Rural Business—Cooperative Service, USDA.
As set forth in 7 CFR 4279.107(b) and 4280.126(c), Rural Development (the Agency) has the authority to charge an annual renewal fee for loans made under the Business and Industry (B&I) Guaranteed Loan Program and the Rural Energy for America (Section 9007; formerly Section 9006 Renewable Energy Systems and Energy Efficiency Improvements Program) Guaranteed Loan Program. Pursuant to that authority, the Agency is establishing the renewal fee rate at one-fourth of 1 percent for the B&I Guaranteed Loan Program and one-fourth of 1 percent for the Section 9007 Guaranteed Loan Program. These rates will apply to all loans obligated in fiscal year (FY) 2010 that are made under the cited programs. As established in 7 CFR 4279.107 and 4280.126, the amount of the fee on each guaranteed loan will be determined by multiplying the fee rate by the outstanding principal loan balance as of December 31, multiplied by the percent of guarantee.
As set forth in 7 CFR 4280.126(a), each fiscal year the Agency shall establish the initial guarantee fee rate for loans made under the Section 9007 Guaranteed Loan Program. Pursuant to that authority, the Agency is establishing the initial guarantee fee rate at 1 percent for loans made in FY 2010.
As set forth in 7 CFR 4279.107(a) and 4279.119(b)(4), each fiscal year the Agency shall establish a limit on the maximum portion of B&I guarantee authority available for that fiscal year that may be used to guarantee loans with a B&I guarantee fee of 1 percent or guaranteed loans with a guarantee percentage exceeding 80 percent.
Allowing the guarantee fee to be reduced to 1 percent or exceeding the 80 percent guarantee on certain B&I guaranteed loans that meet the conditions set forth in 7 CFR 4279.107 and 4279.119, will increase the Agency's ability to focus guarantee assistance on projects which the Agency has found particularly meritorious. For 1 percent fees, (1) the borrower's business must support value-added agriculture and result in farmers benefiting financially, or (2) such projects are “high impact” as defined in 7 CFR 4279.155(b)(5), and are located in rural communities that either (a) remain persistently poor, (b) have experienced long-term population decline and job deterioration, (c) are experiencing trauma as a result of natural disaster, or (d) are experiencing fundamental structural changes in its economic base. For guaranteed loans exceeding 80 percent, such projects must be a high-priority project in accordance with 7 CFR 4279.155 (and meet the other requirements of 7 CFR 4279.119(b)).
Not more than 12 percent of the Agency's quarterly apportioned B&I guarantee authority (including available Disaster funding) will be reserved for loan requests with a guarantee fee of 1 percent, and not more than 15 percent of the Agency's quarterly apportioned guarantee authority (including available Disaster funding) will be reserved for guaranteed loan requests with a guaranteed percentage exceeding 80 percent. Once the respective quarterly limits are reached, all additional loans for that quarter will be at the standard fee and guarantee limits in 7 CFR part 4279. As an exception to this paragraph and for the purposes of this notice, loans developed by the North American Development Bank (NADBank) Community Adjustment and Investment Program (CAIP) will not count against the 15 percent limit. Up to 50 percent of CAIP loans may have a guarantee percentage exceeding 80 percent. The funding authority for CAIP loans is not derived carryover or recovered funding authority of the B&I Guaranteed Loan Program.
For B&I projects funded with American Recovery and Reinvestment Act (ARRA) funds, there is no renewal fee and all guaranteed loans will be charged a 1 percent guarantee fee. Any guaranteed loan that is $10 million or less that scores at least 55 points in accordance with RD Instruction 4279-B, section 4279.155, will receive a 90 percent guarantee.
Effective Date: November 12, 2009.Start Further Info
FOR FURTHER INFORMATION CONTACT:
Brenda Griffin, e-mail firstname.lastname@example.org, Rural Development, Business Programs, Business and Industry Division, STOP 3224, 1400 Independence Avenue, SW., Washington, DC 20250-3224, telephone (202) 720-6802.End Further Info End Preamble Start Supplemental Information
This action has been reviewed and determined not to be a rule or regulation as defined in Executive Order 12866 as amended by Executive Order 13258.Start Signature
Date: October 16, 2009.
Judith A. Canales,
Administrator, Rural Business—Cooperative Service.
[FR Doc. E9-27143 Filed 11-10-09; 8:45 am]
BILLING CODE 3410-XY-P