Announcement of Application Deadlines and Requirements for Section 313A Guarantees for Bonds and Notes Issued for Utility Infrastructure Loans for Fiscal Year (FY) 2019, 16457-16461 [2019-07900]

Agencies

• DEPARTMENT OF AGRICULTURE
• Rural Utilities Service

[Federal Register Volume 84, Number 76 (Friday, April 19, 2019)]
[Notices]
[Pages 16457-16461]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-07900]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service


Announcement of Application Deadlines and Requirements for 
Section 313A Guarantees for Bonds and Notes Issued for Utility 
Infrastructure Loans for Fiscal Year (FY) 2019

AGENCY: Rural Utilities Service, USDA.

ACTION: Notice of Solicitation of Applications (NOSA).

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SUMMARY: The Rural Utilities Service (RUS), an agency of the United 
States Department of Agriculture (USDA), announces the application 
window and requirements and $750 million in loan funding that is 
available for Fiscal Year (FY) 2019 under the Guarantees for Bonds and 
Notes Issued for utility infrastructure loans (the 313A Program) 
authorized under the Rural Electrification Act of 1936, as amended (the 
RE Act), and related terms. The Agriculture Improvement Act of 2018 
(the Farm Bill), enacted on December 20, 2018, amended Section 313A of 
the RE Act. Applications under this NOSA will be considered under the 
new statutory provisions. Those provisions supersede any prior 
inconsistent policy, regulation or guidance. The Farm Bill instructs 
RUS to continue to carry out this program under a Notice until new 
regulations are implemented. RUS is developing regulatory changes to 
implement new Farm Bill provisions related to this program and others. 
This NOSA implements the new 313A Program provisions until further 
notice or regulation.
    Under the 313A Program, in accordance with the Farm Bill, the 
Federal Financing Bank (FFB) will make loans to the selected 
applicant(s) and RUS will guarantee the applicant(s)'s repayment of the 
loans to FFB. The Farm Bill amended the RE Act to allow selected 
applicants to use the proceeds of loan funds made available under this 
NOSA for the 313A Program to make utility infrastructure loans (which 
includes broadband loans) or to refinance, subject to certain 
limitations, bonds or notes issued for such purposes to an applicant 
that has at any time received, or is eligible to receive, a loan under 
the RE Act. In addition, the Farm Bill amendments to the RE Act removed 
the prohibition against the use of proceeds of loan funds made 
available under the 313A Program for projects for the generation of 
electricity.

DATES: Completed applications must be received or post marked by RUS no 
later than 5:00 p.m. Eastern Daylight Time (EDT) June 18, 2019.

ADDRESSES: Applicants are required to submit one original and two 
copies of their loan applications to the U.S. Department of 
Agriculture, Rural Utilities Service, Electric Program, ATTN: Amy 
McWilliams, Management Analyst, 1400 Independence Avenue SW, STOP 1568, 
Room 0226-S, Washington, DC 20250-1568.

FOR FURTHER INFORMATION CONTACT: For further information contact Amy 
McWilliams, Management Analyst, 1400 Independence Avenue SW, STOP 1568, 
Room 0226-S, Washington, DC 20250-1568. Telephone: (202) 205-8663; fax: 
(844) 749-0736; or email: [email protected].

SUPPLEMENTARY INFORMATION:

Overview

    Federal Agency: Rural Utilities Service, USDA.
    Funding Opportunity Title: Guarantees for Bonds and Notes Issued 
for Electrification or Telephone Purposes for Fiscal Year (FY) 2019.
    Announcement Type: Guarantees for Bonds and Notes.
    Catalog of Federal Domestic Assistance (CFDA) Number: 10.850.
    Due Date for Applications: Completed applications must be received 
or post marked by RUS no later than 5:00 p.m. Eastern Daylight Time 
(EDT) June 18, 2019.

