[Federal Register: August 15, 2003 (Volume 68, Number 158)]
[Proposed Rules]
[Page 48814-48833]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15au03-12]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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[[Page 48814]]
LOCAL TELEVISION LOAN GUARANTEE BOARD
7 CFR Parts 2200 and 2201
RIN 0572-AB82
LOCAL Television Loan Guarantee Program
AGENCY: LOCAL Television Loan Guarantee Board.
ACTION: Proposed rule.
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SUMMARY: The LOCAL Television Loan Guarantee Board (Board) is proposing
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 the primary purpose of the Act 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 proposes to establish eligibility and Guarantee
requirements, the application and approval process, as well as the
administration of Guarantees made by the Board. Additionally, this rule
proposes the process through which the Board will consider applications
under the priority considerations required in the Act.
DATES: Written comments must by received by the LOCAL Television Loan
Guarantee Board, or bear a postmark or equivalent, no later than
September 15, 2003. Comments regarding the information and
recordkeeping requirements must be received by October 14, 2003.
ADDRESSES: Written comments should be addressed to Jacqueline G.
Rosier, Secretary, LOCAL Television Loan Guarantee Board, 1400
Independence Avenue, SW., STOP 1575, Room 2919-S, Washington, DC 20250-
1575. Telephone (202) 720-0530; Facsimile (202) 720-2734; e-mail
localtv@rus.usda.gov.
FOR FURTHER INFORMATION CONTACT: Jacqueline G. Rosier, Secretary, LOCAL
Television Loan Guarantee Board, 1400 Independence Avenue, SW., STOP
1575, Room 2919-S, Washington, DC 20250-1575. Telephone (202) 720-0530;
Facsimile (202) 720-2734; E-mail localtv@rus.usda.gov.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This proposed 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
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
chapter 35), the Board invites comments on this information collection
for which the Board intends to request approval from the Office of
Management and Budget (OMB).
Comments on the information collection and recordkeeping
requirements in this proposed rule must be received by October 14,
2003.
Comments are invited on (a) whether the collection of information
is necessary for the proper performance of the functions of the agency,
including whether the information will have practical utility; (b) the
accuracy of the agency's estimate of burden including the validity of
the methodology and assumptions used; (c) ways to enhance the quality,
utility and clarity of the information to be collected; and (d) ways to
minimize the burden of the collection of information on those who are
to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology.
Comments on the information collection and recordkeeping
requirements in this proposed rule may be sent to F. Lamont Heppe, Jr.,
Director, Program Development and Regulatory Analysis, Rural Utilities
Service, U.S. Department of Agriculture, 1400 Independence Ave. SW.,
Stop 1522, Room 4034 South Building, Washington, DC 20250-1522.
Title: LOCAL Television Loan Guarantee Program.
Type of Request: New collection.
Estimate of Burden: Public reporting burden for this collection of
information is estimated to average 9 hours per response.
Respondents: Public bodies, commercial companies, cooperatives,
nonprofits, Indian tribes, and limited dividend or mutual associations
and must be incorporated or a limited liability company.
Estimated Number of Respondents: 10.
Estimated Number of Responses per Respondent: 19.4
Estimated Total Annual Burden on Respondents: 1,830 hours.
Copies of this information collection can be obtained from Michele
Brooks,
[[Page 48815]]
Program Development and Regulatory Analysis, at (202) 690-1078.
All responses to this information collection and recordkeeping
notice will be summarized and included in the request for OMB approval.
All comments will also become a matter of public record.
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 Public Law 106-553, the
Federal Funding Act for Fiscal Year 2001. Title X of Pub. L. 106-553,
entitled the ``Launching our Communities'' Access to Local Television
Act of 2000'' established the LOCAL Television Loan Guarantee Board and
authorized the Board to guarantee Loans to facilitate access, on a
technologically neutral basis, to signals of local television stations
for households located in Nonserved Areas or Underserved Areas. The
Board is comprised of the Secretaries of Agriculture, Treasury, and
Commerce, and the Chair of the Board of Governors of the Federal
Reserve System, or their designees. Individuals have been designated as
Board members for each of the agencies represented on the Board. The
LOCAL Television Act does not, however, designate a chair of the Board.
Pursuant to procedural regulations previously published in the Federal
Register on December 11, 2002 (67 FR 76105), the Board has chosen the
designee of the Secretary of the Treasury as Chair. The Board is
authorized to approve Guarantees up to 80 percent of the principal
amount of up to $1.25 billion in Loans. The Board's authority to
guarantee Loans under the Program expires on the earlier of the date
the Secretary of Agriculture determines that at least 75 percent of
Designated Market Areas, other than the top 40 Designated Market Areas,
have access to Local Television Broadcast Signals for virtually all
households or December 31, 2006.
The Act requires the issuance of regulations to implement its
provisions. Specifically, the Act requires that these regulations set
forth: (1) The form of any application to be submitted to the Board;
(2) the time periods for the review and consideration by the Board of
applications submitted to the Board, as well as any other actions to be
taken by the Board with respect to such applications; (3) appropriate
safeguards against evasions of the Act; (4) circumstances in which an
Applicant, together with any Affiliate of an Applicant, shall be
treated as an Applicant for a Guarantee; (5) requirements that
appropriate parties submit to the Board any documents and assurances
that are required for the administration of the Act's provisions; (6)
requirements governing defaults on Loans guaranteed under the Act,
including the administration of the payment of guaranteed amounts upon
Default; and (7) other provisions consistent with the Act's purposes as
the Board considers appropriate.
On March 14, 2001, the Rural Utilities Service (RUS), U.S.
Department of Agriculture, published in the Federal Register a request
for public comment and a notice of public discussion meetings on
implementing the provisions of the Act (66 FR 14880). This notice
requested comments and encouraged participation in informal meetings
regarding the implementation of the Act. RUS requested information
regarding all aspects of the Program, including any financial and
technological implications, as well as analyses of any provisions of
the Act that may present issues or problems in implementing the
Program. On April 30, 2002, RUS issued a Notice of Inquiry (NOI) in the
Federal Register (67 FR 21216) seeking additional public comment on the
implementation of the Act. Specifically, the NOI was issued to assess
the interest of eligible entities in pursuing application for funding
under the Act taking into account: (1) The recent commercial and
regulatory developments, including pending industry mergers; (2) the
impacts of new technology capable of providing local TV signals; (3)
the effects of the Satellite Home Viewer Improvement Act; and (4) the
ability to accomplish the Act's objectives utilizing current
appropriations.
Comments and Responses
RUS received nine written comments in response to its March 14,
2001, request for public comment and notice of public discussion
meetings. Five of the nine commenters participated in public discussion
meetings with RUS and other Board staff.
RUS received three written comments in response to its April 30,
2002, NOI.
The twelve respondents included: satellite and internet services
providers, cable, telecommunications & television trade associations,
the interest of rural utilities companies and cooperatives, TV station
owners and operators, a rural financial lender, a financial consultant
and a terrestrial system local TV provider.
RUS submitted the comments to the Board and the Board considered
the oral and written comments as it formulated
[[Page 48816]]
these regulations implementing the Program.
The comments received in response to both notices are available on
the RUS Web site at: http://www.usda.gov/rus/telecom/initiatives/index_initiatives.htm#comment
.
Description of Proposed Rule
The LOCAL TV Act is intended to help spread local television into
Nonserved Areas and Underserved Areas. The Act defines these terms in
relation to the ability to receive the Local Television Broadcast
Signals serving a particular Designated Market Area. What comprises
these Local Television Broadcast Signals is not defined. This proposed
rule would define Local Television Broadcast Signals to create a
reasonable, meaningful, and administratively workable distinction
between Nonserved Areas and Underserved Areas, so that priority is
given to Projects that provide signals to areas without access to local
signals.
The Act refers to signals (plural). As such, receiving a single
local television signal does not constitute access. The various
technologies used to provide a multichannel system (typically a cable
television system or a Direct Broadcast Satellite) do not inherently
dictate the number of local signals provided. Therefore, Local
Television Broadcast Signals must be defined on a different basis.
As of August 15, 2003, the Federal Communications Commission (FCC)
recognizes four major national television broadcast networks in its
rulings. In addition, the Board determined that it is reasonable to
define a practical set of ``Local Television Broadcast Signals'' as a
set most likely to provide the local news, weather, sports and other
programming of local interest that are the reason people need access to
local signals. As such, the Board proposes a technologically neutral
definition of ``Local Television Broadcast Signals'' so that Nonserved
Areas and Underserved Areas are determined by whether that area has
access to the local signals of the major national television broadcast
networks. Further, the Act defines ``Nonserved Area'' to mean any area
that is outside the grade B contour (as determined using standards
employed by the FCC) of the Local Television Broadcast Signals serving
a particular Designated Market Area and does not have access to such
signals by any commercial, for profit, multichannel video provider.
