[Federal Register Volume 68, Number 246 (Tuesday, December 23, 2003)]
[Rules and Regulations]
[Pages 74412-74433]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-31299]



[[Page 74411]]

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Part VI





LOCAL Television Loan Guarantee Board





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7 CFR Parts 2200 and 2201



LOCAL Television Loan Guarantee Program; Final Rule and Notice

  Federal Register / Vol. 68, No. 246 / Tuesday, December 23, 2003 / 
Rules and Regulations  

[[Page 74412]]


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LOCAL TELEVISION LOAN GUARANTEE BOARD

7 CFR Parts 2200 and 2201

RIN 0572-AB82


LOCAL Television Loan Guarantee Program

AGENCY: LOCAL Television Loan Guarantee Board.

ACTION: Final rule.

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SUMMARY: The LOCAL Television Loan Guarantee Board (Board) is issuing 
regulations to implement the LOCAL Television Loan Guarantee Program 
(Program or LOCAL TV Program) as authorized by the Launching Our 
Communities' Access to Local Television Act of 2000 (the Act). Section 
1002 of the Act sets forth that the primary purpose of the Act is to 
facilitate access, on a technologically neutral basis to signals of 
local television stations for households located in Nonserved Areas and 
Underserved Areas. The Act establishes a LOCAL Television Loan 
Guarantee Board (the Board) to approve Guarantees made under the Act. 
The Board is comprised of the Secretary of the Treasury, the Chairman 
of the Board of Governors of the Federal Reserve System, the Secretary 
of Agriculture, and the Secretary of Commerce, or their designees.
    This rule establishes eligibility and Guarantee requirements, the 
application and approval process, as well as the administration of 
Guarantees made by the Board. Additionally, this rule establishes the 
process through which the Board will consider applications under the 
priority considerations required in the Act.

DATES: Effective: This rule becomes effective December 23, 2003.

ADDRESSES: A complete set of comments filed in response to the Proposed 
Rules are available for public inspection at 1400 Independence Avenue, 
SW., STOP 1575, Room 2919-S, Washington, DC 20250-1575. These comments 
can be viewed electronically at http://www.usda.gov/rus/localtvboard/reply-comments.htm.

FOR FURTHER INFORMATION CONTACT: Jacqueline G. Rosier, Secretary, LOCAL 
Television Loan Guarantee Board, 1400 Independence Avenue, SW., STOP 
1575, Room 2919-S, Washington, DC 20250-1575. Telephone (202) 720-0530; 
Facsimile (202) 720-2734; E-mail [email protected].

SUPPLEMENTARY INFORMATION: 

Executive Order 12866

    This rule has been determined to be significant for purposes of 
Executive Order 12866, and therefore has been reviewed by the Office of 
Management and Budget (OMB). In accordance with Executive Order 12866, 
an Economic Impact Analysis was completed, outlining the costs and 
benefits of implementing this program. The complete analysis is 
available from the Board upon request.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. The Board has determined that this rule meets the 
applicable standards provided in Section 3 of the Executive Order, to 
minimize litigation, eliminate ambiguity, and reduce burden.

Administrative Procedure Act

    Pursuant to authority at 5 U.S.C. 553(a)(2), this rule related to 
loans is exempt from the rulemaking requirements of the Administrative 
Procedure Act, 5 U.S.C. 551 et seq., including the requirement to 
provide prior notice and an opportunity for public comment.

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.

Information Collection and Recordkeeping Requirements

    The reporting and recordkeeping requirements contained in the rule 
have been approved by OMB pursuant to the Paperwork Reduction Act of 
1995 (44 U.S.C. chapter 35) under OMB control number 0572-0135.

Catalog of Federal Domestic Assistance

    The Program described by this rule is listed in the Catalog of 
Federal Domestic Assistance Programs under No. 10.853, LOCAL Television 
Loan Guarantee Program. This catalog is available on a subscription 
basis from the Superintendent of Documents, the United States 
Government Printing Office, Washington, DC 20402. Telephone: (202) 512-
1800.

Executive Order 12372

    No intergovernmental consultation with State and local officials is 
required because this rule is not subject to the provisions of 
Executive Order 12372, Intergovernmental Consultation.

Unfunded Mandates

    This rule contains no Federal mandates (under the regulatory 
provision 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.

National Environmental Policy Act

    It has been determined that this rule 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.] (NEPA), an Environmental Impact 
Statement is not required. If necessary, Loans sought to be guaranteed 
under this Program will be assessed individually to determine 
appropriate compliance with NEPA.

Government Paperwork Elimination Act

    The Board is committed to compliance with the Government Paperwork 
Elimination Act, which requires Government agencies to provide the 
public the option of submitting information or transacting business 
electronically to the maximum extent possible.

Civil Rights

    The LOCAL TV Board is an equal opportunity lender. Applicants are 
required to comply with regulations on nondiscrimination and equal 
employment opportunity.

Executive Order 12630

    This rule does not contain policies that have takings implications.

Executive Order 13132

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

Background

    On December 21, 2000, the President signed into law Public Law 106-
553, the Federal Funding Act for Fiscal Year 2001. Title X of Pub. L. 
106-553, entitled Launching our Communities Access to Local Television 
Act of 2000 (``LOCAL TV Act'' or ``Act'') established the LOCAL 
Television Loan Guarantee Board (``Board''). The Board is authorized to 
guarantee loans to facilitate access, on a technologically neutral 
basis, to signals of local television stations for households located 
in nonserved or underserved areas. The Board is comprised of the

[[Page 74413]]

Secretary of Treasury, the Chairman of the Board of Governors of the 
Federal Reserve System, the Secretary of Agriculture, and the Secretary 
of Commerce, or their designees.
    On August 15, 2003, the Board published proposed regulations to 
implement the LOCAL Television Loan Guarantee Program (Program or LOCAL 
TV Program).\1\ The proposed regulations outlined proposed eligibility 
and guarantee requirements, the application process, as well as the 
administration of guarantees made by the Board. Additionally, the 
proposed regulations outlined the proposed process through which the 
Board would consider application under the priority considerations 
required in the Act. The Board received eight comments in response to 
the proposed regulations. In this document, the Board adopts rules to 
implement the LOCAL TV Program.
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    \1\ See 68 FR 48814 (August 15, 2003). The proposed regulations 
can also be viewed at http://www.usda.gov/rus/localtvboard/legislative_docs.htm.
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Section 2201.1 Definitions

    One commenter suggested that the Board amend the proposed rule to 
provide that the Board will publish contour maps for each Designated 
Market Area (DMA), including grade A and B contours, to ensure that all 
applicants are using the same definitions and data sets.
    The Act does not require the Board to create contour maps and the 
Board does not have funds available to undertake such a project. 
Applicants are required to indicate the number of nonserved and 
underserved households their projects will reach. See Section 
2201.11(c)(4) of the regulations. It is expected that applicants will 
also disclose the manner in which this determination was made. This 
information, along with the other information requested as part of the 
application, will be analyzed in a consistent manner across all 
applicants by the Board.
    A number of commenters suggested amending the definition of ``local 
television broadcast signals'' to include all local television 
broadcast stations in a DMA or, at least, all local television 
broadcast stations eligible for mandatory carriage under Federal 
Communications Commission (FCC) rules applicable to cable television 
systems or satellite providers. These suggestions were made because of 
the concerns of commenters that the proposed definition would have one 
of four possible negative results: (1) It would overlook some local 
stations in determining the existing availability of service; (2) it 
would cause some areas currently receiving local broadcast signals from 
a cable or satellite provider in accordance with FCC rules to be 
considered nonserved or underserved erroneously; (3) it would limit the 
applicability of the loan guarantee to that portion of a loan required 
to finance facilities necessary to provide only some of the local 
signals that a cable or satellite provider would be required by FCC 
rules to provide; or (4) it would direct applicants to provide 
retransmission of a smaller number of signals than the FCC's rules 
would dictate, thereby possibly running afoul of both FCC rules and 
copyright laws. While we do not agree that all of these results were 
possible, because nothing in the Board's rules would have affected the 
power of copyright law or the authority of the FCC's rules regarding 
carriage of local signals by providers applying for loan guarantees 
under the program, the Board acknowledges that the proposed definition 
could be improved.
    Therefore, the Board has amended the definition of Local Television 
Broadcast Signals to include all television broadcast signals located 
in a DMA, subject to limitations pertaining to duplication, similar to 
the rules the FCC has used in Part 76 of Title 47 of the Code of 
Federal Regulations. The Board has also added definitions of the terms 
``low power television station,'' ``television broadcast station,'' 
``television broadcast translator station,'' and ``television network'' 
to ensure that these terms are well understood in the revised 
definition of ``local television broadcast signals.''
    To address the concern that the local signals carried by a cable or 
satellite provider under the FCC's rules might, in some case, not 
accord with the definition of ``local television broadcast signals'' in 
this rule, the Board has added a new Section 2201.9 which clarifies 
that the local signals carried by cable or satellite providers in 
accordance with the FCC's rules will always be considered to meet the 
definition of ``local television broadcast signals'' for the purposes 
of this regulation.

Section 2201.10 Loan Amount and Guarantee Percentage

    One comment recommended that the regulations be amended to delete 
the proposed $1 million minimum size of a guaranteed loan (floor), so 
that the Board might consider applications for small loans on a case-
by-case basis. The commenter indicated that, while the proposed $1 
million floor would not pose a problem for it, it might serve to deter 
certain small companies from applying for a loan guarantee under the 
program.
    The floor was set by the Board after taking into consideration the 
full costs to the Board of analyzing the eligibility and 
creditworthiness of applicants and their compliance with appropriate 
statutes and regulations. Such costs, which might appear to be borne by 
the Board, would be passed on to applicants through application and 
origination fees. Lenders would be authorized to charge reasonable fees 
as well. For loans of less than $1 million, total amount of fees 
charged by the Board and the lenders would be larger than the benefit 
of reduced interest expense of the borrower from receiving a Federal 
loan guarantee. Therefore, the Board will not delete the $1 million 
floor from the regulations.
    Two commenters expressed concern about how the Board would 
determine the portion of the loan eligible for coverage by the 
guarantee under Section 2201.10. The Act makes clear that the guarantee 
should not cover any portion of a loan being used for purposes other 
than the establishment of the means by which local television broadcast 
signals will be delivered to a nonserved or underserved Area. However, 
if the Board were to prorate the costs of facilities based simply on 
the percentage of local television broadcast signals carried relative 
to all signals carried or the percentage of signals delivered to 
nonserved or underserved areas relative to all Areas served and adjust 
the portion of the loan eligible for guarantee accordingly, the effect 
would be to undermine the effectiveness of the LOCAL TV Program, by 
dropping the actual guarantee percentage significantly in many cases. 
Nonetheless any separable costs used to pay for features, services, or 
facilities not essential to the means by which local television 
broadcast signals will be delivered to a nonserved or underserved Area 
will be excluded from the portion of the loan eligible for coverage by 
the guarantee. A new subsection 2201.10(b)(3) has been added to clarify 
this policy.

Section 2201.11 Application Requirements

    Credit Opinion. The proposed rules require applicants for loans of 
$5 million or more to submit to the Board a preliminary credit rating 
opinion letter. The Board solicited comment on whether the minimum 
amount should be set within the range of $5 million to $25 million. One 
comment argued that this requirement could serve as a costly barrier 
for potential applicants and that this credit opinion letter was not

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required by the Act. The commenter also stated that this requirement is 
inconsistent with the ``no credit elsewhere test'' and that the 
proposed regulations do not specify what outcome would be required from 
this opinion letter as a condition to obtaining a Guarantee.
    The creditworthiness of an applicant is an important consideration 
for the Board as it implements this program. At the same time, the 
Board recognizes the commenter's concern that the cost of obtaining a 
credit opinion letter may be a potential barrier for some applicants. 
Therefore, the Board will raise the minimum amount of a loan for which 
a credit rating opinion letter is required from $5 million to $15 
million. Section 2201.11(g)(2) of the final rules has been changed 
accordingly.
    Environmental Impact and Documentation for Eligibility 
Determination. One commenter recommended amending the documentation and 
other requirements for an applicant to be eligible for a loan guarantee 
consistently throughout the regulations to provide that the 
environmental impact assessment and all necessary regulatory approvals, 
spectrum licenses, and delivery permissions will be required to be 
finalized prior to the closing of the loan to be guaranteed, but not 
necessarily at the time of application, as appeared to be required 
under certain sections of the proposed regulations.
    Applications may be submitted, evaluated and conditionally approved 
prior to finalization of the environmental assessment and completion of 
the NEPA process however, guaranteed loan funds will not be advanced 
until the NEPA process is completed. Section 2201.11(i) of the 
regulations has been amended accordingly. Applications may also be 
submitted, evaluated and conditionally approved prior to an Applicant 
obtaining all required regulatory and other approvals, licenses and 
permissions; however, guaranteed loan funds will not be advanced until 
they have been obtained. The regulations have been amended to clarify 
this point as well.

Section 2201.12 Applicant

    One commenter asked that the Board amend the regulations to clearly 
state what the Board actually requires in order for an applicant to be 
deemed eligible to receive a loan guarantee and indicate the timing for 
the Board's determination on the applicant's eligibility, as opposed to 
merely listing in the regulations the information required to be 
submitted as part of the application.
    The Board's regulations state both the factors for determining 
eligibility of an applicant and the information items necessary to be 
submitted as part of a complete application. A determination that an 
applicant is eligible does not mean that the applicant will be made an 
offer of guarantee. Similarly, a complete application presenting an 
economically viable project cannot receive an offer of guarantee if the 
party submitting the application is not eligible. Several commenters 
suggested that the Board amend either the requirement that an applicant 
show that their loan would not be available on reasonable terms and 
conditions without a program guarantee or the documentation requested 
in the application to show that this requirement has been satisfied. 
See Section 2201.12(b)(2)(v) of the proposed rule.
    The ``not available on reasonable terms and conditions'' 
requirement in the proposed rule is taken directly from the statute, 
and therefore cannot be eliminated by regulation. See Section 
1004(d)(3)(v) of the Act. The documentation requirement is similar to 
that used in other government loan guarantee programs.

Section 2201.15 Ineligible Loan Purposes

    One commenter noted that the regulations do not lay out how the 
Board, in consultation with the National Telecommunications and 
Information Administration (NTIA), will make a determination that a 
project is ``not likely to have a substantial adverse impact on 
competition that outweighs the benefits of improving access to Local 
Television Broadcast Signals in a Nonserved Area or Underserved area * 
* *. ``Another commenter asked that the section be moved to a new 
location in the regulations in order to underscore the importance of 
this requirement for Board deliberations on this issue.''
    The standard that the Board is to apply in making its determination 
is clearly stated in the Act, i.e., the project is not likely to have a 
substantial adverse impact on competition that outweighs the benefits 
of improving access to the signals of a local television station in a 
nonserved area or underserved area and is commercially viable. 
Moreover, the Act requires the Board to consult with the NTIA in its 
determination. Given the wide variety of types of projects, market 
conditions, and consumer services that may be offered, it would be 
inappropriate to specify a formula for making this determination in the 
regulations. Rather, the Board will make its determination, in 
accordance with the Act, on a case-by-case basis based on the nature of 
the project under consideration. A detailed process outlined in the 
regulations as to how the Board will make this determination is not 
required by the Act. Because of the importance of this determination, 
however, the regulations have been amended to move this determination 
from Section 2201.15(c) to Section 2201.18(f).

Section 2201.17 Submission of Applications

    One group of commenters recommended that the Board amend the 
regulations to state that each application window will be at least 120 
days long, and not just approximately 120 days long, as was stated in 
the proposed rule.
    Elsewhere in today's Federal Register the Board is publishing a 
notice announcing that applications for guarantees are being accepted 
through April 21, 2004; a 120 day period. While the Board believes 120 
days is an appropriate period of time for an applicant to submit an 
application, it does not believe that a slightly shorter period for 
additional application windows is inappropriate. As such, should the 
Board decide to open additional application windows, any such window 
could be shorter than 120 days.
    Two commenters recommended that the regulations require that a 
public notice be put in place so that affected participants in the DMA 
are aware an application has been filed. The Board expects to give the 
public notice of the names of those who applied during an application 
window after the application window has closed. This notice will be 
published in the Federal Register.

