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AGENCY:

Rural Housing Service, Rural Business-Cooperative Service, Rural Utilities Service, and Farm Service Agency, USDA.

ACTION:

Proposed rule.

SUMMARY:

The Rural Housing Service (RHS), Rural Business-Cooperative Service (RBS), and the Rural Utilities Service (RUS), agencies delivering the United States Department of Agriculture's Rural Development Housing, Business, and Utilities Programs, are proposing to amend their regulations to reflect the clarification of the definition of SNMHI. The definition will in essence state “the median Start Printed Page 48175household income of the state's non-metropolitan counties and portions of metropolitan counties outside of cities, towns or places of 50,000 or more population.” This minor modification will enable Rural Development to serve more communities across rural America. The loan and grant eligibility or priority scoring will be positively impacted for Rural Development Housing, Business, and Utilities Programs.

DATES:

Comments must be received by RUS or bear a postmark or equivalent, no later than September 8, 2004.

ADDRESSES:

You may submit comments by any of the following methods:

• Federal eRulemaking Portal: Go to http://www.regulations.gov. Follow the online instructions for submitting comments.
• Agency Web site: http://www.usda.gov/​rus/​index2/​Comments.htm. Follow the instructions for submitting comments.
• E-mail: RUSComments@usda.gov. Include in the subject line of the message “Definition Clarification of State Non-metropolitan Median Household Income (SNMHI).”
• Mail: Addressed to Richard Annan, Acting Director, Program Development and Regulatory Analysis, Rural Utilities Service, United States Department of Agriculture, 1400 Independence Avenue, SW., STOP 1522, Washington, DC 20250-1522.
• Hand Delivery/Courier: Addressed to Richard Annan, Acting Director, Program Development and Regulatory Analysis, Rural Utilities Service, United States Department of Agriculture, 1400 Independence Avenue, SW., Room 5168-S, Washington, DC 20250-1522.

Instructions: All submissions received must include that agency name and the subject heading “Definition Clarification of State Non-metropolitan Median Household Income (SNMHI).” All comments received must identify the name of the individual (and the name of the entity, if applicable) who is submitting the comment. All comments received will be posted without change to http://www.usda.gov/​rus/​index2/​Comments.htm, including any personal information provided.

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FOR FURTHER INFORMATION CONTACT:

Linda Scott, Loan Specialist, Water Programs Division, Rural Utilities Service, U.S. Department of Agriculture, 1400 Independence Avenue, SW., Room 2235-S, Stop 1570, Washington, DC 20250-1570. Telephone (202) 720-9639. E-mail: Linda.Scott@usda.gov.

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SUPPLEMENTARY INFORMATION:

Executive Order 12866

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

Catalog of Federal Domestic Assistance

The programs described by this rule are listed in the Catalog of Federal Domestic Assistance Programs under numbers 10.760—Water and Waste Disposal Systems for Rural Communities; 10.761—Technical Assistance and Training Grants; 10.762—Solid Waste Management Grants; 10.763—Emergency Community Water Assistance Grants; 10.766—Community Facilities Loans and Grants; 10.767—Intermediary Relending Program; and 10.770—Water and Waste Disposal Loans and Grants (Section 306C). This catalog is available on a subscription basis from the Superintendent of Documents, the United States Government Printing Office, Washington, DC, 20402-9325, telephone number (202) 512-1800.

Executive Order 12372

The programs described by this rule that are subject to the requirements of Executive Order 12372, “Intergovernmental Review of Federal Programs,” as implemented under USDA's regulations at 7 CFR part 3015, are 10.760—Water and Waste Disposal Systems for Rural Communities; 10.763—Emergency Community Water Assistance Grants; 10.766—Community Facilities Loans and Grants; 10.767—Intermediary Relending Program; and 10.770—Water and Waste Disposal Loans and Grants (Section 306C).

