Substantially Underserved Trust Areas (SUTA), 63846-63850 [2011-26133]

Download as PDF 63846 Proposed Rules Federal Register Vol. 76, No. 199 Friday, October 14, 2011 This section of the FEDERAL REGISTER contains notices to the public of the proposed issuance of rules and regulations. The purpose of these notices is to give interested persons an opportunity to participate in the rule making prior to the adoption of the final rules. DEPARTMENT OF AGRICULTURE Rural Utilities Service 7 CFR Part 1700 RIN 0572–AC23 Substantially Underserved Trust Areas (SUTA) Rural Utilities Service, USDA. Proposed rule. AGENCY: ACTION: The Rural Utilities Service (RUS) proposes to issue regulations in order to provide loans and grants to facilitate the construction, acquisition, or improvement of infrastructure projects in Substantially Underserved Trust Areas (SUTA). The intent is to implement Section 906F of the Rural Electrification Act (7 U.S.C. 960f) by providing the process by which eligible applicants may apply for funding by the agency. DATES: Comments must be submitted on or before December 13, 2011. ADDRESSES: Submit comments by either of the following methods: • Federal eRulemaking Portal at https://www.regulations.gov. Follow instructions for submitting comments. • Postal Mail/Commercial Delivery: Please send your comment addressed to Michele Brooks, Director, Program Development and Regulatory Analysis, USDA Rural Development, 1400 Independence Avenue, STOP 1522, Room 5159, Washington, DC 20250– 1522. Additional information about the Agency and its programs is available on the Internet at https:// www.rurdev.usda.gov. FOR FURTHER INFORMATION CONTACT: Michele Brooks, Director, Program Development and Regulatory Analysis, Rural Utilities Service, Rural Development, U.S. Department of Agriculture, 1400 Independence Avenue, SW., STOP 1510, Room 5135– S, Washington, DC 20250–1590. Telephone number: (202) 720–9542, Facsimile: (202) 720–1725. tkelley on DSK3SPTVN1PROD with PROPOSALS SUMMARY: VerDate Mar<15>2010 15:18 Oct 13, 2011 Jkt 226001 SUPPLEMENTARY INFORMATION: Executive Order 12866 This rule has been determined to be not significant for purposes of Executive Order 12866 and, therefore, has not been reviewed by the Office of Management and Budget. Executive Order 12988 This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Rural Development has determined that this rule meets the applicable standards provided in section 3 of that Executive Order. In addition, all State and local laws and regulations that are in conflict with this rule will be preempted. No retroactive effect will be given to the rule and, in accordance with section 212(e) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6912(e)), administrative appeal procedures must be exhausted before an action against the Department or its agencies may be initiated. Regulatory Flexibility Act Certification RUS has determined that this proposed rule will not have a significant economic impact on a substantial number of small entities, as defined in the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). RUS provides loans to borrowers at interest rates and on terms that are more favorable than those generally available from the private sector. RUS borrowers, as a result of obtaining federal financing, receive economic benefits that exceed any direct economic costs associated with complying with RUS regulations and requirements. Information Collection and Recordkeeping Requirements In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35), RUS invites comments on this information collection for which RUS intends to request approval from the Office of Management and Budget (OMB). Comments on this notice must be received by December 13, 2011. Comments are invited on (a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility; (b) the accuracy of the agency’s estimate of burden including PO 00000 Frm 00001 Fmt 4702 Sfmt 4702 the validity of the methodology and assumption used; (c) ways to enhance the quality, utility and clarity of the information to be collected; and (d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques on other forms of information technology. Comments may be sent to Michele Brooks., Director, Program Development and Regulatory Analysis, Rural Utilities Service, U.S. Department of Agriculture, 1400 Independence Ave., SW., Stop 1522, Room 5159 South Building, Washington, DC 20250–1522. Title: Substantially Underserved Trust Areas. Type of Request: Approval of a new collection. Abstract: The RUS provides loan, loan guarantee and grant programs for rural electric, water and waste, and telecommunications and broadband infrastructure. The SUTA initiative gives the Secretary of Agriculture certain discretionary authorities relating to financial assistance terms and conditions that can enhance the financing possibilities in areas that are underserved by certain RUS electric, water and waste, and telecommunications and broadband programs. The data covered by this collection of information are those materials necessary to allow the agency to determine applicant and community eligibility and an explanation and documentation of the high need for the benefits of the SUTA provisions. Program specific application materials are covered by the information collection package for the specific RUS program being applied for. Estimate of Burden: Public reporting burden for this collection of information is estimated to average 2 hours per response. Respondents: Tribes, tribal leaders, tribal members and other stakeholders interested in developing utility infrastructure on trust areas. Estimated Number of Respondents: 10. Estimated Number of Responses per Respondent: 1. Estimated Total Annual Burden on Respondents: 20 hours. Copies of this information collection can be obtained from Michele Brooks, E:\FR\FM\14OCP1.SGM 14OCP1 Federal Register / Vol. 76, No. 199 / Friday, October 14, 2011 / Proposed Rules Program Development and Regulatory Analysis, at (202) 690–1078. All responses to this information collection and recordkeeping notice will be summarized and included in the request for OMB approval. All comments will also become a matter of public record. E-Government Act Compliance Rural Development is committed to the E-Government Act, which requires Government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible tkelley on DSK3SPTVN1PROD with PROPOSALS Catalog of Federal Domestic Assistance The programs described by this rule are listed in the Catalog of Federal Domestic Assistance Programs under number 10.759, Special Evaluation Assistance for Rural Communities and Households Program (SEARCH); 10.760, Water and Waste Disposal Systems for Rural Communities; 10.761, Technical Assistance and Training Grants; 10.762, Solid Waste Management Grants; 10.763, Emergency Community Water Assistance Grants; 10.770, Water and Waste Disposal Loans and Grants (Section 306C); 10.850, Rural Electrification Loans and Loan Guarantees; 10.851, Rural Telephone Loans and Loan Guarantees, 10.855, Distance Learning and Telemedicine Loans and Grants; 10.857, State Bulk Fuel Revolving Fund Grants; 10.859, Assistance to High Energy Cost Rural Communities; 10.861, Public Television Station Digital Transition Grant Program; 10.862, Household Water Well System Grant Program; 10.863, Community Connect Grant Program; 10.864, Grant Program to Establish a Fund for Financing Water and Wastewater Projects; 10.886, Rural Broadband Access Loans and Loan Guarantees. The Catalog is available on the Internet at https://www.cfda.gov. Executive Order 12372 Most programs covered by this rulemaking are excluded from the scope of Executive Order 12372, Intergovernmental Consultation, which may require consultation with State and local officials. See the final rule related notice entitled ‘‘Department Programs and Activities Excluded from Executive Order 12372,’’ (50 FR 47034). However, the Water and Waste Disposal Loan Program, CFDA number 10.770, is subject to the provisions of Executive Order 12372 which requires intergovernmental consultation with State and local officials. VerDate Mar<15>2010 15:18 Oct 13, 2011 Jkt 226001 Unfunded Mandates This rule contains no Federal mandates (under the regulatory provision of Title II of the Unfunded Mandate Reform Act of 1995) 