E6-3546. Notice of Availability of Hurricane Disaster Assistance

AGENCIES:

Rural Housing Service, Rural Business-Cooperative Service and Rural Utilities Service, USDA.

ACTION:

Notice.

SUMMARY:

The Rural Housing Service, Rural Business-Cooperative Service, and Rural Utilities programs are administered through USDA Rural Development. This Notice is intended to announce the availability of hurricane disaster assistance provided pursuant to chapter 1 of title I of Division B of the Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico and Pandemic Influenza Act, 2006 with respect to programs and activities of the Rural Development Mission Area of USDA.

DATES:

Effective Date: March 13, 2006.

FOR FURTHER INFORMATION CONTACT:

Information for the various USDA Rural Development programs as set forth in Section I., may be obtained by contacting your USDA Rural Development State Office as outlined in Section I. D.

Background: The Rural Development Mission Area agencies (Rural Housing Service, Rural Utilities Service, and Rural Business-Cooperative Service of the United States Department of Agriculture) provide a wide variety of grant, loan, and loan guarantee assistance to rural residents, rural communities, and rural utility systems. The eligibility criteria for each of the programs differ widely.

Chapter 1 of title I of Division B of the Department of Defense, Emergency Supplemental Appropriations to Address Hurricanes in the Gulf of Mexico and Pandemic Influenza Act, 2006 (Pub. L. 109-148) (Act) provides USDA Rural Development with additional authorities to waive certain program requirements and resources to address the damage caused by the Gulf Coast hurricanes and, in some instances, provides additional latitude in program administration for a six-month period beginning on the date of enactment.

Based upon the extensiveness and the magnitude of the damages to housing; community facilities such as schools, hospitals, first responder services; businesses; water and waste disposal services and other utilities, USDA Rural Development has determined that even with additional resources provided in the Act, it does not have the resources to fully implement all of the authorities provided within the Act within the six-month time frame provided. As a result, in implementing the authorities provided in the Act, USDA Rural Development has determined that it is most efficient and effective to provide assistance to the areas and activities that are currently served by its programs. To the extent that USDA Rural Development has determined that there are resources available to expand areas and activities served by June 30, 2006, by implementing the waiver authorities of the Act, it has implemented such waiver authority.

The matching funds requirement for the community facilities program will be waived; however, the median family income requirements will remain the same as provided in current regulations. Further, the six-month limitation imposed by the Act precludes implementation of the waivers associated with the Value-Added Producer Grant Program, the Rural Cooperative Development Grant Program and the Renewable Energy Systems/Energy Efficiency Improvements Program due to the time required to prepare, review, and process applications on a competitive basis. Therefore, these provisions of the Act will not be implemented. Should the authority to waive certain requirements be extended, USDA Rural Development will review, on a program-by-program basis, its ability to implement each of the waiver provisions.

For programs for which USDA Rural Development has decided not to implement specific provisions of the Act, applicants located in both designated disaster areas and non-designated disaster areas may apply for funding under the already published statutory and regulatory provisions.

I. General Provisions

A. Rural Area

Section 105 of chapter 1 of title I of Division B of the Act (section 105) provides that the Secretary may “waive the application of the rural area or similar limitations under any program funded through an appropriations act and administered by the Rural Development Mission Area.” Based upon the limitations of resources and time, USDA Rural Development has selectively implemented this waiver authority and, therefore, has decided not to implement a general waiver for all of its programs. In the case of the housing programs, USDA Rural Development, with authority provided in section 541 of the Housing Act of 1949 (42 U.S.C. 1490q), has increased the population limitation for rural areas to 50,000 and for a limited number of communities to 75,000. With the additional funding provided for the water and waste disposal grant program, USDA Rural Development will consider waivers of the rural area definition on a project-by-project basis. Should additional funding become available in the future, USDA Rural Development will review, on a program-by-program basis, its ability to further implement the rural area definition waiver.

B. Designated Disaster Area

For the purposes of this Notice, the designated disaster area shall be those Presidentially-declared areas in the states of Alabama, Florida, Louisiana, Mississippi, and Texas in accordance with the Robert T. Stafford Disaster Relief and Emergency Assistance Act, 42 U.S.C. 5121 et seq.