Section 2201.18 Application Selection

    Two commenters asked that the Board explain in the regulations how 
it will meet its statutory requirement to prioritize the service of 
nonserved areas over the course of the program; e.g., how will the 
Board prevent the majority of loan guarantees from being issued to 
serve underserved areas in the initial application window or windows so 
that the opportunities to serve nonserved areas will not be limited in 
later application windows. Another commenter raised the related issue 
of how the Board will select applications from the same area if more 
than one application meets the eligibility requirements.
    All applications received during the time period established in the 
Board's public notice, published elsewhere in

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today's Federal Register, will be reviewed based on the criteria in the 
statute and these regulations. Included in these criteria is a 
statutory priority to provide service to nonserved areas. The Board 
will extend offers of guarantee to eligible applicants in accordance 
with such priority standards. However, the Board will apply that 
priority with regard only to the applications before it. The Board will 
not withhold funds for potential future applications that may be 
submitted during a possible additional funding availability period. 
With respect to applications covering the same geographic area, the 
Board will again apply the statutory and regulatory approval criteria 
to its determination as to whether to make an offer of guarantee. The 
Board may extend an offer of guarantee to more than one applicant 
seeking to provide service to the same geographic area. However, 
analysis of the financial feasibility of any particular project 
proposed by an applicant will necessarily take into account any other 
applications received by the Board covering the same geographic area. 
This analysis will include determining whether both Projects can be 
economically sustainable.
    One commenter asked that the Board amend the regulations to 
facilitate the transition to digital television (DTV) by giving 
priority to those entities whose business and technical plans include 
the delivery of all local DTV broadcast stations and the entire 19.4 
MBPS digital signal, whether stations are delivering one high-
definition signal, several DTV multicast signals, data, or a 
combination.
    The Act specifies the considerations that the Board shall give 
priority to with respect to the approval of loan guarantees. The 
transition to DTV is not included within the priorities stated in the 
Act. If Congress had wanted the Board to give priority to those 
entities that facilitate the transition to DTV, it could have made that 
a priority in the Act. The regulations have not been amended to give 
priority to those entities that facilitate the transition to DTV. 
However, Section 2201.11(e)(8) of the proposed rule does require the 
applicant to identify the capacity necessary to digitally broadcast all 
local television broadcast signals to be provided by the project so 
that the technical capabilities of the project can be evaluated in 
light of the ongoing transition to DTV.
    One commenter proposed that the Board amend the proposed rule so 
that an applicant could refer to its entire system, and not merely the 
assets involved with a proposed project, when describing how high-speed 
Internet services will be provided in conjunction with the proposed 
project.
    The Act states that the Board should give additional consideration 
to projects that also provide high-speed Internet service. See Section 
1004(e)(1)(B) of the Act. The Board, therefore, does not have the 
flexibility to consider any means outside of the project in question by 
which an applicant might already provide, or would provide in the 
future, high-speed Internet service.
    Another commenter recommended that the regulations be amended to 
preserve the statutory requirement that ``additional''--not ``higher'' 
as the regulations now state--priority is given to projects that 
provide high-speed Internet service. The Board agrees with this comment 
and has changed the regulations to reflect this change in Section 
2201.18(b)(1).

Section 2201.20 Collateral

    One commenter suggested amending the proposed rule to specifically 
allow collateral to include certain intangible assets. The definition 
of collateral in the proposed rule is broad, and does not preclude the 
use of intangible assets. All collateral, including any intangible 
assets, will be subject to review and approval by the Board under 
Section 2201.20(e) of the regulations.
    Another commenter recommended amending the regulations to provide 
that the Board will adjust the value of collateral downward and require 
an applicant to pledge additional collateral only if the Board makes a 
finding that such an adjustment is appropriate as a result of fraud or 
abuse by the applicant or any affiliate of the applicant. Such an 
amendment cannot be made. The Act requires that collateral having a 
value equal to the unpaid balance of the loan, secure the loan. The 
government must be able to evaluate, at all times, the value of the 
collateral, regardless of fraud or abuse. The Act clearly contemplates 
that, in the event the value of pledged collateral is not equal to the 
unpaid balance of the loan, additional collateral securing the loan 
will be provided either by the applicant or its affiliates.
    Another commenter recommended that the regulations be amended to 
enable the Board to use its discretion to minimize burdensome fees and 
penalties and the use of credit premiums by providing that: (1) The 
Administrator will never hold liens on assets securing the loan that 
are in excess of the unpaid balance of the loan amount covered by the 
loan guarantee; and (2) credit risk premiums should be required only in 
the event of an appropriations shortfall such that the cost of the loan 
guarantee cannot be covered and that, in such cases, that credit risk 
premiums will be kept to the lowest practical amount.
    With regard to the liens issue, the regulations must preserve 
discretion for the Board to hold liens in an amount sufficient to 
protect the taxpayer. With respect to credit risk premiums, Section 
2201.23 already permits the Board to use its discretion, with OMB 
concurrence as to the amount, regarding whether and to what extent 
credit risk premiums will be charged. Section 2201.23 also states that 
the Board will reduce the credit risk premium with respect to 
guarantees proportionately to the extent appropriations of budget 
authority are sufficient to cover the cost of guarantees, as determined 
under Section 502(5) of the Federal Credit Reform Act of 1990.

Section 2201.21 Fees

    One commenter stated that the origination fee, if one is charged at 
all, should be capped at 50 percent of the application fee. A loan 
guarantee origination fee capped at 50 percent of the application fee 
would impair the Board's ability to recover its costs. The loan 
guarantee origination fee will be charged only to those applicants that 
have been made an offer of guarantee. The application fee, on the other 
hand, will be charged for all applications. The amount of the 
application fee is meant to cover Board expenses incurred in reviewing 
an application, while the loan guarantee origination fee is meant to 
recoup Board expenses incurred in issuing a guarantee and closing the 
loan.
    To ensure that the loan guarantee origination fee more accurately 
reflects the administrative costs of issuing the guarantee and closing 
the loan, the Board has decided to revise the amount of the loan 
guarantee origination fee. This change is reflected in subsection 
2201.21(b) of the final rules. This subsection provides a fee 
sufficient to cover the Board's administrative costs and requires 
borrowers to enter into an agreement with the Board regarding payment 
of the fee once an offer of guarantee has been extended. Such costs 
will likely include legal, financial analysis and other outside 
consulting fees as well as other administrative costs incurred by the 
Board. The language conditions closing the loan on full payment of the 
fee and makes it clear that a borrower is liable for the administrative 
costs of the Board regardless of whether the loan closes.

[[Page 74416]]

Section 2201.25 Performance Agreement

    One commenter suggested that the proposed rule be amended to 
provide that the penalty in subsection 2201.25(b) of the proposed rule 
for failure to comply with a stipulated performance schedule would not 
be charged if the applicant in good faith failed to meet the 
performance schedule.
    The Act provides the Board with authority to impose a penalty not 
to exceed three times the interest due on a guaranteed loan if an 
applicant fails to meet its stipulated performance schedule.\2\ While 
the Board believes that it is important to retain the flexibility 
granted to it in the Act to impose the penalty, the Board expects to 
use its authority very judiciously in order to protect the financial 
interests of the United States.
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    \2\ See Section 1005(f)(2) of the Act.
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    Another commenter recommended that in the event a borrower in good 
faith failed to meet the stipulated performance schedule, the 
Administrator should provide the borrower with a minimum of 120 days to 
attempt to cure the failure to perform before the assessment of the 
penalty.
    The issue of a ``cure period'' is more appropriately addressed in 
the loan documents. It is anticipated that an appropriate ``cure 
period'' provision will be included in the loan documents.

Section 2201.27 Assignment or Transfer of Loans

    One commenter recommended that only modifications of significant 
material provisions of the Loan Documents should require prior written 
approval of the Board. The commenter also recommended that Board 
approval not be required for the transfer of certain participation 
interests in a Loan (e.g., transfer of interests within a group of 
participating Lenders).
    The requirements and limitations in section 2201.27 of the 
regulations are needed for the Board to assure compliance with the 
authorizing statute, which requires, for example, that the Board 
determine whether or not Lenders are eligible to participate in the 
Program and take note of any transfer of the guaranteed portion of the 
loan separate and apart from the unguaranteed portion of a loan (``loan 
stripping''). Such loan stripping is prohibited under subsection 
1005(d) of the Act. The Board's need for this information exists not 
only at the time the loan is originated, but throughout the repayment 
period.

Section 2201.31 Indemnification

    One commenter recommended amending the regulations to clarify that 
only those affiliates that are providing collateral for the loan 
guarantee will be subject to the statutorily required indemnification 
requirements. A case-by-case statutorily required determination will be 
made concerning which affiliates will be required to indemnify the 
government. It is possible, however, that indemnification will be 
received from affiliates which are not providing collateral for a 
guarantee. It is anticipated that appropriate contracts, between the 
affiliates and the government, evidencing such indemnification 
obligation, will be obtained.

Section 2201.33 Defaults

    One commenter recommended amending the regulations to state that 
the failure of a lender to provide all of the required documents to the 
Board in the event of a default will not void the loan guarantee and 
that instead only a good faith effort by lender in this regard will be 
required, which is consistent with current commercial practice.
    Subsection 2201.33(c) of the regulations requires the lender to 
provide certain information, relating to the collection process, to the 
Board within 90 days of the date of a payment demand. Paragraph (f) of 
that section provides that the Board may withhold payment under the 
guarantee if such information has not been provided. This provision is 
reasonable in light of the Board's reliance on the lender in the loan 
collection process.

List of Subjects in 7 CFR Parts 2200 and 2201

    Loan programs--Communications, Rural areas, Telecommunications, 
Reporting and recordkeeping requirements.


0
For the reasons set forth in the preamble, chapter XX of title 7 of the 
Code of Federal Regulations is amended as follows:

PART 2200--ACCESS TO LOCAL TELEVISION SIGNALS GUARANTEED LOAN 
PROGRAM; GENERAL POLICIES AND PROCEDURES

0
1. The authority citation for part 2200 continues to read as follows:

    Authority: 47 U.S.C. 1101 et seq.; Pub. L. 106-553; Pub. L.107-
171.


0
2. The title of part 2200 is revised to read as set out above.

0
3. Section 2200.1 is amended by adding a new paragraph (d) to read as 
follows:


Sec.  2200.1  Definitions.

* * * * *
    (d) Person means any individual, corporation, cooperative, 
partnership, joint venture, association, joint-stock company, limited 
liability company or partnership, trust, unincorporated organization, 
government entity, agency or instrumentality or any subdivision 
thereof.

0
4. Part 2200 is amended by adding Sec. Sec.  2200.10 through 2200.12 to 
read as follows:


Sec.  2200.10  Restrictions on lobbying.

    (a) No funds received through a Loan guaranteed under this Program 
in this chapter may be expended by the recipient of a Federal contract, 
grant, loan, loan guarantee, or cooperative agreement to pay any person 
for influencing or attempting to influence an officer or employee of 
any agency, a Member of Congress, an officer or employee of Congress, 
or an employee of a Member of Congress in connection with any of the 
following covered Federal actions: the awarding of any Federal 
contract, the making of any Federal grant, the making of any Federal 
loan or loan Guarantee, the entering into of any cooperative agreement, 
and the extension, continuation, renewal, amendment, or modification of 
any Federal contract, grant, loan, loan Guarantee, or cooperative 
agreement.
    (b) Each person who requests or receives from an agency a 
commitment providing for the United States to insure or guarantee a 
loan shall file with that agency a statement, set forth in the 
application form, whether that person has made or has agreed to make 
any payment to influence or attempt to influence an officer or employee 
of any agency, a Member of Congress, an officer or employee of 
Congress, or an employee of a Member of Congress in connection with 
that loan insurance or Guarantee.
    (c) Each person who requests or receives from an agency a 
commitment providing for the United States to insure or guarantee a 
loan shall file with that agency a Standard Form-LLL if that person has 
made or has agreed to make any payment to influence or attempt to 
influence an officer or employee of any agency, a Member of Congress, 
an officer or employee of Congress, or an employee of a Member of 
Congress in connection with that loan insurance or Guarantee.
    (d) Each person shall file a certification, contained in the 
application form, and a disclosure form (Standard Form-LLL), if 
required, with each submission that initiates agency consideration of 
such person for:

[[Page 74417]]

    (1) Award of a Federal contract, grant, or cooperative agreement 
exceeding $100,000; or
    (2) An award of a Federal loan or a commitment providing for the 
United States to insure or guarantee a loan exceeding $150,000.
    (e) Each person shall file a certification, and a disclosure form, 
if required, upon receipt by such person of:
    (1) A Federal contract, grant, or cooperative agreement exceeding 
$100,000; or
    (2) A Federal loan or a commitment providing for the United States 
to insure or guarantee a loan exceeding $150,000, unless such person 
previously filed a certification, and a disclosure form, if required, 
under paragraph (c) of this section.
    (f) Each person shall file a disclosure form at the end of each 
calendar quarter in which there occurs any event that requires 
disclosure or that materially affects the accuracy of the information 
contained in any disclosure form previously filed by such person under 
paragraphs (d) or (e) of this section. An event that materially affects 
the accuracy of the information reported includes:
    (1) A cumulative increase of $25,000 or more in the amount paid or 
expected to be paid for influencing or attempting to influence a 
covered Federal action; or
    (2) A change in the person(s) or individual(s) influencing or 
attempting to influence a covered Federal action; or
    (3) A change in the officer(s), employee(s), or Member(s) contacted 
to influence or attempt to influence a covered Federal action.


Sec.  2200.11  Government-wide debarment and suspension 
(nonprocurement).

    (a) Executive Order (E.O.) 12549 provides that, to the extent 
permitted by law, Executive departments and agencies shall participate 
in a governmentwide system for nonprocurement debarment and suspension. 
A person who is debarred or suspended shall be excluded from Federal 
financial and nonfinancial assistance and benefits under Federal 
programs and activities. Debarment or suspension of a participant in a 
program by one agency shall have governmentwide effect. The Board shall 
review the List of Debarred entities prior to making final loan 
Guarantee decisions. Suspension or debarment may be a basis for denying 
a loan Guarantee.
    (b) This section applies to all persons who have participated, are 
currently participating or may reasonably be expected to participate in 
transactions under Federal nonprocurement programs. For purposes of 
this section such transactions will be referred to as ``covered 
transactions.''
    (1) Covered transaction. For purposes of this section, a covered 
transaction is a primary covered transaction or a lower tier covered 
transaction. Covered transactions at any tier need not involve the 
transfer of Federal funds.
    (i) Primary covered transaction. Except as noted in paragraph 
(b)(2) of this section, a primary covered transaction is any 
nonprocurement transaction between an agency and a person, regardless 
of type, including: grants, cooperative agreements, scholarships, 
fellowships, contracts of assistance, loans, loan guarantees, 
subsidies, insurance, payments for specified use, donation agreements 
and any other nonprocurement transactions between a Federal agency and 
a person.
    (ii) Lower tier covered transaction. A lower tier covered 
transaction is:
    (A) Any transaction between a participant and a person other than a 
procurement contract for goods or services, regardless of type, under a 
primary covered transaction;
    (B) Any procurement contract for goods or services between a 
participant and a person, regardless of type, expected to equal or 
exceed the Federal procurement small purchase threshold fixed at 10 
U.S.C. 2304(g) and 41 U.S.C. 253(g) (currently $100,000) under a 
primary covered transaction;
    (C) Any procurement contract for goods or services between a 
participant and a person under a covered transaction, regardless of 
amount, under which that person will have a critical influence on or 
substantive control over that covered transaction. Such persons may 
include loan officers or chief executive officers acting as principal 
investigators and providers of federally required audit services.
    (2) Exceptions. The following transactions are not covered:
    (i) Statutory entitlements or mandatory awards (but not subtier 
awards thereunder which are not themselves mandatory), including 
deposited funds insured by the Federal Government;
    (ii) Direct awards to foreign governments or public international 
organizations, or transactions with foreign governments or foreign 
governmental entities, public international organizations, foreign 
government owned (in whole or in part) or controlled entities, entities 
consisting wholly or partially of foreign governments or foreign 
governmental entities;
    (iii) Benefits to an individual as a personal entitlement without 
regard to the individual's present responsibility (but benefits 
received in an individual's business capacity are not accepted);
    (iv) Federal employment;
    (v) Transactions pursuant to national or agency-recognized 
emergencies or disasters;
    (vi) Incidental benefits derived from ordinary governmental 
operations; and
    (vii) Other transactions where the application of this section 
would be prohibited by law.
    (3) Board covered transactions. This section applies to the Board's 
Loan Guarantees, subcontracts and transactions at any tier that are 
charges as direct or indirect costs, regardless of type.
    (c) Primary covered transactions. Except to the extent prohibited 
by law, persons who are debarred or suspended shall be excluded from 
primary covered transactions as either participants or principals 
throughout the Executive Branch of the Federal Government for the 
period of their debarment, suspension, or the period they are proposed 
for debarment under 48 CFR part 9, subpart 9.4. Accordingly, no agency 
shall enter into primary covered transactions with such excluded 
persons during such period, except as permitted pursuant to paragraph 
(l) of this section.
    (d) Lower tier covered transactions. Except to the extent 
prohibited by law, persons who have been proposed for debarment under 
48 CFR part 9, subpart 9.4, debarred or suspended shall be excluded 
from participating as either participants or principals in all lower 
tier covered transactions (see paragraph (b)(1)(ii) of this section for 
the period of their exclusion).
    (e) Exceptions. Debarment or suspension does not affect a person's 
eligibility for:
    (1) Statutory entitlements or mandatory awards (but not subtier 
awards thereunder which are not themselves mandatory), including 
deposited funds insured by the Federal Government;
    (2) Direct awards to foreign governments or public international 
organizations, or transactions with foreign governments or foreign 
governmental entities, public international organizations, foreign 
government owned (in whole or in part) or controlled entities, and 
entities consisting wholly or partially of foreign governments or 
foreign governmental entities;
    (3) Benefits to an individual as a personal entitlement without 
regard to the individual's present responsibility

