82 FR 27682 - Compliance Examination Procedures for Rural Business Investment Companies Under the Rural Business Investment Program

DEPARTMENT OF AGRICULTURE
Rural Business-Cooperative Service

Federal Register Volume 82, Issue 115 (June 16, 2017)

This Notice identifies the examination procedures that the Rural Business-Cooperative Service (the Agency) will use for non- leveraged Rural Business Investment Companies (RBICs) within the Rural Business Investment Program (RBIP).

[Federal Register Volume 82, Number 115 (Friday, June 16, 2017)]
[Notices]
[Pages 27682-27684]
From the Federal Register Online  [www.thefederalregister.org]
[FR Doc No: 2017-12531]


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DEPARTMENT OF AGRICULTURE

Rural Business-Cooperative Service


Compliance Examination Procedures for Rural Business Investment 
Companies Under the Rural Business Investment Program

AGENCY: Rural Business-Cooperative Service, USDA.

ACTION: Notice.

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SUMMARY: This Notice identifies the examination procedures that the 
Rural Business-Cooperative Service (the Agency) will use for non-
leveraged Rural Business Investment Companies (RBICs) within the Rural 
Business Investment Program (RBIP).

FOR FURTHER INFORMATION CONTACT: Information on this Notice may be 
obtained by contacting David Chesnick, Program Manager, Rural Business 
Investment Program, Specialty Programs Division, U.S. Department of 
Agriculture, Room 4221-S, 1400

[[Page 27683]]

Independence Avenue SW., Washington, DC 20250-3226, at (202) 690-0433. 
You may also obtain detailed information on RBIP found on the Agency's 
Web site at http://www.rd.usda.gov/programs-services/rural-business-investment-program.

SUPPLEMENTARY INFORMATION: 

Paperwork Reduction Act

    The Paperwork Reduction Act of 1995 defines ``collection of 
information'' as a requirement for ``answers to * * * identical 
reporting or recordkeeping requirements imposed on ten or more 
persons'' (44 U.S.C. 3502(3)(A)). The collection requirement associated 
with this Notice is expected to receive less than 10 respondents and 
therefore the Act does not apply.

Overview Information

    Federal Agency Name. Rural Business-Cooperative Service.
    Opportunity Title. Rural Business Investment Program for Non-
leveraged RBICs.
    Announcement Type. Subsequent announcement.
    Catalog of Federal Domestic Assistance (CFDA) Number. The CFDA 
number for the program impacted by this action is 10.860, RBIP.
    Dates. The Agency will conduct compliance exams on an annual basis, 
or until such time the Agency determines otherwise.
    Availability of Notice. This Notice is available on the USDA Rural 
Development Web site at: http://www.rd.usda.gov/programs-services/rural-business-investment-program.

I. Background

    Subtitle H of the Consolidated Farm and Rural Development Act, as 
amended (7 U.S.C. 2009cc et seq.) establishes RBIP.
    The terms defined in 7 CFR part 4290 are applicable to this Notice.
    The RBIP promotes rural economic development through venture 
capital investment by for-profit RBICs. The mission of the RBIP is to 
encourage economic growth, innovation, and entrepreneurship by sharing 
in the financial success of privately owned and managed venture capital 
investment funds, for the benefit of America's small rural businesses 
and the customers and communities they serve.
    Under RBIP, USDA may license RBICs as either leveraged or non-
leveraged. The Agency began accepting applications for non-leveraged 
status under RBIP on August 6, 2012.
    The purpose of this Notice is to define the scope of the annual 
compliance review for each operating non-leveraged RBIC.
    All licensed RBICs are subject to regulatory compliance 
examinations by USDA under 7 CFR 4290.690. The examination objective is 
to evaluate and conclude whether the RBIC has appropriately complied 
with USDA program regulations in 7 CFR part 4290. The examination 
determines whether investments made by the RBIC were to eligible 
entities and for authorized purposes under program regulations.