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 Unfunded Mandate Reform Act of 1995. National Environmental Policy Act Certification Rural Development has determined that this rule will not significantly affect the quality of the human environment as defined by the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). Therefore, this action does not require an environmental impact statement or assessment. Executive Order 13132, Federalism The policies contained in this rule do not have any substantial direct effect on states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. Nor does this rule impose substantial direct compliance costs on state and local governments. Therefore, consultation with the states is not required Executive Order 13175 The policies contained in this rule do not impose substantial unreimbursed direct compliance costs on Indian tribal, Alaska native, or native Hawaiian governments and sovereign institutions or have tribal implications that preempt tribal law. Prior to development of this rulemaking, the agency held Tribal Consultations at seven (7) USDA regional consultations, conducted sixteen (16) SUTA specific consultations and hosted three (3) internet and toll free teleconference based webinars in order to determine the impact of this rule on Tribal governments, communities, and individuals. Reports from these sessions for consultation will be made part of the USDA annual reporting on Tribal Consultation and Collaboration, the annual SUTA Report to Congress and were used extensively throughout the drafting of this proposed rule. Background USDA Rural Development (Rural Development) is a mission area within the U.S. Department of Agriculture comprising the Rural Housing Service, Rural Business/Cooperative Service and Rural Utilities Service. Rural Development’s mission is to increase PO 00000 Frm 00002 Fmt 4702 Sfmt 4702 63847 economic opportunity and improve the quality of life for all rural Americans. Rural Development meets its mission by providing loans, loan guarantees, grants and technical assistance through more than forty programs aimed at creating and improving housing, businesses and infrastructure throughout rural America. Rural Utilities Service (RUS) loan, loan guarantee and grant programs act as a catalyst for economic and community development. By financing improvements to rural electric, water and waste, and telecom and broadband infrastructure, RUS also plays a big role in improving other measures of quality of life in rural America, including public health and safety, environmental protection, conservation, and cultural and historic preservation. The 2008 Farm Bill (Pub. L. 110–246, codified at 7 U.S.C. 906f) authorized the Substantially Underserved Trust Area (SUTA) initiative. The SUTA initiative gives the Secretary of Agriculture certain discretionary authorities relating to financial assistance terms and conditions that can enhance the financing possibilities in areas that are underserved by certain RUS electric, water and waste, and telecom and broadband programs. Given the challenges, dynamics, and opportunities in implementing the SUTA initiative, RUS has aimed to foster a process that includes the voices of tribal leaders, tribal community members, Alaska Native Regional and Village Corporations, Guam, American Samoa and the Commonwealth of the Northern Mariana Islands, and other stakeholders. Preliminary research by RUS identified various reports that provided several insights. In 2007, the United States Census Bureau Facts for Features article (dated 10/29/07) reported that the poverty rate of people who reported being sole race American Indian and Alaska Native (AI/AN) was 27 percent. Additionally, in 2006, the United States Government Accountability Office reported that based on the 2000 decennial census, the telephone subscribership rate for Native American households on tribal lands was substantially below the national level of about 98 percent. Specifically, about 69 percent of Native American households on tribal lands in the lower 48 states and about 87 percent in Alaska Native villages had telephone service. Finally, in 2000, the United States Census Bureau reported that on Native American lands, 11.7 percent of residents lack complete plumbing facilities, compared to 1.2 percent of the general U.S. population. There are special considerations and challenges in implementing an initiative E:\FR\FM\14OCP1.SGM 14OCP1 tkelley on DSK3SPTVN1PROD with PROPOSALS 63848 Federal Register / Vol. 76, No. 199 / Friday, October 14, 2011 / Proposed Rules on trust lands. Many American Indians, Alaska Natives, Native Hawaiians, and Pacific Islanders have a deep spiritual, cultural, and historical relationship with the land. In certain circumstances, the objectives of economic and infrastructure development can be at odds with spiritual, cultural, historical, and environmental values. Additionally, there are special legal considerations inherent in financing projects in areas where the land itself cannot be used as security. The SUTA initiative identifies the need and improves the availability of RUS programs to reach trust areas when they are determined by the Secretary of Agriculture (such authority has been delegated to the Administrator of RUS) to be substantially underserved. The RUS programs that are affected by this provision include: Rural Electrification Loans and Guaranteed Loans, and High Cost Energy Grants; Water and Waste Disposal Loans, Guaranteed Loans and Grants; Telecommunications Infrastructure Loans and Guaranteed Loans; Distance Learning and Telemedicine Loans and Grants; and Broadband Loans and Guaranteed Loans. In addition to its discretionary authority to implement the SUTA provisions, RUS is under a continuing obligation to make annual reports to Congress on (a) The progress of the SUTA initiative, and (b) recommendations for any regulatory or legislative changes that would be appropriate to improve services to substantially underserved trust areas. RUS has submitted three reports to Congress, dated June 18, 2009, and June 21, 2010, and August 23, 2011. The USDA Office of Native American Programs (since renamed the Office of Tribal Relations, hereinafter OTR) and RUS began exploring a potential SUTA initiative in 2008 after passage of the Farm Bill. RUS in conjunction with OTR interpreted this to include formal USDA Tribal Consultation in working with stakeholders that are federally recognized tribes. Pursuant to this determination and in accordance with President Obama’s November 5, 2009, Memorandum on Tribal Consultation, RUS conducted sixteen (16) direct tribal consultations, seven (7) regional consultations, one listening session and three (3) internet and toll free teleconference based webinars on implementation of the SUTA provision with Indian tribes from across the country. Additionally, the agency heard from six Federal agencies at three separate consultations on how best to implement the SUTA provision. VerDate Mar<15>2010 15:18 Oct 13, 2011 Jkt 226001 Federal agencies that were consulted include: the Department of the Interior, as the primary Federal agency with direct responsibilities to serve Native American and Pacific Islander stakeholders; the Department of Veterans Affairs, for its clarification of the definition of ‘‘trust land’’; the Environmental Protection Agency, because it has information regarding underserved trust areas with environmental challenges; the Department of Energy, because it has an interest in promoting energy development in trust areas; the Department of Commerce and the Federal Communications Commission, because each agency has an interest in telecommunications development in trust areas; the Department of Health and Human Services; and the Office of Management and Budget. As a result of categorizing and analyzing the comments received at both sets of consultations, RUS was able to identify certain issues that impact both the underserved areas who seek better access to RUS programs, and the federal agencies who have similar yet sometimes competing interests in these areas. This regulation is informed by the insight gained through the consultations, and is designed to complement existing loan, grant, and combination loan and grant programs with the SUTA provisions that authorize the Administrator to apply certain discretionary authorities (2 percent interest and extended repayment terms; waivers of nonduplication restrictions, matching fund requirements, or credit support requirements; and highest funding priority) for the benefit of eligible communities, and the entities that serve them, in underserved Trust areas. List of Subjects in 7 CFR Part 1700 Authority delegations (Government agencies), Electric power, Freedom of information, Loan programs— communications, Loan programs— energy, Organization and functions (Government agencies), Rural areas, Telecommunications, Broadband loan and grant programs, Water and waste loan and grant program, and the Distance Learning and Telemedicine program. For reasons set out in the preamble, the agency proposes to amend chapter XVII of title 7 of the Code of Federal Regulations by proposing to amend part 1700 to read as follows: PART 1700—GENERAL INFORMATION 1. The authority citation continues to read as follows: PO 00000 Frm 00003 Fmt 4702 Sfmt 4702 Authority: 5 U.S.C. 301, 552; 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.; 7 CFR 2.7, 2.17 and 2.47. §§ 1700.59 through 1700.99 [Reserved] 2. Add and reserve §§ 1700.59 through 1700.99 to Subpart C of part 1700. 