[Federal Register Volume 64, Number 107 (Friday, June 4, 1999)]
[Rules and Regulations]
[Pages 29945-29947]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-13931]



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 Rules and Regulations
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  Federal Register / Vol. 64, No. 107 / Friday, June 4, 1999 / Rules 
and Regulations  

[[Page 29945]]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1780

RIN 0572-AB44


Water and Waste Program Regulations

AGENCY: Rural Utilities Service, USDA.

ACTION: Final rule.

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SUMMARY: The Rural Utilities Service (RUS) amends the rules used to 
administer the water and waste loan and grant programs. This action 
implements provisions of the Agriculture, Rural Development, Food and 
Drug Administration and Related Agencies Appropriations Act, 1999 
(Act). The Act reduces the amount of funds that a rural or native 
Alaskan village applicant must contribute from 50 percent to 25 percent 
of the project development costs. Additionally, it removes the 
population eligibility requirement that expired September 30, 1998, for 
certain timber-dependent communities in the Pacific Northwest. This 
action also includes an increase in the administrative fee that the 
Appalachian Regional Commission pays to USDA to administer grants for 
projects in which USDA has provided no funds and makes other technical 
corrections. The intended effect is to make 7 CFR part 1780 current 
with statutory authority.

EFFECTIVE DATE: June 4, 1999.

FOR FURTHER INFORMATION CONTACT: Cheryl Francis, Loan Specialist, Water 
and Waste Division, Rural Utilities Service, USDA, South Agriculture 
Building, Room 2239, STOP 1570, Washington, DC 20250, telephone: (202) 
720-9589.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This final rule has been determined to be not significant under 
Executive Order 12866, Regulatory Planning and Review. Therefore, the 
Office of Management and Budget (OMB) has not been reviewed by OMB.

National Environmental Policy Act Certification

    This action has been reviewed under 7 CFR Part 1940, Subpart G, 
Environmental Program. It has been determined that the action does not 
constitute a major Federal action significantly affecting the quality 
of the human environment. An Environmental Impact Statement is not 
required under the National Environmental Policy Act of 1969.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. RUS has determined that this rule meets the applicable 
standards provided in section 3 of the Executive Order.
    In accordance with the Executive Order and the rule: (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 to the rule; and 
(3) administrative appeal procedures, if any, must be exhausted before 
litigation against the Department or its agencies may be initiated in 
accordance with section 212(e) of the Department of Agriculture 
Reorganization Act of 1994 (7 U.S.C. 6912).

Information Collection and Recordkeeping Requirements

    The Office of Management and Budget (OMB) has approved the 
reporting and recordkeeping requirements contained in the rule under 
the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35). OMB has 
assigned clearance number 0575-0115.

Unfunded Mandates

    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the Unfunded Mandates Reform Act of 1995) 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 the 
Unfunded Mandates Reform Act.

Regulatory Flexibility Act Certification

    Under section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 
605(b), RUS certifies that this rule will not have a significant 
economic impact on a substantial number of small entities. The 
amendments reflect only statutory changes that Congress has mandated 
and over which the Agency has no discretion. They also involve minimal 
procedural matters on other agreements already negotiated.

Executive Order 12372

    The water and waste loan and grant program is listed in the Catalog 
of Federal Domestic Assistance under number 10.760, Water and Waste 
Disposal Systems For Rural Communities. The program is subject to the 
provisions of Executive Order 12372, which requires intergovernmental 
consultation with State and local officials. Consultation will be 
completed at the time of the action performed.

