Water and Waste Program Regulations

DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1780

RIN 0572-AB44

Water and Waste Program Regulations

AGENCY: Rural Utilities Service, USDA.

ACTION: Final rule.

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SUMMARY: The Rural Utilities Service (RUS) amends the rules used to

administer the water and waste loan and grant programs. This action

implements provisions of the Agriculture, Rural Development, Food and

Drug Administration and Related Agencies Appropriations Act, 1999

(Act). The Act reduces the amount of funds that a rural or native

Alaskan village applicant must contribute from 50 percent to 25 percent

of the project development costs. Additionally, it removes the

population eligibility requirement that expired September 30, 1998, for

certain timber-dependent communities in the Pacific Northwest. This

action also includes an increase in the administrative fee that the

Appalachian Regional Commission pays to USDA to administer grants for

projects in which USDA has provided no funds and makes other technical

corrections. The intended effect is to make 7 CFR part 1780 current

with statutory authority.

EFFECTIVE DATE: June 4, 1999.

FOR FURTHER INFORMATION CONTACT: Cheryl Francis, Loan Specialist, Water

and Waste Division, Rural Utilities Service, USDA, South Agriculture

Building, Room 2239, STOP 1570, Washington, DC 20250, telephone: (202)

720-9589.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This final rule has been determined to be not significant under

Executive Order 12866, Regulatory Planning and Review. Therefore, the

Office of Management and Budget (OMB) has not been reviewed by OMB.

National Environmental Policy Act Certification

This action has been reviewed under 7 CFR Part 1940, Subpart G,

Environmental Program. It has been determined that the action does not

constitute a major Federal action significantly affecting the quality

of the human environment. An Environmental Impact Statement is not

required under the National Environmental Policy Act of 1969.

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 accordance with the Executive Order and the 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 the rule; and

(3) administrative appeal procedures, if any, must be exhausted before

litigation against the Department or its agencies may be initiated in

accordance with section 212(e) of the Department of Agriculture

Reorganization Act of 1994 (7 U.S.C. 6912).

Information Collection and Recordkeeping Requirements

The Office of Management and Budget (OMB) has approved the

reporting and recordkeeping requirements contained in the rule under

the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35). OMB has

assigned clearance number 0575-0115.

Unfunded Mandates

This rule contains no Federal mandates (under the regulatory

provisions 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 sections 202 and 205 of the

Unfunded Mandates Reform Act.

Regulatory Flexibility Act Certification

Under section 605(b) of the Regulatory Flexibility Act, 5 U.S.C.

605(b), RUS certifies that this rule will not have a significant

economic impact on a substantial number of small entities. The

amendments reflect only statutory changes that Congress has mandated

and over which the Agency has no discretion. They also involve minimal

procedural matters on other agreements already negotiated.

Executive Order 12372

The water and waste loan and grant program is listed in the Catalog

of Federal Domestic Assistance under number 10.760, Water and Waste

Disposal Systems For Rural Communities. The program is subject to the

provisions of Executive Order 12372, which requires intergovernmental

consultation with State and local officials. Consultation will be

completed at the time of the action performed.

Background

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

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

comment although 5 U.S.C. 553 exempts such rules from publication. Good

cause is found for not requiring notice and comment before making this

rule effective.

These amendments are not published for proposed rulemaking because

they merely reflect changes in statutory authority enacted by the

Agriculture, Rural Development, Food and Drug Administration and

Related Agencies Appropriations Act, 1999 (Act). They also make only

minor technical corrections to the regulations, which do not involve

matters of agency discretion. The Act leaves no discretion to the

agency as to the local share of project costs the rural and native

Alaskan village applicants must contribute. Notice and public comment,

therefore, are impractical, unnecessary, and contrary to the public

interest.

The Act amends section 306D of the Consolidated Farm and Rural

Development Act (7 U.S.C. 1926d) by inserting ``25 percent'' instead of

``equal'' in subsection (b). Section 306D authorizes the Secretary of

Agriculture to make grants for the benefit of rural or native villages

in the State of Alaska. This amendment reduces the percentage of

matching funds that must be provided from non-Federal sources to 25

percent.

This final rule deletes the temporary expansion of eligibility of

certain

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timber-dependent communities in the Pacific Northwest. Public Law 103-

427 expanded the maximum population eligibility for RUS water and waste

loans and grants from 10,000 to 25,000 inhabitants if the cities or

towns met certain criteria. This change in eligibility expired on

September 30, 1998, and is being removed from the regulations.

On August 24, 1998, USDA and the Appalachian Regional Commission

(ARC) updated the Memorandum of Agreement (MOA) that establishes a

working partnership to serve the needs of Appalachian communities. This

MOA increases the fee that ARC pays USDA for administering grants to

Appalachian communities on behalf of ARC. The fee increase will better

reflect the present cost in administering the grants.

The fee had been calculated as 5 percent of the first $50,000 of an

ARC grant and 1 percent of any amount over $50,000. The MOA increases

the ARC grant amount on which the percentages are based from $50,000 to

$100,000. The fees will increase to 5 percent of the first $100,000 of

an ARC grant plus 1 percent of any amount over $100,000.

The final rule also makes some minor technical corrections to the

regulations to correct deficiencies that have surfaced since the

regulation was published June 19, 1997 (62 FR 33462). The changes are

mostly grammatical and eliminate obsolete form references.

List of Subjects in 7 CFR Part 1780

Business and industry, Community development, Community facilities,

Grant programs-housing and community development, Reporting and

recordkeeping requirements, Rural areas, Waste treatment and disposal,

Water supply, Watersheds.

