PART 400—EMERGENCY STEEL GUARANTEE LOAN PROGRAM Authority: Pub. L. 106-51, 113 Stat. 252 (15 U.S.C. 1841 note); Pub. L. 106-102, 113 Stat. 1338. Source: 64 FR 57933, Oct. 27, 1999, unless otherwise noted. Subpart A—General § 400.1 Purpose. This part is issued by the Emergency Steel Guarantee Loan Board pursuant to section 552 of title 5 of the United States Code and the Emergency Steel Loan Guarantee Act of 1999, Chapter 1 of Public Law 106-51, 113 Stat. 252, as amended by section 734 of Public Law 106-102, 113 Stat. 1338, the Gramm-Leach-Bliley Financial Modernization Act (1999). [65 FR 70293, Nov. 22, 2000] § 400.2 Definitions. (a) Act (b) Administer, administering and administration, (c) Agent (d) Applicant (e) Board (f) Borrower (g) Guarantee (h) Guaranteed Portion (i) Lender (j) Loan Documents (k) Program (l) Security (m) Qualified Steel Company (n) Supplemental Guarantee (o) Unguaranteed Portion [64 FR 57933, Oct. 27, 1999, as amended at 65 FR 24104, Apr. 25, 2000; 66 FR 53079, Oct. 19, 2001] Subpart B—Board Procedures § 400.100 Purpose and scope. This subpart describes the Board's authorities and organizational structure, the means and rules by which the Board takes actions, and procedures for public access to Board records. § 400.101 Composition of the Board. The Board consists of the Chairman of the Board of Governors of the Federal Reserve System, who acts as Chairman of the Board, the Chairman of the Securities and Exchange Commission, and the Secretary of Commerce. § 400.102 Authority of the Board. Pursuant to the provisions of the Act, the Board is authorized to guarantee loans provided to Qualified Steel Companies by private banking and investment institutions in accordance with the procedures, rules, and regulations established by the Board, to make the determinations authorized by the Act, and to take such other actions as necessary to carry out its functions in accordance with the Act. § 400.103 Offices. The principal offices of the Board are in the U.S. Department of Commerce, Washington, DC 20230. [72 FR 63976, Nov. 14, 2007] § 400.104 Meetings and actions of the Board. (a) Place and frequency. (b) Quorum and voting. (c) Agenda of meetings. (d) Minutes. (e) Use of conference call communications equipment. (f) Actions between meetings. (g) Delegations of authority. § 400.105 Staff. (a) Executive Director. (b) General Counsel. (c) Secretary of the Board. (d) An individual may hold more than one staff position. [64 FR 57933, Oct. 27, 1999, as amended at 65 FR 70293, Nov. 22, 2000] § 400.106 Ex parte Oral or written communication, not on the public record, between any member of the Board and any party or parties interested in any matter pending before the Board concerning the substance of that matter is prohibited. [66 FR 53079, Oct. 19, 2001] § 400.107 Freedom of Information Act. (a) Definitions. (1) FOIA, (2) Commercial use request (3) Direct costs (4) Duplication (5) Educational institution (6) Noncommercial scientific institution (7) News (8) Representative of the news media (9) Review (10) Search (b) Records available for public inspection and copying Types of records made available. (2) Reading room procedures. (3) Electronic records. http://elb.osec.doc.gov http://elb.commerce.gov. (c) Records available to the public on request Types of records made available. (2) Procedures for requesting records. FREEDOM OF INFORMATION ACT REQUEST. (3) Contents of request. (i) The name and address of the requester, and the telephone number at which the requester can be reached during normal business hours; (ii) Whether the requested information is intended for commercial use, or whether the requester represents an educational or noncommercial scientific institution, or news media; (iii) A statement agreeing to pay the applicable fees, or a statement identifying any fee limitation desired, or a request for a waiver or reduction of fees that satisfies paragraph (f) of this section. (d) Processing requests Priority of responses. (2) Expedited processing. (ii) The Secretary of the Board shall notify a requester of the determination whether to grant or deny a request for expedited processing within ten working days of receipt of the request. If the Secretary of the Board grants the request for expedited processing, the Board shall process the request for access to information as soon as practicable. If the Secretary of the Board denies a request for expedited processing, the requester may file an appeal pursuant to the procedures set forth in paragraph (e) of this section, and the Board shall respond to the appeal within twenty days after the appeal was received by the Board. (3) Time limits. (i) In the case of expedited treatment under paragraph (d)(2) of this section; (ii) Where the running of such time is suspended for payment of fees pursuant to paragraph (f)(2)(ii) of this section; (iii) Where the estimated charge is less than $250, and the requester does not guarantee payment pursuant to paragraph (f)(2)(i) of this section; or (iv) In unusual circumstances, as defined in 5 U.S.C. 552(a)(6)(B)(iii), the time limit may be extended for a period of time not to exceed 10 working days as provided by written notice to the requester, setting forth the reasons for the extension and the date on which a determination is expected to be dispatched; or such alternative time period as mutually agreed to by the Secretary of the Board and the requester when the Secretary of the Board notifies the requester that the request cannot be processed in the specified time limit. (4) Response to request. (i) The Secretary of the Board's determination of the request and the reasons therefor; (ii) The information withheld, and the basis for withholding; and (iii) The right to appeal any denial or partial denial, pursuant to paragraph (e) of this section. (5) Referral to another agency. (i) Another Federal agency subject to the FOIA has a significant interest, but not the primary interest; or (ii) Another Federal agency not subject to the FOIA has the primary interest or a significant interest. Ordinarily, the agency that originated a record will be presumed to have the primary interest in it. (6) Providing responsive records. (ii) The Secretary of the