``Underserved Area'' is defined in the Act to mean any area that is
outside the grade A contour (as determined using standards employed by
the FCC) of the Local Television Broadcast Signals serving a particular
Designated Market Area and has access to Local Television Broadcast
Signals from not more than one commercial, for-profit multichannel
video provider.
The definitions of nonserved area and underserved area contained in
this proposed rule are directly from the Act. We interpret these
statutory definitions as follows. An area outside of the grade A
contour, but within the grade B contour, can never be considered a
nonserved area. Areas outside of the grade B contour, which by
definition are always not included in the grade A contour, may be
considered either a nonserved area or an underserved area. However, any
one geographic area outside of the grade B contour can never be both
nonserved and underserved. An area outside of the grade B contour would
be nonserved if it does not have access to local television broadcast
signals from any commercial, for profit, or multichannel video
provider. An area outside of the grade B contour would be underserved
if it has access to local television broadcast signals from only one
commercial, for profit, multichannel video provider.
The LOCAL TV Act requires the Board to develop and utilize
underwriting criteria to determine which loans may be eligible for a
loan guarantee under the Act. The underwriting criteria have been
embodied within these proposed rules. The underwriting criteria will be
posted on the LOCAL TV Web site at http://www.usda.gov/rus/localtvboard
.
In Section 2201.11(g)(2) of the proposed rule, the Board proposes
that an Applicant applying for a guarantee for a loan greater than some
minimum amount be required to submit a preliminary credit rating
opinion letter prepared by a nationally recognized statistical rating
organization. The proposed rule provides for a minimum amount of $5
million. The Board Is interested in receiving comment on where this
minimum should be set within the range of $5 million to $25 million.
Comments must include relevant information in support of their
positions.
These proposed rules implement the requirements of the Act and
provide a procedure to administer the Program.
List of Subjects in 7 CFR Parts 2200 and 2201
Loan programs--Communications, 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 proposed to be amended as follows:
PART 2200--ACCESS 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. 106--553; Pub. L.
107-171.
2. The title of part 2200 is proposed to be revised to read as set
out above.
3. Section 2200.1 is proposed to be 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, joint-stock company, limited
liability company or partnership, trust, unincorporated organization,
government entity, agency or instrumentality or any subdivision
thereof.
4. Part 2200 is proposed to be amended by adding sections 2200.10
through 2200.12 to read as follows:
Sec. 2200.10 Restrictions on lobbying.
(a) No funds received through a Loan guaranteed under the 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
[[Page 48817]]
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 Form--LLL 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 Form--LLL), if
required, with each submission that initiates agency consideration of
such person for:
(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 Government-wide 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 agency-recognized
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.
[[Page 48818]]
(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 (but benefits
received in an individual's business capacity are not accepted);
(4) Federal employment;
(5) Transactions pursuant to national or agency-recognized
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 no-cost 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 machine-readable
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
[[Page 48819]]
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 page-by-page or line-by-line
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 (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 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 2919-S, 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 therefor;
(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
[[Page 48820]]
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.
(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 2919-S, Washington, DC 20250-
1575, or sent by facsimile to (202) 720-2734. 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 the 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 review--the 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 quarter-hour
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.
[[Page 48821]]
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, non-commercial 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 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 30-day 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 with the request for records to which it pertains. If a waiver
is requested and the requester has not indicated in writing an
agreement to pay the applicable fees if the waiver request is denied,
the time for response to the request for documents, as set forth in
under paragraph (d)(4) of this section, shall not begin until a
determination has been made on the request for a waiver or reduction of
fees.
(i) Standards for determining waiver or reduction. The Secretary of
the Board may grant a waiver or reduction of fees where it is
determined both that disclosure of the information is in the public
interest because it is likely to contribute significantly to public
understanding of the operation or activities of the government, and
that the disclosure of information is not primarily in the commercial
interest of the requester. In making this determination, the following
factors shall be considered:
(A) Whether the subject of the records concerns the operations or
activities of the government;
(B) Whether disclosure of the information is likely to contribute
significantly to public understanding of government operations or
activities;
(C) Whether the requester has the intention and ability to
disseminate the information to the public;
(D) Whether the information is already in the public domain;
(E) Whether the requester has a commercial interest that would be
furthered by the disclosure; and, if so,
(F) Whether the magnitude of the identified commercial interest of
the requester is sufficiently large, in comparison with the public
interest in disclosure, that disclosure is primarily in the commercial
interest of the requester.
(ii) Contents of request for waiver. A request for a waiver or
reduction of fees shall include a clear statement of how the request
satisfies the criteria set forth in paragraph (f)(6)(i) of this
section.
(iii) Burden of proof. The burden shall be on the requester to
present evidence or information in support of a request for a waiver or
reduction of fees.
(iv) Determination by Secretary of the Board. The Secretary of the
Board shall make a determination on the request for a waiver or
reduction of fees and shall notify the requester accordingly. A denial
may be appealed to the Board in accordance with paragraph (e) of this
section.
(7) Uniform fee schedule.
------------------------------------------------------------------------
Service Rate
------------------------------------------------------------------------
(i) Manual search......................... Actual salary rate of
employee involved, plus 16
percent of salary rate.
(ii) Computerized search.................. Actual direct cost,
including operator time.
(iii) Duplication of records:
(A) Paper copy reproduction............. $.15 per page.
(B) Other reproduction (e.g., computer Actual direct cost,
disk or printout, microfilm, including operator time.
microfiche, or microform).
(iv) Review of records (includes employee Actual salary rate of
preparation for release, i.e. excising). conducting review, plus 16
percent of salary rate.
------------------------------------------------------------------------
(g) Request for confidential treatment of business information. (1)
Submission of request. Any submitter of information to the Board who
desires confidential treatment of business information pursuant to 5
U.S.C. 552(b)(4) shall file a request for confidential treatment with
the Board at the time the information is submitted or a reasonable time
after submission.
(2) Form of request. Each request for confidential treatment of
business information shall state in reasonable detail the facts
supporting the commercial or financial nature of the business
information and the legal justification under which the business
information should be protected. Conclusory statements that release of
the information would cause competitive harm generally will not be
considered sufficient to justify confidential treatment.
(3) Designation and separation of confidential material. All
information considered confidential by a submitter shall be clearly
designated ``PROPRIETARY'' or ``BUSINESS CONFIDENTIAL'' in the
submission and separated from information for which confidential
treatment is not requested. Failure to segregate confidential
commercial or financial information from other material may result in
release of the nonsegregated material to the public without notice to
the submitter.
(h) Request for access to confidential commercial or financial
information. (1) Request for confidential commercial or financial
information. A request by a submitter for confidential treatment of any
business information shall be considered in connection with a request
for access to that information.
(2) Notice to the submitter. (i) The Secretary of the Board shall
notify a submitter who requested confidential treatment of information
pursuant to 5 U.S.C. 552(b)(4), of the request for access.
(ii) Absent a request for confidential treatment, the Secretary of
the Board may notify a submitter of a request for access to submitter's
business information if the Secretary of the Board
[[Page 48822]]
reasonably believes that disclosure of the information may cause
substantial competitive harm to the submitter.
(iii) The notice given to the submitter by mail, return receipt
requested, shall be given as soon as practicable after receipt of the
request for access, and shall describe the request and provide the
submitter seven working days from the date of notice, to submit written
objections to disclosure of the information. Such statement shall
specify all grounds for withholding any of the information and shall
demonstrate why the information which is considered to be commercial or
financial information, and that the information is a trade secret, is
privileged or confidential, or that its disclosure is likely to cause
substantial competitive harm to the submitter. If the submitter fails
to respond to the notice within the time specified, the submitter will
be considered to have no objection to the release of the information.
Information a submitter provides under this paragraph may itself be
subject to disclosure under the FOIA.
(3) Exceptions to notice to submitter. Notice to the submitter need
not be given if:
(i) The Secretary of the Board determines that the request for
access should be denied;
(ii) The requested information lawfully has been made available to
the public;
(iii) Disclosure of the information is required by law (other than
5 U.S.C. 552); or
(iv) The submitter's claim of confidentiality under 5 U.S.C.
552(b)(4) appears obviously frivolous or has already been denied by the
Secretary of the Board, except that in this last instance the Secretary
of the Board shall give the submitter written notice of the
determination to disclose the information at least seven working days
prior to disclosure.
(4) Notice to requester. At the same time the Secretary of the
Board notifies the submitter, the Secretary of the Board also shall
notify the requester that the request is subject to the provisions of
this section.
(5) Determination by Secretary of the Board. The Secretary of the
Board's determination whether or not to disclose any information for
which confidential treatment has been requested pursuant to this
section shall be communicated to the submitter and the requester
immediately. If the Secretary of the Board determines to disclose the
business information over the objection of a submitter, the Secretary
of the Board shall give the submitter written notice via mail, return
receipt requested, or similar means, which shall include:
(i) A statement of reason(s) why the submitter's objections to
disclosure were not sustained;
(ii) A description of the business information to be disclosed; and
(iii) A statement that the component intends to disclose the
information seven working days from the date the submitter receives the
notice.
