[Federal Register Volume 67, Number 179 (Monday, September 16, 2002)]
[Rules and Regulations]
[Pages 58323-58324]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-23492]


-----------------------------------------------------------------------

DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1717

RIN 0572-AB63


Mergers and Consolidations of Electric Borrowers

AGENCY: Rural Utilities Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Rural Utilities Service (RUS) is amending its' regulations 
to provide the Administrator with loan processing prioritization 
authority for recently merged companies. This change will allow the 
Administrator to grant or decline priority or grant priority for a 
limited amount of a loan application. This action will allow for 
lending priority to newly merged companies and provide greater 
opportunity to provide loans to as many borrowers as possible.

EFFECTIVE DATE: September 16, 2002.

FOR FURTHER INFORMATION CONTACT: Patrick R. Sarver, Management Analyst, 
Rural Utilities Service, Electric Program, Room 4024 South Building, 
Stop 1560, 1400 Independence Ave., SW., Washington, DC 20250-1560, 
Telephone: 202-690-2992, FAX: 202-690-0717, e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be not significant for purposes of 
Executive Order 12866 and, therefore, has not been reviewed by the 
Office of Management and Budget (OMB).

Executive Order 12372

    This rule is excluded from the scope of Executive Order 12372, 
Intergovernmental Consultation, which may require consultation with 
State and local officials. See the final rule related notice titled 
``Department Programs and Activities Excluded from Executive Order 
12372'' (50 FR 47034) advising that RUS loans and loan guarantees from 
coverage were not covered by Executive Order 12372.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. RUS has determined that this proposed rule meets the 
applicable standards provided in section 3 of the Executive Order. In 
addition, all state and local laws and regulations that are in conflict 
with this rule will be preempted; no retroactive effect will be given 
to this rule, and, in accordance with section 212(e) of the Department 
of Agriculture Reorganization Act of 1994 (7 U.S.C. 6912(e)), 
administrative appeals procedures, if any are required, must be 
exhausted before an action against the Department or its agencies.

Regulatory Flexibility Act Certification

    In accordance with the Regulatory Flexibility Act (5 U.S.C. 601 et 
seq.), the Administrator of RUS has determined that this rule will not 
have significant impact on a substantial number of small entities. The 
RUS electric loan program provides loans and loan guarantees to 
borrowers at interest rates and terms that are more favorable than 
those generally available from the private sector. Small entities are 
not subjected to any requirements, which are not applied equally to 
large entities. RUS borrowers, as a result of obtaining federal 
financing, receive economic benefits that exceed any direct cost 
associated with RUS regulations and requirements.

Information Collection and Recordkeeping Requirements

    This rule contains no additional information collection or 
recordkeeping requirements under OMB control number 0572-0032 that 
would require approval under the Paperwork Reduction Act of 1995 (44 
U.S.C. Chapter 35).

Unfunded Mandates

    This rule contains no Federal mandates (under the regulatory 
provision of title II of the Unfunded Mandates Reform Act) 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.

National Environmental Policy Act Certification

    The Administrator of RUS has determined that this rule will not 
significantly affect the quality of 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 No. 10.850, Rural 
Electrification Loans and Loan Guarantees. This catalog is available on 
a subscription basis from the Superintendent of Documents, U.S. 
Government Printing Office, Washington, DC 20402-9325, telephone number 
(202) 512-1800.

Background

    For reasons set for in the proposed rule dated November 1, 2001, 66 
FR 55130, and to provide a greater opportunity to provide loans to as 
many borrowers as possible, the Rural Utilities Service (RUS) is 
amending 7 CFR part 1717, subpart D, to provide the Administrator the 
flexibility to limit the amount of a loan to a successor (surviving 
business entity) following a merger.
    No comments were received by RUS as the result of the proposed 
rule.

List of Subjects in 7 CFR Part 1717

    Administrative practice and procedure, Electric power, Electric 
power rates, Electric utilities, Intergovernmental relations, 
Investments, Loan programs--energy, Reporting and recordkeeping 
requirements, Rural areas.

    For the reasons set forth in the preamble, chapter XVII of title 7 
of the Code of Federal Regulations, is amended as follows:

PART 1717--POST-LOAN POLICIES AND PROCEDURES COMMON TO INSURED AND 
GUARANTEED ELECTRIC LOANS

    1. The authority citation for part 1717 continues to read as 
follows:

    Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

Subpart D--Mergers and Consolidations of Electric Borrowers

    2. Section 1717.154 is amended by:
    A. Revising paragraph (a)(1);
    B. Redesignating paragraph (a)(2) to (a)(3), and

[[Page 58324]]

    C. Adding a new paragraph (a)(2).
    This revision and addition are to read as follows:


Sec.  1717.154  Transitional assistance in connection with new loans.

* * * * *
    (a) Loan processing priority. (1) RUS loans are generally processed 
in chronological order based on the date the complete application is 
received in the regional or division office. At the borrower's request, 
RUS may offer loan processing priority for the first loan to a 
successor, provided that the loan is approved by RUS not later than 5 
years after the effective date of the merger. In considering the 
request, the Administrator will take into account, among other factors, 
the amount of the loan application, whether there is a significant 
backlog in pending loan applications, the impact that loan priority 
would have on the backlog, the savings and efficiencies to be realized 
from the merger and the relative importance of loan priority to 
facilitating the merger. The Administrator may, in his or her sole 
discretion, grant or decline to grant priority, or grant priority for a 
limited amount of the loan application while deferring for later 
consideration the remainder of the application.
    (2) For any subsequent loans approved during those 5 years, RUS may 
offer loan processing priority. In reviewing requests for loan 
processing priority on subsequent loans, RUS will consider the loan 
authority for the fiscal year, the borrower's projected cash flows, its 
electric rates and rate disparity, and the likely mitigation effects of 
priority loan processing. See 7 CFR 1710.108 and 1710.119.
* * * * *

    Dated: September 5, 2002.
Curtis M. Anderson,
Deputy Administrator, as Acting Administrator, Rural Utilities Service.
[FR Doc. 02-23492 Filed 9-13-02; 8:45 am]
BILLING CODE 3410-15-P