Background

    It is the policy of this Department that rules relating to public 
property, loans, grants, benefits, or contracts shall be published for 
comment although 5 U.S.C. 553 exempts such rules from publication. Good 
cause is found for not requiring notice and comment before making this 
rule effective.
    These amendments are not published for proposed rulemaking because 
they merely reflect changes in statutory authority enacted by the 
Agriculture, Rural Development, Food and Drug Administration and 
Related Agencies Appropriations Act, 1999 (Act). They also make only 
minor technical corrections to the regulations, which do not involve 
matters of agency discretion. The Act leaves no discretion to the 
agency as to the local share of project costs the rural and native 
Alaskan village applicants must contribute. Notice and public comment, 
therefore, are impractical, unnecessary, and contrary to the public 
interest.
    The Act amends section 306D of the Consolidated Farm and Rural 
Development Act (7 U.S.C. 1926d) by inserting ``25 percent'' instead of 
``equal'' in subsection (b). Section 306D authorizes the Secretary of 
Agriculture to make grants for the benefit of rural or native villages 
in the State of Alaska. This amendment reduces the percentage of 
matching funds that must be provided from non-Federal sources to 25 
percent.
    This final rule deletes the temporary expansion of eligibility of 
certain

[[Page 29946]]

timber-dependent communities in the Pacific Northwest. Public Law 103-
427 expanded the maximum population eligibility for RUS water and waste 
loans and grants from 10,000 to 25,000 inhabitants if the cities or 
towns met certain criteria. This change in eligibility expired on 
September 30, 1998, and is being removed from the regulations.
    On August 24, 1998, USDA and the Appalachian Regional Commission 
(ARC) updated the Memorandum of Agreement (MOA) that establishes a 
working partnership to serve the needs of Appalachian communities. This 
MOA increases the fee that ARC pays USDA for administering grants to 
Appalachian communities on behalf of ARC. The fee increase will better 
reflect the present cost in administering the grants.
    The fee had been calculated as 5 percent of the first $50,000 of an 
ARC grant and 1 percent of any amount over $50,000. The MOA increases 
the ARC grant amount on which the percentages are based from $50,000 to 
$100,000. The fees will increase to 5 percent of the first $100,000 of 
an ARC grant plus 1 percent of any amount over $100,000.
    The final rule also makes some minor technical corrections to the 
regulations to correct deficiencies that have surfaced since the 
regulation was published June 19, 1997 (62 FR 33462). The changes are 
mostly grammatical and eliminate obsolete form references.

List of Subjects in 7 CFR Part 1780

    Business and industry, Community development, Community facilities, 
Grant programs-housing and community development, Reporting and 
recordkeeping requirements, Rural areas, Waste treatment and disposal, 
Water supply, Watersheds.

    Therefore, the Rural Utilities Service amends 7 CFR chapter XVII as 
follows:

PART 1780--WATER AND WASTE LOANS AND GRANTS

    1. The authority citation for part 1780 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 7 U.S.C. 1989; 16 U.S.C. 1005.

Subpart A--General Policies and Requirements

    2. Remove Sec. 1780.7(h).
    3. Revise Sec. 1780.10(b)(2) to read as follows:


Sec. 1780.10  Limitations.

* * * * *
    (b) * * *
    (2) Pay any costs of a project when the median household income of 
the service area is more than 100 percent of the nonmetropolitan median 
household income of the State;
* * * * *

Subpart B--Loan and Grant Application Processing

    4. Revise Sec. 1780.35(c) to read as follows:


Sec. 1780.35  Processing office review.

* * * * *
    (c) User charges. The user charges should be reasonable and produce 
enough revenue to provide for all costs of the facility after the 
project is complete. The planned revenue should be sufficient to 
provide for all debt service, debt reserve, operation and maintenance, 
and, if appropriate, additional revenue for facility replacement of 
short-lived assets without building a substantial surplus. Ordinarily, 
the total debt service reserve will be equal to one average annual loan 
installment which will accumulate at the rate of one-tenth of the total 
each year.
    5. In Sec. 1780.39, paragraphs (e)(2) and (f) introductory text are 
revised to read as follows:


Sec. 1780.39  Application processing.

