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Federal Register / Vol. 86, No. 92 / Friday, May 14, 2021 / Rules and Regulations Comment: Priority designations for race and ethnicity within populations is discriminatory.
Agency response: The Agency does not agree with the comment as there is not a priority designation based on race and ethnicity and the application scoring criteria is based on the diversity of the MDOs loan portfolio matching the diversity of their program service area. The race and ethnicity criteria is often used in the determination of an underserved community and such information is also obtained voluntarily from applicants for compliance with Federal civil rights requirements.
The Agency has carefully reviewed the above comments and is modifying the regulation based on an analysis of responsive comments received, program delivery experience, and changes required by Section 379E of the 2018
Farm Bill.
The modifications to the Programs regulations will allow the Agency to implement the requirements of the 2018
Farm Bill, address comments received after publication of the interim regulation in 2010 and implement the final regulation.

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III. Summary of Changes to the Rule This section presents the major changes to the existing RMAP interim rule.
The authority citation was updated from 7 U.S.C. 1989a, 7 U.S.C. 2009s to accurately read as 7 U.S.C. 1989a, 7
U.S.C. 2008s.
The definitions of close relative, Indian tribe and rural or rural area were modified to match the definitions in other RD programs. These changes will provide consistency across RD
programs as well as clarify the definitions for applicants.
The definitions of loan loss reserve fund LLRF and rural microloan revolving fund RMRF were modified to remove the requirement for the deposit accounts to be interest-bearing.
Microenterprise Development Organizations have found it difficult to obtain interest-bearing accounts and when they are available, the monthly bank fees often exceed the interest earned.
At 4280.310, Program requirements for MDOs, a requirement for all applicants to be registered in the System for Awards Management SAM prior to submitting an application was added.
This requirement was added as a result of the Office of Management and Budgets publication of revisions to OMB Guidance for Grants and Agreements 2 CFR part 200 at 85 FR
49506, on August 13, 2020.

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At 4280.310c, the minimum score required to be considered eligible to participate in the program was reduced from 70 to 60 points. The Agencys experience shows that 70 points was too restrictive and eliminated many small, rural MDOs from the program.
Section 4280.311e was revised to more closely align with the application and servicing process flows.
Clarification was provided, at 4280.311e3, that, in the event that the repayment terms of a loan are modified by the Agency, the term of the loan may not exceed a 20-year period from the loan origination date.
As a satisfactory participation designation impacts lending practices of the MDO after the first five years of participation in the program, additional information was added to 4280.311e4 to expand and clarify the performance metrics that must be met to be considered in satisfactory participation for the program.
Provisions were added to 4280.311e10 to allow for a greater than 25 percent disbursement of loan proceeds at closing to the extent that there are commitments to fund projects within 60 days of loan closing. This provision allows MDOs to promote their programs and provide funds needed by the small business community.
The frequency of fund distribution was changed at 4280.311e11 from not more often than quarterly to should be not more often than quarterly to allow some flexibility to the MDOs to request funds to more readily meet the needs of their customers.
At 4280.311e14, the Agency strengthened the penalties for using revolving microloan revolving funds for other than approved purposes to include default due to non-performance rather than just restricting access to future withdrawals. This provides the Agency with an additional option in the event of egregious or multiple instances of improper use of loan funds.
In order to meet the requirements of the 2018 Farm Bill, 4280.313a was modified to allow for microlenders to receive up to 25 percent of their new loan amount as a technical assistance grant. Currently, the amount is limited to 25 percent of the first $400,000 of loans, then 5 percent of any amount over $400,000. The change will potentially increase the amount of technical assistance available to microborrowers.
The Agency clarified the annual grant process at 4280.313a1. The additional language provides information to applicants and grantees regarding grant awards, that are non-

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competitive and based on the microlenders loan balance as of June 30th of each year, as well as replenishment levels and the process used to distribute funds if full replenishment is not possible within available grant funds. This clarification provides details needed by grantees for planning and budgeting purposes.
Applicants are reminded at 4280.315a to provide the documentation listed for a complete application and scoring purposes. Some applicants were confused as to what constituted a complete application. The Agency believes this reminder will reduce that confusion.
The scoring criteria at 4280.316 was modified to clarify requirements for applicants and emphasize Agency priorities for the overall delivery of the program. While there are numerous changes, the total score possible has not changed. These changes include:
Replacing within with between at 4280.316.b3iiiA and B to more accurately state that the calculated ratio must be within the intervals of the listed ratio in each priority level.
Increased points from 1 to 2 for applicants that provide success stories to demonstrate the effect of technical assistance on their clients at 4280.316b4ii. This change allows the Agency to further prioritize this action.
Removed 4280.316b4iv Applicants that present their narrative clearly and concisely five pages or less and at a level expected by trainers and teachers will be awarded 1 point. This paragraph was removed as the Agency determined that it was vague and too subjective.
At 4280.316b5iii, 4280.316c8iii and 4280.316d4iii the Agency removed, up to and including 10
percent. This change made the criteria, 8 percent or greater, 0 points will be awarded. The Agency prioritizes maximizing the amount of actual technical assistance provided. This change serves to meet the goal of reducing the amount of grant funds that will be used for administrative expenses.
Changed 4280.316c5 to remove subjective scoring for references and recommendations from other entities, to awarding one point for each support letter received from potential program beneficiaries or a local organization. The maximum points for this section is unchanged at five points.
Merged the previous 4280.316d1i and ii into one item at 4280.316d1i. The previous 4280.316d1i was a data collection
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