Board shall provide any reasonably segregable portion of a record that is responsive to the request after deleting those portions that are exempt under the FOIA or this section. (iii) Except where disclosure is expressly prohibited by statute, regulation, or order, the Secretary of the Board may authorize the release of records that are exempt from mandatory disclosure whenever the Board or designated Board members determine that there would be no foreseeable harm in such disclosure. (iv) The Board is not required in response to the request to create records or otherwise to prepare new records. (7) Prohibition against disclosure. (e) Appeals. FREEDOM OF INFORMATION ACT APPEAL (2) The General Counsel of the Board shall make a determination regarding any appeal within 20 working days of actual receipt of the appeal, and the determination letter shall notify the appealing party of the right to seek judicial review in event of denial. (f) Fee schedules; waiver of fees (1) Fee schedule. (i) Search. Search fees shall be the direct costs of conducting the search by the involved employees. (B) For computer searches of records, requesters will be charged the direct costs of conducting the search, although certain requesters (as provided in paragraph (f)(3) of this section will be charged no search fee and certain other requesters (as provided in paragraph (f)(3)) are entitled to the cost equivalent of two hours of manual search time without charge. These direct costs include the costs, attributable to the search, of operating a central processing unit and operator/programmer salary. (ii) Duplication. (iii) Review. (iv) Limitations on charging fees. (B) No search fee or review fee will be charged for a quarter-hour period unless more than half of that period is required for search or review. (C) Whenever a total fee calculated under this paragraph is $25 or less for any request, no fee will be charged. (D) For requesters other than those seeking records for a commercial use, no fee will be charged unless the cost of search in excess of two hours plus the cost of duplication in excess of 100 pages totals more than $25. (2) Payment procedures. (i) Advance notification of fees. (ii) Advance payment. (iii) Late charges. (3) Categories of uses. (i) Commercial use requester. (ii) Educational, non-commercial scientific institutions, or representatives of the news media requesters. (iii) All other requesters. (4) Nonproductive search. (5) Aggregated requests. (6) Waiver or reduction of fees. (i) Standards for determining waiver or reduction. (A) Whether the subject of the records concerns the operations or activities of the government; (B) Whether disclosure of the information is likely to contribute significantly to public understanding of government operations or activities; (C) Whether the requester has the intention and ability to disseminate the information to the public; (D) Whether the information is already in the public domain; (E) Whether the requester has a commercial interest that would be furthered by the disclosure; and, if so, (F) Whether the magnitude of the identified commercial interest of the requester is sufficiently large, in comparison with the public interest in disclosure, that disclosure is primarily in the commercial interest of the requester. (ii) Contents of request for waiver. (iii) Burden of proof. (iv) Determination by Secretary of the Board. (7) Uniform fee schedule. Service Rate (i) Manual search Actual salary rate of employee involved, plus 16 percent of salary rate. (ii) Computerized search Actual direct cost, including operator time. (iii) Duplication of records: (A) Paper copy reproduction $.15 per page (B) Other reproduction (e.g., computer disk or printout, microfilm, microfiche, or microform) Actual direct cost, including operator time. (iv) Review of records (includes preparation for release, i.e. Actual salary rate of employee conducting review, plus 16 percent of salary rate. (g) Reuest for confidential treatment of business information Submission of request. (2) Form of request. (3) Designation and separation of confidential material. “PROPRIETARY” “BUSINESS CONFIDENTIAL” (h) Request for access to confidential commercial or financial information Request for confidential commercial or financial information. (2) Notice to the submitter. (ii) Absent a request for confidential treatment, the Secretary of the Board may notify a submitter of a request for access to submitter's business information if the Secretary of the Board reasonably believes that disclosure of the information may cause substantial competitive harm to the submitter. (iii) The notice given to the submitter by mail, return receipt requested, shall be given as soon as practicable after receipt of the request for access, and shall describe the request and provide the submitter seven working days from the date of notice, to submit written objections to disclosure of the information. Such statement shall specify all grounds for withholding any of the information and shall demonstrate why the information which is considered to be commercial or financial information, and that the information is a trade secret, is privileged or confidential, or that its disclosure is likely to cause substantial competitive harm to the submitter. If the submitter fails to respond to the notice within the time specified, the submitter will be considered to have no objection to the release of the information. Information a submitter provides under this paragraph may itself be subject to disclosure under the FOIA. (3) Exceptions to notice to submitter. (i) The Secretary of the Board determines that the request for access should be denied; (ii) The requested information lawfully has been made available to the public; (iii) Disclosure of the information is required by law (other than 5 U.S.C. 552); or (iv) The submitter's claim of confidentiality under 5 U.S.C. 552(b)(4) appears obviously frivolous or has already been denied by the Secretary of the Board, except that in this last instance the Secretary of the Board shall give the submitter written notice of the determination to disclose the information at least seven working days prior to disclosure. (4) Notice to