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LOCAL TELEVISION LOAN GUARANTEE BOARD

Veterans Affairs Department

CFR Citation: 7 CFR Parts 2200 and 2201

RIN ID: RIN 0572-AB82

NOTICE: Part VI

DOCUMENT ACTION: Final rule.

SUBJECT CATEGORY: LOCAL Television Loan Guarantee Program

DATES: Effective: This rule becomes effective December 23, 2003.

DOCUMENT SUMMARY: The LOCAL Television Loan Guarantee Board (Board) is issuing regulations to implement the LOCAL Television Loan Guarantee Program (Program or LOCAL TV Program) as authorized by the Launching Our Communities' Access to Local Television Act of 2000 (the Act). Section 1002 of the Act sets forth that the primary purpose of the Act is to facilitate access, on a technologically neutral basis to signals of local television stations for households located in Nonserved Areas and Underserved Areas. The Act establishes a LOCAL Television Loan Guarantee Board (the Board) to approve Guarantees made under the Act. The Board is comprised of the Secretary of the Treasury, the Chairman of the Board of Governors of the Federal Reserve System, the Secretary of Agriculture, and the Secretary of Commerce, or their designees.

This rule establishes eligibility and Guarantee requirements, the application and approval process, as well as the administration of Guarantees made by the Board. Additionally, this rule establishes the process through which the Board will consider applications under the priority considerations required in the Act.

SUMMARY: Local Television Loan Guarantee Board,

SUPPLEMENTAL INFORMATION

Executive Order 12866

This rule has been determined to be significant for purposes of Executive Order 12866, and therefore has been reviewed by the Office of Management and Budget (OMB). In accordance with Executive Order 12866, an Economic Impact Analysis was completed, outlining the costs and benefits of implementing this program. The complete analysis is available from the Board upon request.

Executive Order 12988

This rule has been reviewed under Executive Order 12988, Civil Justice Reform. The Board has determined that this rule meets the applicable standards provided in Section 3 of the Executive Order, to minimize litigation, eliminate ambiguity, and reduce burden. Administrative Procedure Act

Pursuant to authority at 5 U.S.C. 553(a)(2), this rule related to loans is exempt from the rulemaking requirements of the Administrative Procedure Act, 5 U.S.C. 551 et seq., including the requirement to provide prior notice and an opportunity for public comment. Regulatory Flexibility Act

Because this rule is not subject to a requirement to provide prior notice and an opportunity for public comment pursuant to 5 U.S.C. 553, or any other law, the analytical requirements of the Regulatory Flexibility Act, 5 U.S.C. 601 et seq. are inapplicable.

Information Collection and Recordkeeping Requirements

The reporting and recordkeeping requirements contained in the rule have been approved by OMB pursuant to the Paperwork Reduction Act of 1995 (44 U.S.C. chapter 35) under OMB control number 05720135. Catalog of Federal Domestic Assistance

The Program described by this rule is listed in the Catalog of Federal Domestic Assistance Programs under No. 10.853, LOCAL Television Loan Guarantee Program. This catalog is available on a subscription basis from the Superintendent of Documents, the United States Government Printing Office, Washington, DC 20402. Telephone: (202) 512 1800.

Executive Order 12372

No intergovernmental consultation with State and local officials is required because this rule is not subject to the provisions of Executive Order 12372, Intergovernmental Consultation.

Unfunded Mandates

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

National Environmental Policy Act

It has been determined that this rule does not constitute a major Federal action significantly affecting the quality of the human environment, and in accordance with the National Environmental Policy Act of 1969 [42 U.S.C. 4321 et seq.] (NEPA), an Environmental Impact Statement is not required. If necessary, Loans sought to be guaranteed under this Program will be assessed individually to determine appropriate compliance with NEPA.

Government Paperwork Elimination Act

The Board is committed to compliance with the Government Paperwork Elimination Act, which requires Government agencies to provide the public the option of submitting information or transacting business electronically to the maximum extent possible.

Civil Rights

The LOCAL TV Board is an equal opportunity lender. Applicants are required to comply with regulations on nondiscrimination and equal employment opportunity.

Executive Order 12630

This rule does not contain policies that have takings implications. Executive Order 13132

This rule does not contain policies having federalism implications requiring preparation of a Federalism Summary Impact Statement. Background

On December 21, 2000, the President signed into law Public Law 106 553, the Federal Funding Act for Fiscal Year 2001. Title X of Pub. L. 106553, entitled Launching our Communities Access to Local Television Act of 2000 (``LOCAL TV Act'' or ``Act'') established the LOCAL Television Loan Guarantee Board (``Board''). The Board is authorized to guarantee loans to facilitate access, on a technologically neutral basis, to signals of local television stations for households located in nonserved or underserved areas. The Board is comprised of the [[Page 74413]]
Secretary of Treasury, the Chairman of the Board of Governors of the Federal Reserve System, the Secretary of Agriculture, and the Secretary of Commerce, or their designees.

On August 15, 2003, the Board published proposed regulations to implement the LOCAL Television Loan Guarantee Program (Program or LOCAL TV Program).\1\ The proposed regulations outlined proposed eligibility and guarantee requirements, the application process, as well as the administration of guarantees made by the Board. Additionally, the proposed regulations outlined the proposed process through which the Board would consider application under the priority considerations required in the Act. The Board received eight comments in response to the proposed regulations. In this document, the Board adopts rules to implement the LOCAL TV Program.
\1\ See 68 FR 48814 (August 15, 2003). The proposed regulations can also be viewed at http://www.usda.gov/rus/localtvboard/legislative_docs.htm .

Section 2201.1 Definitions

One commenter suggested that the Board amend the proposed rule to provide that the Board will publish contour maps for each Designated Market Area (DMA), including grade A and B contours, to ensure that all applicants are using the same definitions and data sets.

The Act does not require the Board to create contour maps and the Board does not have funds available to undertake such a project. Applicants are required to indicate the number of nonserved and underserved households their projects will reach. See Section 2201.11(c)(4) of the regulations. It is expected that applicants will also disclose the manner in which this determination was made. This information, along with the other information requested as part of the application, will be analyzed in a consistent manner across all applicants by the Board.

