[Federal Register Volume 84, Number 131 (Tuesday, July 9, 2019)]
[Rules and Regulations]
[Pages 32607-32618]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-14511]



 ========================================================================
 Rules and Regulations
                                                 Federal Register
 ________________________________________________________________________
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 This section of the FEDERAL REGISTER contains regulatory documents 
 having general applicability and legal effect, most of which are keyed 
 to and codified in the Code of Federal Regulations, which is published 
 under 50 titles pursuant to 44 U.S.C. 1510.
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 The Code of Federal Regulations is sold by the Superintendent of Documents. 
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  Federal Register / Vol. 84, No. 131 / Tuesday, July 9, 2019 / Rules 
and Regulations  

[[Page 32607]]



DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Parts 1710, 1714, 1717, 1724, 1726, and 1730

RIN 0572-AC40


Streamlining Electric Program Procedures

AGENCY: Rural Utilities Service, USDA.

ACTION: Final rule.

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

SUMMARY: The Rural Utilities Service (RUS), a Rural Development agency 
of the United States Department of Agriculture (USDA), is revising 
several regulations to streamline its procedures for Electric Program 
borrowers, including its loan application requirements, approval of 
work plans and load forecasts, use of approved contracts and system 
design procedures. Additionally, unnecessary sections in the 
regulations will be removed.

DATES: This rule is effective September 9, 2019.

FOR FURTHER INFORMATION CONTACT: Gerard Moore, Deputy Assistant 
Administrator, Office of Policy, Outreach, and Standards (OPOS), Rural 
Utilities Service, U.S. Department of Agriculture, STOP 1569, 1400 
Independence Ave. SW, Washington, DC 20250-0787, telephone: (202) 720-
1900. Email contact [email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This final rule has been determined to be non-significant for 
purposes of Executive Order (E.O.) 12866 and therefore has not been 
reviewed by the Office of Management and Budget (OMB).

Catalog of Federal Domestic Assistance

    The affected programs are listed in the Catalog of Federal Domestic 
Assistance (CFDA) Program under 10.850, Rural Electrification Loans and 
Loan Guarantees. This catalog is available electronically through the 
free CFDA website on the internet at https://www.cfda.gov/. The print 
edition may be purchased by calling the Superintendent of Documents at 
(202) 512-1800 or toll free at (866) 512-1800, or by ordering online at 
https://bookstore.gpo.gov/.

Executive Order 12372, Intergovernmental Review of Federal Programs

    This rule is excluded from the scope of Executive Order 12372, 
Intergovernmental Consultation, which may require a consultation with 
State and local officials. See the final rule related notice entitled, 
``Department Programs and Activities Excluded from Executive Order 
12372'' (50 FR 47034) advising that RUS loans and loan guarantees were 
not covered by Executive Order 12372.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    The Agency has determined that this 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 final rule 
is not subject to the requirements of Executive Order 13175. 
Consequently, the Agency will not conduct tribal consultation sessions. 
If a Tribe determines that this rule has implications of which RUS is 
not aware and would like to request government-to-government 
consultation on this rule, please contact USDA Rural Development's 
Native American Coordinator at (720) 544-2911 or [email protected].

Executive Order 12988, Civil Justice Reform

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. In accordance with this final 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.

National Environmental Policy Act Certification

    The final rule has been reviewed in accordance with 7 CFR part 
1970, Environmental Policies and Procedures. 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 (NEPA) of 1969, 
42 U.S.C. 4321 et seq., an Environmental Impact Statement is not 
required. Loan and grant applications will be reviewed individually to 
determine compliance with Agency environmental regulations and with 
NEPA.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public 
Law 104-4, establishes 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, RUS 
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 one 
year. When such a statement is needed for a rule, section 205 of the 
UMRA generally requires RUS 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 final 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 final rule is not 
subject to the requirements of sections 202 and 205 of the UMRA.

Regulatory Flexibility Act

    The Regulatory Flexibility Act (5 U.S.C. 601-602) (RFA) generally 
requires an agency to prepare a regulatory flexibility analysis of any 
rule subject to notice and comment rulemaking requirements under the 
Administrative Procedure Act (APA) or any other statute. This final 
rule; however, is not subject to the APA

[[Page 32608]]

under 5 U.S.C. 553(a)(2) and 5 U.S.C. 553(b)(3)(A) nor any other 
statute.

Executive Order 13132, Federalism

    It has been determined, under E.O. 13132, Federalism, that the 
policies contained in this final rule do 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 does this 
final rule impose substantial direct compliance costs on state and 
local governments. Therefore, consultation with the states is not 
required.

E-Government Act Compliance

    The Agency is committed to complying with the E-Government Act, 
which requires Government agencies in general to provide the public the 
option of submitting information or transacting business electronically 
to the maximum extent possible and 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.

Information Collection and Recordkeeping Requirements

    The information collection and record-keeping requirements 
contained in this rule are approved by the Office of Management and 
Budget (OMB) under OMB Control Numbers 0572-0020, 0572-0032, 0572-0100, 
and 0572-0123. There is a total burden reduction of 10,571 hours 
associated with this rulemaking. The agency will submit a revision of 
the above referenced control numbers to OMB for review and approval.

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, found online at http://www.ascr.usda.gov/complaint_filing_cust.html and at any USDA office or 
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.

Background and Discussion of the Rule

    Rural Development is a mission area within the U.S. Department of 
Agriculture (USDA) comprising the Rural Utilities Service, Rural 
Housing Service, and Rural Business-Cooperative Service. Rural 
Development's mission is to increase economic opportunity and improve 
the quality of life for all rural Americans. Rural Development meets 
its mission by providing loans, loan guarantees, grants, and technical 
assistance through numerous programs aimed at creating and improving 
housing, business, and infrastructure throughout rural America. The 
Rural Utilities Service (RUS) loan, loan guarantee, and grant programs 
act as a catalyst for economic and community development. By financing 
improvements to rural electric, water and waste, and telecommunications 
and broadband infrastructure, RUS also plays a significant role in 
improving other measures of quality of life in rural America, including 
public health and safety, environmental protection and culture and 
historic preservation.
    RUS Electric Program loans, loan guarantees and grants finance the 
construction of improvement of rural electric infrastructure. In an 
effort by the RUS Electric Program to provide its program in an 
efficient and effective manner while improving its customer service and 
experience, and in response to requests from the RUS Electric Program 
borrowers, the Electric Program undertook a systematic review of 
regulations and procedures in place to administer its program. After 
review conclusion, RUS determined that pre- and post-loan procedures 
could be made more efficient and regulatory burden could be reduced on 
Electric Program borrowers while still ensuring RUS loans remain 
adequately secured and ensuring that loan funds will be repaid in the 
time agreed upon. This rulemaking will streamline Electric Program 
procedures and revise regulations. This includes removing unnecessary 
and outdated regulations and removing burdensome requirements imposed 
on borrowers and applicants.
    To implement this change, the Agency will publish this as a final 
rule. The Administrative Procedure Act exempts from prior notice rules, 
``relating to agency management or personnel or to public property, 
loans, grants, benefits, or contracts'' (5 U.S.C. 553(b)(A)).

