Regulation

41755

Rules and Regulations

Federal Register
Vol. 66, No. 154
Thursday, August 9, 2001

This section of the FEDERAL REGISTER
contains regulatory documents having general
applicability and legal effect, most of which
are keyed to and codified in the Code of
Federal Regulations, which is published under
50 titles pursuant to 44 U.S.C. 1510.
The Code of Federal Regulations is sold by
the Superintendent of Documents. Prices of
new books are listed in the first FEDERAL
REGISTER issue of each week.

This rule is excluded from the scope
of Executive Order 12372,
Intergovernmental Consultation, which
may require a consultation with State
and local officials. See the final rule
related notice entitled, ‘‘Department
Programs and Activities Excluded from
Executive Order 12372’’ (50 FR 47034).

Rural Utilities Service
7 CFR Part 1744

Executive Order 12988

RIN 0572–AB48

Post-Loan Policies and Procedures
Common to Guaranteed and Insured
Loans
Rural Utilities Service, USDA.
Final rule.

AGENCY:

SUMMARY: Recent changes in the
telecommunications industry, including
deregulation and technological
developments, have caused Rural
Utilities Service (RUS) borrowers and
other organizations providing
telecommunications services to consider
undertaking projects that provide new
telecommunications services and other
telecommunications services not
ordinarily financed by RUS. To facilitate
the financing of those projects and
services, RUS is willing to consider
accommodating the Government’s lien
on telecommunications borrowers’
systems in an expedited manner based
on the financial strength of the
borrowers operations. This will help
enable RUS telecommunications
providers to compete in an expanding
number of telecommunications services
may be critical to their financial
strength and stability.
EFFECTIVE DATE: This rule is effective
August 9, 2001.
FOR FURTHER INFORMATION CONTACT:
Jonathan P. Claffey, Deputy Assistant
Administrator, Telecommunications
Program, Rural Utilities Service, U.S.
Department of Agriculture, 1400
Independence Avenue, SW., STOP
1590, Room 4056, Washington, DC
20250–1590. Telephone number (202)
720–9556.
SUPPLEMENTARY INFORMATION:

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This rule has been determined to be
significant for purposes of Executive
Order 12866 and therefore has been
reviewed by the Office of Management
and Budget (OMB).
Executive Order 12372

DEPARTMENT OF AGRICULTURE

ACTION:

Executive Order 12866

Jkt 194001

This rule has been reviewed under
Executive Order 12988, Civil Justice
Reform. RUS has determined that this
rule meets the applicable standards
provided in section 3 of the Executive
Order. In addition, all State and local
laws and regulations that are in conflict
with this rule will be preempted, no
retroactive effort will be given to this
rule, and, in accordance with sec. 212(e)
of the Department of Agriculture
Reorganization Act of 1994 (7 U.S.C.
Sec. 6912(e)), administrative appeal
procedures, if any, must be exhausted
before an action against the Department
or its agencies may be initiated.
Regulatory Flexibility Act Certification
RUS has determined that this rule
will not have a significant economic
impact on a substantial number of small
entities, as defined in the Regulatory
Flexibility Act (5 U.S.C. 601 et seq.).
The RUS telecommunications program
provides loans to borrowers at interest
rates and on terms that are more
favorable than those generally available
from the private sector. RUS borrowers,
as a result of obtaining federal
financing, receive economic benefits
that exceed any direct economic costs
associated with complying with RUS
regulations and requirements.
Information Collection and
Recordkeeping Requirements
In accordance with the Paperwork
Reduction Act of 1995 (44 U.S.C.
chapter 35), RUS invites comments on
this information collection for which
RUS intends to request approval from
the Office of Management and Budget
(OMB). These requirements have been

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approved by emergency clearance under
OMB Control Number 0572–0126.
Comments on this information
collection must be received by October
9, 2001.
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
assumption 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 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, D.C. 20250–1522.
Title: 7 CFR part 1744, subpart B,
‘‘Lien Accommodation and
Subordination Policy’’
Type of Request: New collection.
Estimate of Burden: Public reporting
burden for this collection of information
is estimated to average 1 hour per
respondent.
Respondents: Business or other forprofit and non-profit institutions.
Estimated Number of Respondents:
30.
Estimated Number of Responses per
Respondent: 2.
Estimated Total Annual Burden on
Respondents: 23.
Copies of this information collection
can be obtained from Michele Brooks,
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.
National Environmental Policy Act
Certification
The Administrator of RUS has
determined that this rule will not
significantly affect the quality of the
human environment as defined by the

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Federal Register / Vol. 66, No. 154 / Thursday, August 9, 2001 / Rules and Regulations

National Environmental Policy Act of
1969 (42 U.S.C. 4321 et seq.). Therefore,
this action does not require an
environmental impact statement or
assessment.
Catalog of Federal Domestic Assistance
The program described by this rule is
listed in the Catalog of Federal Domestic
Assistance Programs under number
10.851, Rural Telephone Loans and
Loan Guarantees; and number 10.852,
Rural Telephone Bank Loans. This
catalog is available on a subscription
basis from the Superintendent of
Documents, the United States
Government Printing Office,
Washington, DC 20402–9325.
Unfunded Mandates
This rule contains no Federal
mandates (under the regulatory
provisions of Title II of the Unfunded
Mandates Reform Act of 1995) for State,
local, and tribal governments or the
private sector. Thus, this rule is not
subject to the requirements of section
202 and 205 of the Unfunded Mandates
Reform Act of 1995.
Background
RUS is amending its regulations
covering lien accommodations under
certain circumstances where the
borrower’s financial strength is
sufficient to protect security for the
Government’s loans and the lender
seeking a lien accommodation.
Since the passage of the
Telecommunications Act of 1996, which
provides for a competitive, deregulated
national telecommunications policy
framework, the Federal
Communications Commission (FCC) has
been working to implement the
provisions of the law. As those
provisions begin to be integrated
through the FCC’s rulemaking process,
the FCC is focusing on the types of
telecommunications service that must
be made available to all Americans; i.e.
part of universal service, and the
benefits to all Americans from advanced
services for schools, libraries, and rural
health care providers. The newly
competitive environment will
undoubtedly affect the rural
telecommunications marketplace. For
the industry as a whole—urban and
rural—competition will offer the means
for delivering the universal service
concept envisioned by the
Telecommunications Act of 1996. In the
competitive marketplace of the future,
investment in infrastructure will be
lucrative in markets where local
exchange carriers seek to attract highusage, low-cost subscribers.
Competition will be fierce and