[[Page 74418]]

(but benefits received in an individual's business capacity are not 
accepted);
    (4) Federal employment;
    (5) Transactions pursuant to national or agency-recognized 
emergencies or disasters;
    (6) Incidental benefits derived from ordinary governmental 
operations; and
    (7) Other transactions where the application of this section would 
be prohibited by law.
    (f) Persons who are ineligible are excluded in accordance with the 
applicable statutory, executive order, or regulatory authority.
    (g) Persons who accept voluntary exclusions are excluded in 
accordance with the terms of their settlements. The Board shall, and 
participants may, contact the original action agency to ascertain the 
extent of the exclusion.
    (h) The Board may grant an exception permitting a debarred, 
suspended, or voluntarily excluded person, or a person proposed for 
debarment under 48 CFR part 9, subpart 9.4, to participate in a 
particular covered transaction upon a written determination by the 
agency head or an authorized designee stating the reason(s) for 
deviating from the Presidential policy established by Executive Order 
12549. However, in accordance with the President's stated intention in 
the Executive Order, exceptions shall be granted only infrequently. 
Exceptions shall be reported in accordance with the Executive Order.
    (i) Notwithstanding the debarment, suspension, proposed debarment 
under 48 CFR part 9, subpart 9.4, determination of ineligibility, or 
voluntary exclusion of any person by an agency, agencies and 
participants may continue covered transactions in existence at the time 
the person was debarred, suspended, proposed for debarment under 48 CFR 
part 9, subpart 9.4, declared ineligible, or voluntarily excluded. A 
decision as to the type of termination action, if any, to be taken 
should be made only after thorough review to ensure the propriety of 
the proposed action.
    (j) Agencies and participants shall not renew or extend covered 
transactions (other than no-cost time extensions) with any person who 
is debarred, suspended, proposed for debarment under 48 CFR part 9, 
subpart 9.4, ineligible or voluntary excluded, except as provided in 
paragraph (h) of this section.
    (k) Except as permitted under paragraphs (h) or (i) of this 
section, a participant shall not knowingly do business under a covered 
transaction with a person who is:
    (1) Debarred or suspended;
    (2) Proposed for debarment under 48 CFR part 9, subpart 9.4; or
    (3) Ineligible for or voluntarily excluded from the covered 
transaction.
    (l) Violation of the restriction under paragraph (k) of this 
section may result in disallowance of costs, annulment or termination 
of award, issuance of a stop work order, debarment or suspension, or 
other remedies as appropriate.
    (m) A participant may rely upon the certification of a prospective 
participant in a lower tier covered transaction that it and its 
principals are not debarred, suspended, proposed for debarment under 48 
CFR part 9, subpart 9.4, ineligible, or voluntarily excluded from the 
covered transaction, unless it knows that the certification is 
erroneous. An agency has the burden of proof that a participant did 
knowingly do business with a person that filed an erroneous 
certification.


Sec.  2200.12  Freedom of Information Act.

    (a) Definitions. All terms used in this section, which are defined 
in 5 U.S.C. 551 or 5 U.S.C. 552 shall have the same meaning in this 
section. In addition the following definitions apply to this section:
    (1) FOIA, as used in this section, means the ``Freedom of 
Information Act,'' as amended, 5 U.S.C. 552.
    (2) Commercial use request means a request from or on behalf of one 
who seeks information for a use or purpose that furthers the 
commercial, trade, or profit interests of the requester or the person 
on whose behalf the request is made.
    (3) Direct costs mean those expenditures that the Board actually 
incurs in searching for, reviewing, and duplicating documents in 
response to a request made under paragraph (c) of this section. Direct 
costs include, for example, the labor costs of the employee performing 
the work (the basic rate of pay for the employee, plus 16 percent of 
that rate to cover benefits). Not included in direct costs are overhead 
expenses such as the costs of space and heating or lighting of the 
facility in which the records are kept.
    (4) Duplication means the process of making a copy of a document in 
response to a request for disclosure of records or for inspection of 
original records that contain exempt material or that otherwise cannot 
be inspected directly. Among others, such copies may take the form of 
paper, microfilm, audiovisual materials, or machine-readable 
documentation (e.g., magnetic tape or disk).
    (5) Educational institution means a preschool, a public or private 
elementary or secondary school, or an institution of undergraduate 
higher education, graduate higher education, professional education, or 
an institution of vocational education that operates a program of 
scholarly research.
    (6) Noncommercial scientific institution refers to an institution 
that is not operated on a ``commercial'' basis (as that term is used in 
this section) and which is operated solely for the purpose of 
conducting scientific research, the results of which are not intended 
to promote any particular product or industry.
    (7) News means information about current events or that would be of 
current interest to the public. Examples of news media entities 
include, but are not limited to, television or radio stations 
broadcasting to the public at large, and publishers of newspapers and 
other periodicals (but only in those instances when they can qualify as 
disseminators of ``news'') who make their products available for 
purchase or subscription by the general public. ``Freelance'' 
journalists may be regarded as working for a news organization if they 
can demonstrate a solid basis for expecting publication through that 
organization, even though not actually employed by it.
    (8) Representative of the news media means any person actively 
gathering news for an entity that is organized and operated to publish 
or broadcast news to the general public.
    (9) Review means the process of examining documents, located in 
response to a request for access, to determine whether any portion of a 
document is exempt information. It includes doing all that is necessary 
to excise the documents and otherwise to prepare them for release. 
Review does not include time spent resolving general legal or policy 
issues regarding the application of exemptions.
    (10) Search means the process of looking for material that is 
responsive to a request, including page-by-page or line-by-line 
identification within documents. Searches may be done manually or by 
computer.
    (b) Records available for public inspection and copying. (1) Types 
of records made available. The information in this section is furnished 
for the guidance of the public and in compliance with the requirements 
of the FOIA. This section sets forth the procedures the Board follows 
to make publicly available the materials specified in 5 U.S.C. 
552(a)(2). These materials shall be made available for inspection and 
copying at the Board's offices pursuant to 5 U.S.C. 552(a)(2). 
Information routinely provided to the public as part of a regular Board 
activity

[[Page 74419]]

(for example, press releases) may be provided to the public without 
following this section.
    (2) Reading room procedures. Information available under this 
section is available for inspection and copying, from 9 a.m. to 5 p.m. 
weekdays, at 1400 Independence Avenue, SW., Washington, DC.
    (3) Electronic records. Information available under this section 
shall also be available on the Board's Web site found at http://www.usda.gov/rus/localtvboard.
    (c) Records available to the public on request--(1) Types of 
records made available. All records of the Board that are not available 
under paragraph (b) of this section shall be made available upon 
request, pursuant to the procedures in this section and the exceptions 
set forth in the FOIA.
    (2) Procedures for requesting records. A request for records shall 
reasonably describe the records in a way that enables the Board's staff 
to identify and produce the records with reasonable effort and without 
unduly burdening or significantly interfering with any of the Board's 
operations. The request shall be submitted in writing to the Secretary 
of the Board at LOCAL Television Loan Guarantee Board, 1400 
Independence Avenue, SW., STOP 1575, Room 2919-S, Washington, DC 20250-
1575, or sent by facsimile to the Secretary of the Board at (202) 720-
2734. The request shall be clearly marked FREEDOM OF INFORMATION ACT 
REQUEST.
    (3) Contents of request. The request shall contain the following 
information:
    (i) The name and address of the requester, and the telephone number 
at which the requester can be reached during normal business hours;
    (ii) Whether the requested information is intended for commercial 
use, or whether the requester represents an educational or 
noncommercial scientific institution, or news media;
    (iii) A statement agreeing to pay the applicable fees, or a 
statement identifying any fee limitation desired, or a request for a 
waiver or reduction of fees that satisfies paragraph (f) of this 
section.
    (d) Processing requests--(1) Priority of responses. The date of 
receipt for any request, including one that is addressed incorrectly or 
that is referred to the Board by another agency, is the date the 
Secretary of the Board actually receives the request. The Secretary of 
the Board shall normally process requests in the order they are 
received. However, in the Secretary of the Board's discretion, the 
Board may use two or more processing tracks by distinguishing between 
simple and more complex requests based on the number of pages involved, 
or some other measure of the amount of work and/or time needed to 
process the request, and whether the request qualifies for expedited 
processing as described in paragraph (d)(2) of this section. When using 
multitrack processing, the Secretary of the Board may provide 
requesters in the slower track(s) with an opportunity to limit the 
scope of their requests in order to qualify for faster processing. The 
Secretary of the Board shall contact the requester by telephone or by 
letter, whichever is most efficient in each case.
    (2) Expedited processing. (i) A person may request expedited access 
to records by submitting a statement, certified to be true and correct 
to the best of that person's knowledge and belief, that demonstrates a 
compelling need for the records, as defined in 5 U.S.C. 
552(a)(6)(E)(v).
    (ii) The Secretary of the Board shall notify a requester of the 
determination whether to grant or deny a request for expedited 
processing within ten working days of receipt of the request. If the 
Secretary of the Board grants the request for expedited processing, the 
Board shall process the request for access to information as soon as 
practicable. If the Secretary of the Board denies a request for 
expedited processing, the requester may file an appeal pursuant to the 
procedures set forth in paragraph (e) of this section, and the Board 
shall respond to the appeal within twenty days after the appeal was 
received by the Board.
    (3) Time limits. The time for response to requests shall be 20 
working days, except:
    (i) In the case of expedited treatment under paragraph (d)(2) of 
this section;
    (ii) Where the running of such time is suspended for payment of 
fees pursuant to paragraph (f)(2)(ii) of this section;
    (iii) Where the estimated charge is less than $250, and the 
requester does not guarantee payment pursuant to paragraph (f)(2)(i) of 
this section; or
    (iv) In unusual circumstances, as defined in 5 U.S.C. 
552(a)(6)(B)(iii), the time limit may be extended for a period of time 
not to exceed 10 working days as provided by written notice to the 
requester, setting forth the reasons for the extension and the date on 
which a determination is expected to be dispatched; or such alternative 
time period as mutually agreed to by the Secretary of the Board and the 
requester when the Secretary of the Board notifies the requester that 
the request cannot be processed in the specified time limit.
    (4) Response to request. In response to a request that satisfies 
paragraph (c) of this section, an appropriate search shall be conducted 
of records in the custody and control of the Board on the date of 
receipt of the request, and a review made of any responsive information 
located. The Secretary of the Board shall notify the requester of:
    (i) The Secretary of the Board's determination of the request and 
the reasons therefore;
    (ii) The information withheld, and the basis for withholding; and
    (iii) The right to appeal any denial or partial denial, pursuant to 
paragraph (e) of this section.
    (5) Referral to another agency. To the extent a request covers 
documents that were created by, obtained from, classified by, or is in 
the primary interest of another agency, the Secretary of the Board may 
refer the request to that agency for a direct response by that agency 
and inform the requester promptly of the referral. The Secretary of the 
Board shall consult with another Federal agency before responding to a 
requester if the Board receives a request for a record in which:
    (i) Another Federal agency subject to the FOIA has a significant 
interest, but not the primary interest; or
    (ii) Another Federal agency not subject to the FOIA has the primary 
interest or a significant interest. Ordinarily, the agency that 
originated a record will be presumed to have the primary interest in 
it.
    (6) Providing responsive records. (i) A copy of records or portions 
of records responsive to the request shall be sent to the requester by 
regular U.S. mail to the address indicated in the request, unless the 
requester elects to take delivery of the documents at the Board's 
Freedom of Information Office or makes other acceptable arrangements, 
or the Secretary of the Board deems it appropriate to send the 
documents by another means. The Secretary of the Board shall provide a 
copy of the record in any form or format requested if the record is 
readily reproducible in that form or format, but the Secretary of the 
Board need not provide more than one copy of any record to a requester.
    (ii) The Secretary of the Board shall provide any reasonably 
segregable portion of a record that is responsive to the request after 
deleting those portions that are exempt under the FOIA or this section.
    (iii) Except where disclosure is expressly prohibited by statute, 
regulation, or order, the Secretary of the Board may authorize the 
release of records that are exempt from mandatory disclosure whenever 
the Board or designated Board members determine that there would be no 
foreseeable harm in such disclosure.

