[Federal Register Volume 59, Number 68 (Friday, April 8, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-8348]
Federal Register / Vol. 59, No. 68 / Friday, April 8, 1994 /
[[Page Unknown]]
[Federal Register: April 8, 1994]
VOL. 59, NO. 68
Friday, April 8, 1994
DEPARTMENT OF AGRICULTURE
Farmers Home Administration
7 CFR Parts 1941, 1943, and 1945
RIN 0575-AB72
Revisions to the Direct Emergency Loan Instructions To Implement
Administrative Decisions Pertaining to the Applicant Loan Eligibility
Calculation, Appraisals, and Crop Insurance
AGENCY: Farmers Home Administration, USDA.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Farmers Home Administration (FmHA) amends its emergency
loan (EM) regulations to revise the applicant eligibility calculation
and appraisal requirements and to require crop insurance. The Agency
also amends its Operating (OL), Farm Ownership (FO) and Soil and Water
(SW) regulations to revise appraisal requirements. This action is
necessary to ease the EM eligibility requirements, to expedite EM, OL,
FO, and SW application processing time, and to reduce losses to family-
size farmers and the Government. The intended effect is to provide
assistance to a greater number of farmers affected by major disasters
in a timely manner.
EFFECTIVE DATE: April 8, 1994.
FOR FURTHER INFORMATION CONTACT: David R. Smith, Senior Loan Officer,
Farmer Programs Loan Making Division, Farmers Home Administration,
USDA, room 5428, South Building, 14th Street and Independence Avenue
SW., Washington, DC 20250, telephone (202) 720-5114.
SUPPLEMENTARY INFORMATION:
Classification
We are issuing this final rule in conformance with Executive Order
12866, and the Office of Management and Budget (OMB) has determined
that it is a ``significant regulatory action.'' Based on information
compiled by the Department, OMB has determined that this final rule:
(1) Would alter the budgetary impact of entitlements, grants, user
fees, or loan programs or rights and obligations of recipients thereof;
and (2) is a significant public policy issue as related to the
direction of the EM loan program.
Intergovernmental Consultation
1. For the reasons set forth in the final rule related to Notice, 7
CFR part 3015, subpart V (48 FR 29115, June 24, 1983) and FmHA
Instruction 1940-J, ``Intergovernmental Review of Farmers Home
Administration Programs and Activities'' (December 23, 1983), Farm
Ownership Loans, Farm Operating Loans, and Emergency Loans are excluded
from the scope of Executive Order 12372, which requires
intergovernmental consultation with State and local officials.
2. The Soil and Water Loan Program is subject to the provisions of
Executive Order 12372 and FmHA Instruction 1940-J.
Programs Affected
These changes affect the following FmHA program as listed in the
Catalog of Federal Domestic Assistance:
10.404--Emergency Loans
10.406--Farm Ownership Loans
10.407--Farm Ownership Loans
10.416--Soil and Water Loans
Environmental Impact Statement
This document has been reviewed in accordance with 7 CFR part 1940,
subpart G, ``Environmental Program.'' It is the determination of FmHA
that the final action does not constitute a major Federal action
significantly affecting the quality of the human environment, and in
accordance with the National Environmental Policy Act of 1969, Public
Law 91-190, an Environmental Impact Statement is not required.
Civil Justice Reform
This document has been reviewed in accordance with Executive Order
(E.O.) 12778. It is the determination of FmHA that this action does not
unduly burden the Federal Court System in that it meets all applicable
standards provided in section 2 of the E.O.
Paperwork Reduction Act
The information collection requirements contained in these
regulations have been approved by the Office of Management and Budget
(OMB) under the provisions of 44 U.S.C. Chapter 35 and have been
assigned OMB control numbers 0575-0141, 0575-0085, 0575-0083, and 0575-
0090, in accordance with the Paperwork Reduction Act of 1980 (44 U.S.C.
3507). This final rule does not revise or impose any new information
collection or recordkeeping requirements from those approved by OMB.
Discussion of Comments and Final Rule
The Agency published a proposed rule in the Federal Register (59 FR
5737-40) on February 8, 1994, which provided for a 15-day comment
period ending on February 23, 1994. At that time, EM loan regulations
stated that all financial disaster assistance/compensation would be
considered in determining the applicant's eligibility for EM assistance
and again in calculating the maximum amount of loss loan entitlement.
Once eligibility was established, then all single enterprises showing a
production loss would be considered in the calculation to determine the
maximum loss loan entitlement.
