SUPPORTING STATEMENT
OMB Control No. 0572-0032
RUS Electric Loan Application and Related Reporting Burdens
A. Justification
1. Explain the circumstances that make the collection of information necessary.
The Rural Utilities Service (RUS) was established in 1994 by the Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994 (Pub. L. 103-354, 108 Stat. 3178, 7 U.S.C. 6941 et. Seq.) as successor to the Rural Electrification Administration (REA) with respect to certain programs, including the electric loan and loan guarantee program authorized under the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq., as amended) (RE Act).
The RE Act authorizes and empowers the Administrator of RUS to make and guarantee loans to furnish and improve electric service in rural areas. These loans are amortized over a period of up to 35 years and secured by the borrower's electric assets and/or revenue. In the interest of protecting loan security, monitoring compliance with debt covenants, and ensuring that RUS loan funds are used for purposes authorized by law, RUS requires that borrowers prepare and submit for RUS evaluation certain studies and reports. Some of these studies and reports are required only once for each loan application; others must be submitted periodically until the loan is completely repaid.
The RE Act also authorizes and empowers the Administrator of RUS to make or cause to be made, studies, investigations, and reports concerning the condition and progress of the electrification of the several States and Territories; and to publish and disseminate information with respect thereto. Information supplied by borrowers forms the basis of many of these reports.
2. Indicate how, by whom, and for what purpose the information is to be used. Except for a new collection, indicate the actual use the Agency has made of the information received from the current collection.
The required information is submitted by applicants to the RUS General Field Representative or to the RUS Washington, DC office and is used by RUS to:
Determine the eligibility of applicants for loans and loan guarantees under the RE Act;
Monitor the compliance of borrowers with debt covenants and regulatory requirements in order to protect loan security;
Ensure that borrowers use loan funds for purposes consistent with the statutory goals of the RE Act; and
Obtain information on the progress of rural electrification and evaluate the success of RUS program activities.
The information needed to determine eligibility for loans is required as part of a loan application. The information needed to monitor compliance with debt covenants and other requirements is required periodically.
The specific items of burden and their uses are as follows:
The first page of the application shall be a list of documents included in the application. Borrowers may use RUS Form 726, Checklist for Electric Loan Application, for this purpose.
This letter is part of an application for an RUS loan. It is the formal request by the borrower's management for loan funds. It must address the need for flood hazard insurance, provide a breakdown of the requested loan funds by State, list the counties served by the borrower, list any potential actions by third parties that could adversely affect the borrower's financial condition, and list pending regulatory actions pertaining to the borrower.
The borrower will submit a board resolution as part of the application package. The board resolution serves as the formal request by the borrower's board of directors for a loan from RUS. The board resolution shall include: The requested loan amount, loan term, final maturity, and method of amortization; sources and amounts of any supplemental or other financing; authorization for RUS to release appropriate information to supplemental or other lender(s) and authorization for these lender to release appropriate information to RUS; and the type of loan or loan guarantee the borrower is requesting (municipal rate, direct treasury rate loan, hardship loan, or loan guarantees). RUS does not require that this document be prepared in a certain format, however, the Agency does make sample board resolutions available on its website.
This form together with its attachments lists the construction, equipment and facilities and other cost estimates from the construction work plan or engineering and cost studies and the sources of financing for each component. The following information will be attached to the Form 740c: description of funds and materials; useful life of facilities financed by the loan; reimbursement schedule; and location of consumers. Each of these attachments is explained at 7 CFR 1710.401(a)(3).
This form is used to list the individual cost estimates from the construction work plan or other engineering study that support the need for RUS financing for any office, warehouse and service type facilities included.
Financial and Statistical Report (RUS Form 7 and 12)
These forms serve two purposes. A form containing recent month end data is submitted as part of an application for an RUS loan; the information is used to evaluate the borrower’s creditworthiness. An annual submission, which is required by the borrower’s mortgage, is used to monitor loan security, verify compliance with debt covenants and statutory requirements, and compile the Agency’s annual reports. Borrowers may manually enter this information on Form 7 or 12 or access RUS’ Document Collection System (DCS) website at http://dcs.usda.gov to download a program which will walk the borrower through electronic preparation of the form. The borrower can then submit the completed form by uploading via the web or returning the information via disk to the Agency. Data that is entered into the DCS System for Part O of the Form 7 will be maintained at the borrower’s site and will not be submitted to RUS. This information is based on monthly data. Year-end data will be reported to RUS and printed as found in Part O of the Form 7 paper copy.