[[Page 74420]]

    (iv) The Board is not required in response to the request to create 
records or otherwise to prepare new records.
    (7) Prohibition against disclosure. Except as provided in this 
part, no officer, employee, or agent of the Board shall disclose or 
permit the disclosure of any unpublished information of the Board to 
any person (other than Board officers, employees, or agents properly 
entitled to such information for the performance of official duties), 
unless required by law.
    (e) Appeals. (1) Any person denied access to Board records 
requested under paragraph (c) of this section, denied expedited 
processing under paragraph (d) of this section, or denied a waiver of 
fees under paragraph (f) of this section may file a written appeal 
within 30 calendar days after the date of such denial with the Board. 
The written appeal shall prominently display the phrase FREEDOM OF 
INFORMATION ACT APPEAL on the first page, and shall be addressed to 
Chairman of the Board, LOCAL Television Loan Guarantee Board, 1400 
Independence Avenue, SW., STOP 1575, Room 2919-S, Washington, DC 20250-
1575, or sent by facsimile to (202) 720-2734. The appeal shall include 
a copy of the original request, the initial denial, if any, and a 
statement of the reasons why the requested records should be made 
available and why the initial denial was in error.
    (2) The Chairman of the Board shall make a determination regarding 
any appeal within 20 working days of actual receipt of the appeal, and 
the determination letter shall notify the appealing party of the right 
to seek judicial review in event of denial.
    (f) Fee schedules and waiver of fees-- (1) Fee schedule. The fees 
applicable to a request for records pursuant to paragraph (c) of this 
section are set forth in the uniform fee schedule at the end of this 
paragraph (f).
    (i) Search. (A) Search fees shall be charged for all requests other 
than requests made by educational institutions, noncommercial 
scientific institutions, or representatives of the news media, subject 
to the limitations of paragraph (f)(1)(iv) of this section. The 
Secretary of the Board shall charge for time spent searching even if no 
responsive record is located or if the Secretary of the Board withholds 
the record(s) located as entirely exempt from disclosure. Search fees 
shall be the direct costs of conducting the search by the involved 
employees.
    (B) For computer searches of records, requesters will be charged 
the direct costs of conducting the search, although certain requesters 
(as provided in paragraph (f)(3) of this section) will be charged no 
search fee and certain other requesters (as provided in paragraph 
(f)(3)) are entitled to the cost equivalent of two hours of manual 
search time without charge. These direct costs include the costs, 
attributable to the search, of operating a central processing unit and 
operator/programmer salary.
    (ii) Duplication. Duplication fees will be charged to all 
requesters, subject to the limitations of paragraph (f)(1)(iv) of this 
section. For a paper photocopy of a record (no more than one copy of 
which need be supplied), the fee shall be 15 cents per page. For copies 
produced by computer, such as tapes or printouts, the Secretary of the 
Board shall charge the direct costs, including operator time, of 
producing the copy. For other forms of duplication, the Secretary of 
the Board will charge the direct costs of that duplication.
    (iii) Review. Review fees shall be charged to requesters who make a 
commercial use request. Review fees shall be charged only for the 
initial record review--the review done when the Secretary of the Board 
determines whether an exemption applies to a particular record at the 
initial request level. No charge will be made for review at the 
administrative appeal level for an exemption already applied. However, 
records withheld under an exemption that is subsequently determined not 
to apply may be reviewed again to determine whether any other exemption 
not previously considered applies, and the costs of that review are 
chargeable. Review fees shall be the direct costs of conducting the 
review by the involved employees.
    (iv) Limitations on charging fees. (A) No search fee will be 
charged for requests by educational institutions, noncommercial 
scientific institutions, or representatives of the news media.
    (B) No search fee or review fee will be charged for a quarter-hour 
period unless more than half of that period is required for search or 
review.
    (C) Whenever a total fee calculated under this paragraph is $25 or 
less for any request, no fee will be charged.
    (D) For requesters other than those seeking records for a 
commercial use, no fee will be charged unless the cost of search in 
excess of two hours plus the cost of duplication in excess of 100 pages 
totals more than $25.
    (2) Payment procedures. All persons requesting records pursuant to 
paragraph (c) of this section shall pay the applicable fees before the 
Secretary of the Board sends copies of the requested records, unless a 
fee waiver has been granted pursuant to paragraph (f)(6) of this 
section. Requesters must pay fees by check or money order made payable 
to the Treasury of the United States.
    (i) Advance notification of fees. If the estimated charges are 
likely to exceed $25, the Secretary of the Board shall notify the 
requester of the estimated amount, unless the requester has indicated a 
willingness to pay fees as high as those anticipated. Upon receipt of 
such notice, the requester may confer with the Secretary of the Board 
to reformulate the request to lower the costs. The processing of the 
request shall be suspended until the requester provides the Secretary 
of the Board with a written guarantee that payment will be made upon 
completion of the processing.
    (ii) Advance payment. The Secretary of the Board shall require 
advance payment of any fee estimated to exceed $250. The Secretary of 
the Board shall also require full payment in advance where a requester 
has previously failed to pay a fee in a timely fashion. If an advance 
payment of an estimated fee exceeds the actual total fee by $1 or more, 
the difference shall be refunded to the requester. The time period for 
responding to requests under paragraph (d)(4) of this section, and the 
processing of the request shall be suspended until the Secretary of the 
Board receives the required payment.
    (iii) Late charges. The Secretary of the Board may assess interest 
charges when fee payment is not made within 30 days of the date on 
which the billing was sent. Assessment of such interest will commence 
on the 31st day following the day on which the billing was sent. 
Interest is at the rate prescribed in 31 U.S.C. 3717.
    (3) Categories of uses. The fees assessed depend upon the fee 
category. In determining which category is appropriate, the Secretary 
of the Board shall look to the identity of the requester and the 
intended use set forth in the request for records. Where a requester's 
description of the use is insufficient to make a determination, the 
Secretary of the Board may seek additional clarification before 
categorizing the request.
    (i) Commercial use requester. The fees for search, duplication, and 
review apply when records are requested for commercial use.
    (ii) Educational, non-commercial scientific institutions, or 
representatives of the news media requesters. The fees for duplication 
apply when records are not sought for commercial use, and the requester 
is a representative of the news media or an educational or 
noncommercial scientific institution, whose purpose is scholarly or 
scientific

[[Page 74421]]

research. The first 100 pages of duplication, however, will be provided 
free.
    (iii) All other requesters. For all other requests, the fees for 
search and duplication apply. The first two hours of search time and 
the first 100 pages of duplication, however, will be provided free.
    (4) Nonproductive search. Fees for search may be charged even if no 
responsive documents are found. Fees for search and review may be 
charged even if the request is denied.
    (5) Aggregated requests. A requester may not file multiple requests 
at the same time, solely in order to avoid payment of fees. If the 
Secretary of the Board reasonably believes that a requester is 
separating a request into a series of requests for the purpose of 
evading the assessment of fees or that several requesters appear to be 
acting together to submit multiple requests solely in order to avoid 
payment of fees, the Secretary of the Board may aggregate such requests 
and charge accordingly. It is considered reasonable for the Secretary 
of the Board to presume that multiple requests by one requester on the 
same topic made within a 30-day period have been made to avoid fees.
    (6) Waiver or reduction of fees. A request for a waiver or 
reduction of the fees, and the justification for the waiver, shall be 
included with the request for records to which it pertains. If a waiver 
is requested and the requester has not indicated in writing an 
agreement to pay the applicable fees if the waiver request is denied, 
the time for response to the request for documents, as set forth in 
under paragraph (d)(4) of this section, shall not begin until a 
determination has been made on the request for a waiver or reduction of 
fees.
    (i) Standards for determining waiver or reduction. The Secretary of 
the Board may grant a waiver or reduction of fees where it is 
determined both that disclosure of the information is in the public 
interest because it is likely to contribute significantly to public 
understanding of the operation or activities of the government, and 
that the disclosure of information is not primarily in the commercial 
interest of the requester. In making this determination, the following 
factors shall be considered:
    (A) Whether the subject of the records concerns the operations or 
activities of the government;
    (B) Whether disclosure of the information is likely to contribute 
significantly to public understanding of government operations or 
activities;
    (C) Whether the requester has the intention and ability to 
disseminate the information to the public;
    (D) Whether the information is already in the public domain;
    (E) Whether the requester has a commercial interest that would be 
furthered by the disclosure; and, if so,
    (F) Whether the magnitude of the identified commercial interest of 
the requester is sufficiently large, in comparison with the public 
interest in disclosure, that disclosure is primarily in the commercial 
interest of the requester.
    (ii) Contents of request for waiver. A request for a waiver or 
reduction of fees shall include a clear statement of how the request 
satisfies the criteria set forth in paragraph (f)(6)(i) of this 
section.
    (iii) Burden of proof. The burden shall be on the requester to 
present evidence or information in support of a request for a waiver or 
reduction of fees.
    (iv) Determination by Secretary of the Board. The Secretary of the 
Board shall make a determination on the request for a waiver or 
reduction of fees and shall notify the requester accordingly. A denial 
may be appealed to the Board in accordance with paragraph (e) of this 
section.
    (7) Uniform fee schedule.

------------------------------------------------------------------------
                  Service                               Rate
------------------------------------------------------------------------
(i) Manual search.........................  Actual salary rate of
                                             employee involved, plus 16
                                             percent of salary rate.
(ii) Computerized search..................  Actual direct cost,
                                             including operator time.
(iii) Duplication of records:
    (A) Paper copy reproduction...........  $.15 per page.
    (B) Other reproduction (e.g., computer  Actual direct cost,
     disk or printout, microfilm,            including operator time.
     microfiche, or microform).
(iv) Review of records (includes employee   Actual salary rate of
 preparation for release, i.e. excising).    conducting review, plus 16
                                             percent of salary rate.
------------------------------------------------------------------------

    (g) Request for confidential treatment of business information--(1) 
Submission of request. Any submitter of information to the Board who 
desires confidential treatment of business information pursuant to 5 
U.S.C. 552(b)(4) shall file a request for confidential treatment with 
the Board at the time the information is submitted or a reasonable time 
after submission.
    (2) Form of request. Each request for confidential treatment of 
business information shall state in reasonable detail the facts 
supporting the commercial or financial nature of the business 
information and the legal justification under which the business 
information should be protected. Conclusory statements that release of 
the information would cause competitive harm generally will not be 
considered sufficient to justify confidential treatment.
    (3) Designation and separation of confidential material. All 
information considered confidential by a submitter shall be clearly 
designated ``PROPRIETARY'' or ``BUSINESS CONFIDENTIAL'' in the 
submission and separated from information for which confidential 
treatment is not requested. Failure to segregate confidential 
commercial or financial information from other material may result in 
release of the nonsegregated material to the public without notice to 
the submitter.
    (h) Request for access to confidential commercial or financial 
information--(1) Request for confidential commercial or financial 
information. A request by a submitter for confidential treatment of any 
business information shall be considered in connection with a request 
for access to that information.
    (2) Notice to the submitter. (i) The Secretary of the Board shall 
notify a submitter who requested confidential treatment of information 
pursuant to 5 U.S.C. 552(b)(4), of the request for access.
    (ii) Absent a request for confidential treatment, the Secretary of 
the Board may notify a submitter of a request for access to submitter's 
business information if the Secretary of the Board reasonably believes 
that disclosure of the information may cause substantial competitive 
harm to the submitter.
    (iii) The notice given to the submitter by mail, return receipt 
requested, shall be given as soon as practicable after receipt of the 
request for access, and shall describe the request and provide the 
submitter seven working days from the date of notice, to submit written 
objections to disclosure of the information. Such statement shall 
specify all grounds for withholding any of the information and shall 
demonstrate why the information which is considered to be commercial or 
financial information, and that the information is a trade secret, is 
privileged or confidential, or that its disclosure is likely to cause 
substantial competitive harm to the submitter. If the submitter fails 
to respond to the notice within the time specified, the submitter will 
be considered to have no objection to the release of the information. 
Information a submitter provides under

[[Page 74422]]

this paragraph may itself be subject to disclosure under the FOIA.
    (3) Exceptions to notice to submitter. Notice to the submitter need 
not be given if:
    (i) The Secretary of the Board determines that the request for 
access should be denied;
    (ii) The requested information lawfully has been made available to 
the public;
    (iii) Disclosure of the information is required by law (other than 
5 U.S.C. 552); or
    (iv) The submitter's claim of confidentiality under 5 U.S.C. 
552(b)(4) appears obviously frivolous or has already been denied by the 
Secretary of the Board, except that in this last instance the Secretary 
of the Board shall give the submitter written notice of the 
determination to disclose the information at least seven working days 
prior to disclosure.
    (4) Notice to requester. At the same time the Secretary of the 
Board notifies the submitter, the Secretary of the Board also shall 
notify the requester that the request is subject to the provisions of 
this section.
    (5) Determination by Secretary of the Board. The Secretary of the 
Board's determination whether or not to disclose any information for 
which confidential treatment has been requested pursuant to this 
section shall be communicated to the submitter and the requester 
immediately. If the Secretary of the Board determines to disclose the 
business information over the objection of a submitter, the Secretary 
of the Board shall give the submitter written notice via mail, return 
receipt requested, or similar means, which shall include:
    (i) A statement of reason(s) why the submitter's objections to 
disclosure were not sustained;
    (ii) A description of the business information to be disclosed; and
    (iii) A statement that the component intends to disclose the 
information seven working days from the date the submitter receives the 
notice.
    (6) Notice of lawsuit. The Secretary of the Board shall promptly 
notify any submitter of information covered by this section of the 
filing of any suit against the Board to compel disclosure of such 
information, and shall promptly notify a requester of any suit filed 
against the Board to enjoin the disclosure of requested documents.

0
5. Part 2201 is added to read as follows:

PART 2201--LOCAL TELEVISION LOAN GUARANTEE PROGRAM--PROGRAM 
REGULATIONS

Subpart A--General
Sec.
2201.1 Definitions.
2201.2-2201.8 [Reserved]
2201.9 Limitation on the applicability of the definition of Local 
Television Broadcast signals.
Subpart B--Loan Guarantees
2201.10 Loan amount and Guarantee percentage.
2201.11 Application requirements.
2201.12 Applicant.
2201.13 Lender.
2201.14 Eligible Loan purposes.
2201.15 Ineligible Loan purposes.
2201.16 Environmental requirements.
2201.17 Submission of applications.
2201.18 Application selection.
2201.19 Loan terms.
2201.20 Collateral.
2201.21 Fees.
2201.22 Issuance of Guarantees.
2201.23 Funding for the Program.
2201.24 Insurance.
2201.25 Performance Agreement.
2201.26 Lender standard of care.
2201.27 Assignment or transfer of Loans.
2201.28 Participation in guaranteed Loans.
2201.29 Supplemental guarantees.
2201.30 Adjustments.
2201.31 Indemnification.
2201.32 Termination of obligations.
2201.33 Defaults.
2201.34 OMB Control Number.

    Authority: 47 U.S.C. 1101 et seq.; Pub. L. 106-553; Pub. L. 107-
171.

Subpart A--General


Sec.  2201.1  Definitions.

    Act means Title X of Public Law 106-553, entitled the Launching Our 
Communities' Access to Local Television (LOCAL TV) Act of 2000, as 
amended.
    Administrator means the Administrator of the Rural Utilities 
Service, U.S. Department of Agriculture, acting pursuant to the Act and 
on behalf of the Board.
    Affiliate means any person or entity that controls, or is 
controlled by, or is under common control with, another person or 
entity; and may include any individual who is a director or senior 
management officer of an Affiliate, a shareholder controlling more than 
25 percent of the voting securities of an Affiliate, or more than 25 
percent of the ownership interest in an Affiliate not organized in 
stock form.
    Agent means that Lender authorized to take such actions, exercise 
such powers, and perform such duties on behalf and in representation of 
all Lenders party to a Guarantee of a single Loan, as is required by, 
or necessarily incidental to, the terms and conditions of the 
Guarantee.
    Applicant means any party that is seeking financing under the Act 
in order to provide access to Local Television Broadcast Signals for 
households in Nonserved Areas and Underserved Areas.
    Asset means anything owned by the Applicant that has commercial or 
exchange value including, but not limited to, cash flows and rights 
thereto.
    Banking Institution means a bank or bank holding company.
    Board means the LOCAL Television Loan Guarantee Board authorized by 
the Act to approve Guarantees to facilitate access, on a 
technologically neutral basis, to Local Television Broadcast Signals 
for households located in Nonserved Areas and Underserved Areas.
    Borrower means the entity liable for the payment of principal and 
interest on any Loan guaranteed under the Act, where such entity shall 
be a corporation, partnership, joint venture trustee or government 
entity, agency or instrumentality. An individual cannot be a Borrower.
    Collateral means all Assets economically pledged by the Applicant, 
any Affiliate of the Applicant, or both that is required under the 
provisions of the Act or the Loan Documents to secure the repayment of 
the indebtedness of the Borrower under the Loan Documents.
    Default means a failure by a Borrower, other than a Payment 
Default, on its obligations under the Loan Documents which has not been 
cured by the Borrower or duly waived by the Lender within any 
applicable cure period.
    Designated Market Area (DMA) means an area designated as such by 
Nielsen Media Research and published in the most recent Nielsen Station 
Index Directory and Nielsen Station Index United States Television 
Household Estimates.
    Generally Accepted Accounting Principles (GAAP) means a common set 
of accounting standards and procedures that are either promulgated by 
an authoritative accounting rulemaking body or accepted as appropriate 
due to wide-spread application in the United States.
    Guarantee means the written agreement, including all terms and 
conditions and all exhibits thereto, guaranteeing repayment of a 
specified percentage of the principal of a Loan pursuant to the Act.
    Guaranteed Portion means the portion of the principal of a loan 
that is subject to the Guarantee.