* * * * *
    (e) * * *
    (2) Other than general obligation or special assessment bonds. Each 
borrower will be required to establish and maintain reserves sufficient 
to assure that loan installments will be paid on time, for emergency 
maintenance, for extensions to facilities, and for replacement of 
short-lived assets which have a useful life significantly less than the 
repayment period of the loan. Borrowers issuing bonds or other 
evidences of debt pledging facility revenues as security will plan 
their debt reserve to provide for at least one average annual loan 
installment. The debt reserve will accumulate at the rate of one-tenth 
of an average annual loan installment each year unless prohibited by 
state law.
    (f) Membership authorization. For organizations other than public 
bodies, the membership will authorize the project and its financing. 
Form RD 1942-8, ``Resolution of Members or Stockholders,'' may be used 
for this authorization. The approval official may accept RUS Bulletin 
1780-28, ``Loan Resolution Security Agreement,'' without such 
membership authorization when State statutes and the organization's 
charter and bylaws do not require such authorization; and
* * * * *
    6. Revise Sec. 1780.45(a)(2) to read as follows:


Sec. 1780.45  Loan and grant closing and delivery of funds.

    (a) * * *
    (2) RUS Bulletins 1780-27, ``Loan Resolution (Public Bodies),'' or 
1780-28, ``Loan Resolution Security Agreement,'' will be adopted by 
public and other-than-public bodies. These resolutions supplement other 
provisions in this part.
* * * * *
    7. Revise Sec. 1780.48(b) introductory text to read as follows:


Sec. 1780.48  Regional commission grants.

* * * * *
    (b) When RUS has no loan or grant funds in the project, an 
administrative charge will be made pursuant to the Economy Act of 1932 
(31 U.C.S. 1535). A fee of 5 percent of the first $100,000 of a 
regional commission grant and 1 percent of any amount over $100,000 
will be paid to RUS by the commission.
* * * * *
    8. In Sec. 1780.49, paragraphs (c)(4) and (d) are revised to read 
as follows:


Sec. 1780.49  Rural or Native Alaskan villages.

* * * * *
    (c) * * *
    (4) The applicant must obtain 25 percent of project development 
costs from State or local contributions. The local contribution can be 
from loan funds authorized under this part.
    (d) Grant amount. Grants will be made for up to 75 percent of the 
project development costs.
* * * * *

Subpart C--Planning, Designing, Bidding, Contracting, Constructing 
and Inspections

    9. Revise Sec. 1780.55 to read as follows:


Sec. 1780.55  Preliminary engineering reports and Environmental 
Reports.

    Preliminary engineering reports (PERs) must conform to customary 
professional standards. PER guidelines for water, sanitary sewer, solid 
waste, and storm sewer are available from the Agency. Environmental 
Reports must meet the policies and intent of the National Environmental 
Policy Act and RUS procedures. Guidelines for preparing Environmental 
Reports are available in RUS Bulletin 1794A-602.
    10. In Sec. 1780.57, add paragraph (o) to read as follows:


Sec. 1780.57  Design policies.

* * * * *
    (o) Seismic safety. All new structures, fully or partially 
enclosed, used or

[[Page 29947]]

intended for sheltering persons or property will be designed with 
appropriate seismic safety provisions in compliance with the Earthquake 
Hazards Reduction Act of 1977 (42 U.S.C. 7701 et seq.), and Executive 
Order 12699, Seismic Safety of Federal and Federally Assisted or 
Regulated New Building Construction (3 CFR, 1990 Comp., p. 269). 
Designs of components essential for system operation and substantial 
rehabilitation of structures that are used for sheltering persons or 
property should incorporate seismic safety provisions to the extent 
practicable. RUS implementing regulations for seismic safety are in 7 
CFR part 1972, subpart C.

Subpart D--Information Pertaining to Preparation of Notes or Bonds 
and Bond Transcript Documents for Public Body Applicants

    11. Revise Sec. 1780.94(j)(3) to read as follows:


Sec. 1780.94  Minimum bond specifications.

* * * * *
    (j) * * *
    (3) Provisions that amend covenants contained in RUS Bulletins 
1780-27 or 1780-28.
* * * * *
    Dated: May 18, 1999.
Jill Long Thompson,
Under Secretary for Rural Development.
[FR Doc. 99-13931 Filed 6-3-99; 8:45 am]
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