3. Add subpart D, consisting of §§ 1700.100 to 1700.150, to read as follows: Subpart D—Substantially Underserved Trust Areas Sec. 1700.100 Purpose. 1700.101 Definitions. 1700.102 Eligible programs. 1700.103 Eligible communities. 1700.104 Financial feasibility. 1700.105 Determining whether land meets the statutory definition of ‘‘trust land.’’ 1700.106 Discretionary provisions. 1700.107 Considerations relevant to the exercise of SUTA discretionary provisions. 1700.108 Application requirements. 1700.109 RUS review. 1700.110–1700.150 [Reserved] Subpart D—Substantially Underserved Trust Areas § 1700.100 Purpose. This subpart establishes policies and procedures for the Rural Utilities Service (RUS) implementation of the Substantially Underserved Trust Areas (SUTA) initiative under section 306F of the Rural Electrification Act of 1936, as amended (7 U.S.C. 906f). The purpose of this rule is to identify and improve the availability of eligible programs in communities in substantially underserved trust areas. § 1700.101 Definitions. Administrator means the Administrator of the Rural Utilities Service, or designee or successor. Applicant means an entity that is eligible for an eligible program under that program’s eligibility criteria. Borrower means any organization that has an outstanding loan or loan guarantee made by RUS for a program purpose. Completed application means an application that includes the elements specified by the rules for the applicable eligible program in form and substance satisfactory to RUS. ConAct means the Consolidated Farm and Rural Development Act, as amended (7 U.S.C. 1921 et seq.). Credit support means equity, cash requirements, letters of credit, and other financial commitments provided in support of a loan or loan guarantee. E:\FR\FM\14OCP1.SGM 14OCP1 Federal Register / Vol. 76, No. 199 / Friday, October 14, 2011 / Proposed Rules Eligible community means a community as defined by 7 CFR 1700.103. Eligible program means a program as defined by 7 CFR 1700.102. Financial assistance means a grant, combination loan and grant, loan guarantee or loan. Financial feasibility means the ability of a project or enterprise to meet operating expenses, financial performance metrics, such as debt service coverage requirements and return on investment, and the general ability to repay debt and sustain continued operations at least through the life of the RUS loan or loan guarantee. Matching fund requirements means the applicant’s financial or other required contribution to the project for approved purposes. Nonduplication generally means a restriction on financing projects for services in a geographic area where reasonably adequate service already exists as defined by the applicable program. Project means the activity for which financial assistance has been provided. RE Act means the Rural Electrification Act of 1936, as amended (7 U.S.C. 901 et seq.). RUS means the Rural Utilities Service, an agency of the United States Department of Agriculture, successor to the Rural Electrification Administration. Substantially underserved trust area means a community in trust land with respect to which the Administrator determines has a high need for the benefits of an eligible program. Trust land means ‘‘trust land’’ as defined in section 3765 of title 38, United States Code as determined by the Administrator under 7 CFR 1700.104. Underserved means an area or community lacking an adequate level or quality of service in an eligible program, including areas of duplication of service provided by an existing provider where such provider has not provided or will not provide adequate level or quality of service. tkelley on DSK3SPTVN1PROD with PROPOSALS § 1700.102 Eligible programs. SUTA does not apply to all RUS programs. SUTA only applies to eligible programs. An eligible program means a program administered by RUS and authorized in (a) the RE Act, or (b) paragraphs (1), (2), (14), (22), or (24) of section 306(a) (7 U.S.C. 1926(a)(1), (2), (14), (22), (24)), or sections 306A, 306C, 306D, or 306E of the Con Act (7 U.S.C. 1926a, 1926c, 1926d, 1926e). VerDate Mar<15>2010 15:18 Oct 13, 2011 Jkt 226001 § 1700.103 Eligible communities. 63849 (a) An eligible community is a community that: (1) Is located on trust land; (2) May be served by an RUS administered program; and (3) Is determined by the Administrator as having a high need for benefits of an eligible program. Islands, and is eligible for use in the Veteran’s Administration direct loan program for veterans purchasing or constructing homes on communallyowned land; and (g) Any other evidence satisfactory to the Administrator to establish that the land is ‘‘trust land’’ within the meaning of 38 U.S.C. 3765(1). § 1700.104 § 1700.106 Financial feasibility. (a) Financial Feasibility. The Administrator will only make grants, loans and loan guarantees that RUS finds to be financially feasible and that provide eligible program benefits to substantially underserved trust areas. The financial feasibility of an application will be determined pursuant to normal underwriting practices for a particular eligible program, as supplemented by available SUTA provisions. All income and assets available to and under the control of the Applicant will be considered as part of the Applicant’s financial profile. § 1700.105 Determining whether land meets the statutory definition of ‘‘trust land.’’ The Administrator will use one or more of the following resources in determining whether a particular community is located in trust land: (a) Official maps of Federal Indian Reservations based on information compiled by the U.S. Department of the Interior, Bureau of Indian Affairs and made available to the public; (b) Title Status Reports issued by the U.S. Department of the Interior, Bureau of Indian Affairs showing that title to such land is held in trust or is subject to restrictions imposed by the United States; (c) Trust Asset and Accounting Management System data, maintained by the Department of the Interior, Bureau of Indian Affairs; (d) Official maps of the Department of Hawaiian Homelands of the State of Hawaii identifying land that has been given the status of Hawaiian home lands under the provisions of section 204 of the Hawaiian Homes Commission Act, 1920; (e) Official records of the U.S. Department of the Interior, the State of Alaska, or such other documentation of ownership as the Administrator may determine to be satisfactory, showing that title is owned by a Regional Corporation or a Village Corporation as such terms are defined in the Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq); (f) Evidence that the land is located on Guam, American Samoa or the Commonwealth of the Northern Mariana PO 00000 Frm 00004 Fmt 4702 Sfmt 4702 Discretionary provisions. (a) To improve the availability of eligible programs in eligible communities determined to have a high need for the benefits of an eligible program, the Administrator retains the discretion, on a case-by-case basis, to: (1) Make available to qualified applicants financing with an interest rate as low as 2 percent, or extend