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Federal Register / Vol. 86, No. 235 / Friday, December 10, 2021 / Rules and Regulations 5001.3

Definitions.

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Affiliate means a person where one of the following circumstances exists:
1 The person controls or has the power to control another person, or a third party or parties controls or has the power to control both. Factors such as ownership, management, current and previous relationships with or ties to another person, and contractual relationships, shall be considered in determining whether affiliation exists. It does not matter whether control is actually exercised, so long as the power to control exists. Entities owned and controlled by Indian Tribes, Alaskan Native Corporations ANCs, Native Hawaiian Organizations NHOs, Community Development Corporations CDCs, or wholly-owned entities of Indian Tribes, ANCs, NHOs, or CDCs, are not considered to be affiliated with other entities owned by these entities solely because of their common ownership or common management.
2 There is a family relationship and identical or substantially identical business or economic interests amongst persons such as where the immediate family operate entities in the same or similar industry in the same geographic area; however, a person may rebut such determination with evidence showing that the business or economic interests are not identical or substantially identical.

Energy efficiency improvement EEI
means improvements to or replacement of an existing building or systems, or equipment owned by the borrower, that reduces measurable energy consumption on an annual basis.

Existing business means a business that has been in operation for at least one full year and has achieved full operational capacity or stable operations as determined by the Administrator.

Final loss claim means the Agencys payment of a final settlement amount with the lender after the collateral is liquidated or after settlement and compromise actions have been completed and as further set forth in 5001.521e.

New business means a business that has been in operation for less than one full year and a business that has been in operation for at least one full year and has not achieved full operational capacity or stable operations as determined by the Administrator, including a new enterprise or new
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affiliate of an existing business moving or expanding into a new location involving new market or labor areas.

Power purchase agreement means the terms and conditions governing the sale and transportation of power produced by the borrower to another party.

3. Amend 5001.8 by revising paragraph a and adding paragraph e to read as follows:
5001.8
forms.

Approvals, regulations, and
a When Agency approval or concurrence is required, it must be in writing and must be obtained prior to any action taken for which approval or concurrence is required. Written communication from an authorized Agency official, including any written communication approving, concurring, or otherwise communicating an Agency decision on a matter when such decision is required, may be transmitted via an electronic Agency system in accordance with Electronic Signatures in Global and National Commerce Act ESIGN of 2000 114 Stat. 464 E-Sign Act.

e 7 CFR part 5001 does not prohibit or consent to electronic signatures.
Rural Development will accept electronic signatures from Lenders for origination, loan closing, and servicing documents in accordance with the ESign Act unless otherwise prohibited by law or program. Lenders may use electronic signatures for electronic promissory notes eNotes, deeds of trust and other documents relevant to the loan transaction, providing that the lender perfects and maintains a first lien position, an enforceable promissory note, and meets all other agency requirements including the following:
1 Lenders may submit forms to Rural Development electronically using USDAs Service Center Agencies Online Services website. Registration is limited to individuals and each individual authorized by the Lender must register and upon registration may electronically sign and submit certain forms on behalf of the Lender.
2 Lenders who choose to accept electronic signatures from borrowers must ensure that such signatures meet the standards and requirements set forth in the E-Sign Act, as well as all other applicable federal and state regulations and guidelines. Lenders are charged with the same responsibility of due diligence with electronically signed documents as they are with paper documents. If any electronically signed
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document is deemed unenforceable and is connected to any fraud, misrepresentation or negligent servicing, the lender bears the risk that any loss claim submitted in relation to the unenforceable document will be denied or reduced in accordance with applicable regulations. Any loss attributed to a lenders failure to collect on the promissory note or enforce the security instrument because of its electronic signature will be treated as negligent servicing under 7 CFR 5001
servicing regulations. Failure to comply with any Federal statute or regulation could result in the denial of a loan guarantee or claim, withdrawal of lending authority and/or debarment from Federal programs.
Subpart BEligibility Provisions 4. Amend 5001.104 by revising paragraph c to read as follows:

5001.104 Eligible WWD projects and requirements.

c Project location. The project must be located in a rural area as defined in 5001.3 of this part, except that utility projects serving both rural and non-rural areas are eligible for a loan guarantee regardless of project location. For utility service projects serving both rural and non-rural areas, the Agency will guarantee only the portion of the project necessary to provide the essential services to rural areas. The part of the facility located in a non-rural area must be necessary to provide the essential services to rural areas.

5. Amend 5001.105 by:
A. Revising the introductory text;
B. Revising paragraph b1, 8, 9
and 10;
C. Revising paragraph d1i and ii;
D. Revising paragraph d2i and ii;
E. Revising paragraph d3i and ii;
F. Revising paragraph d4i and ii;
and G. Revising paragraph d5ii The revisions read as follows:
5001.105 Eligible B&I projects and requirements.

For a B&I project to be eligible for a loan guarantee under this part, it must meet the criteria specified in 5001.102, be for a borrower eligible to submit an application for the project in accordance with 5001.126, and the uses of loan funds include, but are not limited to, the following:

b
1 Purchase and development of land, buildings, or infrastructure for
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