[Federal Register Volume 69, Number 110 (Tuesday, June 8, 2004)]
[Notices]
[Pages 32230-32231]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-12732]



  Federal Register / Vol. 69, No. 110 / Tuesday, June 8, 2004 / 
Notices  

[[Page 32230]]


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DEPARTMENT OF AGRICULTURE

Office of the Secretary


Announcement of Competitive Application Round for the Rural 
Business Investment Program (RBIP)

AGENCY: Office of the Secretary, USDA.

ACTION: Notice.

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SUMMARY: The Department of Agriculture (USDA) will select and license 
applicants to become Rural Business Investment Companies (RBIC), and 
provide financial assistance and grant awards under the RBIP. The 
Secretary of the USDA invites applications from newly-formed venture 
capital companies seeking to be licensed as a RBIC. USDA has delegated 
to the U.S. Small Business Administration (SBA) receipt of applications 
under this Notice of Funds Availability (NOFA).

DATES: Application window opening date: SBA will begin accepting 
applications on June 8, 2004.
    Application deadline date: The application deadline is 4 p.m. EST 
on Friday, September 17, 2004. See SUPPLEMENTARY INFORMATION for rules 
concerning application submission.

ADDRESSES: Address for application submission: Completed applications 
must be sent to Associate Administrator (or his or her designee), 
Investment Division, U.S. Small Business Administration, 409 Third 
Street, SW., Washington, DC 20416.
    Address for requesting information: Applications materials and 
other information may be requested by writing to Director of New 
Markets Venture Capital, Investment Division, U.S. Small Business 
Administration, 409 Third Street, SW., Washington, DC 20416.

FOR FURTHER INFORMATION CONTACT: Detailed information on the RBIP, 
including information, materials, and instructions concerning 
application for the program, can be found on SBA's Web site at http://www.sba.gov/INV/RBIP and at the specific URLs listed in this NOFA. You 
also may request information from SBA by contacting Austin J. Belton, 
Director of New Markets Venture Capital, Investment Division, U.S. 
Small Business Administration, 409 Third Street, SW., Washington, DC 
20416, at (202) 205-6510.