(6) Notice of lawsuit. The Secretary of the Board shall promptly
notify any submitter of information covered by this section of the
filing of any suit against the Board to compel disclosure of such
information, and shall promptly notify a requester of any suit filed
against the Board to enjoin the disclosure of requested documents.
5. Part 2201 is proposed to be added to read as follows:
PART 2201--LOCAL TELEVISION LOAN GUARANTEE PROGRAM--PROGRAM
REGULATIONS
Subpart A--General
Sec.
2201.1 Definitions.
2201.2-2201.9 [Reserved]
Subpart B--Loan Guarantees
2201.10 Loan amount and Guarantee percentage.
2201.11 Application requirements.
2201.12 Applicant.
2201.13 Lender.
2201.14 Eligible Loan purposes.
2201.15 Ineligible Loan purposes.
2201.16 Environmental requirements.
2201.17 Submission of applications.
2201.18 Application selection.
2201.19 Loan terms.
2201.20 Collateral.
2201.21 Fees.
2201.22 Issuance of Guarantees.
2201.23 Funding for the Program.
2201.24 Insurance.
2201.25 Performance Agreement.
2201.26 Lender standard of care.
2201.27 Assignment or transfer of Loans.
2201.28 Participation in guaranteed Loans.
2201.29 Supplemental guarantees.
2201.30 Adjustments.
2201.31 Indemnification.
2201.32 Termination of obligations.
2201.33 Defaults
2201.34 OMB Control Number
Authority: 47 U.S.C. 1101 et seq.; Pub. L. 106-553; Pub. L. 107-
171.
Subpart A--General
Sec. 2201.1 Definitions.
Act means Title X of Public Law 106-553, entitled the Launching our
Communities' Access to Local Television (LOCAL TV) Act of 2000, as
amended.
Administrator means the Administrator of the Rural Utilities
Service, U.S. Department of Agriculture, acting pursuant to the Act and
on behalf of the Board.
Affiliate means any person or entity that controls, or is
controlled by, or is under common control with, another person or
entity; and may include any individual who is a director or senior
management officer of an Affiliate, a shareholder controlling more than
25 percent of the voting securities of an Affiliate, or more than 25
percent of the ownership interest in an Affiliate not organized in
stock form.
Agent means that Lender authorized to take such actions, exercise
such powers, and perform such duties on behalf and in representation of
all Lenders party to a Guarantee of a single Loan, as is required by,
or necessarily incidental to, the terms and conditions of the
Guarantee.
Applicant means any party that is seeking financing under the Act
in order to provide access to Local Television Broadcast Signals for
households in Nonserved Areas and Underserved Areas.
Asset means anything owned by the Applicant that has commercial or
exchange value including, but not limited to, cash flows and rights
thereto.
Banking Institution means a bank or bank holding company.
Board means the LOCAL Television Loan Guarantee Board authorized by
the Act to approve Guarantees to facilitate access, on a
technologically neutral basis, to Local Television Broadcast Signals
for households located in Nonserved Areas and Underserved Areas.
Borrower means the entity liable for the payment of principal and
interest on any Loan guaranteed under the Act, where such entity shall
be a corporation, partnership, joint venture trustee or government
entity, agency or instrumentality. An individual cannot be a Borrower.
Collateral means all Assets economically pledged by the Applicant,
any Affiliate of the Applicant, or both that is required under the
provisions of the Act or the Loan Documents to secure the repayment of
the indebtedness of the Borrower under the Loan Documents.
Default means a failure by a Borrower, other than a Payment
Default, on its obligations under the Loan Documents which has not been
cured by the Borrower or duly waived by the Lender within any
applicable cure period.
Designated Market Area (DMA) means an area designated as such by
Nielsen Media Research and published in the most recent Nielsen Station
Index Directory and Nielsen Station Index
[[Page 48823]]
United States Television Household Estimates.
Generally Accepted Accounting Principles (GAAP) means a common set
of accounting standards and procedures that are either promulgated by
an authoritative accounting rulemaking body or accepted as appropriate
due to wide-spread application in the United States.
Guarantee means the written agreement, including all terms and
conditions and all exhibits thereto, guaranteeing repayment of a
specified percentage of the principal of a Loan pursuant to the Act.
Guaranteed Portion means the portion of the principal of a loan
that is subject to the Guarantee.
High-Speed Internet means a data connection to the Internet
providing an information rate exceeding 200 kilobits per second (kbps)
in the consumer's connection to the network in at least one direction,
either from the provider to the consumer (downstream) or from the
consumer to the provider (upstream).
Lender means an entity that has committed to make a Loan to an
Applicant, where such entity shall be:
(1) An entity currently engaged in commercial lending in the normal
course of its business; or
(2) A nonprofit corporation, including the National Rural Utilities
Cooperative Finance Corporation, engaged primarily in commercial
lending, but does not include any governmental entity or any Affiliate
thereof, the Federal Agricultural Mortgage Corporation, any institution
supervised by the Office of Federal Housing Enterprise Oversight, the
Federal Housing Finance Board, or any Affiliate of such entities.
Loan means a Loan guaranteed pursuant to the Act and includes the
funds made available to the Borrower by the Lender.
Loan Agreement means the contract between the Lender and the
Borrower, approved by the Board, setting forth the terms applicable to
the Loan.
Loan Documents means the Loan Agreement, Guarantee and all other
instruments, and all documentation between or among the Lender, the
Borrower, and the Board or Administrator, evidencing the making,
disbursing, securing, collecting, or otherwise administering of the
Loan.
Local Television Broadcast Signals means the television signals
that carry the local network broadcasts of the four major national
television broadcast networks as recognized by the Federal
Communications Commission (as of August 15, 2003 these networks are
ABC, CBS, Fox, and NBC). When a particular national television
broadcast network is carried by more than one broadcaster in a DMA, the
signal of any one of these local broadcasters will qualify as the Local
Television Broadcast Signal of the network at that location. In a DMA
where one or more of these networks do not have a local affiliate, the
set of Local Television Broadcast Signals only includes the local
affiliates of the aforementioned networks that are present in that DMA.
In areas not included in a DMA but under the jurisdiction of the FCC,
an appropriate set of Local Television Broadcast Signals will be
determined on a case-by-case basis, subject to the approval of the
Board.
Net equity means the value of the total Assets of an entity, less
the total liabilities of that entity, as recorded under Generally
Accepted Accounting Principles for the fiscal quarter ended immediately
prior to the date on which the subject Loan is approved.
Net Worth Ratio means the book value of equity over total Assets.
Nonserved Area means any area that is outside the grade B contour
(as determined using standards employed by the Federal Communications
Commission (FCC)) of the Local Television Broadcast Signals serving a
particular Designated Market Area and does not have access to such
signals by any commercial, for profit, multichannel video provider.
Offer of Guarantee means the Board's decision to approve an
application for, and extend a Guarantee under, the LOCAL TV Act.
Payment Default means any failure of a Borrower to pay any amount
of principal or interest on the Loan when and as due under the Loan
Agreement (including, without limitation, following any acceleration
thereunder) which has not been cured within any applicable cure period.
Payment Demand means a request, by the Lender or Agent, following a
Payment Default, in writing to the Board, for payment under the
Guarantee in respect of the defaulted principal.
Performance Agreement means the written agreement between the
Administrator and the Borrower (and Lender, if applicable), pursuant to
which the Borrower provides stipulated performance schedules with
respect to Local Television Broadcast Signals provided through the
Project.
Program means the LOCAL Television Loan Guarantee Program (LOCAL TV
Program) established under the Act.
Project means a proposal for the acquisition, improvement,
enhancement, construction, deployment, launch, or rehabilitation of the
means to deliver Local Television Broadcast Signals to a Nonserved Area
or Underserved Area.
Regulatory Capital Ratio means tier 1 and total capital ratios as
shown on a Banking Institution's balance sheet.
Security means all Collateral required by the provisions of the Act
or the Loan Documents to secure repayment of any indebtedness of the
Borrower under the Loan Documents.
Separate Tier of Local Television Broadcast Signals means a
category or package of services provided by the applicant, to include
the Local Television Broadcast Signals and all over-the-air television
broadcast signals carried pursuant to the must-carry requirement of the
Communications Act of 1934, as amended, offered as a distinct and
separate service choice to the applicant's subscribers at a specified
lower rate when compared to other program service choices.
Term Sheet means an executed agreement between the Applicant and
the Lender or Agent that sets forth the key business terms and
conditions of the proposed Loan. Execution of this agreement represents
evidence of the commitment between the Applicant and Lender or Agent.
Underserved Area means any area that is outside the grade A contour
(as determined using standards employed by the Federal Communications
Commission) of the Local Television Broadcast Signals serving a
particular Designated Market Area and has access to such signals from
not more than one commercial, for profit, multichannel video provider.
Unguaranteed Portion means the portion of the principal of a Loan
that is not covered by the Guarantee.
