Community Facility Loans and Grants

DEPARTMENT OF AGRICULTURE

7 CFR Part 1942

RIN 0575-AB82

Community Facility Loans and Grants

AGENCY: Farmers Home Administration, USDA.

ACTION: Proposed rule.

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SUMMARY: The Farmers Home Administration (FmHA) proposes to amend its

regulations that are utilized by the Rural Development Administration

(RDA) in administering Community Facility Loans and Grants. This action

is necessary to implement a provision of the Rural Electrification

Administration Loan Restructuring Act of 1993, (REA Act) and change the

security requirements for solid waste disposal loans. The REA Act

prohibits that a condition for assistance under any RDA program be a

requirement that the recipient of such assistance accept or receive

electric service from any particular utility, supplier, or cooperative.

Also, a change is proposed in the security requirements for loans

secured primarily by revenue and the funds used to construct or improve

solid waste facilities in rural communities. The intended effect of

changing the security requirements for solid waste facilities is to

provide better service to communities seeking to resolve solid waste

disposal problems on a regional level.

DATES: Written comments must be received on or before October 18, 1994.

ADDRESSES: Submit written comments in duplicate to the Chief,

Regulations Analysis and Control Branch, Farmers Home Administration,

U.S. Department of Agriculture, Room 6348, South Agriculture Building,

14th and Independence, SW., Washington, DC 20250. All written comments

will be available for public inspection during regular work hours at

the above address.

FOR FURTHER INFORMATION CONTACT: Jerry W. Cooper, Loan Specialist,

Water and Waste Disposal Division, Rural Development Administration,

USDA, South Agriculture Building, Room 6328, Washington, DC 20250,

telephone: (202) 720-9589.

SUPPLEMENTARY INFORMATION:

Classification

We are issuing this proposed rule in conformance with Executive

Order 12866, and we have determined that it is a ``significant

regulatory action.''

Intergovernmental Review

The programs are listed in the Catalog of Federal Domestic

Assistance under number 10.760, Water and Waste Disposal Systems for

Rural Communities, and are subject to the provisions of Executive Order

12372 which requires intergovernmental consultation with State and

local officials.

Environmental Impact Statement

This action has been reviewed in accordance with FmHA Instruction

1940-G, ``Environmental Program.'' RDA has determined that the 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, Pub. L. 91-190, an Environmental

Impact Statement is not required.

Compliance with Executive Order 12778

The regulation has been reviewed in light of Executive Order 12778

and meets the applicable standards provided in sections 2(a) and

(2)(b)(2) of that Order. Provisions within this part which are

inconsistent with State law are controlling. All administrative

remedies pursuant to 7 CFR Part 1900 Subpart B must be exhausted prior

to filing suit.

Paperwork Reduction Act

The information collection 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 have been

assigned OMB control number 0575-0015 in accordance with the Paperwork

Reduction Act (44 U.S.C. 3507). This proposed rule does not revise or

impose any new information collection requirement from those approved

by OMB.

Background

A change is proposed in the security requirements for loans made

for construction or improvements to solid waste facilities. The

requirements of the Environmental Protection Agency Subtitle D

regulations have increased the capital needs of rural communities for

disposal of solid waste. The current security requirements for loans on

solid waste facilities are too stringent, and this proposed action will

add flexibility that is needed to improve the program. Currently,

additional security is required when revenue is the primary security

for loans involving solid waste facilities. The proposed change will

remove the requirement for additional security.

This proposed action also incorporates into RDA loan and grant

regulations the provision contained in the REA Act of 1993 which

prohibits a recipient of the programs from imposing certain conditions

on the users of the service provided. For example, a utility, supplier,

or cooperative that provides electric service cannot obtain RDA

financing for a water system and require that the water customers

connect to their electric system as a condition for receiving water.

The REA Act requires that appropriate measures and sanctions be

implemented against any person violating or attempting to violate this

prohibition.

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.

Therefore, Chapter XVIII, title 7, Code of Federal Regulations is

proposed to be amended as follows:

PART 1942--ASSOCIATIONS

1. The authority citation for part 1942 continues to read as

follows:

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

2.23; 7 CFR 2.70.

Subpart A--Community Facility Loans

2. Section 1942.17 is amended by revising paragraphs (g)(2)(ii) and

(g)(3)(ii) and by adding paragraph (j)(12) to read as follows:

Sec. 1942.17 Community facilities.

* * * * *

(g) * * *

(2) * * *

(ii) Solid waste systems. The type of security required will be

based on State law and what is determined adequate to protect the

interest of the Government during the repayment period of the loan.

* * * * *

(3) * * *

(ii) Solid waste systems. The type of security required will be

based on State law and what is determined adequate to protect the

interest of the Government during the repayment period of the loan.

* * * * *

(j) * * *

(12) Prohibition on electric service. Recipients of assistance

processed in accordance with this subpart cannot require the users of

the services provided to accept or receive electric service from any

particular utility, supplier, or cooperative. If the recipient of

assistance is a utility, supplier, or cooperative that provides

electric service, the recipient must agree that users of the facility

financed will not be required to accept or receive electric service.

All recipients that also provide electric service must include the

following in its rules and regulations: ``No existing or future user of

the facility financed by the Rural Development Administration has been

or will be required to receive electric service as a condition to

utilize the services provided by the facility.'' A violation of this

prohibition will result in the acceleration of all loans received under

this subpart and debarment from receiving future Federal financial

assistance. Compliance with this paragraph will be monitored through

routine servicing procedures.

* * * * *

Dated: August 9, 1994.

Bob J. Nash,

Under Secretary, Small Community and Rural Development.

[FR Doc. 94-20433 Filed 8-18-94; 8:45 am]

BILLING CODE 3410-07-U