[Federal Register Volume 86, Number 61 (Thursday, April 1, 2021)]
[Notices]
[Pages 17117-17120]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-06675]



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DEPARTMENT OF AGRICULTURE

Rural Utilities Service

[Docket Number RUS-20-ELECTRIC-0045]


Announcement of Application Deadlines and Requirements for 
Section 313A Guarantees for Bonds and Notes Issued for Utility 
Infrastructure Purposes for Fiscal Year (FY) 2021

AGENCY: Rural Utilities Service, USDA.

ACTION: Notice of Solicitation of Applications (NOSA).

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SUMMARY: The Rural Utilities Service (RUS), an agency of the United 
States Department of Agriculture (USDA), announces the application 
window and requirements and $750 million in loan funding that is 
available for Fiscal Year (FY) 2021 under the Guarantees for Bonds and 
Notes Issued for Utility Infrastructure Purposes Program (the 313A 
Program), authorized under the Rural Electrification Act of 1936, as 
amended (the RE Act). Successful applications will be selected by the 
Agency for funding and subsequently awarded. All applicants are 
responsible for any expenses incurred in developing their applications.

DATES: Completed applications must be received, or post marked by RUS 
no later than 5:00 p.m. Eastern Daylight Time (EDT) June 1, 2021.

ADDRESSES: Applicants are required to submit one original and two 
copies of their loan application to the U.S. Department of Agriculture, 
Rural Utilities Service, Electric Program, ATTN: Amy McWilliams, 
Program Advisor, 1400 Independence Avenue SW, STOP 1560, Room 4137D-S, 
Washington, DC 20250-1560.

FOR FURTHER INFORMATION CONTACT: Amy McWilliams, Program Advisor, 1400 
Independence Avenue SW, STOP 1560, Room 4137D-S, Washington, DC 20250-
1560. Telephone: (202) 205-8663; fax: (844) 749-0736; or email: 
[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 in the Office of 
Management and Budget designated this action as a major rule, as 
defined by 5 U.S.C. 804(2), because it will result in an annual effect 
on the economy of $100,000,000 or more. Accordingly, there will be a 
mandatory 60-day delay in effectiveness to award loan funds. However, 
applications will be accepted for 60 days beginning April 1, 2021 as 
stated in the DATES section of this NOSA.

Overview

    Federal Agency: Rural Utilities Service, USDA.
    Funding Opportunity Title: Guarantees for Bonds and Notes Issued 
for Utility Infrastructure Purposes for Fiscal Year (FY) 2021.
    Announcement Type: Guarantees for Bonds and Notes.
    Catalog of Federal Domestic Assistance (CFDA) Number: 10.850.
    Due Date for Applications: Completed applications must be received 
or post marked by RUS no later than 5:00 p.m. Eastern Daylight Time 
(EDT) June 1, 2021.

Items in Supplementary Information

I. Funding Opportunity Description
II. Award Information
III. Eligibility Information
IV. Fiscal Year 2021 Application and Submission Information
V. Application Review Information
VI. Issuance of Guarantee
VII. Guarantee Agreement
VIII. Reporting Requirements
IX. Award Administration Information
X. National Environmental Policy Act Certification
XI. Other Information and Requirements
XII. Agency Contacts: Website, Phone, Fax, Email, Contact Name
XIII. Non-Discrimination Statement: USDA Non-Discrimination 
Statement, How To File a Complaint, Persons With Disabilities

I. Funding Opportunity Description

A. Purpose and Objectives of the 313A Program

    The purpose of the 313A Program is to make guaranteed loans to 
selected applicants (each referred to as ``Guaranteed Lender'' in this 
NOSA) that are to be used (i) to make utility infrastructure loans or 
(ii) to refinance bonds or notes issued for such purposes to a borrower 
that has at any time received, or is eligible to receive, a loan under 
the RE Act. Each applicant must provide a statement on how it proposes 
to use the proceeds of the guaranteed bonds, and the financial benefit 
it anticipates deriving from participating in the program pursuant to 7 
CFR 1720.6(a)(3), or its equivalent in any subsequent regulation. 
Objectives may include, but are not limited to the annual savings to be 
realized by the ultimate borrower(s) as a result of the applicant's use 
of lower cost loan funds provided by the Federal Financing Bank (FFB) 
and guaranteed by RUS.
    The Agriculture Improvement Act of 2018 (2018 Farm Bill) modified 
the 313A Program by amending the RE Act to allow proceeds of guaranteed 
bonds awarded under this NOSA to be used to make broadband loans, or to 
refinance broadband loans made to a borrower that has received, or is 
eligible to receive, a broadband loan under Title VI of the RE Act. As 
a result, to the extent that the proceeds of guaranteed bonds are to be 
used to fund or refinance broadband loans that were not made by RUS 
(``Non Broadband Loans''), such proceeds may only be used for Non 
Broadband Loans that would meet the amended eligibility requirements of 
Title VI pursuant to the 2018 Farm Bill.
    The 2018 Farm Bill has also modified the 313A Program to allow the 
proceeds of guaranteed loans made under this NOSA to be used by the 
Guaranteed Lender to fund projects for the generation of electricity.