[[Page 74423]]

    High-Speed Internet means a data connection to the Internet 
providing an information rate exceeding 200 kilobits per second (kbps) 
in the consumer's connection to the network in at least one direction, 
either from the provider to the consumer (downstream) or from the 
consumer to the provider (upstream).
    Lender means an entity that has committed to make a Loan to an 
Applicant, where such entity shall be:
    (1) An entity currently engaged in commercial lending in the normal 
course of its business; or
    (2) A nonprofit corporation, including the National Rural Utilities 
Cooperative Finance Corporation, engaged primarily in commercial 
lending, but does not include any governmental entity or any Affiliate 
thereof, the Federal Agricultural Mortgage Corporation, any institution 
supervised by the Office of Federal Housing Enterprise Oversight, the 
Federal Housing Finance Board, or any Affiliate of such entities.
    Loan means a Loan guaranteed pursuant to the Act and includes the 
funds made available to the Borrower by the Lender.
    Loan Agreement means the contract between the Lender and the 
Borrower, approved by the Board, setting forth the terms applicable to 
the Loan.
    Loan Documents means the Loan Agreement, Guarantee and all other 
instruments, and all documentation between or among the Lender, the 
Borrower, and the Board or Administrator, evidencing the making, 
disbursing, securing, collecting, or otherwise administering of the 
Loan.
    Local Television Broadcast means the signals of all Television 
Broadcast Stations located in a DMA. However, when more than one 
commercial Television Broadcast Station within the same DMA is 
affiliated with a particular Television Network, the signal of any one 
of these commercial Television Broadcast Stations will qualify as the 
Local Television Broadcast Signal of the network at that location, 
unless such stations are licensed to communities in different States, 
in which case both stations must be counted. Even if they are not 
affiliated with the same Television Network, when two or more 
commercial Television Broadcast Stations simultaneously broadcast the 
identical programming for more than 50 percent of the broadcast week, 
the signal of any one of these Television Broadcast Stations will 
qualify as the Local Television Broadcast Signal. When two or more 
noncommercial television stations simultaneously broadcast the same 
programming for more than 50 percent of prime time as defined in 47 CFR 
76.5(n), and more than 50 percent outside of prime time over a 3-month 
period, the signal of any one of these Television Broadcast Stations 
will qualify as the Local Television Broadcast Signal. In areas not 
included in a DMA, but under the jurisdiction of the Federal 
Communications Commission (FCC), an appropriate set of Local Television 
Broadcast Signals will be determined on a case-by-case basis, subject 
to the approval of the Board.
    Low Power Television Station means a station authorized by the FCC 
under subpart G of part 74 of title 47, Code of Federal Regulations, 
that may retransmit the programs and signals of a Television Broadcast 
Station and that may originate programming in any amount greater than 
30 seconds per hour and/or operates a subscription service.
    Net equity means the value of the total Assets of an entity, less 
the total liabilities of that entity, as recorded under Generally 
Accepted Accounting Principles for the fiscal quarter ended immediately 
prior to the date on which the subject Loan is approved.
    Net Worth Ratio means the book value of equity over total Assets.
    Nonserved Area means any area that is outside the grade B contour 
(as determined using standards employed by the Federal Communications 
Commission (FCC)) of the Local Television Broadcast Signals serving a 
particular Designated Market Area and does not have access to such 
signals by any commercial, for profit, multichannel video provider.
    Offer of Guarantee means the Board's decision to approve an 
application for, and extend a Guarantee under, the LOCAL TV Act.
    Payment Default means any failure of a Borrower to pay any amount 
of principal or interest on the Loan when and as due under the Loan 
Agreement (including, without limitation, following any acceleration 
thereunder) which has not been cured within any applicable cure period.
    Payment Demand means a request, by the Lender or Agent, following a 
Payment Default, in writing to the Board, for payment under the 
Guarantee in respect of the defaulted principal.
    Performance Agreement means the written agreement between the 
Administrator and the Borrower (and Lender, if applicable), pursuant to 
which the Borrower provides stipulated performance schedules with 
respect to Local Television Broadcast Signals provided through the 
Project.
    Program means the LOCAL Television Loan Guarantee Program (LOCAL TV 
Program) established under the Act.
    Project means a proposal for the acquisition, improvement, 
enhancement, construction, deployment, launch, or rehabilitation of the 
means to deliver Local Television Broadcast Signals to a Nonserved Area 
or Underserved Area.
    Regulatory Capital Ratio means tier 1 and total capital ratios as 
shown on a Banking Institution's balance sheet.
    Security means all Collateral required by the provisions of the Act 
or the Loan Documents to secure repayment of any indebtedness of the 
Borrower under the Loan Documents.
    Separate Tier of Local Television Broadcast Signals means a 
category or package of services provided by the applicant, to include 
the Local Television Broadcast Signals and all over-the-air television 
broadcast signals carried pursuant to the must-carry requirement of the 
Communications Act of 1934, as amended, offered as a distinct and 
separate service choice to the applicant's subscribers at a specified 
lower rate when compared to other program service choices.
    Television Broadcast Station means an over-the-air commercial or 
noncommercial Television Broadcast Station licensed by the FCC under 
subpart E of part 73 of title 47, Code of Federal Regulations, except 
that such term does not include a Low Power Television Station or 
Television Broadcast Translator Station.
    Television Broadcast Translator Station means a station in the 
broadcast service operated for the purpose of retransmitting the 
programs and signals of a Television Broadcast Station, without 
significantly altering any characteristic of the original signal other 
than its frequency and amplitude, for the purpose of providing 
television reception to the general public.
    Television Network means an entity which offers an interconnected 
program service on a regular basis for 15 or more hours per week to at 
least 25 affiliated broadcast stations in 10 or more States.
    Term Sheet means an executed agreement between the Applicant and 
the Lender or Agent that sets forth the key business terms and 
conditions of the proposed Loan. Execution of this agreement represents 
evidence of the commitment between the Applicant and Lender or Agent.
    Underserved Area means any area that is outside the grade A contour 
(as determined using standards employed by the Federal Communications 
Commission) of the Local Television Broadcast Signals serving a 
particular Designated Market Area and has access to such signals from 
not more than one

[[Page 74424]]

commercial, for profit, multichannel video provider.
    Unguaranteed Portion means the portion of the principal of a Loan 
that is not covered by the Guarantee.


Sec. Sec.  2201.2--2201.8  [Reserved]


Sec.  2201.9  Limitation on the applicability of the definition of 
Local Television Broadcast Signals.

    Notwithstanding the definition of Local Television Broadcast 
Signals provided in Sec.  2201.1 of this part, if an area is being 
served by either a satellite carrier which rebroadcasts signals of 
Television Broadcast Stations located in the DMA or a cable television 
system, and that satellite carrier or cable television system is 
currently in compliance with the rules administered by the Federal 
Communications Commission (FCC) as described in part 76 of title 47, 
Code of Federal Regulations, the group of signals of Television 
Broadcast Stations located in the DMA being retransmitted by such 
satellite carrier or cable television system will be considered to meet 
the definition of Local Television Broadcast Signals for the purposes 
of the regulation.

Subpart B--Loan Guarantees


Sec.  2201.10  Loan amount and Guarantee percentage.

    (a) Aggregate Value of Loans. The aggregate value of all Loans for 
which Guarantees are issued under the Program, including the 
Unguaranteed Portions of such Loans, may not exceed $1,250,000,000.
    (b) Guarantee Percentage. (1) A Guarantee approved by the Board may 
not exceed an amount equal to 80 percent of the principal amount of a 
Loan made to finance the acquisition, improvement, enhancement, 
construction, deployment, launch, or rehabilitation of the means by 
which Local Television Broadcast Signals are delivered to a Nonserved 
Area or Underserved Area;
    (2) If only a portion of a Loan is meant to achieve the purposes 
described in paragraph (b)(1) of this section, the Board shall 
determine that portion of the Loan meant to achieve such purpose and 
may approve a Guarantee in an amount not exceeding 80 percent of that 
portion of the Loan.
    (3) The portion of the Loan meant to achieve the purposes described 
in paragraph (b)(1) of this section will not be lowered simply because 
the means by which Local Television Broadcast Signals are delivered to 
a Nonserved Area or Underserved Area also enable either the provision 
of signals other than Local Television Broadcast Signals or the 
provision of signals to areas other than Nonserved or Underserved 
Areas. However, any amounts of a Loan which the Board determines will 
be used for separable costs not essential to funding the means by which 
Local Television Broadcast Signals are delivered to a Nonserved Area or 
Underserved Area, will be excluded from the portion of the Loan 
eligible for a Guarantee.
    (c) Minimum Loan Amount. The Board will not approve a Guarantee for 
a Loan in an amount less than $1,000,000 (inclusive of both the 
Guaranteed and Unguaranteed Portions of the Loan).


Sec.  2201.11  Application requirements.

    A completed application consists of the following information:
    (a) An executive summary of the Project. The Applicant must provide 
the Board with a general Project overview that addresses each of the 
following six categories:
    (1) A general overview of the system to be developed and 
description of the Project including the types of equipment, 
technologies, and facilities to be used;
    (2) An explanation of how the Applicant will provide Local 
Television Broadcast Signals to Nonserved Areas and Underserved Areas;
    (3) A short description of the Applicant including a written 
narrative describing its demonstrated capability and experience in 
providing access to Local Television Broadcast Signals for households;
    (4) An explanation of the total Project cost including a breakdown 
of the Loan required and the source of funding for the remainder of the 
Project, if a portion of the Project is to be paid with non-Loan funds;
    (5) The name of the Lender or Agent (including a listing of other 
participating Lenders, if applicable) and a description of the 
financing structure of the proposed Loan; and
    (6) A general description of the geographic area to be served.
    (b) Background information. General information concerning the 
Applicant, its Affiliates, and its Lender or Agent, including a 
description of any financial and contractual arrangements among the 
parties. Specific information required of all Applicants is as follows:
    (1) Evidence of legal authority and existence of the applicant. The 
Applicant must provide evidence of its legal existence and authority to 
execute the Loan Documents under the proposed Loan and perform the 
activities proposed under the Project. Such evidence must include 
Articles of Incorporation and bylaws for incorporated Applicants; other 
types of Applicants should submit appropriate documentation for their 
forms of organization. If the Applicant is a special purpose entity 
(SPE) formed for the purpose of the Project, then the Applicant must 
provide a copy of the Deed of Partnership or Articles of Organization 
for the SPE.
    (2) Affiliates descriptions. A listing of all Affiliates of the 
Applicant including a description of the nature of the Applicant's 
relationship to each Affiliate. Any existing or proposed contractual 
arrangements with each Affiliate should be described.
    (3) Legal name. The legal name and form of organization of the 
proposed Lender or Agent.
    (4) Cover Form. A signed copy of Standard Form 424.
    (5) Management Credentials. A description of the experience and 
capabilities of the Applicant's management to carry out the Project.
    (c) A business plan. A plan, satisfactory to the Board, presenting 
in detail the fundamentals of the business and providing sufficient 
financial data to indicate that the business will be economically 
sustainable. The business plan should include, at a minimum:
    (1) Risk Assessments. An assessment of the risks related to 
construction, performance, demand, and financing structure, including a 
narrative statement detailing planned risks mitigation strategies;
    (2) Plans. A comprehensive operations and maintenance plan, as well 
as a marketing strategy;
    (3) Economic and Financial Analysis. A review of economic and 
financial factors affecting the business in general and the Project in 
particular. Applicants should refer to economic and financial 
conditions in the past three years, and also discuss expectations of 
such conditions in the future, including:
    (i) The adequacy and stability of the business' customer base. 
Applicants should provide information on the number of subscribers, 
subscriber churn, subscriber acquisition cost or cost per gross added, 
subscriber penetration, geographic concentration of customers, nature 
of the terms of customer contracts, customer technical support, 
customer satisfaction and retention;
    (ii) The demand for services;
    (iii) The sensitivity of the business to economic cycles;
    (iv) Future capital needs;
    (v) The adequacy, competitiveness and affordability of service 
fees;

[[Page 74425]]

    (vi) An overview of the prevailing economic and demographic trends 
in the target service area; and
    (vii) Information on programming content and costs.
    (4) Project Market Analysis. A breakdown of the key elements of the 
Project, including:
    (i) All proposed services to be offered, including High-speed 
Internet Service, and whether a Separate Tier of Local Television 
Broadcast Signals will be provided;
    (ii) The total number of households, by DMA, and by Nonserved and 
Underserved Area, which will have access to Local Television Broadcast 
Signals under the Project;
    (iii) The total number of households, by DMA, and by Nonserved and 
Underserved Area, which will have access under the Project to any other 
services as described pursuant to paragraph (c)(4)(i) of this section, 
including an explanation if this number is greater than the total 
identified in paragraph (c)(4)(ii);
    (iv) Estimates of the number of households identified in paragraphs 
(c)(4)(ii) and (c)(4)(iii) which will subscribe to each of the services 
identified in paragraph (c)(4)(i) of this section by DMA, including a 
breakdown of Nonserved and Underserved households;
    (v) A breakdown of the Applicant's proposed pricing coupled with an 
evaluation of any competitor's services offerings and pricings; and
    (vi) A service deployment plan and a deployment performance 
schedule, by DMA, for the services to access the Local Television 
Broadcast Signals.
    (d) Financial forecast and information. The Applicant must 
demonstrate its financial ability to complete and maintain the Project 
and repay its obligations. The financial data must include the 
following:
    (1) Audited financial statements. Income statements, balance 
sheets, and cash flow statements for at least the last three years or 
from the date of inception if less than three years. If the Applicant 
is an SPE, then the Applicant must provide at least the last three 
years of audited financial statements of the shareholders or partners 
of the SPE. If an Affiliate has been designated by the Applicant as a 
source of credit support, then at least three years audited financial 
statements for the Affiliate must be submitted as well.
    (2) Plan of finance. An identification and explanation of all 
sources and uses of funds throughout the proposed loan period, 
including, but not limited to, any payments to Affiliates or 
shareholders of the Applicant, estimated Project costs, and proposed 
terms.
    (3) A Pro-forma financial forecast covering the life of the 
proposed loan, including balance sheets, income statements and cash 
flow statements, with an explanation of assumptions. These Projections 
must be prepared in accordance with Generally Accepted Accounting 
Principles and should discuss such issues as the effects of inflation, 
competition, ongoing repair and replacement needs, technological 
obsolescence, working capital requirements, and other factors that may 
affect the Applicant's ability to meet its debt service obligations.
    (4) Project budget. A detailed cost breakdown of all facilities to 
be constructed as part of the Project. This breakdown should be on a 
per unit basis. It should also clearly show what will be financed with 
guaranteed loan funds and what will be financed with other funds, 
consistent with the plan of finance in paragraph (d)(2) of this 
section.
    (5) Commitments. The Applicant must disclose all reasonably 
foreseeable financial obligations, contingent liabilities, or other 
commitments that could affect its financial health over the proposed 
financing term. At the Board's request, the Applicant must take all 
reasonable measures to insulate the Project and the Loan from external 
factors that could affect timely payment of principal and interest. The 
Board may ask for additional detailed information on commitments where 
it is deemed necessary.
    (6) Credit enhancement. In cases where an Affiliate provides credit 
enhancement, the Applicant must provide documentation demonstrating the 
Affiliate is sufficiently capitalized and evidencing the strength, 
extent, limitations, and priority of the credit enhancement relative to 
the other obligations of the Affiliate.
    (e) A certified system plan, technical analysis, and design. 
Prepared by qualified personnel on the Applicant's staff or by a 
licensed consulting engineer, consisting of the following:
    (1) A detailed description of the proposed service area including 
maps of the service area;
    (2) A TV Signals Coverage Diagram and detailed description of all 
existing and proposed facilities. The diagram must include proposed 
route miles of cable plant, if applicable, the estimated area served, 
types of facilities to be deployed (terrestrial microwave or satellite 
microwave, wireless, translator, fiber optic cable or coaxial cable, 
electronic equipment, etc.), the capacity of the facilities (number of 
fibers, size of the cables, and intended number of channels, 
frequencies used, bandwidth capacity, etc.), and the serving area of 
the proposed facilities;
    (3) The intended capabilities of the Project's facilities, 
including bandwidth, proposed television signal topology, standards, 
and television signal transmission protocols. In addition, the 
Applicant must explain the manner in which the transmission facilities 
will deliver the proposed Local Television Broadcast Signals, including 
any equipment necessary to receive the signals which will be located at 
the subscribers' premises, and/or, near or on the subscribers' 
television sets;
    (4) A listing of all regulatory approvals required to operate 
facilities, including licenses, permits, and franchises and the status 
of any required approvals not obtained at the time of the application. 
For any approvals not yet received, the Applicant should provide 
details on the nature of the needed approval, the justification for 
expecting such an approval, the track-record of the Applicant in 
obtaining such approvals, and the contingency plan in the event the 
approval is delayed;
    (5) A description of the television signal sources (including, but 
not limited to local, regional and national television signal 
broadcasters, other television signal providers, content providers, 
cable television operators and providers, enhanced service providers, 
providers of satellite services, and the anticipated role of such 
providers in the proposed Project);
    (6) The results of discussions, if any, with local television 
broadcasters serving the Project area;
    (7) An identification of all Local Television Broadcast Signals 
that will be carried by the Project;
    (8) An identification of the digital signal quality and capacity in 
megabits per second (Mb/s) that will be required to digitally broadcast 
all Local Television Broadcast Signals to be provided by the Project;
    (9) An identification of the net usable bandwidth, in Mb/s, that 
are surplus to the provision of the Local Television Broadcast Signals 
to be provided by the Project and that will be used to provide High 
Speed Internet Service; and
    (10) A description of the extent to which the Project will enable 
the delivery of Local Television Broadcast Signals by a means 
reasonably compatible with existing systems or devices predominantly in 
use for the reception of television signals.
    (f) Lender information--(1) Lender. The Application shall include 
the information described in Sec.  2201.13(b),

