[Federal Register Volume 59, Number 178 (Thursday, September 15, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-22877]


[[Page Unknown]]

[Federal Register: September 15, 1994]


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Part V





Department of Commerce





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Economic Development Administration



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Economic Development Financial Restructuring Assistance Program for 
Businesses Affected by the Southern California Earthquake; Notice
DEPARTMENT OF COMMERCE

Economic Development Administration
[Docket No. 940830-4230]

 
Economic Development Financial Restructuring Assistance Program 
for Businesses Affected by the Southern California Earthquake

AGENCY: Economic Development Administration (EDA), Department of 
Commerce (DoC).

ACTION: Notice.

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SUMMARY: The Economic Development Administration (EDA) announces the 
policies and the application procedures for funds available to support 
disaster relief programs designed to assist affected businesses located 
in communities impacted by the California Northridge earthquake, under 
the Presidential declaration of disaster of January 17, 1994.

DATES: This announcement is effective September 15, 1994. An 
Intermediary Worksheet, with instructional guidelines (Appendix A), 
will serve as the initial proposal for EDA review. This information is 
available from EDA's Pasadena office. The completed worksheets will be 
received for 30 days from the date of this notice. Due to the exigency 
of the Financial Restructuring Assistance Program, EDA may commence 
with grant awards prior to the 30 day deadline for receipt of the 
worksheets.

ADDRESSES: To establish merits of project proposals, interested parties 
should contact the EDA Disaster Field Office, 150 East Colorado 
Boulevard, Suite 101, Pasadena, California 91105; telephone (818) 583-
6831.

FOR FURTHER INFORMATION CONTACT: Potential applicants should contact 
the Economic Development Representatives (EDRs), Charles Oaks or James 
Lavery, at the EDA Disaster Field Office, 150 East Colorado Boulevard, 
Suite 101, Pasadena, California 91105; telephone (818) 583-6831.

SUPPLEMENTARY INFORMATION: Buy American-Made Equipment or Products--
Applicants are hereby notified that they are encouraged, to the extent 
feasible, to purchase American-made equipment and products with funding 
provided under this program in accordance with Congressional intent as 
set forth in the resolution contained in Public Law 103-121, Sections 
606 (a) and (b).
    Refer to the Notice published on March 30, 1994, in the Federal 
Register (59 FR 14996) for information on EDA's general policies and 
other requirements.

Authority

    Support for this program is authorized under the contingency fund 
provided to the President under Public Law 103-211, the Emergency 
Supplemental Appropriations Act of 1994.

Catalog of Federal Domestic Assistance (CFDA)

    The Special Economic Development and Adjustment Assistance 
Program--Long-Term Economic Deterioration (LTED) and Sudden and Severe 
Economic Dislocation (SSED) is listed under CFDA 11.307.

Program Description

    Assistance will be provided in the form of grants to eligible 
intermediaries to capitalize or recapitalize a revolving loan fund 
program. The primary purpose and focus of the initial lending phase of 
the program will be to provide funds to assist in the financial 
restructuring of businesses denied assistance by the Small Business 
Administration (SBA). Businesses that receive loans from EDA grantees 
under this program must demonstrate to grantees that financial 
viability existed before the effects of the disaster on the capital 
structure of the business.
    Upon completion of an initial lending phase, intermediaries will be 
eligible to apply program funds to assist other targeted businesses 
after submittal of an Administrative Plan which addresses a longer-term 
recovery strategy.

Funding Availability

    Funds in the amount of $30 million are available for this disaster 
recovery program and shall remain available until expended.

Funding Instrument

    Funds will be awarded through grants under the Sudden and Severe 
Economic Dislocation (SSED) program under Title IX of the Public Works 
and Economic Development Act of 1965, as amended (Pub. L. 89-136, 42 
U.S.C. 3241 et seq.) (PWEDA), as described in the Federal Register of 
March 30, 1994 (59 FR 15005), that announces EDA's FY 1994 Notice of 
Availability of Funds, or such subsequent annual Notices of the 
Availability of Funds.

Eligible Applicants

    Priority consideration for selection of intermediaries will be 
given to Community Development Corporations as defined in the Community 
Economic Development Act (42 U.S.C. 9802), and to nonprofit 
organizations determined by EDA to be representative of a redevelopment 
area. To meet this requirement, nonprofit organizations shall obtain a 
written endorsement from the city or county in which the nonprofit 
operates.
    All nonprofit applicants are subject to a name check review 
process. Name checks are intended to reveal if any key individuals 
associated with the applicant have been convicted of, or are presently 
facing, criminal charges such as fraud, theft, perjury, or other 
matters which significantly reflect on the applicant's management, 
honesty or financial integrity.

