES and EEI grants;
     RES and EEI guaranteed loans;
     RES feasibility study grants;
     EA and REDA grants; and
     Appendices.
    The changes discussed are how the interim rule varies from the 
existing RES and EEI program in 7 CFR part 4280, subpart B, and the 
Fiscal Year 2010 Federal Register notice for the RES and EEI program, 
and from the implementation of RES feasibility study grants and EA and 
REDA grants as found in their respective Fiscal Year 2010 notices.
1. General Provisions
    The organization of this section follows the first six sections of 
the current regulation at 7 CFR part 4280, subpart B, with changes as 
discussed below. The interim rule includes several new sections to the 
general provisions, the contents of which mostly consolidate existing 
provisions from the Fiscal Year 2010 Notices that are applicable to 
each of the programs within REAP. Lastly, the applicant eligibility and 
project eligibility sections of the existing rule have been relocated 
to the RES and EEI grants section of the rule and modified as needed.
Purpose (Sec.  4280.101)
    The primary revision to this section is adding reference to 
provision of grants for conducting RES feasibility studies and for 
energy audits and renewable energy development assistance. These 
provisions are being added as a result of the 2008 Farm Bill. In 
addition, reference to a direct loan program has been removed because 
direct loans are no longer authorized under the 2008 Farm Bill. Lastly, 
the Agency also removed current 7 CFR 4280.101(b), which the Agency has 
determined is unnecessary for the rule. Additional conforming changes 
were made in subsequent sections, but are not necessarily identified 
below.
Organization of Subpart (Sec.  4280.102)
    This section is basically the same as existing 7 CFR 4280.102, in 
that it identifies the organization of the rule. The primary 
differences are editorial in nature, simplifying the discussion, 
expanding the section to cover FS, EA, and REDA grants and identifying 
more clearly the rule's organization.
Definitions (Sec.  4280.103)
    This section was revised by adding, revising, and deleting a number 
of terms. The major revisions were the addition of definitions from the 
Fiscal Year 2010 notices for the RES/EEI, FS, EA, and REDA grants. The 
following present the changes made.
Added Terms
     Administrator. This term was added for clarity.
     Blended liquid transportation fuel. This term was added to 
implement the revision to allow retail pumps that combine and dispense 
a blended liquid transportation fuel to be eligible for grant funding.
     Departmental regulations. This term was added and is now 
referenced in the rule.
     Flexible fuel pump. This term was added because the Agency 
will allow flexible fuel pumps as an eligible RES project. The term 
refers to a retail pump that combines and dispenses a blended liquid 
transportation fuel or that dispenses a blended liquid transportation 
fuel with a percentage volume of renewable fuel in excess of the 
Federal or State requirements, whichever is higher.
     Hydroelectric energy, hydropower, ocean energy and small 
hydropower. These terms were added in response to the 2008 Farm Bill 
provisions that authorize these qualifying sources of renewable energy. 
The Agency is limiting the size of eligible hydropower projects to 
those that have a rated power of 30 megawatts or less. The Conference 
Managers Report to the 2008 Farm Bill specifically mentions allowing 
small hydroelectric systems to be eligible under the program. Per 
consultation with the U.S. Department of Energy, the Agency is defining 
small hydropower systems as having a rated power of 30 megawatts or 
less, which includes hydropower projects commonly referred to as 
``micro-hydro'' and ``mini-hydro.'' Thus, if the hydropower system has 
a rated power of more than 30 megawatts, it would not be eligible for 
this program.
     Institution of higher education, instrumentality, and 
public power entity. These terms were added because they are three of 
the eligible entities for energy audit and renewable energy development 
assistance grants.
     Rated power. This term was added to clarify the 
definitions in which it is used.
     Renewable biomass. This term was added as a result of the 
2008 Farm Bill.
     Renewable energy development assistance, renewable energy 
site assessment, and renewable energy technical assistance. These terms 
were added to implement the Energy Audit and Renewable Energy 
Development Assistance grants.
     Rural Energy for America Grant Agreement. This term was 
added for clarity.
     Simple payback. This term was added to implement the 
scoring criterion for simple payback. It includes the method to be used 
to calculate simple payback.
Deleted Terms
     Biomass. This term has been replaced, under the 2008 Farm 
Bill, with ``renewable biomass.''
     Demonstrated financial need. This term was deleted because 
it is no longer part of the program as found in the 2008 Farm Bill.
     In-kind contribution, loan-to-value, and parity. These 
terms were deleted because they are not used in the rule.
Revised Terms
     Agency. This term was updated to refer to the Rural Energy 
for America Program rather than the 9006 program.
     Anaerobic digester project. This term was revised in order 
to allow facilities producing natural gas in a compressed gaseous or 
liquid state to qualify as an anaerobic digester project.
     Biogas. This term was revised to refer to ``renewable 
biomass'' rather than to ``biomass.''
     Matching funds. This term was revised to remove reference 
to direct loans.
     Post-application. This term was clarified.
     Power purchase agreement. This term was revised by 
replacing ``arrangement'' with ``agreement.''
     Renewable energy. This term was revised to conform to 
changes in the 2008 Farm Bill, including adding reference to ocean and 
hydroelectric energy as renewable energy sources and replacing 
``biomass'' with ``renewable biomass.''
     Rural or rural area. This term was revised to conform to 
changes provided in the 2008 Farm Bill.
     Small business. In order for the Agency to clarify the 
application of the requirement that entities must operate independent 
of governmental control to certain Tribal enterprises, this term was 
revised to allow such enterprises to remain eligible if they are 
operated in a manner consistent to the Department of the Interior's 
regulation governing the establishment of Section 17 Corporations. This 
clarification is necessary to enable this program to be effectively 
administered in Indian Country.
     State. This term was clarified by adding ``of the United 
States.''
Exception Authority (Sec.  4280.104)
    This section was updated to reflect the latest language the Agency 
uses, as reflected in the recent Agency energy