[[Page 74426]]

(c) and (d) of this part concerning the Lender or Lenders.
    (2) Term Sheet. The Application shall include a signed Term Sheet.
    (3) Lender's Analysis. The Applicant shall submit the Lender's 
detailed analysis of the creditworthiness of the transaction at the 
time of application and any supporting due diligence documentation, 
including a complete underwriting analysis of the Project (assessing 
Applicant creditworthiness and Project feasibility) exercising the 
Lender's standard of care as set forth at Sec.  2201.26(a).
    (4) Certification. The Lender must certify that the information 
provided pursuant to paragraphs (f)(1), (2) and (3) of this section is 
true and accurate.
    (5) Additional Information. The Board will request any other 
information the Board deems material to its assessment of the Lender.
    (g) Other Financial Information--(1) Collateral. The Applicant 
shall provide a detailed description and valuation of all Collateral to 
be used to secure the Loan. This valuation shall be supported by an 
independent, third party appraisal for existing Assets, and/or adequate 
cost substantiation for Assets to be constructed for purposes of the 
Project, and in all cases shall be acceptable to the Board. Such a 
valuation should address, at a minimum, pledged Assets of the 
Applicant, any designated Affiliate of the Applicant, or both as 
identified in the Loan Documents, including primary Assets to be used 
in the delivery of the service for which the Loan sought would be 
guaranteed. The Applicant also must provide a depreciation schedule (as 
classified under and in accordance with GAAP) for the major Assets in 
order for the Board to determine the economically useful life of the 
primary Assets to be used in delivery of the signals concerned. 
Appraisals of real property must be prepared by State licensed or 
certified appraisers, and be consistent with the ``Uniform Standards of 
Professional Appraisal Practice,'' promulgated by the Appraisal 
Standards Board of the Appraisal Foundation.
    (2) Credit Opinion. With respect to applications for a Loan of $15 
million or more, the Applicant is required to obtain and submit to the 
Board a preliminary credit rating opinion letter on the proposed 
transaction at the time of application, prepared by a nationally 
recognized statistical rating organization (rating agency) approved by 
the Board. This preliminary credit rating opinion shall be based on the 
financing structure proposed by the Applicant for the Project absent 
the Federal Guarantee, without regard to recovery expectations. The 
Board will utilize this preliminary credit assessment to assist in 
evaluating the creditworthiness of the proposed transaction and 
determining whether it provides a reasonable assurance of repayment. In 
addition, applicants for loans less than $15 million that have a credit 
rating shall provide that credit rating to the Board. The Board will 
utilize this preliminary credit assessment (for loans over $15 million) 
or an existing credit rating (for loans less than $15 million) to 
assist in evaluating the creditworthiness of the proposed transaction 
and determining whether it provides a reasonable assurance of 
repayment. The Board may approve a Guarantee over $15 million only if 
it receives a final credit rating opinion letter from the rating agency 
on the Loan that is in form and substance acceptable to the Board.
    (3) Evidence of Lack of Credit Elsewhere. The Applicant shall 
provide the information required pursuant to Sec.  2201.12(b)(2)(v) of 
this part.
    (h) Compliance with other Federal statutes, regulations and 
Executive Orders. The Applicant must certify compliance with other 
applicable Federal statutes, regulations, and Executive Orders.
    (i) Environmental impact. The Applicant must provide information 
describing the Project's impact on the environment as required pursuant 
to Sec.  2201.16 of this part. The application may be submitted prior 
to final determination of a Project's environmental impacts; however, a 
Guarantee shall not be made and no Loan funds will be advanced prior to 
such determination and demonstrated compliance with all environmental 
statutes, regulations and executive orders.
    (j) Federal debt certification. The Applicant must provide a 
certification that it is not delinquent on any obligation owed to the 
government (7 CFR parts 3016 and 3019). No Guarantee will be made if 
either the Applicant or Lender has an outstanding, delinquent Federal 
debt until:
    (1) The delinquent account has been paid in full;
    (2) A negotiated repayment schedule is established and at least one 
payment has been received; or
    (3) Other arrangements, satisfactory to the agency responsible for 
collecting the debt, are made.
    (k) Supplemental information. The Applicant should provide any 
additional information it considers relevant to the Project and likely 
to be helpful in determining the extent to which the Project would 
further the purposes of the Act.
    (l) Additional information required by the Board. The Applicant 
must provide any additional information the Board determines is 
necessary to adequately evaluate the application.
    (m) Application Fee. For an application to be considered complete, 
the Applicant must submit a check payable to the United States Treasury 
in the amount of the application fee as set forth in Sec.  2201.21(a) 
of this part.
    (n) Incomplete application. An incomplete application, including 
any fee submitted therewith, will be returned to the Applicant without 
action.


Sec.  2201.12  Applicant.

    (a) Eligibility. (1) The Board will make a determination of 
eligibility of an Applicant to be a Borrower under the Program based 
upon the Applicant's ability to directly provide, as a result of 
financing received under the Program, Local Television Broadcast 
Signals to households in Nonserved Areas and/or Underserved Areas and 
the information provided pursuant to paragraph (b) of this section.
    (2) A determination that an Applicant is eligible does not assure 
that the Board will approve a Guarantee sought, or otherwise preclude 
the Board from declining to approve a Guarantee.
    (b) Documentation for Eligibility Determination. (1) An Applicant 
must provide a Term Sheet evidencing a commitment of that Lender or 
Agent, and the Lenders it represents, to make a Loan to the Applicant 
upon an Offer of Guarantee by the Board, subject to the requirements of 
the Act and the regulations set forth in this part.
    (2) An Applicant must provide documentation demonstrating that:
    (i) The Assets, facilities, or equipment covered by the Loan will 
be utilized economically and efficiently;
    (ii) The terms, conditions, security, and schedule and amount of 
repayments of principal and the payment of interest with respect to the 
Loan protect the financial interests of the United States and are 
reasonable;
    (iii) Appropriate and adequate Collateral secures the Loan sought 
to be guaranteed;
    (iv) All necessary and required regulatory and other approvals, 
spectrum licenses, and delivery permissions for the Loan and the 
Project under the Loan have been applied for or obtained (a Guarantee 
shall not be made and no Loan funds will be advanced until all such 
approvals, licenses and permissions have been obtained);
    (v) The Loan would not be available on reasonable terms and 
conditions without a Guarantee under this

[[Page 74427]]

Program. To satisfy this requirement, an Applicant must provide, with 
its application, documentation from at least one lending institution 
other than the Lender to which the Applicant has applied for financial 
assistance dated within six months of submission of the application, 
indicating that the Applicant was unable to obtain substantially the 
same Loan it is applying for on reasonable terms and conditions; and
    (vi) Repayment of the Loan can reasonably be expected.


Sec.  2201.13  Lender.

    (a) Eligibility. (1) The Board will make a determination of 
eligibility of a Lender to make a Loan to be guaranteed under the 
Program based upon the criteria set forth in paragraphs (b) and (c) of 
this section.
    (2) A determination that a Lender is eligible does not assure that 
the Board will approve a Guarantee sought, or otherwise preclude the 
Board from declining to approve a Guarantee.
    (b) Qualifications. In addition to evaluating an application 
pursuant to Sec.  2201.18, in making a determination to approve a 
Guarantee to a Lender, the Board will assess:
    (1) The Lender's Regulatory Capital Ratios, in the case of Banking 
Institutions, or Net Worth Ratios, in the case of other institutions;
    (2) Whether the Lender possesses the ability to administer the 
Loan, including its experience with loans to telecommunications 
companies;
    (3) The scope, volume and duration of the Lender's activity in 
administering loans, including federally guaranteed loans;
    (4) The performance of the Lender's loan portfolio, including its 
current delinquency rate;
    (5) The Lender's charge-off rate, expressed as a percentage of 
outstanding loans for its current fiscal year;
    (6) If the Lender intends to sell participation interests in the 
Loan, the plan of syndication; and
    (7) Any other matter the Board deems material to its assessment of 
the Lender.
    (c) A Loan will not be guaranteed unless:
    (1) If the Lender is not a nonprofit corporation and is subject to 
loan-to-one-borrower and Affiliate transaction restrictions under 
applicable law, the Loan is made in accordance with such restrictions;
    (2) If the Lender is not a nonprofit corporation and is not subject 
to the restrictions described in paragraph (c)(1) of this section, the 
Loan is made to a Borrower that is not an Affiliate of the Lender and 
the amount of the Loan, and all outstanding loans by the Lender to the 
Borrower and any of its Affiliates, does not exceed 10 percent of the 
Net Equity of the Lender; and
    (3) If the Lender is a nonprofit corporation, the Board determines 
that:
    (i) Such nonprofit corporation has one or more issues of 
outstanding long-term debt that is rated within the highest 3 rating 
categories of a nationally recognized statistical rating organization, 
as evidenced by written confirmation from the nationally recognized 
statistical rating organization, subject to updating upon request of 
the Board; and
    (ii) The making of the Loan would not cause a decline in the rating 
of such Lender's long-term debt below the highest 3 rating categories 
of a nationally recognized statistical rating organization, as 
evidenced by written confirmation from the nationally recognized 
statistical rating organization, subject to updating upon request of 
the Board.
    (d) Agent. (1) An application for a Guarantee of a single Loan that 
includes participation of more than one Lender must identify one of the 
Lenders participating in such Loan to act as Agent for all Lenders. 
This Agent is responsible for administering the Loan and shall have 
those duties and responsibilities required of an Agent, as set forth in 
the Guarantee.
    (2) If more than one Lender is seeking a Guarantee of a single 
Loan, each one of the Lenders on the application must meet the 
qualifications set forth in paragraphs (b) and (c) of this section. 
However, only the Agent must meet the qualifications set forth in 
paragraph (b)(2) and (3) of this section.
    (3) Each Lender, irrespective of any indemnities or other 
agreements between the Lenders and the Agent, shall be bound by all 
actions, and/or failures to act, of the Agent. The Board and the 
Administrator shall be entitled to rely upon such actions and/or 
failures to act of the Agent as binding all Lenders.


Sec.  2201.14  Eligible Loan purposes.

    To be guaranteed under the Program, a Loan must be made for the 
purpose of financing the acquisition, improvement, enhancement, 
construction, deployment, launch, or rehabilitation of the means by 
which Local Television Broadcast Signals will be delivered to a 
Nonserved Area or Underserved Area.


Sec.  2201.15  Ineligible Loan purposes.

    (a) The proceeds of the Loan shall not be used for operating, 
advertising, or promotion expenses, or for the acquisition of licenses 
for the use of spectrum in any competitive bidding.
    (b) The Applicant shall not transfer proceeds of the Loan to any 
Affiliate(s).
    (c) The Board will not fund a Project that is designed primarily to 
serve one or more of the top 40 Designated Market Areas.
    (d) The Board will not fund a Project that would alter or remove 
National Weather Service warnings from Local Television Broadcast 
Signals.
    (e) No Guarantee may be granted or used to provide funds to a 
Project that extends, upgrades, or enhances the services provided over 
any cable system to an area that, as of the enactment of the Act, is 
covered by a cable franchise agreement that expressly obligates a cable 
operator to serve such area.


Sec.  2201.16  Environmental requirements.

    (a) General. (1) Environmental assessments of the Board's actions 
will be conducted in accordance with applicable statutes, regulations, 
and other applicable authorities. Therefore, each application for a 
Guarantee under the Program must be accompanied by information 
necessary for the Board to meet the requirements of applicable law.
    (2) Actions requiring compliance with NEPA. (i) The types of 
actions classified as ``major Federal actions'' subject to NEPA 
procedures are discussed in 40 CFR parts 1500 through 1508.
    (ii) With respect to this Program, these actions typically include:
    (A) Any Project, permanent or temporary, that will involve 
construction and/or installations;
    (B) Any Project, permanent or temporary, that will involve ground 
disturbing activities; and
    (C) Any Project supporting renovation, other than interior 
remodeling.
    (3) Environmental information required from the Applicant. (i) 
Environmental data or documentation concerning the use of the proceeds 
of any Loan guaranteed under this Program must be provided by the 
Applicant to the Board to assist the Board in meeting its legal 
responsibilities.
    (ii) Such information includes:
    (A) Documentation for an environmental threshold review from 
qualified data sources, such as a Federal, State or local agency with 
expertise and experience in environmental protection, or other sources, 
qualified to provide reliable environmental information;
    (B) Any previously prepared environmental reports or data relevant 
to the Loan at issue;
    (C) Any environmental review prepared by Federal, State, or local

[[Page 74428]]