The regulations also required two complete real estate appraisals
to establish the two required asset values, the value on the day before
the Governor's request and the value one year and one day before such a
request. Section 324(d) of the Consolidated Farm and Rural Development
Act (7 U.S.C. 1921 et. seq.) (CONACT) states in part, that farm
security, including land, livestock, and equipment, for EM loans will
be valued based on the higher of the value of the assets on the day
before the Governor requests assistance and the value of the assets one
year before such day. While the two values must be considered, the
values do not have to be based on two complete appraisals.
The February 8, 1994, proposed rule included a revision to the EM
loan eligibility calculation to not consider disaster related
assistance/compensation in the eligibility calculation. This change
would allow the Agency to assist more family-size farmers. In addition,
it was proposed to allow for the use of a second abbreviated appraisal
when the first appraisal (to establish the asset value for one day
before the Governor's request) reflected adequate security for the
loan. The proposed rule also required, instead of encouraged, the
applicant to carry multi-peril crop insurance on next year's crops as a
condition of receiving an EM production loss loan.
In response to the proposed rule, 6 comments were received. Four
respondents made the following general comments. The timing of the
final rule will come too late to help most borrowers, as deadlines for
filing applications will expire before the regulations become
effective. The Agency should immediately adopt the regulations on an
interim basis. The period for filing applications should be extended.
Applicants rejected under the prior eligibility calculation should be
reconsidered under the revised calculation, and FmHA must widely
publicize the proposed rule changes to reach farmers that did not
apply, including non-FmHA borrowers.
In response, the Agency agrees that the regulation changes would
assist more applicants, had they been implemented at an earlier date.
Interim regulations must go through the same clearance process as final
regulations. Interim regulations, therefore, could not be published any
sooner than this final rule, so the comment is not being adopted. The
8-month timeframe from the date of the disaster designation for filing
of EM applications is statutory; thus, any extension of this timeframe
would require Congressional action. The Agency is making every effort
to assist those applicants who would benefit from the new eligibility
calculation. In the last several months, the Agency has worked closely
with FmHA State offices in the flood and drought-affected States to
assure that potential applicants are aware of the EM program. FmHA
field offices have encouraged applicants to apply prior to the 8-month
deadline and have held EM applications in abeyance, where
administratively possible, until the revised EM calculation changes are
implemented.
Two respondents made further comments regarding the proposed
revisions to the EM appraisal requirements, stating that the present
appraisal process and proposed rule were confusing. The Agency agrees
and has attempted to clarify the process in the final rule.
Three respondents recommended that the EM collateral value be based
on a current market value appraisal, that an abbreviated appraisal does
not meet current appraisal standards under the Uniform Standards of
Professional Appraisal Practices (USPAP), and that the first value to
be established for chattels be the same as for real estate, one day
before the Governor's disaster designation request. The Agency agrees
in part with the current market value approach and adopts this in
principle. A real estate appraisal reflecting the Recommended Market
Value (RMV) and meeting USPAP standards will be used as a bench-mark in
arriving at the two required asset values. The two statements of value
established by the County Supervisor need not meet USPAP appraisal
standards. The Agency has eliminated the reference to an abbreviated
appraisal in the final rule. The Agency does not adopt the
recommendation that the first value established for chattels represent
the value one day before the Governor's request. With respect to
chattels, generally, the value one year and one day before the
Governor's request will be the higher value ultimately chosen and
should be the first value established.
One respondent recommended that the County Supervisor establish the
two required values after receipt of a real estate appraisal. The
Agency adopts this recommendation in the final rule.
This final rule specifically amends Sec. 1941.25(a) of subpart A of
part 1941, Sec. 1943.25(c) of subpart A of part 1943, and
Sec. 1943.75(c) of subpart B of part 1943 to allow the use of
appraisals completed by State-certified general appraisers, providing
such appraisals meet the guidelines of the USPAP and have had an
acceptable desk review completed by an FmHA designated review
appraiser. If such an acceptable appraisal is provided by the borrower,
FmHA will not need to perform one. References to contract appraiser
qualifications have been updated accordingly to require the contractor/
appraiser to be State-certified general. These sections also are
changed to not require a new real estate appraisal if the latest
appraisal report is not over one year old, unless the approval official
requests a new appraisal, or unless significant changes in the market
value of the real estate have occurred in the area within the 1-year
period. These changes are intended to result in a more flexible
consistent, timely, and less costly loan making process. Emergency loan
applicants often also request other types of Farmer Programs loans, so
these changes will indirectly benefit disaster victims.