Statements from the borrower’s counsel are part of an RUS loan application. The information may be submitted as a single statement addressing all three items, or as separate statements. The three statements are as follows:
Mortgage Information
Mortgage
information, including a property schedule, is needed for loan
security. RUS generally has a first mortgage on the borrower’s
total electric system, and an accurate and up to date description of
real property is necessary to prepare the mortgage. The statement
must list the counties served by the borrower and all the borrower’s
real property. In addition, the statement must state that the new
loan will not cause the borrower’s total debt to exceed the
maximum debt limit established by its board of directors.
A copy of each is required as part of an RUS loan application if either has been amended since the borrower’s last loan application or if this is the borrower’s first loan.
Rate Data
If the borrower is applying under the rate disparity and consumer income tests for either a municipal rate loan subject to the interest rate cap or a hardship rate loan, the application must provide a breakdown of residential consumers either by county or by census tract. In addition, if the borrower serves in 2 or more states, the application must include a breakdown of all ultimate consumers by state. This breakdown may be a copy of Form EIA 861 submitted by the Borrower to the Department of Energy or in a similar form.
The financial forecast includes such items as pro forma financial statements, goals for key financial rations, projected cash flows, estimated future capital needs, and projected costs and revenues. Underlying assumptions must be stated and the forecast must be approved by the borrower’s board of directors and be accompanied by a Certified Board Resolution. This information is prepared by any prudent business contemplating a capital investment project. The forecast is used by RUS to evaluate the borrower’s strength and stability in order to assess its ability to repay a loan. RUS requires distribution borrowers to follow the format of RUS Form 325; however, borrowers are permitted to use a computer program to prepare the information as long as the output is provided in the same format as RUS Form 325. RUS does not prescribe a format for generation and transmission (G&T) borrowers.
Power Requirements Study (PRS) and Board Resolution
A PRS must be submitted in support of a RUS loan application if the loan amount exceeds certain amounts. It must be maintained by the borrower and updated periodically. The PRS is used by RUS in conjunction with other studies to evaluate loan feasibility and to help ensure that the most effective use is made of loan funds. The PRS must be approved by the borrower’s board of director’s and be accompanied by a Certified Board Resolution. The information required in a PRS is maintained by any prudent electric utility in its normal course of business and is required in many States by regulatory authorities for rate setting and other purposes.
Construction Work Plan (CWP), Related Engineering Studies, and Board Resolution
A CWP must be submitted in support of a RUS loan application. In addition, all RUS borrowers must maintain a current CWP covering most new construction, improvements, replacements, and retirements of distribution, transmission, and generation plant that are financed by RUS loan funds. The CWP is developed by borrowers to determine their short and long term needs for plant. It is used by RUS in conjunction with other studies to evaluate loan feasibility and to help ensure that the most efficient use is made of loan funds. The CWP must be approved by the borrower’s board of director’s and be accompanied by a Certified Board Resolution. Most of the information required in the CWP is prepared by any prudent business contemplating a capital investment project. In may States the information is required by regulatory authorities for rate setting and other purposes.
This is part of an application for a RUS loan if the borrower is seeking to use loan funds for new generation facilities. The requirement ensures that full consideration is given to the possibility of obtaining needed power from other suppliers, including independent power producers before adding capacity financed by government loans. Most of the information is prepared by any prudent utility as part of its strategic planning. In many States it is required by a State regulatory authority.
Standard
Form (SF) 100, Equal Employment Opportunity Employer Report.
The form is required by the Department of Labor and
sets forth employment data for borrowers with 100 or more employees.
A copy of this form, as submitted to the Department of Labor, is to
be included in the application for an insured loan if the borrower
has more than 100 employees. (The time attributed to this form is
the time that it takes the borrower to provide RUS with a copy of
the completed form.) This form is cleared under 3046-0007.
Form
AD-1047, Certification Regarding Debarment, Suspension and Other
Responsibility Matters – Primary Covered Transactions
This
statement certifies that the borrower will comply with certain
regulations on debarment and suspension required by Executive Order
12549, Department and Suspension and 7 CFR 3017. In lieu of this
form, the Agency will issue a more current certification to
borrowers to execute.