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customers will be the winners as their
demands for new and improved service
at affordable rates will be met. Yet in
rural and high-cost areas, where quality
of service and advanced service
offerings are just as important, there is
less potential for investment based on
competition. Investment will need to be
encouraged in the form of incentives
through the universal support
mechanisms and the lending programs
of RUS, as well as private sources of
financing. RUS will continue its
partnership with rural America to
ensure that telecommunications
providers will have the means to
modernize their networks; however,
industry deregulation and new
technological developments have
caused RUS borrowers and other
organizations providing
telecommunications services to consider
undertaking projects that provide new
telecommunications services and other
telecommunications services not
ordinarily financed by RUS. Although
some of these services may not be
eligible for financing under the Rural
Electrification Act of 1936 (RE Act),
these services may nevertheless advance
RE Act objectives where the borrower
obtains financing from private lenders.
Due to the changing environment of
the telecommunications industry, large
or predominately non-rural local
exchange carriers (LECs) are selling
their more rural exchanges in order to
concentrate on their more lucrative
service areas. This ‘‘sell-off’’ provides an
opportunity for rural LECs to expand
their service territories. Typically, these
acquired exchanges will need
infrastructure improvements and the
rural LECs will work hard to provide
state-of-the-art service. This will require
increased investment. RUS loans for
infrastructure building can enable rural
LECs to upgrade plant and service
territories that may have been neglected
for years. All subscribers, urban and
rural, benefit from improvements to the
national network. While opportunities
exist for rural LECs to expand their
markets and continue the tradition of
providing the best possible service
available to rural residents,
uncertainties regarding future revenue
streams and the availability of funds
from universal service support may
hamper some small LECs’ investment
decisions. The amendments to this
regulation will help to facilitate funding
from non-RUS sources in order to meet
the growing capital needs of rural LECs.
Depending on the purposes for which a
lien accommodation is being sought,
RUS will provide ‘‘automatic’’ approval
for borrowers that meet the financial

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tests described in this rule. RUS
believes that borrowers that are
financially sound should be afforded
more flexibility with regard to financial
arrangements with outside lenders for
the purpose of promoting rural
telecommunications. The tests are
designed to ensure that the financial
strength of the borrower is more than
sufficient to protect the government’s
loan security interests; hence, the lien
accommodations will not adversely
affect the government’s financial
interests.
In addition to providing for automatic
lien accommodations, this amendment
removes the requirement for borrowers
seeking lien accommodations to comply
with competitive bid procedures under
7 CFR part 1753. Further, RUS proposes
to address other concerns involved in
the accommodation of the Government’s
lien for those borrowers that do not
qualify for an automatic lien
accommodation in a subsequent
revision to this subpart.
Comments
A proposed rule was published
December 15, 1999, at 64 FR 69946.
During the comment period that
ended February 14, 2000, RUS received
comments from the following
organizations:
(1) Cooper, White & Cooper LLR,
representing:National Rural Telecom
AssociationOrganization for the
Protection and Advancement of
SmallTelecommunications
CompaniesUnited States Telecom
Association; andWestern Rural
Telephone Association
(2) Rural Telephone Finance
Cooperative; and
(3) CoBank.
The comments and RUS’ responses
follow:
Comment summary. The respondents
commented that RUS should utilize
consolidated financial reports when
determining a borrower’s eligibility for
an ‘‘automatic’’ lien accommodation
under this rule, rather than
unconsolidated borrower financial
statements that reflect only the
telecommunication company’s or
cooperative’s financial condition.
RUS response. When dealing with the
security of the government’s loans, RUS
must rely on the financial strength of
the borrower and its ability to survive
economically based on its
‘‘telecommunications service’’
operations. Basing financial tests on
consolidated statements may distort the
true health of the borrower’s financial
position with regards to its operations.
In addition, the RUS mortgage does not
provide a lien on assets not held by the

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Federal Register / Vol. 66, No. 154 / Thursday, August 9, 2001 / Rules and Regulations
borrower and therefore, RUS believes
the best measure is to use
unconsolidated statements.
Comment summary. The respondents
request that RUS implement rule
changes that would allow a borrower to
effect the release of lien of the
government’s mortgage on afteracquired property upon a showing of
sufficient financial strength to ensure
that the government’s security interest is
adequate to protect the RUS loan.
RUS response. RUS disagrees with
this position. RUS views each borrower
as an ‘on-going’ project whereby the
strength of its operations as a whole is
needed to adequately secure the
government’s interests. Commercial
operations are oftentimes cyclical and
evidence of current financial strength is
not an insurance of future financial
performance.
Comment summary. The respondents
requested that RUS clarify whether TIER
and Debt Service were calculated on a
before or after-tax basis.
RUS response. As noted in the
definition section, both ratios use ‘net
income’, denoting that the calculations
are after income taxes.
Comment summary. The respondents
requested that RUS eliminate the
requirement that the weighted average
life of the new private lender notes does
not exceed the remaining weighted
average life of the notes being
refinanced, stating that in some cases,
longer maturity periods that would
reduce debt service payment could
improve cash flow. In addition, the
respondents requested that the terms of
the loans be measured by the borrowers
ability to repay the loan as indicated by
TIER and Debt Service Coverage.
RUS response. Increasing the life of
the loan beyond the remaining original
life could have the effect of severely
under-collaterallizing the debt, thereby
putting the lenders at risk of not having
sufficient assets to provide adequate
security. An open-ended maturity
period, as suggested by relying on TIER
and Debt Service Coverage indicators,
only exacerbates the lenders’ risks.
Comment summary. RUS should
increase the principal amount of a loan
from a private lender to refinance or
refund the Government’s loan from not
greater than 105 percent of the of the
balance of the notes being refunded or
refinanced to not less than 112 percent,
or eliminate the percentage limitation
altogether. The respondents propose
that this would allow borrowers to cover
additional closing and fees associated
with the new financing.
RUS response. RUS recognizes that
loans from private lenders may contain
fees and equity contribution