B. Statutory Authority

    The 313A Program is authorized by Section 313A of the Rural 
Electrification Act of 1936, as amended (7 U.S.C. 940c-1) and is 
implemented by regulations located at 7 CFR part 1720, in accordance 
with the 2018 Farm Bill. The Administrator of RUS (the Administrator) 
has been delegated responsibility for administering the 313A Program.

C. Definition of Terms

    The definitions applicable to this NOSA are currently published at 
7 CFR 1720.3, or its equivalent in any new regulation issued by RUS.

D. Application Awards

    RUS will review and evaluate applications received in response to 
this NOSA based on the regulations at 7 CFR 1720.7, and as provided in 
this NOSA.

II. Award Information

    Type of Awards: Guaranteed Loans.
    Fiscal Year Funds: FY 2021.
    Available Funds: $750 million. Should additional funding become 
available this fiscal year, the RUS reserves the right to increase the 
total funds available under this notice.
    Award Amounts: RUS anticipates making multiple guarantees under 
this NOSA. The number, amount, and terms of awards under this NOSA will 
depend in part on the number of eligible applications and the amount of 
funds requested. In determining whether or not to make an award, RUS 
will take overall program policy objectives into account.
    Due Date for Applications: See SUPPLEMENTARY INFORMATION above.
    Award Date: Awards will be made on or before September 30, 2021, 
but no earlier than June 1, 2021.

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    Schedule of Loan Repayment: The amortization method for the 
repayment of the guaranteed loan shall be repaid by the Guaranteed 
Lender: (i) in periodic installments of principal and interest, (ii) in 
periodic installments of interest and, at the end of the term of the 
bond or note, as applicable, by the repayment of the outstanding 
principal, or (iii) through a combination of the methods described in 
(i) and (ii) above. The amortization method will be agreed to by RUS 
and the Guaranteed Lender.

III. Eligibility Information

A. Eligible Applicants

    1. To be eligible to participate in the 313A Program, a Guaranteed 
Lender must be:
    a. A bank or other lending institution organized as a private, not-
for-profit cooperative association, or otherwise organized on a non-
profit basis;
    b. Able to demonstrate to the Administrator that it possesses the 
appropriate expertise, experience, and qualifications to make loans for 
utility infrastructure purposes (to the extent that the applicant 
intends to use the guaranteed loan funds for such purpose); and
    c. Able to demonstrate to the Administrator that it has bonds or 
notes eligible for refinancing under the 313A Program (to the extent 
that the applicant intends to use the guaranteed loan funds for such 
purpose).
    2. To be eligible to receive a guarantee, a Guaranteed Lender's 
bond must meet the following criteria:
    a. The Guaranteed Lender must furnish the Administrator with a 
certified list of the principal balances of eligible loans outstanding 
and certify that such aggregate balance is at least equal to the sum of 
the proposed principal amount of guaranteed bonds to be issued, 
including any previously issued guaranteed bonds outstanding; and
    b. The guaranteed bonds to be issued by the Guaranteed Lender would 
receive an underlying investment grade rating from a Rating Agency, 
without regard to the guarantee.
    3. A lending institution's status as an eligible applicant does not 
assure that the Administrator will issue the guarantee sought in the 
amount or under the terms requested, or otherwise preclude the 
Administrator from declining to issue a guarantee.

