[Federal Register Volume 78, Number 88 (Tuesday, May 7, 2013)]
[Rules and Regulations]
[Pages 26485-26486]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-10783]



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 Rules and Regulations
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  Federal Register / Vol. 78, No. 88 / Tuesday, May 7, 2013 / Rules and 
Regulations  

[[Page 26485]]



DEPARTMENT OF AGRICULTURE

Rural Housing Service

7 CFR Part 3575

RIN 0575-AC92


Community Programs Guaranteed Loans

AGENCY: Rural Housing Service, USDA.

ACTION: Final rule.

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

SUMMARY: The Rural Housing Service (RHS) is amending the regulations 
utilized to service the Community Facilities Guaranteed Loan Program in 
two separate sections, in order to clarify the types of projects that 
are eligible for a Community Facilities Guaranteed Loan. The intended 
effect of this action is to strengthen the Community Facilities 
Guaranteed Loan Program by limiting the risk to the guaranteed loan 
portfolio. RHS will prohibit the financing of facilities in which the 
operation of such facilities have not been supported by the community 
and have resulted in significant default and loan losses to the agency.

DATES: Effective July 8, 2013.

FOR FURTHER INFORMATION CONTACT: Susan Woolard, Loan Specialist, Rural 
Housing Service, U.S. Department of Agriculture, STOP 0787, 1400 
Independence Ave. SW., Washington, DC 20250-0787, telephone: (202) 720-
1506.

SUPPLEMENTARY INFORMATION: 

Background

    The Community Facilities Guaranteed Loan Program bolsters the 
credit available from private lending institutions through the 
guarantee of loans for essential community facilities in rural areas. 
This program has been in existence since 1992, and as it evolves, the 
need to define and revise terms is required.
    Section 3575.24(a)(1)(x) currently identifies recreational 
facilities as eligible types of facilities for financing under this 
program. The Agency experience, however, shows that the current 
language is too brief and subject to different interpretations by 
prospective applicants and other program users. Therefore, the Agency 
is revising the paragraph to more clearly convey to the public the 
Agency's policy with respect to the financing of essential community 
facilities that provide recreational services as part of addressing 
overall community development needs.
    Section 3575.25 prohibits the financing with guaranteed loan funds 
on specific types of projects. The Agency has added a paragraph (j) 
``Golf courses'' to this section. This is based upon the Agency's 
experience to date in financing this type of project and the failure 
rate the Agency has experienced on golf course projects. Also, the lack 
of support demonstrated by the community indicates that a golf course 
is not essential to a rural community and is typically viewed as a 
commercial undertaking.
    RHS published the proposed rule on June 26, 2012, to solicit 
comments on amending Sec.  3575.24, ``Eligible loan purposes'' on 
facilities that are an integral part of the orderly development of a 
community. Recreational components, such as, but not limited to, 
playground equipment of an otherwise non-recreational eligible 
community facility such as childcare, educational, or health care 
facilities; and amending Sec.  3575.25 ``Ineligible loan purposes'' 
identified as golf courses, water parks, race tracks or other 
recreational type facilities inherently commercial in nature.
    Only one comment was received and it was outside the scope of the 
proposed rule and therefore not considered in this final rulemaking.

Executive Order 12866

    The final rule has been determined to be not significant for the 
purposes of Executive Order 12866 and, therefore, has not been reviewed 
by the Office of Management and Budget (OMB).

Programs Affected

    The Catalog of Federal Domestic Assistance Program impacted by this 
action is 10.766, Community Facilities Loans and Grants.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    Executive Order 13175 imposes requirements on Rural Development in 
the development of regulatory policies that have tribal implications or 
preempt tribal laws. Rural Development has determined that the final 
rule does not have a substantial direct effect on one or more Indian 
tribe(s) or on either the relationship or the distribution of powers 
and responsibilities between the Federal Government and Indian tribes. 
Thus, this rule is not subject to the requirements of Executive Order 
13175. If a tribe determines that this rule has implications of which 
Rural Development is not aware and would like to engage in consultation 
with Rural Development on this rule, please contact Rural Development's 
Native American Coordinator at (720) 544-2911 or [email protected].

Executive Order 12372, Intergovernmental Review

    This program is subject to the provisions of Executive Order 12372, 
which requires intergovernmental consultation with State and local 
officials. RHS conducts intergovernmental consultations for each loan 
in the manner delineated in 7 CFR part 3015, subpart V.

