[Federal Register Volume 75, Number 140 (Thursday, July 22, 2010)]
[Rules and Regulations]
[Pages 42571-42575]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-17817]



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Rules and Regulations
                                                Federal Register
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Federal Register / Vol. 75, No. 140 / Thursday, July 22, 2010 / Rules 
and Regulations

[[Page 42571]]



DEPARTMENT OF AGRICULTURE

Rural Utilities Service

7 CFR Part 1720

RIN 0572-ZA06


Guarantees for Bonds and Notes Issued for Electrification or 
Telephone Purposes

AGENCY: Rural Utilities Service, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The Rural Utilities Service (RUS) is amending its regulations 
for the guarantee program for cooperative and other not-for-profit 
lenders that make loans for eligible electric and telephone purposes. 
These proposed amendments implement changes adopted in the Food, 
Conservation and Energy Act of 2008 (Pub. L. 110-246). The intended 
effect is to update agency regulations to reflect current statutory 
authority.

DATES: Effective Date: This rule is effective August 23, 2010.

FOR FURTHER INFORMATION CONTACT: Karen L. Larsen, Policy Analysis and 
Loan Management Staff, Office of the Assistant Administrator, Electric 
Programs, Rural Utilities Service, United States Department of 
Agriculture, 1400 Independence Avenue, SW., Room 5165-S, Washington, DC 
20250-1560. Telephone (202) 720-9545; e-mail: 
[email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be not significant for purposes of 
Executive Order 12866 and, therefore, has not been reviewed by the 
Office of Management and Budget.

Catalog of Federal Domestic Assistance

    The Catalog of Federal Domestic Assistance (CFDA) number assigned 
to the Electric Loan and Loan Guarantee program is 10.850 Rural 
Electrification Loans and Loan Guarantees. The catalog is available on 
the Internet and the General Services Administration's (GSA) free CFDA 
Web site at http://www.cfda.gov. The CFDA Web site also contains a PDF 
file version of the Catalog that, when printed, has the same layout as 
the printed document that the Government Printing Office (GPO) 
provides. GPO prints and sells the CFDA to interested buyers. For 
information about purchasing the Catalog of Federal Domestic Assistance 
from GPO, call the Superintendent of Documents at 202-512-1800 or toll 
free at 866-512-1800, or access GPO's on-line bookstore at http://bookstore.gpo.gov.

Executive Order 12372

    This rule is excluded from the scope of Executive Order 12372, 
Intergovernmental Consultation, which may require consultation with 
State and local officials. See the final rule related notice entitled, 
``Department Programs and Activities Excluded from Executive Order 
12372,'' (50 FR 47034) advising that RUS loans and loan guarantees are 
not covered by Executive Order 12372.

Information Collection and Recordkeeping Requirements

    This rule contains no new reporting or recordkeeping burdens that 
would require approval under the Paperwork Reduction Act of 1995 (44 
U.S.C. Chapter 35).

National Environmental Policy Act Certification

    The Administrator of RUS has determined that this rule will not 
significantly affect the quality of the human environment as defined by 
the National Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). 
Therefore, this action does not require an environmental impact 
statement or assessment.

Regulatory Flexibility Act Certification

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this rule since the Agency is not required by 5 U.S.C. 
551 et seq. or any other provision of law to publish a notice of 
proposed rulemaking with respect to the subject matter of this rule.

Executive Order 12988

    This rule has been reviewed under Executive Order 12988, Civil 
Justice Reform. The Agency has determined that this rule meets the 
applicable standards in section 3 of the Executive Order.

Unfunded Mandates

    This rule contains no Federal mandates (under the regulatory 
provisions of Title II of the Unfunded Mandates Reform Act of 1995) for 
State, local, and tribal governments for the private sector. Thus, this 
rule is not subject to the requirements of section 202 and 205 of the 
Unfunded Mandates Reform Act of 1995.

Executive Order 13132, Federalism

    The policies contained in this rule do not have any substantial 
direct effect on States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Nor does this 
rule impose substantial direct compliance costs on state and local 
governments. Therefore, consultation with the States is not required.

