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Associations-Community Facilities Loans

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Rural Housing Service, USDA.


Final rule.


The Rural Housing Service (RHS) hereby amends the regulations utilized to administer the Community Facilities loan program to remove administrative requirements and the requirement to complete Forms RD 1942-14, 1942-43, and 1942-45 from Federal regulations. Forms RD 1942-14, 1942-43, and 1942-45 are completed by Federal employees processing loan requests to summarize information concerning project feasibility. Removal of the forms from the regulation will allow us to consolidate the forms and print a specialized project summary for each project from information entered into the Rural Development automated system.


September 27, 2002.

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Dan Spieldenner, Community Programs Senior Loan specialist, Rural Housing Service, U.S. Department of Agriculture, STOP 0787, 1400 Independence Avenue SW., Washington, DC 20250-0787, telephone: (202) 720-9700.

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This action is not subject to the provisions of Executive Order 12866 since it involves only internal Agency management. This action is not published for proposed rulemaking because it involves only internal Agency management and publication for notice and comment is not necessary.

Programs Affected

The Catalog of Federal Domestic Assistance Program impacted by this action is 10.766, Community Facilities Loans and Grants.

Intergovernmental Review

These loans are subject to the provisions of Executive Order 12372, which require intergovernmental consultation with State and local officials. RHS conducts intergovernmental consultations for each loan in the manner delineated in 7 CFR, part 3015 subpart V.

Civil Justice Reform

This final rule has been reviewed under Executive Order 12988, Civil Justice Reform. In accordance with this rule: (1) All State and local laws and regulations that are in conflict with this rule will be preempted; (2) except as expressively provided in the regulation, 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.

Environmental Impact Statement

The action has been reviewed in accordance with 7 CFR part 1940, subpart G, “Environmental Program.” 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 of 1969, 42 U.S.C. 4321 et seq., an Environmental Impact Statement is not required.

Unfunded Mandates Reform Act

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C. chapters 17A and 25, established 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, RHS 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 1 year. When such a statement is needed for a rule, section 205 of the UMRA generally requires RHS 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 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 rule is not subject to the requirements of sections 202 and 205 of the UMRA.

Regulatory Flexibility Act

This rule has been reviewed with regard to the requirements of the Regulatory Flexibility Act (5 U.S.C. 601-612). The undersigned has determined and certified by signature of this document that this rule will not have a significant economic impact on a substantial number of small entities since this rulemaking action does not involve a new or expanded program.


It is the policy of this Department that rules relating to public property, loans, grants, benefits, or contracts shall comply with 5 U.S.C. 553, notwithstanding the exemption of that section with respect to such rules. This action is not published for proposed rulemaking because it involves only internal Agency management and publication for notice and comment is unnecessary.

Paperwork Reduction Act

The information collection and recordkeeping requirements contained in this regulation have been approved by the Office of Management and Budget (OMB) under the provisions of 44 U.S.C. chapter 35 and were assigned OMB control number 0575-0015 in accordance with the Paperwork Reduction Act of 1995. Under the Paperwork Reduction Act of 1955, no person is required to respond to a collection of information unless it displays a valid OMB control number. This final rule does not impose any new information or recordkeeping requirements.Start Printed Page 60854


The Agency has determined that internal administrative forms completed by Agency employees are not subject to Federal regulatory requirements when information is obtained from other OMB-approved forms. Removal of administrative processing requirements and administrative forms will improve our ability to modernize our documentation process used to determine project feasibility and eligibility for program funding. We are developing a customized project summary for each project with our automated system to replace Forms RD 1942-14, 1942-43, and 1942-45.

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List of Subjects in 7 CFR Part 1942

  • Community Development
  • Community Facilities
  • Loan programs—Housing and Community Development
  • Loan security
  • Rural areas
  • Waste treatment and disposal—Domestic
  • Water supply—Domestic
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1. The authority citation for part 1942 continues to read as follows:

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Authority: 5 U.S.C. 301; 7 U.S.C. 1932; 7 U.S.C. 1989; 16 U.S.C. 1005.

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Subpart A—Community Facilities Loans

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2. Section 1942.5 is amended by revising paragraphs (a)(1), introductory, (a)(2), (a)(3), (b)(1)(ii)(C), the introductory text of (c) and paragraph (c)(3) to read as follows:

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Application review and approval.

(a) * * *

(1) The Rural Development manager will complete the project summary, including written analysis and recommendations, and will prepare a draft letter of conditions listing all the requirements that the applicant must agree to meet within a specific time.

* * * * *

(2) The State staff engineer or architect, as appropriate, will include a written analysis and recommendations on the project summary.

(1) The Chief, Community Programs or Community and Business Programs, will review the assembled application and include in the project summary a written analysis and recommendations, including the availability of other credit and other eligibility determinations. The draft letter of conditions will be reviewed and any necessary modifications made.

(b) * * *

(1) * * *

(ii)* * *

(C) Community Facilities Project Summary.

(c) For all applications. All letters of conditions will be addressed to the applicant, signed by the Rural Development Manager or other Agency representative designated by the State Director, and delivered to the applicant. Upon signing the letter of conditions, the Rural Development Manager will send two copies of the letter of conditions and two copies of the project summary to the State Director. The State Director will immediately send one copy of the project summary and a copy of the letter of conditions to the National Office, Attention: Community Programs. The Rural Development Manager, with assistance as needed from the State Office, will discuss the requirements of the letter of conditions with the applicant's representatives and afford them an opportunity to execute Form RD 1942-46.

* * * * *

(3) If the applicant accepts the letter of conditions, the Rural Development Manager will forward the executed Form RD 1942-46 and a signed and an unsigned copy of Form RD 1940-1 to the State Director.

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3. Section 1942.17(f) is amended by revising paragraph (f)(1) to read as follows:

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Community facilities.
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(f) * * *—(1) General. Each loan will bear interest at the rate prescribed in RD Instruction 440.1, exhibit B (available in any Rural Development office). The interest rates will be set by Rural Development at least for each quarter of the fiscal year. All rates will be adjusted to the nearest one-eighth of 1 percent. The applicant may submit a written request prior to loan closing that the interest rate charged on the loan be the lower of the rate in effect at the time of loan approval or the rate in effect at the time of loan closing. If the interest rate is to be that in effect at loan closing, the interest rate charged on a loan involving multiple advances of Rural Development funds, using temporary debt instruments, shall be that in effect on the date when the first temporary debt instrument is issued. If no written request is received from the applicant prior to loan closing, the interest rate charged on the loan will be the rate in effect at the time of loan approval.

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Subpart C—Fire and Rescue Loans

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4. Section 1942.108(b) is removed and reserved.

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Dated: September 20, 2002.

Arthur A. Garcia,

Administrator, Rural Housing Service.

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[FR Doc. 02-24621 Filed 9-26-02; 8:45 am]