Items in Supplementary Information

I. Funding Opportunity Description.
II. Award Information.
III. Eligibility Information.
IV. Fiscal Year 2019 Application and Submission Information.
V. Application Review Information.
VI. Issuance of the Guarantee.
VII. Guarantee Agreement.
VIII. Reporting Requirements.
IX. Award Administration Information.
X. National Environmental Policy Act Certification.
XI. Other Information and Requirements.
XII. Agency Contacts: website, phone, fax, email, contact name.
XIII. Non-discrimination Statement: USDA non-discrimination 
statement, how to file a complaint, persons with disabilities.

[[Page 16458]]

I. Funding Opportunity Description

A. Purpose and Objectives of the 313A Program

    The purpose of the 313A Program is to make guaranteed loans to 
selected applicants (each referred to as ``Guaranteed Lender'' in this 
NOSA and in the Program Regulations) that are to be used (i) to make 
utility infrastructure loans or (ii) to refinance bonds or notes issued 
for such purposes to a borrower that has at any time received, or is 
eligible to receive, a loan under the RE Act. Each applicant must 
provide a statement on how it proposes to use the proceeds of the 
guaranteed bonds, and the financial benefit it anticipates deriving 
from participating in the program pursuant to 7 CFR 1720.6(a)(3). 
Objectives may include, but are not limited to the annual savings to be 
realized by the ultimate borrower(s) as a result of the applicant's use 
of lower cost loan funds provided by FFB and guaranteed by RUS.
    The Farm Bill has modified the 313A Program by amending the RE Act 
to allow proceeds of guaranteed bonds awarded under this NOSA to be 
used to make broadband loans, or to refinance broadband loans, made to 
a borrower that has received, or is eligible to receive, a broadband 
loan under Title VI of the RE Act. As a result, to the extent that the 
proceeds of guaranteed bonds are to be used to fund or refinance 
broadband loans that were not made by RUS (``Non-RUS Broadband 
Loans''), such proceeds may only be used for Non-RUS Broadband Loans 
that would meet the amended eligibility requirements of Title VI 
pursuant to the 2018 Farm Bill.
    The Farm Bill has also modified the 313A Program to allow the 
proceeds of guaranteed loans made under this NOSA to be used by the 
Guaranteed Lender to fund projects for the generation of electricity.

B. Statutory Authority

    The 313A Program is authorized by Section 313A of the Rural 
Electrification Act of 1936, as amended (7 U.S.C. 940c-1) (the RE Act) 
and is implemented by regulations located at 7 CFR part 1720, in 
accordance with the Farm Bill. The Administrator of RUS (the 
Administrator) has been delegated responsibility for administering the 
313A Program.

C. Definition of Terms

    The definitions applicable to this NOSA are published at 7 CFR 
1720.3.

D. Application Awards

    RUS will review and evaluate applications received in response to 
this NOSA based on the regulations at 7 CFR 1720.7, and as provided in 
this NOSA.

II. Award Information

    Type of Awards: Guaranteed Loans.
    Fiscal Year Funds: FY 2019.
    Available Funds: $750 million.
    Award Amounts: RUS anticipates making multiple approvals under this 
NOSA. The number, amount and terms of awards under this NOSA will 
depend in part on the number of eligible applications and the amount of 
funds requested. In determining whether or not to make an award, RUS 
will take overall program policy objectives into account.
    Due Date for Applications: See under SUPPLEMENTARY INFORMATION 
section.
    Award Date: Awards will be made on or before September 30, 2019.
    Schedule of Loan Repayment: The amortization method for the 
repayment of the guaranteed loan shall be repaid by the Guaranteed 
Lender: (i) In periodic installments of principal and interest, (ii) in 
periodic installments of interest and, at the end of the term of the 
bond or note, as applicable, by the repayment of the outstanding 
principal, or (iii) through a combination of the methods described in 
(i) and (ii) above. The amortization method will be agreed to by RUS 
and the Guaranteed Lender.

