[Federal Register Volume 68, Number 58 (Wednesday, March 26, 2003)]
[Rules and Regulations]
[Pages 14527-14528]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-7237]



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 Rules and Regulations
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  Federal Register / Vol. 68, No. 58 / Wednesday, March 26, 2003 / 
Rules and Regulations  

[[Page 14527]]



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, USDA.

ACTION: Final rule.

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

SUMMARY: The Rural Business-Cooperative Service (RBS) is amending 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.

EFFECTIVE DATE: April 25, 2003.

FOR FURTHER INFORMATION CONTACT: Diane Berger, Loan Specialist, 
Specialty Lenders Division, Rural Business-Cooperative Service, U.S. 
Department of Agriculture, STOP 3225, Room 6868, 1400 Independence Ave. 
SW., Washington, DC 20250-3225, Telephone (202) 720-2383. The TTD 
number is (800) 877-8339 or (202) 708-9300.

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.

Intergovernmental Consultation

    The Programs listed are subject to the provisions of Executive 
Order 12372 which requires intergovernmental consultation with state 
and local officials.

Paperwork Reduction Act

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

Executive Order 13132

    The policies contained in this rule do not have any substantial 
direct effect on states, on the relationship between the national 
government and the states, or on the distribution of power and 
responsibilities among the various levels of government. Nor does this 
rule impose substantial direct compliance costs on state and local 
governments. This rule is intended to foster cooperation between the 
Federal Government and the states and local governments, and reduces, 
where possible, any regulatory burden imposed by the Federal Government 
that impedes the ability of states and local governments to solve 
pressing economic, social and physical problems in their state.

Civil Justice Reform

    This final 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 
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.

Background

    RBS is amending 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 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.

Discussion of Comments

    This rule was published in the Federal Register as a proposed rule 
on

[[Page 14528]]

August 3, 2000 (65 FR 47695) with public comments invited through 
October 2, 2000. No comments were received.

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 
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.  1940.552(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) The data source for each criterion is based on the latest 
census data available. The percentage representing each criterion is 
multiplied by the weight factor and added 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.
    (a) 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: March 17, 2003.
Thomas C. Dorr,
Under Secretary, Rural Development.
[FR Doc. 03-7237 Filed 3-25-03; 8:45 am]
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