repayment terms; (2) Waive non-duplication restrictions, matching fund requirements, and/or credit support requirements from any loan or grant program administered by RUS; (3) Give the highest funding priority to designated projects in substantially underserved trust areas. (b) Requests for waivers of nonduplication restrictions, matching fund requirements, or credit support requirements, and requests for highest funding priority will be reviewed on a on a case-by-case basis upon written request of the applicant filed pursuant to 7 CFR 1700.108. (c) Notwithstanding the requirements in paragraph (b) of this section, the Administrator reserves the right to evaluate any application for an eligible program for use of the discretionary provisions of this subpart without a formal, written request from the applicant. § 1700.107 Considerations relevant to the exercise of SUTA discretionary provisions. (a) In considering a request to make available financing with an interest rate as low as 2 percent, and/or with extended repayment terms, the Administrator will evaluate the effect of and need for such terms on the finding of financial feasibility. (b) In considering a request for a nonduplication waiver, the Administrator will consider the offerings of all existing service providers to determine whether or not granting the non-duplication waiver is warranted. A waiver of nonduplication restrictions will not be given if the Administrator determines as a matter of financial feasibility that, taking into account all existing service providers, an applicant or RUS borrower would not be able to repay a loan or successfully implement a grant agreement. Requests for waivers of non- E:\FR\FM\14OCP1.SGM 14OCP1 tkelley on DSK3SPTVN1PROD with PROPOSALS 63850 Federal Register / Vol. 76, No. 199 / Friday, October 14, 2011 / Proposed Rules duplication restrictions will be reviewed by taking the following factors into consideration: (1) The size, extent and demographics of the duplicative area; (2) The cost of service from existing service providers; (3) The quality of available service; and (4) The ability of the existing service provider to serve the eligible service area. (c) Requests for waivers of matching fund requirements will be evaluated by taking the following factors into consideration: (1) Whether waivers or reductions in matching or equity requirements would make an otherwise financially infeasible project financially feasible; (2) Whether permitting a matching requirement to be met with sources not otherwise permitted in an affected program due to regulatory prohibition may be allowed under a separate statutory authority; and (3) Whether the application could be ranked and scored as if the matching requirements were fully met. (d) Requests for waivers of credit support requirements will be evaluated taking the following factors into consideration: (1) The cost and availability of credit support relative to the loan security derived from such support; (2) The extent to which the requirement is shown to be a barrier to the applicant’s participation in the program; and (3) The alternatives to waiving the requirements. (e) The Administrator may adapt the manner of assigning highest funding priority to align with the selection methods used for particular programs or funding opportunities. (1) Eligible programs which use priority point scoring may, in a notice of funds availability or similar notice, assign extra points for SUTA eligible applicants as a means to exercise a discretionary authority under this subpart. (2) The Administrator may announce a competitive grant opportunity focused exclusively or primarily on trust lands which incorporates one or more discretionary authorities under this subpart into the rules or scoring for the competition. § 1700.108 Application requirements. (a) To receive consideration under this subpart, the applicant must submit to RUS a completed application that includes all of the information required for an application in accordance with the regulations relating to the program VerDate Mar<15>2010 15:18 Oct 13, 2011 Jkt 226001 for which financial assistance is being sought. In addition, the applicant must notify the RUS contact for the applicable program in writing that it seeks consideration under this subpart and identify the discretionary authorities of this subpart it seeks to have applied to its application. The required written request memorandum or letter must include the following items: (1) A description of the applicant, documenting eligibility. (2) A description of the community to be served, documenting eligibility in accordance with 7 CFR 1700.103. (3) An explanation and documentation of the high need for the benefits of the eligible program, which may include: (i) Data documenting a lack of service (i.e. no service or unserved areas) or inadequate service in the affected community; (ii) Data documenting significant health risks due to the fact that a significant proportion of the community’s residents do not have access to, or are not served by, adequate, affordable service. (iii) Data documenting economic need in the community, which may include: (A) Per capita income of the residents in the community, as documented by the U.S. Department of Commerce, Bureau of Economic Analysis; (B) Local area unemployment and notemployed statistics in the community, as documented by the U.S. Department of Labor, Bureau of Labor Statistics and/ or the U.S. Department of the Interior, Bureau of Indian Affairs; (C) Supplemental Nutrition Assistance Program participation and benefit levels in the community, as documented by the U.S. Department of Agriculture, Economic Research Service; (D) National School Lunch Program participation and benefit levels in the community, as documented by the U.S. Department of Agriculture, Food and Nutrition Service; (E) Temporary Assistance for Needy Families Program participation and benefit levels in the community, as documented by the U.S. Department of Health and Human Services, Administration for Children and Families; (F) Lifeline Assistance and Link-Up America Program participation and benefit levels in the community, as documented by the Federal Communications Commission and the Universal Service Administrative Company; PO 00000 Frm 00005 Fmt 4702 Sfmt 9990 (G) Examples of economic opportunities which have been or may be lost without improved service. (H) Data maintained and supplied by Indian tribes or other tribal or jurisdictional entities on ‘‘trust land’’ to the Department of Interior, the Department of Health and Human Services and the Department of Housing and Urban Development that illustrates a high need for the benefits of an eligible program. (4) The impact of the specific authorities sought under this subpart. (b) The applicant must provide any additional information RUS may consider relevant to the application which is necessary to adequately evaluate the application under this subpart. (c) RUS may also request modifications or changes, including changes in the amount of funds requested, in any proposal described in an application submitted under this subpart. (d) The applicant must submit a completed application within the application window and guidelines for an eligible program. § 1700.109 RUS review. (a) RUS will review the application to determine whether the applicant is eligible to receive consideration under this subpart and whether the application is timely, complete, and responsive to the requirements set forth in 7 CFR 1700.107. (b) If the Administrator determines that the application is eligible to receive consideration under this subpart and one or more SUTA requests are granted, the applicant will be so notified. (c) If RUS determines that the application is not eligible to receive further consideration under this subpart, RUS will so notify the applicant. The applicant may withdraw its application or request that RUS treat its application as an ordinary application for review, feasibility analysis and service area verification by RUS consistent with the regulations and guidelines normally applicable to the relevant program. §§ 1700.110–1700.150 [Reserved] Dated: September 8, 2011. Jonathan Adelstein, Administrator, Rural Utilities Service. [FR Doc. 2011–26133 Filed 10–13–11; 8:45 am] BILLING CODE P E:\FR\FM\14OCP1.SGM 14OCP1