requester. (5) Determination by Secretary of the Board. (i) A statement of reason(s) why the submitter's objections to disclosure were not sustained; (ii) A description of the business information to be disclosed; and (iii) A statement that the component intends to disclose the information seven working days from the date the submitter receives the notice. (6) Notice of lawsuit. [64 FR 57933, Oct. 27, 1999, as amended at 65 FR 70293, Nov. 22, 2000] § 400.108 Restrictions on lobbying. (a) No funds received through a loan guaranteed under this Program may be expended by the recipient of a Federal contract, grant, loan, loan Guarantee, or cooperative agreement to pay any person for influencing or attempting to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with any of the following covered Federal actions: the awarding of any Federal contract, the making of any Federal grant, the making of any Federal loan or loan Guarantee, the entering into of any cooperative agreement, and the extension, continuation, renewal, amendment, or modification of any Federal contract, grant, loan, loan Guarantee, or cooperative agreement. (b) Each person who requests or receives from an agency a commitment providing for the United States to insure or guarantee a loan shall file with that agency a statement, set forth in the application form, whether that person has made or has agreed to make any payment to influence or attempt to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with that loan insurance or Guarantee. (c) Each person who requests or receives from an agency a commitment providing for the United States to insure or guarantee a loan shall file with that agency a Standard Form-LLL if that person has made or has agreed to make any payment to influence or attempt to influence an officer or employee of any agency, a Member of Congress, an officer or employee of Congress, or an employee of a Member of Congress in connection with that loan insurance or Guarantee. (d) Each person shall file a certification, contained in the application form, and a disclosure form (Standard Form-LLL), if required, with each submission that initiates agency consideration of such person for: (1) Award of a Federal contract, grant, or cooperative agreement exceeding $100,000; or (2) An award of a Federal loan or a commitment providing for the United States to insure or guarantee a loan exceeding $150,000. (e) Each person shall file a certification, and a disclosure form, if required, upon receipt by such person of: (1) A Federal contract, grant, or cooperative agreement exceeding $100,000; or (2) A Federal loan or a commitment providing for the United States to insure or Guarantee a loan exceeding $150,000, unless such person previously filed a certification, and a disclosure form, if required, under paragraph (c) of this section. (f) Each person shall file a disclosure form at the end of each calendar quarter in which there occurs any event that requires disclosure or that materially affects the accuracy of the information contained in any disclosure form previously filed by such person under paragraphs (d) or (e) of this section. An event that materially affects the accuracy of the information reported includes: (1) A cumulative increase of $25,000 or more in the amount paid or expected to be paid for influencing or attempting to influence a covered Federal action; or (2) A change in the person(s) or individual(s) influencing or attempting to influence a covered Federal action; or (3) A change in the officer(s), employee(s), or Member(s) contacted to influence or attempt to influence a covered Federal action. § 400.109 Government-wide debarment and suspension (nonprocurement). (a) Executive Order (E.O.) 12549 provides that, to the extent permitted by law, Executive departments and agencies shall participate in a governmentwide system for nonprocurement debarment and suspension. A person who is debarred or suspended shall be excluded from Federal financial and nonfinancial assistance and benefits under Federal programs and activities. Debarment or suspension of a participant in a program by one agency shall have governmentwide effect. The Board shall review the List of Debarred entities prior to making final loan Guarantee decisions. Suspension or debarment may be a basis for denying a loan Guarantee. (b) This section applies to all persons who have participated, are currently participating or may reasonably be expected to participate in transactions under Federal nonprocurement programs. For purposes of this section such transactions will be referred to as “covered transactions”. (1) Covered transaction. (i) Primary covered transaction. Except as noted in paragraph (b)(2) of this section, a primary covered transaction is any nonprocurement transaction between an agency and a person, regardless of type, including: grants, cooperative agreements, scholarships, fellowships, contracts of assistance, loans, loan Guarantees, subsidies, insurance, payments for specified use, donation agreements and any other nonprocurement transactions between a Federal agency and a person. (ii) Lower tier covered transaction. A lower tier covered transaction is: (A) Any transaction between a participant and a person other than a procurement contract for goods or services, regardless of type, under a primary covered transaction; (B) Any procurement contract for goods or services between a participant and a person, regardless of type, expected to equal or exceed the Federal procurement small purchase threshold fixed at 10 U.S.C. 2304(g) and 41 U.S.C. 253(g) (currently $100,000) under a primary covered transaction; (C) Any procurement contract for goods or services between a participant and a person under a covered transaction, regardless of amount, under which that person will have a critical influence on or substantive control over that covered transaction. Such persons may include loan officers or chief executive officers acting as principal investigators and providers of federally-required audit services. (2) Exceptions. (i) Statutory entitlements or mandatory awards (but not subtier awards thereunder which are not themselves mandatory), including deposited funds insured by the Federal