Emergency Oil and Gas Guaranteed Loan Program
Federal RegisterOct 27, 1999
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SUMMARY: On August 17, 1999, President Clinton signed into law an act
providing authority for guarantees of loans to qualified steel and iron
ore companies and to qualified oil and gas companies. Chapter 2 of the
Emergency Oil and Gas Guaranteed Loan Program Act (``Act''),
established the Emergency Oil and Gas Guaranteed Loan Program
(``Program'') for guaranteeing loans made by private sector lending
institutions to qualified oil and gas companies. The Act established
the Guarantee Loan Board (``Board''), composed of the Chairman of the
Board of Governors of the Federal Reserve System, as Chairman of the
Board, the Secretary of Commerce, and the Chairman of the Securities
and Exchange Commission. The Board has certain responsibilities under
the law, including the issuance of necessary rules. The Department of
Commerce was appropriated funds to implement and administer the
Program. These regulations have been approved by the Board, and are
being issued to implement the Program.
DATES: This rule is effective December 27, 1999.
FOR FURTHER INFORMATION CONTACT: Executive Director, Oil and Gas
Guaranteed Loan Board, U.S. Department of Commerce, Washington D.C.
20230, (202) 482-6151.
SUPPLEMENTARY INFORMATION:
Background
The Program will provide guarantees for up to $500 million in loans
to qualified oil and gas companies. These loans will be made by private
sector lenders, with the Federal Government providing a guarantee for
up to 85 percent of the amount of the principal of the loan. The Board,
composed of the Chairman of the Board of Governors of the Federal
Reserve System, who will serve as Chairman of the Board, the Secretary
of Commerce, and the Chairman of the Securities and Exchange
Commission, will oversee the Program. The Board will select an
Executive Director, a Secretary, and a General Counsel to oversee day-
to-day operations of the Program. A loan guarantee may be issued upon
application to the Board by a private banking or investment institution
which has committed to enter into an agreement to provide a loan to a
qualified oil and gas company. A qualified oil and gas company is
defined in the Act to mean any company that (A) is: (i) An independent
oil and gas company (within the meaning of section 57(a)(2)(B)(i) of
the Internal Revenue Code of 1986); or (ii) A small business concern
under section 3 of the Small Business Act, 15 U.S.C. 632, (or a company
based in Alaska, including an Alaska Native Corporation created
pursuant to the Alaska Native Claims Settlement Act, 43 U.S.C. 1601 et
seq.) that is an oil field service company whose main business is
providing tools, products, personnel, and technical solutions on a
contractual basis to exploration and production operators that drill,
complete wells, and produce, transport, refine, and sell hydrocarbons
and their byproducts as the main commercial business of the concern or
company; and (B) has experienced financial losses since January 1997.
In order to guarantee a loan to a qualified oil and gas company,
the Board must make certain determinations. The Board must determine
that credit is not otherwise available to a qualified oil and gas
company under reasonable terms or conditions sufficient to meet its
financing needs. Next, the prospective earning power of that company,
together with the character and value of the security pledged, must
furnish reasonable assurance of repayment of the loan to be guaranteed
in accordance with its terms. In addition, the loan to be guaranteed
must bear interest at a rate determined by the Board to be reasonable,
taking into account the current average yield on outstanding
obligations of the United States with remaining periods of maturity
comparable to the maturity of such loan. Further the company must agree
to an audit by the General Accounting Office, or its designee, and an
independent auditor acceptable to the Board, prior to the issuance of
the Guarantee and annually thereafter while such guarantee is
outstanding. In addition, audited financial statements are required to
be submitted with an application.
The Act established several conditions applicable to each loan
guarantee issued by the Board. All loans guaranteed under this Program
must be paid in full not later than December 31, 2010. The guarantee
level may not exceed 85 percent of the amount of principal of the loan.
The aggregate amount of loans guaranteed and outstanding at any one
time under this Program may not exceed $500 million, and the aggregate
amount of loans guaranteed under this Program with respect to a single
qualified oil and gas company may not exceed $10 million. A qualified
oil and gas company receiving a guarantee under this section will be
required to pay a fee in the amount of 0.5 percent of the principal of
the loan to the Department of the Treasury to cover the costs of the
Program payable within one year from the issuance of the guarantee.
Finally, the terms and conditions of each guaranteed loan must provide
that the loan may not be amended, and that no provision of the loan
documents or the guarantee agreement can be waived, without the prior
written consent of the Board.
In the Act, Congress appropriated $122.5 million for the cost of
the loans guaranteed. The Board will consider applications and award
guarantees under the Program in accordance with the appropriated
funding.
Public Meeting
To receive public input regarding operation of the Program, the
Board held a public meeting on September 22, 1999, at the Department of
Commerce. The meeting consisted of parties presenting oral statements
to staff of the Department of Commerce, the Federal Reserve Board, and
the Securities and Exchange Commission. Oral statements addressed
issues and made suggestions regarding implementation of the Program.
Four parties, representing oil and gas companies, presented oral
testimony at the meeting. In addition to oral statements presented at
the meeting, written comments were submitted by interested parties. All
comments were considered in promulgating these rules.
Description of Regulation
The Board's regulations are divided into three subparts. Subpart A
sets out the purpose of the rules and contains definitions of terms
used in the other subparts. Subpart B contains rules regarding the
Board's organization, staffing, rules of procedure, and procedures for
public access to the Board's records. The Board will establish an
official staff consisting of an Executive Director, General Counsel,
and Secretary, with the respective responsibilities set out in Subpart
B. The Board may delegate to its official staff authority to take
certain actions, subject to such terms and conditions as the Board
deems appropriate. The Board may employ additional staff or outside
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consultants as it deems necessary to carry out its functions in
accordance with the Act.
Subpart C sets out the eligibility requirements for lenders and
borrowers under the Program, general loan terms, fees, and restrictions
on assignment and transfer of loans guaranteed under the Program. In
addition, Subpart C describes the process by which eligible lenders can
submit applications for loan guarantees to the Board and the Board's
procedures for processing and evaluating the applications in order to
select the loans that will be granted guarantees. Finally, Subpart C
sets out some of the Lender's responsibilities in originating and
administering a guaranteed loan and the events and conditions that
could cause the Board to terminate the guarantee in whole or in part.
The Act directs the Board to act on applications for loan
guarantees as soon as possible. In addition, the Board must implement
the Program within the appropriated funding provided by the Act and,
thus, must ensure that it grants guarantees to the loans that it
determines best meet the Program's evaluation criteria. In view of
these and other considerations, the Board has determined to create an
application ``window'' during which applicants must submit their loan
guarantee applications. The window will run from the date these rules
are published in the Federal Register until December 30, 1999.
Each application package received by the Board during this window
will be screened to confirm that it meets all of the Program's
eligibility requirements as set out in the applicable regulations and
application forms. Application packages that do not meet the Program's
eligibility requirements will not be considered for a loan guarantee.
The Board will compare the eligible applications on a competitive basis
and offer guarantees to those applications that it determines best meet
the Program's evaluation criteria. As discussed in more detail in
Subpart C, the Program's evaluation criteria include the ability of the
Borrower to repay the loan according to its terms, the protection
provided by the proposal to the Government in the event of default
(including sufficiency of collateral, lien position, and percentage of
guarantee requested), and the adequacy of the Lender's loan
underwriting analysis. Since the accelerated schedule does not provide
time for the Board to negotiate with individual applicants and the
Board's selection process will be on a competitive basis, it is in each
applicant's best interest to provide, at the outset, a thorough
proposal that ranks as high as possible on each of the Program's
evaluation criteria. For example, applicants should request the lowest
guarantee percentage practicable for their proposals at the outset. In
addition, applications giving the government a higher security position
on higher quality collateral will be given preference over those that
provide a lesser level of security. Failure to do so could reduce the
likelihood that the application will be selected to receive a
guarantee.
Administrative Law Requirements
Executive Order 12866
This final rule has been determined to be a ``significant
regulatory action'' under section 3(f) of Executive Order 12866.
Administrative Procedure Act
This rule is exempt from the rulemaking requirements contained in 5
U.S.C. 553 pursuant to authority contained in 5 U.S.C. 553(a)(2) as it
involves a matter relating to loans. As such, prior notice and an
opportunity for public comment and a delay in effective date otherwise
required under 5 U.S.C. 553 are inapplicable to this rule.
List of Subjects in 13 CFR Part 500
Administrative practice and procedures, Freedom of Information,
Loan programs--Natural resources, Reporting and recordkeeping
requirements.
Paperwork Reduction Act
The Board will submit to the Office of Management and Budget, for
clearance under the Paperwork Reduction Act, a package containing the
necessary forms and documentation for participation in this Program.
Regulatory Flexibility Act
Because this rule is not subject to a requirement to provide prior
notice and an opportunity for public comment pursuant to 5 U.S.C. 553,
or any other law, the analytical requirements of the Regulatory
Flexibility Act, 5 U.S.C. 601 et seq., are inapplicable.
