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| section_id ▼ | title_number | title_name | chapter | subchapter | part_number | part_name | subpart | subpart_name | section_number | section_heading | agency | authority | source_citation | amendment_citations | full_text |
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| 7:7:15.1.19.2.11.1.65.1 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | A | Subpart A—Introduction to Part 4290 | § 4290.10 Description of the Rural Business Investment Company Program. | RBS | The Rural Business Investment Company (“RBIC”) Program is a Developmental Capital program for the purpose of promoting economic development and the creation of wealth and job opportunities in Rural Areas and among individuals living in such Areas. To this end, the Agency will select and license RBIC Applicants that will agree to address the unmet Equity Capital needs of Smaller Enterprises primarily located in Rural Areas. | |||||
| 7:7:15.1.19.2.11.1.65.2 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | A | Subpart A—Introduction to Part 4290 | § 4290.15 Leveraged and Non-leveraged Rural Business Investment Companies. | RBS | [76 FR 80221, Dec. 23, 2011] | The regulations in this part apply to rural business investment companies (RBICs) that seek leverage and to RBICs that do not seek leverage. The provisions of subparts A through N of this part apply to Leveraged RBICs and, except as indicated or as otherwise modified by subpart O of this part, to Non-leveraged RBICs. The provisions in subpart O of this part apply to Non-leveraged RBICs and, in addition, modify certain provisions in subparts A through N of this part as they apply to Non-leveraged RBICs. | ||||
| 7:7:15.1.19.2.11.1.65.3 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | A | Subpart A—Introduction to Part 4290 | § 4290.20 Legal basis and applicability of this part 4290. | RBS | The regulations in this part implement Subtitle H of the Consolidated Farm and Rural Development Act, as amended (7 U.S.C. 2009cc et seq. ) (“Act”). All RBICs must comply with all applicable regulations, accounting guidelines and valuation guidelines for RBICs. | |||||
| 7:7:15.1.19.2.11.1.65.4 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | A | Subpart A—Introduction to Part 4290 | § 4290.30 Amendments to Act and regulations. | RBS | A RBIC is subject to all existing and future provisions of the Act and part 4290 of title 7 of the Code of Federal Regulations. | |||||
| 7:7:15.1.19.2.11.1.65.5 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | A | Subpart A—Introduction to Part 4290 | § 4290.40 How to read this part 4290. | RBS | (a) Center Headings. Center headings are descriptive and are used for convenience only. They have no regulatory effect. (b) Capitalizing defined terms. Terms defined in § 4290.50 have initial capitalization in this part 4290. (c) “You.” The pronoun “you” as used in this part 4290 means a RBIC unless otherwise noted. (d) Forms. All references in this part to forms, and instructions for their preparation, are to the current issue of such forms. | |||||
| 7:7:15.1.19.2.11.1.65.6 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | A | Subpart A—Introduction to Part 4290 | § 4290.45 Responsibility for implementing this part 4290. | RBS | The Agency has delegated to the U.S. Small Business Administration (SBA), pursuant to an agreement under the Economy Act (31 U.S.C. 1535), the authority to implement the RBIC program, including implementing and enforcing the regulations in this part 4290. Therefore, unless specifically stated otherwise, SBA will exercise on behalf of the Agency all responsibilities and authorities assigned to the Agency in this part 4290. | |||||
| 7:7:15.1.19.2.11.10.81.1 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1100 Type of Leverage and application procedures. | RBS | (a) Type of Leverage available. You may apply for Leverage from the Agency in the form of a guarantee of your Debentures. (b) Applying for Leverage. The Leverage application process has two parts. You must first apply for the Agency's conditional commitment to reserve a specific amount of Leverage for your future use. You may then apply to draw down Leverage against the commitment. See §§ 4290.1200 through 4290.1240. (c) Where to send your application. Send all Leverage draw-down applications to Funding Control Officer, Investment Division, U.S. Small Business Administration, 409 Third Street, SW., Suite 6300, Mail Code 7050, Washington, DC 20416. | |||||
| 7:7:15.1.19.2.11.10.81.2 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1120 General eligibility requirements for Leverage. | RBS | To be eligible for Leverage, you must be in compliance with the Act, the regulations in this part, and your Participation Agreement. | |||||
| 7:7:15.1.19.2.11.10.81.3 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1130 Leverage fees payable by RBIC. | RBS | (a) Leverage fee. You must pay the Agency a non-refundable leverage fee for each issuance of a Debenture. The fee is 3 percent of the face amount of the Debenture issued, and will be deducted from the proceeds remitted to you. (b) Additional charge. You must pay the Agency an additional annual charge of 1 percent of the outstanding amount of your Debenture. (c) Other Leverage fees. The Agency may establish a fee structure for services performed by the Central Registration Agent (CRA). The Agency will not collect any fee for its guarantee of TCs. | |||||
| 7:7:15.1.19.2.11.10.81.4 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1140 RBIC's acceptance of remedies under § 4290.1810. | RBS | If you issue Leverage, you automatically agree to the terms and conditions in § 4290.1810 as it exists at the time of issuance. The effect of these terms and conditions is the same as if they were fully incorporated in the terms of your Leverage. | |||||
| 7:7:15.1.19.2.11.10.82.5 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1150 Maximum amount of Leverage for a RBIC. | RBS | The face amount of a RBIC's outstanding Debentures may not exceed the lesser of 200 percent of its Leverageable Capital or $105,000,000. | |||||
| 7:7:15.1.19.2.11.10.83.6 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1200 Leverage commitment to a RBIC—application procedure, amount, and term. | RBS | (a) General. Under the provisions in §§ 4290.1200 through 4290.1240, you may apply for the Agency's conditional commitment to reserve a specific amount of Leverage and type of Debenture (standard or discounted) for your future use. You may then apply to draw down Leverage against the commitment. (b) Applying for a Leverage commitment. The Agency will notify you when requests for Leverage commitments are being accepted, and upon receipt of your request, will send you a complete application package. (c) Limitations on the amount of a Leverage commitment. The amount of a Leverage commitment must be a multiple of $5,000. The Agency in its discretion may determine a minimum dollar amount for Leverage commitments. Any such minimum amounts will be published in Notices in the Federal Register from time to time. (d) Term of Leverage commitment. Your Leverage commitment will automatically lapse on the expiration date stated in the commitment letter issued to you by the Agency. The Agency's Leverage commitment will be included in the Participation Agreement at the time of your licensing as a RBIC, under § 4290.390. | |||||
| 7:7:15.1.19.2.11.10.83.7 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1220 Requirement for RBIC to file financial statements at the time of request for a draw. | RBS | [69 FR 32204, June 8, 2004, as amended at 76 FR 80224, Dec. 23, 2011] | (a) If you submit a request for a draw against your Leverage commitment more than 90 days following your submission of an annual SBA Form 468 or a SBA Form 468 (Short Form) or other USDA-approved form(s), you must: (1) Give the Agency a financial statement on Form 468 (Short Form) or other USDA-approved form(s), and (2) File a statement of no material adverse change in your financial condition since your last filing of SBA Form 468 or other USDA-approved form(s). (b) You will not be eligible for a draw if you are not in compliance with this § 4290.1220. | ||||
| 7:7:15.1.19.2.11.10.83.8 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1230 Draw-downs by RBIC under Leverage commitment. | RBS | [69 FR 32204, June 8, 2004, as amended at 76 FR 80224, Dec. 23, 2011] | (a) RBIC's authorization of the Agency to guarantee securities. By submitting a request for a draw against the Leverage commitment, you authorize the Agency, or the Agency's designated agent or trustee, to guarantee your Debenture and to sell it with the Agency's guarantee. (b) Limitations on amount of draw. The amount of a draw must be a multiple of $5,000. The Agency, in its discretion, may determine a minimum dollar amount for draws against Leverage commitments. Any such minimum amounts will be published in Notices in the Federal Register from time to time. (c) Effect of regulatory violations on RBIC's eligibility for draws —(1) General rule. You are eligible to make a draw against your Leverage commitment only if you are in compliance with all applicable provisions of the Act and this part ( i.e., no unresolved statutory or regulatory violations) and your Participation Agreement. (2) Exception to general rule. If you are not in compliance, you may still be eligible for draws if: (i) The Agency determines that your outstanding violations are of non-substantive provisions of the Act or this part or your Participation Agreement and that you have not repeatedly violated any non-substantive provisions; or (ii) You have agreed with the Agency in writing on a course of action to resolve your violations and such agreement does not prevent you from issuing Leverage. (d) Procedures for funding draws. You may request a draw at any time during the term of the commitment. With each request, submit the following documentation: (1) A statement certifying that there has been no material adverse change in your financial condition since your last filing of SBA Form 468 or other USDA-approved form(s) (see also § 4290.1220 for filing requirements). (2) If your request is submitted more than 30 days following the end of your fiscal year, but before you have submitted your annual filing of SBA Form 468 or other USDA-approved form(s) in accordance with § 4290.630(a), a preliminary unaudited annual financial st… | ||||
| 7:7:15.1.19.2.11.10.83.9 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1240 Funding of RBIC's draw request through sale to third-party. | RBS | (a) RBIC's authorization of the Agency to arrange sale of Debentures to third-party. By submitting a request for a draw of Debenture Leverage, you authorize the Agency, or any agent or trustee the Agency designates, to enter into any agreements (and to bind you to such agreements) necessary to accomplish: (1) The sale of your Debenture to a third-party at a price approved by the Agency; and (2) The purchase of your Debenture from the third-party and the pooling of your Debenture with other Debentures with the same maturity date. (b) Sale of Debentures to a third-party. If the Agency arranges for the sale of your Debenture to a third-party, the sale price may be an amount discounted from the face amount of the Debenture. | |||||