Government; (ii) Direct awards to foreign governments or public international organizations, or transactions with foreign governments or foreign governmental entities, public international organizations, foreign government owned (in whole or in part) or controlled entities, entities consisting wholly or partially of foreign governments or foreign governmental entities; (iii) Benefits to an individual as a personal entitlement without regard to the individual's present responsibility (but benefits received in an individual's business capacity are not excepted); (iv) Federal employment; (v) Transactions pursuant to national or agency-recognized emergencies or disasters; (vi) Incidental benefits derived from ordinary governmental operations; and (vii) Other transactions where the application of this section would be prohibited by law. (3) Board covered transactions. (c) Primary covered transactions. (d) Lower tier covered transactions. (e) Exceptions. (1) Statutory entitlements or mandatory awards (but not subtier awards thereunder which are not themselves mandatory), including deposited funds insured by the Federal Government; (2) Direct awards to foreign governments or public international organizations, or transactions with foreign governments or foreign governmental entities, public international organizations, foreign government owned (in whole or in part) or controlled entities, and entities consisting wholly or partially of foreign governments or foreign governmental entities; (3) Benefits to an individual as a personal entitlement without regard to the individual's present responsibility (but benefits received in an individual's business capacity are not excepted); (4) Federal employment; (5) Transactions pursuant to national or agency-recognized emergencies or disasters; (6) Incidental benefits derived from ordinary governmental operations; and (7) Other transactions where the application of this section would be prohibited by law. (f) Persons who are ineligible are excluded in accordance with the applicable statutory, executive order, or regulatory authority. (g) Persons who accept voluntary exclusions are excluded in accordance with the terms of their settlements. The Board shall, and participants may, contact the original action agency to ascertain the extent of the exclusion. (h) The Board may grant an exception permitting a debarred, suspended, or voluntarily excluded person, or a person proposed for debarment under 48 CFR part 9, subpart 9.4, to participate in a particular covered transaction upon a written determination by the agency head or an authorized designee stating the reason(s) for deviating from the Presidential policy established by Executive Order 12549. However, in accordance with the President's stated intention in the Executive Order, exceptions shall be granted only infrequently. Exceptions shall be reported in accordance with the Executive Order. (i) Notwithstanding the debarment, suspension, proposed debarment under 48 CFR part 9, subpart 9.4, determination of ineligibility, or voluntary exclusion of any person by an agency, agencies and participants may continue covered transactions in existence at the time the person was debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, declared ineligible, or voluntarily excluded. A decision as to the type of termination action, if any, to be taken should be made only after thorough review to ensure the propriety of the proposed action. (j) Agencies and participants shall not renew or extend covered transactions (other than no-cost time extensions) with any person who is debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, ineligible or voluntary excluded, except as provided in paragraph (h) of this section. (k) Except as permitted under paragraphs (h) or (i) of this section, a participant shall not knowingly do business under a covered transaction with a person who is— (1) Debarred or suspended; (2) Proposed for debarment under 48 CFR part 9, subpart 9.4; or (3) Ineligible for or voluntarily excluded from the covered transaction. (l) Violation of the restriction under paragraph (k) of this section may result in disallowance of costs, annulment or termination of award, issuance of a stop work order, debarment or suspension, or other remedies as appropriate. (m) A participant may rely upon the certification of a prospective participant in a lower tier covered transaction that it and its principals are not debarred, suspended, proposed for debarment under 48 CFR part 9, subpart 9.4, ineligible, or voluntarily excluded from the covered transaction, unless it knows that the certification is erroneous. An agency has the burden of proof that a participant did knowingly do business with a person that filed an erroneous certification. § 400.110 Amendments. The Board's rules in this chapter may be adopted or amended, or new rules may be adopted, only by majority vote of the Board. [65 FR 70293, Nov. 22, 2000] Subpart C—Steel Guarantee Loans § 400.200 Eligible Borrower. (a) An eligible Borrower must be a Qualified Steel Company that can demonstrate: (1) Credit is not otherwise available to it under reasonable terms or conditions sufficient to meet its financing needs, as reflected in the financial and business plans of the company; (2) The prospective earning power of that company, together with the character and value of the security pledged, furnish reasonable assurance of repayment of the loan to be guaranteed in accordance with its terms; (3) The company has agreed to permit audits by the General Accounting Office and an independent auditor acceptable to the Board prior to the issuance of the guarantee and while any such guaranteed loan is outstanding; (4) It has experienced layoffs, production losses, or financial losses between January 1, 1998, and the date of application for the Guarantee, demonstrated as a comparison between employment, production, or net income existing on January 1, 1998 and on the date of application; and (5) In the case of a purchaser of substantial assets of a Qualified Steel Company; the Qualified Steel Company is unable to re-organize itself. (b) For purposes of this section, a company will be considered a purchaser of substantial assets