The Agency also amends Sec. 1945.163, as proposed, to no longer
consider disaster related assistance/compensation in determining
eligibility for EM loans. The section has been further clarified to
refer to existing provisions for considering costs not incurred in
determining eligibility. Such costs will be subtracted from the amount
of actual production losses.
The Agency adopts as final the proposed changes to Sec. 1945.169
requiring applicants to purchase multi-peril crop insurance when
receiving EM loan assistance.
The Agency also amends Sec. 1945.175 by revising the requirement
for two complete real estate appraisals to establish the two required
asset values. The County Supervisor will establish the two required
values upon receipt of a real estate appraisal denoting the RMV. The
RMV will be used by the County Supervisor as a bench-mark in arriving
at a statement of value for each of the required dates. The use of
appraisals completed by State Certified General Appraisers is allowed
providing such appraisals meet the guidelines of the USPAP, and have
had an acceptable desk review completed by an FmHA designated review
appraiser. Changes proposed to Sec. 1945.175 concerning chattel
appraisals are adopted without change.
List of Subjects
7 CFR Part 1941
Crops, Livestock, Loan programs--agriculture, Rural areas, Youth.
7 CFR Part 1943
Credit, Loan programs--agriculture, Recreation, Water resources.
7 CFR Part 1945
Agriculture, Disaster assistance, Loan programs--agriculture.
Therefore, chapter XVIII, title 7, Code of Federal Regulations, is
amended as follows:
PART 1941--OPERATING LOANS
1. The authority citation for part 1941 continues to read as
follows:
Authority: 7 U.S.C. 1989; 5 U.S.C. 301; 7 CFR 2.23 and 2.70.
Subpart A--Operating Loan Policies, Procedures, and Authorizations
2. Section 1941.25 is amended by revising the introductory text of
paragraph (a) and paragraph (b) and adding new paragraphs (a)(5) and
(a)(6) to read as follows:
Sec. 1941.25 Appraisals.
(a) Except as provided in paragraph (a)(5) of this section, real
estate appraisals will be completed by an FmHA employee, or a
contractor authorized to make farm appraisals. Chattel and real estate
appraisals will be made on Forms FmHA 440-21, ``Appraisal of Chattel
Property,'' FmHA 1922-1, ``Appraisal Report--Farm Tract,'' and FmHA
1922-11, ``Appraisal for Mineral Rights,'' respectively, to determine
market value and borrower equity in the following instances:
* * * * *
(5) Other real estate appraisals completed by other State-certified
general appraisers may be used providing such appraisals meet the
ethics, competency, departure provisions, etc., and Sections I and II
of the Uniform Standards of Professional Appraisal Practices, and
contain a mineral rights appraisal as set out in paragraph (a) of this
section. Prior to acceptance, the appraisal must have an acceptable
desk review (technical) completed by an FmHA designated review
appraiser.
(6) A new real estate appraisal is not required if the latest
appraisal report available is not over 1 year old, unless the approval
official requests a new appraisal, or unless significant changes in the
market value of real estate have occurred in the area within the 1-year
period.
(b) Real estate appraiser qualifications. The contractor, when he/
she is not the appraiser, is responsible for substantiating the
appraiser's qualifications. The contractor will obtain FmHA's
concurrence that the appraiser has the necessary qualifications and
experience before the contractor will utilize the appraiser in any
appraisal work. The contractor/appraiser completing the report must be
State-certified general.
PART 1943--FARM OWNERSHIP, SOIL AND WATER AND RECREATION
3. The authority citation for part 1943 continues to read as
follows:
Authority: 7 U.S.C. 1989; 5 U.S.C. 301; 7 CFR 2.23 and 2.70.
Subpart A--Direct Farm Ownership Loan Policies, Procedures, and
Authorizations
4. Section 1943.25 is amended by redesignating current paragraphs
(c)(2) through (c)(4) as paragraphs (c)(4) through (c)(6) respectively,
revising paragraph (c)(1) and newly redesignated paragraph (c)(4), and
adding new paragraphs (c)(2) and (c)(3) to read as follows:
Sec. 1943.25 Options, planning and appraisals.