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requirements, and therefore, will raise
the percentage limitation from not more
than 105 percent to not more than 112
percent. This should provide a
reasonable level at which borrowers
seeking to finance closing costs and
associated fees and equity contributions
would be able to do so.
Comment summary. Sections
1744.30(c)(2)(iii) and (iv) could be in
conflict with each other if the number
of years remaining on a loan to be
refinanced is less than five. Paragraph
(c)(2)(iv) requires the refinancing to be
amortized for a period of not less than
five years.
RUS response. RUS agrees that there
is the potential for conflict in the way
the proposed rule worded those
sections. The final rule has been
modified to allow for the amortization
period of the loan to be, at a minimum,
the original remaining years to maturity.
Comment summary. The respondents
stated a preference for a net assets to
long-term debt test instead of the
proposed net plant to long-term debt
test in §§ 1744.30(d)(2) and
1744.30(e)(2). As stated in the rule, the
ratio includes, on a pro-forma basis, the
new private lender debt but does not
include the plant associated with that
debt. In addition, where the proceeds of
the private lender debt go to a
subsidiary, even if the formula
accounted for the new assets, they
would not be recorded on the
borrower’s balance sheet, thereby
reducing the borrower’s ability to meet
the test. The respondents argued that
using net assets, where the borrower
owns assets that are not counted as
plant, would be better since many
borrowers have substantial assets that
are not plant.
RUS response. The premise behind
providing ‘‘automatic’’ lien
accommodations is based on the
strength of a borrower’s financial
condition and a negligible potential for
loan security risk based on that strength.
Using net plant rather than net assets
counts only those assets on which the
government’s mortgage provides a
perfected first lien. RUS has, however,
revised the ratio test to include, on a
pro-forma basis, the associated plant to
be added by the private lender debt,
when that plant is owned directly by the
borrower. In the case of a borrower
flowing through the proceeds of the
private lender debt to a subsidiary, RUS
believes that the borrower should have
sufficient net plant need to provide RUS
with adequate security necessary for the
‘‘automatic’’ lien accommodation, since
the subsidiary’s assets (financed through
the lien accommodation) are not
covered by the government’s mortgage.

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Comment summary. The respondents
stated that RUS should consider
including ‘‘non-plant’’ costs, such as
transaction fees, working capital, and
goodwill, associated with exchanges or
purchases as eligible costs for lien
accommodations under the regulation.
They stated that these costs are typically
contemplated in the purchase of
existing systems as well as in new
projects and that if private lenders were
willing to finance these ‘‘non-plant’’
costs, RUS should not object to
inclusion of these costs under the lien
of the mortgage.
RUS response. The ‘‘soft costs’’
associated with the construction or
acquisition of assets provide little or no
tangible security. Accommodating
payment of such costs under the lien of
the mortgage would dilute the security
of the other mortgage.
Comment summary. The respondents
questioned the need for the certification
from the borrower’s CPA to the financial
tests required in sections 1744(d)(5) and
(e)(5), and stated that since RUS already
had borrowers’ CPA audits, certification
should only be required when the audit
had not yet been received by RUS.
RUS response. The CPA audit does
not calculate nor attest to a borrower’s
achievement of TIER or Debt Service
Coverage. The assurance provided by
the CPA’s certification of the borrower’s
achievement of the financial
requirements is crucial to the
‘‘automatic’’ lien accommodation
process. To expedite the process,
borrowers may wish to have the CPA
prepare the certification at the
completion of the annual audit, thereby
eliminating the need for further
participation by the CPA.
Comment summary. The respondents
objected to the provision that the
financing agreement between the
borrower and the private lender provide
for the private lender to terminate
advances on its loan to the borrower
when the borrower is in default under
the terms of its mortgage with RUS.
They argue that this places an undue
burden on the private lender that is
contractually obligated to advance funds
under the terms of its loan. The
respondents stated that once the terms
of the ‘‘automatic’’ lien accommodation
have been met, RUS should take the risk
for the facility financed. Further, the
respondents stated that the burden
should be placed on the borrower to
cease the request for advances, not on
the private lender.
RUS response. As a provision for
obtaining an automatic lien
accommodation (which does not require
RUS approval when the criteria
contained in the regulation are met), to

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protect the security for the
Government’s loans, the borrower
should cease to incur additional private
debt when it is in default on the
Government’s loans. Further, the
respondents incorrectly view the burden
as being placed on the private lender,
and not on the borrower. The regulation
clearly states that the financing
agreement, a document prepared and
executed prior to the advance of funds,
contain the provision for termination of
advance of funds upon request by RUS.
In the event of a default, RUS would
notify the borrower and the private
lender so that they could comply with
the termination of advance of funds
provision. Therefore, notice to the
private lender would not place the
private lender under two inconsistent
obligations.
Comment summary. Section
1744.30(e) pertains only to ‘‘whollyowned’’ subsidiaries and is silent as to
structures in which a borrower is a
participant in a joint venture or
partnership. The respondents argue that
these types of projects are often
undertaken for the mutual benefit of
numerous telecommunications
providers and that the regulation should
make provision for these increasingly
common ventures.
RUS response. At the present time,
RUS believes that limiting the
applicability of ‘‘automatic’’ lien
accommodations to wholly-owned
subsidiaries is prudent and in the best
interest of protecting security for the
Government’s loans. Borrowers are, of
course, not prevented from requesting
approval for a lien accommodation
under the traditional procedures for
these types of projects. The comment is,
however, beneficial and RUS will take
it under advisement for future policy
discussion.
Comment summary. The respondents
argue that the financial tests in
§§ 1744.30(e)(1) (TIER not less than 2.5
and DSC not less than 1.5) and (e)(3)
(equity percentage not less than 45
percent) seem excessive and may result
in most RUS or RTB borrowers failing
to qualify for automatic lien
accommodations when the assets are to
be owned by a subsidiary.
RUS response. The financial tests
required when the assets are to be
owned by a subsidiary are more
stringent, by design, and are intended to
ensure that only the healthiest, strongest
borrowers qualify, since there is no
direct tie to assets being funded in
relation to the security that RUS is
giving up. By RUS’ calculation, based
on the most recent financial data
available, 40% of RUS’
telecommunications borrowers qualify.

