[Federal Register Volume 62, Number 187 (Friday, September 26, 1997)]
[Rules and Regulations]
[Pages 50486-50494]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-25315]
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DEPARTMENT OF AGRICULTURE
Rural Utilities Service
7 CFR Part 1717
RIN 0572-AB26
Settlement of Debt Owed by Electric Borrowers
AGENCY: Rural Utilities Service, USDA.
ACTION: Final rule.
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SUMMARY: The Administrator of the Rural Utilities Service (RUS) hereby
establishes policies and standards for the settlement of debts and
claims owed by rural electric borrowers. In addition to establishing
policies and standards for debt settlement, the rule establishes RUS
policy on subsequent loans to borrowers whose debt has been
restructured.
DATES: This rule is effective September 26, 1997.
FOR FURTHER INFORMATION CONTACT: Mr. Blaine D. Stockton, Jr., Assistant
Administrator--Electric, U.S. Department of Agriculture, Rural
Utilities Service, Stop 1560, 1400 Independence Avenue, SW.,
Washington, DC 20250-1560. Telephone: 202-720-9545.
SUPPLEMENTARY INFORMATION: This regulatory action has been determined
to be significant for the purposes of Executive Order 12866, Regulatory
Planning and Review, and therefore has been reviewed by the Office of
Management and Budget (OMB). The Administrator of the Rural Utilities
Service (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). 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: The
recordkeeping and reporting burdens contained in this rule were
approved by the Office of Management and Budget (OMB) pursuant to the
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35, as amended)
under control number 0572-0116.
Background
On April 4, 1996, Public Law 104-127 (110 Stat. 888) amended
section 331(b) of the Consolidated Farm and Rural Development Act (Con
Act) to extend to RUS loans and loan guarantees the Secretary of
Agriculture's authority to compromise, adjust, reduce, or charge-off
debts or claims owed to the government (collectively, debt settlement).
The amendment also extended to the security instruments, leases,
contracts, and agreements administered by RUS, the Secretary's
authority to adjust, modify, subordinate, or release the terms of those
documents. The Secretary of Agriculture, in 7 CFR 2.47, has delegated
authority under section 331(b) to the Administrator of RUS, with
respect to loans made or guaranteed by RUS.
The proposed rule to implement this new authority was published in
the Federal Register on March 3, 1997 at 62 FR 9382. Comments were
received from 42 different individuals or organizations, including the
National Rural Electric Cooperative Association (NRECA), the National
Rural Utilities Cooperative Finance Corporation (CFC), the Edison
Electric Institute (EEI), the Office of Inspector General of the U.S.
Department of Agriculture, an ad hoc group of 6 investor-owned
utilities (IOUs), 9 power supply borrowers, 16 distribution borrowers,
and 12 other individuals or organizations. Two of the power supply
borrowers submitted identical comments, which were supported by
identical or supporting comments from 9 of their members. Five other
distribution borrowers and one state-wide borrower association
submitted comments identical to their power supplier's comments.
In general, comments from NRECA, CFC, and most borrowers supported
a more expansive use of debt relief under section 331(b) of the Con
Act, more flexibility and discretion for the Administrator to grant
debt relief, no limitation on the debt relief measures, such as the
proposed 5 percent floor on interest rates, and other changes in
support of more generous terms and conditions for defaulting borrowers
and other borrowers facing financial or competitive problems. In
contrast, 2 distribution borrowers opposed settlement of borrowers'
debts, stating that debt forgiveness is unfair to the majority of
cooperatives who exercise fiscal responsibility and presents an
undesirable public image for all electric cooperatives. EEI, the ad hoc
group of 6 IOUs, and 2 individual IOUs generally favored strict
limitation of the Administrator's debt settlement authority to
borrowers in default or where default is imminent; more specific and
more restrictive standards for determining eligibility for relief and
the amount of relief provided; referral of most cases to the Department
of Justice for settlement under the Attorney General's settlement
authority; more extensive documentation of the need for relief, the
amount of relief provided, and the underlying justification; and
greater congressional and public oversight of RUS' debt settlement
activities.
All comments received were considered in drafting this final
regulation. The more common and more significant comments are discussed
below.
Information Collection and Recordkeeping Requirements
Several commenters expressed concern that the estimate of 2
responses per year from the public, in the from of borrowers seeking
debt settlement, was too low and might impose an artificial limit on
the number of applications for
[[Page 50487]]
debt relief RUS would consider. The estimate is nothing more than an
estimate of the average number of responses over a period of several
years. More applications may be received in some years than in others.
This estimate does not place any limit on the number of legitimate
applications RUS would consider.
Expansion of Use of Debt Settlement Authority
As indicated above, NRECA and several borrowers urged that the rule
be expanded to authorize the use of debt relief to lower the costs of
borrowers that, although not in default and not expected to face
default within the foreseeable future, nevertheless face serious
financial or competitive problems. They argued that Congress intended
the new debt settlement authority to be used in this expansive way. EEI
and the ad hoc group of 6 IOUs argued just the opposite. They argued
that Congress intended the authority to be used only in cases where a
borrower has defaulted or where default is imminent. They further
argued that providing debt relief to non-defaulting borrowers would
give an unfair competitive advantage to cooperatives at the expense of
IOUs and other utilities, which they and other taxpayers would be
required to pay for. They also said that such expanded use of debt
relief would constitute a federal program of stranded cost recovery
(avoidance) for cooperatives, at taxpayer expense, without any
direction from Congress on stranded cost recovery for the electric
industry as a whole.
RUS does not believe that the language of section 331(b) or the
legislative history of the section supports the expansive use of debt
settlement to lower the costs and improve the competitive positions of
borrowers that are not in default nor expected to default in the
foreseeable future. Furthermore, RUS does not believe it would be good
policy to accept applications with respect to defaults projected far
into the future. There would be too many uncertainties with respect to
a borrower's particular circumstances and the competitive and
regulatory environment within the industry as a whole. It would be too
difficult to accurately assess the borrower's problems, the likelihood
of default, effective remedial actions, and the actual need for and
appropriateness of debt settlement.