* * * * *
(c) Appraisals. (1) Except as provided in paragraph (c)(2) of this
section, real estate appraisals will be completed on Forms FmHA 1922-1
or FmHA 1922-8, ``Uniform Residential Appraisal Report,'' for farm real
estate or residential farm real estate, respectively, by a designated
FmHA real property appraiser, or FmHA State-certified general contract
real property appraiser. Appraisals are necessary when real estate is
taken as primary security, as defined in Sec. 1943.4 of this subpart,
and when loans are serviced in accordance with subpart S of part 1951
of this chapter. Real estate appraisals are not required when real
estate is taken as additional security, as defined in Sec. 1943.4 of
this subpart. However, the County Supervisor will document in the
running record the estimated market value of the additional security
and the basis for the estimate.
(2) Other real estate appraisals completed by other State-certified
general appraisers may be used providing such appraisals meet the
ethics, competency, departure provisions, etc., and sections I and II
of the Uniform Standards of Professional Appraisal Practices, and
contain a mineral rights appraisal as set out in paragraph (c)(4) of
this section. Prior to acceptance, the appraisal must have an
acceptable desk review (technical) completed by an FmHA designated
review appraiser.
(3) A new real estate appraisal is not required if the latest
appraisal report available is not over 1 year old, unless the approval
official requests a new appraisal, or unless significant changes in the
market value of real estate have occurred in the area within the 1-year
period.
(4) Real estate appraisals will be completed as provided in subpart
E of part 1922 of this chapter. The rights to mining products, gravel,
oil, gas, coal, or other minerals will be considered a portion of the
security for Farmer Programs loans and will be specifically included as
a part of the appraised value of the real estate securing the loans
using Form FmHA 1922-11, ``Appraisal for Mineral Rights.''
* * * * *
Subpart B--Direct Soil and Water Loan Policies, Procedures and
Authorizations
5. Section 1943.75 is amended by redesignating current paragraphs
(c)(2) through (c)(4) as paragraphs (c)(4) through (c)(6) respectively,
revising paragraphs (c)(1) and newly redesignated paragraph (c)(4), and
adding new paragraphs (c)(2) and (c)(3) to read as follows:
Sec. 1943.75 Options, planning, and appraisals.
* * * * *
(c) Appraisals. (1) Except as provided in paragraph (c)(2) of this
section, real estate appraisals will be completed on Forms FmHA 1922-1
or FmHA 1922-8, ``Uniform Residential Appraisal Report,'' for farm real
estate or residential farm real estate, respectively, by a designated
FmHA real property appraiser, or FmHA State-certified general contract
real property appraiser. Appraisals are necessary when real estate is
taken as primary security, as defined in Sec. 1943.4 of this subpart,
and when loans are serviced in accordance with subpart S of part 1951
of this chapter. Real estate appraisals are not required when real
estate is taken as additional security, as defined in Sec. 1943.4 of
this subpart. However, the County Supervisor will document in the
running record the estimated market value of the additional security
and the basis for the estimate.
(2) Other real estate appraisals completed by other State-certified
general appraisers may be used providing such appraisals meet the
ethics, competency, departure provisions, etc., and sections I and II
of the Uniform Standards of Professional Appraisal Practices, and
contain a mineral rights appraisal as set out in paragraph (c)(4) of
this section. Prior to acceptance, the appraisal must have an
acceptable desk review (technical) completed by an FmHA designated
review appraiser.
(3) A new real estate appraisal is not required if the latest
appraisal report available is not over 1 year old, unless the approval
official requests a new appraisal, or unless significant changes in the
market value of real estate have occurred in the area within the 1-year
period.
(4) Real estate appraisals will be completed as provided in subpart
E of part 1922 of this chapter. The rights to mining products, gravel,
oil, gas, coal, or other minerals will be considered a portion of the
security for Farmer Programs loans and will be specifically included as
a part of the appraised value of the real estate securing the loans
using Form FmHA 1922-11, ``Appraisal for Mineral Rights.''
* * * * *
PART 1945--EMERGENCY
6. The authority citation for part 1945 continues to read as
follows:
Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR
2.23 and 2.70.
Subpart D--Emergency Loan Policies, Procedures, and Authorizations
7. Section 1945.163 is amended by revising paragraphs (a)(2)(v),
(a)(2)(xx) and (d) to read as follows:
Sec. 1945.163 Determining qualifying losses, eligibility for EM
loan(s) and the maximum amount of each.
