[Federal Register Volume 84, Number 76 (Friday, April 19, 2019)]
[Notices]
[Pages 16457-16461]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-07900]
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DEPARTMENT OF AGRICULTURE
Rural Utilities Service
Announcement of Application Deadlines and Requirements for
Section 313A Guarantees for Bonds and Notes Issued for Utility
Infrastructure Loans for Fiscal Year (FY) 2019
AGENCY: Rural Utilities Service, USDA.
ACTION: Notice of Solicitation of Applications (NOSA).
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SUMMARY: The Rural Utilities Service (RUS), an agency of the United
States Department of Agriculture (USDA), announces the application
window and requirements and $750 million in loan funding that is
available for Fiscal Year (FY) 2019 under the Guarantees for Bonds and
Notes Issued for utility infrastructure loans (the 313A Program)
authorized under the Rural Electrification Act of 1936, as amended (the
RE Act), and related terms. The Agriculture Improvement Act of 2018
(the Farm Bill), enacted on December 20, 2018, amended Section 313A of
the RE Act. Applications under this NOSA will be considered under the
new statutory provisions. Those provisions supersede any prior
inconsistent policy, regulation or guidance. The Farm Bill instructs
RUS to continue to carry out this program under a Notice until new
regulations are implemented. RUS is developing regulatory changes to
implement new Farm Bill provisions related to this program and others.
This NOSA implements the new 313A Program provisions until further
notice or regulation.
Under the 313A Program, in accordance with the Farm Bill, the
Federal Financing Bank (FFB) will make loans to the selected
applicant(s) and RUS will guarantee the applicant(s)'s repayment of the
loans to FFB. The Farm Bill amended the RE Act to allow selected
applicants to use the proceeds of loan funds made available under this
NOSA for the 313A Program to make utility infrastructure loans (which
includes broadband loans) or to refinance, subject to certain
limitations, bonds or notes issued for such purposes to an applicant
that has at any time received, or is eligible to receive, a loan under
the RE Act. In addition, the Farm Bill amendments to the RE Act removed
the prohibition against the use of proceeds of loan funds made
available under the 313A Program for projects for the generation of
electricity.
DATES: Completed applications must be received or post marked by RUS no
later than 5:00 p.m. Eastern Daylight Time (EDT) June 18, 2019.
ADDRESSES: Applicants are required to submit one original and two
copies of their loan applications to the U.S. Department of
Agriculture, Rural Utilities Service, Electric Program, ATTN: Amy
McWilliams, Management Analyst, 1400 Independence Avenue SW, STOP 1568,
Room 0226-S, Washington, DC 20250-1568.
FOR FURTHER INFORMATION CONTACT: For further information contact Amy
McWilliams, Management Analyst, 1400 Independence Avenue SW, STOP 1568,
Room 0226-S, Washington, DC 20250-1568. Telephone: (202) 205-8663; fax:
(844) 749-0736; or email: [email protected].
SUPPLEMENTARY INFORMATION:
Overview
Federal Agency: Rural Utilities Service, USDA.
Funding Opportunity Title: Guarantees for Bonds and Notes Issued
for Electrification or Telephone Purposes for Fiscal Year (FY) 2019.
Announcement Type: Guarantees for Bonds and Notes.
Catalog of Federal Domestic Assistance (CFDA) Number: 10.850.
Due Date for Applications: Completed applications must be received
or post marked by RUS no later than 5:00 p.m. Eastern Daylight Time
(EDT) June 18, 2019.
Items in Supplementary Information
I. Funding Opportunity Description.
II. Award Information.
III. Eligibility Information.
IV. Fiscal Year 2019 Application and Submission Information.
V. Application Review Information.
VI. Issuance of the Guarantee.
VII. Guarantee Agreement.
VIII. Reporting Requirements.
IX. Award Administration Information.
X. National Environmental Policy Act Certification.
XI. Other Information and Requirements.
XII. Agency Contacts: website, phone, fax, email, contact name.
XIII. Non-discrimination Statement: USDA non-discrimination
statement, how to file a complaint, persons with disabilities.
[[Page 16458]]
I. Funding Opportunity Description
A. Purpose and Objectives of the 313A Program
The purpose of the 313A Program is to make guaranteed loans to
selected applicants (each referred to as ``Guaranteed Lender'' in this
NOSA and in the Program Regulations) that are to be used (i) to make
utility infrastructure loans or (ii) to refinance bonds or notes issued
for such purposes to a borrower that has at any time received, or is
eligible to receive, a loan under the RE Act. Each applicant must
provide a statement on how it proposes to use the proceeds of the
guaranteed bonds, and the financial benefit it anticipates deriving
from participating in the program pursuant to 7 CFR 1720.6(a)(3).