III. Eligibility Information

A. Eligible Applicants

    1. To be eligible to participate in the 313A Program, a Guaranteed 
Lender must be:
    a. A bank or other lending institution organized as a private, not-
for-profit cooperative association, or otherwise organized on a non-
profit basis;
    b. Able to demonstrate to the Administrator that it possesses the 
appropriate expertise, experience, and qualifications to make loans for 
utility infrastructure purposes (to the extent that the applicant 
intends to use the guaranteed loan funds for such purpose); and
    c. Able to demonstrate to the Administrator that it has bonds or 
notes eligible for refinancing under the 313A Program (to the extent 
that the applicant intends to use the guaranteed loan funds for such 
purpose).
    2. To be eligible to receive a guarantee, a Guaranteed Lender's 
bond must meet the following criteria:
    a. The Guaranteed Lender must furnish the Administrator with a 
certified list of the principal balances of eligible loans outstanding 
and certify that such aggregate balance is at least equal to the sum of 
the proposed principal amount of guaranteed bonds to be issued, 
including any previously issued guaranteed bonds outstanding;
    b. The guaranteed bonds to be issued by the Guaranteed Lender would 
receive an underlying investment grade rating from a Rating Agency, 
without regard to the guarantee; and
    3. A lending institution's status as an eligible applicant does not 
assure that the Administrator will issue the guarantee sought in the 
amount or under the terms requested, or otherwise preclude the 
Administrator from declining to issue a guarantee.

B. Other Eligibility Requirements

    Applications will only be accepted from lenders that serve rural 
areas defined in 7 CFR 1710.2(a) as (i) any area of the United States, 
its territories and insular possessions (including any area within the 
Federated States of Micronesia, the Marshall Islands, and the Republic 
of Palau) other than a city, town, or unincorporated area that has a 
population of greater than 20,000 inhabitants; and (ii) any area within 
a service area of a borrower for which a borrower has an outstanding 
loan as of June 18, 2008, made under titles I through V of the Rural 
Electrification Act of 1936 (7 U.S.C. 901-950bb). For initial loans to 
a borrower made after June 18, 2008, the ``rural'' character of an area 
is determined at the time of the initial loan to furnish or improve 
service in the area.

IV. Fiscal Year 2019 Application and Submission Information

A. Applications

    All applications must be prepared and submitted in accordance with 
this NOSA and 7 CFR 1720.6 (Application Process). To ensure the proper 
preparation of applications, applicants should carefully read this NOSA 
and 7 CFR part 1720 (available online at https://www.ecfr.gov/cgi-bin/text-idx?SID=9295e45c9a0f6a857d800fbec5dde2fb&mc=true&node=pt7.11.1720&rgn=div5).

B. Content and Form of Submission

    In addition to the required application specified in 7 CFR 1720.6, 
all applicants must submit the following additional required documents 
and materials:
    1. Form AD-1047, Certification Regarding Debarment, Suspension, and 
Other Responsibility Matters Primary Covered Transactions.
    This form contains certain certifications relating to debarment and 
suspension, convictions, criminal

[[Page 16459]]