Executive Order 13175, Consultation and Coordination With Indian Tribal 
Governments

    This executive order imposes requirements on Federal agencies in 
the development of regulatory policies that have tribal implications or 
preempt tribal laws. The RUS has determined that this rule relating to 
loan guarantees for non-profit lenders does not pre-empt tribal laws, 
or have a substantial direct effect on either one or more Indian 
tribe(s) or on the relationship or the distribution of powers and 
responsibilities between the Federal Government and the Indian tribes. 
Thus, this final rule is not subject to the requirements of Executive 
Order 13175.

Executive Order 13211

    This rule does not have any adverse effects on energy supply, 
distribution, or use should the proposal be implemented. The Agency has 
determined that the preparation of Statement of Energy Effects under 
Executive Oder 13211 is not required.

E-Government Act Compliance

    The Agency is committed to complying with the E-Government Act,

[[Page 42572]]

to promote the use of the Internet and other information technologies 
to provide increased opportunities for citizen access to Government 
information and services, and for other purposes.

Background

    On February 5, 2010, the Rural Utilities Service (RUS) published a 
proposed rule, 7 CFR Part 1720, Guarantees for Bonds and Notes issued 
for Electrification and Telephone Purposes (75 FR 5902). This rule 
amends the Agency's policies and procedures for granting guarantees to 
eligible cooperatives and other not-for-profit lenders that make loans 
for eligible electric and telephone purposes under the Rural 
Electrification Act of 1936 (the ``RE Act'') (7 U.S.C. 901 et seq.). 
The amendments to part 1720 revise the current regulations to implement 
changes made by the 2008 Farm Bill and to clarify existing provisions. 
The public was invited to submit comments on or before April 6, 2010. 
Two comments were received and are addressed in the Discussion of 
Comments section of this rule.
    The RE Act authorizes the Secretary to guarantee and make loans to 
persons, corporations, States, territories, municipalities, and 
cooperative, non-profit, or limited-dividend associations for the 
purpose of furnishing or improving electric and telephone service in 
rural areas. Responsibility for administering electrification and 
telecommunications loan and guarantee programs along with other 
functions the Secretary deemed appropriate have been assigned to RUS 
under the Department of Agriculture Reorganization Act of 1994 (7 
U.S.C. 6941 et seq.). The Administrator of RUS has been delegated 
responsibility for administering the programs and activities of RUS, 
see 7 CFR 1700.25.
    Section 6101 of the Farm Security and Rural Investment Act of 2002 
(Pub. L. 107-171) (FSRIA) amended the RE Act to add section 313A (7 
U.S.C. 940c-1) entitled ``Guarantees for Bonds and Notes Issued for 
Electrification or Telephone Purposes.'' This section created a new 
loan guarantee program (313A program) for eligible non-profit lenders. 
Final regulations implementing the program were published in the 
Federal Register on October 29, 2004, 69 FR 63045.
    Section 6106(a)(1)(A) of the Food, Conservation, and Energy Act of 
2008 (Pub. L. 110-246) amended section 313A of the RE Act extending the 
program authorization from September 30, 2007, to September 30, 2012, 
expanding eligible loan purposes, and setting an annual limit of 
$1,000,000,000 on the total amount of guarantees approved by the 
Secretary during a fiscal year, subject to the availability of funds. 
Prior to the 2008 amendment the total amount of a lender's bonds and 
notes that could be guaranteed under this section was limited to the 
total amount of loans made by the lender concurrently with a loan 
approved by the Secretary under the RE Act.
    Section 6106(a)(1)(B) further amended section 313A of the RE Act by 
removing the provision prohibiting the recipient from using any amount 
obtained from the reduction in funding costs as a result of a guarantee 
under section 313A to reduce the interest rate charged on a new or 
concurrent loan. New loan guarantees will not be subject to this 
limitation.

Discussion of Comments

    The proposed rule was published on February 5, 2010, at 75 FR 5902. 
Comments were due on April 6, 2010.
    RUS received two written public comments via the Regulations.gov 
portal on the proposed rule amending 7 CFR part 1720, the regulations 
implementing section 313A of the RE Act (7 U.S.C. 940c-1).
    CoBank, ACB (CoBank), a member of Farm Credit System overseen by 
the Farm Credit Administration (FCA) and a major lender to electric 
cooperatives, including many RUS borrowers, expressed its concerns that 
part 1720 as proposed, if implemented without change or clarification 
``could be read to preclude entities such as CoBank from participating 
in the program as a guaranteed lender.'' CoBank commented on an 
unchanged section of the existing rule (7 CFR 1720.4(b)(1)) relating to 
restrictions on patronage and dividend distributions in the event of a 
decline in credit quality of a participating lender and requested 
clarification of lender eligibility under 7 CFR 1720.5(a)(1).
    The National Rural Utilities Cooperative Finance Corporation (CFC), 
an existing participant in the program, commented on two proposed 
additions to the evaluation criteria in 7 CFR 1720.7(b) that the Agency 
would use to consider applications competitively.

