[Federal Register Volume 84, Number 192 (Thursday, October 3, 2019)]
[Notices]
[Pages 52869-52870]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-21475]


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DEPARTMENT OF AGRICULTURE

Rural Housing Service

Rural Utilities Service


Community Facilities Guaranteed Loan Program Guarantee Fee Rate, 
Annual Renewal Fee, Rural Area Definition, and Funding Priority for 
Fiscal Year 2020; and Water and Waste Disposal Programs Guaranteed 
Rural Area Definition and Funding Reservation for Fiscal Year 2020

AGENCY: Rural Housing Service and Rural Utilities Service, USDA.

ACTION: Notice.

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SUMMARY: This notice announces implementation of several provisions of 
the 2018 Farm Bill related to the Rural Housing Service (RHS) and the 
Rural Utilities Service (RUS) agencies of the Rural Development mission 
area of the United States Department of Agriculture, USDA, sometimes 
hereinafter referred to as Agency. Specifically, it provides notice of 
the population change in the rural area definition for the Community 
Facilities (CF) Guaranteed Loan Program and the Water and Waste 
Disposal (WWD) Guaranteed Loan Program and priorities for each program. 
It also provides established fee levels for Fiscal Year (FY) 2020 for 
the CF Guaranteed Loan Program.
    This Notice is being issued prior to enactment of full year 
appropriation for FY 2020. The Agency will publish the amount of 
funding received in the final appropriations act on its website at 
https://www.rd.usda.gov/newsroom/fy2020-appropriated-funding.

DATES: Applicability date: The Agency will not act on any applications 
received under this Notice until December 2, 2019.

FOR FURTHER INFORMATION CONTACT: Karla Peiffer, USDA Rural Development, 
Community Facilities Program at (515) 238-6668 or via email at 
[email protected]; or Susan Woolard, USDA Rural Development, Water 
and Waste Disposal Program at (202) 720-9631, or via email at 
[email protected].

SUPPLEMENTARY INFORMATION:

Congressional Review Act

    Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.), 
the Office of Information and Regulatory Affairs designated this notice 
as major, as defined by 5 U.S.C. 804(2).

Background

    The Agriculture Improvement Act of 2018 (Pub. L. 115-334, 2018 Farm 
Bill) was signed into law by the President on December 20, 2018. The 
Farm Bill included several statutory provisions affecting the CF and 
WWD Programs.

Rural Area Population Threshold

    Section 6402 of the Farm Bill amended section 343(a)(13) of the 
Consolidated Farm and Rural Development Act (CONACT) to change the 
eligible population threshold in the definition of ``rural'' and 
``rural area'' for the CF and WWD Guaranteed Loan Programs to 50,000. 
As a result of this amended definition, Sec.  343(a)(13)(D) ``Areas 
Rural in Character'' is also applicable to CF and WWD Guaranteed Loans, 
but this portion of the definition has been determined to not be self-
executing and, therefore, will be implemented through the rulemaking 
process consistent with Administrative Procedure Act requirements. 
While the guaranteed programs generally are available in more highly 
populated rural areas, Section 306(a)(24) of the CONACT was amended to 
establish a reservation of funds for CF Guaranteed Loans for projects 
in rural areas with a population of not more than 20,000 inhabitants 
and to provide a prioritization for WWD Guaranteed Loans for rural 
areas with a population of not more than 10,000 people.

CF Guaranteed Loans

    Section 6402 of the 2018 Farm Bill amended Sec.  343(a)(13) of the 
CONACT to define a rural area for CF Guaranteed loans as ``an area 
other than (i) a city or town that has a population of greater than 
50,000 inhabitants; and (ii) any urbanized area contiguous and adjacent 
to a city or town described in clause (i).'' Applications for CF 
Guaranteed Loan funds for projects in rural areas with a population up 
to 50,000 may be submitted to RHS in accordance with 7 CFR 3575.52 for 
processing. Pursuant to Section 6402 of the 2018 Farm Bill and Section 
306(a)(24) of the CONACT, guarantee funds appropriated during the 
fiscal year (including FY 2020) will be reserved for projects in rural 
areas with a population of not more than 20,000 inhabitants based on 
the following reservation of funds schedule:
    (1) 100 percent of the first $200,000,000 so made available;
    (2) 50 percent of the next $200,000,000 so made available; and
    (3) 25 percent of all amounts exceeding $400,000,000 so made 
available.
    Based on the reservation of funds schedule outlined above, 
applications received where no funds are available (i.e. applications 
for projects in areas with more than 20,000 inhabitants, but

[[Page 52870]]

only reserved funding is available) will not be processed by RHS and 
will be returned to the lender. The lender may resubmit the application 
when funds become available.