Sec. Sec. 2201.2--2201.9 [Reserved]
Subpart B--Loan Guarantees
Sec. 2201.10 Loan amount and Guarantee percentage.
(a) Aggregate value of loans. The aggregate value of all Loans for
which Guarantees are issued under the Program, including the
Unguaranteed Portions of such Loans, may not exceed $1,250,000,000.
(b) Guarantee percentage. (1) A Guarantee approved by the Board may
not exceed an amount equal to 80 percent of the principal amount of a
Loan made to finance the acquisition, improvement, enhancement,
construction, deployment, launch, or rehabilitation of the means by
which Local Television Broadcast Signals are delivered to a Nonserved
Area or Underserved Area;
[[Page 48824]]
(2) If only a portion of a Loan is meant to achieve the purposes
described in paragraph (b)(1) of this section, the Board shall
determine that portion of the Loan meant to achieve such purpose and
may approve a Guarantee in an amount not exceeding 80 percent of that
portion of the Loan.
(c) Minimum loan amount. The Board will not approve a Guarantee for
a Loan in an amount less than $1,000,000 (inclusive of both the
Guaranteed and Unguaranteed Portions of the Loan).
(d) Form of Guarantee. The Board shall adopt a form of Guarantee to
be used under the Program, and shall publish the Guarantee on its
website. Modifications to the provisions of the form of Guarantee must
be approved and adopted by the Board.
Sec. 2201.11 Application requirements.
A completed application consists of the following information:
(a) An executive summary of the Project. The Applicant must provide
the Board with a general Project overview that addresses each of the
following six categories:
(1) A general overview of the system to be developed and
description of the Project including the types of equipment,
technologies, and facilities to be used;
(2) An explanation of how the Applicant will provide Local
Television Broadcast Signals to Nonserved Areas and Underserved Areas;
(3) A short description of the Applicant including a written
narrative describing its demonstrated capability and experience in
providing access to Local Television Broadcast Signals for households;
(4) An explanation of the total Project cost including a breakdown
of the Loan required and the source of funding for the remainder of the
Project, if a portion of the Project is to be paid with non-Loan funds;
(5) The name of the Lender or Agent (including a listing of other
participating Lenders, if applicable) and a description of the
financing structure of the proposed Loan; and
(6) A general description of the geographic area to be served.
(b) Background information. General information concerning the
Applicant, its Affiliates, and its Lender or Agent, including a
description of any financial and contractual arrangements among the
parties. Specific information required of all Applicants is as follows:
(1) Evidence of legal authority and existence of the applicant. The
Applicant must provide evidence of its legal existence and authority to
execute the Loan Documents under the proposed Loan and perform the
activities proposed under the Project. Such evidence must include
Articles of Incorporation and bylaws for incorporated Applicants; other
types of Applicants should submit appropriate documentation for their
forms of organization. If the Applicant is a special purpose entity
(SPE) formed for the purpose of the Project, then the Applicant must
provide a copy of the Deed of Partnership or Articles of Organization
for the SPE.
(2) Affiliates descriptions. A listing of all Affiliates of the
Applicant including a description of the nature of the Applicants
relationship to each Affiliate. Any existing or proposed contractual
arrangements with each Affiliate should be described.
(3) Legal name. The legal name and form of organization of the
proposed Lender or Agent.
(4) Cover Form. A signed copy of Standard Form 424.
(c) A business plan. A plan, satisfactory to the Board, presenting
in detail the fundamentals of the business and providing sufficient
financial data to indicate that the business will be economically
sustainable. The business plan should include, at a minimum:
(1) Risk assessments. An assessment of the risks related to
construction, performance, demand, and financing structure, including a
narrative statement detailing planned risks mitigation strategies;
(2) Plans. A comprehensive operations and maintenance plan;
(3) Economic and financial analysis. A review of economic and
financial factors affecting the business in general and the Project in
particular, including:
(i) The adequacy and stability of the business' customer base;
(ii) The demand for services;
(iii) The sensitivity of the business to economic cycles;
(iv) Future capital needs;
(v) The adequacy, competitiveness and affordability of service
fees; and
(vi) An overview of the prevailing economic and demographic trends
in the target service area.
(4) Project Market Analysis. A breakdown of the key elements of the
Project, including:
(i) All proposed services to be offered, including High-speed
Internet Service, and whether a Separate Tier of Local Television
Broadcast Signals will be provided;
(ii) The total number of households, by DMA, and by Nonserved and
Underserved Area, which will have access to Local Television Broadcast
Signals under the Project;
(iii) The total number of households, by DMA, and by Nonserved and
Underserved Area, which will have access under the Project to any other
services as described pursuant to paragraph (c)(4)(i) of this section,
including an explanation if this number is greater than the total
identified in paragraph (c)(4)(ii);
(iv) Estimates of the number of households identified in paragraphs
(c)(4)(ii) and (c)(4)(iii) which will subscribe to each of the services
identified in paragraph (c)(4)(i) of this section by DMA, including a
breakdown of Nonserved and Underserved households;
(v) A breakdown of the Applicant's proposed pricing coupled with an
evaluation of any competitor's services offerings and pricings.
(vi) A service deployment plan and a deployment performance
schedule, by DMA, for the services to access the Local Television
Broadcast Signals.
(d) Financial forecast and information. The Applicant must
demonstrate its financial ability to complete and maintain the Project
and repay its obligations. The financial data must include the
following:
(1) Audited financial statements. Income statements, balance
sheets, and cash flow statements for at least the last three years or
from the date of inception if less than three years. If the Applicant
is an SPE, then the Applicant must provide at least the last three
years of audited financial statements of the shareholders or partners
of the SPE. If an Affiliate has been designated by the Applicant as a
source of credit support, then at least three years audited financial
statements for the Affiliate must be submitted as well;
(2) Plan of finance. An identification and explanation of all
sources and uses of funds throughout the proposed loan period,
including, but not limited to, any payments to Affiliates or
shareholders of the Applicant, estimated Project costs, and proposed
terms.
(3) A Pro-forma financial forecast covering the life of the
proposed loan, including balance sheets, income statements and cash
flow statements, with an explanation of assumptions. These Projections
must be prepared in accordance with Generally Accepted Accounting
Principles and should discuss such issues as the effects of inflation,
competition, ongoing repair and replacement needs, technological
obsolescence, working capital requirements, and other factors that may
affect the Applicant's ability to meet its debt service obligations.
(4) Project budget. A detailed cost breakdown of all facilities to
be constructed as part of the Project. This breakdown should be on a
per unit
[[Page 48825]]
basis. It should also clearly show what will be financed with
guaranteed loan funds and what will be financed with other funds,
consistent with the plan of finance in paragraph (d)(2) of this
section.
(5) Commitments. The Applicant must disclose all reasonably
foreseeable financial obligations, contingent liabilities, or other
commitments that could affect its financial health over the proposed
financing term. At the Board's request, the Applicant must take all
reasonable measures to insulate the Project and the Loan from external
factors that could affect timely payment of principal and interest. The
Board may ask for additional detailed information on commitments where
it is deemed necessary.
(6) Credit enhancement. In cases where an Affiliate provides credit
enhancement, the Applicant must provide documentation demonstrating the
Affiliate is sufficiently capitalized and evidencing the strength,
extent, limitations, and priority of the credit enhancement relative to
the other obligations of the Affiliate.
(e) A certified system plan, technical analysis, and design.
Prepared by qualified personnel on the Applicant's staff or by a
licensed consulting engineer, consisting of the following:
(1) A detailed description of the proposed service area including
maps of the service area;
(2) A TV Signals Coverage Diagram and detailed description of all
existing and proposed facilities. The diagram must include proposed
route miles of cable plant, if applicable, the estimated area served,
types of facilities to be deployed (terrestrial microwave or satellite
microwave, wireless, translator, fiber optic cable or coaxial cable,
electronic equipment, etc.), the capacity of the facilities (number of
fibers, size of the cables, and intended number of channels,
frequencies used, bandwidth capacity, etc.), and the serving area of
the proposed facilities;
(3) The intended capabilities of the Project's facilities,
including bandwidth, proposed television signal topology, standards,
and television signal transmission protocols. In addition, the
Applicant must explain the manner in which the transmission facilities
will deliver the proposed Local Television Broadcast Signals, including
any equipment necessary to receive the signals which will be located at
the subscribers premise, and/or, near or/on the subscribers' television
set;
(4) A listing of all regulatory approvals required to operate
facilities, including licenses, permits, and franchises and the status
of any required approvals not obtained at the time of the application.