C. Limitation of Grant Amounts

The Act enables the Secretary of Agriculture to make grants under the Renewable Energy Systems and Energy Efficiency Improvements Program, Value-Added Producer Grants Program, Rural Cooperative Development Grant Program, and the Community Facilities Grant Program without regard to any grant amount limitation. The Act did not, however, provide additional funding for these programs. Therefore, USDA Rural Development has determined that it is most efficient and effective to provide assistance through these programs without waiving the statutory or regulatory grant limitations. Should additional funding become available in the future, USDA Rural Development will review, on a program-by-program basis, its ability to increase the grant amount limitations.

D. Contacts for Additional Information

For questions about USDA Rural Development's programs and for application assistance, please contact your USDA Rural Development State Office. The contact information for your State Office can be found at: http://www.rurdev.usda.gov. You can also reach your State Office by calling [phone] and pressing “1”.

E. Programs Referenced in This Notice Are Subject to Applicable Civil Rights Laws

These laws include the Equal Credit Opportunity Act, Title VI of the Civil Rights Act of 1964, Title VIII of the Civil Rights Act of 1968, as amended in 1988, Section 504 of the Rehabilitation Act of 1973 and the Age Discrimination Act of 1975.”

II. Assistance Available Through This Notice

A. Agricultural Producers

1. Description of Assistance

i. Renewable Energy—Section 105 enables USDA Rural Development to make Renewable Energy Systems/Energy Efficiency Improvements loans, grants and guaranteed loans in designated disaster areas with (a) a cost share requirement not to exceed 50 percent, (b) no limitation of the grant amount, and (c) the inclusion of businesses processing unsegregated solid waste and paper. However, because the authority is restricted to a six-month period following the enactment of the law and because the Notice of Funding Availability (NOFA) for this year's grant funding cycle has already been announced in the Federal Register on February 13, 2006 (71 FR 7509), the above cited provisions are not being implemented at this time. Should the authority to implement the above cited provisions be extended, USDA Rural Development will consider issuing a separate NOFA to address the provisions.

ii. Value-Added—Section 105 enables USDA Rural Development to make Value-Added Producer Grants in designated disaster areas without a matching fund requirement. However, because the authority is restricted to a six-month period following the enactment of the law and because USDA Rural Development does not anticipate announcing grant awards until August 31, 2006, the matching funds requirement is not being waived at this time. Should the authority to waive the matching funds requirement be extended, USDA Rural Development will contemplate reducing the matching funds requirement for successful applicants located in the designated disaster areas, as long as the proposed projects would still be viable with the reduced matching funds requirement.

2. Eligibility Criteria

i. Renewable Energy—Farmers, ranchers and rural small businesses located in rural areas are eligible to apply.

ii. Value-Added—Independent producers, agriculture producer groups, farmer- and rancher-cooperatives, and majority-controlled producer-based business ventures located in rural areas are eligible to apply.

3. Statutory or Regulatory Authority

i. Renewable Energy:

• 7 U.S.C. 8106; and
• 7 CFR Part 4280, Subpart B, Renewable Energy Systems and Energy Efficiency Improvements Program.

ii. Value-Added:

• 7 U.S.C. 1621 note;
• 7 CFR Part 4284, Subpart A, General Requirements for Cooperative Services Grant Programs; and
• 7 CFR Part 4284, Subpart J, Value-Added Producer Grants.

B. Community Programs

1. Description of Assistance

i. Community Facilities—Section 105 enables USDA Rural Development to make Community Facilities Grants in designated disaster areas without regard to graduated funding or matching fund requirements.

ii. Water and Waste Disposal—The Act provides an additional $45 million in grant funds to respond to damage caused by hurricanes by rebuilding, repairing, or otherwise improving water and waste disposal systems in designated disaster areas.

2. Eligibility Criteria

i. Community Facilities—Public entities such as municipalities, counties, and special-purpose districts, as well as non-profit corporations and tribal governments in designated disaster areas are eligible to apply.

ii. Water and Waste Disposal—Municipalities, counties, special purpose districts, Native American Tribes and non-profit corporations in designated disaster areas are eligible to apply. As stated in the preamble, these funds are available to systems serving populations of 10,000 or less. However, under the authority of the waiver of rural area definitions, the program officials will consider waivers of the population requirement on a project-by-project basis.

