[Federal Register Volume 65, Number 150 (Thursday, August 3, 2000)]
[Proposed Rules]
[Pages 47695-47696]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-19698]


 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
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 

  Federal Register / Vol. 65, No. 150 / Thursday, August 3, 2000 / 
Proposed Rules  

[[Page 47695]]



DEPARTMENT OF AGRICULTURE

Rural Business-Cooperative Service

Rural Housing Service

Rural Utilities Service

Farm Service Agency

7 CFR Part 1940

RIN 0570-AA30


Methodology and Formulas for Allocation of Loan and Grant Program 
Funds

AGENCY: Rural Business-Cooperative Service; Rural Housing Service; 
Rural Utilities Service; Farm Service Agency, USDA.

ACTION: Proposed rule.

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SUMMARY: The Rural Business-Cooperative Service (RBS) is proposing to 
amend the regulations for allocating program funds to its State 
Offices. This action is needed to add the Rural Business Opportunity 
Grant (RBOG) Program and update the formulas used for the Rural 
Business Enterprise Grant (RBEG) and Business and Industry (B&I) 
Guaranteed and Direct Loan programs. The intended effect of this action 
is to update the formula used for allocating B&I and RBEG funds among 
State Offices and provide a regulatory formula for allocating RBOG 
funds.

DATES: Written or E-mail comments must be received on or before October 
2, 2000 to be assured of consideration.

ADDRESSES: Submit written comments in duplicate to the Branch Chief, 
Regulations And Paperwork Management Branch, Rural Development, U.S. 
Department of Agriculture, STOP 0742, 1400 Independence Ave. SW., 
Washington, DC 20250-0742. Comments may be submitted via the Internet 
by addressing them to ``[email protected]'' and must contain the 
word ``opportunity'' in the subject. All written comments made pursuant 
to this notice will be available for public inspection at 300 E Street, 
SW., Washington, DC 20546, during normal working hours.

FOR FURTHER INFORMATION CONTACT: M. Wayne Stansbery, Loan Specialist, 
Specialty Lenders Division, Rural Business-Cooperative Service, U.S. 
Department of Agriculture, STOP 3225, Room 6868, 1400 Independence Ave. 
SW., Washington, DC 20250, Telephone (202) 720-6819.

SUPPLEMENTARY INFORMATION:

Classification

    This rule has been determined to be not-significant and has not 
been reviewed by the Office of Management and Budget.

Programs Affected

    The Catalog of Federal Domestic Assistance numbers for the programs 
impacted by this action are 10.773, Rural Business Opportunity Grants; 
10.769, Rural Business Enterprise Grants; and 10.768, Business and 
Industry loans.

Paperwork Reduction Act

    There are no reporting and recordkeeping requirements associated 
with this proposed rule.

Intergovernmental Consultation

    This action is not subject to the provisions of Executive Order 
12372 which requires intergovernmental consultation with state and 
local officials.

Civil Justice Reform

    This proposed rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. In accordance with this 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 this rule; and (3) 
administrative proceedings in accordance with the regulations of the 
Agency at 7 CFR part 11 must be exhausted before bringing suit in court 
challenging action taken under this rule, unless those regulations 
specifically allow bringing suit at an earlier time.

Environmental Impact Statement

    This document has been reviewed in accordance with 7 CFR part 1940, 
subpart G, ``Environmental Program.'' RBS has determined that this 
proposed action does not constitute a major Federal action 
significantly affecting the quality of the human environment, and, in 
accordance with the National Environmental Policy Act of 1969, Pub. L. 
91-190, an Environmental Impact Statement is not required.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
establishes requirements for Federal agencies to assess the effects of 
their regulatory actions on state, local, and tribal governments and 
the private sector. Under section 202 of the UMRA, RBS must prepare a 
written statement, including a cost-benefit analysis, for proposed and 
final rules with ``Federal mandates'' that may result in expenditures 
to state, local or tribal governments, in the aggregate, or to the 
private sector, of $100 million or more in any 1 year. When such a 
statement is needed for a rule, section 205 of the UMRA generally 
requires RBS to identify and consider a reasonable number of regulatory 
alternatives and adopt the least costly, more cost-effective, or least 
burdensome alternative that achieves the objectives of the rule.
    This rule contains no Federal mandates (under the regulatory 
provisions of title II of the UMRA) 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 UMRA.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act, RBS has 
determined that this action would not have a significant economic 
impact on a substantial number of small entities, because the action 
will not affect a significant number of small entities as defined by 
the Regulatory Flexibility Act (5 U.S.C. 601). RBS made this 
determination based on the fact that this action only impacts internal 
Agency procedures for determining how much of available program funds 
are allocated to each state. Small entities will not be impacted to a 
greater extent than large entities.