Congressional Review Act
This rule has been determined to be a major rule for purposes of
the Congressional Review Act, 5 U.S.C. 801 et seq. The Congressional
Review Act requires that major rules have their effective date delayed
60 days while Congress has the opportunity to review the rule. While
there are certain exemptions to this delayed effective date
requirement, the Board has determined that none are applicable to this
rule.
List of Subjects in 13 CFR Part 500
Administrative practice and procedure, Freedom of Information; Loan
programs--Natural resources, Reporting and recordkeeping requirements.
Intergovernmental Review
No intergovernmental consultation with state and local officials is
required because the rule is not subject to the provisions of Executive
Order 12372 or Executive Order 12875.
National Environmental Policy Act
The Board determined that this Program 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, 42 U.S.C. Sec. 4321 et seq., Public Law 91-190 (NEPA), an
Environmental Impact Statement is not required. Loans sought to be
guaranteed under the Program will be assessed individually to determine
appropriate compliance with NEPA.
Unfunded Mandate Reform Act of 1995
This rule contains no Federal mandates, as that term is defined in
the Unfunded Mandates Reform Act, on State, local and tribal
governments or the private sector.
Executive Order 12612
This rule does not contain policies having federalism implications
requiring preparation of a Federalism Assessment.
Executive Order 12630
This rule does not contain policies that have takings implications.
Programs Affected
There is no Catalog of Federal Domestic Assistance listing for the
Emergency Oil and Gas Guaranteed Loan Program.
Dated: October 18, 1999.
Jonathan Orszag,
Acting Executive Director, Emergency Oil and Gas Guaranteed Loan Board.
For the reasons set out in the preamble, 13 CFR Chapter V is
established to read as follows:
CHAPTER V--EMERGENCY OIL AND GAS GUARANTEED LOAN BOARD
PART 500--EMERGENCY OIL AND GAS GUARANTEED LOAN PROGRAM
Subpart A--General
500.1 Purpose.
500.2 Definitions.
Subpart B--Board Procedures
500.100 Purpose and scope.
500.101 Composition of the Board.
500.102 Authority of the Board.
500.103 Offices.
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500.104 Meetings and actions of the Board.
500.105 Staff.
500.106 Ex parte communications.
500.107 Freedom of Information Act.
500.108 Restrictions on lobbying.
500.109 Government-wide debarment and suspension (nonprocurement).
500.110 Amendments.
Subpart C--Oil and Gas Guaranteed Loans
500.200 Eligible Borrower.
500.201 Eligible Lender.
500.202 Loan amount.
500.203 Guarantee percentage.
500.204 Loan terms.
500.205 Application process.
500.206 Environmental requirements.
500.207 Application evaluation.
500.208 Issuance of the Guarantee.
500.209 Funding for the Program.
500.210 Assignment or transfer of loans.
500.211 Lender responsibilities.
500.212 Liquidation.
500.213 Termination of Guarantee.
500.214 OMB control number.
Authority: Pub. L. 106-51, 113 Stat. 255 (15 U.S.C. 1841 note).
Subpart A--General
Sec. 500.1 Purpose.
This part is issued by the Emergency Oil and Gas Guaranteed Loan
Board pursuant to section 552 of title 5 of the United States Code and
the Emergency Oil and Gas Guaranteed Loan Act, Chapter 2 of Public Law
106-51. This part contains rules for making and servicing loans to
qualified oil and gas guaranteed by the Board.
Sec. 500.2 Definitions.
(a) Act means the Emergency Oil and Gas Guaranteed Loan Program
Act, Chapter 2 of Public Law 106-51.
(b) Administer, administering and administration, mean the Lender's
actions in making, disbursing, servicing (including, but not limited to
care, preservation and maintenance of collateral), collecting and
liquidating a loan and security.
(c) Applicant means the private banking or investment institution
applying for a loan guarantee under this part.
(d) Board means the Emergency Oil and Gas Guaranteed Loan Board.
(e) Borrower means a Qualified Oil and Gas Company which could
receive a loan guaranteed by the Board under this Program.
(f) Guarantee means the written agreement between the Board and the
Lender, and approved by the Borrower, pursuant to which the Board
guarantees repayment of a specified percentage of the principal of the
loan, including the Special Terms and Conditions, the General Terms and
Conditions, and all exhibits thereto.
(g) Lender means a private banking or investment institution that
is eligible pursuant to Sec. 500.201.
(h) Loan Documents mean the loan agreement and all other
instruments, and all documentation between the Lender and the Borrower
evidencing the making, disbursing, securing, collecting, or otherwise
administering of the loan.
(i) Program means the Emergency Oil and Gas Guaranteed Loan Program
established by the Act.
(j) Security means all property, real or personal, required by the
provisions of the Guarantee or by the Loan Documents to secure
repayment of any indebtedness of the Borrower under the Loan Documents
or Guarantee.
(k) Qualified Oil and Gas Company means any company that: (A) is
(i) an independent oil and gas company (within the meaning of section
57(a)(2)(B)(i) of the Internal Revenue Code of 1986) or; (ii) a small
business concern under section 3 of the Small Business Act, 15 U.S.C.
632, (or a company based in Alaska, including an Alaska Native
Corporation created pursuant to the Alaska Native Claims Settlement
Act, 43 U.S.C. 1601 et seq.) that is an oil field service company whose
main business is providing tools, products, personnel, and technical
solutions on a contractual basis to exploration and production
operators that drill, complete wells, and produce, transport, refine,
and sell hydrocarbons and their byproducts as the main commercial
business of the concern or company; and (B) has experienced layoffs,
production losses, or financial losses since January 1997.
Subpart B--Board Procedures
Sec. 500.100 Purpose and scope.
This subpart describes the Board's authorities and organizational
structure, the means and rules by which the Board takes actions, and
procedures for public access to Board records.
Sec. 500.101 Composition of the Board.
The Board consists of the Chairman of the Board of Governors of the
Federal Reserve System, who acts as Chairman of the Board, the Chairman
of the Securities and Exchange Commission, and the Secretary of
Commerce.
Sec. 500.102 Authority of the Board.
Pursuant to the provisions of the Act, the Board is authorized to
guarantee loans provided to Qualified Oil and Gas companies by private
banking and investment institutions in accordance with the procedures,
rules, and regulations established by the Board, to make the
determinations authorized by the Act, and to take such other actions as
necessary to carry out its functions in accordance with the Act.
Sec. 500.103 Offices.
The principal offices of the Board are in the U.S. Department of
Commerce, Washington, D.C. 20230.
Sec. 500.104 Meetings and actions of the Board.
(a) Place and frequency. The Board meets, on the call of the
Chairman, in order to consider matters requiring action by the Board.
Time and place for any such meeting shall be determined by the members
of the Board.
(b) Quorum and voting. Two voting members of the Board constitute a
quorum for the transaction of business. All decisions and
determinations of the Board shall be made by a majority vote of the
voting members. All votes on determinations of the Board required by
the Act shall be recorded in the minutes. A Board member may request
that any vote be recorded according to individual Board members.
(c) Agenda of meetings. To the extent practicable, an agenda for
each meeting shall be distributed to members of the Board at least two
days in advance of the date of the meeting, together with copies of
materials relevant to the agenda items.
(d) Minutes. The Secretary of the Board shall keep minutes of each
Board meeting and of action taken without a meeting, a draft of which
is to be distributed to each member of the Board as soon as practicable
after each meeting or action. To the extent practicable, the minutes of
a Board meeting shall be corrected and approved at the next meeting of
the Board.
(e) Use of conference call communications equipment. Any member may
participate in a meeting of the Board through the use of conference
call, telephone or similar communications equipment, by means of which
all persons participating in the meeting can simultaneously speak to
and hear each other. Any member so participating in a meeting shall be
deemed present for all purposes. Actions taken by the Board at meetings
conducted through the use of such equipment, including the votes of
each member, shall be recorded in the usual manner in the minutes of
the meetings of the Board.
(f) Actions between meetings. When, in the judgment of the
Chairman, circumstances occur making it desirable for the Board to
consider action when it is not feasible to call a meeting, the relevant
information and recommendations for action may be
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transmitted to the members by the Secretary of the Board and the voting
members may communicate their votes to the Chairman in writing
(including an action signed in counterpart by each Board member),
electronically, or orally (including telephone communication). Any
action taken under this paragraph has the same effect as an action
taken at a meeting. Any such action shall be recorded in the minutes.
(g) Delegations of authority. The Board may delegate authority,
subject to such terms and conditions as the Board deems appropriate, to
the Executive Director, the General Counsel, or the Secretary of the
Board, to take certain actions not required by the Act to be taken by
the Board. All delegations shall be made pursuant to resolutions of the
Board and recorded in writing, whether in the minutes of a meeting or
otherwise. Any action taken pursuant to delegated authority has the
effect of an action taken by the Board.
Sec. 500.105 Staff.
(a) Executive Director. The Executive Director of the Board advises
and assists the Board in carrying out its responsibilities under the
Act, provides general direction with respect to the administration of
the Board's actions, directs the activities of the staff, and performs
such other duties as the Board may require.
(b) General Counsel. The General Counsel of the Board provides
legal advice relating to the responsibilities of the Board and performs
such other duties as the Board may require.
