Intermediary Relending Program Loan Limits

SUMMARY: The Rural Business-Cooperative Service (RBS) is the successor

to the Rural Business and Cooperative Development Service (RBCDS),

which was the successor to the Rural Development Administration (RDA),

which was the successor to the Farmers Home Administration (FmHA).

RBS is amending the regulations for the Intermediary Relending

Program (IRP) to raise the loan limit. This action is needed to allow

intermediaries that have received and successfully used the maximum

amount of IRP loans allowed by the current regulations, and have need

for additional funds, to be eligible to apply for such additional

funds. The intended effect is to raise the maximum outstanding IRP

indebtedness of an intermediary to $4 million, from the current limit

of $2 million, for a period to end at the close of business on August

28, 1996. IRP loan funds per intermediary will not exceed $2 million

for loans approved after August 28, 1996.

DATES: Effective February 22, 1996. Comments must be received on or

before April 22, 1996.

ADDRESSES: Submit written comments in duplicate to the Director,

Regulations and Paperwork Management Division, Rural Economic and

Community Development, USDA, Ag. Box 0743, Washington, DC 20250-0743.

All written comments will be available for public inspection during

regular working hours at the above office, located in Room 6348, South

Agricultural Building, 14th and Independence Avenue SW, Washington DC.

FOR FURTHER INFORMATION CONTACT: M. Wayne Stansbery, Loan Specialist,

RBS, USDA, Ag. box 1521, Washington, DC 20250-1521, Telephone (202)

720-6819.

SUPPLEMENTARY INFORMATION:

Classification

This interim final rule has been determined to be ``not-

significant'' and has not been reviewed by OMB.

Program Affected

The catalog of Federal Domestic Assistance program impacted by this

action is: 10.767, Intermediary Relending Program.

Intergovernmental Review

As set forth in the final rule and related Notice to 7 CFR part

3015, subpart V, 48 FR 29112, June 24, 1983, this program is subject to

the provisions of Executive Order 12372 which requires

intergovernmental consultation with State and local officials. The

Agency conducts intergovernmental consultation in the manner delineated

in FmHA Instruction 1940-J, ``Intergovernmental Review of Farmers Home

Administration Programs and Activities.''

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 0575-0130 in accordance with the Paperwork

Reduction Act of 1980 (44 U.S.C. 3507). This interim rule does not

revise or impose any new information collection or record keeping

requirements from those approved by OMB. Please send written comments

to the Office of Information Regulatory Affairs, OMB, Attention: Desk

Officer for USDA, Washington, DC 20503. Please send a copy of your

comments to Jack Holston, Agency Clearance Officer, USDA, Ag. box 0743,

Washington, DC 20250.

Civil Justice Reform

This interim final rule has been reviewed under Executive Order

12778, 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) no retroactive effect will be given to this

rule; and (3) administrative proceedings in accordance with the

regulations of the agency at 7 CFR 1900 subpart B or those regulations

published by the Department of Agriculture to implement the provisions

of the National Appeals Division as mandated by the Department of

Agriculture Reorganization Act of 1994 must be exhausted before

bringing suit in court challenging action taken under this rule unless

those regulations specifically allow bringing suit at an earlier time.

This document has been reviewed in accordance with Executive Order

12778. It is the determination of this Agency that this action does not

unduly burden the Federal Court System in that it meets all applicable

standards provided in section 2 of the Executive Order.

Environmental Impact Statement

This action has been reviewed in accordance with FmHA Instruction

1940-G, ``Environmental Program.'' Rural Business-Cooperative Service

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,

Pub. L. 91-190, an Environmental Impact Statement is not required.

Unfunded Mandate

Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Pub. L.

104-4, establishes 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, RBS

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

[[Page 6762]]

in any one year. When such a statement is needed for a rule, section

205 of UMRA generally requires RBS to identify and consider a

reasonable number of regulatory alternatives and adopt the least

costly, more 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. Thus today's rule is not subject to

the requirements of sections 202 and 205 of UMRA.

Background

This regulatory package is an agency initiative to make the IRP

more effective at stimulating rural community economic development. The

current regulation prohibits approval of any IRP loan that would result

in any one intermediary having an outstanding IRP indebtedness

exceeding $2 million. RBS is still not encouraging initial loans of

more than $2 million. However, some intermediaries have received and

reloaned $2 million and have demand for additional funding to meet the

needs of the communities they serve.

The primary reason for this action is to allow subsequent loans to

those successful intermediaries that have reached the current limit.

Intermediaries in several States including; Vermont, Maine, Minnesota,

Michigan, Colorado, North Carolina, Oklahoma, and Louisiana are

currently at the limit of $2 million, and faced by additional demand

for funds. Because of this program's role in the President's Rural

Development Initiative, the fact that the efforts of some successful

lenders are impeded by the $2 million limit, and the potential of

attracting other lenders as a result of efforts to target the program

more effectively to underserved areas, a decision has been made to

increase the maximum loan limit to $4 million for a maximum period

ending August 28. The anticipated benefits are increased lending

activity, particularly by successful lenders and the creation of new

business opportunities and employment, particularly in areas

experiencing economic distress.

There are no anticipated costs associated with this decision. The

cost of expanding the potential of the program is already built into

the budget estimates and there should be no increase in delinquencies

because of this action.

Discussion of Interim Final Rule

It is the policy of this Department that rules relating to public

property, loans, grants, benefits or contracts shall be published for

comment notwithstanding the exemption of 5 U.S.C. 553 with respect to

such rules. However, the Agency is making this action effective upon

publication in the Federal Register without securing prior public

comment. It would be contrary to the public interest to wait for public

comment before implementing an increase in the loan ceiling. There is

an immediate need to provide funds to the public to help alleviate

severe economic hardship which exists in many rural areas as a result

of high unemployment and poverty level wages. Numerous intermediaries

have received the maximum of $2 million, have successfully used the

funds to assist rural businesses, and have urgent need for additional

loan funds. These intermediaries have proven their ability to play a

major and successful role in stimulating the economy and developing

jobs in rural areas experiencing high unemployment and depressed

economies. Increasing the loan ceiling quickly will allow them to

receive additional funds to continue to provide needed assistance.

Delaying action will only deprive them of opportunities to provide

assistance. Comments will be accepted for 60 days after publication

and, if appropriate, adjustments will be made in the regulation based

on the comments.

List of Subjects in 7 CFR Part 1948

Business and industry, Credit, Economic development, Rural areas.

Accordingly, Part 1948, Chapter XVIII, Title 7 of the Code of

Federal Regulations is amended as follows:

PART 1948--RURAL DEVELOPMENT

1. The authority citation for part 1948 continues to read as

follows:

Authority: 5 U.S.C. 301; 7 U.S.C. 1932 note; 7 CFR 2.23, and

2.70.

Subpart C--Intermediary Relending Program (IRP)

2. Section 1948.103 is amended by revising paragraph (c) (4) to

read as follows:

Sec. 1948.103 Eligibility requirements.

* * * * *

(c) * * *

(4) The total amount of Agency loan funds requested by the

intermediary plus the outstanding balance of existing IRP loan(s) will

meet one of the following conditions:

(i) IRP loan funds will not exceed $4 million per intermediary for

loans approved on or before August 28, 1996.

(ii) IRP loan funds will not exceed $2 million per intermediary for

loans approved after August 28, 1996.

* * * * *

Dated: February 7, 1996.

Wally B. Beyer,

Acting Under Secretary for Rural Economic and Community Development.

[FR Doc. 96-4018 Filed 2-21-96; 8:45 am]

BILLING CODE 3410-32-P