This assurance, which will be submitted only once by each borrower, provides that the borrower shall comply with 49 CFR part 24, which implements the Uniform Relocation Assistance and Real Property Acquisition Policy Act of 1970, as amended by the Uniform Relocation Act Amendments of 1987 and 1991.
The following information on lobbying is required pursuant to 7 CFR Part 3018:
Prior to approval of a loan or advance of funds, a borrower must report to RUS whether or not it is delinquent on any Federal debt. Applicants for a loan or loan guarantee must also certify that they have been informed of the collection options the Federal government may use to collect delinquent debt.
3. Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g. permitting electronic submission of responses, and the basis for the decision for adopting this means of collection.
At this time, RUS is requesting approval to place the RUS Forms associated with this package on its website at http://www.usda.gov/rus (excluding RUS Forms 7 and 12, see next paragraph). Even though the Electric Program of RUS is not operated from a USDA Service Center, the Agency is working toward placing many of its forms on the USDA e-Gov Website. The Agency has identified RUS Forms 726, 740c, 740g, 325, and 266 as forms that will be developed in the common software adopted by the Service Center Agencies. Once these forms have been completed in the common software, with accompanying help instructions, the Agency will request approval from OMB to place these forms on the USDA e-Gov Website. Due to issues regarding electronic signatures, borrowers will need to submit these forms via hard copy. The Agency is awaiting policy and guidance from the Department regarding electronic signature delivery. Once this guidance is received the Agency will examine methods in which to implement the use of electronic signatures.
With this information collection package, RUS is requesting the continued approval of its web-based system related to RUS Forms 7 and 12. A web-based program was developed for the 7 and 12 which allows borrowers to download the needed software from an RUS website, complete the required form on their computer, and upload the completed form back to RUS via the web. Borrowers also have the option to return the information via diskette to the Agency. The output of screens that borrowers enter information into has been included in this package. The applicable website to access the system is http://dcs.usda.gov/. Due to issues regarding electronic signatures, borrowers will need to submit a hard copy signature page to the Agency after uploading the completed form to the Agency. A small percentage of borrowers complete the form via paper, so the Agency is prepared to provide these borrowers with a paper form.
The Agency is examining ways that will allow the supporting documentation that is prepared independently by borrowers in support of the loan application to be submitted electronically in order to comply with the Government Paperwork Elimination Act.
4. Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use for the purposes described in Item 2 above.
The information required by this collection is available only from individual borrowers and much of it is project specific. Much of the information is collected and analyzed by any prudent business in the course of its operations, and some is prepared by an electric utility as part of a petition to its State Regulatory Authority. Whenever possible RUS accepts copies of documents the borrower has prepared for another purpose.
The Department of Energy (DOE) collects some information about RUS electric borrowers. Where possible, RUS relies on DOE data.
5. If the collection of information impacts small businesses or other small entities (item 5 of OMB Form 83-1), describe any methods used to minimize burden.
All but a few electric borrowers meet the Small Business Administration criteria for a small business. RUS has made every effort to ensure that the burden on these small entities is the minimum necessary to effectively administer the agency programs.
6. Describe the consequences to Federal program or policy activities if the collection is not conducted or conducted less frequently, as well as any technical or legal obstacles to reducing burden.
Information needed for evaluating loan applications is required only once for each application. Information necessary to monitor loan security and compliance with RE Act purposes and information necessary to publish reports is required periodically. Less frequent collection would not allow RUS to accomplish statutory goals.
7. Explain any special circumstances that would cause an information collection to be conducted in a manner:
a. Requiring respondents to report information more than quarterly.
There are no requirements to respond more than quarterly.
b. Requiring written responses in less than 30 days.
There are no requirements to respond in less than 30 days.
c. Requiring more than an original and two copies.
There are no requirements to submit more than an original and two copies.
d. Requiring respondents to retain records for more than 3 years.
There are no requirements to retain records for more than 3 years. Record retention requirements for RUS Forms 7 and 12, shall be in accordance with 7 CFR 1767.
e. That is not designed to produce valid and reliable results that can be generalized to the universe of study.
This collection does not involve a survey.
f. Requiring use of statistical sampling which has not been reviewed and approved by OMB.
This collection does not involve statistical sampling.
g. Requiring a pledge of confidentiality.
There is no requirement for a pledge of confidentiality.
h. Requiring submission of proprietary trade secrets.
There is no requirement to submit proprietary trade secrets.