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As noted before, in the case of a
borrower flowing through the proceeds
of the private lender debt to a
subsidiary, RUS believes that the
borrower should have sufficient
financial strength to provide RUS with
adequate security, since the subsidiary’s
assets (financed through the lien
accommodation) are not subject to the
lien of the borrower’s mortgage with
RUS.
Comment summary. The respondents
inquired whether an equity investment
in a subsidiary, as opposed to a loan,
would be permissible. In addition, the
respondents believed there may be some
conflict in RUS’ treatment of loans to
subsidiaries as investments allowed
under the borrower’s current mortgage
with RUS.
RUS response. Equity investments or
contributions are clearly different from
loans with defined repayment terms and
contractual agreements. RUS intended
to only provide for loans to the
subsidiary. RUS further has provided, in
section 1744.30(i)(2), that such loans,
when made in accordance with the
terms of this regulation, do not require
RUS approval as investments in
affiliated companies, thereby releasing
the borrower from obtaining ‘‘double’’
approval for the same investment.
Comment summary. Clarification was
requested with regard to
§ 1744.30(e)(6)(vii), regarding the
submission, upon request by RUS, of the
financing or guarantee agreement
between the borrower and the
subsidiary.
RUS response. This section is only
intended to ensure that RUS has the
right to review the terms and
conditions, if merited, of the borrower’s
loan or guarantee of a loan to its
subsidiary. With regard to loan
guarantees, where the debt exists at the
subsidiary level, and the borrower is
guaranteeing the debt, automatic
approval of a lien accommodation under
this section would permit the guarantee
of the debt without having it count
against the borrower’s allowable
distribution of capital as contained in
the borrower’s mortgage with RUS.
Comment summary. The respondents
requested that RUS provide
acknowledgement for an automatic lien
accommodation to the private lender in
addition to the acknowledgement to the
borrower.
RUS response.
RUS agrees and will provide such
acknowledgment.
List of Subjects in 7 CFR Part 1744
Accounting, Loan programscommunications, Reporting and

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recordkeeping requirements, Rural
areas, Telephone.
For reasons set out in the preamble,
RUS amends 7 CFR chapter XVII as
follows:
PART 1744—POST-LOAN POLICIES
AND PROCEDURES COMMON TO
GUARANTEED AND INSURED
TELEPHONE LOANS
1. The authority citation for part 1744
is revised to read as follows:
Authority: 7 U.S.C. 901 et seq., 1921 et
seq., and 6941 et seq.

Subpart B—Lien Accommodations and
Subordination Policy
2. Sections 1744.20 and 1744.21 are
revised to read as follows:
§ 1744.20

General.

(a) Recent changes in the
telecommunications industry, including
deregulation and technological
developments, have caused Rural
Utilities Service (RUS) borrowers and
other organizations providing
telecommunications services to consider
undertaking projects that provide new
telecommunications services and other
telecommunications services not
ordinarily financed by RUS. Although
some of these services may not be
eligible for financing under the Rural
Electrification Act of 1936 (RE Act),
these services may nevertheless advance
RE Act objectives where the borrower
obtains financing from private lenders.
The borrower’s financial strength and
the assurance of repayment of
outstanding Government debt may be
improved as a result of providing such
telecommunications services.
(b) To facilitate the financing of new
services and other services not
ordinarily financed by RUS, RUS is
willing to consider accommodating the
Government’s lien on
telecommunications borrowers’ systems
or accommodating or subordinating the
Government’s lien on after-acquired
property of telecommunications
borrowers. To expedite this process,
requests for lien accommodations
meeting the requirements of § 1744.30
will receive automatic approval from
RUS.
(c) This subpart establishes RUS
policy with respect to all requests for
lien accommodations and
subordinations for loans from private
lenders. For borrowers that do not
qualify for automatic lien
accommodations in accordance with
§ 1744.30, RUS will consider lien
accommodations for RE Act purposes
under § 1744.40 and non-Act purposes
under § 1744.50.

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Federal Register / Vol. 66, No. 154 / Thursday, August 9, 2001 / Rules and Regulations
§ 1744.21

Definitions.

41759

loan funds have not yet been made
available.
(1) Depreciation expense .............
6560.1
Lien accommodation means sharing
(2) Depreciation expense—telethe Government’s lien on a pari passu
communications plant in service
6561 or pro-rata basis with a private lender.
(3) Depreciation expense—propLoan means any loan made or
erty held for future telecommunications use .................
6562 guaranteed by RUS.
Loan documents means the loan
contract, note and mortgage between the
Note: All references to account numbers
borrower and RUS and any associated
are to the Uniform System of Accounts (7
document pertinent to a loan.
CFR part 1770, subpart B).
Loan funds means the proceeds of a
Disbursement means a transfer of
loan made or guaranteed by RUS.
money by the borrower out of the
Material and supplies means any of
construction fund in accordance with
the items properly recordable in the
the provisions of the fund.
following account of the borrower:
Equity percentage means the total
equity or net worth of the borrower
Account names
Number
expressed as a percentage of the
Account names
Number
(1) Material and Supplies .............
1220.1
borrower’s total assets.
FFB
means
the
Federal
Financing
(1) Amortization expense .............
6560.2
Bank.
(2) Amortization expense—tanNote: All references to account numbers
Financial Requirement Statement (FRS) are to the Uniform System of Accounts (7
gible ...........................................
6563
(3) Amortization expense—intanCFR part 1770, subpart B).
means RUS Form 481 (OMB—No.
gible ...........................................
6564 0572—0023). (This RUS Form is
Net income/Net margins means the
(4) Amortization expense—other ..
6565 available from RUS, Program
sum of the balances of the following
Development and Regulatory Analysis,
accounts of the borrower:
Note: All references to account numbers
Washington, DC 20250–1522).
are to the Uniform System of Accounts (7
Government mortgage means any
Account names
Number
CFR part 1770, subpart B).
instrument to which the Government,
Asset means a future economic
acting through the Administrator, is a
(1) Local Network Services
5000 through
Revenues.
5069
benefit obtained or controlled by the
party and which creates a lien or
(2) Network Access Services 5080 through
borrower as a result of past transactions security interest in the borrower’s
Revenues.
5084
or events.
property in connection with a loan
5100 through
Automatic lien accommodation
made or guaranteed by RUS whether the (3) Long Distance Network
Services Revenues.
5169
means the approval, by RUS, of a
Government is the sole mortgagee or is
(4) Miscellaneous Revenues
5200 through
request to share the Government’s lien
a co-mortgagee with a private lender.
5270
on a pari passu or pro-rata basis with a
Hardship loan means a loan made by
(5) Nonregulated Revenues .. 5280
private lender in accordance with the
RUS under section 305(d)(1) of the RE
(6) Less Uncollectible Reve5200 through
provisions of § 1744.30.
nues.
5302
Act.
Borrower means any organization that
(7) Less Plant Specific Oper- 6110 through
Interim construction means the
has an outstanding telecommunications purchase of equipment or the conduct of
ations Expense.
6441
(8) Less Plant Nonspecific
6510 through
loan made or guaranteed by RUS, or that construction under an RUS-approved
Operations Expense.
6565
is seeking such financing. See 7 CFR
plan of interim financing. See 7 CFR
(9) Less Customer Oper6610 through
part 1735.
part 1737.
ations Expense.
6623
Construction Fund means the RUS
Interest expense means the sum of the (10) Less Corporate Oper6710 through
Construction Fund Account into which
balances of the following accounts of
ations Expense.
6790
all advances of loan funds are deposited the borrower:
(11) Other Operating Income 7100 through
pursuant to the provisions of the loan
and Expense.
7160
documents.
Account names
Number
(12) Less Operating Taxes ... 7200 through
Debt Service Coverage (DSC) ratio
7250/7200.5
means the ratio of the sum of the
(1) Interest and related items .......
7500 (13) Nonoperating Income
7300 through
borrower’s net income, depreciation and (2) Interest on funded debt ...........
7510
and Expense.
7370
(3)
Interest
expense—capital
amortization expense, and interest
(14) Less Nonoperating
7400 through
leases ........................................
7520
Taxes.
7450/7400.5
expense, all divided by the sum of all
(4) Amortization of debt issuance
(15) Less Interest and Re7500 through
payments of principal and interest
expense .....................................
7530
lated Items.
7540
required to be paid by the borrower
(5) Less Allowance for funds used
(16) Extraordinary Items ....... 7600 through
during the year on all its debt from any
during construction ....................
7340/
7640/7600.4
source with a maturity greater than 1
7300.4 (17) Jurisdictional Differences 7910 through
year and capital lease obligations.
(6) Other interest deductions ........
7540
and Nonregulated Income
7990
Default means any event or
Items.
occurrence which, unless corrected,
Note: All references to account numbers
will, with the passage of time and the
are to the Uniform System of Accounts (7
Note: All references to account numbers
giving of proper notices, give rise to
CFR part 1770, subpart B).
are to the Uniform System of Accounts (7
remedies under one or more of the loan
Interim financing means funding for a CFR part 1770, subpart B).
documents.
Net plant means the sum of the
project which RUS has acknowledged
Depreciation expense means the sum
balances of the following accounts of
may be included in a loan, should said
of the balances of the following
the borrower:
loan be approved, but for which RUS
accounts of the borrower:
Account names