3. Applicable Statutory or Regulatory Authority

i. Community Facilities:

• Consolidated Farm and Rural Development Act, Section 306 (7 U.S.C. 1926(a)(1) and (19)); and
• 7 CFR, Part 3570, Subpart B, Community Facilities Grant Program.

ii. Water and Waste Disposal:

• 7 CFR Part 1780, Water and Waste Loans and Grants; and
• 7 CFR Part 1778, Emergency and Imminent Community Water Assistance Grants.
• 7 U.S.C. 1926a.

C. Housing

1. Description of Assistance

The Act provides the following monetary resources for USDA Rural Development's housing programs to respond to hurricane damage in designated disaster areas:

• $1,293,103,000 in deliverable Section 502 guaranteed homeownership funds;
• $175,593,000 in deliverable Section 502 direct homeownership funds;
• $34,188,000 in deliverable Section 504 direct repair/rehabilitation loans; and
• $20,000,000 in deliverable Section 504 direct repair/rehabilitation grants.

In addition, the Act provided the following assistance in designated disaster areas:

• Section 105 provided Rural Development the authority, for a six-month period, to provide Section 502 guaranteed homeownership funds to refinance any loan made to a single-family Resident who resided in an affected county at the time of the disaster and that was used to acquire or construct the single-family residence if the residence will be used as the borrower's principal residence and is located in an eligible rural area. Funds may also be used for essential repairs or rehabilitation. Based upon the limited time frame for enactment, Rural Development will be unable to implement these provisions during the permitted six-month time period authorized. Should the authority to implement the above cited provisions be extended, Rural Development will consider issuing a separate NOFA to address the provisions.
• Under the Rural Housing Assistance Grants account, the aforementioned funds for Section 504 direct repair/rehabilitation grants were appropriated without age restrictions. Funds for Section 504 grants are generally provided only to persons 62 years of age and older. USDA Rural Development intends to provide the $20 million in Section 504 grant funds provided under the Act to applicants regardless of age (provided the applicant has the legal authority to enter into such a transaction). There were no time restrictions on the use of these funds under the Act.
• The Act provides that housing vouchers may be made available to families and individuals whose residence became uninhabitable or inaccessible as a result of the hurricanes. USDA Rural Development is currently working with the United States Department of Housing and Urban Development (HUD) on a “USDA Voucher Program” that will serve these residents and tenants. If USDA Rural Development intends to implement this provision of the Act, a separate Implementation Notice will be published in the Federal Register.

2. Eligibility Criteria

i. Section 502 programs—Applicants that have an income below 80% of the area median income for a direct homeownership loan or below 115% of the area median income for a guaranteed homeownership loan for a home in designated disaster areas are eligible to apply. Applicants must have credit history that indicates reasonable ability and willingness to meet debt obligations.

ii. Section 504 programs—Existing homeowners in designated disaster areas that have an income that does not exceed 50% of the area median income are eligible to apply. Loans up to $20,000 are provided at a 1% interest rate. Grants are limited to $7,500 and only to those who cannot afford a 1% loan. Loan applicants must have a credit history that indicates reasonable ability and willingness to meet debt obligations.

iii. Expanded Rural Area Definition: USDA Rural Development's housing programs are governed by the Housing Act of 1949, as amended (42 U.S.C. 1471, et seq.). Section 541 of the Housing Act (42 U.S.C. 1490q), which only applies to USDA Rural Development's housing programs, provided the authority to waive population limits subsequent to a natural disaster. Further, the statute allowed the population limits to be waived for a period of three (3) years from the date of declaration. Based upon this statutory authority, USDA Rural Development immediately increased the population limits for its housing program to 50,000 in any county or parish declared for individual assistance as a result of Hurricanes Katrina and Rita. In addition, USDA Rural Development included the cities of Biloxi and Gulfport, Mississippi; Kenner, Louisiana; and the Quad cities, Hartselle and Decatur, Alabama, all of which had populations under 75,000 to be considered “rural” for housing assistance.

