[Federal Register Volume 62, Number 99 (Thursday, May 22, 1997)]
[Rules and Regulations]
[Pages 27929-27930]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-13424]
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Rules and Regulations
Federal Register
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Federal Register / Vol. 62, No. 99 / Thursday, May 22, 1997 / Rules
and Regulations
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DEPARTMENT OF AGRICULTURE
Rural Utilities Service
7 CFR Part 1710
Exemptions of RUS Operational Controls under Section 306E of the
Rural Electrification Act; Timing of Notification to Borrowers
AGENCY: Rural Utilities Service, USDA.
ACTION: Final rule.
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SUMMARY: Section 306E of the Rural Electrification Act of 1936, as
amended, directs The Rural Utilities Service (RUS) to minimize approval
rights, requirements and prohibitions imposed on the operations of
electric borrowers whose net worth exceeds 110 percent of the
outstanding loans made or guaranteed to the borrower by RUS. Prior to
today's amendment, RUS regulations implementing this provision included
a requirement that RUS notify borrowers no later than May 1 of each
year whether they meet the 110 percent test in order to qualify for the
exemptions listed in the rule. Most of the information needed to
determine a borrower's exemption status is contained in Financial and
Statistical Reports that each borrower submits to RUS no later than
March 1 each year. Because of the short time available to compile the
data, RUS has had difficulty meeting the May 1 notification date.
Today's rule pushes the date back to July 1. The rule makes no
substantive changes to the ``110 percent rule.'' RUS is simply changing
the timing of the notification to borrowers. The July 1 date is the
same date that RUS is required to notify borrowers of exemption from
RUS approval of certain investments. RUS believes that informing
borrowers of their exemption status under both rules at the same time
will reduce administrative costs to borrowers and to the agency.
DATES: This rule is effective May 22, 1997.
FOR FURTHER INFORMATION CONTACT: Sue Arnold, Financial Analyst, U.S.
Department of Agriculture, Rural Utilities Service, Room 4032-S, 1400
Independence Avenue, SW, STOP 1522, Washington, DC 20250-1500.
Telephone: 202-690-1078. FAX: 202-720-4120. E-mail:
sarnold@rus.usda.gov.
SUPPLEMENTARY INFORMATION: This regulatory action makes no substantive
change to RUS regulations and, therefore, has not been reviewed by the
Office of Management and Budget (OMB). The Administrator of RUS has
determined that a rule relating to the RUS electric loan program is not
a rule as defined in the Regulatory Flexibility Act (5 U.S.C. 601 et
seq.) for which RUS published a general notice of proposed rulemaking
pursuant to 5 U.S.C. 553(b), or any other law. Therefore, the
Regulatory Flexibility Act does not apply to this rule. The
Administrator of RUS 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. This rule is excluded from the scope of
Executive Order 12372, Intergovernmental Consultation, which may
require consultation with State and local officials. A Notice of Final
Rule titled Department Programs and Activities Excluded from Executive
Order 12372 (50 FR 47034) exempts RUS electric loans and loan
guarantees from coverage under this Order. This rule has been reviewed
under Executive Order 12988, Civil Justice Reform. RUS has determined
that this rule meets the applicable standards provided in Sec. 3 of the
Executive Order.
The program described by this rule is listed in the Catalog of
Federal Domestic Assistance Programs under number 10.850 Rural
Electrification Loans and Loan Guarantees. This catalog is available on
a subscription basis from the Superintendent of Documents, the United
States Government Printing Office, Washington, DC 20402-9325.
Information Collection and Recordkeeping Requirements
This rule contains no recordkeeping or reporting burdens requiring
Office of Management and Budget (OMB) approval under the Paperwork
Reduction Act of 1995 (44 U.S.C. Chapter 31, as amended).
Background
Section 306E of the Rural Electrification Act of 1936, as amended,
(7 U.S.C. 936e) directs RUS to minimize approval rights, requirements
and prohibitions imposed on the operations of electric borrowers whose
net worth exceeds 110 percent of the outstanding loans made or
guaranteed to the borrower by RUS. Prior to today's amendment, RUS
regulations required RUS to notify borrowers no later than May 1 of
each year whether they meet the 110 percent test in order to qualify
for the exemptions listed in the rule. See 7 CFR 1710.7(b)(3). The 110
percent rule was last revised December 29, 1995, at 60 FR 67401, but
the date of the notification was not changed at that time.
Most of the information required to prepare the notification is in
the Financial and Statistical Report that each borrower submits
annually to RUS (RUS Form 7 for distribution borrowers, or Form 12 for
power supply borrowers). This report is not due to RUS until March 1.
The short time period for compiling the data has stressed agency
resources, and RUS has had difficulty meeting the May 1 notification
date. Today's rule pushes the notification date back to July 1. No
changes are being made to the qualifications for the exemption or to
the nature of the exemption itself. Borrowers who are notified that
they are exempt will remain exempt until they are notified otherwise by
RUS.
Another RUS rule, Investments, Loans, and Guarantees by Electric
Borrowers, 7 CFR 1717 subpart N, provides in Sec. 1717.656(e) that RUS
will notify borrowers by July 1 of any change in their status with
respect to exemption from RUS approval of certain investments. While
the 110 percent rule and the investment rule deal with different
exemptions, RUS believes that informing borrowers of their exemption
status under both rules at the same time will reduce administrative
costs to borrowers and to the government.
Because this rule makes no change to RUS rules other than a change
in the notification date, RUS has determined that no period for public
comment is
[[Page 27930]]
needed, and the change in date is in effect immediately.
List of Subjects in 7 CFR Part 1710
Electric power, Electric utilities, Loan programs--energy, Rural
areas.
For the reasons set out in the preamble, and under the authority of
7 U.S.C. 901 et seq., RUS amends 7 CFR part 1710 as follows:
PART 1710--GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO
INSURED AND GUARANTEED ELECTRIC LOANS
1. The authority citation for part 1710 continues to read as
follows:
Authority: 7 U.S.C. 901-950(b); Pub. L. 99-591, 100 Stat. 3341;
Pub. L. 103-354, 108 Stat. 3178 (7 U.S.C. 6941 et seq.).
2. Section 1710.7 is amended by revising paragraph (b)(3) to read
as follows:
Sec. 1710.7 Exemptions of RUS operational controls under section 306E
of the RE Act.
* * * * *
(b) * * *
(3) By no later than July 1 of each year, RUS will notify each
borrower in writing of its exemption status. If the borrower's net
worth to RUS debt ratio exceeds 110 percent based on the most recent
year-end data, the borrower will be exempt from the operational
controls exempted under paragraph (c) of this section until
subsequently notified in writing by RUS that it is no longer exempt.
* * * * *
Dated: May 15, 1997.
Jill Long Thompson,
Under Secretary, Rural Development.
[FR Doc. 97-13424 Filed 5-21-97; 8:45 am]
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