charges, and the termination of public transactions (See 2 CFR part 
417, and 7 CFR 1710.123.) This form is available at https://www.ocio.usda.gov/policy-directives-records-forms/forms-management/approved-computer-generated-forms;
    2. Restrictions on Lobbying.
    Applicants must comply with the requirements relating to 
restrictions on lobbying activities. (See 2 CFR part 418, and 7 CFR 
1710.125.) This form is available at https://www.rd.usda.gov/publications/regulations-guidelines/electric-sample-documents;
    3. Uniform Relocation Act assurance statement.
    Applicants must comply with 49 CFR part 24, which implements the 
Uniform Relocation Assistance and Real Property Acquisition Policies 
Act of 1970, as amended. (See 7 CFR 1710.124.) This form is available 
at https://www.rd.usda.gov/publications/regulations-guidelines/electric-sample-documents;
    4. Federal debt delinquency requirements.
    This report indicates whether or not the applicants are delinquent 
on any Federal debt (See 7 CFR 1710.126 and 7 CFR 1710.501(a)(13)). 
This form is available at https://www.rd.usda.gov/publications/regulations-guidelines/electric-sample-documents;
    5. RUS Form 266, Compliance Assurance.
    Applicants must submit a non-discrimination assurance commitment to 
comply with certain regulations on non-discrimination in program 
services and benefits and on equal employment opportunity as set forth 
in 7 CFR parts 15 and 15b and 45 CFR part 90. This form is available at 
https://www.rd.usda.gov/publications/regulations-guidelines/forms-publications;
    6. Articles of incorporation and bylaws.
    See 7 CFR 1710.501(a)(14). These are required if either document 
has been amended since the last loan application was submitted to RUS, 
or if this is the applicant's first application for a loan under the RE 
Act; and
    7. Form AD-3030, Representations Regarding Felony Conviction and 
Tax Delinquent Status for Corporate Applications.
    Corporate applicants are required to complete and submit Form AD-
3030 with their applications. This form is available at https://www.ocio.usda.gov/policy-directives-records-forms/forms-management/approved-computer-generated-forms.

C. Supplemental Documents for Submission

    1. Cash flow projections and assumptions:
    Each applicant must include five-year pro-forma cash flow 
projections or business plans and clearly state the assumptions that 
underlie the projections, demonstrating that there is reasonable 
assurance that the applicant will be able to repay the guaranteed loan 
in accordance with its terms (See 7 CFR 1720.6(a)(4)).
    2. Pending litigation statement:
    A statement from the applicant's counsel listing any pending 
litigation, including levels of related insurance coverage and the 
potential effect on the applicant, must be submitted to RUS.

V. Application Review Information

A. Application Evaluation

    1. Administrator Review.
    a. Each application will be reviewed by the Administrator to 
determine whether it is eligible under 7 CFR 1720.5, the information 
required under 7 CFR 1720.6 is complete, and the proposed guaranteed 
bond complies with applicable statutes and regulations. The 
Administrator can at any time reject an application that fails to meet 
these requirements.
    b. Applications will be subject to a substantive review, on a 
competitive basis, by the Administrator based upon the evaluation 
factors listed in 7 CFR 1720.7(b).
    2. Decisions by the Administrator.
    The Administrator will approve or deny applications in a timely 
manner as such applications are received; provided, however, that in 
order to facilitate competitive evaluation of applications, the 
Administrator may from time to time defer a decision until more than 
one application is pending. The Administrator may limit the number of 
guarantees made to a maximum of five per year, to ensure a sufficient 
examination is conducted of applicant requests. RUS will notify the 
applicant in writing of the Administrator's approval or denial of an 
application. Approvals for guarantees will be conditioned upon 
compliance with 7 CFR 1720.4 (in accordance with the Farm Bill) and 7 
CFR 1720.6. The Administrator reserves the discretion to approve an 
application for an amount less than that requested.

B. Independent Assessment

    Before a guarantee decision is made by the Administrator, the 
Administrator shall request that FFB review the rating agency 
determination required by 7 CFR 1720.5(b)(2) as to whether the bond or 
note to be issued would receive an investment grade rating without 
regard to the guarantee.

VI. Issuance of the Guarantee

    The requirements under this section must be met by the applicant 
prior to the endorsement of a guarantee by the Administrator (See 7 CFR 
1720.8.)

VII. Guarantee Agreement

    Each Guaranteed Lender will be required to enter into a Guarantee 
Agreement with RUS that contains the provisions described in 7 CFR 
1720.8 (Issuance of the Guarantee), 7 CFR 1720.9 (Guarantee Agreement), 
and 7 CFR 1720.12 (Reporting Requirements). The Guarantee Agreement 
will also obligate the Guaranteed Lender to pay, on an annual basis, a 
guarantee fee equal to 30 basis points (0.30 percent) of the 
outstanding principal amount of the guaranteed loan (See 7 CFR 
1720.10).