Agencies

[Federal Register Volume 76, Number 199 (Friday, October 14, 2011)]
[Proposed Rules]
[Pages 63846-63850]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-26133]


========================================================================
Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

========================================================================


Federal Register / Vol. 76, No. 199 / Friday, October 14, 2011 / 
Proposed Rules

[[Page 63846]]



DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1700

RIN 0572-AC23


Substantially Underserved Trust Areas (SUTA)

AGENCY: Rural Utilities Service, USDA.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: The Rural Utilities Service (RUS) proposes to issue 
regulations in order to provide loans and grants to facilitate the 
construction, acquisition, or improvement of infrastructure projects in 
Substantially Underserved Trust Areas (SUTA). The intent is to 
implement Section 906F of the Rural Electrification Act (7 U.S.C. 960f) 
by providing the process by which eligible applicants may apply for 
funding by the agency.

DATES: Comments must be submitted on or before December 13, 2011.

ADDRESSES: Submit comments by either of the following methods:
     Federal eRulemaking Portal at https://www.regulations.gov. 
Follow instructions for submitting comments.
     Postal Mail/Commercial Delivery: Please send your comment 
addressed to Michele Brooks, Director, Program Development and 
Regulatory Analysis, USDA Rural Development, 1400 Independence Avenue, 
STOP 1522, Room 5159, Washington, DC 20250-1522.
    Additional information about the Agency and its programs is 
available on the Internet at https://www.rurdev.usda.gov.

FOR FURTHER INFORMATION CONTACT: Michele Brooks, Director, Program 
Development and Regulatory Analysis, Rural Utilities Service, Rural 
Development, U.S. Department of Agriculture, 1400 Independence Avenue, 
SW., STOP 1510, Room 5135-S, Washington, DC 20250-1590. Telephone 
number: (202) 720-9542, Facsimile: (202) 720-1725.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be not significant for purposes of 
Executive Order 12866 and, therefore, has not been reviewed by the 
Office of Management and Budget.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. Rural Development has determined that this rule meets 
the applicable standards provided in section 3 of that Executive Order. 
In addition, all State and local laws and regulations that are in 
conflict with this rule will be preempted. No retroactive effect will 
be given to the rule and, in accordance with section 212(e) of the 
Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 
6912(e)), administrative appeal procedures must be exhausted before an 
action against the Department or its agencies may be initiated.

Regulatory Flexibility Act Certification

    RUS has determined that this proposed rule will not have a 
significant economic impact on a substantial number of small entities, 
as defined in the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). 
RUS provides loans to borrowers at interest rates and on terms that are 
more favorable than those generally available from the private sector. 
RUS borrowers, as a result of obtaining federal financing, receive 
economic benefits that exceed any direct economic costs associated with 
complying with RUS regulations and requirements.

Information Collection and Recordkeeping Requirements

    In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 
chapter 35), RUS invites comments on this information collection for 
which RUS intends to request approval from the Office of Management and 
Budget (OMB).
    Comments on this notice must be received by December 13, 2011.
    Comments are invited on (a) Whether the collection of information 
is necessary for the proper performance of the functions of the agency, 
including whether the information will have practical utility; (b) the 
accuracy of the agency's estimate of burden including the validity of 
the methodology and assumption used; (c) ways to enhance the quality, 
utility and clarity of the information to be collected; and (d) ways to 
minimize the burden of the collection of information on those who are 
to respond, including through the use of appropriate automated, 
electronic, mechanical, or other technological collection techniques on 
other forms of information technology.
    Comments may be sent to Michele Brooks., Director, Program 
Development and Regulatory Analysis, Rural Utilities Service, U.S. 
Department of Agriculture, 1400 Independence Ave., SW., Stop 1522, Room 
5159 South Building, Washington, DC 20250-1522.
    Title: Substantially Underserved Trust Areas.
    Type of Request: Approval of a new collection.
    Abstract: The RUS provides loan, loan guarantee and grant programs 
for rural electric, water and waste, and telecommunications and 
broadband infrastructure. The SUTA initiative gives the Secretary of 
Agriculture certain discretionary authorities relating to financial 
assistance terms and conditions that can enhance the financing 
possibilities in areas that are underserved by certain RUS electric, 
water and waste, and telecommunications and broadband programs. The 
data covered by this collection of information are those materials 
necessary to allow the agency to determine applicant and community 
eligibility and an explanation and documentation of the high need for 
the benefits of the SUTA provisions. Program specific application 
materials are covered by the information collection package for the 
specific RUS program being applied for.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 2 hours per response.
    Respondents: Tribes, tribal leaders, tribal members and other 
stakeholders interested in developing utility infrastructure on trust 
areas.
    Estimated Number of Respondents: 10.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 20 hours.
    Copies of this information collection can be obtained from Michele 
Brooks,

[[Page 63847]]

Program Development and Regulatory Analysis, at (202) 690-1078.
    All responses to this information collection and recordkeeping 
notice will be summarized and included in the request for OMB approval. 
All comments will also become a matter of public record.

E-Government Act Compliance

    Rural Development is committed to the E-Government Act, which 
requires Government agencies in general to provide the public the 
option of submitting information or transacting business electronically 
to the maximum extent possible

Catalog of Federal Domestic Assistance

    The programs described by this rule are listed in the Catalog of 
Federal Domestic Assistance Programs under number 10.759, Special 
Evaluation Assistance for Rural Communities and Households Program 
(SEARCH); 10.760, Water and Waste Disposal Systems for Rural 
Communities; 10.761, Technical Assistance and Training Grants; 10.762, 
Solid Waste Management Grants; 10.763, Emergency Community Water 
Assistance Grants; 10.770, Water and Waste Disposal Loans and Grants 
(Section 306C); 10.850, Rural Electrification Loans and Loan 
Guarantees; 10.851, Rural Telephone Loans and Loan Guarantees, 10.855, 
Distance Learning and Telemedicine Loans and Grants; 10.857, State Bulk 
Fuel Revolving Fund Grants; 10.859, Assistance to High Energy Cost 
Rural Communities; 10.861, Public Television Station Digital Transition 
Grant Program; 10.862, Household Water Well System Grant Program; 
10.863, Community Connect Grant Program; 10.864, Grant Program to 
Establish a Fund for Financing Water and Wastewater Projects; 10.886, 
Rural Broadband Access Loans and Loan Guarantees.
    The Catalog is available on the Internet at https://www.cfda.gov.

Executive Order 12372

    Most programs covered by this rulemaking are excluded from the 
scope of Executive Order 12372, Intergovernmental Consultation, which 
may require consultation with State and local officials. See the final 
rule related notice entitled ``Department Programs and Activities 
Excluded from Executive Order 12372,'' (50 FR 47034). However, the 
Water and Waste Disposal Loan Program, CFDA number 10.770, is subject 
to the provisions of Executive Order 12372 which requires 
intergovernmental consultation with State and local officials.

Unfunded Mandates

    This rule contains no Federal mandates (under the regulatory 
provision of Title II of the Unfunded Mandate Reform Act of 1995) 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 
Unfunded Mandate Reform Act of 1995.

National Environmental Policy Act Certification

    Rural Development has determined that this rule will not 
significantly affect the quality of the human environment as defined by 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). 
Therefore, this action does not require an environmental impact 
statement or assessment.