A number of commenters suggested amending the definition of ``local television broadcast signals'' to include all local television broadcast stations in a DMA or, at least, all local television broadcast stations eligible for mandatory carriage under Federal Communications Commission (FCC) rules applicable to cable television systems or satellite providers. These suggestions were made because of the concerns of commenters that the proposed definition would have one of four possible negative results: (1) It would overlook some local stations in determining the existing availability of service; (2) it would cause some areas currently receiving local broadcast signals from a cable or satellite provider in accordance with FCC rules to be considered nonserved or underserved erroneously; (3) it would limit the applicability of the loan guarantee to that portion of a loan required to finance facilities necessary to provide only some of the local signals that a cable or satellite provider would be required by FCC rules to provide; or (4) it would direct applicants to provide retransmission of a smaller number of signals than the FCC's rules would dictate, thereby possibly running afoul of both FCC rules and copyright laws. While we do not agree that all of these results were possible, because nothing in the Board's rules would have affected the power of copyright law or the authority of the FCC's rules regarding carriage of local signals by providers applying for loan guarantees under the program, the Board acknowledges that the proposed definition could be improved.

Therefore, the Board has amended the definition of Local Television Broadcast Signals to include all television broadcast signals located in a DMA, subject to limitations pertaining to duplication, similar to the rules the FCC has used in Part 76 of Title 47 of the Code of Federal Regulations. The Board has also added definitions of the terms ``low power television station,'' ``television broadcast station,'' ``television broadcast translator station,'' and ``television network'' to ensure that these terms are well understood in the revised definition of ``local television broadcast signals.''

To address the concern that the local signals carried by a cable or satellite provider under the FCC's rules might, in some case, not accord with the definition of ``local television broadcast signals'' in this rule, the Board has added a new Section 2201.9 which clarifies that the local signals carried by cable or satellite providers in accordance with the FCC's rules will always be considered to meet the definition of ``local television broadcast signals'' for the purposes of this regulation.

Section 2201.10 Loan Amount and Guarantee Percentage

One comment recommended that the regulations be amended to delete the proposed $1 million minimum size of a guaranteed loan (floor), so that the Board might consider applications for small loans on a case bycase basis. The commenter indicated that, while the proposed $1 million floor would not pose a problem for it, it might serve to deter certain small companies from applying for a loan guarantee under the program.

The floor was set by the Board after taking into consideration the full costs to the Board of analyzing the eligibility and
creditworthiness of applicants and their compliance with appropriate statutes and regulations. Such costs, which might appear to be borne by the Board, would be passed on to applicants through application and origination fees. Lenders would be authorized to charge reasonable fees as well. For loans of less than $1 million, total amount of fees charged by the Board and the lenders would be larger than the benefit of reduced interest expense of the borrower from receiving a Federal loan guarantee. Therefore, the Board will not delete the $1 million floor from the regulations.

Two commenters expressed concern about how the Board would determine the portion of the loan eligible for coverage by the guarantee under Section 2201.10. The Act makes clear that the guarantee should not cover any portion of a loan being used for purposes other than the establishment of the means by which local television broadcast signals will be delivered to a nonserved or underserved Area. However, if the Board were to prorate the costs of facilities based simply on the percentage of local television broadcast signals carried relative to all signals carried or the percentage of signals delivered to nonserved or underserved areas relative to all Areas served and adjust the portion of the loan eligible for guarantee accordingly, the effect would be to undermine the effectiveness of the LOCAL TV Program, by dropping the actual guarantee percentage significantly in many cases. Nonetheless any separable costs used to pay for features, services, or facilities not essential to the means by which local television broadcast signals will be delivered to a nonserved or underserved Area will be excluded from the portion of the loan eligible for coverage by the guarantee. A new subsection 2201.10(b)(3) has been added to clarify this policy.

Section 2201.11 Application Requirements

Credit Opinion. The proposed rules require applicants for loans of $5 million or more to submit to the Board a preliminary credit rating opinion letter. The Board solicited comment on whether the minimum amount should be set within the range of $5 million to $25 million. One comment argued that this requirement could serve as a costly barrier for potential applicants and that this credit opinion letter was not [[Page 74414]]
required by the Act. The commenter also stated that this requirement is inconsistent with the ``no credit elsewhere test'' and that the proposed regulations do not specify what outcome would be required from this opinion letter as a condition to obtaining a Guarantee.

The creditworthiness of an applicant is an important consideration for the Board as it implements this program. At the same time, the Board recognizes the commenter's concern that the cost of obtaining a credit opinion letter may be a potential barrier for some applicants. Therefore, the Board will raise the minimum amount of a loan for which a credit rating opinion letter is required from $5 million to $15 million. Section 2201.11(g)(2) of the final rules has been changed accordingly.

Environmental Impact and Documentation for Eligibility Determination. One commenter recommended amending the documentation and other requirements for an applicant to be eligible for a loan guarantee consistently throughout the regulations to provide that the environmental impact assessment and all necessary regulatory approvals, spectrum licenses, and delivery permissions will be required to be finalized prior to the closing of the loan to be guaranteed, but not necessarily at the time of application, as appeared to be required under certain sections of the proposed regulations.

Applications may be submitted, evaluated and conditionally approved prior to finalization of the environmental assessment and completion of the NEPA process however, guaranteed loan funds will not be advanced until the NEPA process is completed. Section 2201.11(i) of the regulations has been amended accordingly. Applications may also be submitted, evaluated and conditionally approved prior to an Applicant obtaining all required regulatory and other approvals, licenses and permissions; however, guaranteed loan funds will not be advanced until they have been obtained. The regulations have been amended to clarify this point as well.

Section 2201.12 Applicant

One commenter asked that the Board amend the regulations to clearly state what the Board actually requires in order for an applicant to be deemed eligible to receive a loan guarantee and indicate the timing for the Board's determination on the applicant's eligibility, as opposed to merely listing in the regulations the information required to be submitted as part of the application.

