[Federal Register Volume 61, Number 170 (Friday, August 30, 1996)]
[Proposed Rules]
[Pages 45907-45910]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-22160]
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DEPARTMENT OF AGRICULTURE
Rural Housing Service
Rural Business-Cooperative Service
Rural Utilities Service
Farm Service Agency
7 CFR Part 1951
RIN 0560-AE93
Handling Payments From the Farm Service Agency (FSA) to
Delinquent FSA Farm Credit Program Borrowers
AGENCY: Farm Service Agency, USDA.
ACTION: Proposed rule.
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SUMMARY: This rule proposes to revise regulations which establish the
requirements for the use of administrative offset to collect delinquent
debts due under programs formerly administered by the Farmers Home
Administration. The proposed action will eliminate the existing
provisions contained in the regulation and the Rural Housing Service,
Rural Business-Cooperative Service, Rural Utilities Service and Farm
Service
[[Page 45908]]
Agency (the Agencies) will instead adhere to the requirements in the
existing United States Department of Agriculture administrative offset
regulations. This revision will eliminate the requirement that a
borrower's account must be accelerated prior to offset of payments to
delinquent borrowers.
DATES: Comments on the proposed rule, or comments on alternatives to
this proposal, must be received on or before September 16, 1996. The
comment period was reduced to allow for publication of a final rule
prior to the distribution of income supplementation and enhancement
program payments by the Farm Service Agency in September 1996. Comments
on the information collection requirements of this rule must be
received on or before October 29, 1996 to be assured of consideration.
ADDRESSES: Send comments on the proposed rule to: Director, Farm Credit
Programs Loan Servicing and Property Management Division (LSPMD), Farm
Service Agency (FSA), U.S. Department of Agriculture (USDA), room 5449-
S, P.O. Box 2415, Stop 0523, Washington, D.C. 20013-2415. Comments on
the information collection requirements of this proposed rule must be
sent to the Office of Management and Budget (OMB) at the address listed
in the Paperwork Reduction Act section of this preamble and to the
Department address listed after the OMB address.
FOR FURTHER INFORMATION CONTACT: Phillip Elder, Senior Loan Officer,
USDA, FSA, Farm Credit Programs Loan Servicing Division, P.O. Box 2415,
Stop 0523, Washington, D.C. 20013-2415, telephone (202) 720-9053.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This rule has been reviewed under Executive Order 12866 has been
determined to be a significant regulatory action, and has been reviewed
by the Office of Management and Budget.
Executive Order 12372
The programs to which this Executive Order may apply are listed in
the Catalog of Federal Domestic Assistance under the following:
10.104 Emergency Loans
10.405 Farm Labor Housing Loans
10.406 Farm Operating Loans
10.407 Farm Ownership Loans
10.410 Low Income Housing Loans
10.411 Rural Housing Site Loans
10.414 Resource Conservation Development Loans
10.415 Rural Rental Housing Loans
10.416 Soil and Water Loans
10.417 Very Low-Income Housing repair Loans and Grants
10.418 Water and Waste Disposal Systems for Rural Communities
10.419 Watershed Protection and Flood Prevention Loans
10.420 Rural Self-Help Housing Loans
10.421 Indian Tribes and tribal Corporation Loans
10.422 Business and Industry Loans
10.423 Community Facility Loans
10.427 Rural rental Housing Assistance Grants
10.428 Economic Emergency Loans
10.433 Housing Preservation Grants
10.434 Nonprofit Organizations
10.435 Agricultural Loan Mediation Program
Programs listed under numbers 10.404, 10.406, 10.407, 10.410,
10.417, 10.421, 10.428, and 10.435 are not subject to the provisions of
Executive Order 12372 which requires intergovernmental consultation
with State and local officials. (7 CFR Part 3015, subpart V, 48 FR
29115, June 24, 1983).
Programs listed under the numbers 10.405, 10.411, 10.414, 10.415,
10.416, 10.418, 10.419, 10.420, 10.422, 10.423, 10.427, 10.433, and
10.434 are subject to and have met the provisions of Executive Order
12372. (7 CFR 3015, subpart V, 48 FR 29112, June 24, 1983; 49 FR 22675,
May 31, 1984; 50 FR 14088, April 10, 1985.)
Environmental Impact Statement
It is the determination of the issuing agencies that this action is
not a major Federal action significantly affecting the environment and,
in accordance with the National Environmental Policy Act of 1969,
Public Law 91-190, an Environmental Impact Statement is not required.
Executive Order 12778
This proposed rule has been reviewed in accordance with Executive
Order 12778, Civil Justice Reform. In accordance with this rule: (1)
All State and local laws and regulations that are in conflict with this
rule will be preempted; (2) no retroactive effect will be given to this
rule: and (3) administrative proceedings in accordance with 7 CFR parts
11 and 780 must be exhausted before bringing suit in court challenging
action taken under this rule unless those regulations specifically
allow bringing suit at an earlier time.