Number

The following definitions apply to
this subpart:
Administrator means the
Administrator of RUS and includes the
Governor of the RTB.
Advance means transferring funds
from RUS, RTB, or a lender guaranteed
by RUS to the borrower’s construction
fund.
After-acquired property means
property which is to be acquired by the
borrower and which would be subject to
the lien of the Government mortgage
when acquired.
Amortization expense means the sum
of the balances of the following
accounts of the borrower:

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Account names
(1) Property, Plant and
Equipment.
(2) Less Depreciation and
Amortization.

Number

Account names

2001 through
2007
3100 through
3600

Note: All references to account numbers
are to the Uniform System of Accounts (7
CFR part 1770, subpart B).

Notes means evidence of
indebtedness secured by or to be
secured by the Government mortgage.
Pari Passu means equably; ratably;
without preference or precedence.
Plant means any of the items properly
recordable in the following accounts of
the borrower:
Account names
(1) Property, Plant and
Equipment.

Number
2001 through
2007

Note: All references to account numbers
are to the Uniform System of Accounts (7
CFR part 1770, subpart B).

Private lender means any lender other
than the RUS or the lender of a loan
guaranteed by RUS.
Private lender notes means the notes
evidencing a private loan.
Private loan means any loan made by
a private lender.
RE Act (Act) means the Rural
Electrification Act of 1936 (7 U.S.C. 901
et seq.) RTB means the Rural Telephone
Bank.
RUS means the Rural Utilities
Service, and includes its predecessor,
the Rural Electrification Administration.
The term also includes the RTB, unless
otherwise indicated.
RUS cost-of-money loan means a loan
made under section 305(d)(2) of the RE
Act.
Subordination means allowing a
private lender to have a lien on specific
property which will have priority over
the Government’s lien on such property.
Tangible plant means any of the items
properly recordable in the following
accounts of the borrower:
Account names
(1) Telecommunications Plant
in Service—General Support Assets.
(2) Telecommunications Plant
in Service—Central Office
Assets.
(3) Telecommunications Plant
in Service—Information
Origination/Termination Assets.
(4) Telecommunications Plant
in Service—Cable and
Wire Facilities Assets.
(5) Amortizable Tangible Assets.

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Number

(6) Nonoperating Plant ..........

Note: All references to account numbers
are to the Uniform System of Accounts (7
CFR part 1770, subpart B).

Telecommunication services means
any service for the transmission,
emission, or reception of signals,
sounds, information, images, or
intelligence of any nature by optical
waveguide, wire, radio, or other
electromagnetic systems and shall
include all facilities used in providing
such service as well as the development,
manufacture, sale, and distribution of
such facilities.
Times interest earned ratio (TIER)
means the ratio of the borrower’s net
income or net margins plus interest
expense, divided by said interest
expense.
Total assets means the sum of the
balances of the following accounts of
the borrower:
Account names

Number

(1) Current Assets .................

1100s through
1300s
1400s through
1500s
2001 through
2007
3100 through
3300s
3400 through
3600s

(2) Noncurrent Assets ...........
(3) Total telecommunications
plant.
(4) Less accumulated depreciation.
(5) Less accumulated amortization.

Note: All references to account numbers
are to the Uniform System of Accounts (7
CFR part 1770, subpart B).

Total equity or net worth means the
excess of a borrower’s total assets over
its total liabilities.
Total liabilities means the sum of the
balances of the following accounts of
the borrower:
Account names

Number
2110 through
2124

Number

(1) Current Liabilities .............
(2) Long-Term Debt ..............

2210 through
2232
2310 through
2362
2410 through
2441
2680 through
2682

Jkt 194001

2006

(3) Other Liabilities and Deferred Credits.

4010 through
4130.2
4210 through
4270.3
4310 through
4370

Note: All references to account numbers
are to the Uniform System of Accounts (7
CFR part 1770, subpart B).

Total long-term debt means the sum
of the balances of the following
accounts of the borrower:

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Account names
(1) Long-Term Debt ..............

Number
4210 through
4270.3

Note: All references to account numbers
are to the Uniform System of Accounts (7
CFR part 1770, subpart B).