B. Other Eligibility Requirements

    Applications will only be accepted from lenders that serve rural 
areas defined in 7 CFR 1710.2(a) as (i) any area of the United States, 
its territories and insular possessions (including any area within the 
Federated States of Micronesia, the Marshall Islands, and the Republic 
of Palau) other than a city, town, or unincorporated area that has a 
population of greater than 20,000 inhabitants; and (ii) any area within 
a service area of a borrower for which a borrower has an outstanding 
loan as of June 18, 2008, made under titles I through V of the Rural 
Electrification Act of 1936, as amended (7 U.S.C. 901-950cc-2). For 
initial loans to a borrower made after June 18, 2008, the ``rural'' 
character of an area is determined at the time of the initial loan to 
furnish or improve service in the area.

IV. Fiscal Year 2021 Application and Submission Information

A. Applications

    All applications must be prepared and submitted in accordance with 
this NOSA and 7 CFR part 1720 (available online at http://www.ecfr.gov/cgi-bin/text-idx?SID=9295e45c9a0f6a857d800fbec5dde2fb&mc=true&node=pt7.11.1720&rgn=div5).

B. Content and Form of Submission

    In addition to the required application specified in 7 CFR 1720.6, 
all applicants must submit the following additional required documents 
and materials:
1. System for Awards Management
    All program applicants must be registered in the System for Awards 
Management (SAM) prior to submitting an application, unless determined 
exempt under 2 CFR 25.110. Loan recipients must maintain an active SAM 
registration with current information at all times during which it has 
an active Federal award or an application under consideration by the 
Agency. The applicant must ensure that the information in the database 
is current, accurate, and complete. Applicants must ensure they 
complete the Financial Assistance General Certifications and 
Representations in SAM;
2. Restrictions on Lobbying
    Applicants must comply with the requirements relating to 
restrictions on lobbying activities. (See 2 CFR part 418, and 7 CFR 
1710.125.) This form is available at https://www.gsa.gov/forms-library/disclosure-lobbying-activities;
3. Uniform Relocation Act Assurance Statement
    Applicants must comply with 49 CFR part 24, which implements the 
Uniform Relocation Assistance and Real Property Acquisition Policies 
Act of 1970, as amended. (See 7 CFR 1710.124.) This form is available 
at http://www.rd.usda.gov/resources/directives/electric-sample-documents;
4. Federal Debt Delinquency Requirements
    This report indicates whether the applicants are delinquent on any 
Federal debt (See 7 CFR 1710.126 and 7 CFR 1710.501(a)(13)). This form 
(the Federal Debt Delinquency Certification) is available at http://www.rd.usda.gov/resources/directives/electric-sample-documents;
5. Form RD 400-4, Assurance Agreement
    Applicants must submit a non-discrimination assurance commitment to 
comply with certain regulations on non-discrimination in program 
services and benefits and on equal employment opportunity as set forth 
in 7 CFR parts 15 and 15b and 12 CFR part 202, 7 CFR 1901, subpart E., 
DR4300-003, DR4330-0300, DR4330-005. This form is available at: http://www.rd.usda.gov/resources/directives/electric-sample-documents; and
6. Articles of Incorporation and Bylaws
    See 7 CFR 1710.501(b)(1). These are required if either document has 
been amended since the last loan application was submitted to RUS, or 
if this is the applicant's first application for a loan under the RE 
Act.

C. Supplemental Documents for Submission

1. Pro Forma Financial Statements Including Cash Flow Projections and 
Assumptions
    Each applicant must include five-year pro forma income statements, 
balance sheets and cash flow projections or business plans and clearly 
state the assumptions that underlie the projections, demonstrating that 
there is reasonable assurance that the applicant will be able to repay 
the guaranteed loan in accordance with its terms (See 7 CFR 
1720.6(a)(4)).
2. Pending Litigation Statement
    A statement from the applicant's counsel listing any pending 
litigation, including levels of related insurance coverage and the 
potential effect on the applicant, must be submitted to RUS.

V. Application Review Information

A. Application Evaluation

1. Administrator Review
    a. Each application will be reviewed by the Administrator to 
determine whether it is eligible under 7 CFR 1720.5, the information 
required under

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7 CFR 1720.6 is complete, and the proposed guaranteed bond complies 
with applicable statutes and regulations. The Administrator can at any 
time reject an application that fails to meet these requirements.
    b. Applications will be subject to a substantive review, on a 
competitive basis, by the Administrator based upon the evaluation 
factors listed in 7 CFR 1720.7(b).
2. Decisions by the Administrator
    The Administrator may limit the number of guarantees made to a 
maximum of five per year, to ensure a sufficient examination is 
conducted of applicant requests. RUS will notify the applicant in 
writing of the Administrator's approval or denial of an application. 
Approvals for guarantees will be conditioned upon compliance with 7 CFR 
1720.4 (in accordance with the 2018 Farm Bill) and 7 CFR 1720.6. The 
Administrator reserves the discretion to approve an application for an 
amount that was less than requested.