For any approvals not yet received, the Applicant should provide
details on the nature of the needed approval, the justification for
expecting such an approval, the track-record of the Applicant in
obtaining such approvals, and the contingency plan in the event the
approval is delayed;
(5) A description of the television signal sources (including, but
not limited to local, regional and national television signal
broadcasters, other television signal providers, content providers,
cable television operators and providers, enhanced service providers,
providers of satellite services, and the anticipated role of such
providers in the proposed Project);
(6) The results of discussions, if any, with local television
broadcasters serving the Project area;
(7) An identification of all Local Television Broadcast Signals
that will be carried by the Project;
(8) An identification of the digital signal quality and capacity in
megabits per second (Mb/s) that will be required to digitally broadcast
all Local Television Broadcast Signals to be provided by the Project;
(9) An identification of the net usable bandwidth, in Mb/s, that
are surplus to the provision of the Local Television Broadcast Signals
to be provided by the Project and that will be used to provide High
Speed Internet Service; and
(10) A description of the extent to which the Project will enable
the delivery of Local Television Broadcast Signals by a means
reasonably compatible with existing systems or devices predominantly in
use for the reception of television signals.
(f) Lender information. (1) Lender. The Application shall include
the information described in Sec. 2201.13(b), (c) and (d) of this part
concerning the Lender or Lenders.
(2) Term Sheet. The Application shall include a signed Term Sheet.
(3) Lender's analysis. The Applicant shall submit the Lender's
detailed analysis of the creditworthiness of the transaction at the
time of application and any supporting due diligence documentation,
including a complete underwriting analysis of the Project (assessing
Applicant creditworthiness and Project feasibility) exercising the
Lender's standard of care as set forth at Sec. 2201.26(a).
(4) Certification. The Lender must certify that the information
provided pursuant to paragraphs (f)(1), (2) and (3) of this section is
true and accurate.
(5) Additional Information. The Board will request any other
information the Board deems material to its assessment of the Lender.
(g) Other Financial Information. (1) Collateral. The Applicant
shall provide a detailed description and valuation of all Collateral to
be used to secure the Loan. This valuation shall be supported by an
independent, third party appraisal for existing Assets, and/or adequate
cost substantiation for Assets to be constructed for purposes of the
Project, and in all cases shall be acceptable to the Board. Such a
valuation should address, at a minimum, pledged Assets of the
Applicant, any designated Affiliate of the Applicant, or both as
identified in the Loan Documents, including primary Assets to be used
in the delivery of the service for which the Loan sought would be
guaranteed. The Applicant also must provide a depreciation schedule (as
classified under and in accordance with GAAP) for the major Assets in
order for the Board to determine the economically useful life of the
primary Assets to be used in delivery of the signals concerned.
Appraisals of real property must be prepared by State licensed or
certified appraisers, and be consistent with the ``Uniform Standards of
Professional Appraisal Practice,'' promulgated by the Appraisal
Standards Board of the Appraisal Foundation.
(2) Credit Opinion. With respect to applications for a Loan of $5
million or more, the Applicant is required to obtain and submit to the
Board a preliminary credit rating opinion letter on the proposed
transaction at the time of application, prepared by a nationally
recognized statistical rating organization (rating agency) approved by
the Board. This preliminary credit rating opinion shall be based on the
financing structure proposed by the Applicant for the Project absent
the Federal Guarantee. The Board will utilize this preliminary credit
assessment to assist in evaluating the creditworthiness of the proposed
transaction and determining whether it provides a reasonable assurance
of repayment. In addition, applicants for loans less than $5 million
that have a credit rating shall provide that credit rating to the
Board. The Board will utilize this preliminary credit assessment (for
loans over $5 million) or an existing credit rating (for loans less
than $5 million) to assist in evaluating the creditworthiness of the
proposed transaction and determining whether it provides a reasonable
assurance of repayment. The Board may approve a Guarantee over $5
million only if it receives a final credit rating opinion letter from
the rating agency on the Loan that is in form and substance acceptable
to the Board.
[[Page 48826]]
(3) Evidence of lack of credit elsewhere. The Applicant shall
provide the information required pursuant to Sec. 2201.12(b)(2)(v) of
this part.
(h) Compliance with other Federal statutes, regulations and
Executive Orders. The Applicant must certify compliance with other
applicable Federal statutes, regulations, and Executive Orders.
(i) Environmental impact. The Applicant must provide an
environmental assessment that details of the Project's impact on the
environment as required pursuant to Sec. 2201.16 of this part.
(j) Federal debt certification. The Applicant must provide a
certification that it is not delinquent on any obligation owed to the
government (7 CFR parts 3016 and 3019). No Guarantee will be made if
either the Applicant or Lender has an outstanding, delinquent Federal
debt until:
(1) The delinquent account has been paid in full;
(2) A negotiated repayment schedule is established and at least one
payment has been received; or
(3) Other arrangements, satisfactory to the agency responsible for
collecting the debt, are made.
(k) Supplemental information. The Applicant should provide any
additional information it considers relevant to the Project and likely
to be helpful in determining the extent to which the Project would
further the purposes of the Act.
(l) Additional information required by the Board. The Applicant
must provide any additional information the Board determines is
necessary to adequately evaluate the application.
(m) Application fee. For an application to be considered complete,
the Applicant must submit a check payable to the United States Treasury
in the amount of the application fee as set forth in Sec. 2201.21(a)
of this part.
(n) Incomplete application. An incomplete application, including
any fee submitted therewith, will be returned to the Applicant without
action.
Sec. 2201.12 Applicant.
(a) Eligibility. (1) The Board will make a determination of
eligibility of an Applicant to be a Borrower under the Program based
upon the Applicant's ability to directly provide, as a result of
financing received under the Program, Local Television Broadcast
Signals to households in Nonserved Areas and/or Underserved Areas and
the information provided pursuant to paragraph (b) of this section.
(2) A determination that an Applicant is eligible does not assure
that the Board will approve a Guarantee sought, or otherwise preclude
the Board from declining to approve a Guarantee.
(b) Documentation for Eligibility Determination. (1) An Applicant
must provide a Term Sheet evidencing a commitment of that Lender or
Agent, and the Lenders it represents, to make a Loan to the Applicant
upon an Offer of Guarantee by the Board, subject to the requirements of
the Act and the regulations set forth in this part.
(2) An Applicant must provide documentation demonstrating that:
(i) The Assets, facilities, or equipment covered by the Loan will
be utilized economically and efficiently;
(ii) The terms, conditions, security, and schedule and amount of
repayments of principal and the payment of interest with respect to the
Loan protect the financial interests of the United States and are
reasonable;
(iii) Appropriate and adequate Collateral secures the Loan sought
to be guaranteed;
(iv) All necessary and required regulatory and other approvals,
spectrum licenses, and delivery permissions have been received for the
Loan and the Project under the Loan;
(v) The Loan would not be available on reasonable terms and
conditions without a Guarantee under this Program. To satisfy this
requirement, an Applicant must provide, with its application,
documentation from at least one lending institution other than the
Lender to which the Applicant has applied for financial assistance
dated within six months of submission of the application, indicating
that the Applicant was unable to obtain substantially the same Loan it
is applying for on reasonable terms and conditions; and
(vi) Repayment of the Loan can reasonably be expected.
Sec. 2201.13 Lender.
(a) Eligibility. (1) The Board will make a determination of
eligibility of a Lender to make a Loan to be guaranteed under the
Program based upon the criteria set forth in paragraphs (b) and (c) of
this section.
(2) A determination that a Lender is eligible does not assure that
the Board will approve a Guarantee sought, or otherwise preclude the
Board from declining to approve a Guarantee.
(b) Qualifications. In addition to evaluating an application
pursuant to Sec. 2201.18, in making a determination to approve a
Guarantee to a Lender, the Board will assess:
(1) The Lender's Regulatory Capital Ratios, in the case of Banking
Institutions, or Net Worth Ratios, in the case of other institutions;
(2) Whether the Lender possesses the ability to administer the
Loan, including its experience with loans to telecommunications
companies;
(3) The scope, volume and duration of the Lender's activity in
administering loans, including federally guaranteed loans;
(4) The performance of the Lender's loan portfolio, including its
current delinquency rate;
(5) The Lender's charge-off rate, expressed as a percentage of
outstanding loans for its current fiscal year;
(6) If the Lender intends to sell participation interests in the
Loan, the plan of syndication; and
(7) Any other matter the Board deems material to its assessment of
the Lender.
(c) A Loan will not be guaranteed unless:
(1) If the Lender is not a nonprofit corporation and is subject to
loan-to-one-borrower and Affiliate transaction restrictions under
applicable law, the Loan is made in accordance with such restrictions;
(2) If the Lender is not a nonprofit corporation and is not subject
to the restrictions described in paragraph (c)(1) of this section, the
Loan is made to a Borrower that is not an Affiliate of the Lender and
the amount of the Loan, and all outstanding loans by the Lender to the
Borrower and any of its Affiliates, does not exceed 10 percent of the
Net Equity of the Lender;
(3) If the Lender is a nonprofit corporation, the Board determines
that:
(i) Such nonprofit corporation has one or more issues of
outstanding long-term debt that is rated within the highest 3 rating
categories of a nationally recognized statistical rating organization,
as evidenced by written confirmation from the nationally recognized
statistical rating organization, subject to updating upon request of
the Board; and
(ii) The making of the Loan would not cause a decline in the rating
of such Lender's long-term debt below the highest 3 rating categories
of a nationally recognized statistical rating organization, as
evidenced by written confirmation from the nationally recognized
statistical rating organization, subject to updating upon request of
the Board.
