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Federal Register / Vol. 86, No. 242 / Tuesday, December 21, 2021 / Rules and Regulations
regulations set forth the criteria the Agency uses via a point system to determine an eligible applicants priority for available loan funds.
Since the enactment of the authorizing legislation, the passage of the Agriculture Improvement Act of 2018 Farm Bill has necessitated specific changes to this regulation. The Agency is also, through this rulemaking, improving processes, streamlining requirements, and providing clarity to daily administration of the program.

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II. Summary of Changes Farm Bill Specific Updates The Farm Bill resulted in specific modifications to three topics: Limitation on loan amounts, evaluation, and return of equity 42 U.S.C. 9812.
The limitation on loan amounts for ultimate recipient projects, including unpaid balance of any existing loans, is modified to allow a maximum loan to an ultimate recipient in the lesser of $400,000 or 50 percent of the loan to the intermediary. In assigning priorities to applications, the Agency now requires an eligible entity to demonstrate that it has a governing or advisory board made up of business, civic and community leaders who are representative of the communities of the service area, without limitation to the size of the service area. Prior versions of the IRP
limited intermediary service areas to no more than 14 counties in order to receive points under this criterion. The Agency eliminated the reference to the 14-county service area to be consistent with the Farm Bill provision.
The Agency establishes a schedule that is consistent with the amortization schedules of the portfolio of loans made or guaranteed under the general requirements of the IRP, for the return of any equity contribution made under the program by an eligible entity that is current on all principal and interest payments and in compliance with the loan covenants. An intermediary with an IRP loans where the cash portion of the IRP revolving loan fund includes fees, principal and interest payments received from the ultimate recipients and is not composed of any original Agency IRP loan funds may request a partial or full return of its contributed equity under the conditions outlined in the subpart: 1 The intermediary is current in all payments to the Agency and in compliance with all elements of their loan agreement and Agency reporting requirements; 2 the ratio of intermediary equity to the Agency loan after the return of equity remains consistent with the initial equity injection percentage by the
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intermediary; and 3 any return of an intermediarys equity from the revolving loan fund must be approved by the Agency in writing and is also limited to an amount that the Agency determines will not cause additional credit risk to the revolving loan fund.
Across the Regulation Updates The entire regulation was updated to make it easier to understand and more streamlined. Throughout this document, the Farm Bill changes are enacted, and minor edits were made that were not intended to change the meaning of the regulation, just to make it clearer, provide more clarification to the public, streamline the regulation, and make it easier for the public to understand. This includes deleting repetitive, unnecessary phrases; breaking up confusing, long sentences and paragraphs into small segments to be more easily understood; and reorganizing the document to make it flow and read more cleanly. This was done throughout the whole regulation.
Introduction 4274.301
The changes in this regulation revision include an introductory section for loans made by the Agency to eligible intermediaries. This applies to borrowers, ultimate recipients, and other involved parties. Any complete applications that have been received but not funded, or funded applications where the loan has not yet been closed by the effective date of this regulation, will be processed under these new requirements. An intermediary borrower may use the Agency-prescribed selfelection template for the Intermediary Relending Program IRP, to have its existing loans projects already approved and closed and any loans approved under the previous regulation but not yet closed processed under these provisions. Other edits in this section were made to provide necessary clarification.
Definitions 4274.302
The Definitions section, 4274.302, has been updated for a variety of reasons, including to be consistent with the Farm Bill, other Agency regulations, and provide needed clarity.
Administrator has been added to be consistent with other Agency regulations. Agency has been edited to be consistent with other Agency regulations. Affiliate has been updated and expanded to be consistent with other Agency regulations, specifically the OneRD Guarantee Loan Initiative, and clarify factors that will be used in determining whether affiliation exists.
Agency IRP loan was added to
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distinguish between Agency loans and the existing term Agency IRP loan funds and also to distinguish the Agencys loan from an Intermediarys loan to an ultimate recipient. Agricultural production was changed to be consistent with other Agency regulations, specifically the OneRD
Guarantee Loan Initiative. Aquaculture was added to the regulation to be consistent with other Agency programs, and to match the Value-Added Producer Grants definition. Citizenship has been changed to Citizen to simplify the definition. Community development was added to add context to references relating to program purpose and scoring.
The Farm Bill clearly indicates it is an eligible purpose, so this was added for clarity. Conflict of interest was updated for consistency with other Agency programs and to add context to its reference in other parts of the regulation. Cooperative was added to eliminate confusion and establish consistency in its application when determining eligibility of applicable entities. Hydroponics was added to define it as an eligible use of funds and to distinguish it from agriculture production. This has been found to be a popular trend in the country and warranted some clarification. Immediate family was added to provide readers a list of relationships that constitute immediate family members to assist in determining if a conflict of interest exists when employing parties of an organization that may have a financial interest or tangible personal benefit in a business transaction. This definition is also consistent across other Business and Industry programs, and the OneRD
Guarantee Loan Initiative program.
Indian tribe was added to eliminate confusion and establish consistency in its application when determining eligibility of applicable entities.
Intermediary was changed to add the common purpose of recapitalizing a revolving loan fund. Intermediary equity contribution was added to provide context to the use of the term under priority scoring of projects. IRP
revolving loan fund was updated to provide clarity regarding the creation of the fund and the segregation of the account from other funds. Loan Agreement was added to define it as a debt instrument that acts as an agreement between an intermediary borrower and the Agency setting forth terms and conditions of the Agency IRP
Loan. Military personnel was added to provide clarification to the term for eligibility purposes and to codify information that was previously addressed through Administrative
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