0572-0032 SuppStatement-8.2.24

2024-2025

SUPPORTING STATEMENT

OMB Control No. 0572-0032

RUS Electric Loan Application and Related Reporting Burdens

A. Justification

1. Explain the circumstances that make the collection of information necessary.

The Rural Utilities Service (RUS) was established in 1994 by the Federal Crop Insurance Reform and Department of Agriculture Reorganization Act of 1994 (Pub. L. 103-354, 108 Stat. 3178, 7 U.S.C. 6941 et. seq.) as successor to the Rural Electrification Administration (REA) with respect to certain programs, including the electric loan and loan guarantee program authorized under the Rural Electrification Act of 1936 (7 U.S.C. 901 et seq., as amended) (RE Act).

The RE Act authorizes and empowers the Administrator of RUS to make and guarantee loans to furnish and improve electric service in rural areas. These loans are amortized over a period of up to 35 years and secured by the borrower's electric assets and/or revenue. In the interest of protecting loan security, monitoring compliance with debt covenants, and ensuring that RUS loan funds are used for purposes authorized by law, RUS requires that borrowers prepare and submit for RUS evaluation certain studies and reports. Some of these studies and reports are required only once for each loan application; others must be submitted periodically until the loan is completely repaid.

The RE Act also authorizes and empowers the Administrator of RUS to make or cause to be made, studies, investigations, and reports concerning the condition and progress of the electrification of several States and Territories; and to publish and disseminate information with respect thereto. Information supplied by borrowers forms the basis of many of these reports.

2. Indicate how, by whom, and for what purpose the information is to be used. Except for a new collection, indicate the actual use the Agency has made of the information received from the current collection.

Applicants first step in the application process is to reach out and establish contact with their RUS General Field Representative (GFR) or with the National Office in Washington, DC. Depending on the type of applicant and the complexity of the application, the required information gets submitted to the Agency one of three ways: a) The online application intake system, b) Through the RUS General Field Representative; or c) Directly to the National Office.

The information submitted as part of an application is used by RUS staff to:

a) Determine the eligibility of applicants for loans and loan guarantees under the RE Act. The information required to make this determination is provided as part of the loan application.

b) Monitor the compliance of borrowers with debt covenants and regulatory requirements to protect loan security. The information required to monitor compliance is required annually but could also be required more frequently based on any conditions outlined in applicable loan documents.

c) Ensure that Federal funds are used for purposes consistent with the statutory goals of the RE Act; and

d) Obtain information on the progress of rural electrification and evaluate the success of RUS program activities.

BURDEN ITEMS COLLECTED AS PART OF A LOAN APPLICATION

The application requirements are captured in 7 CFR 1710, Subparts I, Application Requirements and Procedures for Loans. These requirements consist of the following written and form components:

System for Award Management (SAM) Registration. To do business with the Federal government, the applicant is required to obtain a Unique Identification Number (UEI) and register in SAM. Registration in SAM allows the applicant to complete the Online Representations and Certifications which replaces several paper forms. The registration must be updated annually.

Loan Application Letter. This letter is part of an application for a RUS loan. It is the formal request by the borrower's management for loan funds. It must address the need for flood hazard insurance, provide a breakdown of the requested loan funds by State, list the counties served by the borrower, list any potential actions by third parties that could adversely affect the borrower's financial condition, and list pending regulatory actions pertaining to the borrower, and include the borrowers UEI number.

Special Resolutions. The application should include any special resolutions required by Federal, State, or Tribal authorities and any others identified.

RUS Form 740c, Cost Estimates and Loan Budget for Electric. This form together with its attachments lists the construction, equipment and facilities and other cost estimates from the construction work plan or engineering and cost studies and the sources of financing for each component. The following information, as detailed in § 1710.501(3)(i) through (iv) will be attached to the Form 740c: description of funds and materials; useful life of facilities financed by the loan; reimbursement schedule; and location of consumers. This information for this form can also be placed into RD Apply for Distribution borrowers in lieu of the form when applying.