(c) Secretary of the Board. The Secretary of the Board sends notice
of all meetings, prepares minutes of all meetings, maintains a complete
record of all votes and actions taken by the Board, has custody of all
records of the Board and performs such other duties as the Board may
require.
Sec. 500.106 Ex parte communications.
Oral or written communication, not on the public record, between
the Board, or any member of the Board, and any party or parties
interested in any matter pending before the Board concerning the
substance of that matter is prohibited. This section also applies to
the Board's staff and employees of the constituent agencies who are or
reasonably may be expected to be involved in the decisional process of
the matter pending before the Board.
Sec. 500.107 Freedom of Information Act.
(a) Definitions. All terms used in this section which are defined
in 5 U.S.C. 551 or 5 U.S.C. 552 shall have the same meaning in this
section. In addition the following definitions apply to this section:
(1) FOIA, as used in this section, means the ``Freedom of
Information Act,'' as amended, 5 U.S.C. 552.
(2) Commercial use request means a request from or on behalf of one
who seeks information for a use or purpose that furthers the
commercial, trade, or profit interests of the requester or the person
on whose behalf the request is made.
(3) Direct costs mean those expenditures that the Board actually
incurs in searching for, reviewing, and duplicating documents in
response to a request made under paragraph (c) of this section. Direct
costs include, for example, the labor costs of the employee performing
the work (the basic rate of pay for the employee, plus 16 percent of
that rate to cover benefits). Not included in direct costs are overhead
expenses such as the costs of space and heating or lighting of the
facility in which the records are kept.
(4) Duplication means the process of making a copy of a document in
response to a request for disclosure of records or for inspection of
original records that contain exempt material or that otherwise cannot
be inspected directly. Among others, such copies may take the form of
paper, microfilm, audiovisual materials, or machine-readable
documentation (e.g., magnetic tape or disk).
(5) Educational institution means a preschool, a public or private
elementary or secondary school, or an institution of undergraduate
higher education, graduate higher education, professional education, or
an institution of vocational education that operates a program of
scholarly research.
(6) Noncommercial scientific institution refers to an institution
that is not operated on a ``commercial'' basis (as that term is used in
this section) and which is operated solely for the purpose of
conducting scientific research, the results of which are not intended
to promote any particular product or industry.
(7) News means information about current events or that would be of
current interest to the public. Examples of news media entities
include, but are not limited to, television or radio stations
broadcasting to the public at large, and publishers of newspapers and
other periodicals (but only in those instances when they can qualify as
disseminators of ``news'') who make their products available for
purchase or subscription by the general public. ``Freelance''
journalists may be regarded as working for a news organization if they
can demonstrate a solid basis for expecting publication through that
organization, even though not actually employed by it.
(8) Representative of the news media means any person actively
gathering news for an entity that is organized and operated to publish
or broadcast news to the general public.
(9) Review means the process of examining documents, located in
response to a request for access, to determine whether any portion of a
document is exempt information. It includes doing all that is necessary
to excise the documents and otherwise to prepare them for release.
Review does not include time spent resolving general legal or policy
issues regarding the application of exemptions.
(10) Search means the process of looking for material that is
responsive to a request, including page-by-page or line-by-line
identification within documents. Searches may be done manually or by
computer.
(b) Records available for public inspection and copying.--(1) Types
of records made available. The information in this section is furnished
for the guidance of the public and in compliance with the requirements
of the Freedom of Information Act, as amended (5 U.S.C. 552) (FOIA).
This section sets forth the procedures the Board follows to make
publicly available the materials specified in 5 U.S.C. 552(a)(2). These
materials shall be made available for inspection and copying at the
Board's Freedom of Information Office pursuant to 5 U.S.C. 552(a)(2).
Information routinely provided to the public as part of a regular Board
activity (for example, press releases) may be provided to the public
without following this section.
(2) Reading room procedures. Information available under this
section is available for inspection and copying, from 9:00 a.m. to 5:00
p.m. weekdays, at the Freedom of Information Office of the Board, Oil
and Gas Guarantee Loan Board, U.S. Department of Commerce, Washington,
D.C. 20230.
(3) Electronic records. Information available under this section
that was created on or after November 1, 1996, shall also be available
on the Board's website, found at www.doc.gov.
(c) Records available to the public on request.--(1) Types of
records made available. All records of the Board that are not available
under paragraph (b) of this section shall be made available upon
request, pursuant to the procedures in this section and the exceptions
set forth in the FOIA. The Board's policy is to make discretionary
disclosures of records or information exempt from disclosure under the
FOIA
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whenever disclosure would not foreseeably harm an interest protected by
a FOIA exemption, but this policy does not create any right enforceable
in court.
(2) Procedures for requesting records. A request for records shall
reasonably describe the records in a way that enables the Board's staff
to identify and produce the records with reasonable effort and without
unduly burdening or significantly interfering with any of the Board's
operations. The request shall be submitted in writing to the Secretary
of the Board, Oil and Gas Guarantee Loan Board, U.S. Department of
Commerce, Washington, D.C. 20230; or sent by facsimile to the Secretary
of the Board. The request shall be clearly marked FREEDOM OF
INFORMATION ACT REQUEST.
(3) Contents of request. The request shall contain the following
information:
(i) The name and address of the requester, and the telephone number
at which the requester can be reached during normal business hours;
(ii) Whether the requested information is intended for commercial
use, or whether the requester represents an educational or
noncommercial scientific institution, or news media;
(iii) A statement agreeing to pay the applicable fees, or a
statement identifying any fee limitation desired, or a request for a
waiver or reduction of fees that satisfies paragraph (f) of this
section.
(d) Processing requests.--(1) Priority of responses. The date of
receipt for any request, including one that is addressed incorrectly or
that is referred to the Board by another agency, is the date the
Secretary of the Board actually receives the request. The Secretary of
the Board shall normally process requests in the order they are
received. However, in the Secretary of the Board's discretion, the
Board may use two or more processing tracks by distinguishing between
simple and more complex requests based on the number of pages involved,
or some other measure of the amount of work and/or time needed to
process the request, and whether the request qualifies for expedited
processing as described in paragraph (d)(2) of this section. When using
multitrack processing, the Secretary of the Board may provide
requesters in the slower track(s) with an opportunity to limit the
scope of their requests in order to qualify for faster processing. The
Secretary of the Board shall contact the requester by telephone or by
letter, whichever is most efficient in each case.
(2) Expedited processing. (i) A person may request expedited access
to records by submitting a statement, certified to be true and correct
to the best of that person's knowledge and belief, that demonstrates a
compelling need for the records, as defined in 5 U.S.C.
552(a)(6)(E)(v).
(ii) The Secretary of the Board shall notify a requester of the
determination whether to grant or deny a request for expedited
processing within ten working days of receipt of the request. If the
Secretary of the Board grants the request for expedited processing, the
Board shall process the request for access to information as soon as
practicable. If the Secretary of the Board denies a request for
expedited processing, the requester may file an appeal pursuant to the
procedures set forth in paragraph (e) of this section, and the Board
shall respond to the appeal within twenty days after the appeal was
received by the Board.
(3) Time limits. The time for response to requests shall be 20
working days, except:
(i) In the case of expedited treatment under paragraph (d)(2) of
this section;
(ii) Where the running of such time is suspended for payment of
fees pursuant to paragraph (f)(2)(ii) of this section;
(iii) Where the estimated charge is less than $250, and the
requester does not guarantee payment pursuant to paragraph (f)(2)(i) of
this section; or
(iv) In unusual circumstances, as defined in 5 U.S.C.
552(a)(6)(B)(iii), the time limit may be extended for a period of time
not to exceed 10 working days as provided by written notice to the
requester, setting forth the reasons for the extension and the date on
which a determination is expected to be dispatched; or such alternative
time period as mutually agreed to by the Secretary of the Board and the
requester when the Secretary of the Board notifies the requester that
the request cannot be processed in the specified time limit.
(4) Response to request. In response to a request that satisfies
paragraph (c) of this paragraph, an appropriate search shall be
conducted of records in the custody and control of the Board on the
date of receipt of the request, and a review made of any responsive
information located. The Secretary of the Board shall notify the
requester of:
(i) The Secretary of the Board's determination of the request and
the reasons therefor;
(ii) The information withheld, and the basis for withholding; and
(iii) The right to appeal any denial or partial denial, pursuant to
paragraph (e) of this section.
(5) Referral to another agency. To the extent a request covers
documents that were created by, obtained from, classified by, or is in
the primary interest of another agency, the Secretary of the Board may
refer the request to that agency for a direct response by that agency
and inform the requester promptly of the referral. The Secretary of the
Board shall consult with another Federal agency before responding to a
requester if the Board receives a request for a record in which:
(i) Another Federal agency subject to the FOIA has a significant
interest, but not the primary interest; or
(ii) Another Federal agency not subject to the FOIA has the primary
interest or a significant interest. Ordinarily, the agency that
originated a record will be presumed to have the primary interest in
it.
