Business and Industry Guaranteed Loan Program-Domestic Lamb Industry Adjustment Assistance Program Set Aside

Summary:

The Rural Business-Cooperative Service (RBS) is amending its regulation for Business and Industry Loans, as part of a U.S. Department of Agriculture (USDA) initiative to assist the ailing domestic lamb industry, to establish a 3-year set aside of a portion of its Business and Industry (BI) Guaranteed Loan Program funds to finance real estate purchases and improvements, working capital, debt refinancing, and equipment in domestic lamb packing and processing plants. The intended effect of this rule is to enhance the lamb industry's ability to compete in the marketplace.

Table of Contents

Dates:

The effective date of this interim rule is October 30, 2000. Written or e-mail comments must be received on or before December 29, 2000 to be assured of consideration.

Addresses:

Submit written comments via U.S. Postal Service, in duplicate, to the Regulations and Paperwork Management Branch, Attention: Cheryl Thompson, Rural Development, U.S. Department of Agriculture, STOP 0742, 1400 Independence Avenue, SW., Washington, DC 20250-0742. Submit written comments via Federal Express Mail, in duplicate, to the Regulations and Paperwork Management Branch, Attention: Cheryl Thompson, USDA-Rural Development, 3rd Floor, 300 E Street, SW., Washington, DC 20546. Also, comments may be submitted via the Internet by addressing them to “comments@rus.usda.gov.” The comment must contain the word “Lamb” in the subject line. All comments will be available for public inspection during regular work hours at the 300 E Street, SW., address listed above.

For further information contact:

Roland Woodfolk, Commercial Loan Specialist, Business Programs Processing Division, Rural Business-Cooperative Service, U.S. Department of Agriculture, STOP 3221, 1400 Independence Avenue, SW., Washington, D.C. 20250-3221, telephone (202) 690-3805, or by sending an e-mail message to “roland.woodfolk@usda.gov”.

Supplementary information:

Classification

This interim final rule has been determined not significant and, therefore, has not been reviewed by the Office of Management and Budget (OMB) under Executive Order 12866.

Programs Affected

The Catalog of Federal Domestic Assistance number for this program impacted by this action is 10.768, Business and Industry Loans.

Intergovernmental Review

Business and Industry Guaranteed loans are subject to the provisions of Executive Order 12372, which require intergovernmental consultation with State and local officials. RBS has conducted or will conduct intergovernmental consultation in the manner delineated in 7 CFR part 3015, subpart V, “Intergovernmental Review of Department of Agriculture Programs and Activities.”

Civil Justice Reform

This interim rule has been reviewed under Executive Order 12988, “Civil Justice Reform.” In accordance with this rule: (1) All state and local laws and regulations that are in conflict with this rule will be preempted, (2) no retroactive effect will be given this rule, and (3) administrative proceedings of the National Appeals Division (7 CFR part 11) must be exhausted before bringing suit in court challenging action taken under this rule.

Environmental Impact Statement

This document has been reviewed in accordance with 7 CFR part 1940, subpart G, “Environmental Program.” RBS has determined that this action does not constitute a major Federal action significantly affecting the quality of the human environment, and, inaccordance with the National Environmental Policy Act of 1969, 42 U.S.C. 4321et seq., an Environmental Impact Statement is not required.

Paperwork Reduction Act

There is no reporting and recordkeeping requirements associated with this interim rule.

Unfunded Mandates

Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 U.S.C chapters 17A and 25, establishes requirements for Federal agencies to assess the effects of their regulatory actions on state, local, and tribal governments and the private sector. Under section 202 of the UMRA, RBS generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates,” that may result in expenditures to state, local, or tribal governments, in the aggregate, or to the private sector, of $100 million or more in any 1 year. When such a statement is needed for a rule, section 205 of UMRA generally requires RBS to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, more cost-effective, or least burdensome alternative that achieves the objectives of the rule. This rule contains no Federal mandates (under the regulatory provisions of title II of the UMRA) 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 UMRA.