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title interim rules. First, the exercise of this exception authority 
must be in the Federal government's interest. Under the current rule, 
this reads in the USDA's interest. Second, the exercise of this 
exception authority must be concurred to by the Secretary of 
Agriculture.
Appeals (Sec.  4280.105)
    This section was revised by removing reference to direct loans to 
conform to the 2008 Farm Bill and deleting the last sentence of the 
section because it is inappropriate.
Conflict of Interest (Sec.  4280.106)
    This section was revised by removing reference to direct loans to 
conform to the 2008 Farm Bill and adding a provision specifically 
prohibiting members of, or delegates to, Congress from receiving any 
grant or portion thereof or from receiving any benefit that might arise 
therefrom and specifically addressing assistance to Agency employees 
and their relatives and associates. The Agency added this provision to 
provide greater transparency and accountability in government.
USDA Departmental Regulations (Sec.  4280.107)
    This section was added to clearly identify the incorporation by 
reference of the Departmental Regulations.
Laws That Contain Other Compliance Requirements (Sec.  4280.108)
    This section was relocated under the ``General'' heading of the 
rule because it applies to each REAP program, with minor exceptions. 
Two of the changes made were to remove reference to direct loans in the 
paragraph on civil rights compliance because direct loans are not part 
of the program and to add a paragraph specific to guaranteed loans 
concerning the Americans with Disabilities Act.
Ineligible Applicants, Borrowers, and Owners (Sec.  4280.109)
    With minor wording changes to make it applicable to both grants and 
guaranteed loans, this section replaces existing 7 CFR 4280.107(a)(4).
General Applicant and Application Provisions (Sec.  4280.110)
    With minor wording changes, this new section gathers into one place 
three general requirements affecting each REAP program concerning:
     Complete applications;
     Application withdrawal; and
     Satisfactory progress.
Notifications (Sec.  4280.111)
    This new section gathers into one place general requirements 
affecting each REAP program regarding notification of applicants and 
lenders, as applicable, if applicants and their projects are eligible, 
if their application is determined to be ineligible, and if their 
application receives an award.
2. Renewable Energy System and Energy Efficiency Improvement Grant 
Program
Applicant Eligibility (Sec.  4280.112)
    This section has been reduced to just identifying the type of 
applicant eligible (i.e., agricultural producer or rural small 
business, which is unchanged from the current rule) because the other 
provisions have been either deleted or moved, as discussed below.
    The citizenship requirements currently found in 7 CFR 
4280.107(a)(2) and (3) have been removed (and, in their place, the rule 
requires the project to be located in a State as defined in the rule). 
The Agency removed this requirement because, after reviewing public 
comments that it sought and received on a March 12, 2010, Notice of 
Contract for Proposal (NOCP) for payments to advanced biofuels 
producers, the Agency has determined that it is in the best interests 
of furthering the Administration's goal of increasing the use of 
renewable energy systems and energy efficiency improvements to include 
applicants who are not U.S. citizens, provided the proposed project is 
located in a State and the applicant has a place of business located in 
a State. In addition, this change is consistent with recent litigation.
    The provisions in existing 7 CFR 4280.107(a)(4) and in 7 CFR 
4280.107(b), as noted earlier, have been relocated to Sec. Sec.  
4280.109 and 4280.110(c), respectively.
    The demonstrated financial need provisions in existing 7 CFR 
4280.107(a)(5) have been removed to conform the rule to the 2008 Farm 
Bill.
Project Eligibility (Sec.  4280.113)
    Numerous changes have been made to this section for determining 
whether a project is eligible to receive an RES or EEI grant under this 
subpart.
    First. The Agency clarified that energy efficiency improvements to 
existing renewable energy systems are eligible energy efficiency 
improvement projects.
    Second. Projects must be located in a State, as defined in the 
rule, as discussed above under applicant eligibility.
    Third. The applicant must have a place of business located in a 
State, also as discussed above under applicant eligibility.
    Fourth. The Agency is allowing projects for facilities located in 
non-rural areas to be eligible if the project is being proposed by an 
agricultural producer.
    This conforms the rule to other programs that serve agricultural 
producers (e.g., those provided by the Natural Resource Conservation 
Service and Farm Service Agency), which do not have a rural area 
requirement for agricultural producers. Further, the authorizing 
statute (the 2008 Farm Bill) does not restrict eligibility of 
agricultural producers to rural areas as it does with rural small 
businesses, where the language specifically uses the term ``rural'' in 
referring to small businesses. The Agency does not expect the inclusion 
of projects for facilities located in non-rural areas proposed by 
agricultural producers to affect a large number of agricultural 
producers because most agricultural producers' facilities are located 
within rural areas.
    However, in allowing projects by agricultural producers for 
facilities in non-rural areas to be eligible, the Agency is also 
requiring that the application for such facilities be only for 
renewable energy systems or energy efficiency improvements on integral 
components of or that are directly related to the facility, such as 
vertically integrated operations, and are part of and co-located with 
the agricultural production operation. For example, if an agricultural 
producer grows vegetables in a greenhouse located in a non-rural area 
and sells those vegetables at a co-located retail operation, where both 
the greenhouse and the retail operation are owned by the applicant, the 
application may consider both the greenhouse and the retail operation. 
However, if the retail operation is not co-located with the greenhouse, 
in this example, the application may consider only the greenhouse and 
not the retail operation.
    Fifth. If the project is for a hydropower project, only those 
hydropower projects with a rated power of 30 megawatts or less are 
eligible.
    Sixth. The project must have demonstrated technical feasibility.
    Seventh. The Agency revised the provision associated with 
residential costs to clarify the current regulation and how residential 
purposes relate to the eligibility of projects under REAP. The Agency 
notes that this provision, found in Sec.  4280.113(k), does not 
preclude an applicant from applying for funding for the installation of 
a second meter or providing certification in the application that any 
excess power generated by the renewable energy