(6) Providing responsive records. (i) A copy of records or portions
of records responsive to the request shall be sent to the requester by
regular U.S. mail to the address indicated in the request, unless the
requester elects to take delivery of the documents at the Board's
Freedom of Information Office or makes other acceptable arrangements,
or the Secretary of the Board deems it appropriate to send the
documents by another means. The Secretary of the Board shall provide a
copy of the record in any form or format requested if the record is
readily reproducible in that form or format, but the Secretary of the
Board need not provide more than one copy of any record to a requester.
(ii) The Secretary of the Board shall provide any reasonably
segregable portion of a record that is responsive to the request after
deleting those portions that are exempt under the FOIA or this section.
(iii) Except where disclosure is expressly prohibited by statute,
regulation, or order, the Secretary of the Board may authorize the
release of records that are exempt from mandatory disclosure whenever
the Board or designated Board members determine that there would be no
foreseeable harm in such disclosure.
(iv) The Board is not required in response to the request to create
records or otherwise to prepare new records.
(7) Prohibition against disclosure. Except as provided in this
part, no officer, employee, or agent of the Board shall disclose or
permit the disclosure of any unpublished information of the Board to
any person (other than Board officers, employees, or agents properly
entitled to such information for the performance of official duties),
unless required by law.
(e) Appeals. (1) Any person denied access to Board records
requested under paragraph (c) of this section, denied expedited
processing under paragraph (d) of this section, or denied a waiver of
[[Page 57951]]
fees under paragraph (f) of this section may file a written appeal
within 30 calendar days after the date of such denial with the Board.
The written appeal shall prominently display the phrase FREEDOM OF
INFORMATION ACT APPEAL on the first page, and shall be addressed to the
General Counsel of the Board, Oil and Gas Guaranteed Loan Board, U.S.
Department of Commerce, Washington, D.C. 20230; or sent by facsimile to
the General Counsel of the Board. The appeal shall include a copy of
the original request, the initial denial, if any, and a statement of
the reasons why the requested records should be made available and why
the initial denial was in error.
(2) The General Counsel of the Board shall make a determination
regarding any appeal within 20 working days of actual receipt of the
appeal, and the determination letter shall notify the appealing party
of the right to seek judicial review in event of denial.
(f) Fee schedules; waiver of fees.--(1) Fee schedule. The fees
applicable to a request for records pursuant to paragraph (c) of this
section are set forth in the uniform fee schedule at the end of this
paragraph (b).
(i) Search. (A) Search fees shall be charged for all requests--
other than requests made by educational institutions, noncommercial
scientific institutions, or representatives of the news media--subject
to the limitations of paragraph (f)(1)(iv) of this section. The
Secretary of the Board shall charge for time spent searching even if no
responsive record is located or if the Secretary of the Board withholds
the record(s) located as entirely exempt from disclosure. Search fees
shall be the direct costs of conducting the search by the involved
employees.
(B) For computer searches of records, requesters will be charged
the direct costs of conducting the search, although certain requesters
(as provided in paragraph (f)(3) of this section) will be charged no
search fee and certain other requesters (as provided in paragraph
(f)(3)) are entitled to the cost equivalent of two hours of manual
search time without charge. These direct costs include the costs,
attributable to the search, of operating a central processing unit and
operator/programmer salary.
(ii) Duplication. Duplication fees will be charged to all
requesters, subject to the limitations of paragraph (f)(1)(iv) of this
section. For a paper photocopy of a record (no more than one copy of
which need be supplied), the fee shall be 15 cents per page. For copies
produced by computer, such as tapes or printouts, the Secretary of the
Board shall charge the direct costs, including operator time, of
producing the copy. For other forms of duplication, the Secretary of
the Board will charge the direct costs of that duplication.
(iii) Review. Review fees shall be charged to requesters who make a
commercial use request. Review fees shall be charged only for the
initial record review--the review done when the Secretary of the Board
determines whether an exemption applies to a particular record at the
initial request level. No charge will be made for review at the
administrative appeal level for an exemption already applied. However,
records withheld under an exemption that is subsequently determined not
to apply may be reviewed again to determine whether any other exemption
not previously considered applies, and the costs of that review are
chargeable. Review fees shall be the direct costs of conducting the
review by the involved employees.
(iv) Limitations on charging fees. (A) No search fee will be
charged for requests by educational institutions, noncommercial
scientific institutions, or representatives of the news media.
(B) No search fee or review fee will be charged for a quarter-hour
period unless more than half of that period is required for search or
review.
(C) Whenever a total fee calculated under this paragraph is $25 or
less for any request, no fee will be charged.
(D) For requesters other than those seeking records for a
commercial use, no fee will be charged unless the cost of search in
excess of two hours plus the cost of duplication in excess of 100 pages
totals more than $25.
(2) Payment procedures. All persons requesting records pursuant to
paragraph (c) of this section shall pay the applicable fees before the
Secretary of the Board sends copies of the requested records, unless a
fee waiver has been granted pursuant to paragraph (f)(6) of this
section. Requesters must pay fees by check or money order made payable
to the Treasury of the United States.
(i) Advance notification of fees. If the estimated charges are
likely to exceed $25, the Secretary of the Board shall notify the
requester of the estimated amount, unless the requester has indicated a
willingness to pay fees as high as those anticipated. Upon receipt of
such notice, the requester may confer with the Secretary of the Board
to reformulate the request to lower the costs. The processing of the
request shall be suspended until the requester provides the Secretary
of the Board with a written guarantee that payment will be made upon
completion of the processing.
(ii) Advance payment. The Secretary of the Board shall require
advance payment of any fee estimated to exceed $250. The Secretary of
the Board shall also require full payment in advance where a requester
has previously failed to pay a fee in a timely fashion. If an advance
payment of an estimated fee exceeds the actual total fee by $1 or more,
the difference shall be refunded to the requester. The time period for
responding to requests under paragraph (d)(4) of this section, and the
processing of the request shall be suspended until the Secretary of the
Board receives the required payment.
(iii) Late charges. The Secretary of the Board may assess interest
charges when fee payment is not made within 30 days of the date on
which the billing was sent. Assessment of such interest will commence
on the 31st day following the day on which the billing was sent.
Interest is at the rate prescribed in 31 U.S.C. 3717.
(3) Categories of uses. The fees assessed depend upon the fee
category. In determining which category is appropriate, the Secretary
of the Board shall look to the identity of the requester and the
intended use set forth in the request for records. Where a requester's
description of the use is insufficient to make a determination, the
Secretary of the Board may seek additional clarification before
categorizing the request.
(i) Commercial use requester. The fees for search, duplication, and
review apply when records are requested for commercial use.
(ii) Educational, non-commercial scientific institutions, or
representatives of the news media requesters. The fees for duplication
apply when records are not sought for commercial use, and the requester
is a representative of the news media or an educational or
noncommercial scientific institution, whose purpose is scholarly or
scientific research. The first 100 pages of duplication, however, will
be provided free.
(iii) All other requesters. For all other requests, the fees for
search and duplication apply. The first two hours of search time and
the first 100 pages of duplication, however, will be provided free.
(4) Nonproductive search. Fees for search may be charged even if no
responsive documents are found. Fees for search and review may be
charged even if the request is denied.
(5) Aggregated requests. A requester may not file multiple requests
at the same time, solely in order to avoid
[[Page 57952]]
payment of fees. If the Secretary of the Board reasonably believes that
a requester is separating a request into a series of requests for the
purpose of evading the assessment of fees or that several requesters
appear to be acting together to submit multiple requests solely in
order to avoid payment of fees, the Secretary of the Board may
aggregate such requests and charge accordingly. It is considered
reasonable for the Secretary of the Board to presume that multiple
requests by one requester on the same topic made within a 30-day period
have been made to avoid fees.
(6) Waiver or reduction of fees. A request for a waiver or
reduction of the fees, and the justification for the waiver, shall be
included with the request for records to which it pertains. If a waiver
is requested and the requester has not indicated in writing an
agreement to pay the applicable fees if the waiver request is denied,
the time for response to the request for documents, as set forth in
paragraph (4)(d) of this section, shall not begin until a determination
has been made on the request for a waiver or reduction of fees.
(i) Standards for determining waiver or reduction. The Secretary of
the Board may grant a waiver or reduction of fees where it is
determined both that disclosure of the information is in the public
interest because it is likely to contribute significantly to public
understanding of the operation or activities of the government, and
that the disclosure of information is not primarily in the commercial
interest of the requester. In making this determination, the following
factors shall be considered:
(A) Whether the subject of the records concerns the operations or
activities of the government;
(B) Whether disclosure of the information is likely to contribute
significantly to public understanding of government operations or
activities;
(C) Whether the requester has the intention and ability to
disseminate the information to the public;
(D) Whether the information is already in the public domain;
(E) Whether the requester has a commercial interest that would be
furthered by the disclosure; and, if so,
(F) Whether the magnitude of the identified commercial interest of
the requester is sufficiently large, in comparison with the public
interest in disclosure, that disclosure is primarily in the commercial
interest of the requester.
(ii) Contents of request for waiver. A request for a waiver or
reduction of fees shall include a clear statement of how the request
satisfies the criteria set forth in paragraph (f)(6)(i) of this
section.