Regulatory Flexibility Act

In compliance with the Regulatory Flexibility Act, RBS has determined that this action would not have a significant economic impact on a substantial number of small entities, because the action will not affect a significant number of small entities, as defined by the Regulatory Flexibility Act (5 U.S.C. 601). RBS made this determination based on the fact that this regulation only impacts those who choose to participate in the program. Small entity applicants will not be impacted to a greater extent than large entity applicants.

Executive Order 13132

It has been determined under Executive Order 13132, “Federalism,” that this rule does not have sufficient federalism implications to warrant the preparation of a Federalism Assessment. The provisions contained in this rule will not have a substantial direct effect on states or their political subdivisions or on the distribution of power and responsibilities among the various levels of Government.

Immediate Effectiveness of This Rule

It has been determined that this rule should be issued as an interim rule, effective immediately (October 30, 2000), but subject to the modification on the consideration of comments that are timely received. As a result of the United States International Trade Commission findings in Investigation Number TA-201-68 on July 7, 1999, the President issued a declaration concerning the lamb meat industry. In response to that declaration, the Secretary of Agriculture is implementing import relief and adjustment assistance measures using, among other things, USDA loan programs to facilitate efforts of the domestic lamb industry to compete with foreign lamb industries.

Market conditions have deteriorated since 1997. Lamb producers have been some of the hardest hit, suffering major losses during 1997 and 1998, due to record high imports of low-price lamb meat; so there is a critical need for immediate action. Furthermore, while the need for immediate assistance is critical, potential harm to other parties, resulting from the issuance of this rule as an interim rule, is expected to be minimal. Therefore, RBS has determined that the notice and public procedure thereon are impracticable, unnecessary, and contrary to public interest.

Discussion of the Interim Rule

The purpose of the BI Guaranteed Loan Program is to improve, develop, or finance business, industry, and employment and improve the economic and environmental climate in rural communities. This purpose is achieved by bolstering the existing private credit structure through the guaranteeing of quality loans that will provide lasting community benefits.

The U.S. sheep industry lacks competitive domestic lamb products at the wholesale and retail levels to effectively compete with imported products. Upgrading processing systems to produce a consumer-ready product at the retail level, that include attributes such as modified atmosphere packaging, portion control, and pre-cooked items, will greatly enhance the domestic lamb industry's ability to compete in the marketplace. BI loans to upgrade, replace, and install new processing and packaging equipment are eligible under existing program regulations. As part of a USDA initiative to target assistance to the domestic lamb industry, the Agency is setting aside a portion of the BI Guaranteed Loan Program funds to finance real estate purchases and improvements, working capital, debt refinancing, and equipment in domestic lamb processing and packaging plants. This rule is intended to recognize the set aside of $15 million in fiscal year (FY) 2001, $5 million in FY 2002, and $5 million in FY 2003.

List of subjects in 7 cfr part 4279

Loan programs—Business, Rural areas.

Therefore, chapter XLII, title 7, Code of Federal Regulations, is amended as follows:

Part 4279—guaranteed loanmaking

1. The authority citation for part 4279 continues to read as follows:

Authority:

5 U.S.C. 301; 7 U.S.C 1989.

Subpart b—business and industry loans

2. Section 4279.175 is added to read as follows: § 4279.175

A 3-year set aside of BI Guaranteed Loan Program funds has been established in the National Office to fund loans to lamb processors for real estate purchases and improvements; working capital; debt refinancing; and upgrading, replacing, and installing new processing and packaging equipment for domestic lamb packing and processing plants. The set aside is $15 million for FY 2001, $5 million for FY 2002, and $5 million for FY 2003. These funds will be available through the third quarter of each respective year and, if not used, will revert for use in the general program.

Dated: September 29, 2000. Jill Long Thompson,

Under Secretary, Rural Development.

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