[Federal Register Volume 87, Number 49 (Monday, March 14, 2022)]
[Notices]
[Pages 14242-14246]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-05238]


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DEPARTMENT OF AGRICULTURE

Rural Utilities Service

[Docket Number RUS-22-ELECTRIC-0001]


Announcement of Application Deadlines and Requirements for 
Section 313A Guarantees for Bonds and Notes Issued for Utility 
Infrastructure Purposes for Fiscal Year (FY) 2022

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 solicitation of 
applications under the Guarantees for Bonds and Notes Issued for 
Utility Infrastructure Purposes Program (the 313A Program) for Fiscal 
Year (FY) 2022. The agency has received $750 million for this purpose 
in previous years and has a pro-rata share of that amount pursuant to 
the most recent continuing resolution. The final amount of funding 
shall be determined by Congressional appropriations. Should additional 
funding become available this fiscal year, RUS reserves the right to 
increase the total funds available under this notice. These types of 
loan guarantees will be made available to qualified applicants to make 
utility infrastructure loans or to refinance bonds or notes issued for 
such purposes. This notice is being issued in order to allow applicants 
sufficient time to leverage financing, prepare and submit their 
applications, and give the Agency time to process applications within 
FY 2022. An announcement will be made on the Agency website: https://www.rd.usda.gov/newsroom/notices-solicitation-applications-nosas 
regarding any amount received in the FY 2022 appropriations. 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. The agency welcomes 
financially feasible proposals which would use funds available under 
this notice to further finance eligible utilities projects that 
demonstrably reduce carbon emissions.

DATES: Completed applications must be received or postmarked by RUS no 
later than 5:00 p.m. Eastern Daylight Time (EDT) May 13, 2022. 
Applicants intending to mail applications must have their applications 
postmarked by the closing deadline. The Agency will allow 60 days from 
the date of the postmark for delivery.

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, Electric Program, Rural Utilities Service, 1400 
Independence Avenue SW, Washington, DC 20250-1560 or via email at 
[email protected].

FOR FURTHER INFORMATION CONTACT: Amy McWilliams, Program Advisor, 
Electric Program, Rural Utilities Service, 1400 Independence Avenue SW, 
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 guarantees. 
However, applications will be accepted for 60 days beginning March 14, 
2022 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) 2022.
    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 postmarked by RUS no later than 5:00 p.m. Eastern Daylight Time 
(EDT) May 13, 2022.
    The Agency encourages applicants to consider projects that will 
promote equity and economic opportunity in rural America, specifically 
those that advance key priorities (more details are available at 
https://www.rd.usda.gov/priority-points):
     Assisting rural communities recover economically from the 
impacts of the COVID-19 pandemic, particularly disadvantaged 
communities;
     Ensuring all rural residents have equitable access to 
Rural Development (RD) programs and benefits from RD funded projects; 
and
     Reducing climate pollution and increasing resilience to 
the impacts of climate change through economic support to rural 
communities.

Items in Supplementary Information

I. Program Description
II. Federal Award Information
III. Eligibility Information
IV. Fiscal Year 2022 Application and Submission Information
V. Application Review Information
VI. Issuance of Guarantee
VII. Guarantee Agreement
VIII. Federal Administration Information
IX. National Environmental Policy Act Certification
X. Other Information and Requirements
XI. Agency Contacts
XII. Non-Discrimination Statement

I. Program Description

A. Purpose and Objectives of the 313A Program

    The purpose of the 313A Program is to guarantee loans to selected 
applicants (each referred to as ``Guaranteed Lender'' in this NOSA). 
The proceeds of the guaranteed loans 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 Rural Electrification Act of 
1936, as amended (RE Act). Each applicant must provide a statement on 
how it proposes to use the proceeds of the guaranteed bonds,

[[Page 14243]]

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.
    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. 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. Federal Award Information

    Type of Awards: Guaranteed Loans.
    Fiscal Year Funds: FY 2022.
    Available Funds: The agency received authority to issue $750 
million in loan guarantees for this program in FY 2021 and has a pro-
rata share of that amount for FY 2022 pursuant to the most recent 
continuing resolution. The final amount of funding for this program for 
FY 2022 will be determined by Congressional appropriations. Should 
additional funding become available this fiscal year, 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 to make an award, RUS will take 
overall program policy objectives into account.
    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) May 13, 2022.
    Award Date: Awards will be made on or before September 30, 2022, 
but no earlier than May 13, 2022.
    Performance Period: The Rural Electrification Act provides that 
loans guaranteed under this program cannot exceed 30 years in length.
    Type of Assistance Instrument: The type of assistance is in the 
form of an RUS FFB Guaranteed Loan and is supported by a perfected lien 
on collateral sufficient to provide for full loan security.
    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. Cost Sharing or Matching

    There is no requirement for cost sharing or matching; however, 
borrowers must provide sufficient unencumbered collateral to secure 
loan guarantees made under this program.