Senior Secured Debt

    Comment: CoBank seeks clarification on the applicability of 7 CFR 
1720.4(b)(1) of the existing regulation which limits payments of cash 
patronage and dividends by a participating lender when the credit 
rating on its senior secured debt has fallen below an ``A----'' rating.
    CoBank contends that the limitation imposed by existing section 
1720.4(b)(1) on the payment of cash patronage and dividends to 
guaranteed lenders having a credit rating below ``A----'' on senior 
secured debt (without regard to the guarantee) is problematic because 
CoBank does not issue senior secured debt and, accordingly, could never 
be in compliance with this condition as it could never obtain a senior 
secured debt rating. In its comments, CoBank seeks clarification that 
this regulation does not apply to institutions that do not issue senior 
secured debt.
    Response: RUS does not read existing 7 CFR 1720.4(b)(1) as 
requiring a guaranteed lender to have senior secured debt in order to 
avoid the patronage and dividend limitations imposed by such provision. 
RUS reads this provision as only being applicable to entities that have 
senior secured debt. Therefore, no change is being made to existing 
section 1720.4(b)(1).

Pre-Existing Contractual Commitments To Pay Dividends

    Comment: CoBank also contends that existing 7 CFR 1720.4(b)(1) 
should be modified because it places a restriction on CoBank's ability 
to make dividend payments despite CoBank's pre-existing contractual 
commitments to pay dividends on its preferred stock.
    Response: As stated above, section 1720.4(b)(1) only applies to 
entities that issue senior secured debt. While section 1720.4(b)(1) is 
inapplicable to entities not having senior secured debt, this does not 
mean that RUS is indifferent to the risks that a borrower's 
unrestricted discretion to make distributions present to a creditor. 
However, in the case of CoBank, CoBank has pointed out that the risk 
has been addressed through regulations of the FCA. FCA directly 
regulates CoBank's ability to issue cash patronage refunds and 
dividends. RUS agrees that the regulations of the FCA are helpful in 
addressing the concerns reflected in section 1720.4(b)(1), however, RUS 
does not believe it is necessary to remove the restriction as CoBank 
has suggested since, for reasons already stated, the provision would 
not apply in CoBank's circumstances. RUS reserves the right to 
incorporate suitable alternatives to section 1720.4(b)(1) in the 
transaction documents of borrowers such as CoBank, and no change is 
being made in this rule.

Lender Eligibility

    Comment: CoBank suggests that 7 CFR 1720.5(a)(1), as RUS proposed 
to revise it, establishes the eligibility criteria in an overly narrow 
manner by stating that eligible entities may be

[[Page 42573]]

``organized on a non-profit basis.'' CoBank suggests that this language 
may be construed to mean that an eligible entity needs to be a non-
profit entity organized under State law and that this result was not 
contemplated by Congress. In CoBank's view, this reading of the 
proposed regulation may serve to exclude from participation in the 
section 313A guarantee program entities that are not organized as non-
profit entities under State law. In its comments, CoBank seeks 
confirmation that this regulation requires applicants to have 
substantive non-profit status, and that this regulation does not 
require that applicants be created as non-profit entities under State 
law.
    Response: RUS does not read the language of proposed section 
1720.5(a)(1) as requiring an entity to be organized as a non-profit 
entity under State law in order to be an eligible applicant under the 
313A guarantee program. Furthermore, it finds nothing in the 
legislative history that would support such an interpretation that 
results in a policy excluding entities on the basis of whether they 
have been organized under State laws or Federal laws. RUS notes that 
similar language in section 306 of the RE Act (7 U.S.C. 936) 
establishing the core RUS guaranteed loan programs has for many years 
been interpreted to include CoBank. Therefore, RUS confirms that the 
final rule requires substantive non-profit status, not particular types 
of State law entities. The language itself has not been changed.