Grantee Responsibilities

    Grantees selected for this program shall agree to administer these 
funds in accordance with applicable EDA published directives. To 
implement the intent of the program, substantial deviation from the 
above-mentioned directives may be required. EDA will work with the 
grantees and provide individual or blanket waivers from the established 
directives, when appropriate.
    Since the nature of the loans contemplated under this program 
involve substantial risk compared to loans traditionally made with 
funds available to grantees under Title IX of the Public Works and 
Economic Development Act of 1965 (PWEDA), as amended, grantees must 
agree to participate in special efforts as announced from time to time 
by EDA to assure prudent management of these funds. Additionally, 
grantees will be expected to participate in EDA-sponsored initiatives 
to leverage the impact of these funds through such mechanisms as 
securitization.

Proposal Submission Procedures

    Proposals for assistance authorized under the contingency fund 
provided to the President under Public Law 103-211, the Emergency 
Supplemental Appropriations Act of 1994, shall be submitted to EDA's 
Pasadena Disaster Field Office, as noted in the ADDRESSES section of 
this Notice.
    Intermediaries must clearly demonstrate how the EDA assistance will 
help businesses recover from the economic hardship and other problems 
caused by the Northridge Earthquake, and that such assistance has been 
preceded by sound planning. Interested parties should contact EDA's 
Pasadena Disaster Field Office for a proposal package.

Grant Rates

    Local share requirements are discussed in the Federal Register of 
March 30, 1994, (59 FR 15006) announcing the policies and application 
procedures for EDA's Fiscal Year 1994 programs. Due to the critical 
nature of this program, the Assistant Secretary for Economic 
Development has determined that a higher than normal grant rate will be 
considered. Grants will be awarded at the level not to exceed 90 
percent of the project cost. Grant funds may be awarded for revolving 
loan fund assistance, and for administrative support not to exceed two 
years. In extenuating circumstances, EDA may waive the local share 
requirement where permitted by the PWEDA and its implementing 
regulations at 13 CFR Chapter III.

Application Procedures

    Following the review of the Intermediary Worksheet (Appendix A), 
EDA will invite those entities whose projects are selected for 
consideration to submit full applications. Except as modified herein, 
application procedures, evaluation criteria, and post-approval project 
implementation information for the Title IX assistance are described in 
the Federal Register of March 30, 1994, (59 FR 15005) announcing EDA's 
Notice of Availability of Funds for FY 1994.
    The form associated with this notice has been approved by OMB under 
Control Number 0610-0058.

    Dated: September 9, 1994.
William W. Ginsberg,
Assistant Secretary for Economic Development.

Appendix A--Intermediary Worksheet, EDA's Financial Restructuring 
Assistance Program

    Interested parties should submit a concise response to each of 
the following items, preferably no more than ten pages total. 
Provide a cover sheet signed by the preparer or executive officer.
    1. Describe the nature of your overall organization and the 
sources of administrative and program funding. Provide an 
organization chart and a copy of the most recent, audited financial 
statements for your organization.
    2. Describe your organization's involvement in economic 
development lending, including a description of the programs which 
you provide business technical assistance, loan packaging services, 
loan portfolio administration, loan servicing, workouts, and/or 
foreclosure actions. Provide a summary of the loan activity for each 
program for which your organization has a primary role.
    3. Provide the status of loans which your organization was 
responsible for approving and servicing; discuss or provide data 
showing the repayment and default status of these loans. Indicate 
the # and $ amount of loans presently being serviced and the 
historical default rate of managed portfolios.
    4. Describe your organization's loan administration 
capabilities, including the number of people directly involved in 
lending activities, and the degree to which your organization has 
been or is involved in negotiating or restructuring debt 
obligations. Provide resumes of key loan personnel directly involved 
in lending functions, and list loan board membership by occupation 
and employer name, if applicable.
    5. Briefly describe your lending and servicing procedures and 
systems for delivery and servicing of loan programs for which your 
organization is responsible.
    6. Explain how your organization relates to the community at 
large and set forth the reasons you believe your organization is (or 
will be) recognized as a leading institution for economic and 
entrepreneurial development in your present service area (and 
expanded service area, if applicable). Describe your present service 
area (and expanded service area, if applicable).
    7. Describe the amount of the grant funds under this program 
which your organization would request, and could realistically and 
successfully lend within two years, based upon your stated 
assumptions. Indicate how you would market this program relative to 
existing and (proposed) expanded service areas. Indicate how this 
would be accomplished with existing and/or additional lending staff, 
including a brief discussion or present staff capacity and 
experience regarding debt restructuring, and dollar requirements to 
administer the proposed program over an initial three-year period. 
(Note that interest earnings may be used for program administrative 
expenses.) Provide suggestions how the program could or should be 
operated.

[FR Doc. 94-22877 Filed 9-14-94; 8:45 am]
BILLING CODE 3510-24-P