* * * * *
(a) * * *
(2) * * *
(v) In determining eligibility, the amount of actual production
loss will be calculated for the single enterprise, which is a basic
part of the farming operation (see Sec. 1945.154(a) of this subpart),
by subtracting any costs not incurred as explained in paragraphs
(a)(2)(xii) and (a)(2)(xiv) of this section from the gross dollar
amount of production losses for that enterprise as determined in
paragraph (a)(2)(iv) of this section.
* * * * *
(xx) When an applicant's farming operation(s) is conducted in a
designated county(ies) and nondesignated county(ies), eligibility will
be established based on losses to a single enterprise as explained in
paragraph (a)(2)(v) of this section, which constitutes a basic part of
the total farming operation, without regard to whether the single
enterprise is located in the designated county. The disaster year's
actual yields, both in the designated and nondesignated county(ies)
only, will be used to determine losses. Costs not incurred (if
applicable) will be subtracted as explained in paragraphs (a)(2)(xii)
and (a)(2)(xiv) of this section. The amount of the production loss
loan, however, will be limited to the production loss sustained in the
designated county(ies) only minus any compensatory payments received or
to be received for that portion of the farming operation located in the
designated county(ies).
* * * * *
(d) Compensation for losses. All financial assistance provided
through any disaster relief program and all compensation for disaster
losses received from any source (i.e., crop insurance indemnity
payments, ASCS disaster program payments, etc.) by an EM loan applicant
will reduce the applicant's loss by the amount of such compensation.
All such compensation will be considered in determining the maximum
amount of loss loan entitlement. Disaster related assistance/
compensation will not be considered in the EM eligibility calculation.
The amount of any disaster program benefits received from ASCS,
including the Emergency Feed Assistance Program (EFAP), Emergency
Conservation Program (ECP), and Disaster Program payments will be
considered as compensation for losses. (ASCS Deficiency Payments are
not to be considered as compensation).
* * * * *
8. Section 1945.169 is amended by revising paragraph (j) to read as
follows:
Sec. 1945.169 Security.
* * * * *
(j) Crop insurance. All recipients of EM loans must agree, as a
condition of the loan, to obtain multi-peril crop insurance under the
Federal Crop Insurance Act for the coming year's crop. When one of the
conditions of paragraph (j)(1) of this section exists, the approval
official will document in the applicant's file the basis for not
requiring crop insurance.
(1) Applicants will not be required to obtain crop insurance when
any one of the following conditions exists:
(i) Crop insurance is not available for the crop, i.e., there is no
open season and no opportunity to acquire crop insurance.
(ii) The financial projections on which the loan approval is based
indicate that the premium cost of the required insurance would prevent
the applicant from projecting a feasible plan, and thus disqualify the
applicant for loan assistance.
(2) When crops are the primary source of repayment for EM loans,
FmHA will require an ``Assignment of Indemnity'' on the borrower's crop
insurance policy(ies).
(3) When EM loans are based on physical losses only, crop insurance
will only be required when loan funds will be used for annual
production expenses. In such cases, the same conditions will apply as
stated in paragraph (j)(1) of this section.
(4) When the payment of crop insurance premiums is not required
until after harvest, the premiums may be paid by releasing insured
crop(s) sale proceeds, notwithstanding the limits of Secs. 1962.17 and
1962.29(b) of subpart A of part 1962 of this chapter. If the borrower's
crop losses are sufficient to warrant an indemnity payment, the premium
due will be deducted by the insurance carrier from such payment. The
FmHA County Office will maintain a record on Form FmHA 1905-12,
``Monthly Expirations,'' of the dates which each borrower's crop
insurance premium(s) is due. This is in accordance with FmHA
Instruction 1905-A, a copy of which is available in any FmHA office.
(5) When an applicant purchases the necessary crop insurance as a
condition to receiving an EM loan and, after the EM loan is closed,
allows the policy(ies) to lapse or be cancelled before completion of
the production year, the borrower will become immediately liable for
full repayment of all principal and interest outstanding on any EM loan
made on the condition of obtaining crop insurance. The loan approval
official will insert this requirement in item 44 of Form FmHA 1940-1,
``Request for Obligation of Funds,'' which is signed by the applicant
and the FmHA loan approval official.
* * * * *
9. Section 1945.175 is amended by revising paragraph (c) to read as
follows:
Sec. 1945.175 Options, planning and appraisals.
