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General Memorandum 11-122

General Memorandum 11-122
Rural Utilities Service Publishes Proposed Rule on Implementation of Farm Bill Provision on Substantially Underserved Trust Areas

On October 14, 2011, the Department of Agriculture's Rural Utilities Service (RUS) published a proposed rule and request for comments in the FEDERAL REGISTER regarding the implementation of the Substantially Underserved Trust Areas provisions (Section 6105) of the Farm Bill (PL 110-246). These provisions grant the Secretary of Agriculture "certain discretionary authorities" to provide more favorable loan, guaranteed loan and grant terms when administering certain RUS programs on areas of trust land. The FEDERAL REGISTER notice is attached. Comments are due by December 13, 2011.

PL 110-246 defines a Substantially Underserved Trust Area (SUTA) as "a community in 'trust land' with respect to which the Secretary determines has a high rate of need for the benefits of an eligible program. " This definition provides the Secretary of Agriculture with considerable leeway to determine the definition of a "high rate of need" and provides the Secretary with the authority to: provide extended repayment terms and interest rates as low as two percent for loan and guaranteed loan programs; waive non-duplication restrictions, matching fund, or credit support requirements for loan and grant programs; and give the highest funding priority to such designated projects. Programs eligible for such consideration include: Rural Electrification Loans and Guaranteed Loans and High Cost Energy Grants; Water and Waste Disposal Loans, Guaranteed Loans and Grants; Telecommunications Infrastructure Loans and Guaranteed Loans; Distance Learning and Telemedicine Loans and Grants; and Broadband Loans and Guaranteed Loans.

Because the statute provides the Secretary with such flexibility and discretion to determine what constitutes a "high rate of need" and to consider applications on a case-by-case basis to provide more favorable grant and loan terms, RUS (acting on behalf of the Secretary) proposes that applications for consideration under this provision must provide a certain level of documentation in order to assist RUS in making these determinations. In addition to the issue of documentation, the proposed rule would require that the project be financially viable, and describes what resources will be used to determine that land is in trust status. Respondents are invited to provide comments addressing the following standard questions:

(a) Whether the collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;

(b) the accuracy of the agency's estimate of burden including the validity of the methodology and the assumption used;

(c) ways to enhance the quality, utility and clarity of the information to be collected; and

(d) ways to minimize the burden of the collection of information on those who are to respond, including through the use of appropriate automated, electronic, mechanical, or other technological collection techniques on other forms of information technology.

Prior to publication of the proposed rule and request for comments, RUS conducted a number of consultations with tribes and federal agencies which are detailed in the attached notice. Please let us know if we may provide additional information or assistance in drafting comments regarding the Rural Utilities Service's implementation of the Substantially Underserved Trust Areas initiative.

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Inquiries may be directed to:
Moriah O'Brien (mobrien@hobbsstraus.com)
Karen Funk (kfunk@hobbsstraus.com)

Available Documents for Download ( any referenced attachments are included in download )


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