[Federal Register Volume 68, Number 226 (Monday, November 24, 2003)]
[Rules and Regulations]
[Pages 65829-65831]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-29212]



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 Rules and Regulations
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  Federal Register / Vol. 68, No. 226 / Monday, November 24, 2003 / 
Rules and Regulations  

[[Page 65829]]



DEPARTMENT OF AGRICULTURE

Rural Housing Service

7 CFR Part 1942

RIN 0575-AC53


Fire and Rescue and Other Community Facilities Projects

AGENCY: Rural Housing Service, USDA.

ACTION: Direct final rule.

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

SUMMARY: The Rural Housing Service (RHS) is amending its regulations to 
include all essential community facility projects $300,000 and under to 
utilize the authority granted for fire and rescue loans. Fire and 
rescue loans are handled with a streamlined procedure for application 
handling. All other Community Facilities loans costing $300,000 and 
under will be administered under this streamlined application process. 
The intended effect is to streamline and make available a cost-
effective way to administer all Community Facilities loans $300,000 and 
under.

DATES: This rule is effective February 9, 2004, unless we receive 
written adverse comments or written notices of intent to submit adverse 
comments on or before January 23, 2004. If we receive such comments or 
notices, we will publish a timely document in the Federal Register 
withdrawing the direct final rule.

ADDRESSES: Submit adverse comments, or notice of intent to submit 
adverse comments, to Tracy Givelekian, Regulations and Paperwork 
Management Branch, U.S. Department of Agriculture, Rural Housing 
Service, STOP 0742, 1400 Independence Avenue SW., Washington, DC 20250-
0742. Comments may be submitted via the Internet by addressing them to 
[email protected] and must contain the word ``Community'' in the 
subject. All written comments will be available for public inspection 
at 300 7th Street SW., Washington, DC 20024, during normal business 
hours.

FOR FURTHER INFORMATION CONTACT: Chad Parker, Community Programs, Rural 
Housing Service, Direct Loan and Grant Processing Division, U.S. 
Department of Agriculture, Rural Housing Service, STOP 0787, 1400 
Independence Avenue SW., Washington, DC 20250-0787; Telephone: 202-720-
1490; FAX: 202-690-0471; E-mail: [email protected].

SUPPLEMENTARY INFORMATION:

Classification

    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).

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 to this rule, and (3) 
administrative proceedings in accordance with 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.

Regulatory Flexibility Act

    The Administrator of the Rural Housing Service has determined that 
this rule will not have a significant economic impact on a substantial 
number of small entities as defined in the Regulatory Flexibility Act 
(5 U.S.C. 601 et seq.). 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.

Paperwork Reduction Act

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

Unfunded Mandates Reform Act

    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the Unfunded Mandates Reform Act of 1995) 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 of 1995.

Environmental Impact Statement

    This document has been reviewed in accordance with 7 CFR part 1940, 
subpart G, ``Environmental Program.'' RHS 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.

Programs Affected

    The program affected is listed in the Catalog of Federal Domestic 
Assistance under Number 10.766, Community Facilities Loans and Grants.

Intergovernmental Review

    The Community Facilities loan and grant program is subject to the 
provisions of Executive Order 12372, which requires intergovernmental 
consultation with State and local officials. RHS 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.

Background

    RHS administers the Community Facilities loan program pursuant to 7 
CFR part 1942, subpart A, designed to develop essential community 
facilities for public use in rural areas. These facilities include 
schools, libraries, childcare, hospitals, medical clinics, assisted-
living facilities, fire and rescue stations, police stations, community 
centers, public buildings, and transportation. Loans are available to 
public entities such as municipalities, counties, and special-purpose 
districts, as well as to nonprofit corporations and tribal governments. 
Loan funds may be used to construct, enlarge, or improve community 
facilities for health care, public safety, and public services.
    Regulations pursuant to 7 CFR part 1942, subpart C, entitled Fire 
and Rescue Loans, administered by RHS have allowed a streamlined 
process for application development of essential community facility 
projects meeting the definition of fire and rescue projects. RHS is 
amending its regulations to

[[Page 65830]]

establish rules and regulations to include all essential community 
facility projects under $300,000 currently defined under 7 CFR part 
1942.17(d) to utilize the authority granted for Fire and Rescue loans 
pursuant to 7 CFR part 1942, subpart C. This will allow all essential 
community facility applicants to utilize the streamlined process for 
projects of $300,000 and under.

List of Subjects in 7 CFR Part 1942

    Community development, Community facilities, Loan programs--Housing 
and community development, Loan security, Waste treatment and 
disposal--Domestic, Watersupply--Domestic.

0
For the reasons set forth in the preamble, Chapter XVIII, Title 7, of 
the Code of Federal Regulations is amended as follows:

PART 1942--ASSOCIATIONS

0
1. The authority citation for part 1942 is revised to read as follows:

    Authority: 5 U.S.C. 301; 7 U.S.C. 1989.

Subpart A--Community Facilities Loans

0
2. Section 1942.1 is amended by revising the first two sentences of 
paragraph (a) to read as follows:


Sec.  1942.1  General.

    (a) This subpart outlines the policies and procedures for making 
and processing insured loans for Community Facilities except fire and 
rescue and other small essential community facility loans and water and 
waste disposal facilities. This subpart applies to Community Facilities 
loans for fire and rescue and other small essential community facility 
loans only as specifically provided for in subpart C of this part. * * 
*
* * * * *

0
3. Subpart C is amended by revising the heading to read as follows:

Subpart C--Fire and Rescue and Other Small Community Facilities 
Projects

0
4. Section 1942.101 is revised to read as follows:


Sec.  1942.101  General.