agencies relevant to the Loan at issue; and
    (D) Any other information that can be used by the Board to ensure 
compliance with environmental laws.
    (iii) All information supplied by the Applicant is subject to 
verification by the Board.
    (b) The regulations of the Council on Environmental Quality 
implementing NEPA require the Board to provide public notice of the 
availability of Project specific environmental documents such as 
environmental impact statements, environmental assessments, findings of 
no significant impact, records of decision, etc., to the affected 
public. See 40 CFR 1506.6(b). Environmental information concerning 
specific Projects can be obtained from the Board by contacting: 
Secretary, LOCAL Television Loan Guarantee Board, 1400 Independence 
Ave., SW., Room 2919-S, Stop 1575; Washington, DC 20250-1575.
    (c) National Environmental Policy Act-- (1) Purpose. The purpose of 
this paragraph (c) is to adopt procedures for compliance with the 
National Environmental Policy Act, 42 U.S.C. 4321 et seq., by the 
Board. This paragraph supplements regulations at 40 CFR Chapter V.
    (2) Definitions. For purposes of this section, the following 
definitions apply:
    Categorical exclusion means a category of actions which do not 
individually or cumulatively have a significant effect on the human 
environment and for which neither an environmental assessment nor an 
environmental impact statement is required.
    Environmental assessment means a document that briefly discusses 
the environmental consequences of a proposed action and alternatives 
prepared for the purposes set forth in 40 CFR 1508.9.
    EIS means an environmental impact statement prepared pursuant to 
section 102(2)(C) of NEPA.
    FONSI means a finding of no significant impact on the quality of 
human environment after the completion of an environmental assessment.
    NEPA means the National Environmental Policy Act, 42 U.S.C. 4321, 
et seq.
    Working capital loan means money used by an ongoing business 
concern to fund its existing operations.
    (3) Delegations to the Secretary of the Board. (i) All incoming 
correspondence from Council on Environmental Quality (CEQ) and other 
agencies concerning matters related to NEPA, including draft and final 
EIS, shall be brought to the attention of the Secretary of the Board. 
The Secretary of the Board will prepare or, at his or her discretion, 
coordinated replies to such correspondence.
    (ii) With respect to actions of the Board, the Board will:
    (A) Ensure preparation of all necessary environmental assessments 
and EISs;
    (B) Maintain a list of actions for which environmental assessments 
are being prepared;
    (C) Revise this list at regular intervals, and send the revisions 
to the Environmental Protection Agency;
    (D) Make the list available for public inspection;
    (E) Maintain a list of EISs; and
    (F) Maintain a file of draft and final EISs.
    (4) Categorical exclusions. (i) This paragraph describes various 
classes of Board actions that normally do not have a significant impact 
on the human environment and are categorically excluded. The word 
``normally'' is stressed; there may be individual cases in which 
specific factors require contrary action.
    (ii) Subject to the limitations in paragraph (c)(4)(iii) of this 
section, the actions described in this paragraph have been determined 
not to have a significant impact on the quality of the human 
environment. They are categorically excluded from the need to prepare 
an environmental assessment or an EIS under NEPA.
    (A) Guarantees of working capital loans; and
    (B) Guarantees of loans for the refinancing of outstanding 
indebtedness of the Applicant, regardless of the purpose for which the 
original indebtedness was incurred.
    (iii) Actions listed in paragraph (c)(4)(ii) of this section that 
otherwise are categorically excluded from NEPA review are not 
necessarily excluded from review if they would be located within, or in 
other cases, potentially affect:
    (A) A floodplain;
    (B) A wetland;
    (C) Important farmlands, or prime forestlands or rangelands;
    (D) A listed species or critical habitat for an endangered species;
    (E) A property that is listed on or may be eligible for listing on 
the National Register of Historic Places;
    (F) An area within an approved State Coastal Zone Management 
Program;
    (G) A coastal barrier or a portion of a barrier within the Coastal 
Barrier Resources System;
    (H) A river or portion of a river included in, or designated for, 
potential addition to the Wild and Scenic Rivers System;
    (I) A sole source aquifer recharge area;
    (J) A State water quality standard (including designated and/or 
existing beneficial uses and anti-degradation requirements); or
    (K) The release or disposal of regulated substances above the 
levels set forth in a permit or license issued by an appropriate 
regulatory authority.
    (5) Responsibilities and procedures for preparation of an 
environmental assessment. (i) The Board will request that the Lender 
and Applicant prepare an environmental assessment that provides 
information concerning all potentially significant environmental 
impacts of the Applicant's proposed Project. The Board, consulting at 
its discretion with CEQ, will review the information provided by the 
Lender and Applicant. Though no specific format for an environmental 
assessment is prescribed, it shall be a separate document, suitable for 
public review and should include the following in conformance with 40 
CFR 1508.9:
    (A) Description of the environment. The existing environmental 
conditions relevant to the Board's analysis determining the 
environmental impacts of the proposed Project should be described. The 
no action alternative also should be discussed;
    (B) Documentation. Citations to information used to describe the 
existing environment and to assess environmental impacts should be 
clearly referenced and documented. These sources should include, as 
appropriate, but not be limited to, local, tribal, regional, State, and 
Federal agencies, as well as, public and private organizations and 
institutions;
    (C) Evaluating environmental consequences of proposed actions. A 
brief discussion should be included of the need for the proposal, of 
alternatives as required by 42 U.S.C. 4332(2)(E) and their 
environmental impacts. The discussion of the environmental impacts 
should include measures to mitigate adverse impacts and any 
irreversible or irretrievable commitments of resources to the proposed 
Project.
    (ii) An environmental assessment, may:
    (A) Tier upon the information contained in a previous EIS, as 
described in 40 CFR 1502.20;
    (B) Incorporate by reference reasonably available material, as 
described in 40 CFR 1502.21; and/or
    (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.
    (iii) If, on the basis of the environmental assessment, the Board

[[Page 74429]]

determines 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 Board shall maintain a record of these decisions, making 
them available to interested parties upon request. Requests should be 
directed to LOCAL Television Loan Guarantee Board, 1400 Independence 
Ave., SW., Room 2919-S, Stop 1575; Washington, DC 20250-1575. Prior to 
a final Guarantee decision, a copy of the NEPA documentation shall be 
sent to the Board for consideration.
    (6) Responsibilities and procedures for preparation of an 
environmental impact statement. (i) If after the environmental 
assessment has been completed, the Board determines that an EIS is 
necessary, it and other related documentation will be prepared by the 
Board in accordance with section 102(2)(c) of NEPA, this section, and 
40 CFR parts 1500 through 1508. The Board may seek additional 
information from the Applicant in preparing the EIS. Once the document 
is prepared, the Board will transmit the document to the Environmental 
Protection Agency.
    (ii) EIS. (A) The following procedures, as discussed in 40 CFR 
parts 1500 through 1508, will be followed in preparing an EIS:
    (1) The format and contents of the draft and final EIS shall be as 
discussed in 40 CFR part 1502.
    (2) The requirements of 40 CFR 1506.9 for filing of documents with 
the Environmental Protection Agency shall be followed.
    (3) The Board, consulting at its discretion with CEQ, shall examine 
carefully the basis on which supportive studies have been conducted to 
assure that such studies are objective and comprehensive in scope and 
in depth.
    (4) NEPA requires that the decision making ``utilize a systematic, 
interdisciplinary approach that will ensure the integrated use of the 
natural and social sciences and the environmental design arts.'' 42 
U.S.C. 4332(A). If such disciplines are not present on the Board staff, 
appropriate use should be made of personnel of Federal, State, and 
local agencies, universities, non-profit organizations, or private 
industry.
    (B) Until the Board issues a record of decision as provided in 40 
CFR 1502.2 no action concerning the proposal shall be taken which 
would:
    (1) Have an adverse environmental impact; or
    (2) Limit the choice of reasonable alternatives.
    (3) 40 CFR 1506.10 places certain limitations on the timing of 
Board decisions on taking ``major Federal actions.'' A Guarantee shall 
not be made before the times set forth in 40 CFR 1506.10.
    (iii) A public record of decision stating what the decision was; 
identifying alternatives that were considered, including the 
environmentally preferable one(s); discussing any national 
considerations that entered into the decision; and summarizing a 
monitoring and enforcement program if applicable for mitigating the 
environmental effects of a proposal will be prepared. This record of 
decision will be prepared at the time the decision is made.


Sec.  2201.17  Submission of applications.

    (a) Applications should be submitted as follows:
    (1) Applications for Guarantees shall be submitted to the LOCAL 
Television Loan Guarantee Board, 1400 Independence Avenue, SW., Stop 
1575, Room 2919-S, Washington, DC 20250-1575. Applications should be 
marked Attention: Secretary, LOCAL Television Loan Guarantee Board.
    (2) Applications must be submitted postmarked not later than the 
application filing deadline established by the Board if the 
applications are to be considered during the period for which the 
application was submitted.
    (3) All Applicants must submit an original and two copies of a 
completed application.
    (b) Application deadline. One or more application windows will be 
announced. The duration of each application window for submission of 
applications will be approximately 120 days. Notice of an application 
window will be published in the Federal Register.


Sec.  2201.18  Application selection.

    (a) Application Priority. When evaluating applications to determine 
which Project or combinations of Projects will best facilitate access 
to Local Television Broadcast Signals, the Board shall give priority in 
the approval of Guarantees to the following categories:
    (1) First, to applications for Projects that will serve households 
in Nonserved Areas.
    (2) Second, to applications for Projects that will serve households 
in Underserved Areas.
    (3) Within each category, the Board shall balance applications for 
Projects that will serve the largest number of households with 
applications for Projects that will serve remote, isolated communities 
(including noncontiguous States) in areas that are unlikely to be 
served through market mechanisms. The Board shall consider the 
Project's estimated cost per household and shall give priority to those 
applications for Projects that provide the highest quality service at 
the lowest cost per household.
    (b) Additional Considerations. (1) The Board shall give additional 
consideration to applications for Projects that, in addition to 
providing Local Television Broadcast Signals, also provide High-speed 
Internet service.
    (2) The Board shall consider other factors, which shall include 
applications for Projects that:
    (i) Offer a separate tier of Local Television Broadcast Signals at 
a lower cost to consumers, except where prohibited by applicable 
Federal, State, or local laws or regulations; and
    (ii) Enable the delivery of Local Television Broadcast Signals 
consistent with the purpose of the Act by means reasonably compatible 
with existing systems or devices predominantly in use.
    (c) Other Considerations. All other evaluation factors and priority 
considerations being equal, the Board will give a preference in 
approving Guarantees to those applications for Projects that provide 
greater amounts and higher quality Collateral.
    (d) Protection of United States Financial Interests. The Board may 
not approve the Guarantee of a Loan unless:
    (1) The Board has been given documentation, assurances, and access 
to information, persons, and entities necessary, as determined by the 
Board, to address issues relevant to review of the Loan by the Board 
for purposes of the Act; and
    (2) The Board makes a determination in writing that:
    (i) To the best of its knowledge upon due inquiry, the Assets, 
facilities, or equipment covered by the Loan will be utilized 
economically and efficiently;
    (ii) The terms, conditions, security, and schedule and amount of 
repayments of principal and the payment of interest with respect to the 
Loan protect the financial interests of the United States and are 
reasonable;
    (iii) The value of Collateral provided by an Applicant is at least 
equal to the unpaid balance of the Loan amount; and if the value of 
Collateral provided by an Applicant is less than the Loan amount, 
additional required Collateral is provided by the Applicant or an 
Affiliate designated by the Applicant and acceptable to the Board;
    (iv) All necessary and required regulatory and other approvals, 
spectrum licenses, and delivery

[[Page 74430]]

permissions have been received for the Loan and the Project under the 
Loan;
    (v) The Loan would not be available on reasonable terms and 
conditions without a Guarantee under the Act; and
    (vi) Repayment of the Loan can be reasonably expected.
    (e) Non approvals. A Guarantee will not be approved if it is 
determined that:
    (1) The Applicant's proposal does not indicate financial 
feasibility, or the Collateral is determined to not adequately secure 
the Loan;
    (2) The Applicant's proposal indicates technical flaws, which, in 
the opinion of the Board, would prevent successful implementation, or 
operation of the Project;
    (3) Any other aspect of the Applicant's proposal fails to 
adequately address any requirements of the Act or the regulations in 
this part or contains inadequacies which would, in the opinion of the 
Board, undermine the ability of the Project to meet the general purpose 
of the Act or comply with requirements in this part; or
    (4) Proceeds for the Loan will be used for any of the ineligible 
purposes set forth in Sec.  2201.15.
    (f ) Impact on Competition. A Loan shall not be guaranteed unless 
the proposed Project, as determined by the Board in consultation with 
the National Telecommunications and Information Administration, is not 
likely to have a substantial adverse impact on competition that 
outweighs the benefits of improving access to Local Television 
Broadcast Signals in a Nonserved Area or Underserved Area and is 
commercially viable.


Sec.  2201.19  Loan terms.

    (a) All Loans guaranteed under the Program shall be due and payable 
in full no later than the earlier of 25 years from date of the closing 
of the Loan or the economically useful life of the primary Assets to be 
used in delivery of the signals concerned, as determined by the Board.
    (b) Loans guaranteed under the Program must:
    (1) Bear a rate of interest determined by the Board to protect the 
financial interests of the United States and to be reasonable. This 
determination will be based on the Board's comparison of the:
    (i) Difference, or interest rate spread, between the interest rate 
on the Loan sought to be guaranteed and the current average yield on 
outstanding marketable obligations of the United States of comparable 
maturity; and
    (ii) The interest rate spread between the rates on recently issued 
and similarly rated and structured obligations and the current yields 
on outstanding marketable obligations of the United States of 
comparable maturity.
    (2) Have terms that, in the judgment of the Board, are consistent 
in material respects with the terms of similar obligations in the 
private capital market.
    (c) So long as any principal and interest is due and payable on a 
Loan guaranteed under the Act, a Borrower shall:
    (1) Maintain Assets, equipment, facilities, and operations on a 
continuing basis;
    (2) Not make any discretionary dividend payments that impair its 
ability to repay obligations guaranteed under the Act;
    (3) Remain sufficiently capitalized; and
    (4) Submit to and cooperate fully with any audit or Collateral 
review required by the Board.


Sec.  2201.20  Collateral.

    (a) Existence of adequate Collateral. An Applicant shall provide 
the Board such documentation as is necessary, in the judgment of the 
Board, to provide satisfactory evidence that appropriate and adequate 
Collateral secures a Loan guaranteed under the Program. Prior to 
approving a Guarantee, the Board shall require that the value of the 
Collateral pledged be at least equal to the unpaid balance of the Loan 
Amount.
    (b) Form of Collateral. Collateral required by paragraph (a) of 
this section shall consist solely of Assets of the Applicant, any 
Affiliate of the Applicant, or both, as identified in the Loan 
Documents, including primary Assets to be used in the delivery of the 
service for which the Loan is guaranteed. Such Assets may include, but 
are not limited to, the following:
    (1) Tangible Assets, including current Assets (such as cash, 
accounts receivable, and inventory), reserve funds, land, buildings, 
machinery, fixtures, and equipment;
    (2) Assignments of all relevant contractual agreements, including 
contractual rights to certain cash flows, marketing arrangements, 
third-party guarantees, insurance policies, contractors' bonds, and 
other agreements or rights that may be of value;
    (3) All permits, governmental approvals, franchises and licenses, 
necessary to carry out and operate the required equipment or service; 
and
    (4) Other Assets, which, in the judgment of the Board, possess 
Collateral value suitable for securing the Loan, including a pledge of 
all or part of the Applicant's ownership interest in the Project or 
company, and any after-acquired property.
    (c) Applicant's compliance findings. An Applicant's compliance with 
paragraphs (a) and (b) of this section does not assure a finding of 
reasonable assurance of repayment, or assure the Board's Guarantee of 
the Loan.
    (d) Collateral for entire loan. The same Collateral shall secure 
the entire Loan, including both the Guaranteed Portion and the 
Unguaranteed Portion.
    (e) Review of valuation. The value of Collateral securing a Loan is 
subject to review and approval by the Board, and may be adjusted 
downward by the Board if the Board reasonably believes such adjustment 
is appropriate. The Board's evaluation of the proposed Collateral for 
the Loan will be based on several factors, including but not limited 
to:
    (1) The expected value of the pledged Collateral in the event of 
defaults with specific consideration given to the residual value of 
Project Assets to third-parties and the liquidity of such Assets;
    (2) The cash flow characteristics of the Project;
    (3) The contractual characteristics of the Project to the extent 
Project-related agreements underpin the Project's estimated cash flows;
    (4) The competitiveness of the Project's economics and the 
associated certainty of cash flows in the future; and
    (5) The creditworthiness of any designated Affiliates(s) that 
provides services to the Applicant or provides any credit support.
    (f) Ongoing Collateral Assessment. The Board shall require that the 
value of the Collateral shall be at all times at least equal to the 
unpaid balance of the Loan Amount. To ensure that the ongoing value of 
the Collateral is properly maintained, the Board may require the 
borrower to have an ongoing third-party inspection and valuation of the 
Collateral that is acceptable to the Board. If the Collateral value at 
the measurement date is less than the unpaid balance of the Loan 
Amount, the Borrower or its designated Affiliates(s) will be required 
to pledge additional acceptable Collateral to cover any deficit.
    (g) Lien on Collateral. (1) Upon the Board's approval of a 
Guarantee, the Administrator shall have liens on Collateral securing 
the Loan, which shall be superior to all other liens on such 
Collateral. The value of the Collateral (based on a determination 
satisfactory to the Board) shall be at least equal to the unpaid 
balance of the Loan amount, giving significant consideration to the 
expected value of the Collateral in the event of defaults

[[Page 74431]]

with specific consideration given to the residual value of the Project 
Assets to third-parties and the liquidity of such Assets.
    (2) Both the Administrator and the Lender or Agent shall have a 
perfected security interest in the Collateral fully sufficient to 
protect the financial interests of the United States and the Lenders. 
However, the security interest perfected by the Administrator shall 
ensure that the Administrator has first priority in such Collateral.


Sec.  2201.21  Fees.