of a Qualified Steel Company if the company's identifiable assets purchased from a Qualified Steel Company are 50 percent or more of the consolidated assets of that Qualified Steel Company and its subsidiaries. (c) The Lender must provide with its application a letter from at least one lending institution other than the Lender to which the Borrower has applied for financial assistance dated within six months of submission of the application, indicating that the Borrower was denied for substantially the same loan it is now applying for, and the reasons the Borrower was unable to obtain the financing for which it applied. In addition, the Lender applying for a guarantee under this Program must certify that it would not make the loan without the Board's guarantee. [64 FR 57933, Oct. 27, 1999, as amended at 65 FR 70293, Nov. 22, 2000] § 400.201 Eligible Lender. (a) A lender eligible to apply to the Board for a Guarantee of a loan must be: (1) A banking institution, such as a commercial bank or trust company, subject to regulation by the Federal banking agencies enumerated in 12 U.S.C. 1813; or (2) An investment institution, such as an investment bank, commercial finance company, or insurance company, that is currently engaged in commercial lending in the normal course of its business. (b)(1) If more than one banking or investment institution is applying to the Board for a Guarantee of a single loan, each one of the banking or investment institutions on the application must meet the requirements to be an eligible lender set forth in paragraph (a) of this section. (2) An application for a Guarantee of a single loan submitted by a group of banking or investment institutions, as described in paragraph (b)(1) of this section, must identify one of the banking or investment institutions applying for such loan to act as agent for all. This agent is responsible for administering the loan and shall have those duties and responsibilities required of an agent, as set forth in the Guarantee. (3) Each Lender, irrespective of any indemnities or other agreements between the Lenders and the Agent, shall be bound by all actions, and/or failures to act, of the Agent. The Board shall be entitled to rely upon such actions and/or failures to act of the Agent as binding the Lenders. (c) Status as a Lender under paragraph (a) of this section does not assure that the Board will issue the Guarantee sought, or otherwise preclude the Board from declining to issue a Guarantee. In addition to evaluating an application pursuant to § 400.207, in making a determination to issue a Guarantee to a Lender, the Board will assess: (1) The Agent Lender's level of regulatory capital, in the case of banking institutions, or net worth, in the case of investment institutions; (2) Whether the Agent Lender possesses the ability to administer the loan, as required by § 400.211(b), including its experience with loans to steel companies; (3) The scope, volume and duration of the Agent Lender's activity in administering loans; (4) The performance of the Agent Lender's loan portfolio, including its current delinquency rate; (5) The Agent Lender's loss rate as a percentage of loan amounts for its current fiscal year; and (6) Any other matter the Board deems material to its assessment of the Agent Lender. (d) A proposed loan for the purpose, in whole or in part, of refinancing existing credit provided by the Agent will not be approved unless the Board is satisfied that the Agent retains at least a substantially equivalent level of risk as a result of the refinancing. [64 FR 57933, Oct. 27, 1999, as amended at 65 FR 24104, Apr. 25, 2000; 66 FR 53079, Oct. 19, 2001] § 400.202 Loan amount. (a) The aggregate amount of loan principal guaranteed under this Program to a single Qualified Steel Company may not exceed $ 250 million. (b) Of the aggregate amount of loans authorized to be guaranteed and outstanding at any one time, not more than $30 million shall be loans to iron ore companies. § 400.203 Guarantee percentage. A guarantee issued by the Board may not exceed 85 percent of the amount of the principal of a loan to a Qualified Steel Company. Subject to the provisions of this part, one or more third parties, public or private, may guarantee repayment of part of the Unguaranteed Portion of a loan guaranteed by the Board. [66 FR 53080, Oct. 19, 2001] § 400.204 Loan terms. (a) All loans guaranteed under the Program shall be due and payable in full no later than December 31, 2005. (b) Loans guaranteed under the Program must bear a rate of interest determined by the Board to be reasonable. The reasonableness of an interest rate will be determined with respect to current average yields on outstanding obligations of the United States with remaining periods of maturity comparable to the term of the loan sought to be guaranteed. The Board may reject an application to guarantee a loan if it determines the interest rate of such loan to be unreasonable. (c)(1) The performance of all of the Borrower's obligations under the Loan Documents shall be secured by, and shall have the priority in, such Security as provided for within the terms and conditions of the Guarantee. (2) Without limiting the Lender's or Borrower's obligations under paragraph (c) of this section, at a minimum, the loan shall be secured by: (i) A fully perfected and enforceable security interest and/or lien, with first priority over conflicting security interests or other liens in all property acquired, improved or derived from the loan funds; (ii) A fully perfected and enforceable security interest and/or lien in any other property of the Borrower's pledged to secure the loan, including accessions, replacements, proceeds, or property given by a third party as Security for the loan. (3) The entire loan will be secured by the same Security with equal lien priority for the Guaranteed Portion and the Unguaranteed Portion of the loan. The Unguaranteed Portion of the loan will neither be paid first nor given any preference over the Guaranteed Portion. A Supplemental Guarantor shall not have a security interest, direct or indirect, in any asset of the Borrower or any affiliate thereof other than the Security. (4) An Applicant's compliance with