The Board's regulations state both the factors for determining eligibility of an applicant and the information items necessary to be submitted as part of a complete application. A determination that an applicant is eligible does not mean that the applicant will be made an offer of guarantee. Similarly, a complete application presenting an economically viable project cannot receive an offer of guarantee if the party submitting the application is not eligible. Several commenters suggested that the Board amend either the requirement that an applicant show that their loan would not be available on reasonable terms and conditions without a program guarantee or the documentation requested in the application to show that this requirement has been satisfied. See Section 2201.12(b)(2)(v) of the proposed rule.

The ``not available on reasonable terms and conditions'' requirement in the proposed rule is taken directly from the statute, and therefore cannot be eliminated by regulation. See Section 1004(d)(3)(v) of the Act. The documentation requirement is similar to that used in other government loan guarantee programs.

Section 2201.15 Ineligible Loan Purposes

One commenter noted that the regulations do not lay out how the Board, in consultation with the National Telecommunications and Information Administration (NTIA), will make a determination that a project is ``not likely to have a substantial adverse impact on competition that outweighs the benefits of improving access to Local Television Broadcast Signals in a Nonserved Area or Underserved area * * *. ``Another commenter asked that the section be moved to a new location in the regulations in order to underscore the importance of this requirement for Board deliberations on this issue.''

The standard that the Board is to apply in making its determination is clearly stated in the Act, i.e., the project is not likely to have a substantial adverse impact on competition that outweighs the benefits of improving access to the signals of a local television station in a nonserved area or underserved area and is commercially viable. Moreover, the Act requires the Board to consult with the NTIA in its determination. Given the wide variety of types of projects, market conditions, and consumer services that may be offered, it would be inappropriate to specify a formula for making this determination in the regulations. Rather, the Board will make its determination, in accordance with the Act, on a casebycase basis based on the nature of the project under consideration. A detailed process outlined in the regulations as to how the Board will make this determination is not required by the Act. Because of the importance of this determination, however, the regulations have been amended to move this determination from Section 2201.15(c) to Section 2201.18(f).

Section 2201.17 Submission of Applications

One group of commenters recommended that the Board amend the regulations to state that each application window will be at least 120 days long, and not just approximately 120 days long, as was stated in the proposed rule.

Elsewhere in today's Federal Register the Board is publishing a notice announcing that applications for guarantees are being accepted through April 21, 2004; a 120 day period. While the Board believes 120 days is an appropriate period of time for an applicant to submit an application, it does not believe that a slightly shorter period for additional application windows is inappropriate. As such, should the Board decide to open additional application windows, any such window could be shorter than 120 days.

Two commenters recommended that the regulations require that a public notice be put in place so that affected participants in the DMA are aware an application has been filed. The Board expects to give the public notice of the names of those who applied during an application window after the application window has closed. This notice will be published in the Federal Register.

Section 2201.18 Application Selection

Two commenters asked that the Board explain in the regulations how it will meet its statutory requirement to prioritize the service of nonserved areas over the course of the program; e.g., how will the Board prevent the majority of loan guarantees from being issued to serve underserved areas in the initial application window or windows so that the opportunities to serve nonserved areas will not be limited in later application windows. Another commenter raised the related issue of how the Board will select applications from the same area if more than one application meets the eligibility requirements.

All applications received during the time period established in the Board's public notice, published elsewhere in
[[Page 74415]]
today's Federal Register, will be reviewed based on the criteria in the statute and these regulations. Included in these criteria is a statutory priority to provide service to nonserved areas. The Board will extend offers of guarantee to eligible applicants in accordance with such priority standards. However, the Board will apply that priority with regard only to the applications before it. The Board will not withhold funds for potential future applications that may be submitted during a possible additional funding availability period. With respect to applications covering the same geographic area, the Board will again apply the statutory and regulatory approval criteria to its determination as to whether to make an offer of guarantee. The Board may extend an offer of guarantee to more than one applicant seeking to provide service to the same geographic area. However, analysis of the financial feasibility of any particular project proposed by an applicant will necessarily take into account any other applications received by the Board covering the same geographic area. This analysis will include determining whether both Projects can be economically sustainable.

One commenter asked that the Board amend the regulations to facilitate the transition to digital television (DTV) by giving priority to those entities whose business and technical plans include the delivery of all local DTV broadcast stations and the entire 19.4 MBPS digital signal, whether stations are delivering one high definition signal, several DTV multicast signals, data, or a combination.

The Act specifies the considerations that the Board shall give priority to with respect to the approval of loan guarantees. The transition to DTV is not included within the priorities stated in the Act. If Congress had wanted the Board to give priority to those entities that facilitate the transition to DTV, it could have made that a priority in the Act. The regulations have not been amended to give priority to those entities that facilitate the transition to DTV. However, Section 2201.11(e)(8) of the proposed rule does require the applicant to identify the capacity necessary to digitally broadcast all local television broadcast signals to be provided by the project so that the technical capabilities of the project can be evaluated in light of the ongoing transition to DTV.

One commenter proposed that the Board amend the proposed rule so that an applicant could refer to its entire system, and not merely the assets involved with a proposed project, when describing how highspeed Internet services will be provided in conjunction with the proposed project.

The Act states that the Board should give additional consideration to projects that also provide highspeed Internet service. See Section 1004(e)(1)(B) of the Act. The Board, therefore, does not have the flexibility to consider any means outside of the project in question by which an applicant might already provide, or would provide in the future, highspeed Internet service.

Another commenter recommended that the regulations be amended to preserve the statutory requirement that ``additional''not ``higher'' as the regulations now statepriority is given to projects that provide highspeed Internet service. The Board agrees with this comment and has changed the regulations to reflect this change in Section 2201.18(b)(1).

Section 2201.20 Collateral

One commenter suggested amending the proposed rule to specifically allow collateral to include certain intangible assets. The definition of collateral in the proposed rule is broad, and does not preclude the use of intangible assets. All collateral, including any intangible assets, will be subject to review and approval by the Board under Section 2201.20(e) of the regulations.