[[Page 21115]]

system will be sold to the grid and will not be used by the applicant 
for residential purposes.
Qualification for Simplified Applications (Sec.  4280.114)
    The provisions of this section were modified by removing the 
certification by the applicant of demonstrated financial need.
RES and EEI Grant Funding (Sec.  4280.115)
    Several changes were made to this section as described below.
     The prohibition on third-party, in-kind contributions was 
removed because it conflicts with the Agency's Departmental 
Regulations.
     The Agency added a provision specifically addressing 
energy efficiency improvements as eligible project costs (see Sec.  
4280.115(c)(10)). In the current rule, eligible energy efficiency 
improvement costs were included in the paragraph addressing 
construction of new EEI projects (see 7 CFR 4280.110(c)(9)). This is 
somewhat confusing. The new provision clearly states that energy 
efficiency improvements as eligible project costs are limited to only 
improvements identified in the energy assessment or energy audit. This 
is similar to the current text found in 7 CFR 4280.110(c)(9). The new 
paragraph also covers explicitly how the Agency will address the 
replacement of equipment identified in the energy audit as an eligible 
project cost. To illustrate this, an example is provided in the rule.
     The provisions associated with determining the amount of a 
RES or EEI grant were updated to reflect the 2008 Farm Bill (see Sec.  
4280.115(g)(4) through (g)(6)), which resulted in two substantive 
changes. The first is adding consideration of the expected energy 
efficiency of the renewable energy system. The second is deleting 
consideration of the extent to which the renewable energy system will 
be replicable.
     Unless otherwise agreed to by the Agency, any renewable 
energy system or energy efficiency improvement grant agreement under 
this subpart will terminate 2 years from the date the Agency signs the 
agreement.
Application and Documentation (Sec.  4280.116)
    The primary change to this section was to include a new paragraph 
(a) that addresses general application requirements covering one 
funding type applications, environmental information, foreign 
technology, and commercial application demonstration of pre-commercial 
technology.
    With regard to application content, the two primary changes made 
were to remove the requirement to include intergovernmental 
consultation comments (such consultation is not required for this 
program) and the requirement to certify to and provide sufficient 
information or documentation for determination of demonstrated 
financial need.
Evaluation of RES and EEI Grant Applications (Sec.  4280.117)
    Several changes were made to this section as described below.
    First. The paragraphs concerning ineligible applications and 
incomplete applications were relocated to the General section of the 
rule.
    Second. Scoring for flexible fuel pumps was added to the first 
scoring criterion (see Sec.  4280.117(c)(1)(iv)).
    Third. The return on investment criterion was replaced with a 
simple payback criterion to more accurately reflect the actual scoring 
the Agency performs.
    Fourth. A new scoring criterion was added that allows State 
Directors and the Administrator to award up to 10 priority points if 
the application is for an under-represented technology, is for flexible 
fuel pumps, or would help achieve geographic diversity.
Insurance Requirements (Sec.  4280.118)
    No changes were made to this set of provisions.
Construction Planning and Performing Development (Sec.  4280.119)
    One change was made to this set of provisions in Sec.  
4280.119(f)(3) where the Agency revised the text associated with an 
outdated American Institute of Architects form (i.e., Form A191).
RES and EEI Grantee Requirements (Sec.  4280.120)
    Three primary changes were made to this section as described below.
    First. The requirement that grants must also abide by ``any other 
applicable Federal statutes or regulations'' was added.
    Second. A statement that the failure to follow the requirements 
contained in the grant agreement, the subpart, and other applicable 
Federal statutes and regulations may result in termination of the grant 
and adoption of other available remedies was added.
    Third. The requirement for the applicant to provide, where 
applicable, a copy of the executed power purchase agreement was added.
Servicing Grants (Sec.  4280.121)
    The two changes to this section are:
     Adding reference to the Departmental Regulations when 
servicing RES and EEI grants; and
     Adding provisions for when a grantee seeks to change a 
contractor or vendor.
3. Renewable Energy System and Energy Efficiency Improvement Guaranteed 
Loans
Borrower and Project Eligibility (Sec. Sec.  4280.122 and 4280.123)
    Changes made to these sections reflect the same changes made to 
applicant and project eligibility for RES and EEI grants, as discussed 
above.
Guaranteed Loan Funding (Sec.  4280.124)
    Several changes were made to this section:
     The maximum amount of the loan that will be made available 
to an eligible project was increased from 50 to 75 percent of total 
eligible project costs;
     Both the maximum amount of a guaranteed loan and the total 
amount of loans guaranteed by the Agency under this program to any one 
borrower were increased from $10 million to $25 million;
     A 60 percent guarantee was added for loans greater than 
$10 million; and
     Revised the criteria associated with determining the 
amount of a loan awarded in the same manner as described earlier for 
RES and EEI grants.
Application and Documentation (Sec.  4280.128)
    As was done for grant application and documentation, the 
requirement to include intergovernmental consultation comments was 
removed (such consultation is not required for this program).
Evaluation of RES and EEI Guaranteed Loan Applications (Sec.  4280.129)
    As was done for RES and EEI grants, the requirements associated 
with ineligible applications and incomplete applications were relocated 
under the ``General'' heading of the rule. A minor edit was made to 
paragraph (a) and cross-references were updated. No other changes were 
made to this section.
Conditions Precedent to Issuance of Loan Note Guarantee (Sec.  
4280.146)
    The one substantive change to this section was the addition of the 
requirement for the lender to provide, where applicable, a copy of the 
executed power purchase agreement.
Laws That Contain Other Compliance Requirements (Sec.  4280.151)
    This section is now ``Reserved,'' and the provisions regarding laws 
that