C. 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. When a non-tribal applicant is 
proposing to use guaranteed loan funds made available through this 
program, for projects on tribal lands, the application must include a 
resolution of support from the Tribe or Tribes within the proposed 
service territory of the project.

IV. Fiscal Year 2022 Application and Submission Information

A. AddressTo Request Application Package

    All applications must be prepared and submitted in accordance with 
this NOSA and 7 CFR part 1720 (available online at https://www.ecfr.gov/current/title-7/subtitle-B/chapter-XVII/part-1720).

[[Page 14244]]

B. Content and Form of Application 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. Recipients of guaranteed loans under this 
program must maintain an active SAM registration with current 
information at all times during the time they have an outstanding 
guaranteed loan 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.) 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 https://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 https://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.

D. Submission Dates and Times

    To be considered, applications must be submitted no later than 5:00 
p.m. Eastern Daylight Time (EDT) May 13, 2022.

E. Funding Restrictions

    Funds from loans guaranteed under this program may only be used in 
accordance with this notice, the program regulations and the RE Act.

V. Application Review Information

A. Criteria

    Each application will be reviewed by the Secretary to determine 
whether it is eligible under 7 CFR 1720.5, the information required 
under 7 CFR 1720.6 is complete, and the proposed guaranteed bond 
complies with applicable statutes and regulations. The Secretary can at 
any time reject an application that fails to meet these requirements.

B. Review and Section Process.

1. Administrator Review
    a. 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 and 7 CFR 1720.6. The Administrator reserves the discretion to 
approve an application for an amount that was less than requested.

C. 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 7 CFR 1720.8 must be met by the applicant 
prior to the endorsement of a guarantee by the Administrator.

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. Federal Administration Information

    Award Notices. RUS will send a commitment letter to an applicant 
once the guaranteed loan has been approved. Applicants must accept and 
commit to all terms and conditions of the guaranteed 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

[[Page 14245]]

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 Instruments) and shall be placed on deposit with a collateral 
agent for the benefit of RUS. To be deemed Eligible Instruments 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 the 
Guaranteed Lender's written request to pledge Pledged Collateral, to 
reject any of the Pledged Instruments and require the Guaranteed Lender 
to substitute other Pledged Instruments 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 loan guarantee will be subject to the provisions contained 
in the appropriations act for FY 2022, once enacted by Congress. Prior 
appropriations acts have included prohibitions against RUS making 
awards to applicants having corporate felony convictions within the 
past 24 months or to applicants having corporate federal tax 
delinquencies. It is possible that such a provision will be included in 
the appropriations act for FY 2022.
    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 26, 2022, if the loan is approved 
after September 12, 2022; 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.

3. 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. 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 
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.

X. Other Information and Requirements

 Paperwork Reduction Act

    Under the Paperwork Reduction Act (44 U.S.C. 3501 et seq.), OMB 
must approve all ``collection of information'' as a requirement for 
``answers to *** identical reporting or recordkeeping requirements 
imposed on ten or more persons *** '' (44 U.S.C. 3502(3)(A).) RUS has 
concluded that the reporting requirements contained in this rule/
funding announcement will involve less than 10 persons and do not 
require approval under the provisions of the Act.
    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.

XI. 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) 205-8663.

XII. USDA Non-Discrimination Statement

    In accordance with Federal civil rights laws and U.S. Department of 
Agriculture (USDA) civil rights regulations and policies, the USDA, its 
Mission Areas, agencies, staff 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, 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.
    Program information may be made available in languages other than 
English. Persons with disabilities who require alternative means of 
communication to obtain program information (e.g., Braille, large 
print, audiotape, American Sign Language) should contact the 
responsible Mission Area, agency, or staff office; the USDA TARGET 
Center at (202) 720-2600

[[Page 14246]]

(voice and TTY); or the Federal Relay Service at (800) 877-8339.
    To file a program discrimination complaint, a complainant should 
complete a Form AD-3027, USDA Program Discrimination Complaint Form, 
which can be obtained online at https://www.ocio.usda.gov/document/ad-3027, from any USDA office, by calling (866) 632-9992, or by writing a 
letter addressed to USDA. The letter must contain the complainant's 
name, address, telephone number, and a written description of the 
alleged discriminatory action in sufficient detail to inform the 
Assistant Secretary for Civil Rights (ASCR) about the nature and date 
of an alleged civil rights violation. The completed AD-3027 form or 
letter must be submitted 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) Fax: (833) 256-1665 or (202) 690-7442; or
    (3) 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. 2022-05238 Filed 3-11-22; 8:45 am]
BILLING CODE 3410-15-P