U.S. Code of Federal Regulations

Regulations most recently checked for updates: Dec 07, 2022

§ 4290.3000 - Non-leveraged RBICs - General.

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.

§§ 4290.3001-4290.3002 - §[Reserved]

§ 4290.3003 - Responsibilities for implementing Non-leveraged RBICs.

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.

[77 FR 4885, Feb. 1, 2012]

§ 4290.3004 - [Reserved]

§ 4290.3005 - Qualifications for the Non-leveraged RBIC Program.

(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.

§§ 4290.3006-4290.3009 - §[Reserved]

§ 4290.3010 - Application and Approval Process for RBIC licensing without Leverage.

(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.

[76 FR 80225, Dec. 23, 2011, as amended at 77 FR 4885, Feb. 1, 2012]

§§ 4290.3011-4290.3014 - §[Reserved]

§ 4290.3015 - Evaluation and selection of Non-leveraged RBICs.

(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.

§§ 4290.3016-4290.3019 - §[Reserved]

§ 4290.3020 - Changes in Ownership, Structure, or Control.

Paragraph (b) in § 4290.440 does not apply to Non-leveraged RBICs.

§§ 4290.3021-4290.3024 - §[Reserved]

§ 4290.3025 - Managing the Operations of a RBIC.

(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.

§§ 4290.3026-4290.3029 - §[Reserved]

§ 4290.3030 - Financing of Enterprises by RBICs.

(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.

§§ 4290.3031-4290.3034 - §[Reserved]

§ 4290.3035 - Recordkeeping, Reporting, and Examination Requirements for RBICs.

Except for § 4290.600(d), Subpart H, Recordkeeping, Reporting, and Examination Requirements for RBICs, of this part applies to Non-leveraged RBICs.

§§ 4290.3036-4290.3039 - §[Reserved]

§ 4290.3040 - Financial Assistance for RBICs.

Subpart J, Financial Assistance for RBICs (Leveraged), of this part does not apply to Non-leveraged RBICs.

§ 4290.3041 - Events of default and the Agency's remedies for RBIC's noncompliance with terms of licensure.

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.

[76 FR 80225, Dec. 23, 2011, as amended at 77 FR 4885, Feb. 1, 2012]

§§ 4290.3042-4290.3044 - §[Reserved]

§ 4290.3045 - Computation of RBIC's Capital Impairment.

The provisions specified in §§ 4290.1830 and 4290.1840 do not apply to Non-leveraged RBICs.

§§ 4290.3046-4290.3049 - §[Reserved]

§ 4290.3050 - Operational Assistance Grants for RBICs.

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.

§§ 4290.3051-4290.3099 - §[Reserved]