| 7:7:15.1.19.2.11.10.84.10 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1500 Restrictions on distributions to RBIC investors while RBIC has outstanding Leverage. | RBS | (a) Restriction on distribution. If you have outstanding Leverage, whenever you make a distribution to your investors you must make, at the same time, a prepayment to or for the benefit of the third-party holder of the Debenture sold pursuant to § 4290.1240 of this part, accrued unpaid interest and the principal, in whole or in part, of one or more of your Debentures outstanding as of the date of the distribution (subject to the terms of such Debentures). (b) Amount of prepayment. You must calculate the amount due the third-party holder by multiplying the total amount you intend to distribute by a fraction whose numerator is the outstanding principal of your Debenture(s) immediately preceding your distribution, and whose denominator is the sum of your Leverageable Capital as of that time plus the outstanding principal amount of your Debentures. For purposes of the preceding sentence “principal” means both the net proceeds and interest accrued to date of a discounted Debenture. The amount of any payment received under this section will be credited first against unpaid interest accrued to the date of distribution and then to the principal in whole or in part of the first Debenture you select to prepay and then to the interest and principal in whole or in part of such other Debenture(s) as you select to prepay. You may elect to prepay in whole any discounted Debenture under this section only within five years of its maturity date. Payments under this section must be made on the next occurring March 1 or September 1. (c) Effect of prepayment. Subject to the terms of the Debenture(s), you may voluntarily prepay additional principal, but neither mandatory nor voluntary prepayment will increase your future Leverage eligibility. | |||||
| 7:7:15.1.19.2.11.10.85.11 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1600 Agency's authority to issue and guarantee Trust Certificates. | RBS | [69 FR 32204, June 8, 2004, as amended at 76 FR 80224, Dec. 23, 2011] | (a) Authorization. Section 384F of the Act authorizes the Agency to issue TCs and to guarantee the timely payment of the principal and interest thereon. Any such guarantee of such TC is limited to the principal and interest due on the Debentures in any Trust or Pool backing such TC. The full faith and credit of the United States is pledged to the payment of all amounts due under the guarantee of any TC. (b) Authority to arrange public or private fundings of Leverage. The Agency in its discretion may arrange for public or private financing under its guarantee authority. Such financing may be accomplished by the sale of individual Debentures, aggregations of Debentures, or Pools or Trusts of Debentures. (c) Pass-through provisions. TCs shall provide for a pass-through to their holders of all amounts of principal and interest paid on the Debentures in the Pool or Trust against which they are issued. (d) Formation of a Pool or Trust holding Leverage Securities. The Agency shall approve the formation of each Pool or Trust. The Agency may, in its discretion, establish the size of the Pools and their composition, the interest rate on the TCs issued against Trusts or Pools, discounts, premiums and other charges made in connection with the Pools, Trusts, and TCs, and any other characteristics of a Pool or Trust it deems appropriate. Notwithstanding § 4290.1130(c), any agent of the Agency may collect a fee for the functions described in 7 U.S.C. 2009cc-5(e)(2) that does not exceed $500. | ||||
| 7:7:15.1.19.2.11.10.85.12 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1610 Effect of prepayment or early redemption of Leverage on a Trust Certificate. | RBS | (a) The rights, if any, of a RBIC to prepay any Debenture is established by the terms of such security, and no such right is created or denied by the regulations in this part. (b) The Agency's rights to purchase or prepay any Debenture without premium are established by the terms of the Guaranty Agreement relating to the Debenture. (c) Any prepayment of a Debenture pursuant to the terms of the Guaranty Agreement relating to such security shall reduce the Agency's guarantee of timely payment of principal and interest on a TC in proportion to the amount of principal that such prepaid Debenture represents in the Trust or Pool backing such TC. (d) The Agency shall be discharged from its guarantee obligation to the holder or holders of any TC, or any successor or transferee of such holder, to the extent of any such prepayment, whether or not such successor or transferee shall have notice of any such prepayment. (e) Interest on prepaid Debentures shall accrue only through the date of prepayment. (f) In the event that all Debentures constituting a Trust or Pool are prepaid, the TCs backed by such Trust or Pool shall be redeemed by payment of the unpaid principal and interest on the TCs; provided, however, that in the case of the prepayment of a Debenture pursuant to the provisions of the Guaranty Agreement relating to the Debenture, the Central Registration Agent (CRA) shall pass through pro rata to the holders of the TCs any such prepayments including any prepayment penalty paid by the obligor RBIC pursuant to the terms of the Debenture. | |||||
| 7:7:15.1.19.2.11.10.85.13 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1620 Functions of agents, including Central Registration Agent, Selling Agent and Fiscal Agent. | RBS | (a) Agents. The Agency may appoint or cause to be appointed agent(s) to perform functions necessary to market and service Debentures or TCs pursuant to this part. (1) Selling Agent. As a condition of guaranteeing a Debenture, the Agency may cause each RBIC to appoint a Selling Agent to perform functions that include, but are not limited to: (i) Selecting qualified entities to become pool or Trust assemblers (“Poolers”). (ii) Receiving guaranteed Debentures as well as negotiating the terms and conditions of sales or periodic offerings of Debentures and/or TCs on behalf of RBICs. (iii) Directing and coordinating periodic sales of Debentures and/or TCs. (iv) Arranging for the production of Offering Circulars, certificates, and such other documents as may be required from time to time. (2) Fiscal Agent. The Agency shall appoint a Fiscal Agent to: (i) Establish performance criteria for Poolers. (ii) Monitor and evaluate the financial markets to determine those factors that will minimize or reduce the cost of funding Debentures. (iii) Monitor the performance of the Selling Agent, Poolers, CRA, and the Trustee. (iv) Perform such other functions as the Agency, from time to time, may prescribe. (3) Central Registration Agent. Pursuant to a contract entered into with the Agency, the CRA, as the Agency's agent, will do the following with respect to the Pools or Trust Certificates for the Debentures: (i) Form an approved Pool or Trust; (ii) Issue the TCs in the prescribed form; (iii) Transfer the TCs upon the sale of original issue TCs in any secondary market transaction; (iv) Receive payments from RBICs; (v) Make periodic payments as scheduled or required by the terms of the TCs, and pay all amounts required to be paid upon prepayment of Debentures; (vi) Hold, safeguard, and release all Debentures constituting Trusts or Pools upon instructions from the Agency; (vii) Remain custodian of such other documentation as the Agency shall direct by written instructions; (viii) Provide for the registration … | |||||
| 7:7:15.1.19.2.11.10.85.14 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1630 Regulation of Brokers and Dealers and disclosure to purchasers of Leverage or Trust Certificates. | RBS | (a) Brokers and Dealers. Each broker, dealer, and Pool or Trust assembler approved by the Agency pursuant to these regulations shall either be regulated by a Federal financial regulatory agency, or be a member of the National Association of Securities Dealers (NASD), and shall be in good standing in respect to compliance with the financial, ethical, and reporting requirements of such body. It also shall be in good standing with the Agency as determined by the SBA official with delegated authority to made this determination ( see paragraph (c) of this section) and shall provide a fidelity bond or insurance in such amount as the Agency may require. (b) Suspension and/or termination of Broker or Dealer. The Agency shall exclude from the sale and all other dealings in Debentures or TCs any broker or dealer: (1) If such broker's or dealer's authority to engage in the securities business has been revoked or suspended by a supervisory agency. When such authority has been suspended, the Agency will suspend such broker or dealer for the duration of such suspension by the supervisory agency. (2) If such broker or dealer has been indicted or otherwise formally charged with a misdemeanor or felony bearing on its fitness, such broker or dealer may be suspended while the charge is pending. Upon conviction, participation may be terminated. (3) If such broker or dealer has suffered an adverse final civil judgment holding that such broker or dealer has committed a breach of trust or violation of law or regulation protecting the integrity of business transactions or relationships, participation in the market for Debentures or TCs may be terminated. (c) Termination/suspension proceedings. A broker's or dealer's participation in the market for Debentures or TCs will be conducted in accordance with 7 CFR part 11. The Agency may, for any of the reasons stated in paragraphs (b)(1) through (3) of this section, suspend the privilege of any broker or dealer to participate in this market. The Agency shall give written notice at… | |||||
| 7:7:15.1.19.2.11.10.85.15 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1640 Agency's access to records of the CRA, Brokers, Dealers and Pool or Trust assemblers. | RBS | The CRA and any broker, dealer and Pool or Trust assembler operating under the regulations in this part shall make all books, records and related materials associated with Debentures and TCs available to the Agency for review and copying purposes. Such access shall be at such party's primary place of business during normal business hours. | |||||
| 7:7:15.1.19.2.11.10.86.16 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1700 Agency's transfer of interest in a RBIC's Leverage security. | RBS | Upon such conditions and for such consideration as it deems reasonable, the Agency may sell, assign, transfer, or otherwise dispose of any Debenture held by or on behalf of the Agency. Upon notice by the Agency, a RBIC will make all payments of principal and interest as shall be directed by the Agency. A RBIC will be liable for all damage or loss which the Agency may sustain by reason of the RBIC's failure to follow such payment instructions, up to the amount of the RBIC's liability under such security, plus court costs and reasonable attorney's fees incurred by the Agency. | |||||
| 7:7:15.1.19.2.11.10.86.17 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1710 Agency's authority to collect or compromise claims. | RBS | The Agency may, upon such conditions and for such consideration as it deems reasonable, collect or compromise all claims relating to obligations it holds or has guaranteed, and all legal or equitable rights accruing to it. | |||||
| 7:7:15.1.19.2.11.10.86.18 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | J | Subpart J—Financial Assistance for RBICs (Leverage) | § 4290.1720 Characteristics of Agency's guarantee. | RBS | If the Agency agrees to guarantee a RBIC's Debentures, such guarantee will be unconditional, irrespective of the validity, regularity or enforceability of the Debentures or any other circumstances that might constitute a legal or equitable discharge or defense of a guarantor. Pursuant to its guarantee, the Agency will make timely payments of principal and interest on the Debentures. | |||||