Objectives may include, but are not limited to the annual savings to be
realized by the ultimate borrower(s) as a result of the applicant's use
of lower cost loan funds provided by FFB and guaranteed by RUS.
The Farm Bill has modified the 313A Program by amending the RE Act
to allow proceeds of guaranteed bonds awarded under this NOSA to be
used to make broadband loans, or to refinance broadband loans, made to
a borrower that has received, or is eligible to receive, a broadband
loan under Title VI of the RE Act. As a result, to the extent that the
proceeds of guaranteed bonds are to be used to fund or refinance
broadband loans that were not made by RUS (``Non-RUS Broadband
Loans''), such proceeds may only be used for Non-RUS Broadband Loans
that would meet the amended eligibility requirements of Title VI
pursuant to the 2018 Farm Bill.
The Farm Bill has also modified the 313A Program to allow the
proceeds of guaranteed loans made under this NOSA to be used by the
Guaranteed Lender to fund projects for the generation of electricity.
B. Statutory Authority
The 313A Program is authorized by Section 313A of the Rural
Electrification Act of 1936, as amended (7 U.S.C. 940c-1) (the RE Act)
and is implemented by regulations located at 7 CFR part 1720, in
accordance with the Farm Bill. The Administrator of RUS (the
Administrator) has been delegated responsibility for administering the
313A Program.
C. Definition of Terms
The definitions applicable to this NOSA are published at 7 CFR
1720.3.
D. Application Awards
RUS will review and evaluate applications received in response to
this NOSA based on the regulations at 7 CFR 1720.7, and as provided in
this NOSA.
II. Award Information
Type of Awards: Guaranteed Loans.
Fiscal Year Funds: FY 2019.
Available Funds: $750 million.
Award Amounts: RUS anticipates making multiple approvals under this
NOSA. The number, amount and terms of awards under this NOSA will
depend in part on the number of eligible applications and the amount of
funds requested. In determining whether or not to make an award, RUS
will take overall program policy objectives into account.
Due Date for Applications: See under SUPPLEMENTARY INFORMATION
section.
Award Date: Awards will be made on or before September 30, 2019.
Schedule of Loan Repayment: The amortization method for the
repayment of the guaranteed loan shall be repaid by the Guaranteed
Lender: (i) In periodic installments of principal and interest, (ii) in
periodic installments of interest and, at the end of the term of the
bond or note, as applicable, by the repayment of the outstanding
principal, or (iii) through a combination of the methods described in
(i) and (ii) above. The amortization method will be agreed to by RUS
and the Guaranteed Lender.
III. Eligibility Information
A. Eligible Applicants
1. To be eligible to participate in the 313A Program, a Guaranteed
Lender must be:
a. A bank or other lending institution organized as a private, not-
for-profit cooperative association, or otherwise organized on a non-
profit basis;
b. Able to demonstrate to the Administrator that it possesses the
appropriate expertise, experience, and qualifications to make loans for
utility infrastructure purposes (to the extent that the applicant
intends to use the guaranteed loan funds for such purpose); and
c. Able to demonstrate to the Administrator that it has bonds or
notes eligible for refinancing under the 313A Program (to the extent
that the applicant intends to use the guaranteed loan funds for such
purpose).
2. To be eligible to receive a guarantee, a Guaranteed Lender's
bond must meet the following criteria:
a. The Guaranteed Lender must furnish the Administrator with a
certified list of the principal balances of eligible loans outstanding
and certify that such aggregate balance is at least equal to the sum of
the proposed principal amount of guaranteed bonds to be issued,
including any previously issued guaranteed bonds outstanding;
b. The guaranteed bonds to be issued by the Guaranteed Lender would
receive an underlying investment grade rating from a Rating Agency,
without regard to the guarantee; and
3. A lending institution's status as an eligible applicant does not
assure that the Administrator will issue the guarantee sought in the
amount or under the terms requested, or otherwise preclude the
Administrator from declining to issue a guarantee.