Executive Order 13132, Federalism

    The policies contained in this rule do not have any substantial 
direct effect on states, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government. Nor does this 
rule impose substantial direct compliance costs on state and local 
governments. Therefore, consultation with the states is not required

Executive Order 13175

    The policies contained in this rule do not impose substantial 
unreimbursed direct compliance costs on Indian tribal, Alaska native, 
or native Hawaiian governments and sovereign institutions or have 
tribal implications that preempt tribal law. Prior to development of 
this rulemaking, the agency held Tribal Consultations at seven (7) USDA 
regional consultations, conducted sixteen (16) SUTA specific 
consultations and hosted three (3) internet and toll free 
teleconference based webinars in order to determine the impact of this 
rule on Tribal governments, communities, and individuals. Reports from 
these sessions for consultation will be made part of the USDA annual 
reporting on Tribal Consultation and Collaboration, the annual SUTA 
Report to Congress and were used extensively throughout the drafting of 
this proposed rule.

Background

    USDA Rural Development (Rural Development) is a mission area within 
the U.S. Department of Agriculture comprising the Rural Housing 
Service, Rural Business/Cooperative Service and Rural Utilities 
Service. Rural Development's mission is to increase economic 
opportunity and improve the quality of life for all rural Americans. 
Rural Development meets its mission by providing loans, loan 
guarantees, grants and technical assistance through more than forty 
programs aimed at creating and improving housing, businesses and 
infrastructure throughout rural America.
    Rural Utilities Service (RUS) loan, loan guarantee and grant 
programs act as a catalyst for economic and community development. By 
financing improvements to rural electric, water and waste, and telecom 
and broadband infrastructure, RUS also plays a big role in improving 
other measures of quality of life in rural America, including public 
health and safety, environmental protection, conservation, and cultural 
and historic preservation.
    The 2008 Farm Bill (Pub. L. 110-246, codified at 7 U.S.C. 906f) 
authorized the Substantially Underserved Trust Area (SUTA) initiative. 
The SUTA initiative gives the Secretary of Agriculture certain 
discretionary authorities relating to financial assistance terms and 
conditions that can enhance the financing possibilities in areas that 
are underserved by certain RUS electric, water and waste, and telecom 
and broadband programs. Given the challenges, dynamics, and 
opportunities in implementing the SUTA initiative, RUS has aimed to 
foster a process that includes the voices of tribal leaders, tribal 
community members, Alaska Native Regional and Village Corporations, 
Guam, American Samoa and the Commonwealth of the Northern Mariana 
Islands, and other stakeholders.
    Preliminary research by RUS identified various reports that 
provided several insights. In 2007, the United States Census Bureau 
Facts for Features article (dated 10/29/07) reported that the poverty 
rate of people who reported being sole race American Indian and Alaska 
Native (AI/AN) was 27 percent. Additionally, in 2006, the United States 
Government Accountability Office reported that based on the 2000 
decennial census, the telephone subscribership rate for Native American 
households on tribal lands was substantially below the national level 
of about 98 percent. Specifically, about 69 percent of Native American 
households on tribal lands in the lower 48 states and about 87 percent 
in Alaska Native villages had telephone service. Finally, in 2000, the 
United States Census Bureau reported that on Native American lands, 
11.7 percent of residents lack complete plumbing facilities, compared 
to 1.2 percent of the general U.S. population.
    There are special considerations and challenges in implementing an 
initiative

[[Page 63848]]

on trust lands. Many American Indians, Alaska Natives, Native 
Hawaiians, and Pacific Islanders have a deep spiritual, cultural, and 
historical relationship with the land. In certain circumstances, the 
objectives of economic and infrastructure development can be at odds 
with spiritual, cultural, historical, and environmental values. 
Additionally, there are special legal considerations inherent in 
financing projects in areas where the land itself cannot be used as 
security.
    The SUTA initiative identifies the need and improves the 
availability of RUS programs to reach trust areas when they are 
determined by the Secretary of Agriculture (such authority has been 
delegated to the Administrator of RUS) to be substantially underserved. 
The RUS programs that are affected by this provision include: Rural 
Electrification Loans and Guaranteed Loans, and High Cost Energy 
Grants; Water and Waste Disposal Loans, Guaranteed Loans and Grants; 
Telecommunications Infrastructure Loans and Guaranteed Loans; Distance 
Learning and Telemedicine Loans and Grants; and Broadband Loans and 
Guaranteed Loans.
    In addition to its discretionary authority to implement the SUTA 
provisions, RUS is under a continuing obligation to make annual reports 
to Congress on (a) The progress of the SUTA initiative, and (b) 
recommendations for any regulatory or legislative changes that would be 
appropriate to improve services to substantially underserved trust 
areas. RUS has submitted three reports to Congress, dated June 18, 
2009, and June 21, 2010, and August 23, 2011.
    The USDA Office of Native American Programs (since renamed the 
Office of Tribal Relations, hereinafter OTR) and RUS began exploring a 
potential SUTA initiative in 2008 after passage of the Farm Bill. RUS 
in conjunction with OTR interpreted this to include formal USDA Tribal 
Consultation in working with stakeholders that are federally recognized 
tribes. Pursuant to this determination and in accordance with President 
Obama's November 5, 2009, Memorandum on Tribal Consultation, RUS 
conducted sixteen (16) direct tribal consultations, seven (7) regional 
consultations, one listening session and three (3) internet and toll 
free teleconference based webinars on implementation of the SUTA 
provision with Indian tribes from across the country. Additionally, the 
agency heard from six Federal agencies at three separate consultations 
on how best to implement the SUTA provision.
    Federal agencies that were consulted include: the Department of the 
Interior, as the primary Federal agency with direct responsibilities to 
serve Native American and Pacific Islander stakeholders; the Department 
of Veterans Affairs, for its clarification of the definition of ``trust 
land''; the Environmental Protection Agency, because it has information 
regarding underserved trust areas with environmental challenges; the 
Department of Energy, because it has an interest in promoting energy 
development in trust areas; the Department of Commerce and the Federal 
Communications Commission, because each agency has an interest in 
telecommunications development in trust areas; the Department of Health 
and Human Services; and the Office of Management and Budget.
    As a result of categorizing and analyzing the comments received at 
both sets of consultations, RUS was able to identify certain issues 
that impact both the underserved areas who seek better access to RUS 
programs, and the federal agencies who have similar yet sometimes 
competing interests in these areas. This regulation is informed by the 
insight gained through the consultations, and is designed to complement 
existing loan, grant, and combination loan and grant programs with the 
SUTA provisions that authorize the Administrator to apply certain 
discretionary authorities (2 percent interest and extended repayment 
terms; waivers of nonduplication restrictions, matching fund 
requirements, or credit support requirements; and highest funding 
priority) for the benefit of eligible communities, and the entities 
that serve them, in underserved Trust areas.