[[Page 21116]]

contain other compliance requirements have been incorporated into a 
similar section in the General Provisions portion of the interim rule.
Other Sections
    Other than minor edits and updating cross references where 
applicable, no changes were made to the following guaranteed loan 
sections:
     Interest rates (Sec.  4280.125).
     Terms of loan (Sec.  4280.126).
     Guarantee/annual renewal fee percentage (Sec.  4280.127).
     Eligible lenders (Sec.  4280.130).
     Lender's functions and responsibilities (Sec.  4280.131).
     Access to records (Sec.  4280.132).
     Conditions of guarantee (Sec.  4280.133).
     Sale or assignment of guaranteed loan (Sec.  4280.134).
     Participation (Sec.  4280.135).
     Minimum retention (Sec.  4280.136).
     Repurchase from holder (Sec.  4280.137).
     Replacement of document (Sec.  4280.138).
     Credit quality (Sec.  4280.139).
     Financial statements (Sec.  4280.140).
     Appraisals (Sec.  4280.141).
     Personal and corporate guarantees (Sec.  4280.142).
     Loan approval and obligation of funds (Sec.  4280.143).
     Transfer of lenders (Sec.  4280.144).
     Changes in borrower (Sec.  4280.145).
     Issuance of the guarantee (Sec.  4280.147).
     Refusal to execute Loan Note Guarantee (Sec.  4280.148).
     Requirements after project construction (Sec.  4280.149).
     Insurance requirements (Sec.  4280.150).
     Servicing guaranteed loans (Sec.  4280.152).
     Substitution of lender (Sec.  4280.153).
     Default by borrower (Sec.  4280.154).
     Protective advances (Sec.  4280.155).
     Liquidation (Sec.  4280.156).
     Determination of loss and payment (Sec.  4280.157).
     Future recovery (Sec.  4280.158).
     Bankruptcy (Sec.  4280.159).
     Termination of guarantee (Sec.  4280.160).
4. Combined Funding
    Other than updating cross-references, the only other change to this 
section was deleting the third-party, in-kind contribution prohibition 
as was done for RES and EEI grants.
5. Renewable Energy System Feasibility Study Grants
    The provisions contained in the Fiscal Year 2010 notice for RES 
feasibility study grants that were specific to RES feasibility study 
grants are organized in the interim rule as shown in the following 
table. Other provisions in the Fiscal Year 2010 notice for RES 
feasibility study grants that are applicable to the other REAP programs 
are incorporated into the General provisions section of the interim 
rule.

------------------------------------------------------------------------
                                                               Section
                        Section name                            number
------------------------------------------------------------------------
Applicant eligibility......................................     4280.170
Project eligibility........................................     4280.171
Application eligibility provisions.........................     4280.172
Grant funding for feasibility studies......................     4280.173
Feasibility study grant applications--content..............     4280.176
Evaluation of feasibility study grant applications.........     4280.177
Scoring feasibility study grant applications...............     4280.178
Selecting feasibility study grant applications for award...     4280.179
Actions prior to grant closing.............................     4280.180
Awarding and administering feasibility study grants........     4280.181
Servicing feasibility study grants.........................     4280.182
------------------------------------------------------------------------

    With a limited number of exceptions, the provisions found in the 
Fiscal Year 2010 notice for RES feasibility study grants have been 
incorporated into the interim rule. These exceptions are presented 