SUPPLEMENTARY INFORMATION:
    Background: Subtitle H of the Consolidated Farm and Rural 
Development Act, as amended (7 U.S.C. 2009cc et seq.) (the ``Act'') 
establishes the RBIP. The purpose of the Act is to promote economic 
development and the creation of wealth and job opportunities in rural 
areas and among individuals living in those areas through venture 
capital investments by for-profit RBICs. Pursuant to the Act, USDA 
licenses newly formed for-profit entities as RBICs and provides 
financial assistance in the form of debenture guarantees to such RBICs 
to fund their rural area investment activities. Additionally, USDA 
awards OA grants to RBICs for the purpose of providing operational 
assistance to smaller enterprises in which the RBIC invests or expects 
to invest and that are located in rural areas. RBICs must have raised 
private equity capital of $10,000,000 and must obtain debenture 
leverage (in the amount of 200 percent of its private capital, or 
$20,000,000 per RBIC) through the RBIP, to fund their investment 
activities. USDA will not be granting exceptions to the $10,000,000 
private equity capital requirement, pursuant to 7 CFR 4290.210(b), 
under this funding opportunity.
    Available funding: Section 384S(b) of the Act makes funds for the 
RBIP available until expended. USDA's first competitive application 
round for licensing as an RBIC will end on September 17, 2004.
    The amount currently available for debenture guaranty authority in 
FY 2004 is $280 million. Subject to funding availability, under this 
NOFA, USDA intends to select up to three new RBICs and to obligate up 
to approximately $60,000,000 in debenture guarantee authority and 
approximately $3,000,000 in Operational Assistance (OA) grant funds to 
RBICs. However, applicants should note that pursuant to USDA's FY 2004 
appropriations act (section 759 of the Consolidated Appropriations Act 
of 2004, Pub. L. 108-199 (Jan. 23, 2004)), no selection of any RBICs 
will be made during FY04.
    USDA reserves the right to select and fund some, all, or none of 
the applicants for licensing as an RBIC under this NOFA.
    Application materials: A program announcement, the ``Rural Business 
Investment Program--Program Announcement (June 2004),'' provides 
guidance on the contents of the necessary application materials, 
evaluation criteria, and other program requirements. The program 
announcement also states the critical deadline dates applicable to this 
funding opportunity. This document is available at http://www.sba.gov/INV/RBIP or by contacting USDA at the address and phone number set 
forth in this NOFA. Applicants for licensing as an RBIC can obtain 
detailed application materials and instructions at http://www.sba.gov/INV/RBIP or by contacting USDA at the address and phone number set 
forth in this NOFA.
    USDA has delegated to SBA many of the day-to-day responsibilities 
for the RBIP, including receipt of applications and most of the 
selection process for licensing as a RBIC, under 7 CFR 4290.45. More 
information about all aspects of the RBIP is available in the 
regulations authorizing the RBIP, at 7 CFR part 4290.
    Application submission rules: Applications must be received 
personally by the Associate Administrator for the Investment Division 
(AA/I), or by specific individuals designated by the AA/I, by the 
deadline date and time. Applications received after that date and time 
will be rejected and returned to the sender. Applications must be 
submitted in accordance with the application instructions, which 
include but are not limited to a requirement that applications be 
submitted in hard copy form. Applications sent electronically or by 
facsimile will not be accepted.
    Applicants must enclose in their submission a grant issuance fee of 
$5,000 in the form of a check payable to SBA.
    USDA recommends that potential applicants who plan to request 
application materials via mail request such materials as soon as 
possible but in any event no later than 60 days before the application 
due date, in order to assure that such applicants have sufficient time 
to prepare a responsive application.
    Summary of review and selection process: Selection for licensing as 
an RBIC will be made on a competitive basis using a multi-tiered 
application and approval process.
    SBA staff will screen applications for timely submission, 
eligibility, and completeness. Only those applications that SBA 
receives before the deadline, that are complete, and that are eligible 
will be processed further. On those applications, SBA then will perform 
an initial review of the applicant's management team's qualifications.
    Applications considered qualified as a result of the initial review 
process then will be evaluated, scored and ranked by panels consisting 
of qualified, experienced USDA/SBA staff. The panels will assess the 
applications against specific evaluation criteria described in the 
program announcement, with emphasis on successful investing track 
records in relation to the proposed investment strategy and targeted 
rural areas. USDA/SBA will invite those applicants with

[[Page 32231]]

the highest rankings to interview in person with the Portfolio 
Committee.
    The Portfolio Committee, which shall be comprised of both USDA and 
SBA officials, will score applicants and make final recommendations for 
selection as RBICs. The SBA Administrator and USDA Secretary will 
separately consider but mutually concur on the selection of applicants. 
Selected applicants will be given 12 months to raise their private 
equity capital. Once a selected applicant has raised its $10,000,000 in 
private equity capital and has achieved full compliance with the 
regulations governing licensing as an RBIC, the SBA Administrator and 
USDA Secretary will jointly license the RBIC.
    Assuming private capital of $10 million and compliance with all 
program requirements, USDA/SBA will award each RBIC an OA grant of $1 
million at the time of licensing. Terms of the OA grant will be subject 
to guidelines on Federal grants issued by OMB. OA grants will be 
awarded only to licensed RBICs pursuant to this funding opportunity. 
Subject to the availability of funds, this would not preclude USDA from 
making OA grants to ``other entities'' pursuant to section 384H of the 
Act at some point in the future.

    Program authority: Subtitle H of the Consolidated Farm and Rural 
Development Act, as amended (7 U.S.C. 2009cc et seq.).

    Dated: June 1, 2004.
Gilbert Gonzalez,
Acting Under Secretary for Rural Development.
[FR Doc. 04-12732 Filed 6-3-04; 3:09 pm]
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