Regulatory Flexibility Act
The issuing Agencies are not required by 5 U.S.C. 553, or any other
provision of law, to publish a notice of proposed rulemaking to effect
these administrative changes.
Paperwork Reduction Act
The amendments to 7 CFR part 1951 set forth in this proposed rule
involve a change in existing information collection requirements which
were previously approved by OMB under the provisions of 44 U.S.C. 35
and assigned OMB Control Number 0575-0119. The regulations containing
the information collection approved under 0575-0119 are jointly owned
by the Agencies issuing this rule as aresult of the recent
reorganization of USDA. A review of 0575-0119 has resulted in a
division of the information collection requirements currently approved
and a request for approval of the revised collection has been submitted
to OMB.
OMB Control Number: 0560--New.
Title: Offsets of Federal Payments to FmHA Borrowers.
Type of Request: Revision of Currently Approved Information
Collection.
Abstract: 7 CFR part 1951, subpart C, requires that a borrower's
account be accelerated and the borrower's appeal rights exhausted
before offsetting any payments to be received by the borrower. The
Department of Agriculture Reorganization Act combined the farm credit
functions of FmHA and the former Agricultural Stabilization and
Conservation Service (ASCS), into the Farm Service Agency (FSA). This
results in FSA making payments generated from participation in the
former ASCS programs to the same farmer or rancher that is delinquent
on his debts to the Agency. Acceleration of a borrower's account is one
of the last steps FSA takes before liquidating the account. This
process may take years while the borrower continues to receive payments
from FSA.
This rule proposes to remove the existing administrative offset
regulation which was used by the Agencies when they were a part of the
former Farmers Home Administration (FmHA). The Department of
Agriculture has an existing administrative offset regulation at 7 CFR
part 3, subpart B and the administrative offset regulation of the
former FmHA in 7 CFR part 1951, subpart C is redundant. The Department
of Agriculture regulation complies with the requirements of 31 U.S.C.
3716, as amended by the Debt Collection Improvement Act of 1996, ch. 10
of Pub. L. 104-134 (April 26, 1996).
One intended effect of using the existing Department of Agriculture
administrative offset procedure is that the Department procedure does
not contain the restrictive provision of the former FmHA offset
regulation which
[[Page 45909]]
requires the debt to have been accelerated prior to using
administrative offset. There is no statutory basis for delaying offset
until after a loan has been accelerated and the Department
administrative offset procedure will permit offset to be utilized for
debts which are past due. The information collection requirements for
this type of internal agency offset will decrease, due to the
development of a shortened notification letter, streamlining of the
offset appeal process, and the reduction of the number of notices and
number of meetings offered. However, the easing of offset procedures
will greatly increase the number of FSA borrowers that receive notices
and accounts that are offset. For example, as of March 30, 1996, 1,588
FSA borrowers were accelerated, whereas 27,180 borrowers were past due.
Estimate of Burden: Public reporting burden for this information
collection is estimated to average 2.35 hours per response.
Respondents: FSA Farm Credit Programs borrowers that are over 30
days past due.
Estimated Number of Respondents: 13,000.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Burden on Respondents: 30,500 hours.
Estimated Annual Cost to the Public: $377,000.
Comments regarding the following issues should be sent to the Desk
Officer for Agriculture, Office of Information and Regulatory Affairs,
Office of Management and Budget, Washington, D.C. 20503 and to Phillip
D. Elder, Senior Loan Officer, Loan Servicing Division, Farm Service
Agency, USDA, P.O. Box 2415, Ag Box Code 0523, Washington, D.C. 20013-
2415; telephone (202) 720-9053: (a) whether the collection of
information is necessary for the proper performance of the functions of
the agency, including whether the information will have practical
utility; (b) the accuracy of the agency's estimate of burden including
the validity of the methodology and assumptions used; (c) ways to
enhance the quality, utility and clarity of the information to be
collected; (d) ways to minimize the burden of the collection of
information on those who are to respond, including through the use of
appropriate automated, electronic, mechanical, or other technological
collection techniques or other forms of information technology.
Copies of the information collection may be obtained from Phillip
Elder at the above address. All responses to this notice will be
summarized and included in the request for OMB approval. All comments
will also become a matter of public record.
OMB is required to make a decision concerning the collection of
information contained in these proposed regulations between 30 and 60
days after publication of this document in the Federal Register.
Therefore, a comment to OMB is best assured of having its full effect
if OMB receives it within 30 days of publication. This does not affect
the deadline for the public to comment to the Department on the
proposed regulations.