NRECA and several borrowers also urged that debt relief be used to
encourage mergers between borrowers, regardless of whether or not any
of the parties to the merger are in default or are expected to default
in the foreseeable future. RUS agrees that our policies and programs
ought to support mergers and consolidations between borrowers that will
likely result in economies of scale and lower operating costs, better
management, and improved opportunities for innovation, technological
development, market expansion, and better customer service. This past
December, with publication of 7 CFR 1717 subpart D, RUS instituted
several new forms of transitional assistance for borrowers entering
into economically beneficial mergers and consolidations. While such
assistance is appropriate and strongly supported by RUS, RUS does not
believe it is appropriate to use debt relief under section 331(b) of
the Con Act to encourage mergers or consolidations in the absence of
default or the likelihood of default in the foreseeable future.
Some borrowers also argued that, in support of the objectives of
the RE Act, mergers between borrowers in connection with debt
settlement should be given preference to mergers with or acquisitions
by nonborrowers. While as a general proposition, RUS is very supportive
of economically beneficial mergers that will strengthen both loan
security and service to rural electric consumers, and is happy to
provide transitional assistance for such mergers under 7 CFR part 1717
subpart D, RUS does not believe it is appropriate to give preference to
mergers between borrowers in connection with debt settlements if
granting such preference would in any material way reduce debt recovery
by the government in comparison with any other debt settlement
alternative.
Reports to Congress and the Public
The ad hoc group of 6 IOUs recommended that the findings of the in-
depth analysis used to determine the need for and amount of debt
settlement be published in the Federal Register in each case, with
notice and comment from the public; that RUS be required to report
periodically to Congress (also supported by EEI) on borrowers seeking
settlement, the amount of money at risk, the timetable for acting on
requests, and the status of settlements under consideration, with the
information being made available to the public; and that RUS publish
written orders in the Federal Register on final debt settlements,
detailing the basis for the debt settlement decision, and providing
opportunity for public comment. The commenters argued that these
procedures would keep Congress better informed; improve the information
available to the Administrator in making debt settlement decisions; and
give interested taxpayers and competitors of co-ops a chance to provide
input on the co-ops' financial and competitive positions and their need
for debt settlement, and explain how alternative workout solutions
would affect them.
Regarding the recommendation that RUS be required to report
periodically to Congress, it should be noted that RUS does report to
Congress on its debt settlement activities as part of the budget
process, in testifying before congressional oversight committees, and
in responding to special requests from Congress. Since Congress always
has the prerogative to request status reports and hearings, RUS does
not believe it is necessary to require such reporting in this
regulation.
Publishing the findings of the in-depth analyses of borrowers'
needs for debt settlement and the justification for the amount of
settlement provided, and providing opportunity for public comment,
presents several problems. It could risk divulging the government's
strategy and internal deliberations on debt settlements, thus damaging
the government's ability to achieve maximum recovery in other debt
settlement cases. In addition, much of the information about a borrower
and alternative workout scenarios contained in an in-depth analysis
could be used by the borrower's competitors, other creditors or other
parties, to the disadvantage of both the borrower and the government.
Such information should not be made routinely available to the public
at large. Also, allowing the normal 30 to 60 days for public comment on
the in-depth analyses could cause delays in some cases, such that
certain opportunities with a limited timeframe could be missed, to the
detriment of both the borrower and the government.
Moreover, development of the in-depth analyses, whether supervised
by RUS or an independent consultant, would include the gathering of all
relevant information from sources likely to have information bearing on
the question of a borrower's need for debt settlement and the
alternatives that will likely maximize the government's debt recovery.
For example, in many cases, RUS will require that a competitive bid be
conducted for the borrower's system to determine its value. Relevant
information would be expected to be obtained from bidders and other
parties as part of that process and other information collection
efforts. To ask for public comments on what would have to be, for
reasons of confidentiality, rather heavily summarized versions of the
in-depth analyses, after the analyses
[[Page 50488]]
have been completed, is not likely to produce much additional useful
information in most cases.
As to the last point, on publishing written orders in the Federal
Register on final debt settlements and providing opportunity for public
comment, the purpose of such a procedure isn't clear. If the main
purpose is to inform the public of decisions reached on debt
settlements, it would be more efficient and timely to continue to rely
on the trade press and general media. If the primary purpose is to
provide evaluation and supervision of RUS' debt settlement activities,
that function is more appropriately and effectively provided by the
traditional program planning, evaluation, and budgeting processes at
the RUS, USDA, Office of Management and Budget, and congressional
levels.
Confidentiality of Information and the Deliberative Process
NRECA and several borrowers expressed concerns that privileged or
confidential information about borrowers gathered by RUS be held in
strict confidence. They expressed concerns that such information, if
not held in strict confidence, could be used by competitors, other
creditors, or litigants to gain financial or competitive advantage over
them. RUS agrees that privileged or confidential information should be
held in strictest confidence and should not be released beyond RUS and
its consultants and advisors except when release of the information is
necessary to determine the value of a borrower's system and the need
for and appropriate type of debt settlement. For example, it would be
necessary to provide certain information about a borrower when
conducting a competitive bid for the borrower's system.
RUS also believes that commercial or financial information obtained
from borrowers that is privileged or confidential, as well as agency
documents and other information, such as inter-agency or intra-agency
memoranda, letters, or papers, that are predecisional or deliberative
in nature, should be withheld from the public under the exemptions in
the Freedom of Information Act, such as Exemption 4. Disclosure of this
information would allow other financially troubled borrowers to learn
the general strategic and tactical approaches of RUS and DOJ in dealing
with financially troubled borrowers. Disclosure would harm the
deliberative process of RUS and DOJ in negotiating, settling, and
compromising debts.
Section 1717.1201 Definitions
One commenter suggested that the definition of debt (outstanding
debt) be augmented by adding several specific items, such as deferred
principal and deferred interest. RUS believes that deferred principal
and deferred interest ordinarily would be considered as being included
as part of ``principal'' and ``accrued interest,'' which are listed as
elements of outstanding debt. It was not RUS' intention that the
specific items listed in the definition be all inclusive of every
conceivable element and variation of nomenclature that may make up the
outstanding debt of a borrower. Rather than trying to list every
conceivable element, the definition has been amended to indicate that
the items listed are not necessarily the only elements included in
outstanding debt.