B. Other Eligibility Requirements
Applications will only be accepted from lenders that serve rural
areas defined in 7 CFR 1710.2(a) as (i) any area of the United States,
its territories and insular possessions (including any area within the
Federated States of Micronesia, the Marshall Islands, and the Republic
of Palau) other than a city, town, or unincorporated area that has a
population of greater than 20,000 inhabitants; and (ii) any area within
a service area of a borrower for which a borrower has an outstanding
loan as of June 18, 2008, made under titles I through V of the Rural
Electrification Act of 1936 (7 U.S.C. 901-950bb). For initial loans to
a borrower made after June 18, 2008, the ``rural'' character of an area
is determined at the time of the initial loan to furnish or improve
service in the area.
IV. Fiscal Year 2019 Application and Submission Information
A. Applications
All applications must be prepared and submitted in accordance with
this NOSA and 7 CFR 1720.6 (Application Process). To ensure the proper
preparation of applications, applicants should carefully read this NOSA
and 7 CFR part 1720 (available online at http://www.ecfr.gov/cgi-bin/text-idx?SID=9295e45c9a0f6a857d800fbec5dde2fb&mc=true&node=pt7.11.1720&rgn=div5).
B. Content and Form of Submission
In addition to the required application specified in 7 CFR 1720.6,
all applicants must submit the following additional required documents
and materials:
1. Form AD-1047, Certification Regarding Debarment, Suspension, and
Other Responsibility Matters Primary Covered Transactions.
This form contains certain certifications relating to debarment and
suspension, convictions, criminal
[[Page 16459]]
charges, and the termination of public transactions (See 2 CFR part
417, and 7 CFR 1710.123.) This form is available at http://www.ocio.usda.gov/policy-directives-records-forms/forms-management/approved-computer-generated-forms;
2. Restrictions on Lobbying.
Applicants must comply with the requirements relating to
restrictions on lobbying activities. (See 2 CFR part 418, and 7 CFR
1710.125.) This form is available at http://www.rd.usda.gov/publications/regulations-guidelines/electric-sample-documents;
3. Uniform Relocation Act assurance statement.
Applicants must comply with 49 CFR part 24, which implements the
Uniform Relocation Assistance and Real Property Acquisition Policies
Act of 1970, as amended. (See 7 CFR 1710.124.) This form is available
at http://www.rd.usda.gov/publications/regulations-guidelines/electric-sample-documents;
4. Federal debt delinquency requirements.
This report indicates whether or not the applicants are delinquent
on any Federal debt (See 7 CFR 1710.126 and 7 CFR 1710.501(a)(13)).
This form is available at http://www.rd.usda.gov/publications/regulations-guidelines/electric-sample-documents;
5. RUS Form 266, Compliance Assurance.
Applicants must submit a non-discrimination assurance commitment to
comply with certain regulations on non-discrimination in program
services and benefits and on equal employment opportunity as set forth
in 7 CFR parts 15 and 15b and 45 CFR part 90. This form is available at
http://www.rd.usda.gov/publications/regulations-guidelines/forms-publications;
6. Articles of incorporation and bylaws.
See 7 CFR 1710.501(a)(14). These are required if either document
has been amended since the last loan application was submitted to RUS,
or if this is the applicant's first application for a loan under the RE
Act; and
7. Form AD-3030, Representations Regarding Felony Conviction and
Tax Delinquent Status for Corporate Applications.
Corporate applicants are required to complete and submit Form AD-
3030 with their applications. This form is available at http://www.ocio.usda.gov/policy-directives-records-forms/forms-management/approved-computer-generated-forms.
C. Supplemental Documents for Submission
1. Cash flow projections and assumptions:
Each applicant must include five-year pro-forma cash flow
projections or business plans and clearly state the assumptions that
underlie the projections, demonstrating that there is reasonable
assurance that the applicant will be able to repay the guaranteed loan
in accordance with its terms (See 7 CFR 1720.6(a)(4)).
2. Pending litigation statement:
A statement from the applicant's counsel listing any pending
litigation, including levels of related insurance coverage and the
potential effect on the applicant, must be submitted to RUS.
V. Application Review Information
A. Application Evaluation
1. Administrator Review.
a. Each application will be reviewed by the Administrator to
determine whether it is eligible under 7 CFR 1720.5, the information
required under 7 CFR 1720.6 is complete, and the proposed guaranteed
bond complies with applicable statutes and regulations. The
Administrator can at any time reject an application that fails to meet
these requirements.
b. Applications will be subject to a substantive review, on a
competitive basis, by the Administrator based upon the evaluation
factors listed in 7 CFR 1720.7(b).