below.
    Project eligibility (Sec.  4280.171). Three conforming changes were 
made to the requirements for project eligibility.
    First. The project for which the RES feasibility study is to be 
performed must be located in a State. This is a conforming change 
necessitated by removing the citizenship requirement (which was 
incorporated by reference in the Fiscal Year 2010 Notice).
    Second. The applicant must have a place of business in a State. 
This is also a conforming change necessitated by removing the 
citizenship requirement (which was incorporated by reference in the 
Fiscal Year 2010 notice).
    Third. A RES feasibility study may be performed for a proposed RES 
project for a facility that is located in a non-rural area if the 
applicant is an agricultural producer. If the agricultural producer's 
facility is in a non-rural area, then the feasibility study can be for 
a renewable energy system on integral components of or directly related 
to the facility, such as vertically integrated operations, and are part 
of and co-located with the agriculture production operation. For 
example, if an agricultural producer grows vegetables in a greenhouse 
located in a non-rural area and sells those vegetables at a co-located 
retail operation, where both the greenhouse and the retail operation 
are owned by the applicant, the feasibility study may consider both the 
greenhouse and the retail operation. If the retail operation is not co-
located with the greenhouse, in this example, the feasibility study 
could only consider the greenhouse and not the retail operation. Under 
the Fiscal Year 2010 notice, all projects were required to be in a 
rural area.
    Forms and certifications (Sec.  4280.176). Two additional forms are 
identified for submittal with the application--Forms SF-424A and SF-
424B. These forms are applicable for non-construction projects.
    The certification that the renewable energy system is located in a 
rural area is limited to rural small businesses, because, under the 
interim rule, the rural area location requirement does not apply to 
projects from agricultural producers.
    Evaluation of feasibility study grant applications (Sec.  
4280.177). The sentence referring to the Agency continuing to process 
an application if the application contains certification that the 
applicant has neither sought nor received any other Federal or State 
assistance for a RES feasibility study on the subject facility was not 
included in the interim rule, because there are other reasons why the 
Agency may not continue processing an application.
    Scoring feasibility study grant applications (Sec.  4280.178). 
Reference to ``Other Federal or State assistance for only the RES 
feasibility study would make the request ineligible'' under the scoring 
criterion for commitment of funds was not included in the interim rule 
because it is incorrect.
    Awarding and administering feasibility study grants (Sec.  
4280.181). The interim rule clarifies when which forms are to be 
submitted.
    Servicing (Sec.  4280.182). The sentence ``All non-confidential 
information resulting from the Grantee's activities shall be made 
available to the general public on an equal basis'' is not included in 
the interim rule because it is not appropriate.
    Intergovernmental review comments. This provision was not included 
in the interim rule because it is not applicable to this program.
    Exception Authority. The exception authority provision in the 
Fiscal Year 2010 notice is replaced in the interim rule with a 
different exception authority provision that is a more recent provision 
and that is applicable across the entire subpart.
    Appeals. The appeals provision in the Fiscal Year 2010 notice is 
replaced in the interim rule with a different appeals