Executive Order 12988, Civil Justice Reform

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. In accordance with this rule: (1) All State and local 
laws and regulations that are in conflict with this rule will be 
preempted; (2) no retroactive effect will be given to this rule; and 
(3) administrative proceedings of the National Appeals Division (7 CFR 
part 11) must be exhausted, before bringing suit in court challenging 
action taken under this rule.

Environmental Impact Statement

    The action has been reviewed in accordance with 7 CFR part 1940, 
subpart G, ``Environmental Program.'' The Agency has determined that 
this action does not constitute a major Federal action significantly 
affecting the quality of the human environment and, in accordance with 
the National Environmental Policy Act of 1969, 42

[[Page 26486]]

U.S.C. 4321 et seq., an Environmental Impact Statement is not required.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 
U.S.C. chapters 17A and 25, established requirements for Federal 
agencies to assess the effects of their regulatory actions on State, 
local, and tribal governments and the private sector. Under section 202 
of the UMRA, RHS generally must prepare a written statement, including 
a cost-benefit analysis, for proposed and final rules with Federal 
mandates that may result in expenditures to State, local, or tribal 
governments, in the aggregate, or to the private sector, of $100 
million or more in any 1 year. When such a statement is needed for a 
rule, section 205 of the UMRA generally requires RHS to identify and 
consider a reasonable number of regulatory alternatives and adopt the 
least costly, most cost-effective, or least burdensome alternative that 
achieves the objectives of the rule. This rule contains no Federal 
mandates (under the regulatory provisions of title II of the UMRA) for 
State, local, and tribal governments or the private sector. Therefore, 
this rule is not subject to the requirements of sections 202 and 205 of 
the UMRA.

Regulatory Flexibility Act

    The rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act (5 U.S.C. 601-612). Under Section 605(b) of 
the Regulatory Flexibility Act, 5 U.S.C. 605(b), the Agency has 
determined and certified by signature of this document that the rule 
will not have a significant economic impact on a substantial number of 
small entities since this rulemaking action does not involve a new or 
expanded program. Furthermore, the program does not treat entities 
differently based solely on their size.

Executive Order 13132, Federalism

    The policies contained in the rule does not have any substantial 
direct effect on States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Nor do the 
rules impose substantial direct compliance costs on State and local 
governments. Therefore, consultation with the States is not required.

Implementation

    It is the policy of this Agency that rules relating to public 
property, loans, grants, benefits, or contracts shall comply with 5 
U.S.C. 553, notwithstanding the exemption of that section with respect 
to such rules.

Paperwork Reduction Act

    The revisions in this rulemaking for part 3575 are subject to the 
burden package assigned OMB control number 0575-0137. No paperwork 
changes are being proposed.

Executive Order 12372, Intergovernmental Review of Federal Programs

    This final rule is not subject to the provisions of EO 12372, which 
require intergovernmental consultation with State and local officials, 
because this rule provides general guidance on something. Applications 
for Agency programs will be reviewed individually under EO 12372 as 
required by program procedures.

E-Government Act Compliance

    The Agency is committed to complying with the E-Government Act, to 
promote the use of the Internet and other information technologies to 
provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

List of Subjects in 7 CFR Part 3575

    Community facilities, Guaranteed loans, Loan programs.

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

CHAPTER XXXV--RURAL HOUSING SERVICE, DEPARTMENT OF AGRICULTURE

PART 3575--GENERAL

0
1. The authority citation for part 3575 continues to read as follows:

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

Subpart A--Community Programs Guaranteed Loans

0
2. Amend Sec.  3575.24 to revise paragraph (a)(1)(x) to read as 
follows:


Sec.  3575.24  Eligible loan purposes.

    (a) * * *
    (1) * * *
    (x) Community parks, community activity centers, and similar types 
of facilities that are an integral part of the orderly development of a 
community. Recreational components, such as, but not limited to, 
playground equipment of an otherwise non-recreational eligible 
community facility such as childcare, educational, or health care 
facilities are also eligible.
* * * * *

0
3. Amend Sec.  3575.25 to add paragraph (j) to read as follows:


Sec.  3575.25  Ineligible loan purposes.

* * * * *
    (j) Golf courses, water parks, race tracks or other recreational 
type facilities inherently commercial in nature.

    Dated: February 22, 2013.
Tammye Trevi[ntilde]o,
Administrator, Rural Housing Service.
[FR Doc. 2013-10783 Filed 5-6-13; 8:45 am]
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