2. Decisions by the Administrator.
The Administrator will approve or deny applications in a timely
manner as such applications are received; provided, however, that in
order to facilitate competitive evaluation of applications, the
Administrator may from time to time defer a decision until more than
one application is pending. The Administrator may limit the number of
guarantees made to a maximum of five per year, to ensure a sufficient
examination is conducted of applicant requests. RUS will notify the
applicant in writing of the Administrator's approval or denial of an
application. Approvals for guarantees will be conditioned upon
compliance with 7 CFR 1720.4 (in accordance with the Farm Bill) and 7
CFR 1720.6. The Administrator reserves the discretion to approve an
application for an amount less than that requested.
B. Independent Assessment
Before a guarantee decision is made by the Administrator, the
Administrator shall request that FFB review the rating agency
determination required by 7 CFR 1720.5(b)(2) as to whether the bond or
note to be issued would receive an investment grade rating without
regard to the guarantee.
VI. Issuance of the Guarantee
The requirements under this section must be met by the applicant
prior to the endorsement of a guarantee by the Administrator (See 7 CFR
1720.8.)
VII. Guarantee Agreement
Each Guaranteed Lender will be required to enter into a Guarantee
Agreement with RUS that contains the provisions described in 7 CFR
1720.8 (Issuance of the Guarantee), 7 CFR 1720.9 (Guarantee Agreement),
and 7 CFR 1720.12 (Reporting Requirements). The Guarantee Agreement
will also obligate the Guaranteed Lender to pay, on an annual basis, a
guarantee fee equal to 30 basis points (0.30 percent) of the
outstanding principal amount of the guaranteed loan (See 7 CFR
1720.10).
VIII. Reporting Requirements
Guaranteed Lenders are required to comply with the financial
reporting requirements and Pledged Collateral review and certification
requirements set forth in 7 CFR 1720.12.
IX. Award Administration Information
Award Notices
RUS will send a commitment letter to an applicant once the loan is
approved. Applicants must accept and commit to all terms and conditions
of the loan which are requested by RUS and FFB as follows:
1. Compliance conditions.
In addition to the standard conditions placed on the 313A Program
or conditions requested by RUS to ensure loan security and statutory
compliance, applicants must comply with the following conditions:
a. Each Guaranteed Lender selected under the 313A Program will be
required to post collateral for the benefit of RUS in an amount equal
to the aggregate amount of loan advances made to the Guaranteed Lender
under the 313A Program.
b. The pledged collateral (the Pledged Collateral) shall consist of
outstanding notes or bonds payable to the Guaranteed Lender (the
Eligible Securities) and shall be placed on deposit with a collateral
agent for the benefit of RUS. To be deemed Eligible Securities that can
be pledged as collateral, the notes or bonds to be pledged (i) cannot
be classified as non-performing, impaired, or restructured under
generally accepted accounting principles, (ii) must be free and clear
of all liens other than the lien created for
[[Page 16460]]
the benefit of RUS, (iii) cannot be comprised of more than 30% of bonds
or notes from generation and transmission borrowers, (iv) cannot have
more than 5% of notes and bonds be from any one particular borrower and
(v) cannot be unsecured notes.
c. The Guaranteed Lender will be required to place a lien on the
Pledged Collateral in favor of RUS (as secured party) at the time that
the Pledged Collateral is deposited with the collateral agent. RUS will
have the right, in its sole discretion, within 14 business days to
reject and require the substitution of any Pledged Collateral that the
Guaranteed Lender deposits as collateral with the collateral agent.
Prior to receiving any advances under the 313A Program, the Guaranteed
Lender will be required to enter into a pledge agreement, satisfactory
to RUS, with a banking institution serving as collateral agent.
d. The Guaranteed Lender will be required to maintain Pledged
Collateral at a level that is sufficient to ensure that in the event of
default resources will be available to cover principal, interest, fees
and reasonable expenses incurred by RUS as a result of a default or
incurred pursuant to RUS's obligation to make related payments to FFB
on all guarantees issued by RUS to FFB for the benefit of the
Guaranteed Lender under Section 313A of the RE Act. The Guaranteed
Lender will also be required to agree that the Pledged Collateral can
be used for such purposes.
e. The Guaranteed Lender will be required to agree to not to take
any action that would have the effect of reducing the value of the
pledged collateral below the level described above.
f. Applicants must certify to the RUS, the portion of their loan
portfolio that is:
(1) Refinanced RUS debt;
(2) Debt of borrowers for whom both RUS and the applicants have
outstanding loans; and
(3) Debt of borrowers for whom both RUS and the applicant have
outstanding concurrent loans pursuant to Section 307 of the RE Act, and
the amount of Eligible Loans.
