Community Programs Guaranteed Loans, 38015-38016 [2012-15579]

Agencies

• DEPARTMENT OF AGRICULTURE
• Rural Housing Service

[Federal Register Volume 77, Number 123 (Tuesday, June 26, 2012)]
[Proposed Rules]
[Pages 38015-38016]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-15579]


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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.

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Federal Register / Vol. 77, No. 123 / Tuesday, June 26, 2012 / 
Proposed Rules

[[Page 38015]]



DEPARTMENT OF AGRICULTURE

Rural Housing Service

7 CFR Part 3575

RIN 0575-AC92


Community Programs Guaranteed Loans

AGENCY: Rural Housing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Rural Housing Service (RHS) proposes to amend the 
regulations utilized to service the Community Facilities Guaranteed 
Loan Program by amending the regulation in two separate sections, in 
order to clarify the types of projects that are eligible for a 
Community Facilities Guaranteed Loan. The intended effect of this 
action is to strengthen the Community Facilities Guaranteed Loan 
Program by limiting the risk to the guaranteed loan portfolio. RHS is 
seeking to prohibit the financing of facilities in which the operation 
of such facilities have not been supported by the community and have 
resulted in significant default and loan losses to the agency.

DATES: Written or email comments must be received on or before August 
27, 2012.

ADDRESSES: You may submit comments to this rule by any of the following 
methods:
     Federal e-Rulemaking 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 another 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: Kendra Doedderlein, Community Programs 
Senior Loan Specialist, Rural Housing Service, U.S. Department of 
Agriculture, STOP 0787, 1400 Independence Ave. SW., Washington, DC 
20250-0787, Telephone: (202) 720-1503.

SUPPLEMENTARY INFORMATION: 

Executive Order 12866

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

Programs Affected

    The Catalog of Federal Domestic Assistance Program impacted by this 
action is 10.766, Community Facilities Loans and Grants.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    Executive Order 13175 imposes requirements on Rural Development in 
the development of regulatory policies that have tribal implications or 
preempt tribal laws. Rural Development has determined that the proposed 
rule does not have a substantial direct effect on one or more Indian 
tribe(s) or on either the relationship or the distribution of powers 
and responsibilities between the Federal Government and Indian tribes. 
Thus, this rule is not subject to the requirements of Executive Order 
13175. If a tribe determines that this rule has implications of which 
Rural Development is not aware and would like to engage in consultation 
with Rural Development on this rule, please contact Rural Development's 
Native American Coordinator at (720) 544-2911 or AIAN@wdc.usda.gov.

Executive Order 12372, Intergovernmental Review

    This program is subject to the provisions of Executive Order 12372, 
which requires intergovernmental consultation with State and local 
officials. RHS conducts intergovernmental consultations for each loan 
in the manner delineated in 7 CFR part 3015, subpart V.

Executive Order 12988, Civil Justice Reform

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

Environmental Impact Statement

    The action has been reviewed in accordance with 7 CFR part 1940, 
subpart G, ``Environmental Program.'' The Agency has determined that 
this action does not constitute a major Federal action significantly 
affecting the quality of the human environment and, in accordance with 
the National Environmental Policy Act of 1969, 42 U.S.C. 4321 et seq., 
an Environmental Impact Statement is not required.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 
U.S.C. chapters 17A and 25, established 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, RHS 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 1 year. When such a statement is needed for a 
rule, section 205 of the UMRA generally requires RHS to identify and 
consider a reasonable number of regulatory alternatives and adopt the 
least costly, most cost-effective, or least burdensome alternative that 
achieves the objectives of the rule. This rule contains no Federal 
mandates (under the regulatory provisions of title II of the UMRA) for 
State, local, and tribal governments or the private sector. Therefore, 
this rule is not subject to the requirements of sections 202 and 205 of 
the UMRA.