Section 1717.1202 General Policy
Several comments were received regarding paragraph (d) of this
section, which sets forth several general factors (but not an exclusive
list of factors) the Administrator will consider in structuring debt
settlements and determining the amount of debt recovery that is
possible. NRECA and several borrowers recommended that regulatory and
legislative actions by states be added to the list since such actions
can affect a borrower's ability to meet its financial obligations. EEI
and the ad hoc group of 6 IOUs criticized paragraph (d) for failing to
list, as one of the factors, the ability of the borrower to repay its
debts.
Paragraph (d) is intended to set out some of the more important
general factors the Administrator will consider in structuring debt
settlements and determining the amount of debt a borrower can repay.
These general factors relate either to public policy or the competitive
positions of borrowers and their ability to meet their financial
obligations. They are not intended to have priority over other factors
that affect a borrower's ability to repay debt. Nor are they intended
in any way to modify or diminish the policy set forth in paragraph (a)
of this section that ``wherever possible, all debt owed shall be
collected in full in accordance with the terms of the borrower's loan
documents,'' or the policy in paragraph (c) that the Administrator's
authority to settle debts will be limited to cases where ``settlement
will maximize the recovery of debts and claims owed to the
government.'' This fact is particularly relevant with respect to one
IOU's comment that listing market and nonmarket forces that affect
competition in the electric utility industry introduces a vague and
overbroad provision that could result in RUS providing borrowers an
unfair advantage in competitive electric markets. That is not the
intent. Market and nonmarket forces are included in simple recognition
of the fact that they do affect a borrower's ability to generate
revenue to meet its financial obligations to the government and other
creditors.
Paragraph (d) has been amended to try to allay concerns that the
factors listed might somehow override the central consideration of a
borrower's ability to repay debt. Also, whereas legislative and
regulatory actions by the states was assumed to be included under
``other market and nonmarket forces as to their effects on competition
* * *,'' they are now explicitly listed as one of the general factors
that will be considered. While explicitly recognizing that state
regulatory and legislative actions may affect the ability of borrowers
to meet their financial obligations, RUS believes state legislators and
regulators should give due consideration to the effects of their
actions on the ability of rural electric systems to recover their costs
and meet their financial obligations to the federal government and
other creditors.
In related comments, EEI and the ad hoc group of 6 IOUs criticized
the proposed rule for failing to set out detailed standards for
deciding when a borrower is unable to meet its financial obligations
and the amount of debt relief that is appropriate. These commenters
also suggested several specific changes and additions to the analyses
to be conducted in determining the need for and the appropriate amount
of debt settlement. Several of these suggestions have been adopted, as
discussed elsewhere.
As for more detailed standards for deciding when debt settlement is
needed and the amount of debt settlement, RUS believes that, with the
changes made, the rule provides reasonably detailed standards. Sections
1717.1202 and 1717.1204(b)(1) clearly establish that, wherever
possible, all debt will be collected in full in accordance to its terms
and that settlement will be used only when it will maximize the
recovery of debts and claims. The remainder of Sec. 1717.1204 sets out
in substantial detail the information and actions required for the
Administrator to make a determination that debt settlement is necessary
and the appropriate amount and form of the settlement. Given the
tremendous variation from case to case in the numerous factors that
affect a borrower's ability to meet its financial
[[Page 50489]]
obligations (e.g., economic, financial, competitive, engineering,
technological, and regulatory factors) RUS does not believe that it is
possible to develop a more detailed, immutable set of decision criteria
that would work well in most cases.
Section 1717.1203 Relationship Between RUS and Department of Justice
NRECA, CFC, and several borrowers asked for clarification of
several aspects of this section. First, if a claim has been referred in
writing to the Attorney General for settlement under the Attorney
General's authority, can the claim be referred back to the
Administrator for action? Yes, it can, at the discretion of the
Attorney General. Second, if a claim has been referred in writing to
the Attorney General, is there a formal mechanism by which the borrower
or the Administrator could request that the claim be referred back to
the Administrator? No, there is no formal mechanism. A claim could be
referred back to the Administrator at the discretion of the Attorney
General. Third, if a borrower has previously had its debt settled under
the authority of the Attorney General and the borrower applies for
additional relief on any outstanding debt to the government, can the
Administrator use his or her authority to consider the request from the
borrower? The Administrator could consider the borrower's request after
promptly notifying the Attorney General that the request has been
received. These points have been clarified in the changes made to
Sec. 1717.1203.
Section 1717.204(b) Need for Debt Settlement
The Office of Inspector General (OIG) of the U.S. Department of
Agriculture recommended that a borrower's application for debt
settlement include a certification by the borrower that it is unable to
meet its financial obligations. RUS agrees with the recommendation and
has revised Sec. 1717.204(b) to require a resolution to that effect by
the borrower's board of directors.
OIG also recommended the borrower be required to certify that all
the information provided to RUS in connection with the application for
debt settlement is true and accurate in all material respects. RUS has
adopted this recommendation and has added a new paragraph (m) to
Sec. 1717.1204.
NRECA and several borrowers criticized the provision in paragraph
(b)(1) that would limit the use of debt settlement to borrowers that
have defaulted or are likely to default within 24 months of the
borrower's application for debt settlement. They felt that either there
should be no limit on the forecast period within which a borrower is
likely to default, or that the forecast period should be longer. Some
of them felt that limiting the forecast period to 24 months would limit
the use of debt settlement to essentially crisis situations, where it
would be too late to help the borrower in dealing with its serious
problems and too late to avoid bankruptcy. EEI and the ad hoc group of
6 IOUs argued that debt settlement should be used only when a borrower
has in fact defaulted, and that use of a 24 month forecast period for
when a borrower is likely to default would amount to an extraordinary
grace period and would result in borrowers receiving an unfair subsidy
from RUS at the expense of taxpayers and the borrowers' competitors.
RUS continues to believe that its middle ground position is the
right one on this issue. It does not believe that debt settlement
should be used only when a borrower has already defaulted. Debt
settlement should be one of the tools available to assist borrowers in
addressing their own problems when it is reasonably clear that the
borrower will default without some debt relief. RUS believes, however,
that a specific, defined time period within which a borrower is likely
to default is needed to discourage unmerited or wildly speculative
applications for relief, and to focus government resources on problems
that can be defined and resolved with some degree of certainty, as
opposed to distant potential problems that may not materialize or may
change greatly in the rapidly changing industry environment. This
approach is an important element in maximizing debt recovery by the
government.