Another commenter recommended amending the regulations to provide that the Board will adjust the value of collateral downward and require an applicant to pledge additional collateral only if the Board makes a finding that such an adjustment is appropriate as a result of fraud or abuse by the applicant or any affiliate of the applicant. Such an amendment cannot be made. The Act requires that collateral having a value equal to the unpaid balance of the loan, secure the loan. The government must be able to evaluate, at all times, the value of the collateral, regardless of fraud or abuse. The Act clearly contemplates that, in the event the value of pledged collateral is not equal to the unpaid balance of the loan, additional collateral securing the loan will be provided either by the applicant or its affiliates.

Another commenter recommended that the regulations be amended to enable the Board to use its discretion to minimize burdensome fees and penalties and the use of credit premiums by providing that: (1) The Administrator will never hold liens on assets securing the loan that are in excess of the unpaid balance of the loan amount covered by the loan guarantee; and (2) credit risk premiums should be required only in the event of an appropriations shortfall such that the cost of the loan guarantee cannot be covered and that, in such cases, that credit risk premiums will be kept to the lowest practical amount.

With regard to the liens issue, the regulations must preserve discretion for the Board to hold liens in an amount sufficient to protect the taxpayer. With respect to credit risk premiums, Section 2201.23 already permits the Board to use its discretion, with OMB concurrence as to the amount, regarding whether and to what extent credit risk premiums will be charged. Section 2201.23 also states that the Board will reduce the credit risk premium with respect to guarantees proportionately to the extent appropriations of budget authority are sufficient to cover the cost of guarantees, as determined under Section 502(5) of the Federal Credit Reform Act of 1990. Section 2201.21 Fees

One commenter stated that the origination fee, if one is charged at all, should be capped at 50 percent of the application fee. A loan guarantee origination fee capped at 50 percent of the application fee would impair the Board's ability to recover its costs. The loan guarantee origination fee will be charged only to those applicants that have been made an offer of guarantee. The application fee, on the other hand, will be charged for all applications. The amount of the application fee is meant to cover Board expenses incurred in reviewing an application, while the loan guarantee origination fee is meant to recoup Board expenses incurred in issuing a guarantee and closing the loan.

To ensure that the loan guarantee origination fee more accurately reflects the administrative costs of issuing the guarantee and closing the loan, the Board has decided to revise the amount of the loan guarantee origination fee. This change is reflected in subsection 2201.21(b) of the final rules. This subsection provides a fee sufficient to cover the Board's administrative costs and requires borrowers to enter into an agreement with the Board regarding payment of the fee once an offer of guarantee has been extended. Such costs will likely include legal, financial analysis and other outside consulting fees as well as other administrative costs incurred by the Board. The language conditions closing the loan on full payment of the fee and makes it clear that a borrower is liable for the administrative costs of the Board regardless of whether the loan closes.
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Section 2201.25 Performance Agreement

One commenter suggested that the proposed rule be amended to provide that the penalty in subsection 2201.25(b) of the proposed rule for failure to comply with a stipulated performance schedule would not be charged if the applicant in good faith failed to meet the performance schedule.

The Act provides the Board with authority to impose a penalty not to exceed three times the interest due on a guaranteed loan if an applicant fails to meet its stipulated performance schedule.\2\ While the Board believes that it is important to retain the flexibility granted to it in the Act to impose the penalty, the Board expects to use its authority very judiciously in order to protect the financial interests of the United States.

\2\ See Section 1005(f)(2) of the Act.

Another commenter recommended that in the event a borrower in good faith failed to meet the stipulated performance schedule, the Administrator should provide the borrower with a minimum of 120 days to attempt to cure the failure to perform before the assessment of the penalty.

The issue of a ``cure period'' is more appropriately addressed in the loan documents. It is anticipated that an appropriate ``cure period'' provision will be included in the loan documents.

Section 2201.27 Assignment or Transfer of Loans

One commenter recommended that only modifications of significant material provisions of the Loan Documents should require prior written approval of the Board. The commenter also recommended that Board approval not be required for the transfer of certain participation interests in a Loan (e.g., transfer of interests within a group of participating Lenders).

The requirements and limitations in section 2201.27 of the regulations are needed for the Board to assure compliance with the authorizing statute, which requires, for example, that the Board determine whether or not Lenders are eligible to participate in the Program and take note of any transfer of the guaranteed portion of the loan separate and apart from the unguaranteed portion of a loan (``loan stripping''). Such loan stripping is prohibited under subsection 1005(d) of the Act. The Board's need for this information exists not only at the time the loan is originated, but throughout the repayment period.

Section 2201.31 Indemnification

One commenter recommended amending the regulations to clarify that only those affiliates that are providing collateral for the loan guarantee will be subject to the statutorily required indemnification requirements. A casebycase statutorily required determination will be made concerning which affiliates will be required to indemnify the government. It is possible, however, that indemnification will be received from affiliates which are not providing collateral for a guarantee. It is anticipated that appropriate contracts, between the affiliates and the government, evidencing such indemnification obligation, will be obtained.

Section 2201.33 Defaults

One commenter recommended amending the regulations to state that the failure of a lender to provide all of the required documents to the Board in the event of a default will not void the loan guarantee and that instead only a good faith effort by lender in this regard will be required, which is consistent with current commercial practice.

Subsection 2201.33(c) of the regulations requires the lender to provide certain information, relating to the collection process, to the Board within 90 days of the date of a payment demand. Paragraph (f) of that section provides that the Board may withhold payment under the guarantee if such information has not been provided. This provision is reasonable in light of the Board's reliance on the lender in the loan collection process.