| 7:7:15.1.19.2.11.11.87.1 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | K | Subpart K—RBIC's Noncompliance With Terms of Leverage | § 4290.1810 Events of default and the Agency's remedies for RBIC's noncompliance with terms of Debentures. | RBS | [69 FR 32204, June 8, 2004, as amended at 76 FR 80224, Dec. 23, 2011] | (a) Applicability of this section. Upon acceptance of a license to operate as an RBIC, you automatically agree to the terms, conditions and remedies in this section, as in effect at the time of issuance of the license and as fully set forth in all documents relating to the license, including, without limitation, the Participation Agreement and Debentures. (b) Automatic events of default. The occurrence of one or more of the events in this paragraph (b) causes the remedies in paragraph (c) of this section to take effect immediately. (1) Insolvency. You become equitably or legally insolvent. (2) Voluntary assignment. You make a voluntary assignment for the benefit of creditors without the Agency's prior written approval. (3) Bankruptcy. You file a petition to begin any bankruptcy or reorganization proceeding, receivership, dissolution or other similar creditors' rights proceeding, or such action is initiated against you and is not dismissed within 60 days. (c) Remedies for automatic events of default. Upon the occurrence of one or more of the events in paragraph (b) of this section: (1) Without notice, presentation or demand, the entire indebtedness evidenced by your Debentures, including accrued interest, and any other amounts owed with respect to your Debentures, is immediately due and payable; and (2) You automatically consent to the appointment of the Agency or its designee, as your receiver under section 384M of the Act. (d) Events of default with notice. For any occurrence (as determined by the Agency) of one or more of the events in this paragraph (d), the Agency may avail itself of one or more of the remedies in paragraph (e) of this section. (1) Fraud. You commit a fraudulent act that causes detriment to the Agency's position as a creditor or guarantor. (2) Fraudulent transfers. You make any transfer or incur any obligation that is fraudulent under the terms of 11 U.S.C. 548. (3) Willful conflicts of interest. You willfully violate § 4290.730. (4) Willful non-compliance. Y… | ||||
| 7:7:15.1.19.2.11.11.87.2 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | K | Subpart K—RBIC's Noncompliance With Terms of Leverage | § 4290.1830 RBIC's Capital Impairment definition and general requirements. | RBS | (a) Significance of Capital Impairment condition. If you have a condition of Capital Impairment, you are not in compliance with the terms of your Leverage. As a result, the Agency has the right to impose the applicable remedies for noncompliance in § 4290.1810(g). (b) Definition of Capital Impairment condition. You have a condition of Capital Impairment if your Capital Impairment Percentage, as computed pursuant to the procedures set forth in § 4290.1840, exceeds 70 percent. (c) Quarterly computation requirement and procedure. You must determine whether you have a condition of Capital Impairment as of the end of each fiscal quarter. You must notify the Agency promptly if you are Capitally Impaired. (d) The Agency's right to determine RBIC's Capital Impairment condition. The Agency may make its own determination of your Capital Impairment condition at any time. | |||||
| 7:7:15.1.19.2.11.11.87.3 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | K | Subpart K—RBIC's Noncompliance With Terms of Leverage | § 4290.1840 Computation of RBIC's Capital Impairment Percentage. | RBS | [69 FR 32204, June 8, 2004, as amended at 76 FR 80225, Dec. 23, 2011] | (a) General. This section contains the procedures you must use to determine your Capital Impairment Percentage. You must compare your Capital Impairment Percentage to the maximum permitted under § 4290.1830(b) to determine whether you have a condition of Capital Impairment. (b) Preliminary impairment test. If you satisfy the preliminary impairment test, your Capital Impairment Percentage is zero and you do not have to perform any more procedures in this § 4290.1840. Otherwise, you must continue with paragraph (c) of this section. You satisfy the test if each of the following amounts is zero or greater: (1) The sum of Undistributed Net Realized Earnings, as reported on SBA Form 468 or other USDA-approved form(s) and Includible Non-Cash Gains. (2) Unrealized Gain (Loss) on Securities Held. (c) How to compute your Capital Impairment Percentage. (1) If you have an Unrealized Gain on Securities Held, compute your Adjusted Unrealized Gain using paragraph (d) of this section. If you have an Unrealized Loss on Securities Held, continue with paragraph (c)(2) of this section. (2) Add together your Undistributed Net Realized Earnings, your Includible Non-cash Gains, and either your Unrealized Loss on Securities Held or your Adjusted Unrealized Gain. (3) If the sum in paragraph (c)(2) of this section is zero or greater, your Capital Impairment Percentage is zero. (4) If the sum in paragraph (c)(2) of this section is less than zero, drop the negative sign, divide by your Regulatory Capital (excluding Treasury Stock), and multiply by 100. The result is your Capital Impairment Percentage. (d) How to compute your Adjusted Unrealized Gain. (1) Subtract Unrealized Depreciation from Unrealized Appreciation. This is your “Net Appreciation”. (2) Determine your Unrealized Appreciation on Publicly Traded and Marketable securities. This is your ”Class I Appreciation”. (3) Determine your Unrealized Appreciation on securities that are not Publicly Traded and Marketable and meet the following criteria, which must be subst… | ||||
| 7:7:15.1.19.2.11.12.88.1 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | L | Subpart L—Ending Operations as a RBIC | § 4290.1900 Termination of participation as a RBIC. | RBS | You may not terminate your participation as a RBIC without the Agency's prior written approval. Your request for approval must be accompanied by an offer of immediate repayment of all of your outstanding Leverage (including any prepayment penalties thereon), or by a plan satisfactory to the Agency for the orderly liquidation of the RBIC. | |||||
| 7:7:15.1.19.2.11.13.88.1 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | M | Subpart M—Miscellaneous | § 4290.1910 Non-waiver of rights or terms of Leverage security. | RBS | The Agency's failure to exercise or delay in exercising any right or remedy under the Act or the regulations in this part does not constitute a waiver of such right or remedy. The Agency's failure to require you to perform any term or provision of your Leverage does not affect the Agency's right to enforce such term or provision. Similarly, the Agency's waiver of, or failure to enforce, any term or provision of your Leverage or of any event or condition set forth in § 4290.1810 does not constitute a waiver of any succeeding breach of such term or provision or condition. | |||||
| 7:7:15.1.19.2.11.13.88.2 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | M | Subpart M—Miscellaneous | § 4290.1920 RBIC's application for exemption from a regulation in this part 4290. | RBS | (a) General. You may file an application in writing with the Agency to have a proposed action exempted from any procedural or substantive requirement, restriction, or prohibition to which it is subject under this part, unless the provision is mandated by the Act. The Agency may grant an exemption for such applicant, conditionally or unconditionally, provided the exemption would not be contrary to the purposes of the Act. (b) Contents of application. Your application must be accompanied by supporting evidence that demonstrates to the Agency's satisfaction that: (1) The proposed action is fair and equitable; and (2) The exemption requested is reasonably calculated to advance the best interests of the RBIC program in a manner consistent with the policy objectives of the Act and the regulations in this part. | |||||
| 7:7:15.1.19.2.11.13.88.3 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | M | Subpart M—Miscellaneous | § 4290.1930 Effect of changes in this part 4290 on transactions previously consummated. | RBS | The legality of a transaction covered by the regulations in this part is governed by the regulations in this part in effect at the time the transaction was consummated, regardless of later changes. Nothing in this part bars enforcement action with respect to any transaction consummated in violation of provisions applicable at the time, but no longer in effect. | |||||
| 7:7:15.1.19.2.11.13.88.4 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | M | Subpart M—Miscellaneous | § 4290.1940 Integration of this part with other regulations applicable to USDA's programs. | RBS | [69 FR 32204, June 8, 2004, as amended at 79 FR 76019, Dec. 19, 2014; 81 FR 11053, Mar. 2, 2016] | (a) Intergovernmental review. To the extent applicable to this part, the Agency will comply with 2 CFR part 415, subpart C, “Intergovernmental Review of Department of Agriculture Programs and Activities.” The Agency has not delegated this responsibility to SBA pursuant to § 4290.45. (b) National flood insurance. To the extent applicable to this part, the Agency will comply with subpart B of 7 CFR part 1806. The Agency has not delegated this responsibility to SBA pursuant to § 4290.45 of this part. (c) Clean Air Act and Water Pollution Control Act requirements. To the extent applicable to this part, the Agency will comply with the requirements of the Clean Air Act, section 306; the Clean Water Act, section 508; Executive Order 11738; and 40 CFR part 32. The Agency has not delegated this responsibility to SBA pursuant to § 4290.45 of this part. (d) Historic preservation requirements. To the extent applicable to this part, the Agency will comply with subpart F of 7 CFR part 1901. The Agency has not delegated this responsibility to SBA pursuant to § 4290.45 of this part. (e) Lead-based paint requirements. To the extent applicable to this part, the Agency will comply with subpart A of 7 CFR part 1924. The Agency has not delegated this responsibility to SBA pursuant to § 4290.45 of this part. (f) Conflict of interest. To the extent applicable to this part, the Agency will comply with 2 CFR 400.2, subpart D of 7 CFR part 1900, and RD Instruction 2045-BB. The Agency has not delegated this responsibility to SBA pursuant to § 4290.45. (g) Civil rights impact analysis. To the extent applicable to this part, the Agency will comply with RD Instruction 2006-P, “Civil Rights Impact Analysis.” The Agency has not delegated this responsibility to SBA pursuant to § 4290.45 of this part. (h) Environmental requirements. To the extent applicable to this part, the Agency will comply with 7 CFR part 1970. The Agency has not delegated this responsibility to SBA pursuant to § 4290.45. (i) Appeals to the National A… | ||||