Financial and Statistical Report. (Financial and Operating Report for Distribution Borrowers (formerly RUS Form 7) and Financial and Operating Report for Power Supply (formerly RUS Form 12)). These collections serve two purposes. A submission containing recent month end data is submitted as part of an application for a RUS loan; the information is used to evaluate the borrower’s creditworthiness. An annual submission, which is required by the borrower’s mortgage, is used to monitor loan security, verify compliance with debt covenants and statutory requirements, and compile the Agency’s annual reports. Borrowers are submitting this data using the Data Collection System (DCS). DCS provides electronic signature capability, eliminating the need for a signed certification with the operating report submission and uses standard web page technology.

Load Forecast (LF) and Board Resolution. A LF must be submitted in support of a RUS loan application if required by current regulations. It must be maintained by the borrower and updated periodically. The LF is used by RUS in conjunction with other studies to evaluate loan feasibility and to help ensure that the most effective use is made of loan funds. The LF must be approved by the borrower’s board of director’s.

The information required in a LF is maintained by any prudent electric utility in its normal course of business and is required in many States by regulatory authorities for rate setting and other purposes.

Long Range Financial Forecast and Board Resolution. The financial forecast includes such items as pro forma financial statements, goals for key financial rations, projected cash flows, estimated future capital needs, and projected costs and revenues. Underlying assumptions must be stated, and the forecast must be approved by the borrower’s board of directors. This information is prepared by any prudent business contemplating a capital investment project. The forecast is used by RUS to evaluate the borrower’s strength and stability in order to assess its ability to repay a loan. RUS requires distribution borrowers to follow the format of RUS Form 325; however, borrowers are permitted to use a computer program to prepare the information as long as the output is provided in the same format as RUS Form 325. RUS does not prescribe a format for generation and transmission (G&T) borrowers.

Rate Disparity and Consumer Income Data. If the borrower is applying under the rate disparity and consumer income tests for either a municipal rate loan subject to the interest rate cap or a hardship rate loan, the application must provide a breakdown of residential consumers either by county or by census tract. In addition, if the borrower serves in 2 or more states, the application must include a breakdown of all ultimate consumers by state. This breakdown may be a copy of Form EIA 861 submitted by the borrower to the Department of Energy or in a similar form.

Standard Form (SF) 100, Equal Employment Opportunity Employer Report. This is an electronic submission that is required by the Department of Labor and sets forth employment data for borrowers with 100 or more employees. A copy of this form, as submitted to the Department of Labor, is to be included in the application for a loan if the borrower has more than 100 employees. (The time attributed to this form is the time that it takes the borrower to provide RUS with a copy of the completed form.)

Uniform Relocation Act. This assurance, which will be submitted only once by each borrower, provides that the borrower shall comply with 49 CFR part 24, which implements the Uniform Relocation Assistance and Real Property Acquisition Policy Act of 1970, as amended by the Uniform Relocation Act Amendments of 1987 and 1991.

Lobbying. The following information on lobbying is required pursuant to2 CFR Part 418 and 1710.125:

• Certification Regarding Lobbying. The statement certifies that the borrower shall comply with certain requirements with respect to restriction on lobbying.

• Standard Form LLL (SF LLL)– Disclosure of Lobbying Activities. This disclosure form is required from those borrowers engaged in lobbying activities. This form is cleared under 4040-0013.

Federal Debt Delinquency Requirements. Prior to approval of a loan or advance of funds, a borrower must report to RUS whether or not it is delinquent on any Federal debt. Applicants for a loan or loan guarantee must also certify that they have been informed of the collection options the Federal government may use to collect delinquent debt.

Form 400-4. Assurance Agreement. This form provides assurance that recipients of federal financial assistance are in compliance with Title VI of the Civil Rights Act of 1964.

Seismic Safety Acknowledgments. In accordance with 7 CFR 1792, the borrower shall provide written acknowledgment from a registered architect or engineer responsible for the design stating the seismic provisions will be used in the design of the building. The specific burden for this item is cleared under 0572-0099.

For new or returning borrowers, the following must also be included as part of an application:

Articles of Incorporation and Bylaws. A copy of each is required as part of an RUS loan application if either has been amended since the borrower’s last loan application or if this is the borrower’s first loan.

Audited Financials. Audited GAAP financials for the past one to three years, if available or other financial information as requested.

