[Federal Register Volume 62, Number 101 (Tuesday, May 27, 1997)]
[Rules and Regulations]
[Pages 28618-28619]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-13702]
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DEPARTMENT OF AGRICULTURE
Farm Service Agency
Rural Housing Service
Rural Business--Cooperative Service
Rural Utilities Service
7 CFR Parts 1910, 1941, 1943, 1945, and 1980
RIN 0560-AE87
Implementation of the Direct and Guaranteed Loan Making
Provisions of the Federal Agricultural Improvement Act of 1996:
Correction
AGENCY: Farm Service Agency, USDA.
ACTION: Interim rule, correction; and correcting amendments.
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SUMMARY: This document contains corrections to the interim regulations
that were published Monday, March 3, 1997 (62 FR 9351-59). Technical
corrections are also made to CFR sections not originally included in
the interim rule. The regulations pertained to the loan making
provisions of the Farm Service Agency (FSA) farm loan programs.
EFFECTIVE DATE: The corrections to the interim rule and the correcting
amendments are effective May 27, 1997.
FOR FURTHER INFORMATION CONTACT: Steven R. Bazzell, Senior Loan
Officer, Farm Service Agency. Telephone: 202-720-3889; facsimile: 202-
690-1117; or e-mail: [email protected]
SUPPLEMENTARY INFORMATION:
Background
The interim final regulations, which are the subject of these
corrections, implemented the direct and guaranteed FSA farm loan making
provisions of the Federal Agricultural Improvement Act of 1996 (Act).
The public comment period ended on May 2, 1997.
Need for Correction
As published, the interim final regulations contain errors that
either conflict with the Act, are misleading or are in need of
clarification. Conflicts with the statutory language of the Act require
some corrections not originally included in the interim rule published
on March 3, 1997. Those corrections are as follows: (a) Section 1910.5
of 7 CFR part 1910, subpart A, is corrected by incorporating a
provision that renders an applicant ineligible for most types of FSA
loan assistance when they have received debt forgiveness. (b) Section
1943.13 of 7 CFR part 1943, subpart A, is corrected by removing
references to the ``sale of acquired property'' and ``credit sales'' to
socially disadvantaged applicants, since this is eliminated by the Act.
(c) Section 1980.106 of 7 CFR part 1980, subpart B, is corrected by
removing a reference to ``non-farm enterprises'' contained in the
``farm'' definition because non-farm enterprises are no longer financed
by the Agency under the Act.
List of Subjects
7 CFR Part 1910
Application processing, Loan programs-agriculture.
7 CFR Part 1941 and 1943
Applicant eligibility, Beginning farmers and ranchers, Loan
programs-agriculture.
7 CFR Part 1945
Disaster assistance, Loan programs-agriculture.
7 CFR Part 1980
Beginning farmers and ranchers, Loan guarantees, Loan programs-
agriculture.
Accordingly, 7 CFR chapter XVIII is corrected by making the
following correcting amendments:
PART 1910--GENERAL
1. The authority citation for part 1910 continues to read as
follows:
Authority: 5 U.S.C. 301; 7 U.S.C. 1989; and 42 U.S.C. 1480.
Subpart A--Receiving and Processing Applications
2. Section 1910.5 is amended by revising the introductory text of
paragraph (c) as set forth below and removing paragraph (c)(6).
Sec. 1910.5 Evaluating applications.
* * * * *
(c) When the applicant, including any members of an entity
applicant, caused the Agency a loss by receiving debt forgiveness, they
are ineligible for assistance in accordance with applicable program
eligibility regulations. If the debt forgiveness is cured by repayment
of the Agency's loss, the Agency may still consider the debt
forgiveness in determining the applicant's creditworthiness. The
following circumstances do not automatically indicate an unacceptable
credit history:
* * * * *
PART 1941--OPERATING LOANS
3. The authority citation for part 1941 continues to read as
follows:
Authority: 5 U.S.C. 301; 7 U.S.C. 1989.
Subpart A--Operating Loan Policies, Procedures, and Authorizations
4. Section 1941.12, paragraphs (a)(8), (a)(11), (b)(9) and (b)(12)
are revised to read as follows:
Sec. 1941.12 Eligibility requirements.
* * * * *
(a) * * *
(8) Have not executed a promissory note for a direct OL loan in
more than 6 different calendar years prior to the calendar year that
the requested direct OL loan will close. This eligibility restriction
applies to anyone who signs the promissory note. Youth loans are not
counted as direct OL loans for the purpose of this paragraph.
