[Federal Register Volume 85, Number 96 (Monday, May 18, 2020)]
[Rules and Regulations]
[Pages 29593-29596]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-08078]



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 Rules and Regulations
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 This section of the FEDERAL REGISTER contains regulatory documents 
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  Federal Register / Vol. 85 , No. 96 / Monday, May 18, 2020 / Rules 
and Regulations  

[[Page 29593]]



DEPARTMENT OF AGRICULTURE

Rural Business-Cooperative Service

Rural Utilities Service

[Docket Number: RBS-20-BUSINESS-0015]

7 CFR Parts 4279 and 4287

RIN 0570-AA73


Biorefinery, Renewable Chemical, and Biobased Product 
Manufacturing Assistance Program

AGENCY: Rural Business-Cooperative Service and Rural Utilities Service, 
USDA.

ACTION: Final rule.

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SUMMARY: The Rural Business-Cooperative Service (Agency), a Rural 
Development agency of the United States Department of Agriculture 
(USDA), hereinafter referred to as (the Agency), is issuing a final 
rule for the Biorefinery, Renewable Chemical, and Biobased Product 
Manufacturing Assistance Program (the Program) or (the 9003 Program), 
formerly the Biorefinery Assistance Program. This final rule 
incorporates the statutory definition changes as required in the 
Agricultural Act of 2018 (2018 Farm Bill) and, with one exception, 
adopts the interim rule published on June 24, 2015 in the Federal 
Register. This rule also addresses public comments received by the 
Agency regarding Program changes as published in the Interim final rule 
on June 24, 2015 in the Federal Register.

DATES: Effective May 18, 2020.

FOR FURTHER INFORMATION CONTACT: Aaron Morris, Rural Business-
Cooperative Service, U.S. Department of Agriculture, 1400 Independence 
Avenue SW, Stop 3225, Washington, DC 20250-3201; telephone (202) 720-
1501.

SUPPLEMENTARY INFORMATION:

I. Background

    The Food, Conservation, and Energy Act of 2008 (Pub. L. 110-246), 
otherwise known as the 2008 Farm Bill, established the Biorefinery 
Assistance Program (9003 Program) under Title IX, Section 9003, for 
making loan guarantees to fund the development, construction, and 
Retrofitting of commercial-scale biorefineries using Eligible 
technology. The 2008 Farm Bill defined Eligible technologies as: 
technology that is being adopted in a viable Commercial-scale operation 
of a Biorefinery that produces an Advanced biofuel; and technology that 
has been demonstrated to have technical and economic potential for 
commercial application in a Biorefinery that produces an Advanced 
biofuel.
    The 9003 Program's authority was continued in the Agricultural Act 
of 2014 (2014 Farm Bill) (Pub. L. 113-79), with several specific 
changes: (1) Renames the Program as the Biorefinery, Renewable 
Chemical, and Biobased Product Manufacturing Assistance Program; (2) 
revises the purpose statement for the Program to include Renewable 
chemicals and Biobased product manufacturing; (3) expands the Program 
to include Biobased product manufacturing facilities; (4) adds 
definitions for ``Renewable Chemicals'' and ``Biobased Product 
Manufacturing;'' and (5) Ensures diversity in the types of Projects 
approved.
    Once again, under the Agricultural Act of 2018 (2018 Farm Bill) 
(Pub. L. 115-334), signed into law on December 20, 2018, the 9003 
Program was reauthorized under Title IX and the 2018 Farm Bill also 
amended the definition of the terms `biorefinery' and `eligible 
technology' for the Program.
    Eligible applicants for this Program include: Individuals; 
entities; Indian Tribes; units of State or Local Government; 
corporations; Farm cooperatives; Farmer cooperative organizations; 
Associations of Agricultural Producers; national laboratories; 
Institutions of higher education; rural electric cooperatives; public 
power entities; and consortia of any of the foregoing entities.