Secured Outstanding Debt. A list of any secured outstanding debt should be provided to include the amount and name of lender.

Collateral. The application should include evidence of collateral and/or the applicant’s ability to pledge such collateral.

Statements from Counsel. Statements from the borrower’s counsel are part of an RUS loan application. The information may be submitted as a single statement addressing all three items, or as separate statements. The three statements are as follows:

• Pending Litigation. A list of pending litigation and potential effects on the borrower is necessary to determine the borrower’s creditworthiness and the risk of the proposed loan.

• Mortgage Information. Mortgage information, including a property schedule, is needed for loan security. RUS generally has a first mortgage on the borrower’s total electric system, and an accurate and up to date description of real property is necessary to prepare the mortgage. The statement must list the counties served by the borrower and all the borrower’s real property. In addition, the statement must state that the new loan will not cause the borrower’s total debt to exceed the maximum debt limit established by its board of directors.

• State Regulatory Approvals. Evidence that the State Regulatory Commission will allow the facilities financed to be included in the borrower’s rate base is necessary to determine loan feasibility.

Construction Work Plan (CWP), Related Engineering Studies, and Board Resolution

A CWP must be submitted in support of a RUS loan application. In addition, all RUS borrowers must maintain a current CWP covering most new construction, improvements, replacements, and retirements of distribution, transmission, and generation plants that are financed by RUS loan funds. The CWP is developed by borrowers to determine their short- and long-term needs for plant. It is used by RUS in conjunction with other studies to evaluate loan feasibility and to help ensure that the most efficient use is made of loan funds. The CWP must be approved by the borrower’s board of directors. Most of the information required in the CWP is prepared by any prudent business contemplating a capital investment project. In many States the information is required by regulatory authorities for rate setting and other purposes.

Alternative Sources of Power Statement. This is part of an application for a RUS loan if the borrower is seeking to use loan funds for new generation facilities. The requirement ensures that full consideration is given to the possibility of obtaining needed power from other suppliers, including independent power producers before adding capacity financed by government loans. Most of the information is prepared by any prudent utility as part of its strategic planning. In many States it is required by a State regulatory authority.

Environmental Report (ER)

In accordance with 7 CFR 1970, a borrower must submit an ER before undertaking any project that is expected to have a significant effect on the environment. If the proposed project involves RUS loan funds, the ER must be submitted in support of the loan application. The ER provides RUS with information to evaluate the environmental effects of the proposed construction, including conformance with applicable laws, executive orders and regulations. The ER provides RUS with information to evaluate the environmental effects of the proposed construction, including conformance with applicable laws, executive orders, and regulations. The laws include but are not limited to: the National Environmental Policy Act, Endangered Species Act, National Historic Preservation Act, Farmland Protection Policy Act, Coastal Barrier Act, and the Resources Act. Information submitted to another Federal Agency or to a state agency may be used in lieu of an ER. The ER must be approved by the Borrower's board of directors. The specific burden for this item is cleared under 0575-0197.

SAM Registration Maintenance

Each applicant (unless an exception, as outlined in 2 CFR 25.110(a) through (d), is approved by the Agency) is required to maintain an active SAM registration with current information at all times during which it has an active Federal award. The Agency uses the SAM site to ensure continued eligibility to receive Federal financial assistance.

Energy Efficiency and Conservation Loan Program (EECLP) – 7 CFR 1710, Subpart H

The Agency has not received any applications for this program in several years. However, it remains an eligible use of funds. Therefore, the application items are being included in the burden discussion and on the burden worksheet.

Applications for EELCP must include the following items, in addition to the general application items discussed earlier in this supplemental statement:

Energy Efficiency (EE) Business Plan (7 CFR 1710.410(c)(1). An eligible EE Program must have a business plan for implementing the program. The business plan must have the following elements: Executive Summary, Organizational Background, Marketing Plan Operations Plan, Financial Plan and Risk Analysis.

Energy Efficiency Quality Assurance Plan (7 CFR 1710.410(c)(2). An Eligible EE Program must have a quality assurance plan as part of the program. The quality assurance plan will address Quality Assurance Estimates, Energy Audits, use of certified equipment installers, performance tests and monitoring of contractor performance.