(iii) Burden of proof. The burden shall be on the requester to
present evidence or information in support of a request for a waiver or
reduction of fees.
(iv) Determination by Secretary of the Board. The Secretary of the
Board shall make a determination on the request for a waiver or
reduction of fees and shall notify the requester accordingly. A denial
may be appealed to the Board in accordance with paragraph (e) of this
section.
(7) Uniform fee schedule.
------------------------------------------------------------------------
Service Rate
------------------------------------------------------------------------
(i) Manual search......................... Actual salary rate of
employee involved, plus 16
percent of salary rate.
(ii) Computerized search.................. Actual direct cost,
including operator time.
(iii) Duplication of records:
(A) Paper copy reproduction............... $.15 per page.
(B) Other reproduction (e.g., computer Actual direct cost,
disk or printout, microfilm, microfiche, including operator time.
or microform).
(iv) Review of records (includes Actual salary rate of
preparation for release, i.e. excising). employee conducting review,
plus 16 percent of salary
rate.
------------------------------------------------------------------------
(g) Request for confidential treatment of business information.--
(1) Submission of request. Any submitter of information to the Board
who desires confidential treatment of business information pursuant to
5 U.S.C. 552(b)(4) shall file a request for confidential treatment with
the Board at the time the information is submitted or a reasonable time
after submission.
(2) Form of request. Each request for confidential treatment of
business information shall state in reasonable detail the facts
supporting the commercial or financial nature of the business
information and the legal justification under which the business
information should be protected. Conclusory statements that release of
the information would cause competitive harm generally will not be
considered sufficient to justify confidential treatment.
(3) Designation and separation of confidential material. All
information considered confidential by a submitter shall be clearly
designated ``PROPRIETARY'' or ``BUSINESS CONFIDENTIAL'' in the
submission and separated from information for which confidential
treatment is not requested. Failure to segregate confidential
commercial or financial information from other material may result in
release of the nonsegregated material to the public without notice to
the submitter.
(h) Request for access to confidential commercial or financial
information.--(1) Request for confidential commercial or financial
information. A request by a submitter for confidential treatment of any
business information shall be considered in connection with a request
for access to that information.
(2) Notice to the submitter. (i) The Secretary of the Board shall
notify a submitter who requested confidential treatment of information
pursuant to 5 U.S.C. 552(b)(4), of the request for access.
(ii) Absent a request for confidential treatment, the Secretary of
the Board may notify a submitter of a request for access to submitter's
business information if the Secretary of the Board reasonably believes
that disclosure of the information may cause substantial competitive
harm to the submitter.
(iii) The notice given to the submitter by mail, return receipt
requested, shall be given as soon as practicable after receipt of the
request for access, and shall describe the request and provide the
submitter seven working days from the date of notice, to submit written
objections to disclosure of the information. Such statement shall
specify all grounds for withholding any of the information and shall
demonstrate why the information which is considered to be commercial or
financial information, and that the information is a trade secret, is
privileged or confidential, or that its disclosure is likely to cause
substantial competitive harm to the submitter. If the submitter fails
to respond to the notice within the time specified, the submitter will
be considered to have no objection to the release of the information.
Information a submitter provides under this paragraph may itself be
subject to disclosure under the FOIA.
(3) Exceptions to notice to submitter. Notice to the submitter need
not be given if:
(i) The Secretary of the Board determines that the request for
access should be denied;
(ii) The requested information lawfully has been made available to
the public;
(iii) Disclosure of the information is required by law (other than
5 U.S.C. 552); or
(iv) The submitter's claim of confidentiality under 5 U.S.C.
552(b)(4) appears obviously frivolous or has already been denied by the
Secretary of the Board, except that in this last
[[Page 57953]]
instance the Secretary of the Board shall give the submitter written
notice of the determination to disclose the information at least seven
working days prior to disclosure.
(4) Notice to requester. At the same time the Secretary of the
Board notifies the submitter, the Secretary of the Board also shall
notify the requester that the request is subject to the provisions of
this section.
(5) Determination by Secretary of the Board. The Secretary of the
Board's determination whether or not to disclose any information for
which confidential treatment has been requested pursuant to this
section shall be communicated to the submitter and the requester
immediately. If the Secretary of the Board determines to disclose the
business information over the objection of a submitter, the Secretary
of the Board shall give the submitter written notice via mail, return
receipt requested, or similar means, which shall include:
(i) A statement of reason(s) why the submitter's objections to
disclosure were not sustained;
(ii) A description of the business information to be disclosed; and
(iii) A statement that the component intends to disclose the
information seven working days from the date the submitter receives the
notice.
(6) Notice of lawsuit. The Secretary of the Board shall promptly
notify any submitter of information covered by this section of the
filing of any suit against the Board to compel disclosure of such
information, and shall promptly notify a requester of any suit filed
against the Board to enjoin the disclosure of requested documents.
Sec. 500.108 Restrictions on lobbying.
(a) No funds received through a loan guaranteed under this Program
may be expended by the recipient of a Federal contract, grant, loan,
loan Guarantee, or cooperative agreement to pay any person for
influencing or attempting to influence an officer or employee of any
agency, a Member of Congress, an officer or employee of Congress, or an
employee of a Member of Congress in connection with any of the
following covered Federal actions: the awarding of any Federal
contract, the making of any Federal grant, the making of any Federal
loan or loan Guarantee, the entering into of any cooperative agreement,
and the extension, continuation, renewal, amendment, or modification of
any Federal contract, grant, loan, loan Guarantee, or cooperative
agreement.
(b) Each person who requests or receives from an agency a
commitment providing for the United States to insure or guarantee a
loan shall file with that agency a statement, set forth in the
application form, whether that person has made or has agreed to make
any payment to influence or attempt to influence an officer or employee
of any agency, a Member of Congress, an officer or employee of
Congress, or an employee of a Member of Congress in connection with
that loan insurance or Guarantee.
(c) Each person who requests or receives from an agency a
commitment providing for the United States to insure or guarantee a
loan shall file with that agency a Standard Form-LLL if that person has
made or has agreed to make any payment to influence or attempt to
influence an officer or employee of any agency, a Member of Congress,
an officer or employee of Congress, or an employee of a Member of
Congress in connection with that loan insurance or Guarantee.
(d) Each person shall file a certification, contained in the
application form, and a disclosure form (Standard Form-LLL), if
required, with each submission that initiates agency consideration of
such person for:
(1) Award of a Federal contract, grant, or cooperative agreement
exceeding $100,000; or
(2) An award of a Federal loan or a commitment providing for the
United States to insure or guarantee a loan exceeding $150,000.
(e) Each person shall file a certification, and a disclosure form,
if required, upon receipt by such person of:
(1) A Federal contract, grant, or cooperative agreement exceeding
$100,000; or
(2) A Federal loan or a commitment providing for the United States
to insure or Guarantee a loan exceeding $150,000, unless such person
previously filed a certification, and a disclosure form, if required,
under paragraph (c) of this section.
(f) Each person shall file a disclosure form at the end of each
calendar quarter in which there occurs any event that requires
disclosure or that materially affects the accuracy of the information
contained in any disclosure form previously filed by such person under
paragraphs (d) or (e) of this section. An event that materially affects
the accuracy of the information reported includes:
(1) A cumulative increase of $25,000 or more in the amount paid or
expected to be paid for influencing or attempting to influence a
covered Federal action; or
(2) A change in the person(s) or individual(s) influencing or
attempting to influence a covered Federal action; or
(3) A change in the officer(s), employee(s), or Member(s) contacted
to influence or attempt to influence a covered Federal action.
Sec. 500.109 Government-wide debarment and suspension
(nonprocurement).
(a) Executive Order (E.O.) 12549 provides that, to the extent
permitted by law, Executive departments and agencies shall participate
in a governmentwide system for nonprocurement debarment and suspension.
A person who is debarred or suspended shall be excluded from Federal
financial and nonfinancial assistance and benefits under Federal
programs and activities. Debarment or suspension of a participant in a
program by one agency shall have governmentwide effect. The Board shall
review the List of Debarred entities prior to making final loan
Guarantee decisions. Suspension or debarment may be a basis for denying
a loan Guarantee.
(b) This section applies to all persons who have participated, are
currently participating or may reasonably be expected to participate in
transactions under Federal nonprocurement programs. For purposes of
this section such transactions will be referred to as ``covered
transactions''.
(1) Covered transaction. For purposes of this section, a covered
transaction is a primary covered transaction or a lower tier covered
transaction. Covered transactions at any tier need not involve the
transfer of Federal funds.
(i) Primary covered transaction. Except as noted in paragraph
(b)(2) of this section, a primary covered transaction is any
nonprocurement transaction between an agency and a person, regardless
of type, including: grants, cooperative agreements, scholarships,
fellowships, contracts of assistance, loans, loan Guarantees,
subsidies, insurance, payments for specified use, donation agreements
and any other nonprocurement transactions between a Federal agency and
a person.