[[Page 21117]]

provision that is applicable across the entire subpart.
6. Energy Audit and Renewable Energy Development Assistance Grants
    As was done for RES feasibility study grants, the provisions 
contained in the Fiscal Year 2010 notice for EA and REDA grants that 
are specific to EA and REDA grants are organized in the interim rule as 
shown in the following table. Other provisions in the Fiscal Year 2010 
notice for EA and REDA grants that are applicable to the other REAP 
programs are incorporated into the General provisions section of the 
interim rule.

------------------------------------------------------------------------
                                                               Section
                        Section name                            number
------------------------------------------------------------------------
Applicant eligibility......................................     4280.186
Project eligibility........................................     4280.187
Grant funding for energy audit and renewable energy             4280.188
 development assistance....................................
EA/REDA grant applications--content........................     4280.190
Evaluation of energy audit and renewable energy development     4280.191
 assistance grant applications.............................
Scoring energy audit and renewable energy development           4280.192
 assistance grant applications.............................
Selecting energy audit and renewable energy development         4280.193
 assistance grant applications for award...................
Actions prior to grant closing.............................     4280.194
Awarding and administering energy audit and renewable           4280.195
 energy development assistance grants......................
Servicing energy audit and renewable energy development         4280.196
 assistance grants.........................................
------------------------------------------------------------------------

    With a limited number of exceptions, the provisions found in the 
Fiscal Year 2010 notice for EA and REDA grants have been incorporated 
into the interim rule. These exceptions are presented below.
    Applicant eligibility (Sec.  4280.186). The citizenship requirement 
found in the Fiscal Year 2010 notice is not included in the interim 
rule.
    Project eligibility (Sec.  4280.187). In response to the removal of 
the citizenship requirement, the interim rule requires that the energy 
audit or renewable energy development assistance must be provided to a 
recipient in a State and the applicant must have a place of business in 
a State.
    Another change is that the rural area requirement in the interim 
rule is not applicable to agricultural producers (as it was in the 
Fiscal Year 2010 notice). Instead, a facility owned by an agricultural 
producer for which an energy audit is being conducted or that is 
receiving renewable energy development assistance may be located in 
either a rural area or non-rural area. If the agricultural producer's 
facility is in a non-rural area, then the energy audit or renewable 
energy development assistance can be for a renewable energy system or 
energy efficiency improvement on integral components of or that are 
directly related to the facility, such as vertically integrated 
operations, and are part of and co-located with the agriculture 
production operation.
    Grant funding for energy audit and renewable energy development 
assistance (Sec.  4280.188). Under the provisions for eligible project 
costs, the interim rule does not include ``pay for assistance to any 
private business enterprise which does not meet the requirements of 
paragraph III.A(2) of this Notice'' because the referenced paragraph in 
the Fiscal Year 2010 notice refers to meeting the citizenship 
requirement, which has been not been included in the interim rule, thus 
making this provision not applicable to the interim rule.
    Application contents (Sec.  4280.190). The requirement to submit 
intergovernmental review comments was not included in the interim rule 
because intergovernmental review is not required for this program. In 
addition, the Agency removed the phrasing ``(in addition to the 
required 25 percent contribution from the agricultural producer or 
rural small business for the cost of an energy audit)'' from the title 
of the ``leveraging and commitment of other sources of funding'' 
scoring criterion because the Agency determined that it was confusing.
    Scoring energy audit and renewable energy development assistance 
grant applications (Sec.  4280.192). The interim rule replaces 
``existing rural service area'' with ``existing service area.''
    Selecting energy audit and renewable energy development grant 
assistance applications for award (Sec.  4280.193). The interim rule 
does not include the Fiscal Year 2010 provision concerning objections 
raised by State or local governments during the intergovernmental 
review process, because the intergovernmental review process is not 
applicable to this program. Thus, this provision is not appropriate.
    Awarding and administering energy audit and renewable energy 
development assistance grants (Sec.  4280.195). The text concerning 
forms was revised to clarify which forms are to be submitted to the 
Agency and to remove reference to the grant being considered closed on 
the obligation date, because that is incorrect and is not needed in the 
rule.
    Servicing (Sec.  4280.196). In the requirements for performance 
reports, the phrase ``final semiannual performance report'' was revised 
to ``final performance report'' for clarity. In addition, the Agency 
recast the paragraph on the use of remaining funds to use the same 
phrasing as found in the deobligation provisions for RES feasibility 
study grants.
    Intergovernmental review comments. This provision was not included 
in the interim rule because it is not applicable to this program.
    Exception Authority. The exception authority provision in the 
Fiscal Year 2010 notice is replaced in the interim rule with a 
different exception authority provision that is a more recent provision 
and that is applicable across the entire subpart.
    Appeals. The appeals provision in the Fiscal Year 2010 notice is 
replaced in the interim rule with a different appeals provision that is 
applicable across the entire subpart.