The forecast period is an aid for identifying cases where default
is relatively imminent. It does not establish the time period during
which RUS will consider the borrower's application for relief. Nor does
the forecast period limit in any way discussions between RUS and
borrowers regarding their financial and economic problems, possible
actions by the borrowers to address their problems, and any assistance
that RUS may be able to offer, short of debt settlement, such as
deferral of principal and interest payments under section 12 of the RE
Act, merger incentives under 7 CFR 1717 subpart D, or waiver of certain
requirements and controls under Secs. 1710.4 or 1717.600(c).
Eliminating the forecast period and accepting applications from
borrowers who assert that they may default at some distant point in the
future would not provide greater incentive for borrowers to take
advantage of all available opportunities to address their problems
themselves or to work with RUS in fashioning workable solutions short
of debt settlement. RUS continues to believe that a forecast period of
24 months is reasonable and will enable RUS to assist borrowers in
dealing with serious problems before they become insurmountable.
Some borrowers argued that requiring a borrower to demonstrate to
RUS that it will likely default within a certain period of time in
order to be considered for possible debt settlement would ruin the
borrower's credit rating and make it extremely difficult for the
borrower to obtain credit from other sources. Since debt settlement
will be used only when a borrower has already defaulted or will likely
default in the relatively near future, RUS believes that the act of
applying for debt settlement will probably have the same effect on the
borrower's relationship with other creditors whether or not the
borrower is required to demonstrate to RUS that it will likely default
within the forecast period. No change has been made in the requirement
that borrowers must demonstrate to RUS that they will probably be
unable to meet their financial obligations sometime during the forecast
period.
NRECA, CFC, and some borrowers argued that requiring the borrower
to perform an in-depth analysis of the opportunities available to the
member-owners of a power supply borrower to reduce costs or otherwise
improve their financial and competitive positions could cause too much
delay and should be optional. RUS believes that determination of the
need for debt settlement for a power supply borrower normally should
not be based only on the condition and potential remedial actions of
the power supply borrower, since the efficiency and effectiveness of
the borrower's member-owners will often have a major bearing on the
health of the power supply borrower. If there is a serious financial
problem warranting consideration of debt settlement, there appears to
be no reason why a credible analysis of the member-owner's operations
cannot be completed in a timely manner. However, since there could be
some instances where it may be in the government's interest to waive
this requirement, the provision has been amended to allow for a waiver
by the Administrator.
EEI and an investment banker recommended that the in-depth analysis
required to demonstrate the need for debt settlement include the
possibility of raising rates in order to generate more
[[Page 50490]]
revenue to meet the borrower's obligations. It was assumed by RUS that
such analysis would be included, and that has now been made explicit.
EEI also recommended that the in-depth analysis of the need for debt
settlement include a review of the borrower's contracts for services
and supplies; a thorough analysis of the borrower's management
structure, system operations, and financial and operating statements
for possible cost reductions; and comparisons of the borrower with one
or more ``benchmark'' electric utilities to help identify areas for
efficiency gains. RUS agrees with the substance of these
recommendations and notes that certain elements, such as including a
thorough analysis of the borrower's management structure, system
operations, and financial and operating statements, are already
included in one form or another. Changes have been made to paragraphs
(b)(2) and (b)(3) of Sec. 1717.1204 to include analytical elements
contained in EEI's recommendations that were not explicitly included in
the proposed rule.
With respect to the use by RUS of independent consultants to advise
on debt settlements (see paragraph (b)(3) of Sec. 1717.1204), a
borrower suggested that RUS have a pre-qualified list of consultants
for borrowers to choose among, in order to eliminate the need for
independent consultants. RUS disagrees with this suggestion. The choice
of an independent consultant must reside entirely with RUS in order to
ensure that the consultant has the expertise needed for a particular
case, and is in fact independent and capable of rendering impartial and
objective analysis and advice to RUS. NRECA, in its comments,
recognized the need for the consultant to be completely independent of
the borrower, but suggested that RUS should consider consulting with
the borrower before making a selection. RUS does not believe it should
be under any obligation to consult with the borrower, and would view
any such obligation as compromising its ability to select a truly
independent consultant.
The ad hoc group of 6 IOUs stated that use of independent
consultants and other neutral third parties to determine the value of
the borrower's system should be mandatory rather than optional. RUS
agrees that independent consultants should be used in most cases to
help RUS determine the value of a borrower's system, but does not
believe that this should be mandatory in all cases. The additional time
and cost of obtaining an independent consultant's assessment may not be
worthwhile in all cases, such as when the amount of debt involved is
small, or when only very limited relief is being considered, such as
reamortization or extension of maturities.
Section 1717.1204(c) Debt Settlement Measures
Several commenters argued that extension of debt maturities should
not be limited to the weighted average of the expected remaining useful
lives of the assets pledged as security. RUS agrees that the language
in the proposed rule is suitable primarily when the only assets
involved are plant and other real estate. In many cases there may to
other ``assets'' pledged as security for the debt, such as wholesale
power contracts, irrevocable trusts, or other assured streams of
revenues pledged as security, which don't fit the normal concept of an
asset's useful life. Given these considerations, RUS has concluded that
because of the unusual complexity of the loan security issues when debt
is restructured, it is not possible to impose a fixed generic limit on
debt maturity tied to specific assets or other forms of security that
would serve the government's interests in all cases. The limitation in
Sec. 717.1204(c) on debt maturity has been revised such that the
maturity of the restructured debt shall not extend more than 10 years
beyond the latest maturity date prior to settlement. This is an outside
limit, only. The actual maturity approved in each case will depend on
specific consideration of quality and longevity of the collateral and
other evidence or guarantees that the debt will be repaid and is
reasonably secured.
Proposed paragraph (c) included reducing the interest rate on debt
as one of the settlement measures, but imposed a floor of 5 percent
interest, below which rates could not be reduced. NRECA and several
borrowers argued that limiting the amount that interest rates could be
reduced would limit the Administrator's flexibility in negotiating
terms favorable to the government. RUS does not believe the 5 percent
interest floor would be a problem in most cases, but recognizes that
the Administrator should be able to waive the limitation if he or she
determines that that would facilitate the maximization of debt recovery
by the government. The paragraph has been amended accordingly.