Background and Discussion

    RBS proposes to amend its regulations for allocating program funds 
among its State Offices. This action is necessary to provide a 
regulatory basis for allocating funds for a new program, RBOG. Also, 
adjustments need to be made in the

[[Page 47696]]

formulas for allocating RBEG and B&I funds to reflect current policies 
and to add that one of the factors used for RBEG is the State 
percentage of national rural population with income below the poverty 
level.

List of Subjects in 7 CFR Part 1940

    Administrative practice and procedure, Agriculture, Allocations, 
Grant programs--Housing and community development, Loan programs--
Agriculture, Rural areas.
    Therefore, chapter XVIII, title 7, Code of Federal Regulations, is 
proposed to be amended as follows:

PART 1940--GENERAL

    1. The authority citation for part 1940 continues to read as 
follows:

    Authority: 5 U.S.C. 301, 7 U.S.C. 1989, 42 U.S.C. 1480.

Subpart L--Methodology and Formulas for Allocation of Loan and 
Grant Program Funds

    2. Amend section 1940.588 by removing paragraph (k) and revising 
the heading and paragraphs (d), (g), (h), and (j) to read as follows:


Sec. 1940.588  Business and Industry Guaranteed and Direct Loans.

* * * * *
    (d) Transition formula. The transition formula is not used for B&I 
Guaranteed and Direct Loans.
* * * * *
    (g) Reserve. See Sec. 1940.552(g). States may request reserve funds 
from the B&I reserve when all of the state allocation has been 
obligated or will be obligated to the project for which the request is 
made.
    (h) Pooling of funds. See Sec. 1940.552(h). Funds are pooled near 
fiscal year-end. Pooled funds will be placed in a reserve and made 
available on a priority basis to all States.
* * * * *
    (j) Suballocation by the State Director. Suballocation by the State 
Director is authorized for this program.
* * * * *
    3. Amend section 1940.589 by removing paragraph (k) and revising 
paragraphs (b)(1)(ii), (g), and (h) to read as follows:


Sec. 1940.589  Rural Business Enterprise Grants.

* * * * *
    (b) * * *
    (1) * * *
    (ii) State's percentage of national rural population with incomes 
below the poverty level--25 percent.
* * * * *
    (g) Reserve. See Sec. 1940.552(g).
    (h) Pooling of funds. See Sec. 1940.552(h). Funds are pooled near 
fiscal year-end. Pooled funds will be placed in the National Office 
reserve and will be made available administratively.
* * * * *
    4. Add section 1940.593 to read as follows:


Sec. 1940.593  Rural Business Opportunity Grants.

    (a) Amount available for allocations. See Sec. 1949.552(a).
    (b) Basic formula criteria, data source, and weight. See 
Sec. 1940.552(b).
    (1) The criteria used in the basic formula are:
    (i) State's percentage of national rural population--50 percent.
    (ii) State's percentage of national rural population with incomes 
below the poverty level--25 percent.
    (iii) State's percentage of national nonmetropolitan unemployment--
25 percent.
    (2) Data source for each of these criterion is based on the latest 
census data available. Each criterion is assigned a specific weight 
according to its relevance in determining need. The percentage 
representing each criterion is multiplied by the weight factor and 
summed to arrive at a State Factor (SF). The SF cannot exceed .05.

SF = (criterion (b)(1)(i)  x  50 percent) +
    (criterion (b)(1)(ii)  x  25 percent) +
    (criterion (b)(1)(iii)  x  25 percent)

    (c) Basic formula allocation. See Sec. 1940.552(c).
    (d) Transition formula. The transition formula is not used for 
Rural Business Opportunity Grants (RBOG).
    (e) Base allocation. See Sec. 1940.552(e).
    (f) Administrative allocation. The administrative allocation is not 
used for RBOG.
    (g) Reserve. See Sec. 1940.552(g).
    (h) Pooling of funds. See Sec. 1940.552(h). Funds are pooled near 
fiscal year-end. Pooled funds will be placed in the National Office 
reserve and will be made available administratively.
    (i) Availability of the allocation. See Sec. 1940.552(i). The 
allocation of funds is made available to States on an annual basis.
    (j) Suballocation by the State Director. Suballocation by the State 
Director is authorized for this program.
* * * * *

    Dated: July 19, 2000.
Jill Long Thompson,
Under Secretary, Rural Development.
[FR Doc. 00-19698 Filed 8-2-00; 8:45 am]
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