(ii) Lower tier covered transaction. A lower tier covered
transaction is:
(A) Any transaction between a participant and a person other than a
procurement contract for goods or services, regardless of type, under a
primary covered transaction;
(B) Any procurement contract for goods or services between a
participant and a person, regardless of type, expected to equal or
exceed the Federal procurement small purchase threshold fixed at 10
U.S.C. 2304(g) and 41 U.S.C. 253(g) (currently $100,000) under a
primary covered transaction;
[[Page 57954]]
(C) Any procurement contract for goods or services between a
participant and a person under a covered transaction, regardless of
amount, under which that person will have a critical influence on or
substantive control over that covered transaction. Such persons may
include loan officers or chief executive officers acting as principal
investigators and providers of federally-required audit services.
(2) Exceptions. The following transactions are not covered:
(i) Statutory entitlements or mandatory awards (but not subtier
awards thereunder which are not themselves mandatory), including
deposited funds insured by the Federal Government;
(ii) Direct awards to foreign governments or public international
organizations, or transactions with foreign governments or foreign
governmental entities, public international organizations, foreign
government owned (in whole or in part) or controlled entities, entities
consisting wholly or partially of foreign governments or foreign
governmental entities;
(iii) Benefits to an individual as a personal entitlement without
regard to the individual's present responsibility (but benefits
received in an individual's business capacity are not excepted);
(iv) Federal employment;
(v) Transactions pursuant to national or agency-recognized
emergencies or disasters;
(vi) Incidental benefits derived from ordinary governmental
operations; and
(vii) Other transactions where the application of this section
would be prohibited by law.
(3) Board covered transactions. This section applies to the Board's
loan Guarantees, subcontracts and transactions at any tier that are
charges as direct or indirect costs, regardless of type.
(c) Primary covered transactions. Except to the extent prohibited
by law, persons who are debarred or suspended shall be excluded from
primary covered transactions as either participants or principals
throughout the Executive Branch of the Federal Government for the
period of their debarment, suspension, or the period they are proposed
for debarment under 48 CFR part 9, subpart 9.4. Accordingly, no agency
shall enter into primary covered transactions with such excluded
persons during such period, except as permitted pursuant to paragraph
(l) of this section.
(d) Lower tier covered transactions. Except to the extent
prohibited by law, persons who have been proposed for debarment under
48 CFR part 9, subpart 9.4, debarred or suspended shall be excluded
from participating as either participants or principals in all lower
tier covered transactions (see paragraph (b)(1)(ii) of this section)
for the period of their exclusion.
(e) Exceptions. Debarment or suspension does not affect a person's
eligibility for--
(1) Statutory entitlements or mandatory awards (but not subtier
awards thereunder which are not themselves mandatory), including
deposited funds insured by the Federal Government;
(2) Direct awards to foreign governments or public international
organizations, or transactions with foreign governments or foreign
governmental entities, public international organizations, foreign
government owned (in whole or in part) or controlled entities, and
entities consisting wholly or partially of foreign governments or
foreign governmental entities;
(3) Benefits to an individual as a personal entitlement without
regard to the individual's present responsibility (but benefits
received in an individual's business capacity are not excepted);
(4) Federal employment;
(5) Transactions pursuant to national or agency-recognized
emergencies or disasters;
(6) Incidental benefits derived from ordinary governmental
operations; and
(7) Other transactions where the application of this section would
be prohibited by law.
(f) Persons who are ineligible are excluded in accordance with the
applicable statutory, executive order, or regulatory authority.
(g) Persons who accept voluntary exclusions are excluded in
accordance with the terms of their settlements. The Board shall, and
participants may, contact the original action agency to ascertain the
extent of the exclusion.
(h) The Board may grant an exception permitting a debarred,
suspended, or voluntarily excluded person, or a person proposed for
debarment under 48 CFR part 9, subpart 9.4, to participate in a
particular covered transaction upon a written determination by the
agency head or an authorized designee stating the reason(s) for
deviating from the Presidential policy established by Executive Order
12549. However, in accordance with the President's stated intention in
the Executive Order, exceptions shall be granted only infrequently.
Exceptions shall be reported in accordance with the Executive Order.
(i) Notwithstanding the debarment, suspension, proposed debarment
under 48 CFR part 9, subpart 9.4, determination of ineligibility, or
voluntary exclusion of any person by an agency, agencies and
participants may continue covered transactions in existence at the time
the person was debarred, suspended, proposed for debarment under 48 CFR
part 9, subpart 9.4, declared ineligible, or voluntarily excluded. A
decision as to the type of termination action, if any, to be taken
should be made only after thorough review to ensure the propriety of
the proposed action.
(j) Agencies and participants shall not renew or extend covered
transactions (other than no-cost time extensions) with any person who
is debarred, suspended, proposed for debarment under 48 CFR part 9,
subpart 9.4, ineligible or voluntary excluded, except as provided in
paragraph (h) of this section.
(k) Except as permitted paragraphs (h) or (i) of this section, a
participant shall not knowingly do business under a covered transaction
with a person who is--
(1) Debarred or suspended;
(2) Proposed for debarment under 48 CFR part 9, subpart 9.4; or
(3) Ineligible for or voluntarily excluded from the covered
transaction.
(l) Violation of the restriction under paragraph (k) of this
section may result in disallowance of costs, annulment or termination
of award, issuance of a stop work order, debarment or suspension, or
other remedies as appropriate.
(m) A participant may rely upon the certification of a prospective
participant in a lower tier covered transaction that it and its
principals are not debarred, suspended, proposed for debarment under 48
CFR part 9, subpart 9.4, ineligible, or voluntarily excluded from the
covered transaction, unless it knows that the certification is
erroneous. An agency has the burden of proof that a participant did
knowingly do business with a person that filed an erroneous
certification.
Sec. 500.110 Amendments.
The Board's rules in this chapter may be adopted or amended, or new
rules may be adopted, only by majority vote of the Board. Authority to
adopt or amend these rules may not be delegated.
Subpart C--Oil and Gas Guaranteed Loans
Sec. 500.200 Eligible Borrower.
(a) An eligible Borrower must be a Qualified Oil and Gas Company
that can demonstrate:
[[Page 57955]]
(1) Credit is not otherwise available to it under reasonable terms
or conditions sufficient to meet its financing needs, as reflected in
the financial and business plans of the company;
(2) The prospective earning power of that company, together with
the character and value of the security pledged, furnish reasonable
assurance of repayment of the loan to be guaranteed in accordance with
its terms;
(3) The company has agreed to permit audits by the General
Accounting Office and an independent auditor acceptable to the Board
prior to the issuance of the guarantee and while any such guaranteed
loan is outstanding; and
(4) It has experienced layoffs, production losses, or financial
losses between January 1, 1997, and the date of application for the
Guarantee, demonstrated as a comparison between employment, production,
or net income existing on January 1, 1997 and on the date of
application.
(b) The Lender must provide with its application a letter from at
least one lending institution other than the Lender to which the
Borrower has applied for financial assistance, since January 1, 1997,
indicating that the Borrower was denied for substantially the same loan
they are now applying for, and the reasons the Borrower was unable to
obtain the financing for which it applied. In addition, the Lender
applying for a guarantee under this Program must certify that it would
not make the loan without the Board's guarantee.
Sec. 500.201 Eligible Lender.
(a) A lender eligible to apply to the Board for a Guarantee of a
loan must be:
(1) A banking institution, such as a commercial bank or trust
company, subject to regulation by the Federal banking agencies
enumerated in 12 U.S.C. Sec. 1813; or
(2) An investment institution, such as an investment bank,
commercial finance company, or insurance company, that is currently
engaged in commercial lending in the normal course of its business.
(b) Status as a Lender under paragraph (a) of this section does not
assure that the Board will issue the Guarantee sought, or otherwise
preclude the Board from declining to issue a Guarantee. In addition to
evaluating an application pursuant to Sec. 500.207, in making a
determination to issue a Guarantee to a Lender, the Board will assess:
(1) The Lender's level of regulatory capital, in the case of
banking institutions, or net worth, in the case of investment
institutions;
(2) Whether the Lender possesses the ability to administer the
loan, as required by Sec. 500.211(b), including its experience with
loans to oil and gas companies;
(3) The scope, volume and duration of the Lender's activity in
administering loans;
(4) The performance of the Lender's loan portfolio, including its
current delinquency rate;
(5) The Lender's loss rate as a percentage of loan amounts for its
current fiscal year; and
(6) Any other matter the Board deems material to its assessment of
the Lender.
(c) In the case of the refinancing of an existing credit, the
applicant must be a different lender than the holder of the existing
credit.
Sec. 500.202 Loan amount.
The aggregate amount of loan principal guaranteed under this
Program to a single Qualified Oil and Gas Company may not exceed $10
million.
Sec. 500.203 Guarantee percentage.
A guarantee issued by the Board may not exceed 85 percent of the
amount of the principal of a loan to a Qualified Oil and Gas Company.
Sec. 500.204 Loan terms.
(a) All loans guaranteed under the Program shall be due and payable
in full no later than December 31, 2010.