B. Independent Assessment

    Before a guarantee decision is made by the Administrator, the 
Administrator shall request that FFB review the rating agency 
determination required by 7 CFR 1720.5(b)(2) as to whether the bond or 
note to be issued would receive an investment grade rating without 
regard to the guarantee.

VI. Issuance of the Guarantee

    The requirements under this section must be met by the applicant 
prior to the endorsement of a guarantee by the Administrator (See 7 CFR 
1720.8.)

VII. Guarantee Agreement

    Each Guaranteed Lender will be required to enter into a Guarantee 
Agreement with RUS that contains the provisions described in 7 CFR 
1720.8 (Issuance of the Guarantee), 7 CFR 1720.9 (Guarantee Agreement), 
and 7 CFR 1720.12 (Reporting Requirements). The Guarantee Agreement 
will also obligate the Guaranteed Lender to pay, on an annual basis, a 
guarantee fee equal to 30 basis points (0.30 percent) of the 
outstanding principal amount of the guaranteed loan (See 7 CFR 
1720.10).

VIII. Reporting Requirements

    Guaranteed Lenders are required to comply with the financial 
reporting requirements and Pledged Collateral review and certification 
requirements set forth in 7 CFR 1720.12.

IX. Award Administration Information

Award Notices

    RUS will send a commitment letter to an applicant once the loan is 
approved. Applicants must accept and commit to all terms and conditions 
of the loan which are requested by RUS and FFB as follows:
1. Compliance Conditions
    In addition to the standard conditions placed on the 313A Program 
or conditions requested by RUS to ensure loan security and statutory 
compliance, applicants must comply with the following conditions:
    a. Each Guaranteed Lender selected under the 313A Program will be 
required to post collateral for the benefit of RUS in an amount at 
least equal to the aggregate amount of loan advances made to the 
Guaranteed Lender under the 313A Program.
    b. The pledged collateral (the Pledged Collateral) shall consist of 
outstanding notes or bonds payable to the Guaranteed Lender (the 
Eligible Securities) and shall be placed on deposit with a collateral 
agent for the benefit of RUS. To be deemed Eligible Securities that can 
be pledged as collateral, the notes or bonds to be pledged (i) cannot 
be classified as non-performing, impaired, or restructured under 
generally accepted accounting principles; special mention loans as 
defined by the Office of the Comptroller of the Currency; or any other 
elevated risk categories used by the Guaranteed Lender, (ii) must be 
free and clear of all liens other than the lien created for the benefit 
of RUS, (iii) cannot be comprised of more than 30 percent of bonds or 
notes from generation and transmission borrowers, (iv) cannot have more 
than 5 percent of notes and bonds be from any one particular borrower 
and (v) cannot be unsecured notes.
    c. The Guaranteed Lender will be required to place a lien on the 
Pledged Collateral in favor of RUS (as secured party) at the time that 
the Pledged Collateral is deposited with the collateral agent. RUS will 
have the right, in its sole discretion, within 14 business days of 
receipt of pledged collateral report to reject and require the 
substitution of any Pledged Collateral that the Guaranteed Lender 
deposits as collateral with the collateral agent. Prior to receiving 
any advances under the 313A Program, the Guaranteed Lender will be 
required to enter into a pledge agreement, satisfactory to RUS, with a 
banking institution serving as collateral agent.
    d. The Guaranteed Lender will be required to agree not to take any 
action that would have the effect of reducing the value of the pledged 
collateral below the level described above.
    e. Applicants must certify to the RUS, the portion of their loan 
portfolio that is:
    (1) Refinanced RUS debt;
    (2) Debt of borrowers for whom both RUS and the applicants have 
outstanding loans; and
    (3) Debt of borrowers for whom both RUS and the applicant have 
outstanding concurrent loans pursuant to Section 307 of the RE Act, and 
the amount of Eligible Loans.
2. Compliance With Federal Laws
    Applicants must comply with all applicable Federal laws and 
regulations.
    a. This obligation is subject to the provisions contained in the 
Consolidated Appropriations Act, 2021, Public Law 116-260, Division A, 
Title III, Sections 744 and 745, as amended and/or subsequently enacted 
for USDA agencies and offices, regarding the prohibition against RUS 
making awards to applicants having corporate felony convictions within 
the past 24 months or to applicants having corporate federal tax 
delinquencies.
    b. An authorized official within your organization must execute, 
date, and return the loan commitment letter and the Assurance Regarding 
Felony Conviction or Tax Delinquent Status for Corporate Applicants 
(Form AD-3031) to RUS within 14 calendar days from the date of the loan 
commitment letter, or by September 24, 2021, if the loan is approved 
after September 9, 2021; otherwise, the commitment will be void. This 
form is available at https://www.ocio.usda.gov/document/ad3031.
    c. Uniform Commercial Code (UCC) Filing. The Borrower must provide 
RUS with evidence that the Borrower has filed the UCC financing 
statement required by 7 CFR 1720.8(a)(2). Upon filing of the 
appropriate UCC financing statement, the Guaranteed Lender will provide 
RUS with a perfection opinion by outside counsel which demonstrates 
that RUS's security interest in the pledged collateral under the Pledge 
Agreement is perfected.
    d. Additional conditions may be instituted for future obligations.