Application Evaluation Factor Involving Supervision, Examination, and 
Safety and Soundness Regulation of Applicant by an Independent Federal 
Agency

    Comment: CFC contends that the new evaluation criterion proposed to 
be included in 7 CFR 1720.7(b)(4) would disadvantage entities like CFC 
that are not regulated by an independent Federal agency. The proposed 
section 1720.7(b)(4) would allow RUS to consider the extent to which an 
applicant is subject to ``supervision, examination, and safety and 
soundness regulation by an independent federal agency'' as an 
evaluation factor in connection with the awarding of guarantees under 
the 313A program. CFC contends that it is not subject to an established 
regulatory scheme and, as a result, will not be able to satisfy this 
evaluation criterion. Moreover, CFC essentially contends that although 
it is not regulated by a Federal agency, CFC's compliance with certain 
reporting requirements, their submission of financial statements to 
RUS, and the inclusion of a financial expert on its board of directors 
at the request of the U.S. Treasury Department serve to provide 
disclosure and oversight comparable to or exceeding that required by 
Federal regulation.
    Response: RUS believes that the fact that an applicant is regulated 
by an independent Federal agency provides a substantial benefit in that 
the additional oversight provided by a Federal agency tasked with the 
regulation of lending institutions provides RUS with an additional 
layer of security. Accordingly, the factor is appropriate for RUS to 
consider since regulatory oversight benefits RUS because it serves to 
lessen RUS' financial risk as the guarantor in the 313A program. The 
examples that CFC references are not comparable to the comprehensive 
regulatory scheme of the FCA. Therefore, no change is being adopted in 
the final rule. RUS notes that the degree of regulation is not an 
eligibility factor.

Application Evaluation Factor Involving Concentration of Financial Risk 
Resulting From Previous Guarantees

    Comment: CFC contends that the new evaluation criterion proposed in 
7 CFR 1720.7(b)(5) would serve to penalize entities that have 
previously received guarantees made under section 313A of the RE Act. 
Proposed section 1720.7(b)(5) provides that RUS take into consideration 
``[t]he extent of concentration of financial risk that RUS may have 
resulting from previous guarantees made under section 313A of the RE 
Act.'' CFC suggests that prior RUS guarantees made under the 313A 
program are sufficiently secured by CFC's underlying credit strength 
and its pledged loan collateral. Accordingly, CFC contends that 
financial risk to RUS is already minimized and suggests that if RUS 
seeks to further minimize its risk, it could modify this proposed 
language to limit a guaranteed lender's ability to make loans to a 
single entity in an amount that exceeds ten percent of the total 
section 313A guaranteed loans outstanding to RUS.
    Response: RUS believes that a legitimate purpose is served by 
considering the concentration of outstanding section 313A guarantees. 
Although there are existing protections in place to minimize RUS' risk 
with respect to the existing guaranteed lender, RUS believes that it is 
still prudent risk management to consider the amount of its existing 
exposure to each guaranteed lender under the 313A program when acting 
on applications for additional guarantees. Therefore, no change is 
being made in the final rule.

List of Subjects in 7 CFR Part 1720

    Electric power, Electric utilities, Loan programs--energy, 
Reporting and recordkeeping requirements, Rural areas.

0
For reasons set out in the preamble, RUS amends chapter XVII of title 7 
of the Code of Federal Regulations by amending part 1720 to read as 
follows:

PART 1720--GUARANTEES FOR BONDS AND NOTES ISSUED FOR 
ELECTRIFICATION OR TELEPHONE PURPOSES

0
1. The authority citation for part 1720 continues to read as follows:


    Authority: 7 U.S.C. 901 et seq.; 7 U.S.C. 940c-1.


0
2. Revise Sec.  1720.1 to read as follows:


Sec.  1720.1  Purpose.

    This part prescribes regulations implementing a guarantee program 
for bonds and notes issued for electrification or telephone purposes 
authorized by section 313A of the Rural Electrification Act of 1936 (7 
U.S.C. 940c-1).

0
3. Revise Sec.  1720.2 to read as follows:


Sec.  1720.2  Background.