| 7:7:15.1.19.2.11.14.88.1 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | N | Subpart N—Requirements for Operational Assistance Grants to RBICs | § 4290.2000 Operational Assistance Grants to RBICs. | RBS | (a) Regulations governing. Regulations governing Operational Assistance grants to RBICs may be found in subparts D and E of this part 4290 and in this § 4290.2000. (b) Restrictions on use. A RBIC must use Operational Assistance grant funds only to provide Operational Assistance to Smaller Enterprises to which it either has made, or expects to make, a Financing. (c) Amount of grant. Each RBIC will receive an Operational Assistance grant award equal to the lesser of 10 percent of the Regulatory Capital raised by the RBIC at the time of licensing or $1,000,000. (d) Term. Operational Assistance grants made under this part will be made for a multiyear period (not to exceed 10 years) under such terms as the Agency may require. (e) Reporting and recordkeeping requirements. Policies governing reporting, record retention, and recordkeeping requirements applicable to RBICs may be found in subpart H of this part 4290. | |||||
| 7:7:15.1.19.2.11.15.88.1 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | § 4290.3000 Non-leveraged RBICs—General. | RBS | This subpart identifies provisions specific to RBICs seeking a non-leveraged license, including exceptions and additions to provisions associated with subparts A through N of this part. | |||||
| 7:7:15.1.19.2.11.15.88.10 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | §§ 4290.3016-4290.3019 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.11.15.88.11 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | § 4290.3020 Changes in Ownership, Structure, or Control. | RBS | Paragraph (b) in § 4290.440 does not apply to Non-leveraged RBICs. | |||||
| 7:7:15.1.19.2.11.15.88.12 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | §§ 4290.3021-4290.3024 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.11.15.88.13 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | § 4290.3025 Managing the Operations of a RBIC. | RBS | (a) Nonperformance. In addition to the provisions specified in § 4290.507, failure of an approved Non-leveraged RBIC to maintain sound investment practice, as determined by the Agency, may result in loss of approval for participating in this program. (b) Employment of USDA or SBA officials. Paragraph (a)(2) of § 4290.509 does not apply to Non-leveraged RBICs. (c) Approval of RBIC's Investment Adviser/Manager. In addition to complying with § 4290.510, a Non-leveraged RBIC must notify the Agency of the Management Expenses to be incurred under such contract, or of any subsequent material changes in such Management Expenses, within 30 days of execution. (d) Management Expenses of a RBIC. When complying with § 4290.520, Non-leveraged RBICs do not need prior approval of initial Management Expenses and any increases in those expenses. (e) Restrictions on investments of idle funds by RBICs. The provisions of § 4290.530 apply to Non-leveraged RBICs only when the Non-leveraged RBIC engages in activities not contemplated by the Act. (f) Prior approval of secured third-party debt of RBICs. The provisions of § 4290.550 do not apply to Non-leveraged RBICs. (g) Voluntary decrease in Regulatory Capital. When complying with § 4290.585, Non-leveraged RBICs do not need to obtain prior approval for decreases in Regulatory Capital of more than 2 percent (but not below the minimum required under this Act or these regulations). However, Non-leveraged RBICs must report the reduction to the Agency within 30 days. | |||||
| 7:7:15.1.19.2.11.15.88.14 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | §§ 4290.3026-4290.3029 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.11.15.88.15 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | § 4290.3030 Financing of Enterprises by RBICs. | RBS | (a) Non-compliance with this section. The last sentence of § 4290.700(e) does not apply to Non-leveraged RBICs. (b) Enterprises that may be ineligible for Financing. The provisions associated with real estate enterprises found in § 4290.720(c) apply to Non-leveraged RBICs unless the Non-leveraged RBIC requests, and has received, an irrevocable exemption from the Agency in accordance with § 4290.1920. (c) Farmland purchases. The provisions associated with farmland purchases found in § 4290.720(e) apply to Non-leveraged RBICs unless the Non-leveraged RBIC requests, and has received, an irrevocable exemption from the Agency in accordance with § 4290.1920. (d) Purchasing securities from an underwriter or other third party. Non-leveraged RBICs are exempt from the recordkeeping requirements and fee limitations in § 4290.825(b) and (c), respectively, for securities purchased through or from an underwriter. (e) Assets acquired in liquidation of Portfolio securities. The provisions of § 4290.880 do not apply to Non-leveraged RBICs. | |||||
| 7:7:15.1.19.2.11.15.88.16 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | §§ 4290.3031-4290.3034 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.11.15.88.17 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | § 4290.3035 Recordkeeping, Reporting, and Examination Requirements for RBICs. | RBS | Except for § 4290.600(d), Subpart H, Recordkeeping, Reporting, and Examination Requirements for RBICs, of this part applies to Non-leveraged RBICs. | |||||
| 7:7:15.1.19.2.11.15.88.18 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | §§ 4290.3036-4290.3039 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.11.15.88.19 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | § 4290.3040 Financial Assistance for RBICs. | RBS | Subpart J, Financial Assistance for RBICs (Leveraged), of this part does not apply to Non-leveraged RBICs. | |||||
| 7:7:15.1.19.2.11.15.88.2 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | §§ 4290.3001-4290.3002 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.11.15.88.20 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | § 4290.3041 Events of default and the Agency's remedies for RBIC's noncompliance with terms of licensure. | RBS | [76 FR 80225, Dec. 23, 2011, as amended at 77 FR 4885, Feb. 1, 2012] | In addition to complying with the provisions of § 4290.1810, a RBIC's failure to comply with the terms of this part may result in the Agency revoking the Non-leveraged RBIC's license issued under this part. | ||||
| 7:7:15.1.19.2.11.15.88.21 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | §§ 4290.3042-4290.3044 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.11.15.88.22 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | § 4290.3045 Computation of RBIC's Capital Impairment. | RBS | The provisions specified in §§ 4290.1830 and 4290.1840 do not apply to Non-leveraged RBICs. | |||||
| 7:7:15.1.19.2.11.15.88.23 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | §§ 4290.3046-4290.3049 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.11.15.88.24 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | § 4290.3050 Operational Assistance Grants for RBICs. | RBS | Subpart N, Requirements for Operational Assistance Grant to RBICs, of this part does not apply to Non-leveraged RBICs. All other references to Operational Assistance in this part do not apply to Non-leveraged RBICs. | |||||
| 7:7:15.1.19.2.11.15.88.25 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | §§ 4290.3051-4290.3099 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.11.15.88.3 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | § 4290.3003 Responsibilities for implementing Non-leveraged RBICs. | RBS | [77 FR 4885, Feb. 1, 2012] | Section 4290.45 does not apply to Non-leveraged RBICs. Instead, for the purposes of this part as it applies to Non-leveraged RBICs, all authorities and responsibilities assigned to the Agency under this part shall be carried out by the Agency. Thus, when applying subparts A through N of this part to Non-leveraged RBICs, all references to the Small Business Administration (SBA) or Administrator on behalf of USDA shall be read as the Agency. All forms shall be submitted to USDA or its designee. | ||||
| 7:7:15.1.19.2.11.15.88.4 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | § 4290.3004 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.11.15.88.5 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | § 4290.3005 Qualifications for the Non-leveraged RBIC Program. | RBS | (a) Business form. In addition to complying with the applicable provisions of § 4290.100 not otherwise modified by this section, paragraphs (a)(1) through (a)(4) of this section apply. (1) For RBICs applying for non-leveraged status, the types of investors eligible to invest in a RBIC must have been approved by the Agency. Investors seeking approval must submit a request to the Agency with sufficient documentation to support their request. The USDA will announce such approved categories and types of investors in a public notice published in the Federal Register from time to time. Subsequent notices that modify the types of investors eligible to invest in a RBIC will not be applied retroactively. (2) In lieu of complying with § 4290.100(d)(1)(i), you must have a minimum duration of 10 years. After 10 years, the Partnership RBIC may be terminated by a vote of your partners. (3) In lieu of complying with § 4290.100(d)(2), if you are a LLC RBIC, you must have a minimum duration of 10 years. After 10 years, the LLC RBIC may be terminated by a vote of your members. (4) In lieu of complying with § 4290.100(d)(3), if you are a Corporate RBIC, you must have a duration of not less than 30 years unless earlier dissolved by the shareholders. (b) Approval of initial Management Expenses. Section 4290.140 does not apply to Non-leveraged RBICs. However, the Agency will provide a cap on these expenses in each Federal Register notice soliciting applications for Non-leveraged RBICs. (c) Management and ownership diversity requirements. A Non-leveraged RBIC is subject to the provisions of § 4290.150 unless it is exempted from these provisions by the Agency. Exemptions will only be granted when the applicant establishes, to the satisfaction of the Agency, that granting the exemption will not unduly impair the integrity and soundness of the Non-leveraged RBIC. (d) Special rules for Partnership RBICs and LLC RBICs. Paragraph (c) of § 4290.160 does not apply to Non-leveraged RBICs. | |||||
| 7:7:15.1.19.2.11.15.88.6 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | §§ 4290.3006-4290.3009 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.11.15.88.7 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | § 4290.3010 Application and Approval Process for RBIC licensing without Leverage. | RBS | [76 FR 80225, Dec. 23, 2011, as amended at 77 FR 4885, Feb. 1, 2012] | (a) The provisions of § 4290.300 notwithstanding, the Agency will accept, at any time, applications for consideration as a Non-leveraged RBIC. The number of applications that the Agency will receive each year, and any fees and conditions, will be announced annually in a Federal Register notice. (b) The provision for evaluating applicants on a competitive basis, as specified in § 4290.340(a), does not apply to this subpart. (c) The provisions specified in § 4290.370(m) do not apply to this subpart. | ||||
| 7:7:15.1.19.2.11.15.88.8 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | §§ 4290.3011-4290.3014 [Reserved] | RBS | ||||||