II. Examination Provisions

    This section of the Notice identifies the procedures the Agency 
will use in the compliance examination of non-leveraged RBICs.

Procedures

    A. In accordance with 7 CFR 4290.690, the Agency will conduct each 
year an examination of each non-leveraged RBIC for the sole purpose of 
evaluating regulatory compliance.
    B. The Agency will conduct these regulatory compliance examinations 
using Agency rules located in subparts G, H, and I--as modified by 
subpart O--of 7 CFR part 4290 for non-leveraged RBICs.
    C. The Agency will apply the definitions of 7 CFR 4290.50 to RBIC 
examination reports and work papers.
    D. The Agency will examine the operations of the RBIC; it will not 
examine the investors in the RBIC.
    E. The Agency will determine whether each investment made by the 
RBIC is eligible based on the regulations defined in 7 CFR part 4290; 
the Agency will not examine the quality of the investments made by the 
RBIC.
    F. The Agency will conduct the examination of a non-leveraged RBIC 
off-site, absent specific authorization from USDA for on-site visits.
    G. The Agency will provide a copy of the final examination report 
and its conclusions to the RBIC.
    H. If the portfolio concerns were determined to be ineligible under 
7 CFR 4290.700(e) during the compliance examination, the RBIC will have 
until the end of their next fiscal year to remedy the non-compliance. 
If the RBIC fails to comply with the Secretary's remedy, the Agency 
may, in accordance with 7 CFR 4290.3041, revoke the license of the 
RBIC.
    I. As amplified in this Notice, the Agency reviews the RBIC for 
regulatory compliance only. The Agency does not make any assessments, 
evaluations, warranties, or representations with respect to any aspect 
of the financial performance of the RBIP, its investments, or its 
investors, including their financial strength, likelihood of success, 
or the quality of, or return on, any investments. The review done by 
the Agency is strictly for its sole benefit and not for the benefit of 
any third party. All participants and investors in RBIPs must do their 
own independent due diligence.

III. Nondiscrimination

    In accordance with Federal civil rights law and U.S. Department of 
Agriculture (USDA) civil rights regulations and policies, the USDA, its 
Agencies, offices, and employees, and institutions participating in or 
administering USDA programs are prohibited from discriminating based on 
race, color, national origin, religion, sex, gender identity (including 
gender expression), sexual orientation, disability, age, marital 
status, family/parental status, income derived from a public assistance 
program, political beliefs, or reprisal or retaliation for prior civil 
rights activity, in any program or activity conducted or funded by USDA 
(not all bases apply to all programs). Remedies and complaint filing 
deadlines vary by program or incident.
    Persons with disabilities who require alternative means of 
communication for program information (e.g., Braille, large print, 
audiotape, American Sign Language, etc.) should contact the responsible 
Agency or USDA's TARGET Center at (202) 720-2600 (voice and TTY) or 
contact USDA through the Federal Relay Service at (800) 877-8339. 
Additionally, program information may be made available in languages 
other than English.
    To file a program discrimination complaint, complete the USDA 
Program Discrimination Complaint Form, AD-3027, found online at http://www.ascr.usda.gov/complaint_filing_cust.html and at any USDA office or 
write a letter addressed to USDA and provide in the letter all of the 
information requested in the form. To request a copy of the complaint 
form, call (866) 632-9992. Submit your completed form or letter to USDA 
by:
    (1) Mail: U.S. Department of Agriculture Office of the Assistant 
Secretary for Civil Rights, 1400 Independence Avenue SW., Washington, 
DC 20250-9410;
    (2) Fax: (202) 690-7442; or
    (3) Email: [email protected].
    USDA is an equal opportunity provider, employer, and lender.


[[Page 27684]]


    Dated: June 12, 2017.
Chad Parker,
Acting Administrator, Rural Business-Cooperative Service.
[FR Doc. 2017-12531 Filed 6-15-17; 8:45 am]
BILLING CODE 3410-XY-P