[[Page 38016]]

Regulatory Flexibility Act

    The rules have been reviewed with regard to the requirements of the 
Regulatory Flexibility Act (5 U.S.C. 601-612). Under Section 605(b) of 
the Regulatory Flexibility Act, 5 U.S.C. 605(b), the Agency has 
determined and certified by signature of this document that the rule 
will not have a significant economic impact on a substantial number of 
small entities since this rulemaking action does not involve a new or 
expanded program. Furthermore, the program does not treat entities 
differently based solely on their size.

Executive Order 13132, Federalism

    The policies contained in the rule does 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 do the 
rules impose substantial direct compliance costs on State and local 
governments. Therefore, consultation with the States is not required.

Implementation

    It is the policy of this Department that rules relating to public 
property, loans, grants, benefits, or contracts shall comply with 5 
U.S.C. 553, notwithstanding the exemption of that section with respect 
to such rules.

Paperwork Reduction Act

    The revisions in this rulemaking for part 3575 are subject to the 
burden package assigned OMB control number 0575-0137. No paperwork 
changes are being proposed.

Executive Order 12372, Intergovernmental Review of Federal Programs

    This proposed rule is not subject to the provisions of EO 12372, 
which require intergovernmental consultation with State and local 
officials, because this rule provides general guidance on something. 
Applications for Agency programs will be reviewed individually under EO 
12372 as required by program procedures.

E-Government Act Compliance

    The Agency 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.

Discussion

    The Community Facilities Guaranteed Loan Program bolsters the 
credit available from private lending institutions through the 
guarantee of loans for essential community facilities in rural areas. 
This program has been in existence since 1992, and as it evolves, the 
need to define and revise terms is required.
    Section 3575.24(a)(1)(x) currently identifies recreational 
facilities as eligible types of facilities for financing under this 
program; however, Agency experience shows that the current language is 
too brief and subject to different interpretation by prospective 
applicants and other program users. Therefore, the Agency proposes to 
revise the paragraph to more clearly convey to the public the Agency's 
policy with respect to the financing of essential community facilities 
that provide recreational services as part of addressing overall 
community development needs.
    Section 3575.25 prohibits the financing with guaranteed loan funds 
on specific types of projects. The Agency proposes to add a paragraph 
(j) ``Golf courses'' to this section. This is based upon the Agency's 
experience to date in financing this type of project and the failure 
rate the Agency has experienced on golf course projects. Also, the lack 
of support demonstrated by the community indicates that a golf course 
is not essential to a rural community and is typically viewed as a 
commercial undertaking.

List of Subjects in 7 CFR 3575

    Community facilities, Guaranteed loans, Loan programs.

    For the reasons set forth in the preamble, XXXV of Subtitle B, 
title 7, Code of Federal Regulations is proposed to be amended as 
follows:

PART 3575--GENERAL

    1. The authority citation for part 3575 continues to read as 
follows:

    Authority:  5 U.S.C. 301, 7 U.S.C. 1989.

Subpart A--Community Programs Guaranteed Loans

    2. Amend Sec.  3575.24 to revise paragraph (a)(1)(x) to read as 
follows:


Sec.  3575.24  Eligible loan purposes.

    (a) * * *
    (1) * * *
    (x) Community parks, community activity centers, and similar types 
of facilities that are an integral part of the orderly development of a 
community. Recreational components, such as, but not limited to, 
playground equipment of an otherwise non-recreational eligible 
community facility such as childcare, educational, or health care 
facilities are also eligible.
* * * * *
    3. Amend Sec.  3575.25 to add paragraph (j) to read as follows:


Sec.  3575.25  Ineligible loan purposes.

* * * * *
    (j) Golf courses, water parks, race tracks or other recreational 
type facilities inherently commercial in nature.
* * * * *

    Dated: May 18, 2012.
Tammye Trevi[ntilde]o,
Administrator, Rural Housing Service.
[FR Doc. 2012-15579 Filed 6-25-12; 8:45 am]
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