VIII. Reporting Requirements

    Guaranteed Lenders are required to comply with the financial 
reporting requirements and Pledged Collateral review and certification 
requirements set forth in 7 CFR 1720.12.

IX. Award Administration Information

Award Notices

    RUS will send a commitment letter to an applicant once the loan is 
approved. Applicants must accept and commit to all terms and conditions 
of the loan which are requested by RUS and FFB as follows:
    1. Compliance conditions.
    In addition to the standard conditions placed on the 313A Program 
or conditions requested by RUS to ensure loan security and statutory 
compliance, applicants must comply with the following conditions:
    a. Each Guaranteed Lender selected under the 313A Program will be 
required to post collateral for the benefit of RUS in an amount equal 
to the aggregate amount of loan advances made to the Guaranteed Lender 
under the 313A Program.
    b. The pledged collateral (the Pledged Collateral) shall consist of 
outstanding notes or bonds payable to the Guaranteed Lender (the 
Eligible Securities) and shall be placed on deposit with a collateral 
agent for the benefit of RUS. To be deemed Eligible Securities that can 
be pledged as collateral, the notes or bonds to be pledged (i) cannot 
be classified as non-performing, impaired, or restructured under 
generally accepted accounting principles, (ii) must be free and clear 
of all liens other than the lien created for

[[Page 16460]]

the benefit of RUS, (iii) cannot be comprised of more than 30% of bonds 
or notes from generation and transmission borrowers, (iv) cannot have 
more than 5% of notes and bonds be from any one particular borrower and 
(v) cannot be unsecured notes.
    c. The Guaranteed Lender will be required to place a lien on the 
Pledged Collateral in favor of RUS (as secured party) at the time that 
the Pledged Collateral is deposited with the collateral agent. RUS will 
have the right, in its sole discretion, within 14 business days to 
reject and require the substitution of any Pledged Collateral that the 
Guaranteed Lender deposits as collateral with the collateral agent. 
Prior to receiving any advances under the 313A Program, the Guaranteed 
Lender will be required to enter into a pledge agreement, satisfactory 
to RUS, with a banking institution serving as collateral agent.
    d. The Guaranteed Lender will be required to maintain Pledged 
Collateral at a level that is sufficient to ensure that in the event of 
default resources will be available to cover principal, interest, fees 
and reasonable expenses incurred by RUS as a result of a default or 
incurred pursuant to RUS's obligation to make related payments to FFB 
on all guarantees issued by RUS to FFB for the benefit of the 
Guaranteed Lender under Section 313A of the RE Act. The Guaranteed 
Lender will also be required to agree that the Pledged Collateral can 
be used for such purposes.
    e. The Guaranteed Lender will be required to agree to not to take 
any action that would have the effect of reducing the value of the 
pledged collateral below the level described above.
    f. Applicants must certify to the RUS, the portion of their loan 
portfolio that is:
    (1) Refinanced RUS debt;
    (2) Debt of borrowers for whom both RUS and the applicants have 
outstanding loans; and
    (3) Debt of borrowers for whom both RUS and the applicant have 
outstanding concurrent loans pursuant to Section 307 of the RE Act, and 
the amount of Eligible Loans.
    2. Compliance with Federal Laws.
    Applicants must comply with all applicable Federal laws and 
regulations.
    a. This obligation is subject to the provisions contained in the 
Consolidated Appropriations Act, 2018, Public Law 115-141, Division E, 
Title VII, Sections 745 and 746, as amended and/or subsequently enacted 
for USDA agencies and offices, regarding the prohibition against RUS 
making awards to applicants having corporate felony convictions within 
the past 24 months or to applicants having corporate federal tax 
delinquencies.
    b. An authorized official within your organization must execute, 
date, and return the loan commitment letter and the Assurance Regarding 
Felony Conviction or Tax Delinquent Status for Corporate Applicants 
(Form AD-3031) to RUS within 14 calendar days from the date of the loan 
commitment letter, or by September 27, 2019, if the loan is approved 
after September 13, 2019; otherwise, the commitment will be void. This 
form is available at https://www.ocio.usda.gov/policy-directives-records-forms/forms-management/approved-computer-generated-forms.
    c. Uniform Commercial Code (UCC) Filing. The Borrower must provide 
RUS with evidence that the Borrower has filed the UCC financing 
statement required by 7 CFR 1720.8(a)(2). Upon filing of the 
appropriate UCC financing statement, the Guaranteed Lender will provide 
RUS with a perfection opinion by outside counsel which demonstrates 
that RUS's security interest in the pledged collateral under the Pledge 
Agreement is perfected.
    d. Additional conditions may be instituted for future obligations.