III. Request for Comments

    The Agency is interested in receiving comments on all aspects of 
the interim rule. An area in which the Agency is seeking specific 
comments is identified below. All comments should be submitted as 
indicated in the ADDRESSES section of this preamble.
    Demonstrated financial need. The Agency is seeking comment on 
whether to require demonstrated financial need for applicants seeking 
grants and, if so, what should the requirements be for such 
demonstration (i.e., how would an applicant demonstrate financial 
need). Please be specific and provide rationale to support your 
position.

List of Subjects in 7 CFR Part 4280

    Loan programs--Business and industry, Economic development, Energy, 
Energy audits, Energy efficiency improvements, Feasibility studies, 
Grant programs, Guaranteed loan programs, Renewable energy development 
assistance, Renewable energy systems, and Rural areas.
    For the reasons set forth in the preamble, Chapter XLII of title 7 
of the Code of Federal Regulations is amended as follows:

CHAPTER XLII--RURAL BUSINESS-COOPERATIVE SERVICE AND RURAL UTILITIES 
SERVICE, DEPARTMENT OF AGRICULTURE

PART 4280--LOANS AND GRANTS

0
1. The authority citation for part 4280 is revised to read as follows:


[[Page 21118]]


    Authority: 5 U.S.C. 301; 7 U.S.C. 940c; 7 U.S.C. 8107.

0
2. Subpart B of part 4280 is revised to read as follows:
Subpart B--Rural Energy for America Program General
Sec.
4280.101 Purpose.
4280.102 Organization of subpart.
4280.103 Definitions.
4280.104 Exception authority.
4280.105 Appeals.
4280.106 Conflict of interest.
4280.107 USDA Departmental Regulations.
4280.108 Laws that contain other compliance requirements.
4280.109 Ineligible applicants, borrowers, and owners.
4280.110 General applicant and application provisions.
4280.111 Notifications.

Renewable Energy System and Energy Efficiency Improvement Grants

4280.112 Applicant eligibility.
4280.113 Project eligibility.
4280.114 Qualification for simplified applications.
4280.115 RES and EEI grant funding.
4280.116 Application and documentation.
4280.117 Evaluation of RES and EEI grant applications.
4280.118 Insurance requirements.
4280.119 Construction planning and performing development.
4280.120 RES and EEI grantee requirements.
4280.121 Servicing grants.

