[Federal Register Volume 64, Number 180 (Friday, September 17, 1999)]
[Rules and Regulations]
[Pages 50428-50429]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-24188]
-----------------------------------------------------------------------
DEPARTMENT OF AGRICULTURE
Rural Utilities Service
7 CFR Part 1735
RIN 0572-AB49
General Policies, Types of Loans, Loan Requirements--
Telecommunications Program
AGENCY: Rural Utilities Service, USDA.
ACTION: Direct final rule.
-----------------------------------------------------------------------
SUMMARY: The Rural Utilities Service (RUS) is amending its regulations
to clarify that loan applicants organized as limited liability
companies may be eligible to receive financial assistance. This direct
final rule is part of an ongoing RUS project to modernize agency
policies in order to provide borrowers with the flexibility they need
to continue providing reliable telephone service at reasonable costs in
rural areas, while maintaining the integrity of Government loans. This
action also conforms more closely to private lending practice.
DATES: This rule will become effective on November 16, 1999, unless we
receive written adverse comments or notice of intent to submit adverse
comments on or before October 18, 1999. If we receive such comment or
notice, we will publish a document in the Federal Register prior to the
effective date withdrawing the direct final rule.
ADDRESSES: Submit written comments or notice of intent to submit
adverse comments to Roberta D. Purcell, Assistant Administrator,
Telecommunications Program, Rural Utilities Service, 1400 Independence
Avenue, SW., Room 4056, STOP 1590, Washington, DC 20250-1590. RUS
requires a signed original and three copies of all comments (7 CFR part
1700). Comments received will be available for public inspection at
room 4056, South Building, U.S. Department of Agriculture, Washington,
DC, between 8:00 a.m. and 4:00 p.m. (7 CFR part 1.27(b)).
FOR FURTHER INFORMATION CONTACT: Jonathan P. Claffey, Deputy Assistant
Administrator, Telecommunications Program, Rural Utilities Service,
1400 Independence Avenue, SW., Room 4056, STOP 1590, Washington, DC
20250-1590. Telephone: (202) 720-9556.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule has been determined to be not significant and, therefore,
has not been reviewed by the Office of Management and Budget under
Executive Order 12866.
Executive Order 12988
This rule has been reviewed in accordance with Executive Order
12988, Civil Justice Reform. RUS has determined that this rule meets
the applicable standards provided in section 3 of that 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 this rule; and
(3) in accordance with section 212(e) of the Department of Agriculture
Reorganization Act of 1994 (7 U.S.C. 6912(e)) administrative appeal
procedures, if any, are required must be exhausted prior to initiating
litigation against the Department or its agencies.
Regulatory Flexibility Act Certification
RUS has determined that this rule will not have a significant
economic impact on a substantial number of small entities, as defined
by the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). The RUS
telecommunications loan program provides borrowers with loans at
interest rates and terms that are more favorable than those generally
available from the private sector. Borrowers, as a result of obtaining
federal financing, receive economic benefits that exceed any direct
cost associated with complying with RUS regulations and requirements.
Information Collection and Recordkeeping Requirements
This rule contains no new reporting or recordkeeping burdens under
OMB control number 0572-0079 that would require approval under the
Paperwork
[[Page 50429]]
Reduction Act of 1995 (44 U.S.C. Chapter 35).
Send questions or comments regarding this burden or any other
aspect of these collections of information, including suggestions for
reducing the burden to F. Lamont Heppe, Director, Program Development
and Regulatory Analysis, Rural Utilities Service, 1400 Independence
Avenue, SW., Room 4034, STOP 1522, Washington, DC 20250-1522.
National Environmental Policy Act Certification
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.
Catalog of Federal Domestic Assistance
The program described by this rule is listed in the Catalog of
Federal Domestic Assistance programs under numbers 10.851, Rural
Telephone Loans and Loan Guarantees, and 10.852, Rural Telephone Bank
Loans. This catalog is available on a subscription basis from the
Superintendent of Documents, the United States Government Printing
Office, Washington, 20402-9325.
Executive Order 12372
This program is excluded from the scope of Executive Order 12372,
Intergovernmental Consultation which may require consultation with
state and local offices. A final rule related notice entitled
``Department Programs and Activities Excluded from Executive Order
12372,'' (50 FR 47034) determined that RUS and Rural Telephone Bank
loans and loan guarantees were not covered by Executive Order 12372.
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 of 1995.
Background
The telecommunications industry is becoming increasingly
competitive. The Telecommunications Act of 1996 (Public Law 104-104)
and regulatory actions by the Federal Communications Commission are
drastically altering the regulatory and business environment of all
telecommunications systems, including RUS borrowers. At the same time,
changes in overall business trends and technology continue to place
pressure on RUS financed systems to operate more efficiently.
At the present, RUS regulations stipulate that an entity must be
incorporated to be eligible for RUS financing (7 CFR 1735.14, Borrower
eligibility). However, the limited liability company (LLC) structure is
an increasingly used form of business organization. RUS has determined
that its regulations should provide that LLCs be eligible for RUS loans
if the state laws under which the LLC is organized and existing enable
the LLC to effectively accomplish the purposes of the Rural
Electrification Act of 1936 (7 U.S.C. 901 et seq.).
RUS policies are utilized by the Governor of the Rural Telephone
Bank in carrying out the Rural Telephone Bank's loan program.
List of Subjects in 7 CFR Part 1735
Accounting, Loan programs--communications, Reporting and
recordkeeping requirements, Rural areas, Telephone.
For the reasons set forth in the preamble, 7 CFR Chapter XVII is
amended as follows:
PART 1735--GENERAL POLICIES, TYPES OF LOANS, LOAN REQUIREMENTS--
TELECOMMUNICATIONS PROGRAM
1. The authority citation for part 1735 is revised to read as
follows:
Authority: 7 U.S.C. 901 et seq., 1921 et seq., and 6941 et seq.
2. In Sec. 1735.14, paragraph (c) is revised to read as follows:
Sec. 1735.14 Borrower eligibility.
* * * * *
(c) RUS gives preference to those borrowers (including initial loan
applicants) already providing telephone service in rural areas, and to
cooperative, nonprofit, limited dividend, or mutual associations. To be
eligible for a loan, a borrower:
(1) Must provide or propose to provide the basic local exchange
telephone service needs of rural areas;
(2) Must have sufficient authority to carryout the purposes of the
RE Act; and
(3) Must be incorporated or a limited liability company.
Dated: September 10, 1999.
Inga Smulkstys,
Acting Under Secretary, Rural Development.
[FR Doc. 99-24188 Filed 9-16-99; 8:45 am]
BILLING CODE 3410-15-P