II. Summary of Comments and Responses

    As noted earlier, the Agency invited comments on the interim final 
rule published on June 24, 2015 in the Federal Register (80 FR 36410) 
on or before August 24, 2015. The Agency received three (3) comments 
which are summarized as follows:
    Issue 1: Two organizations expressed support for the Program as 
published on June 24, 2015 in the Federal Register.
    Agency Response: The Agency appreciates the two organizations that 
responded in support of the Interim final rule which implements the 
expansion of the Program to include facilities producing primarily 
renewable chemicals and biobased products and the potential to 
developing the renewable economy.
    Issue 2: One organization wrote that several of these small 
innovative industrial biotechnology companies are not able to meet the 
interim final rule deadlines, which include demonstrating 120 days of 
continuous pilot operation, and cannot obtain an appropriate letter of 
intent from a lender for their projects within the time constraints set 
forth in the rule. The commenter strongly recommended that the USDA 
final rule extend these deadlines, so as to facilitate participation by 
a broader and more diverse array of innovative industrial biotechnology 
companies which include pre-revenue and emerging companies.
    Agency Response: The Agency believes that evidence of 120 days of 
steady, continuous production is required to provide the necessary data 
to make a sound credit decision as well as make a reasoned 
determination about the project's ability to scale up their production 
to a commercial scale. Phase 1 applications are accepted year-round and 
competed on October 1 and April 1 of each fiscal year. Evidence of 120 
days of continuous steady state production from an integrated 
demonstration unit is a Phase 2 application requirement and does not 
necessarily need to be complete prior to the Phase 1 application 
deadline. Applicants are encouraged to submit a Letter of Intent prior 
to submitting a full Phase 1 application. The Letter of Intent is due 
30 days prior to the Phase 1 application deadline. The Program is a 
loan guarantee program and therefore an applicant is required to have a 
lender in order to submit a complete application, but a Letter of 
Intent may be submitted without a lender in place.

[[Page 29594]]

III. Purpose of the Regulatory Action

    This final rulemaking adopts almost all of the changes to 7 CFR 
part 4279, subpart C, and 7 CFR part 4287, subpart D, as published in 
the interim final rule on June 24, 2015 in the Federal Register which 
implemented the provisions contained in the 2014 Farm Bill, modified 
the Program to incorporate administrative improvements based on Agency 
experience in implementing the Program, and incorporated the applicable 
guaranteed loan provisions of the Agency's Business and Industry (B&I) 
Guaranteed Loan program to make the rule a ``stand-alone'' rule. This 
final rulemaking also incorporates the statutory definition changes as 
required in the Agricultural Act of 2018 (2018 Farm Bill) as well as an 
additional credit-driven requirement believed necessary by the Agency 
for projects incorporating technology that does not have a history of 
successful utilization in a commercial-scale operation.

IV. Summary of Changes

    The changes to the 9003 Program regulation that are now being made 
are based on new statutory requirements in the 2018 Farm Bill and one 
non-statutory credit-driven need for the Program.
    The 2018 Farm Bill amended the definition for the terms 
`biorefinery' and `eligible technology' for the 9003 Program.
    The 2018 Farm Bill defines a biorefinery as a facility including 
equipment and processes that converts Renewable biomass or an 
intermediate ingredient or feedstock of Renewable biomass into any one 
or more, or a combination of Biofuels, Renewable chemicals, or Biobased 
products and may produce electricity.
    The 2018 Farm Bill defines ``Eligible Technology'' as: (1) A 
technology that is being adopted in a viable Commercial-scale operation 
of a Biorefinery that produces any one or more, or a combination, of an 
Advanced biofuel; a Renewable chemical; or a Biobased product; and (2) 
a technology not described in item (1) that has been demonstrated to 
have technical and economic potential for commercial application in a 
biorefinery that produces any one or more, or a combination, of an 
Advanced biofuel, a Renewable chemical or a Biobased product.
    The non-statutory change to the 9003 Program is a shift in timing 
for the requirement of the applicant to demonstrate 120 days of 
continuous, steady production from an integrated demonstration unit. 
Such demonstration which was previously required prior to loan closing 
will now be required prior to the issuance of a Conditional Commitment, 
Form RD 4279-3, which is the Agency's notice to the Lender that the 
loan guarantee it has requested is approved subject to the completion 
of all conditions and requirements set forth by the Agency and outlined 
in the attachment to the Conditional Commitment (see 7 CFR 4279.202) 
Specifically, the change will require the borrower to provide evidence 
to the Lender and Agency of 120 days of continuous, steady state 
production from an integrated demonstration unit prior to the issuance 
of a Conditional Commitment instead of prior to loan closing. The 
Agency believes this change will decrease the time between the issuance 
of a Conditional Commitment and loan closing and lessen the credit risk 
to the Government.