Summary of Changes to Rule

    Changes to the Electric Program regulations are as follows:
    (A) The Agency is removing numerous requirements for Board of 
Director resolutions for electric borrower actions in 7 CFR parts 1710-
1730. Also, a new paragraph will be added to 7 CFR 1710.154 to identify 
five specific actions that will require Board Resolutions.
    (B) The Agency is removing 7 CFR 1710.106(c)(4), which placed 
restrictions on loan funds for facilities or other specific purposes 
that were previously rescinded. Currently, the use of loan funds for 
projects included in a loan that was rescinded, excluded those projects 
from receiving loan funds in a subsequent loan even if no loan funds 
were made available for that project prior to rescission. RUS believes 
it has sufficient funds available to allow us to include these types of 
projects provided they had not received loan funds previously. This 
will make more loan funds available for rural electric infrastructure.
    (C) The Agency is removing 7 CFR 1710.112(c) because it is 
outdated. It required a borrower's electric system to be year 2000 
compliant.
    (D) The Agency is revising 7 CFR 1710, Subpart E, Load Forecasts. 
RUS has previously required routine and periodic review and approval of 
up-to-date load forecasts. Load forecasts demonstrate system-wide 
growth and the need for generation. We are amending 7 CFR 1710 to 
require load

[[Page 32609]]

forecasts only in connection with a loan made or guaranteed by RUS to 
reduce burden on borrowers while still giving RUS confidence that the 
borrower is adequately managing anticipated system-wide load growth. We 
are amending 7 CFR 1710.206 to remove RUS approval of a load forecast 
work plan. Routine and periodic submittal and approval by RUS is an 
unnecessary and costly burden on the Electric Program borrowers. We are 
amending 7 CFR 1710.202-208 to remove the requirements for borrowers to 
maintain an approved load forecast on an ongoing basis. We are amending 
7 CFR 1710.202-208 to clarify the timing of the load forecast 
preparation in relation to the loan application and clarify that 
approval of a loan will constitute approval of the load forecast. We 
are amending 7 CFR 1710.209 to increase the total utility plant amount 
requiring the load forecast work plan.
    (E) The agency will revise 7 CFR 1710, Subpart F, Construction Work 
Plans and Related Studies. We are amending 7 CFR 1710.250(a) to require 
a construction work plan (CWP) be prepared for a 4-year term (increased 
from the current 2-3 year requirement). This change will reduce the 
frequency and of review of the CWP for both the electric borrowers' and 
for the Electric Program staff. We are amending 7 CFR 1710.250-255 and 
7 CFR 1717.604 to remove all references to long range engineering plans 
(LRP), except for the definition in 7 CFR 1710.250 and the requirement 
to maintain a LRP. The term of LRPs will be changed from 10 years to 
10-20 years. We are amending 7 CFR 1710.250(j) to require that 
engineering services must be reviewed by a licensed professional 
engineer. This will provide consistency between all borrowers as the 
existing language in regulation language is too vague. We are removing 
7 CFR 1710.254, Alternative sources of power, in its entirety. The 
concepts are duplicative of 7 CFR 1710.253. We are amending 7 CFR 
1710.253(b) to remove the reference to 7 CFR 1710.254 and remove the 
last sentence and replace. We are amending 7 CFR 1710.250(g) to remove 
the 45-day notice of storm or natural disaster requirement.
    (F) The Agency is revising 7 CFR 1710.501 to simplify the 
information and documents required to apply for a loan made or 
guaranteed by RUS. Borrowers will be divided into three categories: 
Current borrower, new/returning borrower, and generation and 
transmission borrower. The categories will determine the required 
documents needed to apply. Several application documents will no longer 
be required and in some cases information within application documents 
may be consolidated. This includes removing the requirement for a 
Transmittal Letter, Sec.  1710.501(1), and amending Sec.  1710.501 to 
require one Loan Application Letter. Sec.  1710.501(a) has been amended 
to show that borrowers may be eligible to submit their loan application 
via RUS' electronic application intake system instead of submitting a 
paper submission. The Agency is revising Sec.  1710.501(a)(5) to remove 
the requirement to submit a current Operating Report with the loan 
application and will rely on the year end form filed by many borrowers 
known as the Financial and Operating Report Electric Distribution. The 
Agency will also remove Sec. Sec.  1710.501(a)(14), Articles of 
incorporation and bylaws, 1710.501(c), Primary support documents, and 
1710.501(a)(6), Pending litigation statement. All required documents, 
forms and necessary information will be clearly set forth for the 
applicant in the revised Sec.  1710.501; only the information needed by 
RUS to make feasibility and security determinations will be required. 
This change should improve customer experience and customer service and 
facilitate lending for electric infrastructure.
    (G) The Agency is amending 7 CFR 1714.56 to delete references to 
automatic termination of loan advances at the end of the fund advance 
period. The fund advance period is actually governed by the terms of 
the applicable loan note and not the regulation. These requirements 
will be replaced by a reference to the terms of the particular loan 
note in determining the fund advance period. This change will alleviate 
any confusion and clarify that the loan note governs the advance 
period.
    (H) The Agency is removing 7 CFR 1717, Subparts G and H, Sec.  
1717.300-356, in its entirety. However, the Wholesale Power Contract 
requirement is moved to a new Sec.  1717.618 of Subpart M. RUS does not 
exercise federal preemption in ratemaking in connection with its 
electric power supply borrowers or in bankruptcy due to federal court 
decisions. Additionally, there are some clarifications to various 
requirements related to Lien Accommodations in Subpart R--Lien 
Accommodations and Subordinations for 100 Percent Private Financing in 
Sec.  1717.850-860.
    (I) Currently, 7 CFR 1724.51 requires RUS approval of electric 
system design regardless of the source of financing and 7 CFR 1724.54 
requires approval of plans and specifications for RUS financed electric 
system facilities. These requirements assure RUS that the electric 
system it is financing is valuable and enhances its security. These 
sections are being amended to allow a licensed professional engineer to 
certify that the design data, plans and profile drawings for the 
electric system facilities meets all applicable RUS electric design 
requirements, specifications, local, state and national requirements 
and that RUS listed materials and equipment was used. This will benefit 
the borrower by allowing it to provide a certification in lieu of the 
actual system design and await review and approval. This will permit 
RUS staff to focus on more complex and non-compliant system designs.
    (J) RUS requires the use of its form of contracts for RUS financed 
facilities, as required by 7 CFR 1724.1(c), 1724.10-1724.74 and 7 CFR 
1726.24-1726.304. The Agency is amending 7 CFR 1724.1(c) to allow the 
borrowers three options: 1. Submit the actual contract used for review 
and approval, 2. submit a certification that the required contract was 
used for the electric project or 3. submit a certification that the 
contract was not used but the essential and identical provisions 
specifically listed in the certification were used in the contract for 
constructing the electric facilities. This change will facilitate 
electric system construction and advances of loan funds to borrowers. 
Certifications routinely are used throughout the government as a means 
of compliance with requirements. RUS will be authorized to review the 
underlying contracts, if requested.

List of Subjects

7 CFR Part 1710

    Electric power, Grant program-energy, Loan program-energy, 
Reporting and recordkeeping requirements, Rural areas.

7 CFR Part 1714

    Electric power, Loan programs-energy, Rural areas.

7 CFR Part 1717

    Administrative practice and procedure, Electric power, Electric 
power rates, Electric utilities, Intergovernmental relations, 
Investments, Loan program-energy, Reporting and recordkeeping 
requirements, Rural areas.

7 CFR Parts 1721, 1724, 1726, and 1730

    Electric power, Loan program-energy, Reporting and recordkeeping 
requirements, Rural areas.

    For the reasons set forth in the preamble, RUS amends 7 CFR parts

[[Page 32610]]

1710, 1714, 1717, 1721, 1724, 1726, and 1730 as follows:

PART 1710--GENERAL AND PRE-LOAN POLICIES AND PROCEDURES COMMON TO 
ELECTRIC LOANS AND GUARANTEES

0
1. The authority citation for part 1710 continues to read as follows:

    Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

Subpart A--General

0
2. Amend Sec.  1710.2 in paragraph (a) by revising the definition of 
``Loan period'' to read as follows:


Sec.  1710.2  Definitions and rules of construction.

    (a) * * *
    Loan period means the period of time during which the facilities 
will be constructed not to exceed the time identified in the Loan note, 
as approved.
* * * * *

Subpart C--Loan Purposes and Basic Policies


Sec.  1710.106  [Amended]

0
3. Amend Sec.  1710.106 by removing paragraph (c)(4).


Sec.  1710.112  [Amended]

0
4. Amend Sec.  1710.112 by removing paragraph (c).

Subpart D--Basic Requirements for Loan Approval

0
 5. Add Sec.  1710.154 to subpart D to read as follows:


Sec.  1710.154  Board of Director Resolutions.