paragraph (c)(2) of this section does not assure a finding of reasonable assurance of repayment, or assure the Board's Guarantee of the loan. (d) An eligible Lender may assess and collect from the Borrower such other fees and costs associated with the application and origination of the loan as are reasonable and customary, taking into consideration the amount and complexity of the credit. The Board may take such other fees and costs into consideration when determining whether to offer a Guarantee to the Lender. [64 FR 57933, Oct. 27, 1999, as amended at 64 FR 72020, Dec. 23, 1999; 65 FR 70293, Nov. 22, 2000; 66 FR 53080, Oct. 19, 2001] § 400.205 Application process. (a) Application process. (b) Applications shall contain the following: (1) A completed Form “Application for Steel Guarantee Loan”; (2) The information required for the completion of Form “Environmental Assessment and Compliance Findings for Related Environmental Laws” and attachments, as required by § 400.206(a)(2)(i)(D); (3) All Loan Documents that will be signed by the Lender and the Borrower, if the application is approved, including all terms and conditions of, and Security or additional Security to assure the Borrower's performance under, the loan; (4) Certification by the chairman of the board and the chief executive officer of the Borrower acknowledging that the Borrower is aware that the Lender is applying to the Board for a Guarantee of a loan under the Program, as described in the Loan Documents; and agreeing to permit audits by the General Accounting Office, its designee, and an independent auditor acceptable to the Board prior to the issuance of the Guarantee and annually thereafter while such guarantee is outstanding; (5) The Lender's full written underwriting analysis of the loan to be guaranteed by the Board; (6) A certification by the Lender that the Lender meets each of the requirements of the Program as set forth in the Act and the Board's rules in this part; (7) A description of all Security for the loan, including, as applicable, current appraisal of real and personal property, copies of any appropriate environmental site assessments, and current personal and corporate financial statements of any guarantors for the same period as required for the Borrower. Appraisals of real property shall be prepared by State licensed or certified appraisers, and be consistent with the “Uniform Standards of Professional Appraisal Practice,” promulgated by the Appraisal Standards Board of the Appraisal Foundation. Financial statements of guarantors shall be prepared by independent Certified Public Accountants; (8) Consolidated financial statements of the Borrower for the previous three years that have been audited by an independent certified public accountant, including any associated notes, as well as any interim financial statements and associated notes for the current fiscal year; (9) A five year history and five year projection for revenue, cash flow, average realized prices and average realized production costs. If the loan funds are to be used to purchase substantial assets of an existing firm, a pro forma balance sheet at startup, and five years projected year end balance sheets and income statement at start-up; (10) Documentation that credit is not otherwise available to the borrower under reasonable terms or conditions sufficient to meet its financial needs, as reflected in the financial or business plan of that company. The Lender must provide with its application those items required by § 400.200(c); (11) Documentation sufficient to demonstrate that the Lender is eligible under § 400.201(a) and to allow the Board to make a determination to issue a Guarantee to such Lender as set forth in § 400.201(c); and (12) A description of any Supplemental Guarantee(s) that will apply to the Unguaranteed Portion of the loan. (c) No Guarantee will be made if either the Borrower or Lender has an outstanding, delinquent Federal debt until: (1) The delinquent account has been paid in full; (2) A negotiated repayment schedule is established and at least one payment has been received; or (3) Other arrangements, satisfactory to the agency responsible for collecting the debt, are made. [64 FR 57933, Oct. 27, 1999, as amended at 64 FR 72021, Dec. 23, 1999; 65 FR 24104, Apr. 25, 2000; 65 FR 70293, Nov. 22, 2000; 66 FR 53080, Oct. 19, 2001] § 400.206 Environmental requirements. (a)(1) In general. (2) Actions requiring compliance with NEPA. (ii) With respect to this Program, these actions typically include: (A) Any project, permanent or temporary, that will involve construction and/or installations; (B) Any project, permanent or temporary, that will involve ground disturbing activities; and (C) Any project supporting renovation, other than interior remodeling. (3) Environmental information required from the Lender. (A) Documentation for an environmental threshold review from qualified data sources, such as a Federal, State or local agency with expertise and experience in environmental protection, or other sources, qualified to provide reliable environmental information; (B) Any previously prepared environmental reports or data relevant to the loan at issue; (C) Any environmental review prepared by Federal, State, or local agencies relevant to the loan at issue; (D) The information required for the completion of Form XYZ, “Environmental Assessment and Compliance Findings for Related Environmental Laws;” and (E) Any other information that can be used by the Board to ensure compliance with environmental laws. (ii) All information supplied by the Lender is subject to verification by the Board. (b) The regulations of the Council on Environmental Quality implementing NEPA require the Board to provide public notice of the availability of project specific environmental documents such as environmental impact statements, environmental assessments, findings of no significant impact, records of decision etc., to the affected public. See 40 CFR 1506.6(b). Environmental information concerning specific projects can be obtained from the Board by contacting: Executive Director, Emergency Steel Guarantee Loan Board, U.S. Department of Commerce, Washington, DC 20230. (c) National Environmental Policy