List of Subjects in 7 CFR Parts 2200 and 2201

Loan programsCommunications, Rural areas, Telecommunications, Reporting and recordkeeping requirements.
For the reasons set forth in the preamble, chapter XX of title 7 of the Code of Federal Regulations is amended as follows:
PART 2200ACCESS TO LOCAL TELEVISION SIGNALS GUARANTEED LOAN PROGRAM; GENERAL POLICIES AND PROCEDURES
1. The authority citation for part 2200 continues to read as follows:

Authority: 47 U.S.C. 1101 et seq.; Pub. L. 106553; Pub. L.107 171.
2. The title of part 2200 is revised to read as set out above. 3. Section 2200.1 is amended by adding a new paragraph (d) to read as follows:
Sec. 2200.1 Definitions.
* * * * *
(d) Person means any individual, corporation, cooperative, partnership, joint venture, association, jointstock company, limited liability company or partnership, trust, unincorporated organization, government entity, agency or instrumentality or any subdivision thereof.
4. Part 2200 is amended by adding Sec. Sec. 2200.10 through 2200.12 to read as follows:
Sec. 2200.10 Restrictions on lobbying.
(a) No funds received through a Loan guaranteed under this Program in this chapter may be expended by the recipient of a Federal contract, grant, loan, loan guarantee, or cooperative agreement to pay any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any of the following covered Federal actions: the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan or loan Guarantee, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, loan Guarantee, or cooperative agreement.
(b) Each person who requests or receives from an agency a commitment providing for the United States to insure or guarantee a loan shall file with that agency a statement, set forth in the application form, whether that person has made or has agreed to make any payment to influence or attempt to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with that loan insurance or Guarantee.
(c) Each person who requests or receives from an agency a commitment providing for the United States to insure or guarantee a loan shall file with that agency a Standard FormLLL if that person has made or has agreed to make any payment to influence or attempt to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with that loan insurance or Guarantee. (d) Each person shall file a certification, contained in the application form, and a disclosure form (Standard FormLLL), if required, with each submission that initiates agency consideration of such person for:
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(1) Award of a Federal contract, grant, or cooperative agreement exceeding $100,000; or
(2) An award of a Federal loan or a commitment providing for the United States to insure or guarantee a loan exceeding $150,000. (e) Each person shall file a certification, and a disclosure form, if required, upon receipt by such person of:
(1) A Federal contract, grant, or cooperative agreement exceeding $100,000; or
(2) A Federal loan or a commitment providing for the United States to insure or guarantee a loan exceeding $150,000, unless such person previously filed a certification, and a disclosure form, if required, under paragraph (c) of this section.
(f) Each person shall file a disclosure form at the end of each calendar quarter in which there occurs any event that requires disclosure or that materially affects the accuracy of the information contained in any disclosure form previously filed by such person under paragraphs (d) or (e) of this section. An event that materially affects the accuracy of the information reported includes:
(1) A cumulative increase of $25,000 or more in the amount paid or expected to be paid for influencing or attempting to influence a covered Federal action; or
(2) A change in the person(s) or individual(s) influencing or attempting to influence a covered Federal action; or
(3) A change in the officer(s), employee(s), or Member(s) contacted to influence or attempt to influence a covered Federal action. Sec. 2200.11 Governmentwide debarment and suspension
(nonprocurement).
(a) Executive Order (E.O.) 12549 provides that, to the extent permitted by law, Executive departments and agencies shall participate in a governmentwide system for nonprocurement debarment and suspension. A person who is debarred or suspended shall be excluded from Federal financial and nonfinancial assistance and benefits under Federal programs and activities. Debarment or suspension of a participant in a program by one agency shall have governmentwide effect. The Board shall review the List of Debarred entities prior to making final loan Guarantee decisions. Suspension or debarment may be a basis for denying a loan Guarantee.
(b) This section applies to all persons who have participated, are currently participating or may reasonably be expected to participate in transactions under Federal nonprocurement programs. For purposes of this section such transactions will be referred to as ``covered transactions.''
(1) Covered transaction. For purposes of this section, a covered transaction is a primary covered transaction or a lower tier covered transaction. Covered transactions at any tier need not involve the transfer of Federal funds.
(i) Primary covered transaction. Except as noted in paragraph (b)(2) of this section, a primary covered transaction is any nonprocurement transaction between an agency and a person, regardless of type, including: grants, cooperative agreements, scholarships, fellowships, contracts of assistance, loans, loan guarantees, subsidies, insurance, payments for specified use, donation agreements and any other nonprocurement transactions between a Federal agency and a person.
(ii) Lower tier covered transaction. A lower tier covered transaction is:
(A) Any transaction between a participant and a person other than a procurement contract for goods or services, regardless of type, under a primary covered transaction;
(B) Any procurement contract for goods or services between a participant and a person, regardless of type, expected to equal or exceed the Federal procurement small purchase threshold fixed at 10 U.S.C. 2304(g) and 41 U.S.C. 253(g) (currently $100,000) under a primary covered transaction;
(C) Any procurement contract for goods or services between a participant and a person under a covered transaction, regardless of amount, under which that person will have a critical influence on or substantive control over that covered transaction. Such persons may include loan officers or chief executive officers acting as principal investigators and providers of federally required audit services. (2) Exceptions. The following transactions are not covered: (i) Statutory entitlements or mandatory awards (but not subtier awards thereunder which are not themselves mandatory), including deposited funds insured by the Federal Government;
(ii) Direct awards to foreign governments or public international organizations, or transactions with foreign governments or foreign governmental entities, public international organizations, foreign government owned (in whole or in part) or controlled entities, entities consisting wholly or partially of foreign governments or foreign governmental entities;
(iii) Benefits to an individual as a personal entitlement without regard to the individual's present responsibility (but benefits received in an individual's business capacity are not accepted); (iv) Federal employment;
(v) Transactions pursuant to national or agencyrecognized emergencies or disasters;
(vi) Incidental benefits derived from ordinary governmental operations; and
(vii) Other transactions where the application of this section would be prohibited by law.
(3) Board covered transactions. This section applies to the Board's Loan Guarantees, subcontracts and transactions at any tier that are charges as direct or indirect costs, regardless of type.
(c) Primary covered transactions. Except to the extent prohibited by law, persons who are debarred or suspended shall be excluded from primary covered transactions as either participants or principals throughout the Executive Branch of the Federal Government for the period of their debarment, suspension, or the period they are proposed for debarment under 48 CFR part 9, subpart 9.4. Accordingly, no agency shall enter into primary covered transactions with such excluded persons during such period, except as permitted pursuant to paragraph (l) of this section.