    Specific actions that require a Board of Director Resolution from a 
borrower:
    (a) Board approval of loan documents;
    (b) Major change in the terms of a loan, i.e. maturity;
    (c) Initial access to RD Apply (or successor RUS online application 
systems);
    (d) Requests for approval by a Board, acting as the regulatory 
authority, for any departure from the RUS Uniform System of Accounts 
with the exception of those deferrals specifically identified in Sec.  
1767.13(d); and
    (e) eAuthentication requirements.

Subpart E--Load Forecasts

0
6. Revise Sec.  1710.202 to read as follows:


Sec.  1710.202  Requirement to prepare a load forecast--power supply 
borrowers.

    (a) A power supply borrower with a total utility plant of $500 
million or more must provide a load forecast in support of any request 
for RUS financial assistance. The borrower must also maintain a load 
forecast work plan on file. The borrower's load forecast must be 
prepared pursuant to the load forecast work plan.
    (b) A power supply borrower that is a member of another power 
supply borrower that has a total utility plant of $500 million or more 
must provide an approved load forecast in support of any request for 
RUS financial assistance. The member power supply borrower may comply 
with this requirement by participation in and inclusion of its load 
forecasting information in the load forecast of its power supply 
borrower. The load forecasts must be prepared pursuant to the load 
forecast work plan.
    (c) A power supply borrower that has total utility plant of less 
than $500 million and that is not a member of another power supply 
borrower with a total utility plant of $500 million or more must 
provide a load forecast that meets the requirements of this subpart in 
support of an application for any RUS loan or loan guarantee which 
exceeds $50 million.

0
7. Revise Sec.  1710.203 to read as follows:


 Sec.  1710.203  Requirement to prepare a load forecast--distribution 
borrowers.

    (a) A distribution borrower that is a member of a power supply 
borrower, with a total utility plant of $500 million or more must 
provide a load forecast in support of any request for RUS financial 
assistance. The distribution borrower may comply with this requirement 
by participation in and inclusion of its load forecasting information 
in the approved load forecast of its power supply borrower. The 
distribution borrower's load forecast must be prepared pursuant to the 
load forecast work plan of its power supply borrower.
    (b) A distribution borrower that is a member of a power supply 
borrower which is itself a member of another power supply borrower that 
has a total utility plant of $500 million or more must provide a load 
forecast in support of any request for RUS financial assistance. The 
distribution borrower may comply with this requirement by participation 
in and inclusion of its load forecasting information in the load 
forecast of its power supply borrower. The distribution borrower's load 
forecast must be prepared pursuant to the load forecast work plan of 
the power supply borrower with total utility plant in excess of $500 
million.
    (c) A distribution borrower that is a member of a power supply 
borrower with a total utility plant of less than $500 million must 
provide a load forecast that meets the requirements of this subpart in 
support of an application for any RUS loan or loan guarantee that 
exceeds $3 million or 5 percent of total utility plant, whichever is 
greater. The distribution borrower may comply with this requirement by 
participation in and inclusion of its load forecasting information in 
the load forecast of its power supply borrower.
    (d) A distribution borrower with a total utility plant of less than 
$500 million and that is unaffiliated with a power supply borrower must 
provide a load forecast that meets the requirements of this subpart in 
support of an application for any RUS loan or loan guarantee which 
exceeds $3 million or 5 percent of total utility plant, whichever is 
greater.
    (e) A distribution borrower with a total utility plant of $500 
million or more must provide a load forecast in support of any request 
for RUS financing assistance. The borrower must also maintain a load 
forecast work plan. The distribution borrower may comply with this 
requirement by participation in and inclusion of its load forecasting 
information in the load forecast of its power supply borrower.


Sec.  1710.204  [Removed and Reserved]

0
8. Remove and reserve Sec.  1710.204.

0
9. Revise Sec.  1710.205 to read as follows:


Sec.  1710.205  Minimum requirements for all load forecasts.

    (a) Contents of load forecast. All load forecasts submitted by 
borrowers for approval must include:
    (1) A narrative describing the borrower's system, service 
territory, and consumers;
    (2) A narrative description of the borrower's load forecast 
including future load projections, forecast assumptions, and the 
methods and procedures used to develop the forecast;
    (3) Projections of usage by consumer class, number of consumers by 
class, annual system peak demand, and season of peak demand for the 
number of years agreed upon by RUS and the borrower;
    (4) A summary of the year-by-year results of the load forecast in a 
format that allows efficient transfer of the information to other 
borrower planning or loan support documents;
    (5) The load impacts of a borrower's demand side management and 
energy efficiency and conservation program activities, if applicable;
    (6) Graphic representations of the variables specifically 
identified by management as influencing a borrower's loads; and

[[Page 32611]]

    (7) A database that tracks all relevant variables that might 
influence a borrower's loads.
    (b) Formats. RUS does not require a specific format for the 
narrative, documentation, data, and other information in the load 
forecast, provided that all required information is included and 
available. All data must be in a tabular form that can be transferred 
electronically to RUS computer software applications. RUS will evaluate 
borrower load forecasts for readability, understanding, filing, and 
electronic access. If a borrower's load forecast is submitted in a 
format that is not readily usable by RUS or is incomplete, RUS will 
require the borrower to submit the load forecast in a format acceptable 
to RUS.
    (c) Document retention. The borrower must retain its latest load 
forecasts and supporting documentation. Any load forecast work plan 
must be retained as part of the load forecast.
    (d) Consultation with RUS. The borrower must designate and make 
appropriate staff and consultants available for consultation with RUS 
to facilitate RUS review of the load forecast when requested by RUS.
    (e) Correlation and consistency with other RUS loan support 
documents. If a borrower relies on an approved load forecast or an 
update of an approved load forecast as loan support, the borrower must 
demonstrate that the approved load forecast and the other primary 
support documentation for the loan were reconciled. For example, both 
the load forecast and the financial forecast require input assumptions 
for wholesale power costs, distribution costs, other systems costs, 
average revenue per kWh, and inflation. Also, a borrower's engineering 
planning documents, such as the construction work plan, incorporate 
consumer and usage per consumer projections from the load forecast to 
develop system design criteria. The assumptions and data common to all 
the documents must be consistent.
    (f) Coordination. A load forecast of a power supply borrower must 
consider the load forecasts of all its member systems.

0
10. Amend Sec.  1710.206 by revising the section heading, and 
paragraphs (a) introductory text and (b) to read as follows:


Sec.  1710.206  Requirements for load forecasts prepared pursuant to a 
load forecast work plan.

    (a) Contents of load forecasts prepared under a load forecast work 
plan. In addition to the minimum requirements for load forecasts under 
Sec.  1710.205, load forecasts developed and submitted by borrowers 
required to have a load forecast work plan shall include the following:
* * * * *
    (b) Compliance with a load forecast work plan. A borrower required 
to maintain a load forecast work plan must also be able to demonstrate 
that both it and its RUS borrower members are in compliance with its 
load forecast work plan.

0
11. Amend Sec.  1710.207 by revising the section heading to read as 
follows:


Sec.  1710.207  RUS criteria for load forecasts by distribution 
borrowers.

* * * * *

0
12. Amend Sec.  1710.208 by revising the section heading and 
introductory text and removing paragraph (g).
    The revisions read as follows:


Sec.  1710.208  RUS criteria for load forecasts by power supply 
borrowers and by distribution borrowers.

    All load forecasts submitted by power supply borrowers and by 
distribution borrowers must satisfy the following criteria:
* * * * *

0
13. Revise Sec.  1710.209 to read as follows:


Sec.  1710.209  Requirements for load forecast work plans.