(d) Agent. (1) An application for a Guarantee of a single Loan that
includes participation of more than one Lender must identify one of the
Lenders participating in such Loan to act as Agent for all Lenders.
This Agent is
[[Page 48827]]
responsible for administering the Loan and shall have those duties and
responsibilities required of an Agent, as set forth in the Guarantee.
(2) If more than one Lender is seeking a Guarantee of a single
Loan, each one of the Lenders on the application must meet the
qualifications set forth in paragraphs (b) and (c) of this section.
However, only the Agent must meet the qualifications set forth in
paragraph (b)(2) and (3) of this section.
(3) Each Lender, irrespective of any indemnities or other
agreements between the Lenders and the Agent, shall be bound by all
actions, and/or failures to act, of the Agent. The Board and the
Administrator shall be entitled to rely upon such actions and/or
failures to act of the Agent as binding all Lenders.
Sec. 2201.14 Eligible Loan purposes.
To be guaranteed under the Program, a Loan must be made for the
purpose of financing the acquisition, improvement, enhancement,
construction, deployment, launch, or rehabilitation of the means by
which Local Television Broadcast Signals will be delivered to a
Nonserved Area or Underserved Area.
Sec. 2201.15 Ineligible Loan purposes.
(a) The proceeds of the Loan shall not be used for operating,
advertising, or promotion expenses, or for the acquisition of licenses
for the use of spectrum in any competitive bidding.
(b) The Applicant shall not transfer proceeds of the Loan to any
Affiliate(s).
(c) A Loan shall not be guaranteed unless the proposed Project, as
determined by the Board in consultation with the National
Telecommunications and Information Administration, 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 and is commercially viable.
(d) The Board will not fund a Project that is designed primarily to
serve one or more of the top 40 Designated Market Areas.
(e) The Board will not fund a Project that would alter or remove
National Weather Service warnings from Local Television Broadcast
Signals.
(f) No Guarantee may be granted or used to provide funds to a
Project that extends, upgrades, or enhances the services provided over
any cable system to an area that, as of the enactment of the Act, is
covered by a cable franchise agreement that expressly obligates a cable
operator to serve such area.
Sec. 2201.16 Environmental requirements.
(a) General. (1) Environmental assessments of the Board's actions
will be conducted in accordance with applicable statutes, regulations,
and Executive Orders. Therefore, each application for a Guarantee under
the Program must be accompanied by information necessary for the Board
to meet the requirements of applicable law.
(2) Actions requiring compliance with NEPA. (i) The types of
actions classified as ``major Federal actions'' subject to NEPA
procedures are discussed in 40 CFR parts 1500 through 1508.
(ii) With respect to this Program, these actions typically include:
(A) Any Project, permanent or temporary, that will involve
construction and/or installations;
(B) Any Project, permanent or temporary, that will involve ground
disturbing activities; and
(C) Any Project supporting renovation, other than interior
remodeling.
(3) Environmental information required from the Applicant. (i)
Environmental data or documentation concerning the use of the proceeds
of any Loan guaranteed under this Program must be provided by the
Applicant to the Board to assist the Board in meeting its legal
responsibilities.
(ii) Such information includes:
(A) Documentation for an environmental threshold review from
qualified data sources, such as a Federal, State or local agency with
expertise and experience in environmental protection, or other sources,
qualified to provide reliable environmental information;
(B) Any previously prepared environmental reports or data relevant
to the Loan at issue;
(C) Any environmental review prepared by Federal, State, or local
agencies relevant to the Loan at issue; and
(D) Any other information that can be used by the Board to ensure
compliance with environmental laws.
(iii) All information supplied by the Applicant is subject to
verification by the Board.
(b) The regulations of the Council on Environmental Quality
implementing NEPA require the Board to provide public notice of the
availability of Project specific environmental documents such as
environmental impact statements, environmental assessments, findings of
no significant impact, records of decision, etc., to the affected
public. See 40 CFR 1506.6(b). Environmental information concerning
specific Projects can be obtained from the Board by contacting:
Secretary, LOCAL Television Loan Guarantee Board, 1400 Independence
Ave., SW., Room 2919-S, Stop 1575; Washington, DC 20250-1575.
(c) National Environmental Policy Act. (1) Purpose. The purpose of
this paragraph (c) is to adopt procedures for compliance with the
National Environmental Policy Act, 42 U.S.C. 4321 et seq., by the
Board. This paragraph supplements regulations at 40 CFR Chapter V.
(2) Definitions. For purposes of this section, the following
definitions apply:
Categorical exclusion means a category of actions which do not
individually or cumulatively have a significant effect on the human
environment and for which neither an environmental assessment nor an
environmental impact statement is required.
Environmental assessment means a document that briefly discusses
the environmental consequences of a proposed action and alternatives
prepared for the purposes set forth in 40 CFR 1508.9.
EIS means an environmental impact statement prepared pursuant to
section 102(2)(C) of NEPA.
FONSI means a finding of no significant impact on the quality of
human environment after the completion of an environmental assessment.
NEPA means the National Environmental Policy Act, 42 U.S.C. 4321,
et seq.
Working capital loan means money used by an ongoing business
concern to fund its existing operations.
(3) Delegations to the Secretary of the Board. (i) All incoming
correspondence from Council on Environmental Quality (CEQ) and other
agencies concerning matters related to NEPA, including draft and final
EIS, shall be brought to the attention of the Secretary of the Board.
The Secretary of the Board will prepare or, at his or her discretion,
coordinated replies to such correspondence.
(ii) With respect to actions of the Board, the Board will:
(A) Ensure preparation of all necessary environmental assessments
and EISs;
(B) Maintain a list of actions for which environmental assessments
are being prepared;
(C) Revise this list at regular intervals, and send the revisions
to the Environmental Protection Agency;
(D) Make the list available for public inspection;
(E) Maintain a list of EISs; and
(F) Maintain a file of draft and final EISs.
[[Page 48828]]
(4) Categorical exclusions. (i) This paragraph describes various
classes of Board actions that normally do not have a significant impact
on the human environment and are categorically excluded. The word
``normally'' is stressed; there may be individual cases in which
specific factors require contrary action.
(ii) Subject to the limitations in paragraph (c)(4)(iii) of this
section, the actions described in this paragraph have been determined
not to have a significant impact on the quality of the human
environment. They are categorically excluded from the need to prepare
an environmental assessment or an EIS under NEPA.
(A) Guarantees of working capital loans; and
(B) Guarantees of loans for the refinancing of outstanding
indebtedness of the Applicant, regardless of the purpose for which the
original indebtedness was incurred.
(iii) Actions listed in paragraph (c)(4)(ii) of this section that
otherwise are categorically excluded from NEPA review are not
necessarily excluded from review if they would be located within, or in
other cases, potentially affect:
(A) A floodplain;
(B) A wetland;
(C) Important farmlands, or prime forestlands or rangelands;
(D) A listed species or critical habitat for an endangered species;
(E) A property that is listed on or may be eligible for listing on
the National Register of Historic Places;
(F) An area within an approved State Coastal Zone Management
Program;
(G) A coastal barrier or a portion of a barrier within the Coastal
Barrier Resources System;
(H) A river or portion of a river included in, or designated for,
potential addition to the Wild and Scenic Rivers System;
(I) A sole source aquifer recharge area;
(J) A State water quality standard (including designated and/or
existing beneficial uses and anti-degradation requirements); or
(K) The release or disposal of regulated substances above the
levels set forth in a permit or license issued by an appropriate
regulatory authority.
(5) Responsibilities and procedures for preparation of an
environmental assessment. (i) The Board will request that the Lender
and Applicant prepare an environmental assessment that provides
information concerning all potentially significant environmental
impacts of the Applicant's proposed Project. The Board, consulting at
its discretion with CEQ, will review the information provided by the
Lender and Applicant. Though no specific format for an environmental
assessment is prescribed, it shall be a separate document, suitable for
public review and should include the following in conformance with 40
CFR 1508.9:
(A) Description of the environment. The existing environmental
conditions relevant to the Board's analysis determining the
environmental impacts of the proposed Project should be described. The
no action alternative also should be discussed;
(B) Documentation. Citations to information used to describe the
existing environment and to assess environmental impacts should be
clearly referenced and documented. These sources should include, as
appropriate, but not be limited to, local, tribal, regional, State, and
Federal agencies, as well as, public and private organizations and
institutions;
(C) Evaluating environmental consequences of proposed actions. A
brief discussion should be included of the need for the proposal, of
alternatives as required by 42 U.S.C. 4332(2)(E) and their
environmental impacts. The discussion of the environmental impacts
should include measures to mitigate adverse impacts and any
irreversible or irretrievable commitments of resources to the proposed
Project.