Therefore, the Rural Utilities Service amends 7 CFR chapter XVII as

follows:

PART 1780--WATER AND WASTE LOANS AND GRANTS

1. The authority citation for part 1780 continues to read as

follows:

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

Subpart A--General Policies and Requirements

2. Remove Sec. 1780.7(h).

3. Revise Sec. 1780.10(b)(2) to read as follows:

Sec. 1780.10 Limitations.

* * * * *

(b) * * *

(2) Pay any costs of a project when the median household income of

the service area is more than 100 percent of the nonmetropolitan median

household income of the State;

* * * * *

Subpart B--Loan and Grant Application Processing

4. Revise Sec. 1780.35(c) to read as follows:

Sec. 1780.35 Processing office review.

* * * * *

(c) User charges. The user charges should be reasonable and produce

enough revenue to provide for all costs of the facility after the

project is complete. The planned revenue should be sufficient to

provide for all debt service, debt reserve, operation and maintenance,

and, if appropriate, additional revenue for facility replacement of

short-lived assets without building a substantial surplus. Ordinarily,

the total debt service reserve will be equal to one average annual loan

installment which will accumulate at the rate of one-tenth of the total

each year.

5. In Sec. 1780.39, paragraphs (e)(2) and (f) introductory text are

revised to read as follows:

Sec. 1780.39 Application processing.

* * * * *

(e) * * *

(2) Other than general obligation or special assessment bonds. Each

borrower will be required to establish and maintain reserves sufficient

to assure that loan installments will be paid on time, for emergency

maintenance, for extensions to facilities, and for replacement of

short-lived assets which have a useful life significantly less than the

repayment period of the loan. Borrowers issuing bonds or other

evidences of debt pledging facility revenues as security will plan

their debt reserve to provide for at least one average annual loan

installment. The debt reserve will accumulate at the rate of one-tenth

of an average annual loan installment each year unless prohibited by

state law.

(f) Membership authorization. For organizations other than public

bodies, the membership will authorize the project and its financing.

Form RD 1942-8, ``Resolution of Members or Stockholders,'' may be used

for this authorization. The approval official may accept RUS Bulletin

1780-28, ``Loan Resolution Security Agreement,'' without such

membership authorization when State statutes and the organization's

charter and bylaws do not require such authorization; and

* * * * *

6. Revise Sec. 1780.45(a)(2) to read as follows:

Sec. 1780.45 Loan and grant closing and delivery of funds.

(a) * * *

(2) RUS Bulletins 1780-27, ``Loan Resolution (Public Bodies),'' or

1780-28, ``Loan Resolution Security Agreement,'' will be adopted by

public and other-than-public bodies. These resolutions supplement other

provisions in this part.

* * * * *

7. Revise Sec. 1780.48(b) introductory text to read as follows:

Sec. 1780.48 Regional commission grants.

* * * * *

(b) When RUS has no loan or grant funds in the project, an

administrative charge will be made pursuant to the Economy Act of 1932

(31 U.C.S. 1535). A fee of 5 percent of the first $100,000 of a

regional commission grant and 1 percent of any amount over $100,000

will be paid to RUS by the commission.

* * * * *

8. In Sec. 1780.49, paragraphs (c)(4) and (d) are revised to read

as follows:

Sec. 1780.49 Rural or Native Alaskan villages.

* * * * *

(c) * * *

(4) The applicant must obtain 25 percent of project development

costs from State or local contributions. The local contribution can be

from loan funds authorized under this part.

(d) Grant amount. Grants will be made for up to 75 percent of the

project development costs.

* * * * *

Subpart C--Planning, Designing, Bidding, Contracting, Constructing

and Inspections

9. Revise Sec. 1780.55 to read as follows:

Sec. 1780.55 Preliminary engineering reports and Environmental

Reports.

Preliminary engineering reports (PERs) must conform to customary

professional standards. PER guidelines for water, sanitary sewer, solid

waste, and storm sewer are available from the Agency. Environmental

Reports must meet the policies and intent of the National Environmental

Policy Act and RUS procedures. Guidelines for preparing Environmental

Reports are available in RUS Bulletin 1794A-602.

10. In Sec. 1780.57, add paragraph (o) to read as follows:

Sec. 1780.57 Design policies.

* * * * *

(o) Seismic safety. All new structures, fully or partially

enclosed, used or

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intended for sheltering persons or property will be designed with

appropriate seismic safety provisions in compliance with the Earthquake

Hazards Reduction Act of 1977 (42 U.S.C. 7701 et seq.), and Executive

Order 12699, Seismic Safety of Federal and Federally Assisted or

Regulated New Building Construction (3 CFR, 1990 Comp., p. 269).

Designs of components essential for system operation and substantial

rehabilitation of structures that are used for sheltering persons or

property should incorporate seismic safety provisions to the extent

practicable. RUS implementing regulations for seismic safety are in 7

CFR part 1972, subpart C.

Subpart D--Information Pertaining to Preparation of Notes or Bonds

and Bond Transcript Documents for Public Body Applicants

11. Revise Sec. 1780.94(j)(3) to read as follows:

Sec. 1780.94 Minimum bond specifications.

* * * * *

(j) * * *

(3) Provisions that amend covenants contained in RUS Bulletins

1780-27 or 1780-28.

* * * * *

Dated: May 18, 1999.

Jill Long Thompson,

Under Secretary for Rural Development.

[FR Doc. 99-13931 Filed 6-3-99; 8:45 am]

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