(d) Lower tier covered transactions. Except to the extent prohibited by law, persons who have been proposed for debarment under 48 CFR part 9, subpart 9.4, debarred or suspended shall be excluded from participating as either participants or principals in all lower tier covered transactions (see paragraph (b)(1)(ii) of this section for the period of their exclusion).
(e) Exceptions. Debarment or suspension does not affect a person's eligibility for:
(1) Statutory entitlements or mandatory awards (but not subtier awards thereunder which are not themselves mandatory), including deposited funds insured by the Federal Government;
(2) Direct awards to foreign governments or public international organizations, or transactions with foreign governments or foreign governmental entities, public international organizations, foreign government owned (in whole or in part) or controlled entities, and entities consisting wholly or partially of foreign governments or foreign governmental entities;
(3) Benefits to an individual as a personal entitlement without regard to the individual's present responsibility
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(but benefits received in an individual's business capacity are not accepted);
(4) Federal employment;
(5) Transactions pursuant to national or agencyrecognized emergencies or disasters;
(6) Incidental benefits derived from ordinary governmental operations; and
(7) Other transactions where the application of this section would be prohibited by law.
(f) Persons who are ineligible are excluded in accordance with the applicable statutory, executive order, or regulatory authority. (g) Persons who accept voluntary exclusions are excluded in accordance with the terms of their settlements. The Board shall, and participants may, contact the original action agency to ascertain the extent of the exclusion.
(h) The Board may grant an exception permitting a debarred, suspended, or voluntarily excluded person, or a person proposed for debarment under 48 CFR part 9, subpart 9.4, to participate in a particular covered transaction upon a written determination by the agency head or an authorized designee stating the reason(s) for deviating from the Presidential policy established by Executive Order 12549. However, in accordance with the President's stated intention in the Executive Order, exceptions shall be granted only infrequently. Exceptions shall be reported in accordance with the Executive Order. (i) Notwithstanding the debarment, suspension, proposed debarment under 48 CFR part 9, subpart 9.4, determination of ineligibility, or voluntary exclusion of any person by an agency, agencies and participants may continue covered transactions in existence at the time the person was debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, declared ineligible, or voluntarily excluded. A decision as to the type of termination action, if any, to be taken should be made only after thorough review to ensure the propriety of the proposed action.
(j) Agencies and participants shall not renew or extend covered transactions (other than nocost time extensions) with any person who is debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, ineligible or voluntary excluded, except as provided in paragraph (h) of this section.
(k) Except as permitted under paragraphs (h) or (i) of this section, a participant shall not knowingly do business under a covered transaction with a person who is:
(1) Debarred or suspended;
(2) Proposed for debarment under 48 CFR part 9, subpart 9.4; or (3) Ineligible for or voluntarily excluded from the covered transaction.
(l) Violation of the restriction under paragraph (k) of this section may result in disallowance of costs, annulment or termination of award, issuance of a stop work order, debarment or suspension, or other remedies as appropriate.
(m) A participant may rely upon the certification of a prospective participant in a lower tier covered transaction that it and its principals are not debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous. An agency has the burden of proof that a participant did knowingly do business with a person that filed an erroneous certification.
Sec. 2200.12 Freedom of Information Act.
(a) Definitions. All terms used in this section, which are defined in 5 U.S.C. 551 or 5 U.S.C. 552 shall have the same meaning in this section. In addition the following definitions apply to this section: (1) FOIA, as used in this section, means the ``Freedom of Information Act,'' as amended, 5 U.S.C. 552.
(2) Commercial use request means a request from or on behalf of one who seeks information for a use or purpose that furthers the commercial, trade, or profit interests of the requester or the person on whose behalf the request is made.
(3) Direct costs mean those expenditures that the Board actually incurs in searching for, reviewing, and duplicating documents in response to a request made under paragraph (c) of this section. Direct costs include, for example, the labor costs of the employee performing the work (the basic rate of pay for the employee, plus 16 percent of that rate to cover benefits). Not included in direct costs are overhead expenses such as the costs of space and heating or lighting of the facility in which the records are kept.
(4) Duplication means the process of making a copy of a document in response to a request for disclosure of records or for inspection of original records that contain exempt material or that otherwise cannot be inspected directly. Among others, such copies may take the form of paper, microfilm, audiovisual materials, or machinereadable documentation (e.g., magnetic tape or disk).
(5) Educational institution means a preschool, a public or private elementary or secondary school, or an institution of undergraduate higher education, graduate higher education, professional education, or an institution of vocational education that operates a program of scholarly research.
(6) Noncommercial scientific institution refers to an institution that is not operated on a ``commercial'' basis (as that term is used in this section) and which is operated solely for the purpose of conducting scientific research, the results of which are not intended to promote any particular product or industry.
(7) News means information about current events or that would be of current interest to the public. Examples of news media entities include, but are not limited to, television or radio stations broadcasting to the public at large, and publishers of newspapers and other periodicals (but only in those instances when they can qualify as disseminators of ``news'') who make their products available for purchase or subscription by the general public. ``Freelance'' journalists may be regarded as working for a news organization if they can demonstrate a solid basis for expecting publication through that organization, even though not actually employed by it.
(8) Representative of the news media means any person actively gathering news for an entity that is organized and operated to publish or broadcast news to the general public.
(9) Review means the process of examining documents, located in response to a request for access, to determine whether any portion of a document is exempt information. It includes doing all that is necessary to excise the documents and otherwise to prepare them for release. Review does not include time spent resolving general legal or policy issues regarding the application of exemptions.
(10) Search means the process of looking for material that is responsive to a request, including pagebypage or linebyline identification within documents. Searches may be done manually or by computer.
(b) Records available for public inspection and copying. (1) Types of records made available. The information in this section is furnished for the guidance of the public and in compliance with the requirements of the FOIA. This section sets forth the procedures the Board follows to make publicly available the materials specified in 5 U.S.C. 552(a)(2). These materials shall be made available for inspection and copying at the Board's offices pursuant to 5 U.S.C. 552(a)(2). Information routinely provided to the public as part of a regular Board activity