X. National Environmental Policy Act Certification

    For any proceeds to be used to refinance bonds and notes previously 
issued by the Guaranteed Lender for RE Act purposes that are not 
obligated for specific projects, RUS has determined that these 
financial actions will not individually or cumulatively have a

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significant effect on the human environment as defined by the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.) and its 
implementing regulations at 40 CFR parts 1500-1508. However, for any 
new projects funded through the 313A Program, applicants must consult 
with RUS and comply with the Agency regulations at 7 CFR part 1970.

XI. Other Information and Requirements

    Applications must contain all the required elements of this NOSA, 
and all standard requirements as required by 7 CFR part 1720. 
Additional supporting data or documents may be required by RUS 
depending on the individual application or financial conditions. All 
applicants must comply with all Federal laws and regulations.

XII. Agency Contacts

    A. Website: https://www.rd.usda.gov/contact-us/national-office/rus.
    B. Phone: (202) 720-9540.
    C. Email: [email protected].
    D. Main point of contact: Amy McWilliams, Program Advisor; Phone: 
(202) 720 9540 or (202) 205-8663;

XIII. USDA Non-Discrimination Statement

    In accordance with Federal civil rights law and U.S. Department of 
Agriculture (USDA) civil rights regulations and policies, the USDA, its 
Agencies, offices, and employees, and institutions participating in or 
administering USDA programs are prohibited from discriminating based on 
race, color, national origin, religion, sex, gender identity (including 
gender expression), sexual orientation, disability, age, marital 
status, family/parental status, income derived from a public assistance 
program, political beliefs, or reprisal or retaliation for prior civil 
rights activity, in any program or activity conducted or funded by USDA 
(not all bases apply to all programs). Remedies and complaint filing 
deadlines vary by program or incident.
    Persons with disabilities who require alternative means of 
communication for program information (e.g., Braille, large print, 
audiotape, American Sign Language, etc.) should contact the responsible 
Agency or USDA's TARGET Center at (202) 720-2600 (voice and TTY) or 
contact USDA through the Federal Relay Service at (800) 877-8339. 
Additionally, program information may be made available in languages 
other than English.
    To file a program discrimination complaint, complete the USDA 
Program Discrimination Complaint Form, AD-3027. Individuals wishing to 
file a discrimination complaint may use the form available at https://www.usda.gov/oascr/how-to-file-a-program-discrimination-complaint and 
at any USDA office, or may write a letter addressed to USDA and provide 
in the letter all of the information requested in the form. To request 
a copy of the complaint form, call (866) 632-9992. Submit your 
completed form or letter to USDA by:
    (1) Mail: U.S. Department of Agriculture, Office of the Assistant 
Secretary for Civil Rights, 1400 Independence Avenue SW, Washington, DC 
20250-9410; or
    (2) Email: [email protected].
    USDA is an equal opportunity provider, employer, and lender.

    Authority: 7 U.S.C. 940c-1.

Christopher A. McLean,
Acting Administrator, Rural Utilities Service.
[FR Doc. 2021-06675 Filed 3-31-21; 8:45 am]
BILLING CODE 3410-15-P