Weighted-average life of the loans or
notes means the average life of the loans
or notes based on the proportion of
original loan principal paid during each
year of the loans or notes. It shall be
determined by calculating the sum of all
loan or note principal payments
expressed as a fraction of the original
loan or note principal amount, times the
number of years and fractions of years
elapsed at the time of each payment
since issuance of the loan or note. For
example, given a $5 million loan, with
a maturity of 5 years and equal principal
payments of $1 million due on the
anniversary date of the loan, the
weighted-average life would be: (.2)(1
year) + (.2)(2 years) + (.2)(3 years) +
(.2)(4 years) + (.2)(5 years) = .2 years +
.4 years + .6 years + .8 years + 1.0 years
= 3.0 years. If instead the loan had a
balloon payment of $5 million at the
end of 5 years, the weighted-average life
would be: ($5 million/$5 million)(5
years) = 5 years.
Weighted-average remaining life of
the loans or notes means the remaining
average life of the loans or notes based
on the proportion of remaining loan or
note principal expressed in years
remaining to maturity of the loans or
notes. It shall be determined by
calculating the sum of the remaining
principal payments of each loan or note
expressed as a fraction of the total
remaining loan or note amounts times
the number of years and fraction of
years remaining until maturity of the
loan or note.
Weighted-average remaining useful
life of the assets means the estimated
original average life of the assets to be
acquired with the proceeds of the
private lender notes expressed in years
based on depreciation rates less the
number of years those assets have been
in service (or have been depreciated). It
shall be determined by calculating the
sum of each asset’s remaining value
expressed as a fraction of the total
remaining value of the assets, times the
estimated number of years and fraction
of years remaining until the assets are
fully depreciated.
Wholly-owned subsidiary means a
corporation owned 100 percent by the
borrower.
3. Sections 1744.30, 1744.40, and
1744.50 are redesignated as §§ 1744.40,
1744.50, and 1744.55, respectively.

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Federal Register / Vol. 66, No. 154 / Thursday, August 9, 2001 / Rules and Regulations
4. New § 1744.30 is added to read as
follows:
§ 1744.30

Automatic lien accommodations.

(a) Purposes and requirements for
approval. Automatic lien
accommodations are available only for
refinancing and refunding of notes
secured by the borrower’s existing
Government mortgage; financing assets,
to be owned by the borrower, to provide
telecommunications services; or
financing assets, to be owned by a
wholly-owned subsidiary of the
borrower, to provide
telecommunications services in
accordance with the procedures set
forth in this section.
(b) Private lender responsibility. The
private lender is responsible for
ensuring that its notes, for which an
automatic lien accommodation has been
approved as set forth in this section, are
secured under the mortgage. The private
lender is responsible for ensuring that
the supplemental mortgage is a valid
and binding instrument enforceable in
accordance with its terms, and recorded
and filed in accordance with applicable
law. If the private lender determines
that additional documents are required
or that RUS must take additional actions
to secure the notes under the mortgage,
the private lender shall follow the
procedures set forth in § 1744.40 or
§ 1744.50, as appropriate.
(c) Refinancing and refunding. The
Administrator will automatically
approve a borrower’s execution of
private lender notes and the securing of
such notes on a pari passu or pro-rata
basis with all other notes secured under
the Government mortgage, when such
private lender notes are issued for the
purpose of refinancing or refunding any
notes secured under the Government
mortgage, provided that all of the
following conditions are met:
(1) No default has occurred and is
continuing under the Government
mortgage;
(2) The borrower has delivered to the
Administrator, at least 10 business days
before the private lender notes are to be
executed, a certification and agreement
executed by the President of the
borrower’s Board of Directors, such
certification and agreement to be
substantially in the form set forth in
Appendix A of this subpart, providing
that:
(i) No default has occurred and is
continuing under the Government
mortgage;
(ii) The principal amount of such
refinancing or refunding notes will not
be greater than 112 percent of the then
outstanding principal balance of the
notes being refinanced or refunded;

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(iii) The weighted-average life of the
private loan evidenced by the private
lender notes will not exceed the
weighted-average remaining life of the
notes being refinanced or refunded;
(iv) The private lender notes will
provide for substantially level debt
service or level principal amortization
over a period not less than the original
remaining years to maturity;
(v) Except as provided in the
Government mortgage, the borrower has
not agreed to any restrictions or
limitations on future loans from RUS;
and
(vi) If the private lender determines
that a supplemental mortgage is
necessary, the borrower will comply
with those procedures contained in
paragraph (h) of this section for the
preparation, execution, and delivery of
a supplemental mortgage and take such
additional action as may be required to
secure the notes under the Government
mortgage.
(d) Financing assets to be owned
directly by a borrower. The
Administrator will automatically
approve a borrower’s execution of
private lender notes and the securing of
such notes on a pari passu or pro-rata
basis with all other notes secured under
the Government mortgage, when such
private lender notes are issued for the
purpose of financing the purchase or
construction of plant and material and
supplies to provide telecommunication
services and when such assets are to be
owned and the telecommunications
services are to be offered by the
borrower, provided that all of the
following conditions are met:
(1) The borrower has achieved a TIER
of not less than 1.5 and a DSC of not less
than 1.25 for each of the borrower’s two
fiscal years immediately preceding the
issuance of the private lender notes;
(2) The ratio of the borrower’s net
plant to its total long-term debt at the
end of any calendar month ending not
more than 90 days prior to execution of
the private lender notes is not less than
1.2, on a pro-forma basis, after taking
into account the effect of the private
lender notes and additional plant on the
total long-term debt of the borrower;
(3) The borrower’s equity percentage,
as of the most recent fiscal year-end,
was not less than 25 percent;
(4) No default has occurred and is
continuing under the Government
mortgage;
(5) The borrower has delivered to the
Administrator, at least 10 business days
before the private lender notes are to be
executed, a certification by an
independent certified public accountant
that the borrower has met each of the
requirements in paragraphs (d)(1) and