3. Statutory and Regulatory Authority

i. Section 502 guaranteed homeownership funds:

• 42 U.S.C. 1472(h); and
• 7 CFR Part 1980, Subpart D, Rural Housing Loans.

ii. Section 502 direct homeownership funds:

• 42 U.S.C. 1472; and
• 7 CFR Part 3550, Direct Single Family Housing Loans and Grants.

iii. Section 504 direct repair/rehabilitation loans and grants:

• 42 U.S.C. 1474; and
• 7 CFR Part 3550, Direct Single Family Housing Loans and Grants.

iv. Vouchers:

• 42 U.S.C. 1490(a) and 42 U.S.C. 1490(r); and
• 7 CFR Part 3560, Direct Multi-Family Housing Loans and Grants.

D. Non-Profit Institutions

1. Description of the Assistance

Section 105 enables USDA Rural Development to make Rural Cooperative Development Grants in designated disaster areas without a matching fund requirement. However, because the authority is restricted to a six-month period following the enactment of the law and because USDA Rural Development does not anticipate announcing grant awards until September 2006, the matching funds requirement is not being waived at this time. Should the authority to waive the matching funds requirement be extended, USDA Rural Development will contemplate reducing the matching funds requirement for successful applicants located in the designated disaster areas, as long as the proposed projects would still be viable with the reduced matching funds requirement.

2. Eligibility Criteria

Non-profit corporations and institutions of higher learning proposing cooperative development projects in rural areas are eligible to apply.

3. Statutory or Regulatory Authority

• 7 U.S.C. 1932(e);
• 7 CFR Part 4284, Subpart A, General Requirements for Cooperative Services Grant Programs; and
• 7 CFR Part 4284, Subpart F, Rural Cooperative Development Grants.

E. Electric and Telecommunications

1. Description of Assistance

i. Electric—The Act provides $8 million in funding to respond to damage caused by hurricanes by covering the cost of loan modifications such as deferring principal and interest payments on existing loans issued to rural electric cooperatives serving designated disaster areas.

ii. Telecommunications—The Act provides $50,000,000 in loan guarantees to be issued to the Federal Financing Bank to respond to damage of telecommunications service in designated disaster areas.

2. Eligibility Criteria

i. Electric—Existing borrowers located in designated disaster areas who are experiencing difficulty in meeting debt service obligations are eligible to apply.

ii. Telecommunications—Organizations providing or proposing to provide telephone service in designated disaster areas including cooperative, nonprofit, limited dividend, mutual, and commercial companies are eligible to apply.

3. Applicable Statutory or Regulatory Authority

i. Electric:

• Rural Electrification Act of 1936 (7 U.S.C. 1926 et seq.); and
• 7 CFR 1721, Subpart B, Extensions of Payments of Principal and Interest.

ii. Telecommunications:

• Rural Electrification Act of 1936 (7 U.S.C. 1926 et seq.);
• 7 CFR Part 1735, General Policies, Types of Loans, Loan Requirements—Telecommunications Program; and
• 7 CFR Part 1737, Pre-Loan Policies and Procedures Common to Insured and Guaranteed Telecommunications Loans.

III. Emergency Declaration

Consistent with Proclamation 7925 issued by President Bush, the USDA Rural Development Mission Area has determined that it would be impracticable, unnecessary, and contrary to public interest to delay the effective date of this Notice for any reason. The USDA Rural Development Agencies need to act promptly on hurricane related needs in the designated disaster areas. Delay is contrary to the public interest because the regulations of USDA Rural Development agencies prescribe policies and procedures for obtaining loans, grants, guarantees for rebuilding critical community facilities, buildings, housing and infrastructure such electricity, telecommunications and water and waste disposal systems.

IV. Non-Discrimination Statement

The U. S. Department of Agriculture (USDA) prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or part of an individual's income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at [phone] (voice and TDD). To file a complaint of discrimination, write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, SW., Washington, DC 20250-9410, or call [phone] (voice), or [phone] (TDD). “USDA is an equal opportunity provider, employer, and lender”.

Dated: March 7, 2006.

Thomas C. Dorr,

Under Secretary, Rural Development.