    (a) In addition to the load forecast required under Sec. Sec.  
1710.202 and 1710.203, any power supply borrower with a total utility 
plant of $500 million or more and any distribution borrower with a 
total utility plant of $500 million or more must maintain a load 
forecast work plan. RUS borrowers that are members of a power supply 
borrower with a total utility plant of $500 million or more must 
cooperate in the preparation of and submittal of the load forecast work 
plan of their power supply borrower.
    (b) A load forecast work plan establishes the process for the 
preparation and maintenance of a comprehensive database for the 
development of the borrower's load forecast, and load forecast updates. 
The load forecast work plan is intended to develop and maintain a 
process that will result in load forecasts that will meet the 
borrowers' own needs and the requirements of this subpart. A work plan 
represents a commitment by a power supply borrower and its members, or 
by a large unaffiliated distribution borrower, that all parties 
concerned will prepare their load forecasts in a timely manner pursuant 
to the load forecast work plan and they will modify the load forecast 
work plan as needed to address changing circumstances or enhance the 
usefulness of the load forecast work plan.
    (c) A load forecast work plan for a power supply borrower and its 
members must cover all member systems, including those that are not 
borrowers. However, only members that are borrowers, including the 
power supply borrower, are required to follow the load forecast work 
plan in preparing their respective load forecasts. Each borrower is 
individually responsible for forecasting all its RE Act beneficiary and 
non-RE Act beneficiary loads.
    (d) A load forecast work plan must outline the coordination and 
preparation requirements for both the power supply borrower and its 
members.
    (e) A load forecast work plan must describe the borrower's process 
and methods to be used in producing the load forecast.
    (f) Load forecast work plans for borrowers with residential demand 
of 50 percent or more of total kWh must provide for a residential 
consumer survey at least every 5 years to obtain data on appliance and 
equipment saturation and electricity demand. Any such borrower that is 
experiencing or anticipates changes in usage patterns shall consider 
surveys on a more frequent schedule. Power supply borrowers shall 
coordinate such surveys with their members. Residential consumer 
surveys may be based on the aggregation of member-based samples or on a 
system-wide sample, provided that the latter provides for relevant 
regional breakdowns as appropriate.
    (g) Load forecast work plans must provide for RUS review of the 
load forecasts as the load forecast is being developed.
    (h) A power supply borrower's work plan must have the concurrence 
of the majority of the members that are borrowers.

Subpart F-- Construction Work Plans and Related Studies

0
14. Revise Sec.  1710.250 to read as follows:


Sec.  1710.250  General.

    (a) An ongoing, integrated planning system is needed by borrowers 
to determine their short-term and long-term needs for plant additions, 
improvements, replacements, and retirements. The primary components of 
the system consist of long-range engineering plans, construction work 
plans (CWPs), CWP amendments, and special engineering and cost studies.

[[Page 32612]]

Long range engineering plans identify plant investments required over a 
period of 10-20 years or more. CWPs specify and document plant 
requirements for the short-term, usually 4 years, and special 
engineering and cost studies are used to support CWPs and to identify 
and document requirements for specific items or purposes, such as load 
management equipment, System Control and Data Acquisition equipment, 
sectionalizing investments, and additions of generation capacity and 
associated transmission plant.
    (b) A long range engineering plan specifies and supports the major 
system additions, improvements, replacements, and retirements needed 
for an orderly transition from the existing system to the system 
required 10 or more years in the future. The planned future system 
should be based on the most technically and economically sound means of 
serving the borrower's long-range loads in a reliable and 
environmentally acceptable manner, and it should ensure that planned 
facilities will not become obsolete prematurely.
    (c) A CWP shall include investment cost estimates and supporting 
engineering and cost studies to demonstrate the need for each proposed 
facility or activity and the reasonableness of the investment 
projections and the engineering assumptions used in sizing the 
facilities. The CWP must be consistent with the borrower's long range 
engineering plan and both documents must be consistent with the 
borrower's RUS-approved power requirements study.
    (d) Applications for a loan or loan guarantee from RUS (new loans 
or budget reclassifications) must be supported by a current CWP 
approved by RUS. RUS approval of these plans relates only to the 
facilities, equipment, and other purposes to be financed by RUS, and 
means that the plans provide an adequate basis from a planning and 
engineering standpoint to support RUS financing. RUS approval of the 
plans does not mean that RUS approves of the facilities, equipment, or 
other purposes for which the borrower is not seeking RUS financing. If 
RUS disagrees with a borrower's estimate of the cost of one or more 
facilities for which RUS financing is sought, RUS may adjust the 
estimate after consulting with the borrower and explaining the reasons 
for the adjustment.
    (e) Except as provided in paragraph (f) of this section, to be 
eligible for RUS financing, the facilities, including equipment and 
other items, included in a CWP must be approved by RUS and receive 
Environmental Clearance before the start of construction. This 
requirement also applies to any amendments to a CWP required to add 
facilities to a CWP or to make significant physical changes in the 
facilities already included in a CWP. Provision for funding of ``minor 
projects'' under an RUS loan guarantee is permitted on the same basis 
as that discussed for insured loan funds in 7 CFR part 1721, Post-Loan 
Policies and Procedures for Insured Electric Loans.
    (f) In the case of damage caused by storms and other natural 
catastrophes, a borrower may proceed with emergency repair work before 
a CWP or CWP amendment is prepared by the borrower and approved by RUS, 
without losing eligibility for RUS financing of the repairs. The 
borrower must notify the RUS regional office in writing after the 
natural catastrophe, of its preliminary estimates of damages and repair 
costs. Not later than 120 days after the natural catastrophe, the 
borrower must submit to RUS for approval, a CWP or CWP amendment 
detailing the repairs.
    (g) A CWP may be amended or augmented when the borrower can 
demonstrate the need for the changes.
    (h) A borrower's CWP or special engineering studies must be 
supported by the appropriate level of environmental review 
documentation, in accordance with 7 CFR part 1970.
    (i) All engineering activities required by this subpart must be 
performed by qualified engineers, who may be staff employees of the 
borrower or outside consultants. All engineering services must be 
reviewed by a licensed professional engineer.
    (j) Upon written request from a borrower, RUS may waive in writing 
certain requirements with respect to long-range engineering plans and 
CWPs if RUS determines that such requirements impose a substantial 
burden on the borrower and that waiving the requirements will not 
significantly affect the accomplishment of the objectives of this 
subpart. For example, if a borrower's load is forecast to remain 
constant or decline during the planning period, RUS may waive those 
portions of the plans that relate to load growth.

0
15. Amend Sec.  1710.251 by revising paragraph (a) to read as follows:


Sec.  1710.251   Construction work plans--distribution borrowers.

    (a) All distribution borrowers must maintain a current CWP covering 
all new construction, improvements, replacements, and retirements of 
distribution and transmission plant, and improvements replacements, and 
retirements of any generation plant. Construction of new generation 
capacity need not be included in a CWP but must be specified and 
supported by specific engineering and cost studies. (See Sec.  
1710.253.)
* * * * *

0
16. Amend Sec.  1710.252 by revising paragraph (a) to read as follows:


Sec.  1710.252   Construction work plans--power supply borrowers.

    (a) All power supply borrowers must maintain a current CWP covering 
all new construction, improvements, replacements, and retirements of 
distribution and transmission plant, and improvements, replacements, 
and retirements of generation plant. Applications for RUS financial 
assistance for such facilities must be supported by a current, RUS-
approved CWP. Construction of new generation capacity need not be 
included in a CWP but must be specified and supported by specific 
engineering and cost studies.
* * * * *

0
17. Amend Sec.  1710.253 by revising paragraph (b) to read as follows:


Sec.  1710.253   Engineering and cost studies--addition of generation 
capacity.

* * * * *
    (b) The studies must include comprehensive economic present-value 
analyses of the costs and revenues of the available self-generation, 
load management, energy conservation, and purchased-power options, 
including assessments of service reliability and financing requirements 
and risks. An analysis of purchased power options, including an 
analysis of available alternate sources of power shall be included. The 
analysis should include the terms and conditions of any requests for 
proposals and responses to such requests.
* * * * *


Sec.  1710.254  [Removed and Reserved]

0
18. Remove and reserve Sec.  1710.254.