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41761

(d)(3) of this section, such certification
to be substantially in the form in
Appendix B of this subpart; and
(6) The borrower has delivered to the
Administrator, at least 10 business days
before the private lender notes are to be
executed, a certification and agreement
executed by the President of the
borrower’s Board of Directors, such
certification and agreement to be
substantially in the form in Appendix C
of this subpart: provided, that:
(i) The borrower has met each of the
requirements in paragraphs (d)(2) and
(d)(4) of this section;
(ii) The proceeds of the private lender
notes are to be used for the construction
or purchase of the plant and materials
and supplies to provide
telecommunications services in
accordance with this section and such
construction or purchase is expected to
be completed not later than 4 years after
execution of such notes;
(iii) The weighted-average life of the
private loan evidenced by the private
lender notes does not exceed the
weighted-average remaining useful life
of the assets being financed;
(iv) The private lender notes will
provide for substantially level debt
service or level principal amortization
over a period not less than the original
remaining years to maturity;
(v) All of the assets financed by the
private loans will be purchased or
otherwise procured in bona fide arm’s
length transactions;
(vi) The financing agreement with the
private lender will provide that the
private lender shall cease the advance of
funds upon receipt of written
notification from RUS that the borrower
is in default under the RUS loan
documents;
(vii) Except as provided in the
Government mortgage, the borrower has
not agreed to any restrictions or
limitations on future loans from RUS;
and
(viii) If the private lender determines
that a supplemental mortgage is
necessary, the borrower will comply
with those procedures set forth in
paragraph (h) of this section for the
preparation, execution, and delivery of
a supplemental mortgage and take such
additional action as may be required to
secure the notes under the Government
mortgage.
(e) Financing assets to be owned by a
wholly-owned subsidiary of the
borrower. The Administrator will
automatically approve a borrower’s
execution of private lender notes and
the securing of such notes on a pari
passu or pro-rata basis with all other
notes secured under the Government
mortgage, when such private lender

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notes are issued for the purpose of
financing the purchase or construction
of tangible plant and material and
supplies to provide telecommunication
services and when such services are to
be offered and the associated tangible
assets are to be owned by a whollyowned subsidiary of the borrower,
provided that all of the following
conditions are met:
(1) The borrower has achieved a TIER
of not less than 2.5 and a DSC of not less
than 1.5 for each of the borrower’s two
fiscal years immediately preceding the
issuance of the private lender notes;
(2) The ratio of the borrower’s net
plant to its total long-term debt at the
end of any calendar month ending not
more than 90 days prior to execution of
the private lender notes is not less than
1.6, on a pro-forma basis, after taking
into account the effect of the private
lender notes and additional plant on the
total long-term debt of the borrower;
(3) The borrower’s equity percentage,
as of the most recent fiscal year-end,
was not less than 45 percent;
(4) No default has occurred and is
continuing under the Government
mortgage;
(5) The borrower has delivered to the
Administrator, at least 10 business days
before the private lender notes are to be
executed, a certification by an
independent certified public accountant
that the borrower has met each of the
requirements in paragraphs (e)(1) and
(e)(3) of this section, such certification
to be substantially in the form in
Appendix D of this subpart; and
(6) The borrower has delivered to the
Administrator, at least 10 business days
before the private lender notes are to be
executed, a certification and agreement
executed by the President of the
borrower’s Board of Directors, such
certification and agreement to be
substantially in the form in Appendix E
of this subpart; providing that:
(i) The borrower has met each of the
requirements in paragraphs (e)(2) and
(e)(4) of this section;
(ii) The proceeds of the private lender
notes are to be used for the construction
or purchase of the tangible plant and
materials and supplies to provide
telecommunications services in
accordance with this section and such
construction or purchase is expected to
be completed not later than 4 years after
execution of such notes;
(iii) The weighted-average life of the
private loan evidenced by the private
lender notes does not exceed the
weighted-average remaining useful life
of the assets being financed;
(iv) The private lender notes will
provide for substantially level debt
service or level principal amortization

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over a period not less than the original
remaining years to maturity;
(v) All of the assets financed by the
private loans will be purchased or
otherwise procured in bona fide arm’s
length transactions;
(vi) The proceeds of the private lender
notes will be lent to a wholly-owned
subsidiary of the borrower pursuant to
terms and conditions agreed upon by
the borrower and subsidiary;
(vii) The borrower will, whenever
requested by RUS, provide RUS with a
copy of the financing or guarantee
agreement between the borrower and
the subsidiary or any similar or related
material including security instruments,
loan contracts, or notes issued by the
subsidiary to the borrower;
(viii) The borrower will promptly
report to the Administrator any default
by the subsidiary or other actions that
impair or may impair the subsidiary’s
ability to repay its loans;
(ix) The financing agreement with the
private lender will provide that the
private lender shall cease the advance of
funds upon receipt of written
notification from RUS that the borrower
is in default under the RUS loan
documents;
(x) Except as provided in the
Government mortgage, the borrower has
not agreed to any restrictions or
limitations on future loans from RUS;
and
(xi) If the private lender determines
that a supplemental mortgage is
necessary, the borrower will comply
with those procedures contained in
paragraph (h) of this section for the
preparation, execution, and delivery of
a supplemental mortgage and take such
additional action as may be required to
secure the notes under the Government
mortgage.
(f) Borrower notification. The
borrower shall notify RUS of its
intention to obtain an automatic lien
accommodation under § 1744.30 by
providing the following:
(1) The board resolution cited in
§ 1744.55(b)(1) and the opinion of
counsel cited in § 1744.55(b)(2);
(2) The applicable certification or
certifications required by paragraph
(c)(2); paragraphs (d)(5) and (d)(6); or
paragraphs (e)(5) and (e)(6),
respectively, of this section, in
substantially the form contained in the
applicable appendices to this subpart.
(g) RUS acknowledgment. Within 5
business days of receipt of the
completed certifications and any other
information required under this section,
RUS will review the information and
provide written acknowledgment to the
borrower and the private lender of its
qualification for an automatic lien

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accommodation. Upon receipt of the
acknowledgment, the borrower may
execute the private lender notes.
(h) Supplemental mortgage. If the
private lender determines that a
supplemental mortgage is required to
secure the private lender notes on a pari
passu or pro-rata basis with all other
notes secured under the Government
mortgage, the private lender may
prepare the supplemental mortgage
using the form attached as Appendix F
to this subpart or the borrower may
request RUS to prepare such
supplemental mortgage in accordance
with the following procedures:
(1) The private lender preparing the
supplemental mortgage shall execute
and forward the completed document to
RUS. Upon ascertaining the correctness
of the form and the information
concerning RUS, RUS will execute and
forward the supplemental mortgage to
the borrower.
(2) When requested by the borrower,
RUS will expeditiously prepare the
supplemental mortgage, using the form
in Appendix F to this subpart, upon
submission by the private lender of:
(i) The name of the private lender;
(ii) The Property Schedule for
inclusion as supplemental mortgage
Schedule B, containing legally sufficient
description of all real property owned
by the borrower; and
(iii) The amount of the private lender
note.
(3) The government is not responsible
for ensuring that the supplemental
mortgage has been executed by all
parties and is a valid and binding
instrument enforceable in accordance
with its terms, and recorded and filed in
accordance with applicable law. If the
private lender determines that
additional security instruments or other
documents are required or that RUS
must take additional actions to secure
the private lender notes under the
mortgage, the private lender shall follow
the procedures established in §§ 1744.40
or 1744.50, as appropriate. Except for
the actions of the government expressly
established in § 1744.40, the
government undertakes no obligation to
effectuate an automatic lien
accommodation. When processing of the
supplemental mortgage has been
completed to the satisfaction of the
private lender, the borrower shall
provide RUS with the following:
(i) A fully executed counterpart of the
supplemental mortgage, including all
signatures, seals, and
acknowledgements; and
(ii) Copies of all opinions rendered by
borrower’s counsel to the private lender.
(i) Other approvals. (1) The borrower
is responsible for meeting all

