[Federal Register Volume 67, Number 246 (Monday, December 23, 2002)]
[Rules and Regulations]
[Pages 78128-78130]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-32241]


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DEPARTMENT OF AGRICULTURE

Rural Housing Service

Rural Business-Cooperative Service

Rural Utilities Service

Farm Service Agency

7 CFR Parts 1980 and 4279

RIN 0570-AA38


Business and Industry Loans; Revision to Definition of Rural Area

AGENCY: Rural Business-Cooperative Service, USDA.

ACTION: Final rule.

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[[Page 78129]]

SUMMARY: The Rural Business-Cooperative Service (RBS) revises its 
regulations to amend the definition of rural area. This action is taken 
to comply with the amendment to section 343(a) of the Consolidated Farm 
and Rural Development Act. The intended effect of this action is to 
implement the revised definition of rural area for the Business and 
Industry Guaranteed and Direct Loan Programs mandated by section 6020 
of the Farm Security and Rural Investment Act of 2002.

EFFECTIVE DATE: December 23, 2002.

FOR FURTHER INFORMATION CONTACT: Brenda Griffin, Loan Specialist, 
Business and Industry Division, Rural Business-Cooperative Service, 
U.S. Department of Agriculture, STOP 3224, 1400 Independence Ave. SW., 
Washington, DC 20250, Telephone (202) 720-6802. The TDD number is (800) 
877-8339 or (202) 708-9300.

SUPPLEMENTARY INFORMATION:

Classification

    This rule has been determined to be non-significant and was 
reviewed by the Office of Management and Budget under Executive Order 
12866.

Programs Affected

    The Catalog of Federal Domestic Assistance number for the program 
impacted by this action is 10.768, Business and Industry Loans.

Paperwork Reduction Act

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

Intergovernmental Review

    The Business and Industry loan programs are subject to the 
provisions of Executive Order 12372, which requires intergovernmental 
consultation with state and local officials. RBS will conduct 
intergovernmental consultation in the manner delineated in RD 
Instruction 1940-J, ``Intergovernmental Review of Rural Development 
Programs and Activities,'' and in 7 CFR part 3015, subpart V.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-
612), the undersigned has determined and certified by signature of this 
document that this rule will not have a significant economic impact on 
a substantial number of small entities. New provisions included in this 
rule will not impact a substantial number of small entities to a 
greater extent than large entities. Therefore, a regulatory flexibility 
analysis was not performed.

Civil Justice Reform

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. In accordance with this Executive Order: (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) administrative proceedings in accordance with the regulations of 
the Agency at 7 CFR part 11 must be exhausted before bringing 
litigation 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 
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, 42 U.S.C. 4321 et seq, 
an Environmental Impact Statement is not required.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Pub. 
L. 104-4, 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 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.

Executive Order 13132

    It has been determined under Executive Order 13132, Federalism, 
that this rule does not have sufficient federalism implications to 
warrant the preparation of a Federalism Assessment. The provisions 
contained in this rule will not have a substantial direct effect on 
States or their political subdivisions or on the distribution of power 
and responsibilities among the various levels of government.

Background

    Section 6020 of the Farm Security and Rural Investment Act of 2002, 
Public Law 107-424, amended section 343(a) of the Consolidated Farm and 
Rural Development Act (Con Act) to change the definition of rural area 
for several programs under that Act, including the RBS Business and 
Industry loan programs. Section 343(a)(13) of the Con Act provides, in 
part, as follows:
    (13) Rural and Rural Area.
    (A) In General. Except as otherwise provided in this paragraph, the 
terms `rural' and `rural area' mean any area other than
    (i) A city or town that has a population of greater than 50,000 
inhabitants; and
    (ii) The urbanized area contiguous and adjacent to such a city or 
town.
    The revised definition in section 343(a)(13) of the Con Act 
supercedes the current definition for rural area used for the Business 
and Industry loan program. The current definition includes all 
territory of a State that is not within the outer boundary of any city 
having a population of 50,000 or more and its immediately adjacent 
urbanized and urbanizing area with a population density of more than 
100 persons per square mile, as determined by the Secretary of 
Agriculture according to the latest decennial census of the United 
States. The new definition in section 343(a)(13) expands eligibility to 
include urbanizing areas; adds ``town'' to an area which can have a 
population of 50,000 or more; and deletes the requirement that the 
urbanized area be ``immediately'' adjacent to the city requiring only 
that it be ``contiguous and adjacent'' to the city or town. Cities or 
towns with populations greater than 50,000 inhabitants and the 
urbanized areas which are contiguous and adjacent to such cities and 
towns are ineligible for Business and Industry program loans.
    This regulation is being published as a final rule without a Notice 
of Prior Rulemaking because the change being made is mandated by 
section 6020 which provides no administrative discretion in choosing 
the language to be used. Therefore, public comment is unnecessary and 
impracticable and contrary to the public interest. For this same 
reason, this final rule will be effective immediately upon publication.

[[Page 78130]]

List of Subjects

7 CFR Part 1980

    Loan programs--Business and industry--Rural development assistance, 
Rural areas.

7 CFR Part 4279

    Loan programs--Business and industry, Loan programs--Rural 
development assistance, Rural areas.

    Accordingly, Chapters XVIII and XLII, Title 7, Code of Federal 
Regulations, are amended as follows:
    Chapter XVIII--Rural Housing Service, Rural Business-Cooperative 
Service, Rural Utilities Service, and Farm Service Agency, Department 
of Agriculture

PART 1980--GENERAL

    1. The authority citation for part 1980 is amended to read as 
follows:

    Authority: 7 U.S.C. 1989.

Subpart E--Business and Industrial Loan Program

    2. Section 1980.402 is amended by removing the definition of 
``Rural area.''

    3. Section 1980.405 is revised to read as follows:


Sec.  1980.405  Rural areas.

    The business financed with a B&I loan must be located in a rural 
area. Loans to borrowers with facilities located in both rural and non-
rural areas will be limited to the amount necessary to finance the 
facility located in the eligible rural area. Cooperatives that are 
headquartered in a non-rural area may be eligible for a B&I loan if the 
loan is used for a project or venture that is located in a rural area. 
Rural areas are any areas other than:
    (a) A city or town that has a population of greater than 50,000 
inhabitants; and
    (b) The urbanized area contiguous and adjacent to such a city or 
town, as defined by the U.S. Bureau of the Census using the latest 
decennial census of the United States.
    Chapter XLII--Rural Business-Cooperative Service and Rural 
Utilities Service, Department of Agriculture

PART 4279--GUARANTEED LOANMAKING

    4. The authority citation for part 4279 is amended to read as 
follows:

    Authority: 7 U.S.C. 1989.

Subpart B--Business and Industry Loans

    5. Section 4279.108 is amended by revising paragraph (c) to read as 
follows:


Sec.  4279.108  Eligible borrowers.

* * * * *
    (c) Rural area. The business financed with a B&I Guaranteed Loan 
must be located in a rural area. Loans to borrowers with facilities 
located in both rural and non-rural areas will be limited to the amount 
necessary to finance the facility located in the eligible rural area. 
Rural areas are any areas other than:
    (1) A city or town that has a population of greater than 50,000 
inhabitants; and
    (2) The urbanized area contiguous and adjacent to such a city or 
town, as defined by the U.S. Bureau of the Census using the latest 
decennial census of the United States.
* * * * *

    Dated: December 6, 2002.
Thomas C. Dorr,
Under Secretary, Rural Development.
[FR Doc. 02-32241 Filed 12-20-02; 8:45 am]
BILLING CODE 3410-XY-P