Executive Order 12988

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. RUS 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 effect will be given to the rule; and, in accordance with section 212 (e) of the Department of Agriculture Reorganization Act of 1994 (7 U.S.C. 6912 (e)) administrative appeal procedures, if any are required, must be exhausted prior to initiating any action against the Department or its agencies.

Regulatory Flexibility Act Certification

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.

Information Collection and Recordkeeping Requirements

This rule contains no new reporting or recordkeeping burdens under OMB control numbers 0572-0109, 0572-0110, 0572-0112, 0572-0121, 0575- that would require approval under the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35).

National Environmental Policy Act Certification

The Administrator of RUS has determined that this 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.

Unfunded Mandates

This 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. Thus this rule is not subject to the requirements of section 202 and 205 of the Unfunded Mandates Reform Act of 1995.

Executive Order 13132, Federalism

The policies contained in this rule do not have any substantial direct effect on states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government. Nor does this rule impose substantial direct compliance costs on state and local governments. Therefore, consultation with states is not required.

Background

Pursuant to 44 U.S.C. 3504(e)(3) and 31 U.S.C. 1104(d) and Executive Order No. 10253 (June 11, 1951), the Office of Management and Budget (OMB) defines Metropolitan Statistical Areas, Micropolitan Statistical Areas, Combined Statistical Areas, and New England City and Town Areas for use in Federal statistical activities. Once-a-decade OMB performs a comprehensive review of statistical area standards and definitions and publishes a list which includes counties where Metropolitan Statistical Areas are located. The entire county in which a metropolitan statistical area is located is determined Start Printed Page 48176by OMB to be a metropolitan area, and, therefore, is not eligible for Rural Development assistance. (OMB issues periodic updates of the areas between decennial censuses based on Census Bureau data.) Because pockets of rural areas in need of Rural Development's financial assistance are located within these counties, Rural Development is proposing to define State Nonmetropolitan Median Household Income to include the portions of such metropolitan counties outside of cities, towns or places of 50,000 or more population.

The purpose of the proposed rule, with respect to the Water and Environmental Programs (WEP), is to create a standard definition of SNMHI to be used in priority scoring for WEP Technical Assistance and Training Grants, Section 306 Water and Waste Disposal Loans and Grants, and Emergency and Imminent Community Water Assistance Grants, and for loan and grant eligibility determinations for Water and Waste Loans and Grants. Standardizing the definition of SNMHI will allow for more efficient administration of these WEP loan and grant programs consistent with the purposes of the Consolidated Farm and Rural Development Act (codified at 7 U.S.C. 1921 et seq.).

The proposed rule also amends the Intermediary Relending Program (IRP) and Community Facilities (CF) loan and grant regulations by adding a definition of SNMHI. The term is actually used to help determine loan funding priority for the IRP and CF programs. The proposed change, for the IRP and CF programs, merely recognizes a test which is already being used and whose parameters have not been changed by inclusion of the definition.

The 30-day comment period for this proposed regulation is needed to make an equitable adjustment in eligibility and priority criteria to coincide with the beginning of Fiscal Year (FY) 2005. When the Census Bureau released the new median household income data based on the 2000 census, a number of rural communities across the country became ineligible for grants and low interest loans. These communities' median household income increased at a much faster rate than the indicator rate used by the agency, giving the appearance that the communities were relatively wealthier when compared to the state's median household income. However, the agency's median household income indicator was faulty since it did not account for a change in the definition of metropolitan counties from the 1990 census to the 2000 census. Based upon a review of applications on hand and using the 2000 census median household income data for non-metropolitan counties, there was approximately a 25 percent reduction in the number of communities eligible for a grant and a 50 percent reduction in the number of communities eligible for a reduced interest rate. An Administrative Notice is in effect until September 30, 2004, enabling Rural Development program areas to continue using the 1990 census data for eligibility and scoring purposes for these communities with applications on hand as of October 1, 2003, provided that the loan and/or grant are funded before the end of FY 2004. After that date, all applications must be processed using the 2000 census data. By having this definition modification in effect as of October 1, 2004, the negative impact to numerous rural communities will be greatly reduced, and they will continue to be eligible for Rural Development financial assistance.