Section 1717.1204(d) Debt Owed to Other Creditors
CFC stated that it was unfair to expect similar debt relief on a
pro rata basis to be provided by other secured lenders, and said that
pro rata implied equal methodology in determining the fair contribution
of each secured lender. RUS disagrees that it would be unfair to expect
each of the secured lenders to provide similar relief on a pro rata
basis, or ``other benefits or value to the restructuring.'' RUS
recognizes that a given structure of debt relief that may be suitable
to one lender may not be entirely suitable to another. RUS is not
trying to impose the same structure or methodology on all lenders
involved, but does want to ensure that each lender provides it fair
share of relief. RUS believes that the proposed language, retained
herein, adequately expresses the intended objective and is not unfair
to other lenders.
NRECA suggested substituting the words ``comparable concessions''
for ``similar relief on a pro rata basis . . . or other benefits or
value.'' RUS does not believe that this change would result in greater
assurance that each lender will provide its fair share of debt relief.
Section 1717.1204(e) Competitive Bids for System Assets
Paragraph (e) provides that RUS may ask the borrower or an
independent consultant to solicit competitive bids from potential
buyers of the borrower's system. One commenter asked how conflicts of
interest could be avoided if the borrower, rather than an independent
consultant, solicits the bids. RUS believes that any conflicts of
interest can be prevented or minimized by the provisions in paragraph
(e) which require the bidding process to be conducted in consultation
with RUS and using standards and procedures acceptable to RUS.
A borrower stated that preference should always be given to a co-op
acquiring or merging with a troubled borrower, and that competitive
bids should not be required when acquisition by or merger with another
RUS-financed co-op is possible. As discussed above, RUS strongly
supports mergers and consolidations between borrowers that are
economically beneficial to the parties and, as a result, strengthen RUS
loan security. RUS provides incentives for such mergers and
consolidations under 7 CFR 1717 subpart D. A merger or consolidation
among two or more borrowers may represent one of the elements of a debt
settlement, but should not be given preference at the expense of
reducing the government's recovery of debt.
Another borrower commented that requiring competitive bids for a
borrower's system and using the bids to sell the system is not a
mortgage requirement for non-defaulting borrowers, and may damage the
credit
[[Page 50491]]
worthiness of solvent borrowers. RUS notes that soliciting of
competitive bids applies only to borrowers that have requested debt
settlement, and in that situation is appropriate whether or not the
borrower has defaulted. It is not a requirement imposed on all
borrowers, but simply an option available to the Administrator for
determining the value of assets of borrowers that have requested debt
settlement.
The ad hoc group of 6 IOUs stated that the value to the Treasury of
selling all or part of the borrower's assets should be considered in
every case, and should not be optional. RUS does not believe it is
necessary to actually solicit competitive bids in every case to
determine the value of a borrower's system. Various appraisal
techniques other than actual competitive bids may be more cost-
effective, more timely, or otherwise more appropriate in some
circumstances to determine a system's value.
Section 1717.1204(i) Regulatory Approvals
A borrower stated that RUS should be able to conditionally approve
a settlement before all regulatory approvals are obtained so that the
borrower could proceed to implement an action plan. NRECA stated that
regulatory approvals should be required in advance of RUS approval of a
debt settlement only ``insofar as possible,'' since it may not be
possible to obtain the regulatory approvals in some cases. RUS would
note that most remedial actions available to borrowers do not hinge on
RUS approval of debt relief, and that borrowers should aggressively
implement such actions without delay. However, the point is well taken
that RUS could approve or preliminarily approve a debt settlement or
parts of a settlement before all regulatory approvals have been
obtained. The paragraph has been amended to clarify that only those
regulatory approvals deemed necessary by the Administrator must be
obtained before a settlement will be approved.
Section 1717.1204(j) Conditions Regarding Management and Operations
NRECA objected to the possibility of RUS imposing additional
controls on the members of a power supply borrower regarding general
funds and investments, based on the argument that such decisions by
members impacted little on their power supplier and because bankruptcy
would be an alternative for the power supply borrower. The additional
controls identified in Sec. 1717.1204(j)(3) ordinarily would not be
imposed on the members of a power supply borrower that is seeking debt
settlement. However, such controls on members may be appropriate in
some cases, such as when the members have agreed to guarantee the debt
of a power supply borrower as a condition of settling the latter's
debt.
Section 1717.1206 Loans Subsequent to Settlement
One commenter stated that the paragraph is unclear and subject to
various interpretations, but did not indicate what is unclear. Perhaps
one area needing some clarification is whether the section would grant
some right to subsequent loans to a borrower that as agreed as part of
its debt settlement not to seek subsequent loans from RUS. The section
does not grant any such right.
Perhaps the commenter thought that a ``presumption'' that credit
support will be needed for any subsequent loans is not clear.
``Presumption'' means that credit support will be required for any
subsequent loans, unless the Administrator, for good reason, determines
that credit support is not needed.
The ad hoc group of 6 IOUs stated that RUS should establish a
presumption that new loans will not be made to borrowers whose debts
have been settled unless they can prove that they are now creditworthy.
Demonstration of creditworthiness is a requirement which applies to all
loans made by RUS, as set forth in 7 CFR 1710.112, 1710.113, and
elsewhere in RUS regulations.
A borrower stated that if a healthy borrower acquires or merges
with a borrower whose debt has been settled by RUS, the surviving
entity should be exempt from the presumption that credit support will
be needed for any subsequent loans. RUS does not agree that an
exemption should be granted for all such cases, since the surviving
entity may nevertheless be a high risk that would warrant credit
support.
List of Subjects in 7 CFR Part 1717
Administrative practice and procedure, Claims, Electric power,
Electric utilities, Intergovernmental relations, Investments, Lien
accommodation, Lien subordination, Loan programs--energy, Reporting and
recordkeeping requirements, Rural areas.