Renewable Energy System and Energy Efficiency Improvement Guaranteed 
Loans

4280.122 Borrower eligibility.
4280.123 Project eligibility.
4280.124 Guaranteed loan funding.
4280.125 Interest rates.
4280.126 Terms of loan.
4280.127 Guarantee/annual renewal fee percentages.
4280.128 Application and documentation.
4280.129 Evaluation of RES and EEI guaranteed loan applications.
4280.130 Eligible lenders.
4280.131 Lender's functions and responsibilities.
4280.132 Access to records.
4280.133 Conditions of guarantee.
4280.134 Sale or assignment of guaranteed loan.
4280.135 Participation.
4280.136 Minimum retention.
4280.137 Repurchase from holder.
4280.138 Replacement of document.
4280.139 Credit quality.
4280.140 Financial statements.
4280.141 Appraisals.
4280.142 Personal and corporate guarantees.
4280.143 Loan approval and obligation of funds.
4280.144 Transfer of lenders.
4280.145 Changes in borrower.
4280.146 Conditions precedent to issuance of Loan Note Guarantee.
4280.147 Issuance of the guarantee.
4280.148 Refusal to execute Loan Note Guarantee.
4280.149 Requirements after project construction.
4280.150 Insurance requirements.
4280.151 [Reserved]
4280.152 Servicing guaranteed loans.
4280.153 Substitution of lender.
4280.154 Default by borrower.
4280.155 Protective advances.
4280.156 Liquidation.
4280.157 Determination of loss and payment.
4280.158 Future recovery.
4280.159 Bankruptcy.
4280.160 Termination of guarantee.
4280.161-4280.164 [Reserved]

Combined Funding for Renewable Energy Systems and Energy Efficiency 
Improvements

4280.165 Combined funding for renewable energy systems and energy 
efficiency improvements.
4280.166-4280.169 [Reserved]

Renewable Energy System Feasibility Study Grants

4280.170 Applicant eligibility.
4280.171 Project eligibility.
4280.172 Application eligibility provisions.
4280.173 Grant funding for feasibility studies.
4280.174-4280.175 [Reserved]
4280.176 Feasibility study grant applications--Content.
4280.177 Evaluation of feasibility study grant applications.
4280.178 Scoring feasibility study grant applications.
4280.179 Selecting feasibility study grant applications for award.
4280.180 Actions prior to grant closing.
4280.181 Awarding and administering feasibility study grants.
4280.182 Servicing feasibility study grants.
4280.183-4280.185 [Reserved]

Energy Audit and Renewable Energy Development Assistance Grants

4280.186 Applicant eligibility.
4280.187 Project eligibility.
4280.188 Grant funding for energy audit and renewable energy 
development assistance.
4280.189 [Reserved]
4280.190 EA/REDA grant applications--Content.
4280.191 Evaluation of energy audit and renewable energy development 
assistance grant applications.
4280.192 Scoring energy audit and renewable energy development 
assistance grant applications.
4280.193 Selecting energy audit and renewable energy development 
assistance grant applications for award.
4280.194 Actions prior to grant closing.
4280.195 Awarding and administering energy audit and renewable 
energy development assistance grants.
4280.196 Servicing energy audit and renewable energy development 
assistance grants.
4280.197-4280.199 [Reserved]
4280.200 OMB control numbers.
Appendix A to Subpart B of Part 4280--Technical Reports for Projects 
with Total Eligible Project Costs of $200,000 or Less
Appendix B to Subpart B of Part 4280--Technical Reports for Projects 
with Total Eligible Project Costs of Greater than $200,000
Appendix C to Subpart B of Part 4280--Technical Report for 
Hydropower Projects
Appendix D to Subpart B of Part 4280--Technical Report for Flexible 
Fuel Pumps
Appendix E to Subpart B of Part 4280--Feasibility Study Content

Subpart B--Rural Energy for America Program

General


Sec.  4280.101  Purpose.

    This subpart contains the procedures and requirements for providing 
the following financial assistance under the Rural Energy for America 
Program:
    (a) Grants or guaranteed loans, or a combination grant and 
guaranteed loan, for the purpose of purchasing and installing renewable 
energy systems and energy efficiency improvements in rural areas;
    (b) Grants for conducting renewable energy system feasibility 
studies; and
    (c) Grants to assist agricultural producers and rural small 
businesses by conducting energy audits and providing recommendations 
and information on renewable energy development assistance and 
improving energy efficiency.


Sec.  4280.102  Organization of subpart.

    (a) Sections 4280.103 through 4280.111 discuss definitions, 
exception authority, appeals, conflict of interest, USDA Departmental 
regulations, other applicable laws, ineligible applicants, borrowers, 
and owners, general applicant and application provisions, and 
notifications, which are applicable to all of the funding programs 
under this subpart.
    (b) Sections 4280.112 through 4280.121 discuss the requirements 
specific to renewable energy system and energy efficiency improvement 
grants. Sections 4280.112 and 4280.113 discuss, respe