    (a) Application Fee. The Board shall charge each Applicant for a 
Guarantee under the Program a non-refundable fee, payable to the United 
States Treasury, to cover the costs of making necessary determinations 
and findings with respect to an application for a Guarantee under the 
Program. The amount of the fee is $10,000 for Loans of $1 million up to 
$50 million, $15,000 for Loans of $50 million up to $100 million, 
$30,000 for Loans of $100 million up to $500 million, and $40,000 for 
Loans of $500 million or greater.
    (b) Guarantee Origination Fee. The Board shall charge and collect 
from a Borrower a Guarantee Origination Fee. The amount of such fee 
will be sufficient to cover the administrative costs of the Board 
associated with the Loan. Upon extending an offer of Guarantee, the 
Board and the Borrower shall enter into an agreement providing for the 
payment of the Guarantee Origination Fee; the agreement shall include 
terms relating to the schedule of payments and deposit of such payments 
into an escrow account. The Guarantee Origination Fee must be paid in 
full no later than and as a condition of the closing of any Loan. A 
Borrower will be responsible for paying the administrative costs of the 
Board regardless of whether the Loan actually closes.
    (c) Lender Fees. A Lender or Agent may assess and collect from the 
Borrower such fees and costs associated with the application and 
origination of the Loan as are reasonable and customary, taking into 
consideration the amount and complexity of the credit. The Board may 
take such fees and costs into consideration when determining whether to 
offer a Guarantee.


Sec.  2201.22  Issuance of Guarantees.

    (a) The Board's decision to approve an application and extend an 
Offer of Guarantee under the Program is conditioned upon:
    (1) The Lender or Agent and Applicant obtaining any required 
regulatory or judicial approvals;
    (2) The Lender or Agent and Applicant being legally authorized to 
enter into the Loan under the terms and conditions submitted to the 
Board in the application;
    (3) The Board's receipt of the Loan Documents and any related 
instruments, in form and substance satisfactory to the Board all 
properly executed by the Lender or Agent, Applicant, and any other 
required party other than the Board;
    (4) No material adverse change in the Applicant's ability to repay 
the Loan between the date of the Board's approval and the date the 
Guarantee is to be issued;
    (5) Entering into the Guarantee violates no Loan covenants or 
existing contractual obligations of the Borrower; and
    (6) Such other conditions as determined by the Board.
    (b) The Board may withdraw its approval of an application and 
rescind its Offer of Guarantee if the Board determines that the Lender 
or Agent or the Applicant cannot, or is unwilling to, provide adequate 
documentation and proof of compliance with paragraph (a) of this 
section within the time provided for in the Offer of Guarantee.
    (c) Only after receipt of all the documentation required by this 
section will the Administrator sign and deliver the Guarantee.


Sec.  2201.23  Funding for the Program.

    (a) Costs incurred by the Government. The Act provides funding for 
the costs incurred by the Government as a result of granting Guarantees 
under the Program. While pursuing the goals of the Act, it is the 
intent of the Board to minimize the cost of the Program to the 
Government. The Board will estimate the risk posed by the guaranteed 
Loans to the funds appropriated for the costs of the Guarantees under 
the Program and operate the Program accordingly.
    (b) Credit Risk Premium--(1) Establishment and approval. The Board 
may establish and approve the acceptance of credit risk premiums with 
respect to a Guarantee under this Act in order to offset the cost, as 
defined in section 502(5) of the Federal Credit Reform Act of 1990, of 
the Guarantee. To the extent that appropriations of budget authority 
are insufficient to cover the cost, as so determined, of a Guarantee, 
and the Board approves such a Guarantee, credit risk premiums shall be 
accepted from a non-Federal source on behalf of a Borrower.
    (2) Credit risk premium amount--(i) General. The Board shall 
determine the amount of any credit risk premium to be accepted with 
respect to a Guarantee on the basis of:
    (A) The financial and economic circumstances of the Borrower, 
including the amount of Collateral offered;
    (B) The proposed schedule of Loan disbursements;
    (C) The business plans of the Borrower;
    (D) Any financial commitment from a broadcast signal provider; and
    (E) The concurrence of the Director of the Office of Management and 
Budget as to the amount of the credit risk premium.
    (ii) Proportionality. To the extent that appropriations of budget 
authority are sufficient to cover the cost, as determined under section 
502(5) of the Federal Credit Reform Act of 1990, of Guarantees, the 
credit risk premium with respect to each Guarantee shall be reduced 
proportionately.
    (iii) Payment of premiums. Credit risk premiums under this 
paragraph shall be paid to an escrow account established in the 
Treasury, which shall accrue interest. Such interest shall be retained 
by the escrow account, subject to paragraph (b)(2)(iv) of this section.
    (iv) Deductions from escrow account. If a liquidation of the 
Collateral occurs pursuant to Sec.  2201.33(h), any shortfall between 
the proceeds of the liquidation net of costs and expenses relating to 
the liquidation, and the guarantee amount paid shall be deducted from 
funds in the escrow account and credited to the Administrator for 
payment of such shortfall. At such time as all Loans guaranteed under 
this Program have been repaid or otherwise satisfied in accordance with 
the Act and the regulations in this part, remaining funds in the escrow 
account, if any, shall be refunded, on a pro rata basis, to Borrowers 
whose Loans guaranteed under the Program were not in Payment Default or 
Default, or where any Payment Default or Default was cured in 
accordance with the terms of the Loan Documents.


Sec.  2201.24  Insurance.

    The Borrower of a Loan guaranteed under the Program shall obtain, 
at its expense, insurance sufficient to protect the financial interests 
of the United States, as determined by the Board.


Sec.  2201.25  Performance Agreement.

    (a) The Borrower of a Loan guaranteed under the Program shall enter 
into a Performance Agreement with the Administrator with respect to the 
Local Television Broadcast Signals to be provided through the Project.
    (b) The Administrator may assess against and collect from a 
Borrower a

[[Page 74432]]

penalty not to exceed 3 times the interest accrued on the Loan during 
the period of noncompliance if the Borrower fails to meet its 
stipulated Performance Agreement entered into under paragraph (a) of 
this section.


Sec.  2201.26  Lender standard of care.

    (a) The Lender or Agent shall exercise due care and diligence in 
analyzing and administering the Loan as would be exercised by a 
responsible and prudent Banking Institution when analyzing and 
administering a secured loan of such Banking Institution's own funds 
without a Guarantee. Such standards shall also apply to any and all 
underwriting analysis, approvals, determinations, permissions, 
acceptances, requirements, or opinion made, given, imposed or reached 
by Lender.
    (b) The Lender or Agent shall have such other obligations and 
duties to the Board and the Administrator as are set forth in the Act 
or Loan Documents.


Sec.  2201.27  Assignment or transfer of Loans.

    (a) Modifications. The Loan Documents may not be modified, in whole 
or in part, without the prior written approval of the Board.
    (b) Requirements. (1) Subject to the provisions of paragraphs (c) 
and (d) of this section and other provisions of this part, a Lender or 
Agent may assign or transfer the Loan including the Loan Documents to 
another Lender that meets the eligibility requirements of Sec.  2201.13 
of this part.
    (2) Any assignment or transfer of a Loan, or any pledge or other 
use of a Loan as security, including but not limited to any derivatives 
transaction, will require the prior written approval of the Board.
    (c) The provisions of paragraph (b) of this section shall not apply 
to transfers which occur by operation of law.
    (d) The Agent must hold an interest in a Loan guaranteed under the 
Program equal to at least the lesser of $25 million or fifteen percent 
of the aggregate amount of the Loan. Of this amount, the Agent must 
hold an interest in the Unguaranteed Portion of the Loan equal to at 
least the minimum amount of the Loan required to be held by the Agent 
under the preceding sentence multiplied by the percentage of the entire 
Loan that is not guaranteed. A non-Agent Lender must hold an interest 
in the Unguaranteed Portion of the Loan representing no less than five 
percent of such Lender's total interest in the Loan; provided, that a 
non-Agent Lender may transfer its interest in the Unguaranteed Portion 
after payment of the Guaranteed Portion has been made under the 
Guarantee.
    (e) The Guarantee shall have no force or effect if any part of the 
Guaranteed Portion of the Loan is transferred separate and apart from 
the Unguaranteed Portion of the Loan. At least five percent of any 
assignment or transfer interest in a Loan must be unguaranteed to 
ensure that no part of the Guaranteed Portion of the Loan is 
transferred separate and apart from the Unguaranteed Portion of the 
Loan.


Sec.  2201.28  Participation 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 as a result of the sale of 
such participations;
    (2) The Lender remains solely responsible for the administration of 
the Loan as an Agent; and
    (3) The Board's ability to assert any and all defenses available to 
it under the law and under the Loan Documents is not adversely 
affected.
    (b) The following categories of entities may purchase participation 
interests in Loans guaranteed under the Program:
    (1) Lenders that meet the eligibility requirements of Sec.  2201.13 
of this part;
    (2) Qualified institutional buyers as defined in 17 CFR 230.144A 
(a), known as Rule 144A (a) of the Securities and Exchange Commission 
and issued under the Securities Act of 1933 (15 U.S.C. 77a et seq.); or
    (3) Any other entity approved by the Board on a case-by-case basis.
    (c) An Agent may not grant participations in that portion of its 
interest in a Loan that may not be assigned or transferred under Sec.  
2201.27(d) of this part. 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.  2201.27(d) of this part.
    (d) At least five percent of any participation interest in a Loan 
must be unguaranteed.


Sec.  2201.29  Supplemental guarantees.

    The Board will allow the structure of a guaranteed Loan to include 
one or more supplemental guarantees only from a State or local 
governmental or tribal entity that cover the Unguaranteed Portion of 
the Loan, provided that:
    (a) There shall be no supplemental guarantee with respect to the 
Unguaranteed Portion required to be held by the Agent or sole Lender 
pursuant to Sec.  2201.27(d) of this part;
    (b) The Loan Documents relating to any supplemental guarantee shall 
be acceptable in form and substance to the Board; and
    (c) In approving the issuance of a Guarantee, the Board may impose 
any conditions with respect to supplemental guarantee(s) relating to 
the Loan that it considers appropriate.


Sec.  2201.30  Adjustments.

    (a) The Board must approve the adjustment of any term or condition 
of the Loan Documents under this Program, including the rate of 
interest, time of payment of principal or interest, or Collateral 
requirements. Adjustments may be approved by the Board only if:
    (1) The adjustment is consistent with the financial interests of 
the United States;
    (2) Consent has been obtained from the parties to the Loan 
Agreement;
    (3) The adjustment is consistent with the underwriting criteria 
developed for the Program;
    (4) The adjustment does not adversely affect the interest of the 
Federal Government in the Assets or Collateral of the Borrower;
    (5) The adjustment does not adversely affect the ability of the 
Borrower to repay the Loan; and
    (6) The National Telecommunications and Information Administration 
of the Department of Commerce has been consulted by the Board regarding 
the adjustment.
    (b) A Lender's decision to forego remedial action in the event of a 
breach of financial covenants required under the Loan Agreement will 
not constitute an adjustment under this section.


Sec.  2201.31  Indemnification.

    (a) The United States may be indemnified by any Affiliate of a 
Borrower designated in the Loan Documents for any losses that the 
United States incurs as a result of:
    (1) A judgment against the Borrower or any of its Affiliates;
    (2) Any breach by the Borrower or any of its Affiliates of their 
obligations under the Loan Documents;
    (3) Any violation of the provisions of the Act, or the regulations 
in this part, by the Borrower or any of its Affiliates;
    (4) Any penalties incurred by the Borrower or any of its Affiliates 
for any reason, including violation of a performance schedule 
stipulated in a Performance Agreement; and
    (5) Any other circumstances that the Board considers appropriate.
    (b) The Board may require more than one Affiliate of a Borrower to 
make the

[[Page 74433]]

indemnifications referred to in paragraph (a) of this section.
    (c) The indemnifications referred to in paragraph (a) of this 
section shall be included in the Loan Documents.


Sec.  2201.32  Termination of obligations.

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


Sec.  2201.33  Defaults.

    (a) In determining, following any Payment Default or Default, 
whether to accelerate the maturity of any amounts outstanding under the 
Loan Documents or otherwise to declare such amounts to be immediately 
due and payable, or pursue other remedial actions available under the 
Loan Documents, the Agent or Lender, as the case may be, shall act at 
all times in accordance with the standard of care and diligence 
required under Sec.  2201.26(a) of this part.
    (b) Following any Payment Default, the Agent or Lender shall 
promptly notify the Board and be entitled to make a Payment Demand. Any 
Payment Demand shall:
    (1) Identify the amount and due date of the defaulted payment of 
principal and the outstanding amounts of principal and interest under 
the Loan;
    (2) Describe briefly the circumstances leading to the Payment 
Default, including, without limitation, the nature of any precipitating 
Default, whether an acceleration has occurred, and whether a bankruptcy 
proceeding has been instituted or threatened; and
    (3) Be accompanied by a copy of each of the Loan Documents and all 
notices and other correspondence with the Borrower or other Lender 
relating to the Payment Default and any precipitating Default.
    (c) Following any Payment Demand being made, the Agent or Lender 
shall furnish to the Board promptly upon request from the Board and, in 
any event, not later than ninety (90) days from the date of such 
request, each of the following:
    (1) A written, detailed and reasonable plan for the partial or 
complete foreclosure on and liquidation of the Collateral, including, 
without limitation, detailed estimates by the Agent or Lender of the 
time and reasonable costs of collection anticipated to be necessary in 
order to carry out such plan; and
    (2) A written, detailed and reasonable work-out plan, if such a 
plan is feasible, for the continued operation of the Borrower 
calculated, in the Agent's or Lender's judgment, to assure the best 
prospect for repayment of principal and interest under the Loan without 
partial or complete foreclosure and liquidation of the Collateral, 
including, without limitation, detailed estimates of the time and 
expense required for such work-out and an assessment of the risks to 
the Agent or Lender and the Board associated therewith relative to such 
risks associated with complete foreclosure and liquidation; and, if any 
partial foreclosure and liquidation is a part of such proposed work-out 
plan, a detailed estimate of the time and reasonable costs of 
collection anticipated by the Agent or Lender to be required to effect 
such partial liquidation.
    (d) By making a Payment Demand, the Agent or Lender shall be 
conclusively deemed to have certified, with full knowledge of the 
provisions of 18 U.S.C. 1001 and 31 U.S.C. 3729 including, without 
limitation, the provisions thereof for penalties and damages, to the 
Board that it has fully and timely complied with all material 
provisions and obligations under the Guarantee and the Loan Documents, 
that the amount demanded is past due and owed by the Borrower under the 
Loan Agreement, and that the demand is properly made and required to be 
satisfied by the Board under the terms of the Guarantee.
    (e) Following receipt of any Payment Demand, the Board or, on its 
behalf, any duly authorized representative or designee, may conduct an 
audit and investigation of compliance with all material provisions and 
obligations under the Guarantee. The Agent and/or Lender shall 
cooperate fully and diligently with any such audit and investigation.
    (f) Within a reasonable period of time from receipt by the Board of 
a Payment Demand, the Board shall approve payment of the amount to be 
paid in respect of the unpaid principal amount under the Loan to which 
the Payment Demand relates. The Board may withhold such payment if any 
audit or investigation is pending or if information remains to be 
furnished by the Agent or Lender. Further, payment shall not be made to 
the extent it is determined by the Board, whether as the result of an 
audit, investigation or otherwise, that the Board's payment obligation 
has terminated. Payment shall be made by wire transfer in immediately 
available funds to the bank and account designated by the Agent or 
Lender for such purpose.
    (g) The Board may take, or direct to be taken any action in 
liquidating the Collateral that the Board determines to be necessary or 
proper, consistent with Federal law and regulations.
    (h) Pursuant to the Guarantee, upon Payment Demand by the Agent or 
Lender, and whether the Board has approved any payment under the 
Guarantee or any payment has been made under the Guarantee, the Board, 
through the Administrator, shall have the right to liquidate, or cause 
to be liquidated, the Collateral. The Board, at its sole discretion, 
shall have the right to require that the Agent or Lender, solely or 
with the Administrator, conduct to completion any liquidation of any of 
the Collateral. Such liquidation shall be conducted by the Agent or 
Lender in accordance with the standards of care specified in Sec.  
2201.26(a) of this part.


Sec.  2201.34  OMB Control Number.

    The information collection requirements in this part are approved 
by the Office of Management and Budget and assigned OMB control number 
0572-0135.

    Dated: December 15, 2003.
Jacqueline G. Rosier,
Secretary, LOCAL Television Loan Guarantee Board.
[FR Doc. 03-31299 Filed 12-22-03; 8:45 am]
BILLING CODE 3410-15-P