0
19. Amend Sec.  1 710.255 by revising paragraph (a) to read as follows:


Sec.  1710.255   Energy efficiency work plans--energy efficiency 
borrowers.

    (a) All energy efficiency borrowers must maintain a current EEWP 
covering in aggregate all new construction, improvements, replacements, 
and retirements of energy efficiency related equipment and activities;
* * * * *

Subpart G--Long-Range Financial Forecasts

0
20. Amend Sec.  1710.300 by revising paragraphs (b) and (d)(4) to read 
as follows:

[[Page 32613]]

Sec.  1710.300   General.

* * * * *
    (b) A borrower must prepare, for RUS review and approval, a long-
range financial forecast in support of its loan application. The 
forecast must demonstrate that the borrower's system is economically 
viable and that the proposed loan is financially feasible. Loan 
feasibility will be assessed based on the criteria set forth in Sec.  
1710.112.
* * * * *
    (d) * * *
    (4) The current rate schedules or new rates;
* * * * *

Subpart H--Energy Efficiency and Conservation Loan Program

0
21. Amend Sec.  1710.410 by revising paragraph (b) to read as follows:


Sec.  1710.410   Application documents.

* * * * *
    (b) A copy of the statement establishing the EE Program that 
reflects an undertaking that funds collected in excess of then current 
amortization requirements for the related RUS loan will be redeployed 
for EE Program purposes or used to prepay the RUS loan.
* * * * *

Subpart I--Application Requirements and Procedures for Loans

0
22. Amend Sec.  1710.500 by revising paragraph (a) to read as follows:


Sec.  1710.500   Initial contact.

    (a) Loan applicants that do not have outstanding loans from RUS 
should contact the Rural Utilities Service via Email at 
[email protected], call RUS at (202) 720-9545 or write to the 
Rural Utilities Service Administrator, United States Department of 
Agriculture, 1400 Independence Ave. SW, STOP 1560, Room 5165, 
Washington, DC 20250-1560. Loan Applicants may also visit RUS' website 
to locate a local General Field Representative at https://www.rd.usda.gov/contact-us/electric-gfr. A field or headquarters staff 
representative may be assigned by RUS to visit the applicant and 
discuss its financial needs and eligibility. Borrowers that have 
outstanding loans should contact their assigned RUS general field 
representative (GFR) or, in the case of a power supply borrower, Deputy 
Assistant Administrator, Office of Loan Origination and Approval. 
Borrowers may consult with RUS field representatives and headquarters 
staff, as necessary.
* * * * *

0
23. Amend Sec.  1710.501 by revising paragraphs (a), (b), (c), and 
(d)(1) to read as follows:


Sec.  1710.501   Loan application documents.

    (a) All borrowers. Borrowers may be eligible to submit their loan 
application via RUS' electronic application intake system instead of 
submitting a paper submission. Please consult your GFR in accordance 
with Sec.  1710.500. All applications for electric loans shall include 
the documents listed in this paragraph (a).
    (1) Loan application letter. A letter signed by the borrower's 
manager indicating the actual corporate name, the borrowers RUS 
Designation, the borrowers RUS Loan Designation, and taxpayer 
identification number of the borrower and addressing the following 
items:
    (i) The amount of loan and loan type. The sources and amounts of 
any supplemental or other financing. For an insured loan, a statement 
of whether the application is for a municipal rate loan, with or 
without the interest rate cap, or a hardship loan. If the application 
is for a municipal rate loan, the board resolution must indicate 
whether the borrower intends to elect the prepayment option. See 7 CFR 
1714.4(c);
    (ii) The Maturity Date/Term of the Loan in number of years (useful 
life to determine maximum);
    (iii) A short description of the purpose of the loan, i.e., 
generation, distribution, transmission, energy efficiency, etc;
    (iv) Method of Amortization;
    (v) The Borrower's DUNS Number;
    (vi) The Borrower's Organization Number from its State Corporation 
Commission or similar entity;
    (vii) The Borrower's Exact Legal Name (please state the legal name 
and identify the legal document used to state the name or attach such 
document;
    (viii) List of current counties where real property is located;
    (ix) Attach current property schedule;
    (x) Identify any new counties with property since last loan;
    (xi) Authorized/registered place of business;
    (xii) Debt Limit;
    (xiii) Identify any State regulatory approvals needed;
    (xiv) List any subsidiaries;
    (xv) Identify any material financial or other material change since 
last loan, including a list of any pending litigation and where there 
is insurance to cover such;
    (xvi) Breakdown of loan funds by State;
    (xvii) Construction Work Plan (CWP), if not previously submitted 
through RD Apply or other method;
    (xviii) Environmental Report (ER), if not previously submitted 
through RD Apply or other method;
    (xix) Statement authorizing RUS to release appropriate information 
and data relating to the loan application to the FFB and any existing 
supplemental lenders.
    (2) Special resolutions. Included any special resolutions required 
by Federal or State Authorities and any others as identified and 
required by the RUS General Field Representative (for example, use of 
contractors, corrective action plans, etc.)
    (3) RUS Form 740c, Cost Estimates and Loan Budget for Electric 
Borrowers. This form together with its attachments lists the 
construction, equipment, facilities and other cost estimates from the 
construction work plan or engineering and cost studies. The date on 
page 1 of the form is the beginning date of the loan period. Form 740c 
also includes the following information, exhibits, and attachments:
    (i) Description of funds and materials. This description details 
the availability of materials and equipment, any unadvanced funds from 
prior loans, and any general funds the borrower designates, to 
determine the amount of such materials and funds to be applied against 
the capital requirements estimated for the loan period.
    (ii) Useful life of facilities financed by the loan. Form 740c must 
include, as a note, either a statement certifying that at least 90 
percent of the loan funds are for facilities that have a useful life of 
33 years or longer, or a schedule showing the costs and useful life of 
those facilities with a useful life of less than 33 years. This 
statement or schedule will be used to determine the final maturity of 
the loan. See Sec.  1710.115.
    (iii) Reimbursement schedule. This schedule lists the date, amount, 
and identification number of each inventory of work orders and special 
equipment summary that form the basis for the borrower's request for 
reimbursement of general funds on the RUS Form 740c. See Sec.  
1710.109. If the borrower is not requesting reimbursement, this 
schedule need not be submitted.
    (iv) Location of consumers. If the application is for a municipal 
rate loan subject to the interest rate cap, or for a loan at the 
hardship rate, and the average number of consumers per mile of the 
total electric system exceeds 17, Form 740c must include, as a note, a 
breakdown of funds included in the proposed loan to furnish or improve 
service to consumers located in an

[[Page 32614]]