2. Compliance with Federal Laws.
Applicants must comply with all applicable Federal laws and
regulations.
a. This obligation is subject to the provisions contained in the
Consolidated Appropriations Act, 2018, Public Law 115-141, Division E,
Title VII, Sections 745 and 746, as amended and/or subsequently enacted
for USDA agencies and offices, regarding the prohibition against RUS
making awards to applicants having corporate felony convictions within
the past 24 months or to applicants having corporate federal tax
delinquencies.
b. An authorized official within your organization must execute,
date, and return the loan commitment letter and the Assurance Regarding
Felony Conviction or Tax Delinquent Status for Corporate Applicants
(Form AD-3031) to RUS within 14 calendar days from the date of the loan
commitment letter, or by September 27, 2019, if the loan is approved
after September 13, 2019; otherwise, the commitment will be void. This
form is available at http://www.ocio.usda.gov/policy-directives-records-forms/forms-management/approved-computer-generated-forms.
c. Uniform Commercial Code (UCC) Filing. The Borrower must provide
RUS with evidence that the Borrower has filed the UCC financing
statement required by 7 CFR 1720.8(a)(2). Upon filing of the
appropriate UCC financing statement, the Guaranteed Lender will provide
RUS with a perfection opinion by outside counsel which demonstrates
that RUS's security interest in the pledged collateral under the Pledge
Agreement is perfected.
d. Additional conditions may be instituted for future obligations.
X. National Environmental Policy Act Certification
For any proceeds to be used to refinance bonds and notes previously
issued by the Guaranteed Lender for the RE Act purposes that are not
obligated with specific projects, RUS has determined that these
financial actions will not individually or cumulatively have a
significant effect on the human environment as defined by the National
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and its
implementing regulations at 40 CFR parts 1500-1508. However, for any
new projects funded through the 313A Program, applicants must consult
with RUS and comply with the Agency regulations at 7 CFR part 1970.
XI. Other Information and Requirements
Applications must contain all the required elements of this NOSA
and all standard requirements as required by 7 CFR part 1720.
Additional supporting data or documents may be required by RUS
depending on the individual application or financial conditions. All
applicants must comply with all Federal Laws and Regulations.
XII. Agency Contacts
A. Website: https://www.rd.usda.gov/contact-us/national-office/rus.
B. Phone: (202) 205-8663.
C. Fax: (844) 749-0736.
D. Email: [email protected].
E. Main point of contact: Amy McWilliams, Management Analyst, 1400
Independence Avenue SW, STOP 1568, Room 0226-S, Washington, DC 20250-
1568.
XIII. USDA Non-Discrimination Statement
In accordance with Federal civil rights law and U.S. Department of
Agriculture (USDA) civil rights regulations and policies, the USDA, its
Agencies, offices, and employees, and institutions participating in or
administering USDA programs are prohibited from discriminating based on
race, color, national origin, religion, sex, gender identity (including
gender expression), sexual orientation, disability, age, marital
status, family/parental status, income derived from a public assistance
program, political beliefs, or reprisal or retaliation for prior civil
rights activity, in any program or activity conducted or funded by USDA
(not all bases apply to all programs). Remedies and complaint filing
deadlines vary by program or incident.
Persons with disabilities who require alternative means of
communication for program information (e.g., Braille, large print,
audiotape, American Sign Language, etc.) should contact the responsible
Agency or USDA's TARGET Center at (202) 720-2600 (voice and TTY) or
contact USDA through the Federal Relay Service at (800) 877-8339.
Additionally, program information may be made available in languages
other than English.
To file a program discrimination complaint, complete the USDA
Program Discrimination Complaint Form, AD-3027. Individuals wishing to
file a discrimination complaint may use the form available at http://www.ocio.usda.gov/policy-directives-records-forms/forms-management/approved-computer-generated-forms and at any USDA office, or may write
a letter addressed to USDA and provide in the letter all of the
information requested in the form. To request a copy of the complaint
form, call (866) 632-9992. Submit your completed form or letter to USDA
by:
(1) Mail: U.S. Department of Agriculture, Office of the Assistant
Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC
20250-9410;
(2) Fax: (202) 690-7442; or
(3) Email: [email protected]. USDA is an equal opportunity
provider, employer, and lender.
Authority: 7 U.S.C. 940c-1.
[[Page 16461]]
Dated: April 11, 2019.
Chad Rupe,
Acting Administrator, Rural Utilities Service.
[FR Doc. 2019-07900 Filed 4-18-19; 8:45 am]
BILLING CODE P