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List of Subjects

• Business and industry; Community development; Community facilities; Grant program—housing and community development; Reporting and recordkeeping requirements; Rural areas; Waste treatment and disposal; Water supply; Watersheds

• Community development; Community facilities; Grant programs—housing and community development; Loan programs—housing and community development; Reporting and recordkeeping requirements; Rural areas; Waste treatment and disposal; Water supply; Watersheds

• Community development; Community facilities; Grant programs—housing and community development; Reporting and recordkeeping requirements; Rural areas; Waste treatment and disposal; Water supply; Watersheds

• Community development; Community facilities; Grant programs—housing and community development; Loan programs—housing and community development; Reporting and recordkeeping requirements; Rural areas; Waste treatment and disposal; Water supply; Watersheds

• Community development; Community facilities; Loan program—Housing and community development; Loan security; Reporting and recordkeeping requirements; Rural Areas; Waste treatment and disposal—Domestic; Water supply—Domestic

• Accounting; Administrative practice and procedure; Conflicts of interests; Environmental impact statements; Foreclosure; Fair Housing; Grant programs—Housing and community development; Loan programs—Housing and community development; Rural areas; Subsidies

• Community development; Economic development; Loan programs—business; Reporting and recordkeeping requirements; Rural areas

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For reasons set forth in the preamble, RUS proposes to amend 7 CFR chapters XVII, XVIII, and XVIV as set forth below:

CHAPTER XVII—Rural Utilities Service, Department of Agriculture

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PART 1775—TECHNICAL ASSISTANCE AND TRAINING GRANTS

1. The authority citation for part 1775 continues to read as follows:

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

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2. Amend § 1775.4 by adding a definition for “Statewide Nonmetropolitan Median Household Income” in alphabetical order to read as follows:

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PART 1777—SECTION 306C WWD LOANS AND GRANTS

3. The authority citation for part 1777 continues to read as follows:

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

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4. Amend § 1777.4 by adding a definition for “Statewide Nonmetropolitan Median Household Income” in alphabetical order to read as follows:

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PART 1778—EMERGENCY AND IMMINENT COMMUNITY WATER ASSISTANCE GRANTS

5. The authority citation for part 1778 continues to read as follows:

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

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6. Amend § 1778.4 by adding a definition for “Statewide Nonmetropolitan Median Household Income” in alphabetical order to read as follows:

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PART 1780—WATER AND WASTE LOANS AND GRANTS

7. The authority citation for part 1780 continues to read as follows:

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

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Subpart A—General Policies and Requirements

8. Amend § 1780.3(a) by revising the definition for “Statewide Nonmetropolitan Median Household Income” to read as follows:

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CHAPTER XVIII—Rural Housing Service, Rural Business—Cooperative Service, and Farm Service Agency, Department of Agriculture

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PART 1942—ASSOCIATIONS

9. The authority citation for part 1942 continues to read:

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

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Subpart A—Community Facility Loans

10. Amend subpart A by adding a new § 1942.21 to read as follows:

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CHAPTER XXXV—Rural Housing Service, Department of Agriculture

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PART 3570—COMMUNITY PROGRAMS

11. The authority citation for part 3570 continues to read:

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

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Subpart B—Community Facilities Grant Program

12. Amend § 3570.53 by revising the definition for “State nonmetropolitan median household income” to read as follows:

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CHAPTER XLII—Rural Business—Cooperative Service, Rural Utilities Service, Department of Agriculture

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PART 4274—DIRECT AND INSURED LOANMAKING

13. The authority citation for part 4274 continues to read:

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

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Subpart D—Intermediary Relending Program (IRP)

14. Amend § 4274.302 (a) by adding a definition for “Statewide Nonmetropolitan Median Household Income” in alphabetical order to read as follows:

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