Analytical Support Documentation (7 CFR 1710.401(c)(3). In addition to a business plan and operations plan, a request for EE program approval must include analytical support documentation. This documentation assures RUS of the operational and financial integrity of the energy efficiency program. This documentation must include, but is not necessarily limited to, the following:

• A comparison of the utility's projected annual growth in demand after incorporating the EE Program together with an updated baseline forecast on file with RUS

• An itemized estimate of the energy savings and peak demand reduction

• An evaluation of the Cost effectiveness of each category of eligible activities and investments to be pursued under the EE Program

• A report of discussions and coordination conducted with the power supplier, an estimate of the amount of direct investment in utility-owned generation that will be deferred as a result of the EE Program

• A description of efforts to identify state and local sources of funding and Copies of sample documentation used by the utility in administering its EE Program.

• Copies of sample documentation used by the utility in administering its EE Program

Energy Efficiency Work Plan (EEWP), Related Engineering Studies, and Board Resolution. An EEWP must be submitted in support of a RUS loan application. In addition, all RUS borrowers must maintain a current EEWP covering energy efficiency investments that are financed by RUS loan funds. The EEWP is developed by borrowers to determine their short and long term needs for an energy efficiency program. It is used by RUS in conjunction with other studies to evaluate loan feasibility and to help ensure that the most efficient use is made of loan funds. The EEWP must be approved by the borrower’s board of directors. Most of the information required in the EEWP is prepared by any prudent business contemplating a capital investment project in energy efficiency.

3. Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology, e.g. permitting electronic submission of responses, and the basis for the decision for adopting this means of collection.

RUS is committed to meeting the requirements of the E-Government Act, which requires Government agencies in general to provide the public the option of submitting information or transacting business electronically to the maximum extent possible. Most of the forms associated with this collection are fillable and printable on the USDA eForms website.

RUS continues to request approval to post Forms 740c, and 325 on the agency’s website as the agency works towards making these available on the eForms website. These forms are available in a printable Adobe Format and in a fillable Microsoft Excel format. Continued approval of the Data Collection System (https://dcs.egov.sc.usda.gov) for electronic submission of Financial and Operating Report for Power Supply and Financial and Operating Report for Distribution Borrowers, is requested. In addition, the required certification, statements, and board resolution are provided in electronic sample formats on the agency website.

RUS is currently involved in an agency wide effort to make agency programs more accessible and is introducing initiatives to improve customer service, shorten processing times and reduce unnecessary burdens. Once such initiative the agency has implemented is RD Apply for Distribution Borrowers. RD Apply is an electronic application intake system that allows the Distribution Borrowers to apply for a loan. Within RD Apply, you can create an application, upload attachments and sign certifications required for submitting a loan. The system digitizes all feasible components of the application. RD Apply incorporates fields for basic, service area, project, and financial items. It also allows for the applicant to submit attachments and to electronically authorize numerous forms, including OMB documents. RD Apply is a secure, internet based program accessible through any network ready device. RUS/RD is aggressively promoting and encouraging the use of RD Apply.

Additionally, borrowers may now use email to transmit to RUS certain requests and signed forms, in portable document format (pdf.) A separate electronic mailbox has been set up to receive the requests and provide access to the appropriate RUS staff for processing, however, this is not available for loan applications.

4. Describe efforts to identify duplication. Show specifically why any similar information already available cannot be used or modified for use for the purposes described in Item 2 above.

The information required by this collection is available only from individual borrowers and much of it is project specific. Much of the information is collected and analyzed by any prudent business in the course of its operations, and some is prepared by an electric utility as part of a petition to its State Regulatory Authority. Whenever possible RUS accepts copies of documents the borrower has prepared for another purpose.

The Department of Energy (DOE) collects some information about RUS electric borrowers. Where possible, RUS relies on DOE data.

5. If the collection of information impacts small businesses or other small entities (item 5 of OMB Form 83-1), describe any methods used to minimize burden.

All but 10 percent of the electric borrowers meet the Small Business Administration criteria for a small business. RUS has made every effort to ensure that the burden on these small entities is the minimum necessary to effectively administer the agency programs.

6. Describe the consequences to Federal program or policy activities if the collection is not conducted or conducted less frequently, as well as any technical or legal obstacles to reducing burden.