V. Executive Orders/Acts

Executive Order 12866

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

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 rule 
as not a major rule, as defined by 5 U.S.C. 804(2).

Executive Order 12372 Intergovernmental Review of Federal Programs

    This Program is not subject to the provisions of E.O. 12372, which 
require intergovernmental consultation with State and local officials.

Executive Order 12988, Civil Justice Reform

    This final rule has been reviewed under Executive Order 12988, 
Civil Justice Reform. The Agency has determined that this rule meets 
the applicable standards provided in section 3 of the Executive order. 
In addition, all State and local laws and regulations that are in 
conflict with this rule will be preempted, no retroactive effort will 
be given to this rule, and, in accordance with Sec. 212(e) of the 
Department of Agriculture Reorganization Act of 1994 (7 U.S.C. Sec. 
912(e)), administrative appeal procedures, if any, must be exhausted 
before an action against the Department or its agencies may be 
initiated.

Unfunded Mandates Reform Act

    This final rule contains no Federal mandates (under the regulatory 
provision of Title II of the Unfunded Mandates Reform Act of 1995) 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 Unfunded Mandates Reform Act of 1995.

Executive Order 13132 Federalism

    It has been determined, under E.O. 13132, Federalism, that this 
final rule does not have sufficient federalism implications to warrant 
the preparation of a Federalism Assessment. The provisions contained in 
the rule will not have a substantial direct effect on States or their 
political subdivisions or on the distribution of power and 
responsibilities among the various government levels.

Regulatory Flexibility Act

    The Agency has determined that this final rule will not have a 
significant economic impact on a substantial number of small entities, 
as defined in the Regulatory Flexibility Act (5 U.S.C. 601 et seq.). 
The Regulatory Flexibility Act (5 U.S.C. 601-612) (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 or any other statute unless the Agency 
certifies that the rule will not have an economically significant 
impact on a substantial number of small entities. Small entities 
include small businesses, small organizations, and small governmental 
jurisdictions. Under section 605(b) of the Regulatory Flexibility Act, 
5 U.S.C. 605(b), the Agency certifies that this rule will not have a 
significant economic impact on a substantial number of small entities. 
This final rule affects entities that utilize the 9003 Program and any 
prospective entities that may that may utilize the Program in the 
future.

National Environmental Policy Act Certification

    The Agency Administrator has determined that this final rule will 
not significantly affect the quality of the human environment as 
defined by the National Environmental Policy Act of 1969 (42 U.S.C. 
4321 et seq.). Therefore, this action does not require an environmental 
impact statement or assessment.

Catalog of Federal Domestic Assistance

    The 9003 Program is listed in the Catalog of Federal Domestic 
Assistance

[[Page 29595]]

(CFDA) under Number 10.865. This will be updated with the Program's new 
name, as changed by the 2014 Farm Bill, the ``Biorefinery, Renewable 
Chemical, and Biobased Product Manufacturing Assistance Program.''
    All active CFDA programs and the CFDA Catalog can be found at the 
following website: https://beta.sam.gov/. The website also contains a 
PDF file version of the Catalog that, when printed, has the same layout 
as the printed document that the Government Publishing Office (GPO) 
provides. GPO prints and sells the CFDA to interested buyers. For 
information about purchasing the Catalog of Federal Domestic Assistance 
from GPO, call the Superintendent of Documents at 202- 512-1800 or toll 
free at 866-512-1800, or access GPO's online bookstore at https://bookstore.gpo.gov.

Information Collection and Recordkeeping Requirements

    This rule contains no new reporting or recordkeeping burdens under 
OMB control number 0570-0065 that would require approval under the 
Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35).

Civil Rights Impact Analysis

    Rural Development has reviewed this rule in accordance with USDA 
Regulation 4300-4, Civil Rights Impact Analysis,'' to identify any 
major civil rights impacts the rule might have on program participants 
on the basis of age, race, color, national origin, sex or disability. 
After review and analysis of the rule and available data, it has been 
determined that based on the analysis of the program purpose, 
application submission and eligibility criteria, issuance of this final 
rule will not likely neither adversely nor disproportionately impact 
very low, low and moderate-income populations, minority populations, 
women, Indian tribes or persons with disability, by virtue of their 
race, color, national origin, sex, age, disability, or marital or 
familiar status.