(b) Loans guaranteed under the Program must bear a rate of interest
determined by the Board to be reasonable. The reasonableness of an
interest rate will be determined with respect to current average yields
on outstanding obligations of the United States with remaining periods
of maturity comparable to the term of the loan sought to be guaranteed.
The Board may reject an application to guarantee a loan if it
determines the interest rate of such loan to be unreasonable.
(c)(1) The performance of all of the Borrower's obligations under
the Loan Documents shall be secured by, and shall have the priority in,
such Security as provided for within the terms and conditions of the
Guarantee.
(2) Without limiting the Lender's and Borrower's obligations under
paragraph (c)(1) of this section, at a minimum, the loan shall be
secured by--
(i) A fully perfected and enforceable security interest and/or
lien, with first priority over conflicting security interests or other
liens in all property, both real and personal, tangible or intangible,
including accessions, replacements and proceeds thereof, which are
acquired, improved, or derived from the loan funds; and
(ii) A fully perfected and enforceable security interest and/or
lien in all other property of the Borrower, including accessions,
replacements and proceeds thereof, or which may be given by a third-
party as Security for the loan, the priority of which shall be on the
same and equal status with the highest voluntarily granted or acquired
security interest or lien then existing therein;
(3) The entire loan will be secured by the same Security with equal
lien priority for the guaranteed and the unguaranteed portions of the
loan. The unguaranteed portion of the loan will neither be paid first
nor given any preference over the guaranteed portion.
(4) An Applicant's compliance with paragraph (c)(2) of this section
does not assure a finding of reasonable assurance of repayment, or
assure the Board's Guarantee of the loan.
(d) An eligible Lender may assess and collect from the Borrower
such other fees and costs associated with the application and
origination of the loan as are reasonable and customary, taking into
consideration the amount and complexity of the credit. The Board may
take such other fees and costs into consideration when determining
whether to offer a Guarantee to the Lender.
Sec. 500.205 Application process.
(a) Application deadline. An original application and three copies
must be received by the Board no later than 8 p.m. EST, December 30,
1999 in U.S. Department of Commerce, Washington D.C. 20230.
Applications which have been provided to a delivery service on or
before December 29, 1999, with ``delivery guaranteed'' before 8 p.m. on
December 30, 1999, will be accepted for review if the Applicant can
document that the application was provided to the delivery service with
delivery to the address listed above guaranteed prior to the closing
date and time. A postmark of December 30, 1999, is not sufficient to
meet this deadline as the application must be received by the required
date and time. Applications will not be accepted via facsimile machine
transmission or electronic mail.
(b) Applications shall contain the following:
(1) A completed Form, ``Application for Oil and Gas Guarantee
Loan'';
(2) The information required for the completion of Form
``Environmental Assessment and Compliance Findings for Related
Environmental Laws'' and attachments, as required by
Sec. 500.206(a)(2)(i)(D), unless the project is categorically excluded
under Sec. 500.206(b);
[[Page 57956]]
(3) All Loan Documents that will be signed by the Lender and the
Borrower, if the application is approved, including all terms and
conditions of, and Security or additional Security to assure the
Borrower's performance under, the loan;
(4) Certification by the chairman of the board and the chief
executive officer of the Borrower acknowledging that the Borrower is
aware that the Lender is applying to the Board for a Guarantee of a
loan under the Program, as described in the Loan Documents, and
agreeing to permit audits by the General Accounting Office, its
designee, an independent auditor acceptable to the Board prior to the
issuance of the Guarantee and annually thereafter while such guarantee
is outstanding;
(5) The Lender's full written underwriting analysis of the loan to
be guaranteed by the Board;
(6) A certification that the Lender has followed the same loan
underwriting analysis with the loan to be guaranteed as it would follow
for a loan not guaranteed by the Government; and a certification by the
Lender, that the loan, Lender, and Borrower meet each of the
requirements of the Program as set forth in the Act and the Board's
rules in this part;
(7) A description of all Security for the loan, including, as
applicable, current appraisal of real and personal property, copies of
any appropriate environmental site assessments, and current personal
and corporate financial statements of any guarantors for the same
periods as required for the Borrower. Appraisals of real property shall
be prepared by State licensed or certified appraisers, and be
consistent with the ``Uniform Standards of Professional Appraisal
Practice,'' promulgated by the Appraisal Standards Board of the
Appraisal Foundation. Financial statements of guarantors shall be
prepared by independent Certified Public Accountants;
(8) Consolidated financial statements of the Borrower for the
previous three years that have been audited by an independent certified
public accountant, including any associated notes, as well as any
interim financial statements and associated notes for the current
fiscal year;
(9) A five year history and five year projection for revenue, cash
flow, average realized prices and average realized production costs. If
the loan funds are to be used to purchase substantial assets of an
existing firm, a pro forma balance sheet at startup, and five years
projected year end balance sheets and income statement at start-up;
(10) Documentation that credit is not otherwise available to the
borrower under reasonable terms or conditions sufficient to meet its
financial needs, as reflected in the financial or business plan of that
company. The Lender must provide with its application those items
required by Sec. 500.200(b);
(11) Documentation sufficient to demonstrate that the Lender is
eligible under Sec. 500.201(a) and to allow the Board to make a
determination to issue a Guarantee to such Lender as set forth in
Sec. 500.201(b); and
(12) A report as to the Borrower's designation of the nature and
value of project reserves from an independent petroleum engineer
acceptable to the Board.
(c) No Guarantee will be made if either the Borrower or Lender has
an outstanding, delinquent Federal debt until:
(1) The delinquent account has been paid in full;
(2) A negotiated repayment schedule is established and at least one
payment has been received; or
(3) Other arrangements, satisfactory to the agency responsible for
collecting the debt, are made.
Sec. 500.206 Environmental requirements.
(a)(1) General. Environmental assessments of the Board's actions
will be conducted in accordance with applicable statutes, regulations,
and Executive Orders. Therefore, except as provided in paragraph (b) of
this section, and subject to paragraph (c) of this section, each
application for a Guarantee under the Program must be accompanied by
information necessary for the Board to meet the requirements of
applicable law.
(2) Environmental information required from the Lender. (i)
Environmental data or documentation concerning the use of the proceeds
of any loan guaranteed under this Program must be provided by the
Lender to the Board to assist the Board in meeting its legal
responsibilities. The Lender may obtain this information from the
Borrower. Such information includes:
(A) Documentation for an environmental threshold review from
qualified data sources, such as a Federal, State or local agency with
expertise and experience in environmental protection, or other sources,
qualified to provide reliable environmental information;
(B) Any previously prepared environmental reports or data relevant
to the loan at issue;
(C) Any environmental review prepared by Federal, State, or local
agencies relevant to the loan at issue;
(D) The information required for the completion of Form
``Environmental Assessment and Compliance Findings for Related
Environmental Laws;'' and
(E) Any other information that can be used by the Board to ensure
compliance with environmental laws.
(ii) All information supplied by the Lender is subject to
verification by the Board.
(b) Categorical exclusions from National Environmental Policy Act
(NEPA) reviews. The actions described in this paragraph have been
determined not to have a significant impact on the quality of the human
environment, either individually or cumulatively. They are
categorically excluded from the need to prepare an environmental
assessment or impact statement under NEPA. It must be emphasized that
even though these actions are excluded from further environmental
reviews under NEPA, they are not excluded from compliance with other
applicable local, State, or Federal environmental laws.
(1) Projects that solely involve the acquisition, construction,
reconstruction, renovation, or installation of facilities, structures
or businesses, for replacement or restoration purposes, with minimal
change in use, size, capacity, purpose or location from the original
facility (e.g., replacement in-kind of utilities such as water or sewer
lines and appurtenances, reconstruction of curbs and sidewalks, street
repaving, and building modifications, renovations, and improvements);
(2) Project management actions relating to invitation for bids,
contract award, and the actual physical commencement of construction
activities;
(3) Projects that solely involve the purchase and installation of
office equipment, public safety equipment, or motor vehicles;
(4) Projects that solely involve the acquisition of working
capital; and
(5) Projects that solely involve a combination of activities under
paragraphs (B)(1) through (4) of this section.
(c) Actions listed in paragraph (b) that otherwise are
categorically excluded from NEPA review are not necessarily excluded
from review if they would be located within, or in other cases,
potentially affect:
(1) A floodplain;
(2) A wetland;
(3) Important farmlands, or prime forestlands or rangelands;
(4) A listed species or critical habitat for an endangered species;
[[Page 57957]]
(5) A property that is listed on or may be eligible for listing on
the National Register of Historic Places;
(6) An area within an approved State coastal zone management
Program;
(7) A coastal barrier or a portion of a barrier within the Coastal
Barrier Resources System;
(8) A river or portion of a river included in, or designated for,
potential addition to the Wild and Scenic Rivers System;
(9) A sole source aquifer recharge area;
(10) A State water quality standard (including designated and/or
existing beneficial uses and anti-degradation requirements); or
(11) Federal lands.
(d) The regulations of the Council on Environmental Quality
implementing NEPA require the Board to provide public notice of the
availability of project specific environmental documents such as
environmental impact statements, environmental assessments, findings of
no significant impact, records of decision etc., to the affected
public. See 40 CFR 1506.6(b). Environmental information concerning
specific projects can be obtained from the Board by contacting:
Executive Director, Emergency Oil and Gas Guaranteed Loan Board, U.S.