| 7:7:15.1.19.2.11.15.88.9 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | O | Subpart O—Additional Requirements for Non-Leveraged Licensees and Exceptions to Regulations | § 4290.3015 Evaluation and selection of Non-leveraged RBICs. | RBS | (a) General. Notwithstanding any other provision in this part, when selecting applications for non-leveraged status, the Agency may select one or more applications, or none, for further consideration based on the evaluation criteria of this part. (b) Eligibility and completeness. In addition to the requirements specified in § 4290.350, an Applicant under this subpart must complete a written application that includes information not otherwise exempted by the Agency, in its sole discretion. The Agency may, on its own initiative, exempt material from a Non-leveraged RBIC application where the Agency determines it impedes an expedited process without a commensurate benefit to the program. To the extent that the Agency's exemption applies to the entire program, an announcement of the exemption will be published in the Federal Register. The Agency shall make a decision as to licensing an Applicant after the receipt of a complete application and will enter into a Participation Agreement with the RBIC if approved. (c) Effect of a RBIC license. Paragraphs (d)(2) and (d)(3) of § 4290.390 do not apply to Non-leveraged RBICs. | |||||
| 7:7:15.1.19.2.11.2.65.1 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | B | Subpart B—Definition of Terms Used in Part 4290 | § 4290.50 Definition of terms. | RBS | [69 FR 32204, June 8, 2004, as amended at 76 FR 80221, Dec. 23, 2011; 79 FR 76018, Dec. 19, 2014; 80 FR 9914, Feb. 24, 2015; 85 FR 16522, Mar. 24, 2020; 87 FR 38645, June 29, 2022] | Act means Subtitle H of the Consolidated Farm and Rural Development Act, as amended (7 U.S.C. 2009cc et seq. ). Administrator means the Administrator of SBA. Affiliate or Affiliates has the meaning set forth in title 13 CFR 121.103. Agency means the Rural Business-Cooperative Service (RBS) an agency of the U.S. Department of Agriculture. Applicant means any entity submitting an application to be licensed as a RBIC. Articles mean articles of incorporation or charter and bylaws for a Corporate RBIC, the certificate and limited partnership agreement for a Partnership RBIC, and the operating agreement or other organizational documents for an LLC RBIC. Assistance or Assisted means Financing of or management services rendered to a Portfolio Concern by or through a RBIC pursuant to the Act and this part. Associate of a RBIC means any of the following: (1)(i) An officer, director, employee or agent of a Corporate RBIC; (ii) A Control Person, employee or agent of a Partnership RBIC; (iii) A managing member of an LLC RBIC; (iv) An Investment Adviser/Manager of any RBIC, including any Person who contracts with a Control Person of a RBIC to be the Investment Adviser/Manager of such RBIC; or (v) Any Person regularly serving a RBIC on retainer in the capacity of attorney at law. (2) Any Person who owns or controls, or who has entered into an agreement to own or control, directly or indirectly, at least 10 percent of any class of stock of a Corporate RBIC or 10 percent of the membership interests of an LLC RBIC, or a limited partner's interest of at least 10 percent of the partnership capital of a Partnership RBIC. However, neither a limited partner in a Partnership RBIC nor a non-managing member in an LLC RBIC is considered an Associate if such Person is an Entity Institutional Investor whose investment in the Partnership, including commitments, represents no more than 33 percent of the capital of the RBIC and no more than five percent of such Person's net worth. (3) Any officer, director, partner (o… | ||||
| 7:7:15.1.19.2.11.3.65.1 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | C | Subpart C—Qualifications for the RBIC Program | § 4290.100 Business form. | RBS | (a) Newly-formed for-profit. An Applicant for a RBIC license must be a newly formed for-profit entity or, subject to § 4290.150, a newly formed for-profit subsidiary of an existing entity. It must be organized under the law of a State. An Applicant may be organized as a corporation (“Corporate RBIC”), a limited partnership (“Partnership RBIC”), or a limited liability company (“LLC RBIC”). (b) Purpose. An Applicant must be organized solely for the purpose of performing the functions and conducting the activities contemplated under the Act: making Developmental Capital investments and providing Operational Assistance to eligible Smaller Enterprises. (c) Articles. The RBIC's Articles— (1) Must specify in general terms: (i) The purposes for which the RBIC is formed; (ii) The name of the RBIC; (iii) The Rural Area or Areas in which it will operate; (iv) The place where the RBIC's headquarters will be located; and (v) The amount and classes of the RBIC's ownership interests. (2) May contain any other provisions consistent with the Act that the RBIC may determine is appropriate to adopt to regulate its business and the conduct of its affairs. (3) Are subject to the Agency's approval. (d) Duration —(1) Partnership RBICs. If you are a Partnership RBIC: (i) You must have a minimum duration of 10 years, or two years following the maturity of your last-maturing Leverage security, whichever is longer. After 10 years, if all Leverage has been repaid or redeemed and all amounts due the Agency, its agent, or Trustee have been paid, the Partnership RBIC may be terminated by a vote of your partners; (ii) None of your general partner(s) may be removed or replaced by your limited partners without prior written approval of the Agency; (iii) Any transferee of, or successor in interest to, your general partner shall have only the rights and liabilities of a limited partner prior to the Agency's written approval of such transfer or succession; and (iv) You must incorporate all the provisions in this paragraph (d)… | |||||
| 7:7:15.1.19.2.11.3.65.2 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | C | Subpart C—Qualifications for the RBIC Program | § 4290.110 Qualified management. | RBS | [76 FR 80222, Dec. 23, 2011] | An Applicant must show, to the satisfaction of the Agency, that its current or proposed management team is qualified and has the knowledge, experience, and capability in Community Development Finance or Relevant Capital Finance, necessary for investing in the types of Enterprises contemplated by the Act, regulations in this part, and its business plan. In determining whether an Applicant's current or proposed management team has sufficient qualifications, the Agency will consider information provided by the Applicant and third parties concerning the background, capability, education, training and reputation (and any other managerial aspect identified by the USDA in a Federal Register notice) of its general partners, managers, officers, key personnel, and investment committee and governing board members. The Applicant must designate at least one individual as the official responsible for contact with the Agency. | ||||
| 7:7:15.1.19.2.11.3.65.3 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | C | Subpart C—Qualifications for the RBIC Program | § 4290.120 Plan to invest in Rural Areas. | RBS | An Applicant must agree that if licensed as a RBIC, it will make Developmental Capital investments in Enterprises that will create wealth and job opportunities in Rural Areas and among individuals living in those areas. | |||||
| 7:7:15.1.19.2.11.3.65.4 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | C | Subpart C—Qualifications for the RBIC Program | § 4290.130 Identified Rural Areas. | RBS | A RBIC must identify the specific Rural Area or Areas in which it intends to make Developmental Capital investments and provide Operational Assistance under the RBIC program. The scope of the identified areas must be consistent with Applicant's business plan, especially as the plan relates to the Applicant's ability to operate actively, soundly, and profitably in such areas. | |||||
| 7:7:15.1.19.2.11.3.65.5 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | C | Subpart C—Qualifications for the RBIC Program | § 4290.140 Approval of initial Management Expenses. | RBS | A RBIC must have its Management Expenses approved by the Agency at the time it is licensed. ( See § 4290.520 for the definition of Management Expenses.) | |||||
| 7:7:15.1.19.2.11.3.65.6 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | C | Subpart C—Qualifications for the RBIC Program | § 4290.150 Management and ownership diversity requirement. | RBS | (a) Diversity requirement. You must have diversity between management and ownership in order to be licensed as a RBIC and to maintain your license. To establish diversity, you must meet the requirements in paragraphs (b) and (c) of this section. (b) Percentage ownership requirement. No Person or group of Persons who are Affiliates of one another may own or control, directly or indirectly, more than 70 percent of your Regulatory Capital or your Leverageable Capital. (c) Non-affiliation requirement. At least 30 percent of your Regulatory Capital and Leverageable Capital must be owned and controlled by Persons unaffiliated with your management and unaffiliated with each other, and whose investments are significant in dollar and percentage terms as determined by the Agency. Such Persons must not be your Associates (except for their status as your shareholders, limited partners or members) and must not Control, be Controlled by, or be under Common Control with any of your Associates. A single “acceptable” Institutional Investor may be substituted for two or three of the three investors who are otherwise required. The following Institutional Investors are “acceptable” for this purpose: (1) Entities whose overall activities are regulated and periodically examined by State, Federal or other governmental authorities satisfactory to the Agency; (2) Entities listed on the New York Stock Exchange; (3) Entities that are publicly-traded and that meet both the minimum numerical listing standards and the corporate governance listing standards of the New York Stock Exchange; (4) Public or private employee pension funds; (5) Trusts, foundations, or endowments, but only if exempt from Federal income taxation; and (6) Other Institutional Investors satisfactory to the Agency. (d) Voting requirement. The investors relied upon to satisfy the diversity requirement may not delegate their voting rights to any Person who is your Associate, or who Controls, is Controlled by, or is under Common Control with any of your Assoc… | |||||
| 7:7:15.1.19.2.11.3.65.7 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | C | Subpart C—Qualifications for the RBIC Program | § 4290.160 Special rules for Partnership RBICs and LLC RBICs. | RBS | (a) Entity General Partner or Entity Managing Member. (1) A general partner of a Partnership RBIC which is a corporation, limited liability company or partnership (an “Entity General Partner”), or a managing member of an LLC RBIC which is a corporation, limited liability company, or partnership (an “Entity Managing Member”) shall be organized under State law solely for the purpose of serving as the general partner or managing member of one or more RBICs, and shall be organized for profit. (2) The Agency must approve any person who will serve as an officer, director, manager, or general partner of the Entity General Partner or Entity Managing Member and of an entity that Controls the Entity General Partner or Entity Managing Member. This provision must be stated in an Entity General Partner's or Entity Managing Member's articles of incorporation or charter and bylaws if a corporation, operating agreement if a limited liability company, or partnership agreement if a partnership. (3) An Entity General Partner or Entity Managing Member is subject to the same examination and reporting requirements as a RBIC under sections 384K and 384L of the Act. The restrictions and obligations imposed upon a RBIC by §§ 4290.1810, 4290.30, 4290.410 through 4290.450, 4290.470, 4290.500, 4290.510, 4290.585, 4290.600, 4290.680, 4290.690 through 4290.692, and 4290.1910 apply also to an Entity General Partner or Entity Managing Member of a RBIC. (4) The general partner(s) of your Entity General Partner(s) or Entity Managing Member(s) will be considered your general partner. (5) If your Entity General Partner or Entity Managing Member is a limited partnership, its limited partners may be considered your Control Person(s) if they meet the definition for Control Person in § 4290.50. (b) Liability of general partner of Partnership RBIC. Subject to section 384O(b) of the Act, your general partner(s) is not liable solely by reason of its status as a general partner for repayment of any Leverage or debts you owe to the Agency unless th… | |||||