urban area. See 7 CFR 1714.7(c) and 1714.8(d). This breakdown must 
indicate the method used by the borrower for allocating loan funds 
between urban and non-urban consumers.
    (4) RUS Form 740g, Application for Headquarters Facilities. This 
form lists the individual cost estimates from the construction work 
plan or other engineering study that support the need for RUS financing 
for any warehouse and service type facilities included, and funding 
requested for such facilities shown on RUS Form 740c. If no loan funds 
are requested for headquarters facilities, Form 740g need not be 
submitted.
    (5) Financial and statistical report. RUS will use the Borrower's 
year end filed Financial and Operating Report Electric Distribution 
(formerly known as the RUS Form 7) or the Financial and Operating 
Report Electric Power Supply (formerly known as the RUS Form 12) unless 
the borrower has failed to meet its applicable financial ratios, as 
required by its security instrument and loan contract. The reports are 
required to be filed electronically in the agency's Data Collection 
System. If the borrower's financial requirements have not been met, RUS 
will require a current Financial and Operating Report to be submitted 
with the loan application, which shall contain the most recent data 
available and shall not be more than 60 days old when received by RUS. 
In addition, for those borrowers not meeting their financial ratios, 
the following information shall also be provided as part of the loan 
application:
    (i) Any other information required to be submitted by RUS;
    (ii) A Plan to meet their Financial Ratios;
    (iii) The Date of the Borrower's last rate change and the amount/
percentage of that rate change;
    (iv) A list of any Subsidiaries along with a brief summary 
identifying the purpose of each subsidiary and identify the percentage 
interest in each if less than 100%;
    (v) If the issues with the Borrower not meeting its financial 
ratios involves the subsidiary or equity investment losses a business 
plan and exit strategy shall be provided;
    (vi) An updated Financial and Operating Report within 60 days of 
actual loan approval which will be requested by RUS and can be 
submitted later.
    (6) Load Forecast Study. A current Load Forecast Study will be 
included in the loan application which is not more than 2 years old 
when the loan application is submitted unless the borrower is a member 
of a Power Supplier which only completes a Load Forecast once every 3 
years. In that case the Load Forecast shall not be more than 3 years 
old when the loan application is submitted.
    (7) Long Range Financial Forecast and assumptions. Along with the 
loan application, the borrower shall submit to RUS a Long-Range 
Financial Forecast (LRFF) that meets the requirements of subpart G of 
this part in a form acceptable to RUS. The forecast shall include any 
sensitivity analysis and/or analysis of alternative scenarios only if 
requested by the RUS General Field Representative.
    (8) Rate disparity and consumer income data. If the borrower is 
applying under the rate disparity and consumer income tests for either 
a municipal rate loan subject to the interest rate cap or a hardship 
rate loan, the application must provide a breakdown of residential 
consumers either by county or by census tract. In addition, if the 
borrower serves in 2 or more states, the application must include a 
breakdown of all ultimate consumers by state. This breakdown may be a 
copy of Form EIA 861 submitted by the Borrower to the Department of 
Energy or in a similar form. See 7 CFR 1714.7(b) and 1714.8(a). To 
expedite the processing of loan applications, RUS strongly encourages 
distribution borrowers to provide this information to the GFR prior to 
submitting the application.
    (9) Standard Form 100--Equal Employment Opportunity Employer Report 
EEO--1. This form, required by the Department of Labor, sets forth 
employment data for borrowers with 100 or more employees. A copy of 
this form, as submitted to the Department of Labor, is to be included 
in the application for an insured loan if the borrower has more than 
100 employees. See Sec.  1710.122.
    (10) Form AD-1047, Certification Regarding Debarment, Suspension, 
and Other Responsibility Matters--Primary Covered Transactions. This 
statement certifies that the borrower will comply with certain 
regulations on debarment and suspension required by Executive Order 
12549, Debarment and Suspension (3 CFR, 1986 Comp., p. 189). See 2 CFR 
417, and Sec.  1710.123 of this part.
    (11) Uniform Relocation Act assurance statement. This assurance, 
which need not be resubmitted if previously submitted, provides that 
the borrower shall comply with 49 CFR part 24, which implements the 
Uniform Relocation Assistance and Real Property Acquisition Policy Act 
of 1970, as amended by the Uniform Relocation Act Amendments of 1987 
and 1991. See Sec.  1710.124.
    (12) Lobbying. The following information on lobbying is required 
pursuant to 2 CFR 418, and Sec.  1710.125. Borrowers applying for both 
insured and guaranteed financing should consult RUS before submitting 
this information.
    (13) Federal debt delinquency requirements. See Sec.  1710.126. The 
following documents are required:
    (i) Report on Federal debt delinquency. This report indicates 
whether or not a borrower is delinquent on any Federal debt.
    (ii) Certification regarding Federal Government collection options. 
This statement certifies that a borrower has been informed of the 
collection options the Federal Government may use to collect delinquent 
debt. The Federal Government is authorized by law to take any or all of 
the following actions in the event that a borrower's loan payments 
become delinquent or the borrower defaults on its loans:
    (A) Report the borrower's delinquent account to a credit bureau;
    (B) Assess additional interest and penalty charges for the period 
of time that payment is not made;
    (C) Assess charges to cover additional administrative costs 
incurred by the Government to service the borrower's account;
    (D) Offset amounts owed directly or indirectly to the borrower 
under other Federal programs;
    (E) Refer the borrower's debt to the Internal Revenue Service for 
offset against any amount owed to the borrower as an income tax refund;
    (F) Refer the borrower's account to a private collection agency to 
collect the amount due; and
    (G) Refer the borrower's account to the Department of Justice for 
collection.
    (14) Assurance regarding Felony Conviction (AD Form 3030). This 
form must be included with each application to document the status 
regarding a felony criminal violation and status of any unpaid federal 
tax liability;
    (15) RD Form 400-4, Assurance Agreement. This form provides 
assurance to USDA that recipients of federal financial assistance are 
in compliance with Title VI of the Civil Rights Act of 1964, 7 CFR part 
15 and other agency regulations;
    (16) Seismic safety certifications. This certification shall be 
included, if required under 7 CFR part 1792.
    (17) Other forms. Other forms as required by law or as requested.
    (b) New or returning borrowers. In addition to the items in 
paragraph (a) of this section, applications for loans

[[Page 32615]]

submitted by new or returning borrowers shall include the items listed 
in this paragraph (b).
    (1) A copy of the Borrower's Current Bylaws;
    (2) Identify the Borrower's Type of Organizational Structure and a 
copy of their Articles of Incorporation;
    (3) Provide evidence of where Borrower is registered to do 
business;
    (4) Copies of the Borrower's Audited GAAP financials for the past 
1-3 years, if available or other financial information, as requested on 
a case by case basis;
    (5) A list of any secured outstanding debt including the amount and 
name of lender;
    (6) Evidence of Collateral and/or its ability to pledge such 
collateral;
    (7) An Attorney Opinion for the Borrower including the counties 
served, a property schedule, the state of incorporation, any pending 
litigation, the corporate debt limit, the Borrower's legal name and 
type of legal organization, and the borrower's legal authority to 
pledge its collateral or other assets.
    (8) Copies of the Borrower's Power Supply Contracts and 
arrangements (including wholesale rate contracts);
    (9) Competitive position information including its rates and rate 
disparity between neighboring utilities;
    (10) Construction Work Plan and/or Engineering Power Cost Study, if 
not previously submitted;
    (11) An Environmental Report related to the facilities for which 
financing is being requested, if not previously submitted.
    (c) Power Supply Borrowers. In addition to the loan application, 
consisting of the documents required by paragraph (a) or (b) of this 
section, Power Supply Borrowers must also provide RUS with the 
following:
    (1) Information on its Power Supply arrangements and/or wholesale 
power contracts including the maturity dates. Please note copies of the 
contracts may be requested on a case by cases basis;
    (2) A Profile of the Power Supply Borrowers' fuel supply 
arrangements;
    (3) The Borrowers Load Resource Table;
    (4) Information on its Transmission and Interconnection 
arrangements. Please note that copies of the contracts related to such 
arrangements may be requested on a case by case basis;
    (5) The Power Supply Borrowers' New/Returning membership chart 
profile and relationships as applicable.
    (d) * * *
    (1) Generally, all information required by paragraphs (a), (b), and 
(c) of this section is submitted to RUS in a single application. 
Borrowers may be eligible to submit their loan application via RUS' 
electronic application intake system instead of submitting hard copies 
of the loan applications. Please contact your respective General Field 
Representative or RUS Headquarters to determine if you are eligible to 
utilize the electronic system.

PART 1714--PRE-LOAN POLICIES AND PROCEDURES FOR INSURED ELECTRIC 
LOANS

0
24. The authority citation for part 1714 continues to read as follows:

    Authority:  7 U.S.C. 901 et seq.; 1921 et seq.; and 6941 et seq.

Subpart A--General

0
25. Amend Sec.  1714.4 by revising paragraph (c) to read as follows:


Sec.  1714.4   Interest rates.

* * * * *
    (c) Application procedure. The borrower must indicate whether the 
application is for a municipal rate loan, with or without the interest 
rate cap, or a hardship rate loan. If the application is for a 
municipal rate loan, the borrower must also indicate whether they 
intend to elect the prepayment option.