    This subpart provides the policies and procedures for making and 
processing insured Community Facilities (CF) loans for facilities that 
will primarily provide fire or rescue services and other small 
essential community facility projects and applies to fire and rescue 
and other Community Facilities loans for projects costing $300,000 and 
under. Any processing or servicing activity conducted pursuant to this 
subpart involving authorized assistance to Rural Development employees, 
members of their families, known close relatives, or business or close 
personal associates, is subject to the provisions of subpart D of part 
1900 of this chapter. Applicants for this assistance are required to 
identify any known relationship or association with a Rural Development 
employee. Community Facilities loans for other types of facilities, and 
those costing in excess of $300,000, are defined in subpart A of this 
part.

0
5. Section 1942.103 is revised to read as follows:


Sec.  1942.103  Definitions.

    Agency. The Rural Housing Service (RHS), an agency of the U.S. 
Department of Agriculture.
    Approval official. An official who has been delegated loan or grant 
approval authorities within applicable programs, subject to certain 
dollar limitations.
    Construction. The act of building or putting together a facility 
that is a part of, or physically attached to, real estate. This does 
not include procurement of major equipment even though the equipment 
may be custom built to meet the owner's requirements.
    Owner. An applicant or borrower.
    Processing office. The office designated by the State program 
official to accept and process applications for Community Facilities 
projects.
    Regional Attorney or OGC. The head of a Regional Office of the 
General Counsel (OGC).
    Small Community Facilities projects. Community Facilities loans 
costing $300,000 and under.

0
6. In Sec.  1942.104, paragraph (a) is revised, paragraphs (b) and (c) 
are removed, and paragraph (d) is redesignated as paragraph (b). (The 
undesignated text following newly designated paragraph (b) remains 
unchanged).


Sec.  1942.104  Application processing.

    (a) General. Prospective applicants should request assistance by 
filing SF 424.2, ``Application for Federal Assistance (For 
Construction),'' with the Local or Area Rural Development Office. When 
practical, approval officials should meet with prospective applicants 
before an application is filed to discuss eligibility and Rural 
Development requirements and processing procedures. Throughout loan 
processing, Rural Development should confer with applicant officials as 
needed to ensure that applicant officials understand the current status 
of the processing of their application, what steps and determinations 
are necessary, and what is required from them. Rural Development should 
assist the applicant as needed and generally try to develop and 
maintain a cooperative working relationship with the applicant.
    (b) Unfavorable decision. If, at any time prior to loan approval, 
it is decided that favorable action will not be taken on an 
application, the approval official will notify the applicant, in 
writing, of the reasons why the request was not favorably considered. 
The notification to the applicant will state that a review of this 
decision by Rural Development may be requested by the applicant in 
accordance with subpart B of part 1900 of this chapter. The following 
statement will also be made on all notifications of adverse action:
* * * * *

0
7. Section 1942.108 is amended by revising paragraphs (e) and (g) to 
read as follows:


Sec.  1942.108  Application docket preparation and review.

* * * * *
    (e) Organizational review. As early in the application process as 
practical, the approval official should obtain copies of organization 
documents from each applicant and forward them through the State Office 
to the Regional Attorney for review and comments. The Regional 
Attorney's comments should be received and considered before obligation 
of funds.
* * * * *
    (g) State Office review. The State Office must monitor fire and 
rescue and other small community facility project loanmaking and 
servicing and provide guidance, assistance, and training as necessary 
to ensure the activities are accomplished in an orderly manner 
consistent with the Agency's regulations. The processing office should 
request advice and assistance from the State Office as needed. The 
State Director may require all or part of a specific application docket 
to be submitted to the State Office for review at any time. The State 
Director may determine that one or more of the processing office staffs 
do not have adequate training and expertise to routinely complete 
application dockets without State Office review. In such cases, the 
State Director should establish guidelines by memorandum or by State 
supplement to the subpart for the necessary State Office reviews.
* * * * *

0
8. Section 1942.111 is amended by revising paragraph (b) to read as 
follows:


Sec.  1942.111  Applicant eligibility.

* * * * *

[[Page 65831]]

    (b) Credit elsewhere determinations. The approval official must 
determine whether financing from commercial sources at reasonable rates 
and terms is available. If credit elsewhere is indicated, the approval 
official should inform the applicant and recommend the applicant apply 
to commercial sources for financing. To provide a basis for referral of 
only those applicants who may be able to finance projects through 
commercial sources, approval officials should maintain liaison with 
representatives of lenders in the area. The State Director should keep 
approval officials informed regarding lenders outside the area who 
might make loans in the area. Approval officials should maintain 
criteria for determining applications that should be referred to 
commercial lenders and maintain a list of lender representatives 
interested in receiving such referrals.
* * * * *

0
9. Section 1942.112 is amended by adding paragraph (a)(1)(iii) to read 
as follows:


Sec.  1942.112  Eligible loan purposes.

    (a) * * *
    (1) * * *
    (iii) The construction or development of an essential community 
facility requisite to the beneficial and orderly development of a 
community operated on a nonprofit basis in accordance with Sec.  
1942.17(d) of this subpart. This subpart includes those projects 
meeting the definition of a small community facility project.
* * * * *

    Dated: November 14, 2003.
Arthur A. Garcia,
Administrator, Rural Housing Service.
[FR Doc. 03-29212 Filed 11-21-03; 8:45 am]
BILLING CODE 3410-XV-P