E7-4920. Business and Industry Guaranteed Loan Program; Technical Correction

AGENCY:

Rural Business—Cooperative Service, USDA.

ACTION:

Final rule.

SUMMARY:

The Rural Business-Cooperative Service (RBS) is revising its program regulations to correct an inadvertent omission in a sentence concerning eligibility of debt refinancing. The words “existing lender debt” will be added to a sentence that currently limits refinancing to less than 50 percent of the overall loan. The intended effect is to limit existing lender debt refinancing to less than 50 percent of the overall loan.

DATES:

Effective Date: March 19, 2007.

FOR FURTHER INFORMATION CONTACT:

Brenda Griffin, Loan Specialist, Business and Industry Division, Rural Business-Cooperative Service, U.S. Department of Agriculture, STOP 3224, 1400 Independence Avenue, SW., Washington, DC 20250-3224. Telephone: [phone]; TDD number is [phone] or [phone]; Fax number: [phone]; e-mail: [e-mail].

SUPPLEMENTARY INFORMATION:

Classification

This 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 number for the program impacted by this action is 10.768, Business and Industry Loans.

Intergovernmental Review

Business and Industry Guaranteed Loans are subject to the provisions of Executive Order 12372, which require intergovernmental consultation with state and local officials. RBS will conduct intergovernmental consultation in the manner delineated in RD Instruction 1940-J, “Intergovernmental Review of Rural Development Programs and Activities,” available in any Rural Development office and on the Internet at http://rurdev.usda.gov.regs/​ and in 7 CFR part 3015, subpart V.

Paperwork Reduction Act

The information collection requirements contained in this regulation have been previously approved by OMB under the provisions of 44 U.S.C. chapter 35 and have been assigned OMB control number 0570-0017, in accordance with the Paperwork Reduction Act (PRA) of 1995. There is no new paperwork burden associated with this correction.

E-Government Act Compliance

RBS 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. For information pertinent to E-GOV compliance related to this proposed rule, please contact Brenda Griffin at [phone].

Regulatory Flexibility Act

In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-612), the undersigned has determined and certified by signature of this document that this rule will not have a significant economic impact on a substantial number of small entities. Since this rule is a technical correction and has no significant economic impact on a substantial number of small entities, a regulatory flexibility analysis was not performed.

Civil Justice Reform

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. In accordance with this Executive Order: (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 this rule, and (3) administrative proceedings in accordance with 7 CFR part 11 must be exhausted before bringing litigation challenging action taken under this rule unless these regulations specifically allow bringing suit at an earlier time.

Environmental Impact Statement

This document has been reviewed in accordance with 7 CFR part 1940, subpart G, “Environmental Program.” RBS 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), Public Law 104-4, establishes requirements for Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, RBS generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local or tribal governments, in the aggregate, or to the private sector, of $100 million or more in any one year. When such a statement is needed for a rule, section 205 of UMRA generally requires RBS to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, more cost effective or least burdensome alternative that achieves the objectives of the rule.

This rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local, and tribal governments or the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of UMRA.

Executive Order 13132

It has been determined under Executive Order 13132, Federalism, that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. The provisions contained in this rule will not have a substantial direct effect on States or their political subdivisions or on the distribution of power and responsibilities among the various levels of government.

Background

A final rule was published in the Federal Register on June 8, 2006, concerning tangible balance sheet equity requirements for the Business and Industry Guaranteed Loan Program. The rule modified existing debt refinancing eligibility language and inadvertently omitted three key words that existed prior to the final rule taking effect. This rule inserts those three words back into the debt refinancing eligibility language.

List of Subjects in 7 CFR Part 4279

• Business and industry
• Loan programs
• Rural areas
• Rural development assistance

Accordingly, chapter XLII, title 7, Code of Federal Regulations, is amended as follows:

PART 4279—GUARANTEED LOANMAKING

1. The authority citation for part 4279 continues to read as follows:

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

Subpart B—Business and Industry Loans

2. In § 4279.113, paragraph (r) is revised to read as follows:

§ 4279.113

Eligible loan purposes.

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(r) To refinance outstanding debt when it is determined that the project is viable and refinancing is necessary to improve cash flow and create new or save existing jobs. Except as provided for in § 4279.108(d)(4) of this subpart, existing lender debt may be included provided that, at the time of application, the loan has been current for at least the past 12 months (unless such status is achieved by the lender forgiving the borrower's debt) and the lender is providing better rates or terms. Subordinated owner debt is not eligible under this paragraph. Unless the amount to be refinanced is owed directly to the Federal government or is federally guaranteed, the existing lender debt refinancing must be a secondary part (less than 50 percent) of the overall loan.

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Dated: February 23, 2007.

Jackie J. Gleason,

Administrator, Rural Business—Cooperative Service.