Information needed for evaluating loan applications is required only once for each application. Information necessary to monitor loan security and compliance with RE Act purposes and information necessary to publish reports is required periodically. Less frequent collection would not allow RUS to accomplish statutory goals.

7. Explain any special circumstances that would cause an information collection to be conducted in a manner:

a. Requiring respondents to report information more than quarterly.

There are no requirements to respond more than quarterly.

b. Requiring written responses in less than 30 days.

There are no requirements to respond in less than 30 days.

c. Requiring more than an original and two copies.

There are no requirements to submit more than an original and two copies.

d. Requiring respondents to retain records for more than 3 years.

There are no requirements to retain records for more than 3 years. Record retention requirements for the Financial and Operating Report for Power Supply and Financial and Operating Report for Distribution Borrowers, shall be in accordance with 7 CFR 1767.

e. In connection with a statistical survey, that is not designed to produce valid and reliable results that can be generalized to the universe of study.

This collection does not involve a survey and there are no requirements for the use of a statistical survey.

f. Requiring the use of statistical data classification that sampling which has not been reviewed and approved by OMB.

This collection does not involve statistical sampling.

g. Requiring a pledge of confidentiality.

There is no requirement for a pledge of confidentiality.

h. Requiring submission of proprietary trade secrets.

There is no requirement to submit proprietary trade secrets.

8. If applicable, identify the date and page number of publication in the Federal Register of the agency’s notice soliciting comments on the information collection. Summarize public comments received and describe actions taken by the agency in response to these comments. Describe efforts to consult with persons outside the Agency to obtain their views on the availability of data, frequency of collection, the clarity of instructions and recordkeeping, disclosure, reporting format (if any), and on data elements to be recorded, disclosed, or reported.

As required by 5 CFR 1320.9(d), a Notice to request public comments was published in the Federal Register on August 7, 2024, at 89 FR 64404. One comment was received from the Bureau of Economic Analysis dated September 11, 2024, strongly supporting the collection of information.

Representatives from the following three cooperatives have been consulted to obtain their views on the availability of data, frequency of collection, the clarity of instructions and recordkeeping, etc.:

CEO, Maquoketa Valley Rural Electric Cooperative, Anamosa, IA 52205

CEO, Red River Valley Cooperative Power Association, Halstad, MN 56548

CEO, Blue Earth-Nicollet-Faribault Cooperative Electric Association, Mankato, MN 56001

Overall, the above Borrowers agree the GFRs and the information available are helpful, information is readily available, and instructions are clear, but the data collection is burdensome.

9. Explain any decision to provide any payment or gift to respondents, other than renumeration of contractors or grantees.

There is no provision to provide payments or gifts to respondents.

10. Describe any assurance of confidentiality provided to respondents and the basis for the assurance in statute, regulation, or Agency policy.

No assurances of confidentiality have been provided. RD has a System of Record Notice (SORN) to cover collection of the information and the systems where the information is stored. Please refer to 89 FR 72820 issued on September 6, 2024. The SORN can be found at https://www.govinfo.gov/content/pkg/FR-2024-09-06/pdf/2024-20068.pdf.

11. Provide additional justification for any question of a sensitive nature, such as sexual behavior or attitudes, religious beliefs, and other matters that are commonly considered private.

There are no questions of a sensitive nature.

12. Provide estimates of the hour burden of the collection of information.

Table 1, Total Cost of Burden, shown below summarizes the estimated annual burden associated with the RUS Electric Loan Application and Related Reporting Burden in this package. The burden workbook provides details on the estimates.

Table 1, Total Cost of Burden

Number of respondents and Applicants *:	608 borrowers/101 new applications
Annual responses:	1,968
Total hours:	37,515
Cost per hour:	$70.19
Total annual cost:	$2,633,160

* Total respondents are based on RUS having 608 active borrowers that must submit the annual Financial and Statistical Report. Of the total, 520 are distribution borrowers, and 88 are power supply borrowers, also known as “generation and transmission borrowers” or “G&Ts.” The program has also estimated, based on the past three years, that 101 applications will be submitted.

