[Federal Register Volume 65, Number 226 (Wednesday, November 22, 2000)]
[Rules and Regulations]
[Pages 70292-70294]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-29812]


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EMERGENCY STEEL GUARANTEE LOAN BOARD

13 CFR Part 400

RIN 3003-ZA00


Emergency Steel Guarantee Loan Program; Commercial Lending 
Practices and Re-Opening of Period for Applications

AGENCY: Emergency Steel Guarantee Loan Board.

ACTION: Final rule.

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SUMMARY: The Emergency Steel Guarantee Loan Board (Board) is amending 
the regulations governing the Emergency Steel Guarantee Loan Program 
(Program). These changes are meant to harmonize certain program 
requirements with commercial lending practices and to open a second 
period for the submission of applications. The intent of these changes 
is to streamline program administration both for the Board and the 
lenders and to allow submission of additional applications for loan 
guarantees.

DATES: This rule is effective November 22, 2000.

FOR FURTHER INFORMATION CONTACT: Marguerite S. Owen, General Counsel, 
Emergency Steel Guarantee Loan Board, 1099--14th Street, NW., Suite 
2600 East, Washington, DC 20005, (202) 219-0584.

SUPPLEMENTARY INFORMATION: On October 27, 1999, the Board published a 
final rule codifying at Chapter 4, Title 13, Code of Federal 
Regulations (CFR), regulations implementing the Program, as established 
in Chapter 1 of Public Law 106-51, the Emergency Steel Loan Guarantee 
Act of 1999 (64 FR 57932). Since those initial regulations were 
published the Board has made a number of changes to the regulations 
meant to conform the regulations to the Guarantee Agreement between the 
government and the lender and to allow for participations in 
unguaranteed tranches of loans guaranteed under the Program. Today the 
Board is making additional changes designed to harmonize certain 
program requirements with commercial lending practices, streamline 
program operation, and to open a second period for the submission of 
applications. In addition, several non-substantive changes are being 
made to change addresses and allow for certain delegations of 
authority.

[[Page 70293]]

Administrative Law Requirements

Executive Order 12866

    This final rule has been determined not to be significant for 
purposes of Executive Order 12866.

Administrative Procedure Act

    This rule is exempt from the rulemaking requirements contained in 5 
U.S.C. 553 pursuant to authority contained in 5 U.S.C. 553(a)(2) as it 
involves a matter relating to loans. As such, prior notice and an 
opportunity for public comment and a delay in effective date otherwise 
required under 5 U.S.C. 553 are inapplicable to this rule.

Regulatory Flexibility Act

    Because this rule is not subject to a requirement to provide prior 
notice and an opportunity for public comment pursuant to 5 U.S.C. 553, 
or any other law, the analytical requirements of the Regulatory 
Flexibility Act, 5 U.S.C. 601 et seq., are inapplicable.

Congressional Review Act

    This rule has been determined to be not major for purposes of the 
Congressional Review Act, 5 U.S.C. 801 et seq.

Intergovernmental Review

    No intergovernmental consultations with State and local officials 
are required because the rule is not subject to the provisions of 
Executive Order 12372 or Executive Order 12875.

Unfunded Mandates Reform Act of 1995

    This rule contains no Federal mandates, as that term is defined in 
the Unfunded Mandates Reform Act, on State, local and tribal 
governments or the private sector.

Executive Order 13132

    This rule does not contain policies having federalism implications 
requiring preparation of a Federalism Summary Impact Statement.

Executive Order 12630

    This rule does not contain policies that have takings implications.

List of Subjects in 13 CFR Part 400

    Administrative practice and procedure, Freedom of information, Loan 
programs--steel, Reporting and recordkeeping requirements.

    Dated: November 16, 2000.
Daniel J. Rooney,
Executive Secretary, Emergency Steel Guarantee Loan Board.

    For the reasons set forth in the preamble, 13 CFR part 400 is 
amended as follows:

PART 400--EMERGENCY STEEL GUARANTEE LOAN PROGRAM

    1. The authority citation for part 400 is revised to read as 
follows:

    Authority: Pub. L. 106-51, 113 Stat. 252 (15 U.S.C. 1841 note); 
Pub. L. 106-102, 113 Stat. 1338.

    2. Section 400.1 is revised to read as follows:


Sec. 400.1  Purpose.

