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USDA/RBS RIN: 0570-AA49 Publication ID: Fall 2003 
Title: ●Tangible Net Equity 
Abstract: This proposed rulemaking amends 7 CFR parts 4279 and 1980 by modifying the equity requirement considered in the underwriting of business and industry loans by guaranteed lenders and/or the Rural Business-Cooperative Service as follows: - In the case of direct or guaranteed refinancing loans only, apply an adjusted equity requirement, where tangible net equity is modified by (i) including asset value to the extent of the difference between the depreciated book value of real property assets and current market value supported by an independent appraisal, or the original loan amount, whichever is less and (ii) family capital subordinated debt, where the subordinated debt is held by and represents a cash infusion to the business by the owner or close family member, and the repayment terms are such that repayment is not ahead of Agency direct and/or guaranteed loan exposure. - Increase the equity requirement for energy loans to 40 percent for existing businesses (in existence for three years) and 50 percent for new businesses. Construction financing is not an eligible energy loan purpose; energy project that produce biomass fuel, biogas, fuel cells or batteries as an output must have completed two operating cycles at design performance levels acceptable to the Agency. 
Agency: Department of Agriculture(USDA)  Priority: Other Significant 
RIN Status: First time published in the Unified Agenda Agenda Stage of Rulemaking: Proposed Rule Stage 
Major: Undetermined  Unfunded Mandates: No 
CFR Citation: 7 CFR 1980    7 CFR 4279   
Legal Authority: 7 USC 1932(a)   
Legal Deadline:  None
Timetable:
Action Date FR Cite
NPRM  11/00/2003    
NPRM Comment Period End  01/00/2004    
Regulatory Flexibility Analysis Required: No  Government Levels Affected: None 
Small Entities Affected: No  Federalism: No 
Included in the Regulatory Plan: No 
Agency Contact:
William F. Hagy
Deputy Administrator, Business Programs
Department of Agriculture
Rural Business-Cooperative Service
Room 5050/Stop 3220, Room 5811/Stop 3220, 1400 Independence Avenue SW,
Washington, DC 20250
Phone:202 720-7287
Fax:202 690-0097
Email: bill.hagy@wdc.usda.gov