List of Subjects in 7 CFR Part 1700

    Authority delegations (Government agencies), Electric power, 
Freedom of information, Loan programs--communications, Loan programs--
energy, Organization and functions (Government agencies), Rural areas, 
Telecommunications, Broadband loan and grant programs, Water and waste 
loan and grant program, and the Distance Learning and Telemedicine 
program.

    For reasons set out in the preamble, the agency proposes to amend 
chapter XVII of title 7 of the Code of Federal Regulations by proposing 
to amend part 1700 to read as follows:

PART 1700--GENERAL INFORMATION

    1. The authority citation continues to read as follows:

    Authority:  5 U.S.C. 301, 552; 7 U.S.C. 901 et seq., 1921 et 
seq., 6941 et seq.; 7 CFR 2.7, 2.17 and 2.47.


Sec. Sec.  1700.59 through 1700.99  [Reserved]

    2. Add and reserve Sec. Sec.  1700.59 through 1700.99 to Subpart C 
of part 1700.
    3. Add subpart D, consisting of Sec. Sec.  1700.100 to 1700.150, to 
read as follows:

Subpart D--Substantially Underserved Trust Areas

Sec.
1700.100 Purpose.
1700.101 Definitions.
1700.102 Eligible programs.
1700.103 Eligible communities.
1700.104 Financial feasibility.
1700.105 Determining whether land meets the statutory definition of 
``trust land.''
1700.106 Discretionary provisions.
1700.107 Considerations relevant to the exercise of SUTA 
discretionary provisions.
1700.108 Application requirements.
1700.109 RUS review.
1700.110-1700.150 [Reserved]

Subpart D--Substantially Underserved Trust Areas


Sec.  1700.100  Purpose.

    This subpart establishes policies and procedures for the Rural 
Utilities Service (RUS) implementation of the Substantially Underserved 
Trust Areas (SUTA) initiative under section 306F of the Rural 
Electrification Act of 1936, as amended (7 U.S.C. 906f). The purpose of 
this rule is to identify and improve the availability of eligible 
programs in communities in substantially underserved trust areas.


Sec.  1700.101  Definitions.

    Administrator means the Administrator of the Rural Utilities 
Service, or designee or successor.
    Applicant means an entity that is eligible for an eligible program 
under that program's eligibility criteria.
    Borrower means any organization that has an outstanding loan or 
loan guarantee made by RUS for a program purpose.
    Completed application means an application that includes the 
elements specified by the rules for the applicable eligible program in 
form and substance satisfactory to RUS.
    ConAct means the Consolidated Farm and Rural Development Act, as 
amended (7 U.S.C. 1921 et seq.).
    Credit support means equity, cash requirements, letters of credit, 
and other financial commitments provided in support of a loan or loan 
guarantee.

[[Page 63849]]

    Eligible community means a community as defined by 7 CFR 1700.103.
    Eligible program means a program as defined by 7 CFR 1700.102.
    Financial assistance means a grant, combination loan and grant, 
loan guarantee or loan.
    Financial feasibility means the ability of a project or enterprise 
to meet operating expenses, financial performance metrics, such as debt 
service coverage requirements and return on investment, and the general 
ability to repay debt and sustain continued operations at least through 
the life of the RUS loan or loan guarantee.
    Matching fund requirements means the applicant's financial or other 
required contribution to the project for approved purposes.
    Nonduplication generally means a restriction on financing projects 
for services in a geographic area where reasonably adequate service 
already exists as defined by the applicable program.
Project means the activity for which financial assistance has been 
provided.
RE Act means the Rural Electrification Act of 1936, as amended (7 
U.S.C. 901 et seq.).
RUS means the Rural Utilities Service, an agency of the United States 
Department of Agriculture, successor to the Rural Electrification 
Administration.
Substantially underserved trust area means a community in trust land 
with respect to which the Administrator determines has a high need for 
the benefits of an eligible program.
Trust land means ``trust land'' as defined in section 3765 of title 38, 
United States Code as determined by the Administrator under 7 CFR 
1700.104.
Underserved means an area or community lacking an adequate level or 
quality of service in an eligible program, including areas of 
duplication of service provided by an existing provider where such 
provider has not provided or will not provide adequate level or quality 
of service.


Sec.  1700.102  Eligible programs.

    SUTA does not apply to all RUS programs. SUTA only applies to 
eligible programs. An eligible program means a program administered by 
RUS and authorized in (a) the RE Act, or (b) paragraphs (1), (2), (14), 
(22), or (24) of section 306(a) (7 U.S.C. 1926(a)(1), (2), (14), (22), 
(24)), or sections 306A, 306C, 306D, or 306E of the Con Act (7 U.S.C. 
1926a, 1926c, 1926d, 1926e).


Sec.  1700.103  Eligible communities.

    (a) An eligible community is a community that:
    (1) Is located on trust land;
    (2) May be served by an RUS administered program; and
    (3) Is determined by the Administrator as having a high need for 
benefits of an eligible program.


Sec.  1700.104  Financial feasibility.

    (a) Financial Feasibility. The Administrator will only make grants, 
loans and loan guarantees that RUS finds to be financially feasible and 
that provide eligible program benefits to substantially underserved 
trust areas. The financial feasibility of an application will be 
determined pursuant to normal underwriting practices for a particular 
eligible program, as supplemented by available SUTA provisions. All 
income and assets available to and under the control of the Applicant 
will be considered as part of the Applicant's financial profile.


Sec.  1700.105  Determining whether land meets the statutory definition 
of ``trust land.''

    The Administrator will use one or more of the following resources 
in determining whether a particular community is located in trust land:
    (a) Official maps of Federal Indian Reservations based on 
information compiled by the U.S. Department of the Interior, Bureau of 
Indian Affairs and made available to the public;
    (b) Title Status Reports issued by the U.S. Department of the 
Interior, Bureau of Indian Affairs showing that title to such land is 
held in trust or is subject to restrictions imposed by the United 
States;
    (c) Trust Asset and Accounting Management System data, maintained 
by the Department of the Interior, Bureau of Indian Affairs;
    (d) Official maps of the Department of Hawaiian Homelands of the 
State of Hawaii identifying land that has been given the status of 
Hawaiian home lands under the provisions of section 204 of the Hawaiian 
Homes Commission Act, 1920;
    (e) Official records of the U.S. Department of the Interior, the 
State of Alaska, or such other documentation of ownership as the 
Administrator may determine to be satisfactory, showing that title is 
owned by a Regional Corporation or a Village Corporation as such terms 
are defined in the Alaska Native Claims Settlement Act (43 U.S.C. 1601 
et seq);
    (f) Evidence that the land is located on Guam, American Samoa or 
the Commonwealth of the Northern Mariana Islands, and is eligible for 
use in the Veteran's Administration direct loan program for veterans 
purchasing or constructing homes on communally-owned land; and
    (g) Any other evidence satisfactory to the Administrator to 
establish that the land is ``trust land'' within the meaning of 38 
U.S.C. 3765(1).


Sec.  1700.106  Discretionary provisions.