    The Rural Electrification Act of 1936 (the ``RE Act'') (7 U.S.C. 
901 et seq.) authorizes the Secretary to guarantee and make loans to 
persons, corporations, States, territories, municipalities, and 
cooperative, non-profit, or limited-dividend associations for the 
purpose of furnishing or improving electric and telephone service in 
rural areas. Responsibility for administering electrification and 
telecommunications loan and guarantee programs along with other 
functions the Secretary deemed appropriate have been assigned to RUS 
under the Department of Agriculture Reorganization Act of 1994 (7 
U.S.C. 6941 et seq.). The Administrator of RUS has been delegated 
responsibility for administering the programs and activities of RUS, 
see 7 CFR 1700.25. Section 6101 of the Farm Security and Rural 
Investment Act of 2002 (Pub. L. 107-171) (FSRIA) amended the RE Act to 
include a new program under section 313A entitled Guarantees for Bonds 
and Notes Issued for Electrification or Telephone Purposes. This 
measure directed the Secretary of Agriculture to promulgate regulations 
that carry out the Program. The Secretary published the regulations for 
the program in the Federal Register as a final rule on

[[Page 42574]]

October 29, 2004, adding Part 1720 to Title 7 of the Code of Federal 
Regulations. Section 6106(a)(1)(A) of the Food, Conservation, and 
Energy Act of 2008 (Pub. L. 110-246) amended section 313A of the RE Act 
by replacing the level of ``concurrent loans'' as a factor limiting the 
amount of bonds and notes that could be guaranteed and inserted ``for 
eligible electrification or telephone purposes'' as the limitation on 
the amount of bonds and notes that can be guaranteed under section 313A 
up to an annual program limit of $1,000,000,000, subject to 
availability of funds. Section 6106(a)(1)(B) further amended section 
313A of the RE Act by removing the prohibition against the recipient 
using an amount obtained from the reduction in funding costs as a 
result of a new guarantee under section 313A to reduce the interest 
rate charged on a new or concurrent loan.

0
4. Amend Sec.  1720.3 by revising the definition of ``Borrower'' and 
adding the definition of ``Eligible Loan'' as follows:


Sec.  1720.3  Definitions.

* * * * *
    Borrower means any organization that has an outstanding loan 
made or guaranteed by RUS for rural electrification or rural 
telephone under the RE Act, or that is eligible for such financing.
* * * * *
    Eligible Loan means a loan that a guaranteed lender extends to a 
borrower for up to 100 percent of the cost of eligible 
electrification or telephone purposes consistent with the RE Act.
* * * * *


0
5. Amend Sec.  1720.4 by revising paragraphs (a)(2), (3), and (4), and 
revising paragraph (b)(2) to read as follows:


Sec.  1720.4  General standards.

    (a) * * *
    (2) At the time the guarantee is executed, the total principal 
amount of guaranteed bonds outstanding would not exceed the principal 
amount of outstanding eligible loans previously made by the guaranteed 
lender;
    (3) The proceeds of the guaranteed bonds will not be used directly 
or indirectly to fund projects for the generation of electricity; and
    (4) The guaranteed lender will not use any amounts obtained from 
the reduction in funding costs provided by a loan guarantee issued 
prior to June 18, 2008, to reduce the interest rates borrowers are 
paying on new or outstanding loans, other than new concurrent loans as 
provided in part 1710 of this chapter.
    (b) * * *
    (2) Maintain sufficient collateral equal to the principal amount 
outstanding, for guaranteed lenders having a credit rating below ``A-'' 
on its senior secured debt without regard to the guarantee, or in the 
case of a lender that does not have senior secured debt, a corporate 
(counterparty) credit rating below ``A-'' without regard to the 
guarantee. Collateral shall be in the form of specific and identifiable 
unpledged securities equal to the value of the guaranteed amount. In 
the case of a guaranteed lender's default, the U.S. government claim 
shall not be subordinated to the claims of other creditors, and the 
indenture must provide that in the event of default, the government has 
first rights on the asset. Upon application and throughout the term of 
the guarantee, guaranteed lenders not subject to collateral pledging 
requirements shall identify, with the concurrence of the Secretary, 
specific assets to be held as collateral should the credit rating of 
its senior secured debt, or its corporate credit rating, as applicable, 
without regard to the guarantee fall below ``A-.'' The Secretary has 
discretion to require collateral at any time should circumstances 
warrant.
* * * * *

0
6. Amend Sec.  1720.5 by revising paragraphs (a)(1) and (b)(1) to read 
as follows:


Sec.  1720.5  Eligibility criteria.