| 7:7:15.1.19.2.11.3.65.8 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | C | Subpart C—Qualifications for the RBIC Program | § 4290.165 Obligations of Control Persons. | RBS | All Control Persons are bound by the provisions of sections 384O and 384P of the Act and by the conflict-of-interest rules under § 4290.730. The term RBIC, as used in §§ 4290.30, 4290.460, and 4290.680, includes all of the RBIC's Control Persons. | |||||
| 7:7:15.1.19.2.11.3.66.10 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | C | Subpart C—Qualifications for the RBIC Program | § 4290.210 Minimum capital requirements for RBICs. | RBS | [69 FR 32204, June 8, 2004, as amended at 76 FR 80222, Dec. 23, 2011; 85 FR 16522, Mar. 24, 2020] | (a) General Rule. Unless otherwise specified in a Federal Register notice, you must have Regulatory Capital of at least $10,000,000, or such lesser amount (but not less than $5,000,000) and Leverageable Capital of at least $500,000, to become a RBIC. (b) Exception. (1) The Agency in its sole discretion and based on a showing of special circumstances and good cause may license an Applicant with Regulatory Capital of at least $2,500,000, but only if the Applicant: (i) Has satisfied all eligibility criteria for licensing as a RBIC as described in § 4290.390(a) of this part, except the capital requirement specified in paragraph (a)(1) of that section, as determined solely by the Agency; (ii) Has a viable business plan reasonably projecting profitable operations; and (iii) Has a reasonable timetable for achieving Regulatory Capital of at least $10,000,000. (2) A RBIC licensed under this exception is not eligible to receive Leverage until it has complied with paragraph (a) of this section. (c) Time frame. Each RBIC shall have a period of 2 years to meet the capital requirements set forth in this section. (d) Closing. Each RBIC may conduct more than one closing to raise the specific amount of Regulatory Capital that the Applicant had projected in its application that it would raise (see § 4290.310(b)). One or more closings may take place subsequent to licensing as an RBIC to raise the difference between the required Regulatory Capital as provided under paragraphs (a) and (b) of this section and the specific amount of Regulatory Capital that the Applicant had projected to raise in its application. | ||||
| 7:7:15.1.19.2.11.3.66.11 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | C | Subpart C—Qualifications for the RBIC Program | § 4290.230 Private Capital for RBICs. | RBS | [69 FR 32204, June 8, 2004, as amended at 85 FR 16523, Mar. 24, 2020] | (a) General. Private Capital means the contributed capital of a RBIC, plus unfunded binding commitments by Institutional Investors (including commitments evidenced by a promissory note) to contribute capital to a RBIC. (b) Contributed capital. For purposes of this section, contributed capital means the paid-in capital and paid-in surplus of a Corporate RBIC, the members' contributed capital of a LLC RBIC, or the partners' contributed capital of a Partnership RBIC, in each case subject to the limitations in paragraph (c) of this section. (c) Exclusions from Private Capital. Private Capital does not include: (1) Funds borrowed by an Applicant or a RBIC from any source. (2) Funds obtained through the issuance of Leverage. (3) Funds obtained directly or indirectly from the Federal government or any State (including by a political subdivision, agency or instrumentality of the Federal government or a State), except that the following categories of such funds are not excluded from Private Capital— (i) Funds obtained directly or indirectly from the business revenues (excluding any governmental appropriation) of any federally-chartered or government-sponsored enterprise established prior to May 13, 2002; (ii) Funds invested by an employee welfare benefit plan or pension plan; and (iii) Qualified Non-private Funds in an amount not to exceed 33 percent of the total Private Capital of any Applicant or RBIC, provided, however, that in no event may any investor or investors of Qualified Non-private Funds have the power to Control, directly or indirectly, the management, board of directors, general partners, or members of the RBIC. (4) Any portion of an unfunded commitment from an Institutional Investor with a net worth of less than $10 million that exceeds 10 percent of such Institutional Investor's net worth. (5) An unfunded commitment from an investor if the Agency determines that the collectability of the commitment is questionable. (d) Non-cash capital contributions. Capital contributions in a form oth… | ||||
| 7:7:15.1.19.2.11.3.66.12 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | C | Subpart C—Qualifications for the RBIC Program | § 4290.240 Limitations on non-cash capital contributions in Private Capital. | RBS | Non-cash capital contributions to a RBIC or Applicant are included in Private Capital only if they are approved by the Agency and they fall into one of the following categories: (a) Direct obligations of, or obligations guaranteed as to principal and interest by, the United States having a term of no more than one year. (b) Services rendered or to be rendered to you, priced at no more than their fair market value. (c) Other non-cash assets approved by the Agency. | |||||
| 7:7:15.1.19.2.11.3.66.9 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | C | Subpart C—Qualifications for the RBIC Program | § 4290.200 Adequate capital for RBICs. | RBS | [76 FR 80222, Dec. 23, 2011] | You must meet the requirements of §§ 4290.210 through 4290.230 in order to qualify as a RBIC. | ||||
| 7:7:15.1.19.2.11.4.67.1 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | D | Subpart D—Application and Approval Process for RBIC Licensing | § 4290.300 When and how to apply for a RBIC License. | RBS | [69 FR 32204, June 8, 2004, as amended at 76 FR 80222, Dec. 23, 2011] | (a) Notice of Funds Availability (“NOFA”). The Agency will publish a NOFA in the Federal Register advising potential applicants of the availability of funds for the RBIC program and inviting the submission of applications. The NOFA may specify limitations, special rules, procedures, and restrictions for a particular funding round. When submitting its application, an Applicant must comply with both this part 4290 and any requirements specified in the NOFA, including the opening and closing dates for submission of an application. (b) Application form. An Applicant must apply for a RBIC license using an appropriate application packet provided by the Agency. Upon receipt of a completed application packet, the Agency may request clarifying or technical information on the materials submitted as part of the application. | ||||
| 7:7:15.1.19.2.11.4.67.2 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | D | Subpart D—Application and Approval Process for RBIC Licensing | § 4290.310 Contents of application. | RBS | Each Applicant must submit a complete application, including the following: (a) Management team experience. The Applicant must provide information generally as to the background, capability, education, reputation and training of its management team, including general partners, managers, officers, key personnel, and investment committee and governing board members. The Applicant also must provide information specifically on these individuals' qualifications and reputation in the areas of Community Development Finance and/or Relevant Capital Finance, including the impact of these individuals' activities in these areas. (b) Amount of Regulatory Capital. The Applicant must indicate the amount of Regulatory Capital it has raised or proposes to raise, which amount must satisfy the requirements of § 4290.210(a) of this part, unless the Applicant indicates that it has raised or proposes to raise at least $2,500,000 and is applying for an exception pursuant to § 4290.210(b) of this part and includes in its application— (1) A showing of special circumstances and good cause for the exception: (2) Will satisfy all eligibility criteria for licensing as a RBIC as set forth in § 4290.390(a) of this part, except the capital requirement specified in paragraph (a)(1) of that section, as determined solely by the Agency; (3) Has a viable business plan reasonably projecting profitable operations; and (4) Has a reasonable timetable for achieving Regulatory Capital in an amount that satisfies the requirements of § 4290.210(a) of this part. (c) Comprehensive business plan. The Applicant must submit a comprehensive business plan covering at least a five-year period, addressing the specific items described in § 4290.320, and which demonstrates that the Applicant has the capacity to operate successfully as a RBIC. | |||||
| 7:7:15.1.19.2.11.4.67.3 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | D | Subpart D—Application and Approval Process for RBIC Licensing | § 4290.320 Contents of comprehensive business plan. | RBS | (a) Plan for Developmental Capital investing. The Applicant must describe its plans and strategies for how it proposes to make successful Developmental Capital investments in identified Rural Areas. (b) Working with Rural Area community-based organizations. The Applicant must describe how it intends to work with community-based organizations and local entities (including local economic development companies, local lenders, and local investors) in order to facilitate its Developmental Capital investments. (c) Market analysis. The Applicant must provide an analysis of the Rural Areas in which it intends to focus its Developmental Capital investments and Operational Assistance to Smaller Enterprises, demonstrating that the Applicant understands the market and the unmet Equity Capital needs in such areas and how its activities will meet these unmet needs and will have a positive economic impact on those areas. The Applicant also must analyze the extent of the demand in such areas for Developmental Capital investments and any factors or trends that may affect the Applicant's ability to make effective Developmental Capital investments. (d) Operational capacity and investment strategies. The Applicant must submit information concerning its policies and procedures for underwriting and approving its Developmental Capital investments, monitoring its portfolio, and maintaining internal controls and operations. (e) Plan to raise Regulatory Capital. The Applicant must include a detailed description of how it plans to raise its Regulatory Capital if it has not yet done so at the time of application. The Applicant must discuss its potential sources of Regulatory Capital, the estimated timing for raising such funds, and the extent of the expressions of interest to commit such funds to the Applicant. (f) Plan for providing Operational Assistance. The Applicant must describe how it plans to use its grant funds to provide Operational Assistance to Smaller Enterprises in which it makes or expects to make Development… | |||||
