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Guarantee Fee Rates for Guaranteed Loans for Fiscal Year 2015; Maximum Portion of Guarantee Authority Available for Fiscal Year 2015; Annual Renewal Fee for Fiscal Year 2015

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Rural Business-Cooperative Service, USDA.




As set forth in 7 CFR 4279.107, the Agency has the authority to charge an initial guarantee fee and an Start Printed Page 487annual renewal fee for loans made under the Business and Industry (B&I) Guaranteed Loan Program. Pursuant to that authority, the Agency is establishing the renewal fee rate at one-half of 1 percent for the B&I Guaranteed Loan Program. This rate will apply to all loans obligated in Fiscal Year (FY) 2015 that are made under the B&I program. As established in 7 CFR 4279.107(b)(1), 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.

The Agency was authorized by the 2012 Appropriations Bill, and subsequent Appropriation Acts, to charge a maximum of 3 percent for its guarantee fee for FYs 2012, 2013, and 2014. The 2015 Appropriations Act does contain a provision to charge a maximum of 3 percent for its guarantee fee for FY 2015. As such, the guarantee fee for FY 2015 will be 3 percent.

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 reduced guarantee fee or guaranteed loans with a guarantee percentage exceeding 80 percent.

Allowing a reduced guarantee fee 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 reduced guarantee fees, the borrower's business must support value-added agriculture and result in farmers benefiting financially or must be a high impact business investment as defined in 7 CFR 4279.155(b)(5) and be located in rural communities that experience long-term population decline and job deterioration, remain persistently poor, are experiencing trauma as a result of natural disaster, or are experiencing fundamental structural changes in its economic base. For guaranteed loans exceeding 80 percent, such projects must qualify as a high-priority project (a requirement of 7 CFR 4279.119(b)), scoring at least 50 points in accordance with 7 CFR 4279.155(b).

Not more than 12 percent of the Agency's quarterly apportioned B&I guarantee authority will be reserved for loan requests with a reduced fee, and not more than 15 percent of the Agency's quarterly apportioned guarantee authority will be reserved for guaranteed loan requests with a guarantee 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.


Effective Date: January 6, 2015.

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Brenda Griffin, USDA, Rural Development, Business Programs, Business and Industry Division, STOP 3224, 1400 Independence Avenue SW., Washington, DC 20250-3224, telephone (202) 720-6802, email

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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.

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Lillian E. Salerno,

Administrator, Rural Business-Cooperative Service.

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[FR Doc. 2014-30967 Filed 1-5-15; 8:45 am]