Act Purpose. et seq., (2) Definitions. Categorical exclusion Environmental assessment EIS FONSI NEPA et seq. Working capital loan (3) Delegations to Executive Director. (ii) With respect to actions of the Board, the Executive Director will: (A) Ensure preparation of all necessary environmental assessments and EISs; (B) Maintain a list of actions for which environmental assessments are being prepared; (C) Revise this list at regular intervals, and send the revisions to the Environmental Protection Agency; (D) Make the list available for public inspection; (E) Maintain a list of EISs; and (F) Maintain a file of draft and final EISs. (4) Categorical exclusions. (ii) Subject to the limitations in paragraph (c)(4)(iii) of this section, the actions described in this paragraph have been determined not to have a significant impact on the quality of the human environment. They are categorically excluded from the need to prepare an environmental assessment or an EIS under NEPA. (A) Guarantees of working capital loans; and (B) Guarantees of loans for the refinancing of outstanding indebtedness of the Borrower, regardless of the purpose for which the original indebtedness was incurred. (iii) Actions listed in paragraph (c)(4)(ii) of this section that otherwise are categorically excluded from NEPA review are not necessarily excluded from review if they would be located within, or in other cases, potentially affect: (A) A floodplain; (B) A wetland; (C) Important farmlands, or prime forestlands or rangelands; (D) A listed species or critical habitat for an endangered species; (E) A property that is listed on or may be eligible for listing on the National Register of Historic Places; (F) An area within an approved State Coastal Zone Management Program; (G) A coastal barrier or a portion of a barrier within the Coastal Barrier Resources System; (H) A river or portion of a river included in, or designated for, potential addition to the Wild and Scenic Rivers System; (I) A sole source aquifer recharge area; (J) A State water quality standard (including designated and/or existing beneficial uses and anti-degradation requirements); or (K) The release or disposal of regulated substances above the levels set forth in a permit or license issued by an appropriate regulatory authority. (5) Responsibilities and procedures for preparation of an environmental assessment. (A) Description of the environment. (B) Documentation. (C) Evaluating environmental consequences of proposed actions. (ii) The Executive Director, in preparing an environmental assessment, may: (A) Tier upon the information contained in a previous EIS, as described in 40 CFR 1502.20; (B) Incorporate by reference reasonably available material, as described in 40 CFR 1502.21; and/or (C) Adopt a previously completed EIS reasonably related to the project for which the proceeds of the loan sought to be guaranteed under the Program will be used, as described in 40 CFR 1506.3. (iii) Because of the statute's admonition to the Board to make its decisions as soon as possible after receiving applications, the Board will not: (A) Publish notice of intent to prepare an environmental assessment, as describe in 40 CFR 1501.7; (B) Conduct scoping, as described in 40 CFR 1501.7; and (C) Seek comments on the environmental assessment, as described in 40 CFR 1503.1. (iv) If, on the basis of an environmental assessment, it is determined that an EIS is not required, a FONSI, as described in 40 CFR 1508.13 will be prepared. The FONSI will include the environmental assessment or a summary of it and be available to the public from the Board. The Executive Director shall maintain a record of these decisions, making them available to interested parties upon request. Requests should be directed to the Executive Director, Emergency Steel Guarantee Loan Program, 1099—14th Street, NW, Suite 2600 East, Washington, DC 20005. Prior to a final loan guarantee decision, a copy of the NEPA documentation shall be sent to the Board for consideration. (6) Responsibilities and procedures for preparation of an environmental impact statement. (ii)(A) The following procedures, as discussed in 40 CFR parts 1500 through 1508, will be followed in preparing an EIS: ( 1 ( 2 ( 3 ( 4 (B) Until the Board issues a record of decision as provided in 40 CFR 1502.2 no action concerning the proposal shall be taken which would: ( 1 ( 2 ( 3 (iii) A public record of decision stating what the decision was; identifying alternatives that were considered, including the environmentally preferable one(s); discussing any national considerations that entered into the decision; and summarizing a monitoring and enforcement program if applicable for mitigating the environmental effects of a proposal; will be prepared. This record of decision will be prepared at the time the decision is made. [64 FR 57933, Oct. 27, 1999, as amended at 64 FR 72021, Dec. 23, 1999; 65 FR 70294, Nov. 22, 2000] § 400.207 Application evaluation. (a) Eligibility screening. (b) Evaluation criteria. (1) The ability of the Borrower to repay the loan by the date specified in the Loan Document, which shall be no later than December 31, 2005. Evaluation of this factor will consider the prospective earning power of the Borrower. An essential and necessary element of the Board's evaluation of whether this criterion is satisfied is whether the applicant has committed to undertake significant efforts to eliminate or reduce economically unviable capacity; (2) The adequacy of the proposed provisions to protect the Government, including sufficiency of Security, the priority of the lien position in the Security, and the percentage of Guarantee requested; and (3) Adequacy of the underwriting analysis performed by the Lender in preparing the application and the ability of the Lender to administer the loan in full compliance with the requisite standard of care set forth in § 400.211(b). (c) Decisions by the Board. [64 FR 57933, Oct. 27, 1999, as amended at 65 FR 70294, Nov. 22, 2000; 66 FR 53080, Oct. 19, 2001] § 400.208 Issuance of the Guarantee. (a) The Board's decisions to approve any application for, and extend an offer of, guarantee under § 400.207 is conditioned upon: (1) The Lender and Borrower obtaining