    (a) To improve the availability of eligible programs in eligible 
communities determined to have a high need for the benefits of an 
eligible program, the Administrator retains the discretion, on a case-
by-case basis, to:
    (1) Make available to qualified applicants financing with an 
interest rate as low as 2 percent, or extend repayment terms;
    (2) Waive non-duplication restrictions, matching fund requirements, 
and/or credit support requirements from any loan or grant program 
administered by RUS;
    (3) Give the highest funding priority to designated projects in 
substantially underserved trust areas.
    (b) Requests for waivers of nonduplication restrictions, matching 
fund requirements, or credit support requirements, and requests for 
highest funding priority will be reviewed on a on a case-by-case basis 
upon written request of the applicant filed pursuant to 7 CFR 1700.108.
    (c) Notwithstanding the requirements in paragraph (b) of this 
section, the Administrator reserves the right to evaluate any 
application for an eligible program for use of the discretionary 
provisions of this subpart without a formal, written request from the 
applicant.


Sec.  1700.107  Considerations relevant to the exercise of SUTA 
discretionary provisions.

    (a) In considering a request to make available financing with an 
interest rate as low as 2 percent, and/or with extended repayment 
terms, the Administrator will evaluate the effect of and need for such 
terms on the finding of financial feasibility.
    (b) In considering a request for a non-duplication waiver, the 
Administrator will consider the offerings of all existing service 
providers to determine whether or not granting the non-duplication 
waiver is warranted. A waiver of non-duplication restrictions will not 
be given if the Administrator determines as a matter of financial 
feasibility that, taking into account all existing service providers, 
an applicant or RUS borrower would not be able to repay a loan or 
successfully implement a grant agreement. Requests for waivers of non-

[[Page 63850]]

duplication restrictions will be reviewed by taking the following 
factors into consideration:
    (1) The size, extent and demographics of the duplicative area;
    (2) The cost of service from existing service providers;
    (3) The quality of available service; and
    (4) The ability of the existing service provider to serve the 
eligible service area.
    (c) Requests for waivers of matching fund requirements will be 
evaluated by taking the following factors into consideration:
    (1) Whether waivers or reductions in matching or equity 
requirements would make an otherwise financially infeasible project 
financially feasible;
    (2) Whether permitting a matching requirement to be met with 
sources not otherwise permitted in an affected program due to 
regulatory prohibition may be allowed under a separate statutory 
authority; and
    (3) Whether the application could be ranked and scored as if the 
matching requirements were fully met.
    (d) Requests for waivers of credit support requirements will be 
evaluated taking the following factors into consideration:
    (1) The cost and availability of credit support relative to the 
loan security derived from such support;
    (2) The extent to which the requirement is shown to be a barrier to 
the applicant's participation in the program; and
    (3) The alternatives to waiving the requirements.
    (e) The Administrator may adapt the manner of assigning highest 
funding priority to align with the selection methods used for 
particular programs or funding opportunities.
    (1) Eligible programs which use priority point scoring may, in a 
notice of funds availability or similar notice, assign extra points for 
SUTA eligible applicants as a means to exercise a discretionary 
authority under this subpart.
    (2) The Administrator may announce a competitive grant opportunity 
focused exclusively or primarily on trust lands which incorporates one 
or more discretionary authorities under this subpart into the rules or 
scoring for the competition.


Sec.  1700.108  Application requirements.

    (a) To receive consideration under this subpart, the applicant must 
submit to RUS a completed application that includes all of the 
information required for an application in accordance with the 
regulations relating to the program for which financial assistance is 
being sought. In addition, the applicant must notify the RUS contact 
for the applicable program in writing that it seeks consideration under 
this subpart and identify the discretionary authorities of this subpart 
it seeks to have applied to its application. The required written 
request memorandum or letter must include the following items:
    (1) A description of the applicant, documenting eligibility.
    (2) A description of the community to be served, documenting 
eligibility in accordance with 7 CFR 1700.103.
    (3) An explanation and documentation of the high need for the 
benefits of the eligible program, which may include:
    (i) Data documenting a lack of service (i.e. no service or unserved 
areas) or inadequate service in the affected community;
    (ii) Data documenting significant health risks due to the fact that 
a significant proportion of the community's residents do not have 
access to, or are not served by, adequate, affordable service.
    (iii) Data documenting economic need in the community, which may 
include: (A) Per capita income of the residents in the community, as 
documented by the U.S. Department of Commerce, Bureau of Economic 
Analysis;
    (B) Local area unemployment and not-employed statistics in the 
community, as documented by the U.S. Department of Labor, Bureau of 
Labor Statistics and/or the U.S. Department of the Interior, Bureau of 
Indian Affairs;
    (C) Supplemental Nutrition Assistance Program participation and 
benefit levels in the community, as documented by the U.S. Department 
of Agriculture, Economic Research Service;
    (D) National School Lunch Program participation and benefit levels 
in the community, as documented by the U.S. Department of Agriculture, 
Food and Nutrition Service;
    (E) Temporary Assistance for Needy Families Program participation 
and benefit levels in the community, as documented by the U.S. 
Department of Health and Human Services, Administration for Children 
and Families;
    (F) Lifeline Assistance and Link-Up America Program participation 
and benefit levels in the community, as documented by the Federal 
Communications Commission and the Universal Service Administrative 
Company;
    (G) Examples of economic opportunities which have been or may be 
lost without improved service.
    (H) Data maintained and supplied by Indian tribes or other tribal 
or jurisdictional entities on ``trust land'' to the Department of 
Interior, the Department of Health and Human Services and the 
Department of Housing and Urban Development that illustrates a high 
need for the benefits of an eligible program.
    (4) The impact of the specific authorities sought under this 
subpart.
    (b) The applicant must provide any additional information RUS may 
consider relevant to the application which is necessary to adequately 
evaluate the application under this subpart.
    (c) RUS may also request modifications or changes, including 
changes in the amount of funds requested, in any proposal described in 
an application submitted under this subpart.
    (d) The applicant must submit a completed application within the 
application window and guidelines for an eligible program.


Sec.  1700.109  RUS review.

    (a) RUS will review the application to determine whether the 
applicant is eligible to receive consideration under this subpart and 
whether the application is timely, complete, and responsive to the 
requirements set forth in 7 CFR 1700.107.
    (b) If the Administrator determines that the application is 
eligible to receive consideration under this subpart and one or more 
SUTA requests are granted, the applicant will be so notified.
    (c) If RUS determines that the application is not eligible to 
receive further consideration under this subpart, RUS will so notify 
the applicant. The applicant may withdraw its application or request 
that RUS treat its application as an ordinary application for review, 
feasibility analysis and service area verification by RUS consistent 
with the regulations and guidelines normally applicable to the relevant 
program.


Sec. Sec.  1700.110-1700.150  [Reserved]

    Dated: September 8, 2011.
Jonathan Adelstein,
Administrator, Rural Utilities Service.
[FR Doc. 2011-26133 Filed 10-13-11; 8:45 am]
BILLING CODE P