WWD Guaranteed Loans

    Notwithstanding the definition in 7 CFR 1779.2, pursuant to section 
343(A)(13) of the CONACT, the eligible population threshold for WWD 
Guaranteed Loans is now 50,000. Applications for WWD Guaranteed Loan 
funds may be submitted to RUS in accordance with 7 CFR 1779.53 for 
processing.
    Pursuant to section 306(a)(24), the Secretary shall prioritize 
water and waste facility projects in rural areas with a population of 
not more than 10,000 people. For FY 2020, the Agency will use National 
Office reserves to ensure that funding is prioritized for eligible 
projects in rural areas with a population of not more than 10,000 
people. Applications for WWD Guaranteed Loan funds may be submitted to 
the RUS in accordance with 7 CFR 1779.53 for processing.

Guarantee Fees

    Section 307(b) of the CONACT provides the authority for the Agency 
to charge fees. Pursuant to section 6418 of the 2018 Farm Bill, the 
Agency by statute is now required to ``charge and collect from the 
lender fees in such amounts as to bring down the costs of subsidies for 
the insured or guaranteed loan, except that the fees shall not act as a 
bar to participation in the programs nor be inconsistent with current 
practices in the marketplace.''

CF Guarantee Fees

    Rural Housing Service has routinely collected an initial (or one-
time) guarantee fee for CF Guaranteed Loans as set forth in 7 CFR 
3575.29(c). Pursuant to its statutory authority as described above, RHS 
is establishing an initial guarantee fee rate of 1.5 percent and an 
annual renewal fee rate of one-half of 1 percent for the CF Guaranteed 
Loan Program. These rates will apply to all loans obligated in FY 2020 
that are made under the CF Guaranteed Loan Program.
    The initial guarantee fee is paid by the lender at the time the 
Loan Note Guarantee is issued. The fee is determined by multiplying the 
amount of the guarantee fee rate (1.5 percent) by the principal loan 
amount multiplied by the percent of guarantee. The annual renewal fee 
is paid by the lender to RHS once a year. Payment of the annual renewal 
fee is required in order to maintain the enforceability of the 
guarantee. The amount of the annual fee on each guaranteed loan will be 
determined by multiplying the annual fee rate (.5 percent) by the 
outstanding principal loan balance as of December 31, multiplied by the 
percentage of guarantee. For Loan Note Guarantees issued in FY 2020, 
the annual renewal fee will be assessed on December 31, 2020, and is 
due January 31, 2021.

WWD Guarantee Fees

    Rural Utilities Service (RUS) has routinely collected an initial 
(or one-time) guarantee fee for WWD Guaranteed Loans as set forth in 7 
CFR 1779.29(c). For FY 2020, RUS will continue to charge an initial 
guarantee fee rate of 1.0 percent. The initial guarantee fee is paid by 
the lender at the time the Loan Note Guarantee is issued. The fee is 
determined by multiplying the amount of the guarantee fee rate (1.0 
percent) by the principal loan amount multiplied by the percent of 
guarantee. RUS will not charge an annual renewal fee rate.

Summary

    To summarize, this notice announces the population limits and 
guarantee fee rates for the CF and WWD Guarantee Loan Program for FY 
2020, as follows:

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                                                                    Population        Initial         Annual
                             Program                                   limit       guarantee fee    renewal fee
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CF Guarantee....................................................          50,000            1.5%             .5%
WWD Guarantee...................................................          50,000            1.0%               0
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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, 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, familial/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, 400 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.

    Dated: September 27, 2019.
Donald J. LaVoy,
Deputy Under Secretary, Rural Development.
[FR Doc. 2019-21475 Filed 10-2-19; 8:45 am]
BILLING CODE 3410-XV-P