(ii) An environmental assessment, may:
(A) Tier upon the information contained in a previous EIS, as
described in 40 CFR 1502.20;
(B) Incorporate by reference reasonably available material, as
described in 40 CFR 1502.21; and/or
(C) Adopt a previously completed EIS reasonably related to the
Project for which the proceeds of the Loan sought to be guaranteed
under the Program will be used, as described in 40 CFR 1506.3.
(iii) If, on the basis of the environmental assessment, the Board
determines that an EIS is not required, a FONSI, as described in 40 CFR
1508.13 will be prepared. The FONSI will include the environmental
assessment or a summary of it and be available to the public from the
Board. The Board shall maintain a record of these decisions, making
them available to interested parties upon request. Requests should be
directed to LOCAL Television Loan Guarantee Board, 1400 Independence
Ave., SW., Room 2919-S, Stop 1575; Washington, DC 20250-1575. Prior to
a final Guarantee decision, a copy of the NEPA documentation shall be
sent to the Board for consideration.
(6) Responsibilities and procedures for preparation of an
environmental impact statement. (i) If after the environmental
assessment has been completed, the Board determines that an EIS is
necessary, it and other related documentation will be prepared by the
Board in accordance with section 102(2)(c) of NEPA, this section, and
40 CFR parts 1500 through 1508. The Board may seek additional
information from the Applicant in preparing the EIS. Once the document
is prepared, the Board will transmit the document to the Environmental
Protection Agency.
(ii) EIS. (A) The following procedures, as discussed in 40 CFR
parts 1500 through 1508, will be followed in preparing an EIS:
(1) The format and contents of the draft and final EIS shall be as
discussed in 40 CFR part 1502.
(2) The requirements of 40 CFR 1506.9 for filing of documents with
the Environmental Protection Agency shall be followed.
(3) The Board, consulting at its discretion with CEQ, shall examine
carefully the basis on which supportive studies have been conducted to
assure that such studies are objective and comprehensive in scope and
in depth.
(4) NEPA requires that the decision making ``utilize a systematic,
interdisciplinary approach that will ensure the integrated use of the
natural and social sciences and the environmental design arts.'' 42
U.S.C. 4332(A). If such disciplines are not present on the Board staff,
appropriate use should be made of personnel of Federal, State, and
local agencies, universities, non-profit organizations, or private
industry.
(B) Until the Board issues a record of decision as provided in 40
CFR 1502.2 no action concerning the proposal shall be taken which
would:
(1) Have an adverse environmental impact; or
(2) Limit the choice of reasonable alternatives.
(3) 40 CFR 1506.10 places certain limitations on the timing of
Board decisions on taking ``major Federal actions.'' A Guarantee shall
not be made before the times set forth in 40 CFR 1506.10.
(iii) A public record of decision stating what the decision was;
identifying alternatives that were considered, including the
environmentally preferable one(s); discussing any national
considerations that entered into the decision; and summarizing a
monitoring and enforcement program if applicable for mitigating the
environmental effects of a proposal will be prepared. This record of
decision will be prepared at the time the decision is made.
[[Page 48829]]
Sec. 2201.17 Submission of applications.
(a) Applications should be submitted as follows:
(1) Applications for Guarantees shall be submitted to the LOCAL
Television Loan Guarantee Board, 1400 Independence Avenue, SW., Stop
1575, Room 2919-S, Washington, DC 20250-1575. Applications should be
marked Attention: Secretary, LOCAL Television Loan Guarantee Board.
(2) Applications must be submitted postmarked not later than the
application filing deadline established by the Board if the
applications are to be considered during the period for which the
application was submitted.
(3) All Applicants must submit an original and two copies of a
completed application.
(b) Application deadline. One or more application windows will be
announced. The duration of each application window for submission of
applications will be approximately 120 days. Notice of an application
window will be published in the Federal Register.
Sec. 2201.18 Application selection.
(a) Application priority. When evaluating applications to determine
which Project or combinations of Projects will best facilitate access
to Local Television Broadcast Signals, the Board shall give priority in
the approval of Guarantees to the following categories:
(1) First, to applications for Projects that will serve households
in Nonserved Areas.
(2) Second, to applications for Projects that will serve households
in Underserved Areas.
(3) Within each category, the Board shall balance applications for
Projects that will serve the largest number of households with
applications for Projects that will serve remote, isolated communities
(including noncontiguous States) in areas that are unlikely to be
served through market mechanisms. The Board shall consider the
Project's estimated cost per household and shall give priority to those
applications for Projects that provide the highest quality service at
the lowest cost per household.
(b) Additional considerations. (1) The Board shall give higher
consideration to applications for Projects that, in addition to
providing Local Television Broadcast Signals, also provide High-speed
Internet service.
(2) The Board shall consider other factors, which shall include
applications for Projects that:
(i) Offer a separate tier of Local Television Broadcast Signals at
a lower cost to consumers, except where prohibited by applicable
Federal, State, or local laws or regulations;
(ii) Enable the delivery of Local Television Broadcast Signals
consistent with the purpose of the Act by means reasonably compatible
with existing systems or devices predominantly in use.
(c) Other considerations. All other evaluation factors and priority
considerations being equal, the Board will give a preference in
approving Guarantees to those applications for Projects that provide
greater amounts and higher quality Collateral.
(d) Protection of United States financial interests. The Board may
not approve the Guarantee of a Loan unless:
(1) The Board has been given documentation, assurances, and access
to information, persons, and entities necessary, as determined by the
Board, to address issues relevant to review of the Loan by the Board
for purposes of the Act; and
(2) The Board makes a determination in writing that:
(i) To the best of its knowledge upon due inquiry, the Assets,
facilities, or equipment covered by the Loan will be utilized
economically and efficiently;
(ii) The terms, conditions, security, and schedule and amount of
repayments of principal and the payment of interest with respect to the
Loan protect the financial interests of the United States and are
reasonable;
(iii) The value of Collateral provided by an Applicant is at least
equal to the unpaid balance of the Loan amount; and if the value of
Collateral provided by an Applicant is less than the Loan amount, the
additional required Collateral is provided by the Applicant or an
Affiliate designated by the Applicant and acceptable to the Board;
(iv) All necessary and required regulatory and other approvals,
spectrum licenses, and delivery permissions have been received for the
Loan and the Project under the Loan;
(v) The Loan would not be available on reasonable terms and
conditions without a Guarantee under the Act; and
(vi) Repayment of the Loan can be reasonably expected.
(e) Non approvals. A Guarantee will not be approved if it is
determined that:
(1) The Applicant's proposal does not indicate financial
feasibility, or the Collateral is determined to not adequately secure
the Loan;
(2) The Applicant's proposal indicates technical flaws, which, in
the opinion of the Board, would prevent successful implementation, or
operation of the Project;
(3) Any other aspect of the Applicant's proposal fails to
adequately address any requirements of the Act or the regulations in
this part or contains inadequacies which would, in the opinion of the
Board, undermine the ability of the Project to meet the general purpose
of the Act or comply with requirements of the regulations in this part;
or
(4) Proceeds for the Loan will be used for any of the ineligible
purposes set forth in Sec. 2201.15.
Sec. 2201.19 Loan terms.
(a) All Loans guaranteed under the Program shall be due and payable
in full no later than the earlier of 25 years from date of the closing
of the Loan or the economically useful life of the primary Assets to be
used in delivery of the signals concerned, as determined by the Board.
(b) Loans guaranteed under the Program must:
(1) Bear a rate of interest determined by the Board to protect the
financial interests of the United States and to be reasonable. This
determination will be based on the Board's comparison of the:
(i) Difference, or interest rate spread, between the interest rate
on the Loan sought to be guaranteed and the current average yield on
outstanding marketable obligations of the United States of comparable
maturity; and
(ii) The interest rate spread between the rates on recently issued
and similarly rated and structured obligations and the current yields
on outstanding marketable obligations of the United States of
comparable maturity.; and
(2) Have terms that, in the judgment of the Board, are consistent
in material respects with the terms of similar obligations in the
private capital market.
(c) So long as any principal and interest is due and payable on a
Loan guaranteed under the Act, a Borrower shall:
(1) Maintain Assets, equipment, facilities, and operations on a
continuing basis;
(2) Not make any discretionary dividend payments that impair its
ability to repay obligations guaranteed under the Act;
(3) Remain sufficiently capitalized; and
(4) Submit to and cooperate fully with any audit or Collateral
review required by the Board.
Sec. 2201.20 Collateral.
(a) Existence of adequate Collateral. An Applicant shall provide
the Board such documentation as is necessary, in the judgment of the
Board, to provide satisfactory evidence that appropriate and adequate
Collateral secures a Loan
[[Page 48830]]
guaranteed under the Program. Prior to approving a Guarantee, the Board
shall require that the value of the Collateral pledged to be at least
equal to the unpaid balance of the Loan Amount.