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(for example, press releases) may be provided to the public without following this section.
(2) Reading room procedures. Information available under this section is available for inspection and copying, from 9 a.m. to 5 p.m. weekdays, at 1400 Independence Avenue, SW., Washington, DC. (3) Electronic records. Information available under this section shall also be available on the Board's Web site found at http://www.usda.gov/rus/localtvboard .
(c) Records available to the public on request(1) Types of records made available. All records of the Board that are not available under paragraph (b) of this section shall be made available upon request, pursuant to the procedures in this section and the exceptions set forth in the FOIA.
(2) Procedures for requesting records. A request for records shall reasonably describe the records in a way that enables the Board's staff to identify and produce the records with reasonable effort and without unduly burdening or significantly interfering with any of the Board's operations. The request shall be submitted in writing to the Secretary of the Board at LOCAL Television Loan Guarantee Board, 1400 Independence Avenue, SW., STOP 1575, Room 2919S, Washington, DC 20250 1575, or sent by facsimile to the Secretary of the Board at (202) 720 2734. The request shall be clearly marked FREEDOM OF INFORMATION ACT REQUEST.
(3) Contents of request. The request shall contain the following information:
(i) The name and address of the requester, and the telephone number at which the requester can be reached during normal business hours; (ii) Whether the requested information is intended for commercial use, or whether the requester represents an educational or noncommercial scientific institution, or news media;
(iii) A statement agreeing to pay the applicable fees, or a statement identifying any fee limitation desired, or a request for a waiver or reduction of fees that satisfies paragraph (f) of this section.
(d) Processing requests(1) Priority of responses. The date of receipt for any request, including one that is addressed incorrectly or that is referred to the Board by another agency, is the date the Secretary of the Board actually receives the request. The Secretary of the Board shall normally process requests in the order they are received. However, in the Secretary of the Board's discretion, the Board may use two or more processing tracks by distinguishing between simple and more complex requests based on the number of pages involved, or some other measure of the amount of work and/or time needed to process the request, and whether the request qualifies for expedited processing as described in paragraph (d)(2) of this section. When using multitrack processing, the Secretary of the Board may provide requesters in the slower track(s) with an opportunity to limit the scope of their requests in order to qualify for faster processing. The Secretary of the Board shall contact the requester by telephone or by letter, whichever is most efficient in each case.
(2) Expedited processing. (i) A person may request expedited access to records by submitting a statement, certified to be true and correct to the best of that person's knowledge and belief, that demonstrates a compelling need for the records, as defined in 5 U.S.C.
552(a)(6)(E)(v).
(ii) The Secretary of the Board shall notify a requester of the determination whether to grant or deny a request for expedited processing within ten working days of receipt of the request. If the Secretary of the Board grants the request for expedited processing, the Board shall process the request for access to information as soon as practicable. If the Secretary of the Board denies a request for expedited processing, the requester may file an appeal pursuant to the procedures set forth in paragraph (e) of this section, and the Board shall respond to the appeal within twenty days after the appeal was received by the Board.
(3) Time limits. The time for response to requests shall be 20 working days, except:
(i) In the case of expedited treatment under paragraph (d)(2) of this section;
(ii) Where the running of such time is suspended for payment of fees pursuant to paragraph (f)(2)(ii) of this section;
(iii) Where the estimated charge is less than $250, and the requester does not guarantee payment pursuant to paragraph (f)(2)(i) of this section; or
(iv) In unusual circumstances, as defined in 5 U.S.C.
552(a)(6)(B)(iii), the time limit may be extended for a period of time not to exceed 10 working days as provided by written notice to the requester, setting forth the reasons for the extension and the date on which a determination is expected to be dispatched; or such alternative time period as mutually agreed to by the Secretary of the Board and the requester when the Secretary of the Board notifies the requester that the request cannot be processed in the specified time limit. (4) Response to request. In response to a request that satisfies paragraph (c) of this section, an appropriate search shall be conducted of records in the custody and control of the Board on the date of receipt of the request, and a review made of any responsive information located. The Secretary of the Board shall notify the requester of: (i) The Secretary of the Board's determination of the request and the reasons therefore;
(ii) The information withheld, and the basis for withholding; and (iii) The right to appeal any denial or partial denial, pursuant to paragraph (e) of this section.
(5) Referral to another agency. To the extent a request covers documents that were created by, obtained from, classified by, or is in the primary interest of another agency, the Secretary of the Board may refer the request to that agency for a direct response by that agency and inform the requester promptly of the referral. The Secretary of the Board shall consult with another Federal agency before responding to a requester if the Board receives a request for a record in which: (i) Another Federal agency subject to the FOIA has a significant interest, but not the primary interest; or
(ii) Another Federal agency not subject to the FOIA has the primary interest or a significant interest. Ordinarily, the agency that originated a record will be presumed to have the primary interest in it.
(6) Providing responsive records. (i) A copy of records or portions of records responsive to the request shall be sent to the requester by regular U.S. mail to the address indicated in the request, unless the requester elects to take delivery of the documents at the Board's Freedom of Information Office or makes other acceptable arrangements, or the Secretary of the Board deems it appropriate to send the documents by another means. The Secretary of the Board shall provide a copy of the record in any form or format requested if the record is readily reproducible in that form or format, but the Secretary of the Board need not provide more than one copy of any record to a requester. (ii) The Secretary of the Board shall provide any reasonably segregable portion of a record that is responsive to the request after deleting those portions that are exempt under the FOIA or this section. (iii) Except where disclosure is expressly prohibited by statute, regulation, or order, the Secretary of the Board may authorize the release of records that are exempt from mandatory disclosure whenever the Board or designated Board members determine that there would be no foreseeable harm in such disclosure.
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(iv) The Board is not required in response to the request to create records or otherwise to prepare new records.
(7) Prohibition against disclosure. Except as provided in this part, no officer, employee, or agent of the Board shall disclose or permit the disclosure of any unpublished information of the Board to any person (other than Board officers, employees, or agents properly entitled to such information for the performance of official duties), unless required by law.