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Federal Register / Vol. 66, No. 154 / Thursday, August 9, 2001 / Rules and Regulations
requirements necessary to issue private
lender notes and to accommodate the
lien of the Government mortgage to
secure the private lender notes
including, but not limited to, those of
the private lender, of any other
mortgagees secured under the existing
RUS mortgage, and of any governmental
entities with jurisdiction over the
issuance of notes or the execution and
delivery of the supplemental mortgage.
(2) To the extent that the borrower’s
existing mortgage requires RUS
approval before the borrower can make
an investment in an affiliated company,
approval is hereby given for all
investments made in affiliated
companies with the proceeds of private

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lender notes qualifying for an automatic
lien accommodation under paragraph
(e) of this section. Any reference to an
approval by RUS under the mortgage
shall apply only to the rights of RUS
and not to any other party.
5. Revise newly redesignated
§ 1744.50(a)(3), to read as follows:
§ 1744.50

Non-Act purposes.

(a) * * *
(3) Approval of the request is in the
interests of the Government with respect
to the financial soundness of the
borrower and other matters, such as
assuring that the borrower’s system is
constructed cost-effectively using sound
engineering practices.

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41763

6. In newly redesignated § 1744.55,
revise paragraph (a), remove paragraph
(b)(5), and redesignate paragraph (b)(6)
as paragraph (b)(5), to read as follows:
§ 1744.55

Application procedures.

(a) Requests for information regarding
applications for lien accommodations or
subordination under this part should be
addressed to the Assistant
Administrator, Telecommunications
Program, Rural Utilities Service,
Washington, DC 20250–1590.
*
*
*
*
*
7. Appendices A, B, C, D, E, and F are
added to subpart B to read as follows:
BILLING CODE 3410–15–P

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Federal Register / Vol. 66, No. 154 / Thursday, August 9, 2001 / Rules and Regulations

Appendix A to Subpart B of Part 1744—Statement, Certification, and Agreement of Borrower’s President of Board
of Directors Regarding Refinancing and Refunding Notes Pursuant to 7 CFR 1744.30(c)

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Appendix B to Subpart B of Part 1744—Certification of Independent Certified Public Accountant Regarding Notes
To Be Issued Pursuant to 7 CFR 1744.30(c)

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Appendix C to Subpart B of Part 1744—Statement, Certification, and Agreement of Borrower’s President of Board
of Directors Regarding Notes To Be Issued Pursuant to 7 CFR 1744.30(d)

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Federal Register / Vol. 66, No. 154 / Thursday, August 9, 2001 / Rules and Regulations

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Appendix D to Subpart B of Part 1744—Certification of Independent Certified Public Accountant Regarding Notes
To Be Issued Pursuant to 7 CFR 1744.30

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41768

Federal Register / Vol. 66, No. 154 / Thursday, August 9, 2001 / Rules and Regulations

Appendix E to Subpart B of Part 1744—Statement, Certification, and Agreement of Borrower’s President of Board
of Directors Regarding Notes To Be Issued Pursuant to 7 CFR 1744.30(e)

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Federal Register / Vol. 66, No. 154 / Thursday, August 9, 2001 / Rules and Regulations
Appendix F to Subpart B of Part 1744—Form of Supplemental Mortgage

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Federal Register / Vol. 66, No. 154 / Thursday, August 9, 2001 / Rules and Regulations

Dated: August 6, 2001.
Blaine D. Stockton,
Acting Administrator, Rural Utilities Service.
[FR Doc. 01–19981 Filed 8–8–01; 8:45 am]
BILLING CODE 3410–15–C

DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 97
[Docket No. 30263; Amdt. No. 2064]

Standard Instrument Approach
Procedures; Miscellaneous
Amendments
AGENCY: Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
SUMMARY: This amendment establishes,
amends, suspends, or revokes Standard
Instrument Approach procedures
(SIAPs) for operations at certain
airports. These regulatory actions are
needed because of changes occurring in
the National Airspace System, such as

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the commissioning of new navigational
facilities, addition of new obstacles, or
changes in air traffic requirements.
These changes are designed to provide
safe and efficient use of the navigable
airspace and to promote safe flight
operations under instrument flight rules
at the affected airports.
DATES: An effective date for each SIAP
is specified in the amendatory
provisions.
Incorporation by reference-approved
by the Director of the Federal Register
on December 31, 1980, and reapproved
as of January 1, 1982.
ADDRESSES: Availability of matter
incorporated by reference in the
amendment is as follows:
For Examination—
1. FAA Rules Docket, FAA
Headquarters Building, 800
Independence Avenue, SW.,
Washington, DC 20591;
2. The FAA Regional Office of the
region in which affected airport is
located; or
3. The Flight Inspection Area Office
which originated the SIAP.

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For Purchase—Individual SIAP
copies may be obtained from:
1. FAA Public Inquiry Center (APA–
200), FAA Headquarters Building, 800
Independence Avenue, SW.,
Washington, DC 20591; or
2. The FAA Regional Office of the
region in which the affected airport is
located.
By Subscription—Copies of all SIAPs,
mailed once every 2 weeks, are for sale
by the Superintendent of Documents,
US Government Printing Office,
Washington, DC 20402.
FOR FURTHER INFORMATION CONTACT:
Donald P. Pate, Flight Procedure
Standards Branch (AMCAFS–420),
Flight Technologies and Programs
Division, Flight Standards Service,
Federal Aviation Administration, Mike
Monroney Aeronautical Center, 6500
South MacArthur Blvd. Oklahoma City,
OK. 73169 (Mail Address: P.O. Box
25082 Oklahoma City, OK. 73125)
telephone: (405) 954–4164.
SUPPLEMENTARY INFORMATION: This
amendment to part 97 of the Federal
Aviation Regulations (14 CFR part 97)

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