(b) Form of Collateral. Collateral required by paragraph (a) of
this section shall consist solely of Assets of the Applicant, any
Affiliate of the Applicant, or both, as identified in the Loan
Documents, including primary Assets to be used in the delivery of the
service for which the Loan is guaranteed. Such Assets may include, but
are not limited to, the following:
(1) Tangible Assets, including current Assets (such as cash,
accounts receivable, and inventory), reserve funds, land, buildings,
machinery, fixtures, and equipment;
(2) Assignments of all relevant contractual agreements, including
contractual rights to certain cash flows, marketing arrangements,
third-party guarantees, insurance policies, contractors' bonds, and
other agreements or rights that may be of value;
(3) All permits, governmental approvals, franchises and licenses,
necessary to carry out and operate the required equipment or service;
and
(4) Other Assets, which, in the judgment of the Board, possess
Collateral value suitable for securing the Loan, including a pledge of
all or part of the Applicant's ownership interest in the Project or
company, and any after-acquired property.
(c) Applicant's compliance findings. An Applicant's compliance with
paragraphs (a) and (b) of this section does not assure a finding of
reasonable assurance of repayment, or assure the Board's Guarantee of
the Loan.
(d) Collateral for entire loan. The same Collateral shall secure
the entire Loan, including both the Guaranteed Portion and the
Unguaranteed Portion.
(e) Review of valuation. The value of Collateral securing a Loan is
subject to review and approval by the Board, and may be adjusted
downward by the Board if the Board reasonably believes such adjustment
is appropriate. The Board's evaluation of the proposed Collateral for
the Loan will be based on several factors, including but not limited
to:
(1) The expected value of the pledged Collateral in the event of
defaults with specific consideration given to the residual value of
Project Assets to third-parties and the liquidity of such Assets;
(2) The cash flow characteristics of the Project;
(3) The contractual characteristics of the Project to the extent
Project-related agreements underpin the Project's estimated cash flows;
(4) The competitiveness of the Project's economics and the
associated certainty of cash flows in the future; and
(5) The creditworthiness of any designated Affiliates(s) that
provides services to the Applicant or provides any credit support.
(f) Ongoing Collateral assessment. The Board shall require that the
value of the Collateral shall be at all times at least equal to the
unpaid balance of the Loan Amount. To ensure that the ongoing value of
the Collateral is properly maintained, the Board may require the
borrower to have an ongoing third-party inspection and valuation of the
Collateral that is acceptable to the Board. If the Collateral value at
the measurement date is less than the unpaid balance of the Loan
Amount, the Borrower or its designated Affiliates(s) will be required
to pledge additional acceptable Collateral to cover any deficit.
(g) Lien on Collateral. (1) Upon the Board's approval of a
Guarantee, the Administrator shall have liens on Collateral securing
the Loan, which shall be superior to all other liens on such
Collateral. The value of the Collateral (based on a determination
satisfactory to the Board) shall be at least equal to the unpaid
balance of the Loan amount, giving significant consideration to the
expected value of the Collateral in the event of defaults with specific
consideration given to the residual value of the Project Assets to
third-parties and the liquidity of such Assets.
(2) Both the Administrator and the Lender or Agent shall have a
perfected security interest in the Collateral fully sufficient to
protect the financial interests of the United States and the Lenders.
However, the security interest perfected by the Administrator shall
ensure that the Administrator has first priority in such Collateral.
Sec. 2201.21 Fees.
(a) Application fee. The Board shall charge each Applicant for a
Guarantee under the Program a non-refundable fee, payable to the United
States Treasury, to cover the costs of making necessary determinations
and findings with respect to an application for a Guarantee under the
Program. The amount of the fee is $10,000 for Loans of $1 million up to
$50 million, $15,000 for Loans of $50 million up to $100 million,
$30,000 for Loans of $100 million up to $500 million, and $40,000 for
Loans of $500 million or greater.
(b) Guarantee Origination Fee. The Board shall charge and collect
from a Borrower, at the closing of the Loan, a Guarantee Origination
Fee to cover the administrative costs of Board related to such Loan.
The amount of such fee shall be the lesser of two percent of the Loan
amount or $500,000.
(c) Lender fees. A Lender or Agent may assess and collect from the
Borrower such fees and costs associated with the application and
origination of the Loan as are reasonable and customary, taking into
consideration the amount and complexity of the credit. The Board may
take such fees and costs into consideration when determining whether to
offer a Guarantee.
Sec. 2201.22 Issuance of Guarantees.
(a) The Board's decisions to approve an application and extend an
Offer of Guarantee under the Program is conditioned upon:
(1) The Lender or Agent and Applicant obtaining any required
regulatory or judicial approvals;
(2) The Lender or Agent and Applicant being legally authorized to
enter into the Loan under the terms and conditions submitted to the
Board in the application;
(3) The Board's receipt of the Loan Documents and any related
instruments, in form and substance satisfactory to the Board all
properly executed by the Lender or Agent, Applicant, and any other
required party other than the Board;
(4) No material adverse change in the Applicant's ability to repay
the Loan between the date of the Board's approval and the date the
Guarantee is to be issued;
(5) Entering into the Guarantee violates no Loan covenants or
existing contractual obligations of the Borrower; and
(6) Such other conditions as determined by the Board.
(b) The Board may withdraw its approval of an application and
rescind its Offer of Guarantee if the Board determines that the Lender
or Agent or the Applicant cannot, or is unwilling to, provide adequate
documentation and proof of compliance with paragraph (a) of this
section within the time provided for in the Offer of Guarantee.
(c) Only after receipt of all the documentation required by this
section will the Administrator sign and deliver the Guarantee.
Sec. 2201.23 Funding for the Program.
(a) Costs incurred by the Government. The Act provides funding for
the costs incurred by the Government as a result of granting Guarantees
under the Program. While pursuing the goals of the Act, it is the
intent of the Board to
[[Page 48831]]
minimize the cost of the Program to the Government. The Board will
estimate the risk posed by the guaranteed Loans to the funds
appropriated for the costs of the Guarantees under the Program and
operate the Program accordingly.
(b) Credit risk premium. (1) Establishment and approval. The Board
may establish and approve the acceptance of credit risk premiums with
respect to a Guarantee under this Act in order to offset the cost, as
defined in section 502(5) of the Federal Credit Reform Act of 1990, of
the Guarantee. To the extent that appropriations of budget authority
are insufficient to cover the cost, as so determined, of a Guarantee,
and the Board approves such a Guarantee, credit risk premiums shall be
accepted from a non-Federal source on behalf of a Borrower.
(2) Credit risk premium amount. (i) General. The Board shall
determine the amount of any credit risk premium to be accepted with
respect to a Guarantee on the basis of:
(A) The financial and economic circumstances of the Borrower,
including the amount of Collateral offered;
(B) The proposed schedule of Loan disbursements;
(C) The business plans of the Borrower;
(D) Any financial commitment from a broadcast signal provider; and
(E) The concurrence of the Director of the Office of Management and
Budget as to the amount of the credit risk premium.
(ii) Proportionality. To the extent that appropriations of budget
authority are sufficient to cover the cost, as determined under section
502(5) of the Federal Credit Reform Act of 1990, of Guarantees, the
credit risk premium with respect to each Guarantee shall be reduced
proportionately.
(iii) Payment of premiums. Credit risk premiums under this
paragraph shall be paid to an escrow account established in the
Treasury, which shall accrue interest. Such interest shall be retained
by the escrow account, subject to paragraph (b)(2)(iv) of this section.
(iv) Deductions from escrow account. If a liquidation of the
Collateral occurs pursuant to Sec. 2201.33(h), any shortfall between
the proceeds of the liquidation net of costs and expenses relating to
the liquidation, and the guarantee amount paid shall be deducted from
funds in the escrow account and credited to the Administrator for
payment of such shortfall. At such time as all Loans guaranteed under
this Program have been repaid or otherwise satisfied in accordance with
the Act and the regulations in this part, remaining funds in the escrow
account, if any, shall be refunded, on a pro rata basis, to Borrowers
whose Loans guaranteed under the Program were not in Payment Default or
Default, or where any Payment Default or Default was cured in
accordance with the terms of the Loan Documents.
Sec. 2201.24 Insurance.
The Borrower of a Loan guaranteed under the Program shall obtain,
at its expense, insurance sufficient to protect the financial interests
of the United States, as determined by the Board.
Sec. 2201.25 Performance Agreement.
(a) The Borrower of a Loan guaranteed under the Program shall enter
into a Performance Agreement with the Administrator with respect to the
Local Television Broadcast Signals to be provided through the Project.
(b) The Administrator may assess against and collect from a
Borrower a penalty not to exceed 3 times the interest accrued on the
Loan during the period of noncompliance if the Borrower fails to meet
its stipulated Performance Agreement entered into under paragraph (a)
of this section.
Sec. 2201.26 Lender standard of care.
(a) The Lender or Agent shall exercise due care and diligence in
analyzing and administering the Loan as would be exercised by a
responsible and pru