For reasons explained in the preamble, RUS hereby amends 7 CFR
chapter XVII, part 1717, as follows:
PART 1717--POST-LOAN POLICIES AND PROCEDURES COMMON TO INSURED AND
GUARANTEED ELECTRIC LOANS
1. The authority citation for part 1717 is revised to read as
follows:
Authority: 7 U.S.C. 901-950b, 1981; Pub. L. 99-591, 100 Stat.
3341-16; Pub. L. 103-354, 108 Stat. 3178 (7 U.S.C. 6941 et seq.),
unless otherwise noted.
2. Subparts T through X are added and reserved and subpart Y is
added to part 1717 to read as follows:
Subpart T--[Reserved]
Sec.
1717.950-1717.999 [Reserved]
Subpart U--[Reserved]
1717.1000-1717.1049 [Reserved]
Subpart V--[Reserved]
1717.1050-1717.1099 [Reserved]
Subpart W--[Reserved]
1717.1100-1717.1149 [Reserved]
Subpart X--[Reserved]
1717.1150-1717.1199 [Reserved]
Subpart Y--Settlement of Debt
1717.1200 Purpose and scope.
1717.1201 Definitions.
1717.1202 General policy.
1717.1203 Relationship between RUS and Department of Justice.
1717.1204 Policies and conditions applicable to settlements.
1717.1205 Waiver of existing conditions on borrowers.
1717.1206 Loans subsequent to settlement.
1717.1207 RUS obligations under loan guarantees.
1717.1208 Government's rights under loan documents.
Subpart T--[Reserved]
Secs. 1717.950-1717.999 [Reserved]
Subpart U--[Reserved]
Secs. 1717.1000-1717.1049 [Reserved]
Subpart V--[Reserved]
Secs. 1717.1050-1717.1099 [Reserved]
Subpart W--[Reserved]
Secs. 1717.1100-1717.1149 [Reserved]
Subpart X--[Reserved]
Secs. 1717.1150-1717.1199 [Reserved]
Subpart Y--Settlement of Debt
Sec. 1717.1200 Purpose and scope.
(a) Section 331(b) of the Consolidated Farm and Rural Development
Act (Con Act), as amended on April 4, 1996 by Public Law 104-127, 110
Stat. 888
(7 U.S.C. 1981), grants authority to the Secretary of Agriculture to
compromise,
[[Page 50492]]
adjust, reduce, or charge-off debts or claims arising from loans made
or guaranteed under the Rural Electrification Act of 1936, as amended
(RE Act). Section 331(b) of the Con Act also authorizes the Secretary
of Agriculture to adjust, modify, subordinate, or release the terms of
security instruments, leases, contracts, and agreements entered into or
administered by the Rural Utilities Service (RUS). The Secretary, in 7
CFR 2.47, has delegated authority under section 331(b) of the Con Act
to the Administrator of the RUS, with respect to loans made or
guaranteed by RUS.
(b) This subpart sets forth the policy and standards of the
Administrator of RUS with respect to the settlement of debts and claims
arising from loans made or guaranteed to rural electric borrowers under
the RE Act. Nothing in this subpart limits the Administrator's
authority under section 12 of the RE Act.
Sec. 1717.1201 Definitions.
Terms used in this subpart that are not defined in this section
have the meanings set forth in 7 CFR part 1710. In addition, for the
purposes of this subpart:
Application for debt settlement means a written application
containing all of the information required by Sec. 1717.1204(b)(2), in
form and substance satisfactory to RUS.
Attorney General means the Attorney General of the United States of
America.
Claim means any claim of the government arising from loans made or
guaranteed under the RE Act to a rural electric borrower.
Con Act means the Consolidated Farm and Rural Development Act (7
U.S.C. 1921 et seq.).
Debt means outstanding debt of a rural electric borrower
(including, but not necessarily limited to, principal, accrued
interest, penalties, and the government's costs of debt collection)
arising from loans made or guaranteed under the RE Act.
Enforced collection procedures means any procedures available to
the Administrator for the collection of debt that are authorized by
law, in equity, or under the borrower's loan documents or other
agreements with RUS.
Loan documents means the mortgage (or other security instrument
acceptable to RUS), the loan contract, and the promissory note entered
into between the borrower and RUS.
RE Act means the Rural Electrification Act of 1936, as amended (7
U.S.C. 901-950b).
Restructure means to settle a debt or claim.
Settle means to reamortize, adjust, compromise, reduce, or charge-
off a debt or claim.
Sec. 1717.1202 General policy.
(a) It is the policy of the Administrator that, wherever possible,
all debt owed to the government, including but not limited to principal
and interest, shall be collected in full in accordance with the terms
of the borrower's loan documents.
(b) Nothing in this subpart by itself modifies, reduces, waives, or
eliminates any obligation of a borrower under its loan documents. Any
such modifications regarding the debt owed by a borrower may be granted
under the authority of the Administrator only by means of the explicit
written approval of the Administrator in each case.
(c) The Administrator's authority to settle debts and claims will
apply to cases where a borrower is unable to pay its debts and claims
in accordance with their terms, as further defined in
Sec. 1717.1204(b)(1), and where settlement will maximize, on a present
value basis, the recovery of debts and claims owed to the government.
(d) In structuring settlements and determining the capability of
the borrower to repay debt and the amount of debt recovery that is
possible, the Administrator will consider, among other factors, the RE
Act, the National Energy Policy Act of 1992 (Pub. L. 102-486, 106 Stat.
2776), the policies and regulations of the Federal Energy Regulatory
Commission, state legislative and regulatory actions, and other market
and nonmarket forces as to their effects on competition in the electric
utility industry and on rural electric systems in particular. Other
factors the Administrator will consider are set forth in more detail in
Sec. 1717.1204.
Sec. 1717.1203 Relationship between RUS and Department of Justice.
(a) The Attorney General will be notified by the Administrator
whenever the Administrator intends to use his or her authority under
section 331(b)of the Con Act to settle a debt or claim.
(b) If an outstanding claim has been referred in writing to the
Attorney General, the Administrator will not use his or her own
authority to settle the claim without the approval of the Attorney
General.
(c) If an application for additional debt relief is received from a
borrower whose debt has been settled in the past under the authority of
the Attorney General, the Administrator will promptly notify the
Attorney General before proceeding to consider the application.