* * * * *
(c) Appraisals. (1) Except as provided in paragraph (c)(1)(i) of
this section, real estate appraisals will be completed on Forms FmHA
1922-1 or FmHA 1922-8, ``Uniform Residential Appraisal Report,'' for
farm real estate or residential farm real estate, respectively, by a
designated FmHA real property appraiser, or FmHA State-certified
general contract real property appraiser. Appraisals are necessary when
real estate is taken as primary security, as defined in Sec. 1945.154
(a) of this subpart, for the EM loan or when loans are serviced in
accordance with subpart S of part 1951 of this chapter.
(i) Other real estate appraisals completed by other State-certified
general appraisers may be used providing such appraisals meet the
ethics, competency, departure provisions, etc., and sections I and II
of the Uniform Standards of Professional Appraisal Practices, and
contain a mineral rights appraisal as set out in paragraph (c)(1)(ii)
of this section. Prior to acceptance, the appraisal must have an
acceptable desk review (technical) completed by an FmHA designated
review appraiser.
(ii) The rights to mining products, gravel, oil, gas, coal, or
other minerals will be considered a portion of the security and will be
specifically included as a part of the appraised value of the real
estate securing the loans using Form FmHA 1922-11, ``Appraisal for
Mineral Rights.''
(iii) When FLB stock is to be used in establishing the recommended
market value (RMV) of the real estate being appraised, see
Sec. 1945.169 (n)(1) of this subpart.
(iv) A new real estate appraisal is not required if the latest
appraisal report available is not over 1 year old, unless the approval
official requests a new appraisal, or unless significant changes in the
market value of real estate have occurred in the area within the 1-year
period.
(v) Real estate appraisals are not required when real estate is
taken as additional security, as defined in Sec. 1945.154 (a) of this
subpart. However, the County Supervisor will document in the running
record the estimated market value of the additional security and the
basis for the estimate.
(2) The value of assets that secure EM loans associated with a
disaster having any portion of its incidence period occurring on or
after May 31, 1983 must be based on the higher of two values, all of
which must be part of the file. These values will show:
(i) The asset value on the day before a State Governor's Indian
Tribal Council's or an FmHA State Director's first EM designation
request, which is associated with the naming of one or more counties in
a State as a disaster area where eligible farmers may qualify for EM
loans; or
(ii) The asset value 1 year (365 days) before the date set in
paragraph (c)(2)(i) of this section.
(3) The County Supervisor will establish the two values as stated
in paragraph (c)(2) of this section upon receipt of a real estate
appraisal denoting the RMV on the day the property was visited and
inspected for appraisal purposes, as follows:
(i) A statement of value will be completed for each date,
reflecting the basis for any variations from the RMV denoted in the
real estate appraisal.
(ii) Parts 2 and 3 of Form FmHA 1922-1 may be used as a guide to
reflect any variation from the established RMV and any additional
documentation necessary in arriving at the statement of value for each
date.
(iii) When the existing real estate appraisal is not over 1 year
old, and reflects the value either 1 day before the Governor's request
or 1 year and 1 day before the Governor's request, the County
Supervisor can so document the applicable statement of value.
(iv) The County Supervisor will sign and date the statement of
values and file it directly on top of the real estate appraisal.
(4) Chattel appraisals will be completed on Form FmHA 1945-15,
``Value Determination Worksheet (EM loans only),'' when chattels are
taken as security. The property which will serve as security will be
described in sufficient detail so it can be identified. Sources such as
livestock market reports and publications reflecting values of farm
machinery and equipment will be used as appropriate. The value of
assets that secure EM loans associated with a disaster having any
portion of the incidence period occurring on or after May 31, 1983 must
be based on the higher of two values, all of which must be made part of
the file. These values will be based on the same time period contained
in paragraphs (c)(2)(i) and (ii) of this section.
(i) In those cases where the value 1 year and 1 day before the
Governor's request reflects adequate security, the appraiser or County
Supervisor will reasonably estimate the value 1 day before the
Governor's request.
(ii) Chattels owned by the applicant, and nonfarm chattel property
offered as security (such as planes, house trailers, boats, etc.) will
be appraised at the present market value only. Chattels that the
applicant/borrower did not own on the dates set forth in paragraphs
(c)(2) (i) and (ii) of this section will be appraised at the present
market value only.
Dated: March 31, 1994.
Bob J. Nash,
Under Secretary for Small Community and Rural Development.
[FR Doc. 94-8348 Filed 4-7-94; 8:45 am]
BILLING CODE 3410-07-U