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Federal Register / Vol. 86, No. 242 / Tuesday, December 21, 2021 / Rules and Regulations
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Notices. Public agency was added to eliminate confusion and establish consistency in its application when determining eligibility of applicable entities. Revolved funds was updated for clarity. The term rural and rural area was updated to be consistent with the Farm Bill. This will eliminate confusion and ensure consistency in application of the term throughout the Agency field offices and users of the regulation.
Statewide nonmetropolitan median household income was deleted as it is not used in the regulation. Processing office or officer was deleted because this term is no longer used in the regulation.
Technical assistance was updated to provide additional information on what constitutes technical assistance and to whom the assistance is provided.
Underrepresented group was updated to provide examples of common demographic characteristics. Valueadded agricultural product was added to provide consistency to other Agency programs, specifically the OneRD
Guarantee Loan Initiative. Work plan was added to define the information components as the document is a required part of a complete application.
Initial Agency IRP loan and Subsequent IRP loan were removed from the definitions as their use was causing confusion and a misconception as it relates to revolved funds and continuing compliance with program regulations.
Also, there has been confusion regarding the continuance of the Federal character of funds once the funds revolved and projects were no longer funded from the Initial Agency IRP loan.
The regulations repeated definitions throughout, and duplications were removed to avoid confusion. For example, 4274.310a and f removed duplicate definitions of public agency, Indian Tribe, cooperative, and citizens.
Section 4271.311c was also edited to avoid duplicating and confusing the definition of citizens.
Review or Appeal Rights 4274.303, Formerly 4274.373
Discussion on Appeal Rights has been moved from the former 4274.373 to 4274.303. Section 4274.303 was previously a reserved section. A
description was added to clarify what appeal and review rights intermediaries have with respect to adverse Agency decisions, in accordance with 7 CFR
part 11.
Exception Authority 4274.304, Formerly 4274.381
Discussion on Exception Authority was moved from the former 4274.381
to 4274.304. This section was revised to clarify that the Agency is authorized
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to exercise Exception Authority when use of such authority is in the best financial interest of the Federal Government and is not contrary to any applicable statutory authorities.
Other Regulatory Requirements 4274.305, Formerly Reserved The current rule is being updated to incorporate specific requirements of the applicable Rural Development environmental regulation, 7 CFR part 1970, Environmental Policies and Procedures. In accordance with 7 CFR
part 1970, intermediary lending is considered a Multi-Tier Action and all intermediaries must execute an Exhibit H to RD Instruction 1970A, Multi-tier Action Environmental Compliance Agreement as part of their IRP
application submitted to the Agency. In accordance with 7 CFR 1970.55, the intermediary must sign a certification that they have a National Environmental Policy Act NEPA staff capable of undertaking an environmental review that meets Agency standards. For intermediaries that do not have capable staff, the Agency has decided that State RBCS Program staff will deliver training to borrowers on the environmental process and how to determine whether a project is a categorical exclusion or requires an environmental assessment and review. Agency RBCS Program staff can also opt to assist with completing the NEPA categorical exclusion review with information provided by the intermediary or ultimate recipient.
In the case of each proposed loan from an intermediary to an ultimate recipient using Agency IRP loan funds, an environmental review will be completed in accordance with 7 CFR
1970.53 and 1970.54. This promulgation will also address whether a project funded from revolved program dollars is subject to NEPA requirements. Projects that do not qualify for a categorical exclusion, or which may be subject to an extraordinary circumstance under 7
CFR 1970.52, will be referred to the Agency for review under 7 CFR part 1970, subpart C.
Requirements for seismic safety of new building construction were revised to reference updated provisions of the most current version of the International Building Code IBC or two versions prior; currently that is 2021 IBC, 2018
IBC or 2015 IBC, or an above-code seismic standard that meets or exceeds the equivalent level of safety to that contained in the latest edition of the National Earthquake Hazard Reduction Programs NEHRP Recommended Provisions for the Development of Seismic Regulations for New Building NEHRP Provisions.

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Eligibility Requirements Intermediaries 4274.310, Formerly 4274.307
Section 4274.310 contains eligibility requirements for intermediaries. This section was in the former regulation at 4274.307 and it was revised to provide clarity on process. It was updated to segregate lengthy paragraphs into smaller sections for clarity and ease of understanding. The term project completion was dropped and instead continuation was used as a more accurate and clear term. As most funds go on in perpetuity, it was the more appropriate term to use. Clarification was added under Section 4274.310b to state that if the intermediary is an affiliate of another entity, the intermediarys governing board must be independent of the affiliated entity.
Section 4274.310d was expanded to clarify that the essential activities of a business lending operation and the administration of the IRP revolving loan fund must be conducted in-house by an employee of the intermediary; they may not routinely use outside entities for their lending outreach, loan underwriting, management, or day-today operations. Section 4274.310j was added to prohibit intermediaries that may be established for the purpose of, or that predominantly use IRP loan funds for, the financial benefit of an affiliate through loan participations or other funding methods.
Eligibility RequirementsUltimate Recipients 4272.311, Formerly 4274.308
Section 4274.311 contains eligibility criteria for Ultimate Recipients and was moved from its location in the previous regulation at 4274.308. This section was revised to provide clarity, but no substantive changes were made.
Loan Purposes 4274.320, Formerly 4274.314
Eligible Loan Purposes are now outlined in the new 4274.320 and were located in 4274.314 in the previous regulation. Paragraph a has been updated to provide a better explanation of intermediary responsibilities regarding Agency IRP
loans. Aquaculture and hydroponics, commercial fishing, commercial nurseries, forestry, and value-added production will continue to be eligible loan purposes, but to minimize confusion, they have now been explicitly listed. In order to provide the necessary clarity for housing projects in the program, eligible use of funds for housing projects was better defined as limited to costs related to community
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