Subpart B--Terms of Insured Loans

0
26. Revise Sec.  1714.56 to read as follows:


Sec.  1714.56   Fund advance period

    (a) For loans approved on or after February 21, 1995, the fund 
advance period begins on the date of the loan note and is one year 
longer than the loan period, but not less than 4 years. The 
Administrator may extend the fund advance period on any loan if the 
borrower meets the requirements of paragraph (b) of this section and as 
permitted by law. As defined in 7 CFR 1710.2, the loan period begins on 
the date shown on page 1 of RUS Form 740c submitted with the loan 
application.
    (b) The Administrator may agree to an extension of the fund advance 
period for loans approved on or after June 1, 1984, if the borrower 
demonstrates to the satisfaction of the Administrator that the loan 
funds continue to be needed for approved loan purposes (i.e., 
facilities included in a RUS approved construction work plan). Policies 
for extension of the fund advance period following certain mergers, 
consolidations, and transfers of systems substantially in their 
entirety are set forth in 7 CFR 1717.156.
    (1) To apply for an extension, the borrower must make a request to 
RUS prior to the last date for advance as noted in the borrower's loan 
documents and provide, the following:
    (i) A certified copy of a board resolution requesting an extension 
of the Government's obligation to advance loan funds;
    (ii) Evidence that the unadvanced loan funds continue to be needed 
for approved loan purposes; and
    (iii) Notice of the estimated date for completion of construction.
    (2) If the Administrator approves a request for an extension, RUS 
will notify the borrower in writing of the extension and the terms and 
conditions thereof. An extension will be effective only if it is 
requested in writing prior to the last date for advance as provided in 
the borrower's loan documents.
    (3) Any request received after the last date for advance shall be 
rejected.
    (c) RUS will rescind the balance of any loan funds not advanced to 
a borrower as of the final date approved for advancing funds.

PART 1717--POST-LOAN POLICIES AND PROCEDURES COMMON TO INSURED AND 
GUARANTEED ELECTRIC LOANS

0
27. The authority citation for part 1717 continues to read as follows:

    Authority:  7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

Subpart G [Removed and Reserved]

0
 28. Remove and reserve subpart G, consisting of Sec. Sec.  1717.300 
through 1717.349.

Subpart H [Removed and Reserved]

0
29. Remove and reserve subpart H, consisting of Sec. Sec.  1717.350 
through 1717.356.

Subpart M--Operational Controls

0
30. Add Sec.  1717.618 to read as follows:


Sec.  1717.618  Wholesale power contracts.

    (a) Pursuant to the terms of the RUS documents each power supply 
borrower shall establish and adjust rates for the sale of electric 
power and energy in such a manner as to assure that the borrower will 
be able to make required payments on secured loans.
    (b) Pursuant to the terms of the RUS wholesale power contract, the 
Board of Directors or Board of Trustees of the power supply borrower 
shall review rates not less frequently than once each calendar year and 
revise its rates as therein set forth. The RUS wholesale power contract 
further provides that the borrower shall notify the Administrator not 
less than 30 nor more than 45 days

[[Page 32616]]

prior to the effective date of any adjustment and shall set forth the 
basis upon which the rate is to be adjusted and established. The RUS 
wholesale power contract provides that no final revision in rates shall 
be effective unless approved in writing by the Administrator.
    Note 1 to paragraph (b): The Wholesale Power Contract, with minor 
modifications which are approved by RUS on a case by case basis, 
provides that the rate charged for electric power and energy, shall 
produce revenues which shall be sufficient, but only sufficient, with 
the revenues of the Seller from all other sources, to meet the cost of 
the operation and maintenance (including without limitation, 
replacements, insurance, taxes and administrative and general overhead 
expenses) of the generating plant transmission system and related 
facilities of the Seller, the cost of any power and energy purchased 
for resale hereunder by the Seller, the cost of transmission service, 
make payments on account of principal and interest on all indebtedness 
of the Seller, and to provide for the establishment and maintenance of 
reasonable reserves.
    (c) Pursuant to the terms of the RUS mortgage, each power supply 
borrower must design its rates as therein set forth and must give 90 
days prior notice to RUS of any proposed change in its general rate 
structure.

(Approved by the Office of Management and Budget under control 
number 0572-0089)

Subpart R--Lien Accommodations and Subordinations for 100 Percent 
Private Financing

0
31. Amend Sec.  1717.850 by revising paragraph (g)(1)(ii) to read as 
follows:


Sec.  1717.850   General.

* * * * *
    (g) * * *
    (1) * * *
    (ii) Obtain a certification from a registered professional 
engineer, for each year during which funds from the separate subaccount 
are utilized by the borrower, that all materials and equipment 
purchased and facilities constructed during the year from said funds 
comply with RUS safety and performance standards, as required by 
paragraph (f) of this section, and are included in an CWP or CWP 
amendment.
* * * * *

0
32. Amend Sec.  1717.855 by revising paragraphs (b) and (h) to read as 
follows:


Sec.  1717.855   Application contents: Advance approval--100 percent 
private financing of distribution, subtransmission and headquarter 
facilities, and certain other community infrastructure.

* * * * *
    (b) A statement requesting the lien accommodation or subordination 
and including the amount and maturity of the proposed loan, a general 
description of the facilities or other purposes to be financed, the 
name and address of the lender, and an attached term sheet summarizing 
the terms and conditions of the proposed loan;
* * * * *
    (h) A CWP or CWP amendment covering the proposed project, in 
accordance with 7 CFR part 1710, subpart F, and subject to RUS 
approval.
* * * * *

0
33. Amend Sec.  1717.856 by revising paragraphs (c), (e), and (f) to 
read as follows:


Sec.  1717.856   Application contents: Normal review--100 percent 
private financing.

* * * * *
    (c) A long-range financial forecast providing financial projections 
for at least 10 years, which demonstrates that the borrower's system is 
economically viable and that the proposed loan is financially feasible. 
The financial forecast must comply with the requirements of 7 CFR part 
1710 subpart G. RUS may, in its sole discretion, waive the requirement 
of this paragraph that a long range financial forecast be provided, if:
* * * * *
    (e) As applicable to the type of facilities being financed, a CWP, 
related engineering and cost studies, a power cost study. These 
documents must meet the requirements of 7 CFR part 1710, subpart F and, 
as applicable, subpart G;
    (f) Unless the requirement has been waived in writing by RUS, a 
current load forecast, which must meet the requirements of 7 CFR part 
1710, subpart E, to the same extent as if the loan were being made by 
RUS; and
* * * * *

0
34. Amend Sec.  1717.857 by revising (c)(3) to read as follows:


Sec.  1717.857   Refinancing of existing secured debt--distribution and 
power supply borrowers.

* * * * *
    (c) * * *
    (3) A statement from the borrower requesting the lien accommodation 
or subordination and including the amount and maturity of the proposed 
loan, a general description of the debt to be refinanced, the name and 
address of the lender, and an attached term sheet summarizing the terms 
and conditions of the proposed loan;
* * * * *

0
35. Amend Sec.  1717.858 by revising paragraph (c)(1) to read as 
follows:


Sec.  1717.858   Lien subordination for rural development investments.

* * * * *
    (c) * * *
    (1) A statement from the borrower requesting the lien subordination 
or release of lien.
* * * * *

0
36. Amend Sec.  1717.860 by revising paragraph (c)(2)(i) to read as 
follows:


Sec.  1717.860   Lien accommodations and subordinations under section 
306E of the RE Act.

* * * * *
    (c) * * *
    (2) * * *
    (i) A statement from the borrower requesting the lien accommodation 
and including the amount and maturity of the proposed loan, a general 
description of the facilities or other purposes to be financed, the 
name and address of the lender, and an attached term sheet summarizing 
the terms and conditions of the proposed loan;
* * * * *

PART 1721--POST-LOAN POLICIES AND PROCEDURES FOR INSURED ELECTRIC 
LOANS

0
37. The authority citation for part 1721 continues to read as follows:

    Authority: 7 U.S.C. 901 et seq.; 1921 et seq.; and 6941 et seq.