    (a) * * *
    (1) A bank or other lending institution organized as a private, 
not-for-profit cooperative association, or otherwise organized on a 
non-profit basis; and
* * * * *
    (b) * * *
    (1) The guaranteed lender must furnish the Secretary with a 
certified list of the principal balances of eligible loans then 
outstanding and certify that such aggregate balance is at least equal 
to the sum of the proposed principal amount of guaranteed bonds to be 
issued, and any previously issued guaranteed bonds outstanding; and
* * * * *

0
7. Amend Sec.  1720.6 by revising paragraph (a)(7) to read as follows:


Sec.  1720.6  Application process.

    (a) * * *
    (7) Evidence of a credit rating, from a Rating Agency, on its 
senior secured debt or its corporate credit rating, as applicable, 
without regard to the government guarantee and satisfactory to the 
Secretary; and
* * * * *

0
8. Amend Sec.  1720.7 by revising paragraphs (b)(3) and (4), adding new 
paragraphs (b)(5) and (6), and revising paragraph (d) to read as 
follows:


Sec.  1720.7  Application evaluation.

* * * * *
    (b) * * *
    (3) The applicant's demonstrated performance of financially sound 
business practices as evidenced by reports of regulators, auditors and 
credit rating agencies;
    (4) The extent to which the applicant is subject to supervision, 
examination, and safety and soundness regulation by an independent 
federal agency;
    (5) The extent of concentration of financial risk that RUS may have 
resulting from previous guarantees made under section 313A of the RE 
Act; and
    (6) The extent to which providing the guarantee to the applicant 
will help reduce the cost and/or increase the supply of credit to rural 
America, or generate other economic benefits, including the amount of 
fee income available to be deposited into the Rural Economic 
Development Subaccount, maintained under section 313(b)(2)(A) of the RE 
Act (7 U.S.C. 940c(b)(2)(A)), after payment of the subsidy amount.
* * * * *
    (d) Decisions by the Secretary. The Secretary shall approve or deny 
applications in a timely manner as such applications are received; 
provided, however, that in order to facilitate competitive evaluation 
of applications, the Secretary may from time to time defer a decision 
until more than one application is pending. The Secretary may limit the 
number of guarantees made to a maximum of five per year, to ensure a 
sufficient examination is conducted of applicant requests. RUS shall 
notify the applicant in writing of the Secretary's approval or denial 
of an application. Approvals for guarantees shall be conditioned upon 
compliance with 7 CFR 1720.4 and 1720.6 of this part. The Secretary 
reserves the discretion to approve an application for an amount less 
than that requested.

0
9. Amend Sec.  1720.8 by revising paragraphs (a) (3), (4), and (8) to 
read as follows:


Sec.  1720.8   Issuance of the guarantee.

    (a) * * *
    (3) Prior to the issuance of the guarantee, the applicant must 
certify to the Secretary that the proceeds from the guaranteed bonds 
will be applied to fund new eligible loans under the RE Act, to 
refinance concurrent loans, or to refinance existing debt instruments 
of

[[Page 42575]]

the guaranteed lender used to fund eligible loans;
    (4) The applicant provides a certified list of eligible loans and 
their outstanding balances as of the date the guarantee is to be 
issued;
* * * * *
    (8) The applicant shall provide evidence of a credit rating on its 
senior secured debt or its corporate credit rating, as applicable, 
without regard to the guarantee and satisfactory to the Secretary; and
* * * * *

0
10. Amend Sec.  1720.12 by revising paragraph (a)(5) to read as 
follows:


Sec.  1720.12  Reporting requirements.

    (a) * * *
    (5) Credit rating, by a Rating Agency, on its senior secured debt 
or its corporate credit rating, as applicable, without regard to the 
guarantee and satisfactory to the Secretary; and
* * * * *

0
11. Revise Sec.  1720.13 to read as follows:


Sec.  1720.13  Limitations on guarantees.

    In a given year the maximum amount of guaranteed bonds that the 
Secretary may approve will be subject to budget authority, together 
with receipts authority from projected fee collections from guaranteed 
lenders, the principal amount of outstanding eligible loans made by the 
guaranteed lender, and Congressionally-mandated ceilings on the total 
amount of credit. The Secretary may also impose other limitations as 
appropriate to administer this guarantee program.

Jonathan Adelstein,
Administrator, Rural Utilities Service.
[FR Doc. 2010-17817 Filed 7-21-10; 8:45 am]
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