| 7:7:15.1.19.2.11.4.67.4 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | D | Subpart D—Application and Approval Process for RBIC Licensing | § 4290.330 Guarantee fee. | RBS | [85 FR 16523, Mar. 24, 2020] | In cases of Leveraged Applications, the Applicant must pay to the Agency an issuance fee for each grant or debenture guarantee. The Agency may charge such fees as the Agency considers appropriate, so long as those fees are proportionally equal for each rural business investment company, with respect to any guarantee or grant issued under this subchapter. | ||||
| 7:7:15.1.19.2.11.5.67.1 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | E | § 4290.340 Evaluation and selection—general. | RBS | [69 FR 32204, June 8, 2004, as amended at 85 FR 16523, Mar. 24, 2020] | The Administrator of RBS and the Administrator on behalf of SBA, in their sole discretion, will evaluate and select an Applicant to participate in the RBIC program based on a review of the Applicant's application materials, interviews or site visits with the Applicant (if any), and background investigations conducted by the Agency and other Federal agencies. The Agency's evaluation and selection process is intended to— (a) Ensure that Applicants are evaluated on a competitive basis and in a fair and consistent manner; (b) Take into consideration the unique proposals presented by Applicants; (c) Ensure that each Applicant licensed as a RBIC can fulfill successfully the goals of its comprehensive business plan; and (d) Ensure that the Agency selects Applicants in such a way as to promote nationwide geographic distribution of Developmental Capital investments. | |||||
| 7:7:15.1.19.2.11.5.67.2 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | E | § 4290.350 Eligibility and completeness. | RBS | The Agency will not consider any application that is not complete or that is submitted by an Applicant that does not meet the eligibility criteria described in subpart C of this part. The Agency at its sole discretion, may request from an Applicant additional information concerning eligibility criteria or easily completed portions of the application in order to facilitate consideration of its application. | ||||||
| 7:7:15.1.19.2.11.5.67.3 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | E | § 4290.360 Initial review of Applicant's management team's qualifications. | RBS | The Agency will review the information submitted by the Applicant concerning the qualifications of the Applicant's management team to determine in its sole discretion whether the team meets the minimum requirements deemed by the Agency to be critical to successful capital investing. In making this determination, the Agency will consider, among other things, the general business reputation of the owners and managers of the Applicant. Only those Applicants considered to have a management team qualified for venture capital investing will be further considered for selection as a RBIC. | ||||||
| 7:7:15.1.19.2.11.5.67.4 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | E | § 4290.370 Evaluation criteria. | RBS | [69 FR 32204, June 8, 2004, as amended at 85 FR 16523, Mar. 24, 2020] | Of those Applicants whose management team is considered qualified for venture capital investing and who have submitted an eligible and complete application, the Administrator of RBS and the Administrator on behalf of SBA, in their sole discretion, will evaluate and select an Applicant for participation in the RBIC program by considering the following criteria: (a) Whether the Applicant's management team has the knowledge, experience, and capability necessary to manage a sound, economically viable RBIC and to comply with the Act; (b) The quality of the Applicant's comprehensive business plan in terms of meeting the objectives of the RBIC program; (c) The likelihood that the Applicant will achieve the goals described in its comprehensive business plan; (d) The strength and likelihood for success of the Applicant's operations and investment strategies, including whether the Applicant has projected adequate profitability and financial soundness; (e) Whether the Applicant will be able to operate soundly and profitably over the long term; (f) Whether the Applicant will be able to operate actively in its identified Rural Areas in accordance with its business plan; (g) The need for Developmental Capital investments in the Rural Areas in which the Applicant intends to invest; (h) The extent to which the Applicant will concentrate its activities on serving Smaller Enterprises located in the Rural Area in which it intends to invest, including the ratio of resources that it proposes to invest in such Enterprises as compared to other Enterprises; (i) The Applicant's demonstrated understanding of the markets in the Rural Areas in which it intends to focus its activities; (j) The likelihood that and the time frame within which the Applicant will be able to raise the Regulatory Capital it proposes to raise for its investments; (k) The strength of the Applicant's proposal to provide Operational Assistance to Smaller Enterprises in which it plans to invest; (l) The extent to which the activities proposed by the Applica… | |||||
| 7:7:15.1.19.2.11.5.67.5 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | E | § 4290.380 Selection. | RBS | [69 FR 32204, June 8, 2004, as amended at 85 FR 16523, Mar. 24, 2020] | From among the Applicants that have submitted eligible and complete applications, the Administrator of RBS and the Administrator on behalf of SBA, in their sole discretion, will select some, all, or none of such Applicants to participate in the RBIC program. Selection will entitle the Applicant to proceed with obtaining a license as a RBIC but only if the Applicant also meets the conditions set forth in § 4290.390. | |||||
| 7:7:15.1.19.2.11.5.67.6 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | E | § 4290.390 Licensing as a RBIC. | RBS | [69 FR 32204, June 8, 2004, as amended at 77 FR 4885, Feb. 1, 2012; 85 FR 16523, Mar. 24, 2020] | (a) Eligibility criteria for licensing as a RBIC. Each selected Applicant must meet the following conditions before it is eligible to be licensed as a RBIC: (1) Raise the specific amount of Regulatory Capital that the Applicant had projected in its application that it would raise (see § 4290.210 for additional information). (2) Raise $500,000 in Leverageable Capital as required by § 4290.210; (3) Complete and submit to the Agency all legal and other documentation concerning the RBIC, including but not limited to its Articles and updated financial information concerning the RBIC in order to qualify for a Leverage commitment; and (4) Enter into a Participation Agreement with the Agency. (b) Licensing as a RBIC. If the selected Applicant has satisfactorily met all the conditions specified in paragraph (a) of this section, as determined within the sole discretion of the Agency, then the Administrator of RBS and the Administrator on behalf of SBA will license the Applicant as a RBIC. (c) Failure to meet eligibility criteria for licensing. Each selected Applicant that does not meet the eligibility criteria for licensing described in paragraph (a) of this section, within a time period specified by the Agency, will not be licensed as a RBIC. Failure to meet any of those conditions, including but not limited to failure to raise the projected Regulatory Capital within the required time period, will cause the Applicant's selection to lapse. The Agency will not restore the selection of such an Applicant after the expiration of that time period. After the expiration of that time period, an Applicant that is not licensed as a RBIC must cease to represent itself as a participant or potential participant in the RBIC program. (d) Effect of a RBIC license. The Participation Agreement executed by the Agency with each Applicant licensed as a RBIC will include the following: (1) Approval to operate as a RBIC under the Act; (2) A commitment of Leverage; and (3) An Operational Assistance grant award. | |||||
| 7:7:15.1.19.2.11.6.67.1 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | F | Subpart F—Changes in Ownership, Structure, or Control | § 4290.400 Changes in ownership of 10 percent or more of RBIC but no change of Control. | RBS | You must obtain the Agency's prior written approval for any proposed transfer or issuance of ownership interests that results in the ownership (beneficial or of record) by any Person, or group of Persons acting in concert, of at least 10 percent of any class of your stock, partnership capital or membership interests. | |||||
| 7:7:15.1.19.2.11.6.67.2 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | F | Subpart F—Changes in Ownership, Structure, or Control | § 4290.410 Changes in Control of RBIC (through change in ownership or otherwise). | RBS | You must obtain the Agency's prior written approval for any proposed transaction or event that results in Control by any Person(s) not previously approved by the Agency. | |||||
| 7:7:15.1.19.2.11.6.67.3 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | F | Subpart F—Changes in Ownership, Structure, or Control | § 4290.420 Prohibition on exercise of ownership or Control rights in RBIC before approval. | RBS | Without the Agency's prior written approval, no change of ownership or Control may take effect and no officer, director, employee or other Person acting on your behalf shall: (a) Register on your books any transfer of ownership interest to the proposed new owner(s); (b) Permit the proposed new owner(s) to exercise voting rights with respect to such ownership interest (including directly or indirectly procuring or voting any proxy, consent or authorization as to such voting rights at any meeting of shareholders, partners or members); (c) Permit the proposed new owner(s) to participate in any manner in the conduct of your affairs (including exercising control over your books, records, funds or other assets; participating directly or indirectly in any disposition thereof; or serving as an officer, director, partner, manager, employee or agent); or (d) Allow ownership or Control to pass to another Person. | |||||
| 7:7:15.1.19.2.11.6.67.4 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | F | Subpart F—Changes in Ownership, Structure, or Control | § 4290.430 Notification of transactions that may change ownership or Control. | RBS | You must promptly notify the Agency as soon as you have knowledge of transactions or events that may result in a transfer of Control or ownership of at least 10 percent of your Regulatory Capital. If the effect of a particular transaction or event is unclear, you must report all pertinent facts to the Agency. | |||||
| 7:7:15.1.19.2.11.6.67.5 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | F | Subpart F—Changes in Ownership, Structure, or Control | § 4290.440 Standards governing prior approval for a proposed transfer of Control. | RBS | The Agency's approval of a proposed transfer of Control is contingent upon full disclosure of the real parties in interest, the source of funds for the new owners' interest, and other data requested by the Agency. As a condition of approving a proposed transfer of control, the Agency may: (a) Require an increase in your Regulatory Capital; (b) Require the new owners or the transferee's Control Person(s) to assume, in writing, personal liability for your Leverage, effective only in the event of their direct or indirect participation in any transfer of Control not approved by the Agency; or (c) Require compliance with any other conditions set by the Agency, including compliance with the requirements for minimum capital and management-ownership diversity in effect at such time for new RBICs. | |||||