    This part is issued by the Emergency Steel Guarantee Loan Board 
pursuant to section 552 of title 5 of the United States Code and the 
Emergency Steel Loan Guarantee Act of 1999, Chapter 1 of Public Law 
106-51, 113 Stat. 252, as amended by section 734 of Public Law 106-102, 
113 Stat. 1338, the Gramm-Leach-Bliley Financial Modernization Act 
(1999).

    3. Section 400.103 is revised to read as follows:


Sec. 400.103  Offices.

    The principal offices of the Board are located at 1099--14th 
Street, NW, Suite 2600 East, Washington, DC 20005.

    4. Section 400.105 is amended by adding paragraph (d) to read as 
follows:


Sec. 400.105  Staff.

* * * * *
    (d) An individual may hold more than one staff position.

    5. Section 400.107 is amended by revising paragraph (b)(3) to read 
as follows:


Sec. 400.107  Freedom of Information Act.

* * * * *
    (b) * * *
    (3) Electronic records. Information available under this section 
that was created on or after November 1, 1996, shall also be available 
on the Board's website found at http://elb.osec.doc.gov and at http://elb.commerce.gov.
* * * * *

    6. Section 400.110 is revised to read as follows:


Sec. 400.110  Amendments.

    The Board's rules in this chapter may be adopted or amended, or new 
rules may be adopted, only by majority vote of the Board.

    7. Section 400.200 is amended by revising paragraph (c) to read as 
follows:


Sec. 400.200  Eligible Borrower.

* * * * *
    (c) The Lender must provide with its application a letter from at 
least one lending institution other than the Lender to which the 
Borrower has applied for financial assistance dated within six months 
of submission of the application, indicating that the Borrower was 
denied for substantially the same loan it is now applying for, and the 
reasons the Borrower was unable to obtain the financing for which it 
applied. In addition, the Lender applying for a guarantee under this 
Program must certify that it would not make the loan without the 
Board's guarantee.

    8. Section 400.204 is amended by revising paragraph (c)(2)(ii) to 
read as follows:


Sec. 400.204  Loan terms.

* * * * *
    (c) * * *
    (2) * * *
    (ii) A fully perfected and enforceable security interest and/or 
lien in any other property of the Borrower's pledged to secure the 
loan, including accessions, replacements, proceeds, or property given 
by a third party as Security for the loan.
* * * * *

    9. Section 400.205 is amended by revising paragraphs (a), (b)(2), 
and (b)(6) to read as follows:


Sec. 400.205  Application process.

    (a) Application process. An original application and three copies 
must be received by the Board no later than 5 p.m. EST, April 2, 2001 
in the Board's offices at 1099--14th Street, NW, Suite 2600 East, 
Washington, DC 20005. Applications which have been provided to a 
delivery service with ``delivery guaranteed'' before 5 p.m. on April 2, 
2001 will be accepted for review if the Applicant can document that the 
application was provided to the delivery service with delivery to the 
address listed in this section guaranteed prior to the closing date and 
time. A postmark is not sufficient to meet this deadline as the 
application must be received by the required date and time. 
Applications will not be accepted via facsimile machine transmission or 
electronic mail.
    (b) * * *
    (2) The information required for the completion of Form 
``Environmental Assessment and Compliance Findings for Related 
Environmental Laws'' and attachments, as required by 
Sec. 400.206(a)(2)(i)(D);
* * * * *

[[Page 70294]]

    (6) A certification by the Lender that the Lender meets each of the 
requirements of the Program as set forth in the Act and the Board's 
rules in this part;
* * * * *

    10. Section 400.206 is amended by revising paragraphs (c)(5)(ii)(C) 
and (c)(5)(iv) to read as follows:


Sec. 400.206  Environmental requirements.

* * * * *
    (c) * * *
    (5) * * *
    (ii) * * *
    (C) Adopt a previously completed EIS reasonably related to the 
project for which the proceeds of the loan sought to be guaranteed 
under the Program will be used, as described in 40 CFR 1506.3.
* * * * *
    (iv) If, on the basis of an environmental assessment, it is 
determined that an EIS is not required, a FONSI, as described in 40 CFR 
1508.13 will be prepared. The FONSI will include the environmental 
assessment or a summary of it and be available to the public from the 
Board. The Executive Director shall maintain a record of these 
decisions, making them available to interested parties upon request. 
Requests should be directed to the Executive Director, Emergency Steel 
Guarantee Loan Program, 1099--14th Street, NW, Suite 2600 East, 
Washington, DC 20005. Prior to a final loan guarantee decision, a copy 
of the NEPA documentation shall be sent to the Board for consideration.
* * * * *

    11. Section 400.207 is amended by revising paragraphs (b) 
introductory text and (c) to read as follows:


Sec. 400.207  Application evaluation.