X. National Environmental Policy Act Certification

    For any proceeds to be used to refinance bonds and notes previously 
issued by the Guaranteed Lender for the RE Act purposes that are not 
obligated with specific projects, RUS has determined that these 
financial actions will not individually or cumulatively have a 
significant effect on the human environment as defined by the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and its 
implementing regulations at 40 CFR parts 1500-1508. However, for any 
new projects funded through the 313A Program, applicants must consult 
with RUS and comply with the Agency regulations at 7 CFR part 1970.

XI. Other Information and Requirements

    Applications must contain all the required elements of this NOSA 
and all standard requirements as required by 7 CFR part 1720. 
Additional supporting data or documents may be required by RUS 
depending on the individual application or financial conditions. All 
applicants must comply with all Federal Laws and Regulations.

XII. Agency Contacts

    A. Website: https://www.rd.usda.gov/contact-us/national-office/rus.
    B. Phone: (202) 205-8663.
    C. Fax: (844) 749-0736.
    D. Email: [email protected].
    E. Main point of contact: Amy McWilliams, Management Analyst, 1400 
Independence Avenue SW, STOP 1568, Room 0226-S, Washington, DC 20250-
1568.

XIII. USDA Non-Discrimination Statement

    In accordance with Federal civil rights law and U.S. Department of 
Agriculture (USDA) civil rights regulations and policies, the USDA, its 
Agencies, offices, and employees, and institutions participating in or 
administering USDA programs are prohibited from discriminating based on 
race, color, national origin, religion, sex, gender identity (including 
gender expression), sexual orientation, disability, age, marital 
status, family/parental status, income derived from a public assistance 
program, political beliefs, or reprisal or retaliation for prior civil 
rights activity, in any program or activity conducted or funded by USDA 
(not all bases apply to all programs). Remedies and complaint filing 
deadlines vary by program or incident.
    Persons with disabilities who require alternative means of 
communication for program information (e.g., Braille, large print, 
audiotape, American Sign Language, etc.) should contact the responsible 
Agency or USDA's TARGET Center at (202) 720-2600 (voice and TTY) or 
contact USDA through the Federal Relay Service at (800) 877-8339. 
Additionally, program information may be made available in languages 
other than English.
    To file a program discrimination complaint, complete the USDA 
Program Discrimination Complaint Form, AD-3027. Individuals wishing to 
file a discrimination complaint may use the form available at https://www.ocio.usda.gov/policy-directives-records-forms/forms-management/approved-computer-generated-forms and at any USDA office, or may write 
a letter addressed to USDA and provide in the letter all of the 
information requested in the form. To request a copy of the complaint 
form, call (866) 632-9992. Submit your completed form or letter to USDA 
by:
    (1) Mail: U.S. Department of Agriculture, Office of the Assistant 
Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 
20250-9410;
    (2) Fax: (202) 690-7442; or
    (3) Email: [email protected]. USDA is an equal opportunity 
provider, employer, and lender.

    Authority: 7 U.S.C. 940c-1.


[[Page 16461]]


    Dated: April 11, 2019.
Chad Rupe,
Acting Administrator, Rural Utilities Service.
[FR Doc. 2019-07900 Filed 4-18-19; 8:45 am]
 BILLING CODE P