Table 2, Estimated Wages, shows the assumptions that the Agency has made concerning the positions and the amount of time that each position will put forth to prepare the applications or subsequent reporting association with this package.

Table 2: Estimated Wages

Position	Occupation Code	Mean Hourly Wage	Benefits (29.7%)	Total Wage Rate	Percent of Time	Weighted Wage Rate
General and Operations Manager	11-1021	$62.18	$18.47	$80.65	80	$64.52
Secretaries and Administrative Assistants	43-6014	$21.87	$6.50	$28.37	20	$5.67
					100	$70.19

The mean wage rate for the two positions were selected from the Department of Labor, Bureau of Labor Statistics, Occupational Employment and Wage Statistics, Occupational Employment and Wages, May 2023 (http://www.bls.gov/oes/current/oes_stru.htm). Data provided by the Bureau of Labor Statistics, Employer Costs for Employee Compensation – March 2024 (https://www.bls.gov/news.release/pdf/ecec.pdf) was utilized to calculate the total cost of benefits. Benefits as a percentage of total compensation for private industry workers in professional and business services industries is 29.7 percent of total hourly compensation.

13. Provide an estimate of the total annual cost burden to respondents or recordkeepers resulting from the collection of information.

1. Total capital and start-up cost component (annualized over its expected useful life); and

There are no capital or start-up costs associated with this collection.

(b) Total operation and maintenance and purchase of services component.

There are no operation and maintenance or purchase of services component associated with this collection.

14. Provide estimates of annualized cost to the Federal Government.

The estimated annualized costs to the Federal Government is $1,657,971, which is summarized in Table 3, Total Cost to the Federal Government. Costs were calculated based on the estimated amount of time that national office program staff is expected to spend reviewing loan applications and annual Financial and Statistical Reports.

Table 3, Total Cost to the Federal Government

Review Task	Number of Applications and Reports	Hourly Wage	Estimated Hours Per Review	Total Cost
Loan Application	101	$87.28	164	$1,445,706
Annual Financial and Statistical Report	608	$87.28	4	$212,265
Total Cost to Federal Government				$1,657,971

Table 4, Wage Rates for Reviews, below provides the staff positions general schedule (GS) grade, step and hourly wage along with the benefits calculation.

Table 4: Wage Rates for Reviews

Review Task	GS Grade/Step	Wage Rate	Benefits	Hourly Rate
Loan Application	GS 13/Step 5	$64.06	$23.22	$87.28
Annual Financial and Statistical Report	GS 13/Step 5	$64.06	$23.22	$87.28

The GS hourly rate was obtained by using Table 2024-DCB (https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/salary-tables/pdf/2024/DCB_h.pdf) hourly rate for DC-MD-VA-WA-PA for January 2024. Benefits were calculated by using the civilian position full fringe benefit cost factor of 36.25 percent from the Office of Management and Budget (OMB) Memorandum for the Heads of Executive Departments and Agencies (M-08-13) dated March 11, 2008 (https://www.whitehouse.gov/wp-content/uploads/legacy_drupal_files/omb/memoranda/2008/m08-13.pdf).

15. Explain the reasons for any program changes or adjustments reported in items 13 or 14 of the OMB Form 83-1.

This is a revision to a currently approved collection. Since the last submission, there was a reduction in borrowers from 625 to 608 submitting their annual reports. This change is due to borrowers paying off their debt, etc. The burden hours changed from the last package due to some forms now being part of the SAM registration process so they do not need to be accounted for separately. In addition, some forms are no longer required so those were removed from the collection and items inadvertently not captured have now been added.

16. For collection of information whose results will be published, outline plans for tabulation and publication.

RUS' Statistical Report is a compilation of operating information and is based in part on financial and operating reports for Power Supply and Distribution Borrowers (formerly known as RUS Form 7 and 12) submitted by borrowers. It is published annually and is available from the Superintendent of Documents.

17. If seeking approval to not display the expiration date for OMB approval of the information collection, explain the reasons that display would be inappropriate.

No exception is requested.

18. Explain each exception to the certification statement identified in item 19 on

OMB 83-1.

There are no exceptions to the certification statement.

2. Collection of Information Employing Statistical Methods.

This collection of information does not employ statistical methods.