Sec. 1717.1204 Policies and conditions applicable to settlements.
(a) General. Settlement of debts and claims shall be subject to the
policies, requirements, and conditions set forth in this section and in
Sec. 1717.1202.
(b) Need for debt settlement. (1) The Administrator will not settle
any debt or claim unless the Administrator has determined that the
borrower is unable to meet its financial obligations under its loan
documents according to the terms of those documents, or that the
borrower will not be able to meet said obligations sometime within the
period of 24 months following the month the borrower submits its
application for debt settlement to RUS, and, in either case, such
default is likely to continue indefinitely. The determination of a
borrower's ability to meet its financial obligations will be based on
analyses and documentation by RUS of the borrower's historical,
current, and projected costs, revenues, cash flows, assets,
opportunities to reduce costs and/or increase revenues, and other
factors that may be relevant on a case by case basis.
(2) In its application to RUS for debt settlement, the borrower
must provide, in form and substance satisfactory to RUS, an in-depth
analysis supporting the borrower's contention that it is unable or will
not be able to meet its financial obligations as described in paragraph
(b)(1) of this section. The analysis must include:
(i) An explanation and analysis of the causes of the borrower's
inability to meet its financial obligations;
(ii) A thorough review and analysis of the opportunities available
or potentially available to the borrower to reduce administrative
overhead and other costs, improve efficiency and effectiveness, and
expand markets and revenues, including but not limited to opportunities
for sharing services, merging, and/or consolidating, raising rates when
appropriate, and renegotiating supplier and service contracts. In the
case of a power supply borrower, the study shall include such
opportunities among the members of the borrower, unless the
Administrator waives this requirement;
(iii) Documentation of the actions taken, in progress, or planned
by the borrower (and its member systems, if applicable) to take
advantage of the opportunities cited in paragraph (b)(2)(ii) of this
section; and
(iv) Other analyses and documentation prescribed by RUS on a case
by case basis.
(3) RUS may require that an independent consultant provide an
analysis of the efficiency and
[[Page 50493]]
effectiveness of the borrower's organization and operations, and those
of its member systems in the case of a power supply borrower. The
following conditions will apply:
(i) RUS will select the independent consultant taking into account,
among other matters, the consultant's experience and expertise in
matters relating to electric utility operations, finance, and
restructuring;
(ii) The contract with the consultant shall be to provide services
to RUS on such terms and conditions as RUS deems appropriate. The
consultant's scope of work may include, but shall not be limited to, an
analysis of the following:
(A) How to maximize the value of the government's collateral, such
as through mergers, consolidations, or sales of all or part of the
collateral;
(B) The viability of the borrower's system, taking into account
such matters as system size, service territory and markets, asset base,
physical condition of the plant, operating efficiency, competitive
pressures, industry trends, and opportunities to expand markets and
improve efficiency and effectiveness;
(C) The feasibility and the potential benefits and risks to the
borrower and the government of corporate restructuring, including
aggregation and disaggregation;
(D) In the case of a power supply borrower, the retail rate mark-up
by member systems and the potential benefits to be achieved by member
restructuring through mergers, consolidations, shared services, and
other alliances;
(E) The quality of the borrower's management, management advisors,
consultants, and staff;
(F) Opportunities for reducing overhead and other costs, for
expanding markets and revenues, and for improving the borrower's
existing and prospective contractual arrangements for the purchase and
sale of power, procurement of supplies and services, and the operation
of plant and facilities;
(G) Opportunities to achieve efficiency gains and increased
revenues based on comparisons with benchmark electric utilities; and
(H) The accuracy and completeness of the borrower's analysis
provided under paragraph (b)(2) of this section;
(iii) RUS and, as appropriate, other creditors, will determine the
extent to which the borrower and third parties (including the members
of a power supply borrower) will be required to participate in funding
the costs of the independent consultant;
(iv) The borrower will be required to make available to the
consultant all corporate documents, files, and records, and to provide
the consultant with access to key employees. The borrower will also
normally be required to provide the consultant with office space
convenient to the borrower's operations and records; and
(v) All analyses, studies, opinions, memoranda, and other documents
and information produced by the independent consultant shall be
provided to RUS on a confidential basis for consideration in evaluating
the borrower's application for debt settlement. Such documents and
information may be made available to the borrower and other appropriate
parties if authorized in writing by RUS.
(4) The borrower may be required to employ a temporary or permanent
manager acceptable to the Administrator, to manage the borrower's
operations to ensure that all actions are taken to avoid or minimize
the need for debt settlement. The employment could be on a temporary
basis to manage the system during the time the debt settlement is being
considered, and possibly for some time after any debt settlement, or it
could be on a permanent basis.
(5) The borrower must submit, at a time determined by RUS, a
resolution of its board of directors requesting debt settlement and
stating that the borrower is either currently unable to meet its
financial obligations to the government or will not be able to meet
said obligations sometime within the next 24 months, and that, in
either case, the default is likely to continue indefinitely.
(c) Debt settlement measures. (1) If the Administrator determines
that debt settlement is appropriate, the debt settlement measures the
Administrator will consider under this subpart with respect to direct,
insured, or guaranteed loans include, but are not limited to, the
following:
(i) Reamortization of debt;
(ii) Extension of debt maturity, provided that the maturity of the
borrower's outstanding debt after settlement shall not extend more than
10 years beyond the latest maturity date prior to settlement;
(iii) Reduction of the interest rate charged on the borrower's
debt, provided that the interest rate on any portion of the
restructured debt shall not be reduced to less than 5 percent, unless
the Administrator determines that reducing the rate below 5 percent
would maximize debt recovery by the government;
(iv) Forgiveness of interest accrued, penalties, and costs incurred
by the government to collect the debt; and
(v) With the concurrence of the Under Secretary for Rural
Development, forgiveness of loan principal.
(2) In the event that RUS has, under section 306 of the RE Act,
guaranteed loans made by the Federal Financing Bank or other third
parties, the Administrator may restructure the borrower's obligations
by: acquiring and restructuring the guaranteed loan; restructuring the
loan guarantee obligation; restructuring the borrower's reimbursement
obligations; or by such means as the Administrator deems appropriate,
subject to such consents and approvals, if any, that may be required by
the third party lender.