| 7:7:15.1.19.2.11.6.67.6 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | F | Subpart F—Changes in Ownership, Structure, or Control | § 4290.450 Notification of pledge of RBIC's shares. | RBS | (a) You must notify the Agency in writing, within 30 calendar days, of the terms of any transaction in which: (1) Any Person, or group of Persons acting in concert, pledges shares of your stock (or equivalent ownership interests) as collateral for indebtedness; and (2) The shares pledged constitute at least 10 percent of your Regulatory Capital. (b) If the transaction creates a change of ownership or Control, you must comply with § 4290.400 or § 4290.410, as appropriate. | |||||
| 7:7:15.1.19.2.11.6.68.7 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | F | Subpart F—Changes in Ownership, Structure, or Control | § 4290.460 Restrictions on Common Control or ownership of two (or more) RBICs. | RBS | Without the Agency's prior written approval, you must not have an officer, director, manager, Control Person, or owner (with a direct or indirect ownership interest of at least 10 percent) who is also: (a) An officer, director, manager, Control Person, or owner (with a direct or indirect ownership interest of at least 10 percent) of another RBIC; or (b) An officer or director of any Person that directly or indirectly controls, or is controlled by, or is under Common Control with, another RBIC. | |||||
| 7:7:15.1.19.2.11.6.69.8 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | F | Subpart F—Changes in Ownership, Structure, or Control | § 4290.470 Prior approval of merger, consolidation, or reorganization of RBIC. | RBS | You may not merge, consolidate, change form of organization (corporation, limited liability company, or limited partnership) or reorganize without the Agency's prior written approval. Any such merger, consolidation, or change of form is subject to § 4290.440. | |||||
| 7:7:15.1.19.2.11.6.69.9 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | F | Subpart F—Changes in Ownership, Structure, or Control | § 4290.480 Prior approval of changes to RBIC's business plan. | RBS | Without the Agency's prior written approval, no change in your business plan, upon which you were selected and licensed as a RBIC, may take effect. | |||||
| 7:7:15.1.19.2.11.7.70.1 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | G | Subpart G—Managing the Operations of a RBIC | § 4290.500 Lawful operations under the Act. | RBS | You must engage only in the activities permitted by the Act and in no other activities. | |||||
| 7:7:15.1.19.2.11.7.70.2 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | G | Subpart G—Managing the Operations of a RBIC | § 4290.502 Representations to the public. | RBS | You may not represent or imply to anyone that the Agency, the U.S. Government, or any of its agencies or officers has approved any ownership interests you have issued, obligations you have incurred, or Financings you have made. You must include a statement to this effect in any solicitation provided to investors. Example: You may not represent or imply that “USDA stands behind the RBIC” or that “Your capital is safe because the Agency's experts review proposed investments to make sure they are safe for the RBIC.” | |||||
| 7:7:15.1.19.2.11.7.70.3 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | G | Subpart G—Managing the Operations of a RBIC | § 4290.503 RBIC's adoption of an approved valuation policy. | RBS | [69 FR 32204, June 8, 2004, as amended at 76 FR 80222, Dec. 23, 2011] | (a) Valuation guidelines. You must prepare, document and report the valuations of your Loans and Investments in accordance with the Valuation Guidelines for SBICs issued by SBA. These guidelines may be obtained from SBA's Investment Division or at http://www.sba.gov/sites/default/files/files/inv_valuation.pdf. (b) The Agency's approval of valuation policy. You must have a written valuation policy approved by the Agency for use in determining the value of your Loans and Investments. You must either: (1) Adopt without change the model valuation policy set forth in section III of the Valuation Guidelines for SBICs; or (2) Obtain the Agency's prior written approval of an alternative valuation policy. (c) Responsibility for valuations. Your board of directors, managing member(s), or general partner(s) will be solely responsible for adopting your valuation policy and for using it to prepare valuations of your Loans and Investments for submission to the Agency. If the Agency reasonably believes that your valuations, individually or in the aggregate, are materially misstated, it reserves the right to require you to engage, at your expense, an independent third party acceptable to the Agency to substantiate the valuations. (d) Frequency of valuations. (1) You must value your Loans and Investments at the end of the second quarter of your fiscal year, and again at the end of your fiscal year. (2) On a case-by-case basis, the Agency may require you to perform valuations more frequently. (3) You must report material adverse changes in valuations at least quarterly, within 30 days following the close of the quarter. (e) Review of valuations by independent public accountant. (1) For valuations performed as of the end of your fiscal year, your independent public accountant must review your valuation procedures and the implementation of such procedures, including adequacy of documentation. (2) The independent public accountant's report on your audited annual financial statements (SBA Form 468 or other USDA-app… | ||||
| 7:7:15.1.19.2.11.7.70.4 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | G | Subpart G—Managing the Operations of a RBIC | § 4290.504 Equipment of USDA or SBA officials. | RBS | [69 FR 32204, June 8, 2004, as amended at 76 FR 80222, Dec. 23, 2011] | (a) Computer capability. You must have a personal computer with access to the Internet and be able to use this equipment to prepare reports and transmit such reports to the Agency. In addition, you must have the capability to send and receive electronic mail. (b) Facsimile capability. You must be able to receive facsimile messages 24 hours per day at your primary office. (c) Accessible office. You must maintain an office that is convenient to the public and is open for business during normal working hours. | ||||
| 7:7:15.1.19.2.11.7.70.5 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | G | Subpart G—Managing the Operations of a RBIC | § 4290.506 Safeguarding the RBIC's assets/Internal controls. | RBS | You must adopt a plan to safeguard your assets and monitor the reliability of your financial data, personnel, Portfolio, funds and equipment. You must provide your bank and custodian with a certified copy of your resolution or other formal document describing your control procedures. | |||||
| 7:7:15.1.19.2.11.7.70.6 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | G | Subpart G—Managing the Operations of a RBIC | § 4290.507 Violations based on false filings and nonperformance of agreements with the Agency or SBA. | RBS | The following shall constitute a violation of this part: (a) Nonperformance. Failure to perform any of the requirements of any Debenture or of any written agreement with the Agency or SBA. (b) False statement. In any document submitted to the Agency or SBA: (1) Any false statement knowingly made; or (2) Any misrepresentation of a material fact; or (3) Any failure to state a material fact. (4) A material fact is any fact that is necessary to make a statement not misleading in light of the circumstances under which the statement was made. | |||||
| 7:7:15.1.19.2.11.7.70.7 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | G | Subpart G—Managing the Operations of a RBIC | § 4290.508 Compliance with non-discrimination laws and regulations applicable to federally-assisted programs. | RBS | In conducting your operations and providing Assistance to your Portfolio Concerns, you must comply with Title VI of the Civil Rights Act of 1964 (42 U.S.C. 2000d-1 et seq. ), the Age Discrimination Act of 1975 (Pub. L. 94-135, Title III), and Title V of the Equal Credit Opportunity Act (15 U.S.C. 1691 et seq. ) and the following regulations promulgated by USDA to implement and enforce such laws: 7 CFR part 15. | |||||
| 7:7:15.1.19.2.11.7.70.8 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | G | Subpart G—Managing the Operations of a RBIC | § 4290.509 Employment of USDA or SBA officials. | RBS | [69 FR 32204, June 8, 2004, as amended at 76 FR 80222, Dec. 23, 2011] | (a) Without the Agency's prior written approval, for a period of two years after the date of your most recent issuance of Leverage or after the receipt of any assistance as defined in paragraph (b) of this section, whichever is later, you are not permitted to employ, offer employment to, or retain for professional services, any person who: (1) Served as an officer, attorney, agent, or employee of SBA or USDA within one year before such date; and (2) In that capacity, occupied a position or engaged in activities which, in SBA's or the Agency's determination, involved discretion with respect to the issuing of Leverage or the granting of such assistance. (b) For purposes of this section, “assistance” means financial, contractual, grant, managerial, or other aid, including licensing, certifications, and other eligibility determinations made by USDA or SBA, and any express decision to compromise or defer possible litigation or other adverse action. | ||||
| 7:7:15.1.19.2.11.7.71.10 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | G | Subpart G—Managing the Operations of a RBIC | § 4290.520 Management Expenses of a RBIC. | RBS | The Agency must approve your initial Management Expenses and any increases in your Management Expenses. (a) Definition of Management Expenses. Management Expenses include: (1) Salaries; (2) Office expenses; (3) Travel; (4) Business development, including finders' fees; (5) Office and equipment rental; (6) Bookkeeping; and (7) Expenses related to developing, investigating and monitoring investments. (b) Management Expenses do not include services provided by specialized outside consultants, outside lawyers and independent public accountants, if they perform services not generally performed by a capital company. | |||||
| 7:7:15.1.19.2.11.7.71.9 | 7 | Agriculture | XLII | 4290 | PART 4290—RURAL BUSINESS INVESTMENT COMPANY (“RBIC”) PROGRAM | G | Subpart G—Managing the Operations of a RBIC | § 4290.510 Approval of RBIC's Investment Adviser/Manager. | RBS | (a) General. You may employ an Investment Adviser/Manager who will be subject to the supervision of your board of directors, managing member(s), or general partner(s). If you have Leverage or plan to seek Leverage, you must obtain the Agency's prior written approval of the management contract. Approval of an Investment Adviser/Manager for one RBIC does not indicate approval of that manager for any other RBIC. (b) Management contract. The contract must: (1) Specify the services the Investment Adviser/Manager will render to you and to your Portfolio Concerns; and (2) Indicate the basis for computing Management Expenses. (c) Material change to approved management contract. Any proposed material change must be approved by both you and the Agency in advance. If you are uncertain whether the change is material, submit the proposed revision to the Agency. |
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