Subpart B--Extensions of Payments of Principal and Interest

0
 38. Amend Sec.  1721.105 by revising paragraphs (b) through (e) to 
read as follows:


Sec.  1721.105   Application documents.

* * * * *
    (b) Deferments for energy resource conservation loans. A Borrower 
requesting principle deferments for an ERC loan program must submit a 
letter from the Borrower's General Manager requesting an extension of 
principle payments for the purpose of offering an ERC loan program to 
its members and describing the details of the program.
    (c) Deferments for renewable energy projects. A Borrower requesting 
principle deferments for its renewable energy project must submit a 
letter from the Borrower's General Manager requesting an extension of 
principle payments for the purpose of offering an ERC loan program to 
its members and describing the details of the program.

[[Page 32617]]

    (d) Deferments for distributed generation projects. A Borrower 
requesting principle deferments for distributed generation projects 
must submit a letter from the Borrower's General Manager requesting an 
extension of principle payments for the purpose of offering an ERC loan 
program to its members and describing the details of the program and 
approval is also subject to any applicable terms and conditions of the 
Borrower's loan contract, mortgage, or indenture.
    (e) Deferments for contribution-in-aid of construction. A Borrower 
requesting principle deferments for contribution-in-aid of construction 
must submit the following:
    (1) A letter from the Borrower's General Manager requesting an 
extension of principle payments for the purpose of offering an ERC loan 
program to its members and describing the details of the program.
    (2) A summary of the calculations used to determine the average 
cost per residential customer. (See Sec.  1721.104(e)(2)).

PART 1724--ELECTRIC ENGINEERING, ARCHITECTURAL SERVICES AND DESIGN 
POLICIES AND PROCEDURES

0
39. The authority citation for part 1724 continues to read as follows:

    Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.


0
40. Amend Sec.  1724.1 by revising paragraph (c) to read as follows:


Sec.  1724.1   Introduction.

* * * * *
    (c) Borrowers are required to use RUS contract forms only if the 
facilities are financed by RUS. Borrowers have three options:
    (1) Submit the actual contract used for review and approval;
    (2) Submit a certification that the required contract was used for 
the electric project or;
    (3) Submit a certification that the contract was not used but the 
essential and identical provisions specifically listed in the 
certification were used in the contract for constructing the electric 
facilities.

0
41. Revise Sec.  1724.5 to read as follows:


Sec.  1724.5   Submission of documents to RUS.

    (a) Where to send documents. Documents required to be submitted to 
RUS under this part are to be sent to the Office of Loan Origination & 
Approval.
    (b) Contracts requiring RUS approval. The borrower shall submit to 
RUS three copies of each contract that is subject to RUS approval under 
subparts B and C of this part. At least one copy of each contract must 
be an original signed in ink (i.e., no facsimile signature).
    (c) Contract amendments requiring RUS approval. The borrower shall 
submit to RUS three copies of each contract amendment (at least one 
copy of which must be an original signed in ink) which is subject to 
RUS approval.

0
42. Amend Sec.  1724.21 by revising paragraph (a) to read as follows:


Sec.  1724.21  Architectural services contracts.

* * * * *
    (a) RUS Form 220, Architectural Services Contract, may be used by 
electric borrowers when obtaining architectural services.
* * * * *

0
43. Amend Sec.  1724.31 by revising paragraph (b) to read as follows:


Sec.  1724.31  Engineering services contracts.

* * * * *
    (b) RUS Form 236, Engineering Service Contract--Electric System 
Design and Construction, may be used for all distribution, 
transmission, substation, and communications and control facilities. 
These contracts are not subject to RUS approval and need not be 
submitted to RUS unless specifically requested by RUS on a case by case 
basis.
* * * * *

Subpart E--Electric System Design

0
44. Amend Sec.  1724.51 by revising paragraphs (b)(1) and (c)(1) to 
read as follows:


Sec.  1724.51   Design requirements.

* * * * *
    (b) * * *
    (1) All transmission line design data must be approved by RUS or a 
licensed professional engineer may certify that the design data, plans 
and profiles drawings for the electric system facilities meets all 
applicable RUS electric design requirements, specifications, local, 
state and national requirements and that RUS listed materials were 
used.
* * * * *
    (c) * * *
    (1) All substation design data must be approved by RUS or a 
licensed professional engineer may certify that the design data, plans 
and profiles drawings for the electric system facilities meets all 
applicable RUS electric design requirements, specifications, local, 
state and national requirements and that RUS listed materials were 
used.
* * * * *

0
45. Amend Sec.  1724.54 by revising (c)(1) and (d)(1)(i) introductory 
text to read as follows:


Sec.  1724.54   Requirements for RUS approval of plans and 
specifications.

* * * * *
    (c) * * *
    (1) Plans and specifications for transmission construction projects 
which are not based on RUS approved line design data or do not use RUS 
standard structures must receive RUS design approval or RUS 
certification approval prior to requesting bids on contracts or 
commencement of force account construction.
    (d) * * *
    (1) * * *
    (i) Plans and specifications for all new substations must receive 
RUS design approval or RUS certification approval prior to requesting 
bids on contracts or commencement of force account construction, 
unless:
* * * * *

0
46. Amend Sec.  1724.55 by revising paragraph (a)(7) to read as 
follows:


Sec.  1724.55   Dam safety.

    (a) * * *
    (7) Emergency action plan. For high hazard potential dams, the 
borrower must develop an emergency action plan incorporating preplanned 
emergency measures to be taken prior to and following a potential dam 
failure. The plan should be coordinated with local government and other 
authorities involved with the public safety.
* * * * *

PART 1726--ELECTRIC SYSTEM CONSTRUCTION POLICIES AND PROCEDURES

0
47. The authority citation for part 1726 continues to read as follows:

    Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.

Subpart A--General

0
48. Amend Sec.  1726.35 by:
0
a. Removing paragraph (c)(5) and redesignating paragraphs (c)(6) and 
(7) as paragraphs (c)(5) and (6);
0
b. Revising paragraph (d);
0
c. Removing paragraph (e)(3)(vi)(A) and redesignating paragraphs 
(e)(3)(vi)(B) through (E) as paragraphs (e)(3)(vi)(A) through (D); and
0
d. Revising paragraph (e)(4)(iii)(E)(1).
    The revisions read as follows:


Sec.  1726.35  Submission of documents to RUS.

* * * * *
    (d) Contract amendments requiring RUS approval. The borrower must

[[Page 32618]]

submit to RUS three copies of each contract amendment (at least one 
copy of which must be an original signed in ink) which is subject to 
RUS approval under Sec.  1726.24(b). Each contract amendment submittal 
to RUS must be accompanied by a bond extension, where necessary.
    (e) * * *
    (4) * * *
    (iii) * * *
    (E) * * *
    (1) The amendment was approved in accordance with the policy of the 
board of directors;
* * * * *

Subpart J--Contract Closeout

0
49. Amend Sec.  1726.403 by revising paragraph (d)(2)(ii) to read as 
follows:


Sec.  1726.403   Project construction contract closeout.

* * * * *
    (d) * * *
    (2) * * *
    (ii) The certification in paragraph (d)(2)(i) of this section is to 
be executed for the contractor by: The sole owner, a partner, or an 
officer of the corporation.

PART 1730--ELECTRIC SYSTEM OPERATIONS AND MAINTENANCE

0
50. The authority citation for part 1730 continues to read as follows:

    Authority: 7 U.S.C. 901 et seq., 1921 et seq., 6941 et seq.


0
51. Amend appendix A to subpart B of part 1730 by revising item 15 in 
PART IV--Operations and Maintenance Budgets to read as follows:

Appendix A to Subpart B to Part 1730--Review Rating Summary, RUS Form 
300

* * * * *
    15. Date Budget Discussed with Board of Directors ____
* * * * *

Chad Rupe,
Administrator, Rural Utilities Service.
[FR Doc. 2019-14511 Filed 7-8-19; 8:45 am]
BILLING CODE 3410-15-P