Department of Commerce, Washington, DC 20230.
Sec. 500.207 Application evaluation.
(a) Eligibility screening. Applications will be reviewed to
determine whether the Lender and Borrower are eligible, the information
required under Sec. 500.205(b) is complete, and the proposed loan
complies with applicable statutes and regulations. The Board can at any
time reject an application that does not meet these requirements.
(b) Evaluation criteria. Applications that are determined to be
eligible pursuant to paragraph (a) of this section shall be subject to
a substantive review, on a competitive basis, by the Board based upon
the following evaluation factors, in order of importance:
(1) The ability of the Borrower to repay the loan by the date
specified in the Loan Document, which shall be no later than December
31, 2010;
(2) The adequacy of the proposed provisions to protect the
Government, including sufficiency of Security, the priority of the lien
position in the Security, and the percentage of Guarantee requested;
and
(3) Adequacy of the underwriting analysis performed by the Lender
in preparing the application and the ability of the Lender to
administer the loan in full compliance with the requisite standard of
care set forth in Sec. 500.211(b).
(c) Decisions by the Board. Upon completion of the evaluation of
the application and as soon as possible after the due date, the Board
will approve or deny all eligible applications timely received under
this Program. The Board shall notify all Applicants in writing of the
approval or denial of the Guarantee applications as soon as possible.
Approvals for loan Guarantees shall be conditioned upon compliance with
Sec. 500.208.
Sec. 500.208 Issuance of the Guarantee.
(a) The Board's decisions to approve any application for, and
extend an offer of, guarantee under Sec. 500.207 is conditioned upon:
(1) The Lender and Borrower obtaining any required regulatory or
judicial approvals;
(2) The Lender and Borrower being legally authorized to enter into
the loan under the terms and conditions submitted to the Board in the
application;
(3) The Board's receipt of the Loan Documents, Guarantee, and any
related instruments, properly executed by the Lender, Borrower, and any
other required party other than the Board; and
(4) No material adverse change in the Borrower's ability to repay
the loan between the date of the Board's approval and the date the
Guarantee is to be issued.
(b) The Board may withdraw its approval of an application and
rescind its offer of Guarantee if the Board determines that the Lender
or the Borrower cannot, or is unwilling to, provide adequate
documentation and proof of compliance with paragraph (a) of this
section within the time provided for in the offer.
(c) Only after receipt of all the documentation, required by this
section, will the Board sign and deliver the Guarantee.
(d) A Borrower receiving a loan guaranteed by the Board under this
Program shall pay a one-time guarantee fee of 0.5 percent of the amount
of the principal of the loan. This fee must be paid no later than one
year from the issuance of the Guarantee.
Sec. 500.209 Funding for the Program.
The Act provides funding for the costs incurred by the Government
as a result of granting Guarantees under the Program. While pursuing
the goals of the Act, it is the intent of the Board to minimize the
cost of the Program to the Government. The Board will estimate the risk
posed by the guaranteed loans to the funds appropriated for the costs
of the Guarantees under the Program and operate the Program
accordingly.
Sec. 500.210 Assignment or transfer of loans.
(a) Neither the Loan Documents nor the Guarantee of the Board, or
any interest therein, may be modified, assigned, conveyed, sold or
otherwise transferred by the Lender, in whole or in part, without the
prior written approval of the Board.
(b) Under no circumstances will the Board permit an assignment or
transfer of less than 100 percent of the Loan Documents and Guarantee,
nor will it permit an assignment or transfer to be made to an entity
which the Board determines not to be an Eligible Lender pursuant to
Sec. 500.201.
(c) The proscription under paragraph (a) of this section shall not
apply to:
(1) Transfers which occur by operation of law, unless a primary
purpose of the transaction leading to such a transfer was to assign,
convey or sell the loan note or Guarantee without the necessity of
securing the Board's prior written approval; or
(2) An action or agreement by the Lender which has the effect of
distributing the risks of the credit among other Lenders if:
(i) Neither the loan note nor the Guarantee is assigned, conveyed,
sold, or transferred in whole or in part;
(ii) Both the unguaranteed and guaranteed portions of the loan are
treated in the same manner;
(iii) The Lender remains solely responsible for the administration
of the loan; and
(iv) The Board's ability to assert any and all defenses available
to it under the Guarantee and the law is not adversely affected.
Sec. 500.211 Lender responsibilities.
(a) General. Lender shall comply with all provisions of the
Guarantee.
(b) Standard of care. The Lender shall exercise due care and
diligence in administering the loan as would be exercised by a
responsible and prudent banking institution when administering a
secured loan of such banking institution's own funds without a Federal
guaranty. Such standard shall also apply to any and all approvals,
determinations, permissions, acceptances, requirements, or opinion
made, given, imposed or reached by Lender.
(c) Representation to the Board. In addition to any other
representations required by the Guarantee, the Lender shall represent
to the Board that it has the ability to, and will, administer the loan,
as well as to exercise the Lender's rights and pursue its remedies,
[[Page 57958]]
including conducting any liquidation of the Security or additional
Security in full compliance with the standard of care, without the need
for any advice, opinion, determination, recommendation, approval,
disapproval, assistance (financial or other) or participation by the
Board, except where the Board's consent is expressly required by the
Guarantee, or where the Board, in its sole discretion and pursuant to
the Guarantee, elects to provide same.
(d) Covenants. With respect to any loan guaranteed by the Board
pursuant to the Act and this part, the Lender shall require the Loan
Documents to contain such affirmative and negative covenants by the
Borrower as are required by the terms and conditions of the Guarantee,
such as the prohibition on the payment of dividends.
(e) Monitoring. In accordance with the Guarantee, the Lender shall
monitor Borrower's performance under the Loan Documents to detect any
noncompliance by the Borrower with any provision thereof, and will use
its best efforts to cause Borrower's timely correction of any such
noncompliance and Borrower's compliance with such provision thereafter.
(f) Reporting. With respect to any loan guaranteed by the Board
pursuant to the Act and this part, the Lender shall provide the Board
with the following information:
(1) Audited financial statements for the Borrower for the prior
fiscal year;
(2) Projected balance sheet, income statement, and cash flows for
the Borrower for each year remaining on the term of the loan within 60
days of the Borrower's fiscal year end; and
(3) A completed signed copy of Form ``Quarterly Compliance
Statement,'' that includes information on the recent performance of the
loan, within 15 days of the end of each calendar quarter.
(g) Notices. All written notices, requests, or demands made to the
Board shall be mailed to the Board at the U.S. Department of Commerce,
Washington, D.C. 20230, except as otherwise specified by the Guarantee
or as directed by the Board. Lender shall notify the Board in writing
without delay of:
(1) Deterioration in the internal risk rating of a loan guaranteed
under this Program within 3 business days of such action by the Lender;
(2) The occurrence of each event of default under the Loan
Documents or Guarantee promptly, but not later than 3 business days, of
the Lender's learning of such occurrence; and
(3) Any other notification requirements as provided by law, or by
the terms of the Guarantee or Loan Documents.
Sec. 500.212 Liquidation.
(a) The Board may take, or direct to be taken, any action in
liquidating the Security which the Board determines to be necessary or
proper, consistent with Federal law and regulations.
(b) Pursuant to the Guarantee, upon written demand by the Lender
and whether or not the Board has made any payment under the Guarantee,
the Board, at the Board's sole option shall have the right to require
that the Lender, solely or jointly with the Board, conduct to
completion the liquidation of any or all of the Security. The Board may
choose to conduct the liquidation itself.
Sec. 500.213 Termination of Guarantee.
(a) The Board, in its discretion, shall be entitled to terminate
all of the Board's obligations under the Guarantee, without further
cause, by giving written notice to the Lender of such termination, in
the event that:
(1) The closing of the loan shall not have occurred in accordance
with the terms and conditions of the Guarantee;
(2) The Guarantee fee required by Sec. 500.208(d) shall not have
been paid;
(3) The Lender shall have released or covenanted not to sue the
Borrower or any other guarantor, or agreed to the modification of any
obligation of any party to any agreement related to the loan, without
the prior written consent of the Board;
(4) Lender has released the Board from its liability and
obligations under the Guarantee;
(5) Lender has been repaid in full on the loan;
(6) Lender shall have made any incorrect or incomplete
representation to the Board in any material respect in connection with
the Application, the Guarantee or the Loan Documents; or
(7) Lender failed to comply with any material provision of the Loan
Documents or the Guarantee.
(b) Upon receipt of a written demand for payment made pursuant to
the Guarantee, the Board shall be entitled to seek such certifications
from the Lender, undertake such audits or investigations, or take such
other action as is provided for by law or the Guarantee so as to
determine whether the Lender has complied with all of the Lender's
obligations under the Guarantee.
Sec. 500.214 OMB control number.
[Reserved.]
[FR Doc. 99-27582 Filed 10-22-99; 2:19 pm]
BILLING CODE 3510-FP-U
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.