USDA Non-Discrimination Policy

    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 https://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.

Executive Order 13211, Actions Concerning Regulations That 
Significantly Affect Energy Supply, Distribution, or Use

    This final rule will not have any adverse impact on energy supply, 
distribution or use. A regulatory impact analysis was conducted for the 
interim final rule (80 FR 36410) which met the requirements for E.O. 
13211, which states that an agency undertaking regulatory actions 
related to energy supply, distribution, or use is to prepare a 
Statement of Energy Effects. The finding in the analysis for the 
interim final rule was that the rule would not have any adverse impacts 
on energy supply, distribution, or use.

Executive Order 12372, Intergovernmental Review of Federal Programs

    This Program is not subject to the provisions of E.O. 12372, which 
require intergovernmental consultation with State and local officials.

Executive Order 13175, Consultation and Coordination With Indian Tribes

    This E.O. imposes requirements on Rural Development in the 
development of regulatory policies that have tribal implications or 
preempt tribal laws. Rural Development has determined that this 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 the Indian 
Tribes. Thus, this rule is not subject to the requirements of E.O. 
13175.

E-Government Act Compliance

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

List of Subjects for 7 CFR Parts 4279 and 4287

    Direct loan programs, Economic development, Energy, Energy 
efficiency improvements, Grant programs, Guaranteed loan programs, Loan 
programs--Business and industry, Loan programs--Rural development 
assistance, Renewable energy systems, Rural areas.

    Accordingly, the interim rule amending 7 CFR parts 4279 and 4287 
which was published at 80 FR 36410 on June 24, 2015, is adopted as 
final with the following changes:

PART 4279--GUARANTEED LOANMAKING

0
1. The authority citation for part 4279 continues to read as follows:

    Authority: 5 U.S.C. 301; and 7 U.S.C. 1989.

Subpart C--Biorefinery, Renewable Chemical, and Biobased Product 
Manufacturing Assistance Loans

0
2. Amend Sec.  4279.202 by revising the definitions of ``Biorefinery'' 
and ``Eligible technology'' to read as follows:


Sec.  4279.202  Definitions and abbreviations.

* * * * *
    Biorefinery. A facility (including equipment and processes) that 
converts Renewable biomass or an intermediate ingredient or feedstock 
of Renewable biomass into any one or more, or a combination, of 
Biofuels, Renewable chemicals or Biobased products, and may produce 
electricity.
* * * * *

[[Page 29596]]

    Eligible technology. The term ``Eligible technology'' means, as 
determined by the Secretary:
    (1) A technology that is being adopted in a viable Commercial-scale 
operation of a Biorefinery that produces any one or more, or a 
combination, of an Advanced biofuel; a Renewable chemical; or a 
Biobased product; and
    (2) A technology not described in paragraph (1) of this definition 
that has been demonstrated to have technical and economic potential for 
commercial application in a Biorefinery that produces any one or more, 
or a combination, of an Advanced biofuel, a Renewable chemical or a 
Biobased product.
* * * * *

0
3. Amend Sec.  4279.265 by revising paragraph (b)(2) to read as 
follows:


Sec.  4279.265  Guarantee application processing.

* * * * *
    (b) * * *
    (2) The Agency's determination of a Project's technical feasibility 
will be based on the technical report. In addition, prior to the 
issuance of the Conditional Commitment for a Project utilizing 
technology that does not have a history of successful utilization in a 
Commercial-scale operation of a Biorefinery that produces an Advanced 
biofuel, Renewable chemical, or Biobased product, evidence 
demonstrating 120 days of continuous, steady state production from an 
integrated demonstration unit must be provided by the Borrower to the 
Lender and the Agency for review and determination of technical 
feasibility. Authoritative demonstration campaign results must be 
provided in 30-day intervals. The integrated demonstration unit must 
prove out the Project's ability to utilize Project-relevant biomass and 
produce Advanced biofuel at a yield and quality consistent with the 
design basis of the Project. The Borrower must provide to the Agency, 
for review and approval, sufficient information on the integrated 
campaign design so as to ensure operation duration, quality, and 
quantity specifications are met and incorporated into the final design 
criteria for the commercial facility.
* * * * *

Bette B. Brand,
Deputy Under Secretary, Rural Development.
[FR Doc. 2020-08078 Filed 5-15-20; 8:45 am]
BILLING CODE 3410-XY-P