(e) Appeals. (1) Any person denied access to Board records requested under paragraph (c) of this section, denied expedited processing under paragraph (d) of this section, or denied a waiver of fees under paragraph (f) of this section may file a written appeal within 30 calendar days after the date of such denial with the Board. The written appeal shall prominently display the phrase FREEDOM OF INFORMATION ACT APPEAL on the first page, and shall be addressed to Chairman of the Board, LOCAL Television Loan Guarantee Board, 1400 Independence Avenue, SW., STOP 1575, Room 2919S, Washington, DC 20250 1575, or sent by facsimile to (202) 7202734. The appeal shall include a copy of the original request, the initial denial, if any, and a statement of the reasons why the requested records should be made available and why the initial denial was in error.
(2) The Chairman of the Board shall make a determination regarding any appeal within 20 working days of actual receipt of the appeal, and the determination letter shall notify the appealing party of the right to seek judicial review in event of denial.
(f) Fee schedules and waiver of fees (1) Fee schedule. The fees applicable to a request for records pursuant to paragraph (c) of this section are set forth in the uniform fee schedule at the end of this paragraph (f).
(i) Search. (A) Search fees shall be charged for all requests other than requests made by educational institutions, noncommercial scientific institutions, or representatives of the news media, subject to the limitations of paragraph (f)(1)(iv) of this section. The Secretary of the Board shall charge for time spent searching even if no responsive record is located or if the Secretary of the Board withholds the record(s) located as entirely exempt from disclosure. Search fees shall be the direct costs of conducting the search by the involved employees.
(B) For computer searches of records, requesters will be charged the direct costs of conducting the search, although certain requesters (as provided in paragraph (f)(3) of this section) will be charged no search fee and certain other requesters (as provided in paragraph (f)(3)) are entitled to the cost equivalent of two hours of manual search time without charge. These direct costs include the costs, attributable to the search, of operating a central processing unit and operator/programmer salary.
(ii) Duplication. Duplication fees will be charged to all requesters, subject to the limitations of paragraph (f)(1)(iv) of this section. For a paper photocopy of a record (no more than one copy of which need be supplied), the fee shall be 15 cents per page. For copies produced by computer, such as tapes or printouts, the Secretary of the Board shall charge the direct costs, including operator time, of producing the copy. For other forms of duplication, the Secretary of the Board will charge the direct costs of that duplication. (iii) Review. Review fees shall be charged to requesters who make a commercial use request. Review fees shall be charged only for the initial record reviewthe review done when the Secretary of the Board determines whether an exemption applies to a particular record at the initial request level. No charge will be made for review at the administrative appeal level for an exemption already applied. However, records withheld under an exemption that is subsequently determined not to apply may be reviewed again to determine whether any other exemption not previously considered applies, and the costs of that review are chargeable. Review fees shall be the direct costs of conducting the review by the involved employees.
(iv) Limitations on charging fees. (A) No search fee will be charged for requests by educational institutions, noncommercial scientific institutions, or representatives of the news media. (B) No search fee or review fee will be charged for a quarterhour period unless more than half of that period is required for search or review.
(C) Whenever a total fee calculated under this paragraph is $25 or less for any request, no fee will be charged.
(D) For requesters other than those seeking records for a commercial use, no fee will be charged unless the cost of search in excess of two hours plus the cost of duplication in excess of 100 pages totals more than $25.
(2) Payment procedures. All persons requesting records pursuant to paragraph (c) of this section shall pay the applicable fees before the Secretary of the Board sends copies of the requested records, unless a fee waiver has been granted pursuant to paragraph (f)(6) of this section. Requesters must pay fees by check or money order made payable to the Treasury of the United States.
(i) Advance notification of fees. If the estimated charges are likely to exceed $25, the Secretary of the Board shall notify the requester of the estimated amount, unless the requester has indicated a willingness to pay fees as high as those anticipated. Upon receipt of such notice, the requester may confer with the Secretary of the Board to reformulate the request to lower the costs. The processing of the request shall be suspended until the requester provides the Secretary of the Board with a written guarantee that payment will be made upon completion of the processing.
(ii) Advance payment. The Secretary of the Board shall require advance payment of any fee estimated to exceed $250. The Secretary of the Board shall also require full payment in advance where a requester has previously failed to pay a fee in a timely fashion. If an advance payment of an estimated fee exceeds the actual total fee by $1 or more, the difference shall be refunded to the requester. The time period for responding to requests under paragraph (d)(4) of this section, and the processing of the request shall be suspended until the Secretary of the Board receives the required payment.
(iii) Late charges. The Secretary of the Board may assess interest charges when fee payment is not made within 30 days of the date on which the billing was sent. Assessment of such interest will commence on the 31st day following the day on which the billing was sent. Interest is at the rate prescribed in 31 U.S.C. 3717.
(3) Categories of uses. The fees assessed depend upon the fee category. In determining which category is appropriate, the Secretary of the Board shall look to the identity of the requester and the intended use set forth in the request for records. Where a requester's description of the use is insufficient to make a determination, the Secretary of the Board may seek additional clarification before categorizing the request.
(i) Commercial use requester. The fees for search, duplication, and review apply when records are requested for commercial use. (ii) Educational, noncommercial scientific institutions, or representatives of the news media requesters. The fees for duplication apply when records are not sought for commercial use, and the requester is a representative of the news media or an educational or noncommercial scientific institution, whose purpose is scholarly or scientific
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research. The first 100 pages of duplication, however, will be provided free.
(iii) All other requesters. For all other requests, the fees for search and duplication apply. The first two hours of search time and the first 100 pages of duplication, however, will be provided free. (4) Nonproductive search. Fees for search may be charged even if no responsive documents are found. Fees for search and review may be charged even if the request is denied.
(5) Aggregated requests. A requester may not file multiple requests at the same time, solely in order to avoid payment of fees. If the Secretary of the Board reasonably believes that a requester is separating a request into a series of requests for the purpose of evading the assessment of fees or that several requesters appear to be acting together to submit multiple requests solely in order to avoid payment of fees, the Secretary of the Board may aggregate such requests and charge accordingly. It is considered reasonable for the Secretary of the Board to presume that multiple requests by one requester on the same topic made within a 30day period have been made to avoid fees. (6) Waiver or reduction of fees. A request for a waiver or reduction of the fees, and the justification for the waiver, shall be included w

FOR FURTHER INFORMATION CONTACT Jacqueline G. Rosier, Secretary, LOCAL Television Loan Guarantee Board, 1400 Independence Avenue, SW., STOP 1575, Room 2919S, Washington, DC 202501575. Telephone (202) 7200530; Facsimile (202) 7202734; Email localtv@rus.usda.gov.