8. If applicable, identify the date and page number of publication in the Federal Register of the agency’s notice soliciting comments on the information collection. Summarize public comments received and describe actions taken by the agency in response to these comments. Describe efforts to consult with persons outside the Agency to obtain their views on the availability of data, frequency of collection, the clarity of instructions and recordkeeping, disclosure, reporting format (if any), and on data elements to be recorded, disclosed, or reported.
As required by 5 CFR 1320.9(d), a Notice to request public comments was published on December 20, 2004, at 66 FR 75901. No comments were received.
RUS maintains close contact with borrowers through general field representatives and a headquarters staff. RUS also conducts seminars for its borrowers. Suggestions and comments are always considered by the Agency.
9. Explain any decision to provide any payment or gift to respondents, other than reenumeration of contractors or grantees.
There is no provision to provide payments or gifts to respondents.
10. Describe any assurance of confidentiality provided to respondents and the basis for the assurance in statute, regulation, or Agency policy.
No assurances of confidentiality have been provided.
11. Provide additional justification for any question of a sensitive nature, such as sexual behavior or attitudes, religious beliefs, and other matters that are commonly considered private.
There are no questions of a sensitive nature.
12. Provide estimates of the hour burden of the collection of information.
The total hour burden for this collection of information is estimated to be 65,673 hours and was derived as follows:
Number of respondents: As of December 31, 2003, RUS had 678 active borrowers. Of these 621 are distribution borrowers, and 57 are power supply borrowers, also known as “generation and transmission borrowers” or “G&Ts.”
Total burden: This information collection involves a total of 65,673 burden hours. The burden hour estimate for each component of this information collection is shown in the spreadsheet included with this package.
Annualized cost to respondents: RUS estimates that approximately 80 percent of the time required to prepare and submit this information 52,539 hours is professional time costing $35per hour, and the balance 13,134 hours is clerical time costing $15 per hour. In addition, RUS estimates that approximately $2 per hour is spent for paper and other supplies. Therefore, the cost is estimated as follows:
Professional time 52,539 hours @ $35 $1,838,865
Clerical time 13,134 hours @ $15 $197,010
Supplies 65,741 hours @ $2 $131,482
Total $2,167,357
13. Provide an estimate of the total annual cost burden to respondents or recordkeepers resulting from the collection of information.
Total capital and start-up cost component (annualized over its expected useful life); and
There are no capital or start-up costs associated with this collection.
(b) Total operation and maintenance and purchase of services component.
There are no operation and maintenance or purchase of services component associated with this collection.
14. Provide estimates of annualized cost to the Federal Government.
The cost to the Federal Government is estimated as follows:
Review of loan applications
GS Grade 13 step 5 @ $40 X 164 hours X 200 loans $1,312,000
Yearly review of financial and statistical information
GS Grade 13 step 5 @ $40 X 4 hours X 680 submissions $108,800
Additional costs associated with this collection of information include travel, training, printing and mailing costs of $ 5,000. This figure was estimated as follows:
$25 per loan X 200 loans $ 5,000
Therefore, a total annual cost to the Federal Government of $1,425,800 is associated with this collection.
15. Explain the reasons for any program changes or adjustments reported in items 13 or 14 of the OMB Form 83-1.
This is an extension of a currently approved collection. There is an increase of 48,839 hours due to an adjustment.
16. For collection of information whose results will be published, outline plans for tabulation and publication.
RUS' Statistical Report is a compilation of operating information and is based in part on financial and statistical reports (RUS Form 7 and 12) submitted by borrowers. It is published annually and is available from the Superintendent of Documents.
17. If seeking approval to not display the expiration date for OMB approval of the information collection, explain the reasons that display would be inappropriate.
RUS requests approval to not display the expiration date on the forms that are associated with this collection of information. Many borrowers reproduce these forms or maintain these forms electronically to meet their reporting needs in lieu of requesting copies directly from RUS. Past experience has shown that the expiration date is not updated on the forms when it changes every three years. Also, RUS incurs additional cost for design and reprinting of stock with each new OMB extension.
Explain each exception to the certification statement identified in item 19 on
OMB 83-1.
There are no exceptions to the certification statement.
Collection of Information Employing Statistical Methods.
This collection of information does not employ statistical methods.
OMB
#0572-0032
| File Type | application/msword |
| File Title | Date |
| Author | Authorized Gateway Customer |
| Last Modified By | dwolfgang |
| File Modified | 2005-02-27 |
| File Created | 2005-02-27 |