[Federal Register: June 8, 2004 (Volume 69, Number 110)]
[Notices]
[Page 32230-32231]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr08jn04-147]
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DEPARTMENT OF AGRICULTURE
Office of the Secretary
Announcement of Competitive Application Round for the Rural
Business Investment Program (RBIP)
AGENCY: Office of the Secretary, USDA.
ACTION: Notice.
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SUMMARY: The Department of Agriculture (USDA) will select and license
applicants to become Rural Business Investment Companies (RBIC), and
provide financial assistance and grant awards under the RBIP. The
Secretary of the USDA invites applications from newly-formed venture
capital companies seeking to be licensed as a RBIC. USDA has delegated
to the U.S. Small Business Administration (SBA) receipt of applications
under this Notice of Funds Availability (NOFA).
DATES: Application window opening date: SBA will begin accepting
applications on June 8, 2004.
Application deadline date: The application deadline is 4 p.m. EST
on Friday, September 17, 2004. See SUPPLEMENTARY INFORMATION for rules
concerning application submission.
ADDRESSES: Address for application submission: Completed applications
must be sent to Associate Administrator (or his or her designee),
Investment Division, U.S. Small Business Administration, 409 Third
Street, SW., Washington, DC 20416.
Address for requesting information: Applications materials and
other information may be requested by writing to Director of New
Markets Venture Capital, Investment Division, U.S. Small Business
Administration, 409 Third Street, SW., Washington, DC 20416.
FOR FURTHER INFORMATION CONTACT: Detailed information on the RBIP,
including information, materials, and instructions concerning
application for the program, can be found on SBA's Web site at http://www.sba.gov/INV/RBIP
and at the specific URLs listed in this NOFA. You
also may request information from SBA by contacting Austin J. Belton,
Director of New Markets Venture Capital, Investment Division, U.S.
Small Business Administration, 409 Third Street, SW., Washington, DC
20416, at (202) 205-6510.
SUPPLEMENTARY INFORMATION:
Background: Subtitle H of the Consolidated Farm and Rural
Development Act, as amended (7 U.S.C. 2009cc et seq.) (the ``Act'')
establishes the RBIP. The purpose of the Act is to promote economic
development and the creation of wealth and job opportunities in rural
areas and among individuals living in those areas through venture
capital investments by for-profit RBICs. Pursuant to the Act, USDA
licenses newly formed for-profit entities as RBICs and provides
financial assistance in the form of debenture guarantees to such RBICs
to fund their rural area investment activities. Additionally, USDA
awards OA grants to RBICs for the purpose of providing operational
assistance to smaller enterprises in which the RBIC invests or expects
to invest and that are located in rural areas. RBICs must have raised
private equity capital of $10,000,000 and must obtain debenture
leverage (in the amount of 200 percent of its private capital, or
$20,000,000 per RBIC) through the RBIP, to fund their investment
activities. USDA will not be granting exceptions to the $10,000,000
private equity capital requirement, pursuant to 7 CFR 4290.210(b),
under this funding opportunity.
Available funding: Section 384S(b) of the Act makes funds for the
RBIP available until expended. USDA's first competitive application
round for licensing as an RBIC will end on September 17, 2004.
The amount currently available for debenture guaranty authority in
FY 2004 is $280 million. Subject to funding availability, under this
NOFA, USDA intends to select up to three new RBICs and to obligate up
to approximately $60,000,000 in debenture guarantee authority and
approximately $3,000,000 in Operational Assistance (OA) grant funds to
RBICs. However, applicants should note that pursuant to USDA's FY 2004
appropriations act (section 759 of the Consolidated Appropriations Act
of 2004, Pub. L. 108-199 (Jan. 23, 2004)), no selection of any RBICs
will be made during FY04.
USDA reserves the right to select and fund some, all, or none of
the applicants for licensing as an RBIC under this NOFA.
Application materials: A program announcement, the ``Rural Business
Investment Program--Program Announcement (June 2004),'' provides
guidance on the contents of the necessary application materials,
evaluation criteria, and other program requirements. The program
announcement also states the critical deadline dates applicable to this
funding opportunity. This document is available at http://www.sba.gov/INV/RBIP
or by contacting USDA at the address and phone number set
forth in this NOFA. Applicants for licensing as an RBIC can obtain
detailed application materials and instructions at http://www.sba.gov/INV/RBIP
or by contacting USDA at the address and phone number set
forth in this NOFA.
USDA has delegated to SBA many of the day-to-day responsibilities
for the RBIP, including receipt of applications and most of the
selection process for licensing as a RBIC, under 7 CFR 4290.45. More
information about all aspects of the RBIP is available in the
regulations authorizing the RBIP, at 7 CFR part 4290.
Application submission rules: Applications must be received
personally by the Associate Administrator for the Investment Division
(AA/I), or by specific individuals designated by the AA/I, by the
deadline date and time. Applications received after that date and time
will be rejected and returned to the sender. Applications must be
submitted in accordance with the application instructions, which
include but are not limited to a requirement that applications be
submitted in hard copy form. Applications sent electronically or by
facsimile will not be accepted.
Applicants must enclose in their submission a grant issuance fee of
$5,000 in the form of a check payable to SBA.
USDA recommends that potential applicants who plan to request
application materials via mail request such materials as soon as
possible but in any event no later than 60 days before the application
due date, in order to assure that such applicants have sufficient time
to prepare a responsive application.
Summary of review and selection process: Selection for licensing as
an RBIC will be made on a competitive basis using a multi-tiered
application and approval process.
SBA staff will screen applications for timely submission,
eligibility, and completeness. Only those applications that SBA
receives before the deadline, that are complete, and that are eligible
will be processed further. On those applications, SBA then will perform
an initial review of the applicant's management team's qualifications.
Applications considered qualified as a result of the initial review
process then will be evaluated, scored and ranked by panels consisting
of qualified, experienced USDA/SBA staff. The panels will assess the
applications against specific evaluation criteria described in the
program announcement, with emphasis on successful investing track
records in relation to the proposed investment strategy and targeted
rural areas. USDA/SBA will invite those applicants with
[[Page 32231]]
the highest rankings to interview in person with the Portfolio
Committee.
The Portfolio Committee, which shall be comprised of both USDA and
SBA officials, will score applicants and make final recommendations for
selection as RBICs. The SBA Administrator and USDA Secretary will
separately consider but mutually concur on the selection of applicants.
Selected applicants will be given 12 months to raise their private
equity capital. Once a selected applicant has raised its $10,000,000 in
private equity capital and has achieved full compliance with the
regulations governing licensing as an RBIC, the SBA Administrator and
USDA Secretary will jointly license the RBIC.
Assuming private capital of $10 million and compliance with all
program requirements, USDA/SBA will award each RBIC an OA grant of $1
million at the time of licensing. Terms of the OA grant will be subject
to guidelines on Federal grants issued by OMB. OA grants will be
awarded only to licensed RBICs pursuant to this funding opportunity.
Subject to the availability of funds, this would not preclude USDA from
making OA grants to ``other entities'' pursuant to section 384H of the
Act at some point in the future.
Program authority: Subtitle H of the Consolidated Farm and Rural
Development Act, as amended (7 U.S.C. 2009cc et seq.).
Dated: June 1, 2004.
Gilbert Gonzalez,
Acting Under Secretary for Rural Development.
[FR Doc. 04-12732 Filed 6-3-04; 3:09 pm]