(d) Borrower's obligations to other creditors. The Administrator
will not grant relief on debt owed to the government unless similar
relief, on a pro rata basis, is granted with respect to other secured
obligations of the borrower, or the other secured creditors provide
other benefits or value to the debt restructuring. Unsecured creditors
will also be expected to contribute to the restructuring. If it is not
possible to obtain the expected contributions from other creditors, the
Administrator may proceed to settle a borrower's debt if that will
maximize recovery by the government and will not result in material
benefits accruing to other creditors at the expense of the government.
(e) Competitive bids for system assets. If requested by RUS, the
borrower or the independent consultant provided for in paragraph (b)(3)
of this section shall solicit competitive bids from potential buyers of
the borrower's system or parts thereof. The bidding process must be
conducted in consultation with RUS and use standards and procedures
acceptable to RUS. The Administrator may use the competitive bids
received as a basis for requiring the sale of all or part of the
borrower's system as a condition of settlement of the borrower's debt.
The Administrator may also consider the bids in evaluating alternative
settlement measures.
(f) Valuation of system. (1) The Administrator will consider the
value of the borrower's system, including, in the case of a power
supply borrower, the wholesale power contracts between the borrower and
its member systems. The valuation of the wholesale power contracts
shall take into account, among other matters, the rights of the
government and/or third parties, to assume the rights and obligations
of the borrower under such contracts, to charge reasonable rates for
service
[[Page 50494]]
provided under the contracts, and to otherwise enforce the contracts in
accordance with their terms. In no case will the Administrator settle a
debt or claim for less than the value (after considering the
government's collection costs) of the borrower's system and other
collateral securing the debt or claim.
(2) RUS may use such methods, analyses, and assessments as the
Administrator deems appropriate to determine the value of the
borrower's system.
(g) Rates. The Administrator will consider the rates charged for
electric service by the borrower and, in the case of a power supply
borrower, by its members, taking into account, among other factors, the
practices of the Federal Energy Regulatory Commission (FERC), as
adapted to the cooperative structure of borrowers, and, where
applicable, FERC treatment of any investments by co-owners in projects
jointly owned by the borrower.
(h) Collection action. The Administrator will consider whether a
settlement is favorable to the government in comparison with the amount
that can be recovered by enforced collection procedures.
(i) Regulatory approvals. Before the Administrator will approve a
settlement, the borrower must provide satisfactory evidence that it has
obtained all approvals required of regulatory bodies that the
Administrator determines are needed to implement rates or other
provisions of the settlement, or that are needed in any other way for
the borrower to fulfill its obligations under the settlement.
(j) Conditions regarding management and operations. As a condition
of debt settlement, the borrower, and in the case of a power supply
borrower, its members, will be required to implement those changes in
structure, management, operations, and performance deemed necessary by
the Administrator. Those changes may include, but are not limited to,
the following:
(1) The borrower may be required to undertake a corporate
restructuring and/or sell a portion of its plant, facilities, or other
assets
(2) The borrower may be required to replace senior management and/
or hire outside experts acceptable to the Administrator. Such changes
may include a commitment by the borrower's board of directors to
restructure and/or obtain new membership to improve board oversight and
leadership;
(3) The borrower may be required to agree to:
(i) Controls by RUS on the general funds of the borrower, as well
as on any investments, loans or guarantees by the borrower,
notwithstanding any limitations on RUS' control rights in the
borrower's loan documents or RUS regulations; and
(ii) Requirements deemed necessary by RUS to perfect and protect
its lien on cash deposits, securities, equipment, vehicles, and other
items of real or non-real property; and
(4) In the case of a power supply borrower, the borrower may be
required to obtain credit support from its member systems, as well as
pledges and action plans by the members to change their operations,
management, and organizational structure (e.g., shared services,
mergers, or consolidations) in order to reduce operating costs, improve
efficiency, and/or expand markets and revenues.
(k) Conveyance of assets. As a condition of a settlement, a
borrower may be required to convey some or all its assets to the
government.
(l) Additional conditions. The borrower will be required to warrant
and agree that no bonuses or similar extraordinary compensation has
been or will be provided, for reasons related to the settlement of
government debt, to any officer or employee of the borrower or to other
persons or entities identified by RUS. The Administrator may impose
such other terms and conditions of debt settlement as the Administrator
determines to be in the government's interests.
(m) Certification of accuracy. Before the Administrator will
approve a debt settlement, the manager or other appropriate official of
the borrower must certify that all information provided to the
government by the borrower or by any agent of the borrower, in
connection with the debt settlement, is true, correct, and complete in
all material respects.
Sec. 1717.1205 Waiver of existing conditions on borrowers.
Pursuant to section 331(b) of the Con Act, the Administrator, at
his or her sole discretion, may waive or otherwise reduce conditions
and requirements imposed on a borrower by its loan documents if the
Administrator determines that such action will contribute to
enhancement of the government's recovery of debt. Such waivers or
reductions in conditions and requirements under this section shall not
include the exercise of any of the debt settlement measures set forth
in Sec. 1717.1204(c), which are subject to all of the requirements of
said Sec. 1717.1204.
Sec. 1717.1206 Loans subsequent to settlement.
In considering any future loan requests from a borrower whose debt
has been settled in whole or in part (including the surviving entity of
merged or consolidated borrowers, where at least one of said borrowers
had its debts settled), it will be presumed that credit support for the
full amount of the requested loan will be required. Such support may be
in a number of forms, provided that they are acceptable to the
Administrator on a case by case basis. They may include, but need not
be limited to, equity infusions and guarantees of debt repayment,
either from the applicant's members (in the case of a power supply
borrower), or from a third party.
Sec. 1717.1207 RUS obligations under loan guarantees.
Nothing in this subpart affects the obligations of RUS under loan
guarantee commitments it has made to the Federal Financing Bank or
other lenders.
Sec. 1717.1208 Government's rights under loan documents.
Nothing in this subpart limits, modifies, or otherwise affects the
rights of the government under loan documents executed with borrowers,
or under law or equity.
Dated: September 19, 1997.
Jill Long Thompson,
Under Secretary, Rural Development.
[FR Doc. 97-25315 Filed 9-25-97; 8:45 am]
BILLING CODE 3410-15-P