* * * * *
    (b) Evaluation criteria. Applications that are determined to be 
eligible pursuant to paragraph (a) of this section shall be subject to 
a substantive review by the Board based upon the following evaluation 
factors, in order of importance:
* * * * *
    (c) Decisions by the Board. Upon completion of the evaluation of an 
application and as soon as possible after its receipt, the Board will 
approve or deny an eligible application that is timely received under 
this Program. The Board shall notify the Applicants and the Borrower in 
writing of the approval or denial of an application as soon as 
possible. Approvals for loan Guarantees shall be conditioned upon 
compliance with Sec. 400.208.

    12. Section 400.208 is amended by revising paragraph (a)(3) to read 
as follows:


Sec. 400.208  Issuance of the Guarantee.

    (a) * * *
    (3) The Board's receipt of the Loan documents and any related 
instruments, in form and substance satisfactory to the Board, and the 
Guarantee, all properly executed by the Lender, Borrower, and any other 
required party other than the Board; and
* * * * *

    13. Section 400.210 is amended by removing paragraph (c)(2), 
redesignating paragraph (c)(3) as paragraph (c)(2), and revising it, 
and adding a new paragraph (d), to read as follows:


Sec. 400.210  Assignment or transfer of loans.

* * * * *
    (c) * * *
    (2) Transfers by a non-Agent Lender of the non-guaranteed portion 
of the loan after payment of the guaranteed portion of the loan has 
been made under the Guarantee.
    (d) The Agent must hold and may not assign or transfer an interest 
in a loan guaranteed under the Program equal to at least the lesser of 
$25 million or 15 percent of the aggregate amount of the loan. The 
Agent must hold and may not assign or transfer an interest in the 
unguaranteed portion of the loan which as a percentage of the Agent's 
overall interest in the loan is no less than the aggregate percentage 
of the loan which is not guaranteed. A non-Agent Lender must hold and 
may not transfer or assign an interest in the unguaranteed portion of 
the loan representing no less than five percent of such Lender's total 
interest in the Loan, except as provided paragraph (c)(2) of this 
section.

    14. Section 400.211 is revised to read as follows:


Sec. 400.211  Lender responsibilities.

    The Lender shall have such obligations and duties to the Board as 
are set forth in the Guarantee.

    15. Section 400.212 is revised to read as follows:


Sec. 400.212  Guarantee.

    The Board shall adopt a form of Guarantee to be used by the Board 
under the Program, and shall publish the Guarantee on its website. 
Modifications to the provisions of the form of Guarantee must be 
approved and adopted by the Board.

    16. Section 400.213 is revised to read as follows:


Sec. 400.213  Termination of obligations.

    The Board shall have such rights to terminate the Guarantee as are 
set forth in the Guarantee.

    17. Section 400.214 is revised to read as follows:


Sec. 400.214  Participations in guaranteed loans.

    (a) Subject to paragraphs (b), (c) and (d) of this section, a 
Lender may distribute the risk of a portion of a loan guaranteed under 
the Program by sale of participations therein if:
    (1) Neither the loan note nor the Guarantee is assigned, conveyed, 
sold, or transferred in whole or in part;
    (2) The Lender remains solely responsible for the administration of 
the loan; and
    (3) The Board's ability to assert any and all defenses available to 
it under the Guarantee and the law is not adversely affected.
    (b) The following categories of entities may purchase 
participations in loans guaranteed under the Program:
    (1) Eligible Lenders;
    (2) Private investment funds and insurance companies that do not 
usually invest in commercial loans;
    (3) Steel company suppliers or customers, who are interested in 
participating as a means of commencing or solidifying the supplier or 
customer relationship with the borrower; or
    (4) Any other entity approved by the Board on a case-by-case basis.
    (c) The Agent may not grant participations in that portion of its 
interest in a loan that may not be assigned or transferred under 
Sec. 400.210(d). A Lender, other than the Agent, may not grant 
participations in that portion of its interest in a loan that may not 
be assigned or transferred under Sec. 400.210(d).
    (d) At least 5 percent of any participation interest in a loan must 
be unguaranteed.

[FR Doc. 00-29812 Filed 11-17-00; 2:17 pm]
BILLING CODE 3510-NC-U