Unfunded Mandates
Title II of the Unfunded Mandate Reform Act of 1995 (UMRA), Public
Law 104-4, establishes requirements for Federal agencies to assess the
effects of their regulatory actions on state, local, and tribal
governments or the private sector. Under section 202 of the UMRA,
agencies generally must prepare a written statement, including a cost
benefit analysis, for proposed and final rules with ``Federal
mandates'' that may result in expenditures to State, local, and tribal
governments, in the aggregate, or to the private sector, of $100
million or more in any 1 year. When such a statement is needed for a
rule, section 205 of the UMRA generally requires agencies to identify
and consider a reasonable number of regulatory alternatives and adopt
the least costly, more cost effective or least burdensome alternative
that achieves the objectives of the rule.
The rule contains no Federal mandates (under the regulatory
provisions of Title II of the UMRA) for State, local, and tribal
governments or the private sector. Thus, today's rule is not subject to
the requirements of sections 202 and 205 of the UMRA.
Discussion of Proposed Rule
The proposed changes involve the credit programs formerly
administered by FmHA. Under the authority of the Department of
Agriculture Reorganization Act of 1994, Pub. L. 10-354 (October 10,
1994), FmHA was abolished on October 20, 1994, and its functions were
transferred to the Agencies.
This rule proposes to remove the existing administrative offset
regulation which was used by the Agencies when they were a part of the
former FmHA. The Department of Agriculture has an existing
administrative offset regulation at 7 CFR part 3, subpart B and the
administrative offset regulation of the former FmHA in 7 CFR part 1951,
subpart C is redundant. The Department of Agriculture regulation
complies with the requirements of 31 U.S.C. 3716, as amended by the
Debt Collection Improvement Act of 1996, chapter 10 of Pub. L. 104-134
(April 26, 1996) and satisfies the administrative offset needs of the
Agencies.
Section 1951.103(b) of Title 7 of the Code of Federal Regulations,
which is part of the existing administrative offset procedure which the
Agencies are proposing to remove, requires a borrower's account to have
been accelerated prior to the use of administrative offset to collect
part of the past due debt. One of the intended effects of this proposed
rule is to eliminate the acceleration prerequisite to the use of
administrative offset. The Department of Agriculture administrative
offset regulation does not impose such a prerequisite. There is no
statutory requirement that a past due account must have been
accelerated prior to offsetting a borrower's federal payments.
Specifically, the acceleration prerequisite to administrative
offset means that a FSA farm credit program borrower's account has to
be accelerated and the borrower's appeal rights exhausted before FSA
can offer any contract payments received by the borrower from programs
of the former Agricultural Stabilization and Conservation Service
(ASCS) (contract payments). Acceleration is one of the last steps FSA
takes before liquidating a farm credit program borrower's account. This
process may take years while the borrower continues to receive contract
payments. After the reorganization of ASCS and FmHA into FSA, an
acceleration prerequisite results in the incongruous situation of FSA
having to make substantial contract payments to a farmer or rancher
that is seriously delinquent on his or her farm program debts to FSA.
FSA proposes to remove the acceleration barrier to administrative
offset in order to enhance collection of delinquent debts thereby
reducing losses. While FSA could have revised the existing
administrative offset procedure in 7 CFR part 1951, subpart C, this
would mean continuing a regulation which is redundant with the existing
Department of Agriculture administrative offset regulation. Removing
unnecessary regulations is a goal of the National Performance Review,
so the Agencies have determined that the adoption of the Department of
Agriculture administrative offset regulation will serve the dual
purpose of eliminating redundancy and removing the acceleration
prerequisite to administrative offset.
[[Page 45910]]
While section 534 of the Housing Act of 1949 requires that
regulations issued pursuant to title V of the Housing Act of 1949
generally must be published for a 60-day comment period, this
regulation is being proposed to implement 31 U.S.C. 3716, not the
Housing Act of 1949. Therefore, the notice and comment provisions of
section 534 are inappropriate to this regulation.
List of Subjects in 7 CFR Part 1951
Accounting, Accounting Servicing, Credit, Loan Programs--
Agriculture, Loan Programs--Housing and community development, Low and
moderate income housing loans--Servicing.
Accordingly, 7 CFR part 1951 is proposed to be amended as follows:
PART 1951--GENERAL
1. The authority citation for part 1951 is revised to read as
follows:
Authority: 5 U.S.C. 301; 7 U.S.C. 1989; 42 U.S.C. 1480.
2. The title of part 1951, subpart C is revised to read as follows:
Subpart C--Offsets of Federal Payments to Agency Borrowers
3. Section 1951.102 is revised to read as follows:
Sec. 1951.102 Administrative offset.
Action to effect administrative offset to recover delinquent claims
may be taken in accordance with the procedures in 7 CFR part 3, subpart
B.
4. Sections 1951.103 through 1951.105 are removed and reserved.
Signed in Washington, DC, on August 23, 1996.
Jill Long Thompson,
Under Secretary for Rural Development.
Eugene Moos,
Under Secretary for Farm and Foreign Agriculture Services.
[FR Doc. 96-22160 Filed 8-29-96; 8:45 am]
BILLING CODE 3410-05-P