any required regulatory or judicial approvals; (2) The Lender and Borrower being legally authorized to enter into the loan under the terms and conditions submitted to the Board in the application; (3) The Board's receipt of the Loan Documents and any related instruments, in form and substance satisfactory to the Board, and the Guarantee, all properly executed by the Lender, Borrower, and any other required party other than the Board; and (4) No material adverse change in the Borrower's ability to repay the loan between the date of the Board's approval and the date the Guarantee is to be issued. (b) The Board may withdraw its approval of an application and rescind its offer of Guarantee if the Board determines that the Lender or the Borrower cannot, or is unwilling to, provide adequate documentation and proof of compliance with paragraph (a) of this section within the time provided for in the offer. (c) Only after receipt of all the documentation, required by this section, will the Board sign and deliver the Guarantee. (d) A Borrower receiving a loan guaranteed by the Board under this Program shall pay a one-time guarantee fee of 0.5 percent of the amount of the principal of the loan. This fee must be paid no later than one year from the issuance of the Guarantee. [64 FR 57933, Oct. 27, 1999, as amended at 65 FR 70294, Nov. 22, 2000; 66 FR 53080, Oct. 19, 2001] § 400.209 Funding for the Program. The Act provides funding for the costs incurred by the Government as a result of granting Guarantees under the Program. While pursuing the goals of the Act, it is the intent of the Board to minimize the cost of the Program to the Government. The Board will estimate the risk posed by the guaranteed loans to the funds appropriated for the costs of the Guarantees under the Program and operate the Program accordingly. § 400.210 Assignment or transfer of loans. (a) Neither the Loan Documents nor the Guarantee of the Board may be modified, in whole or in part, without the prior written approval of the Board. (b) Upon notice to the Board and a certification by the assignor that the assignee is an Eligible Lender, and subject to the provisions of paragraphs (c) and (d) of this section and other provisions of this part, a Lender may assign or transfer its interest in the loan including the Loan documents and the Guarantee to a party that qualifies as an Eligible Lender pursuant to § 400.201. Any other assignment or transfer will require the prior written approval of the Board. (c) The provisions of paragraph (b) of this section shall not apply to transfers which occur by operation of law. (d) The Agent must hold and may not assign or transfer an interest in a loan guaranteed under the Program equal to at least the lesser of $25 million or fifteen percent of the aggregate amount of the loan. In addition, the Agent must hold and may not assign or transfer an interest the Unguaranteed Portion of the loan equal to at least the minimum amount of the loan required to be held by the Agent under the preceding sentence multiplied by the percentage of the loan represented by the Unguaranteed Portion. A non-Agent Lender must hold and may not assign or transfer an interest in the Unguaranteed Portion of the loan representing no less than five percent of such Lender's total interest in the loan; provided, that a non-Agent Lender may transfer its interest in the Unguaranteed Portion after payment of the Guaranteed Portion has been made under the Guarantee. [66 FR 53080, Oct. 19, 2001] § 400.211 Lender responsibilities. The Lender shall have such obligations and duties to the Board as are set forth in the Guarantee. [65 FR 70294, Nov. 22, 2000] § 400.212 Guarantee. The Board shall adopt a form of Guarantee to be used by the Board under the Program, and shall publish the Guarantee on its website. Modifications to the provisions of the form of Guarantee must be approved and adopted by the Board. [65 FR 70294, Nov. 22, 2000] § 400.213 Termination of obligations. The Board shall have such rights to terminate the Guarantee as are set forth in the Guarantee. [65 FR 70294, Nov. 22, 2000] § 400.214 Participations in guaranteed loans. (a) Subject to paragraphs (b), (c) and (d) of this section, a Lender may distribute the risk of a portion of a loan guaranteed under the Program by sale of participations therein if: (1) Neither the loan note nor the Guarantee is assigned, conveyed, sold, or transferred in whole or in part; (2) The Lender remains solely responsible for the administration of the loan; and (3) The Board's ability to assert any and all defenses available to it under the Guarantee and the law is not adversely affected. (b) The following categories of entities may purchase participations in loans guaranteed under the Program: (1) Eligible Lenders; (2) Private investment funds and insurance companies that do not usually invest in commercial loans; (3) Steel company suppliers or customers, who are interested in participating as a means of commencing or solidifying the supplier or customer relationship with the borrower; or (4) Any other entity approved by the Board on a case-by-case basis. (c) The Agent may not grant participations in that portion of its interest in a loan that may not be assigned or transferred under § 400.210(d). A Lender, other than the Agent, may not grant participations in that portion of its interest in a loan that may not be assigned or transferred under § 400.210(d). (d) At least 5 percent of any participation interest in a loan must be unguaranteed. [65 FR 70294, Nov. 22, 2000] § 400.215 Supplemental Guarantees. The Board will allow the structure of a guaranteed loan to include one or more Supplemental Guarantees that cover the Unguaranteed Portion of the loan; provided that: (a) There shall be no Supplemental Guarantee with respect to the Unguaranteed Portion required to be held by the Agent pursuant to § 400.210(c); (b) The Loan Documents relating to any Supplemental Guarantee shall be acceptable in form and substance to the Board; and (c) In approving the issuance of a Guarantee, the Board may impose any conditions with respect to Supplemental Guarantee(s) relating to the loan that it considers appropriate. [66 FR 53080, Oct. 19, 2001]