* * * * *
(11) Not be delinquent on any Federal debt. This restriction will
not apply if the Federal delinquency is cured on or before the loan
closing date.
(b) * * *
(9) Have no member of the business entity who has executed a
promissory note for direct OL loans in more than 6 different calendar
years prior to the calendar year that the requested direct OL loan will
close. This eligibility restriction applies to anyone who signs the
promissory note. Youth loans are not counted as direct OL loans for the
purpose of this paragraph.
* * * * *
(12) Not be delinquent on any Federal debt. This restriction will
not apply if the Federal delinquency is cured on or before the loan
closing date. This eligibility restriction applies to the entity and
all of its members.
* * * * *
Sec. 1941.16 [Corrected]
5. Section 1941.16(i)(2) is amended by removing the word ``owned''
and adding the word ``owed'' in its place.
Subpart B--Closing Loans Secured by Chattels
Sec. 1941.88 [Corrected]
6. In Sec. 1941.88(c), the first sentence is amended by removing
the word ``more'' and adding the word ``less'' in its place.
[[Page 28619]]
PART 1943--FARM OWNERSHIP, SOIL AND WATER AND RECREATION
7. The authority citation for part 1943 continues to read as
follows:
Authority: 5 U.S.C. 301, and 7 U.S.C. 1989.
Subpart A--Direct Farm Ownership Loan Policies, Procedures and
Authorizations
Sec. 1943.4 [Corrected]
8. Section 1943.4(e) is amended by adding ``Except for OL loan
purposes,'' at the beginning of the first sentence.
9. Section 1943.12 (a)(11) and (b)(11) is revised to read as
follows:
Sec. 1943.12 Farm ownership loan eligibility requirements.
* * * * *
(a) * * *
(11) Not be delinquent on any Federal debt. This restriction will
not apply if the Federal delinquency is cured on or before the loan
closing date.
(b) * * *
(11) Not be delinquent on any Federal debt. This restriction will
not apply if the Federal delinquency is cured on or before the loan
closing date. This eligibility restriction applies to the entity and
all of its members.
* * * * *
Sec. 1943.13 [Corrected]
10. Section 1943.13 is amended by:
a. Removing from the introductory text of paragraph (a) and (b) the
words ``and Acquired Property.''
b. Removing paragraph (a)(2).
c. Redesignating paragraphs (a)(3), (4) and (5) as paragraphs
(a)(2), (3) and (4), respectively.
d. Removing the phrase ``and credit sale'' and removing the word
``programs'' and adding the word ``program'' in its place in paragraph
(a)(1) and newly designated paragraph (a)(3).
e. Removing the phrase ``and acquired farmland'' and removing the
word ``programs'' and adding the word ``program'' in its place in
paragraph (b)(1).
Sec. 1943.16 [Corrected]
11. Section 1943.16, paragraph (b) is amended by adding a new
sentence at the end of the paragraph to read, ``In the case of leased
property, the borrower must have a lease to ensure use of the
improvement over its useful life or to ensure that the borrower
receives compensation for any remaining economic life upon termination
of the lease.
PART 1945--EMERGENCY
12. The authority citation for part 1945 continues to read as
follows:
Authority: 5 U.S.C. 301, 7 U.S.C. 1989, 42 U.S.C. 1480.
Subpart D--Emergency Loan Policies, Procedures, and Authorizations
Sec. 1945.167 [Corrected]
13. Section 1945.167, paragraph (a) is amended by revising the last
sentence to read, ``Chattel property must have been covered at the tax
or cost depreciated value, whichever is less, when such insurance was
readily available and the benefit of the coverage (the lesser of the
property's tax or cost depreciated value) was greater than the cost of
the insurance.''
Sec. 1945.175 [Corrected]
14. Section 1945.175 is amended by adding the word ``not'' after
the word ``chattels'' in the second to the last sentence of paragraph
(c)(3), and by revising the last sentence to read, ``Chattels that the
applicant did not own on the date set forth in paragraph (c)(2) of this
section will be appraised at the present market value.''
PART 1980--GENERAL
15. The authority citation for part 1980 continues to read as
follows:
Authority: 5 U.S.C. 301, 7 U.S.C. 1989, 42 U.S.C. 1480.
Subpart B--Farmer Program Loans
Sec. 1980.106 [Corrected]
16. Section 1980.106 is corrected by removing the second sentence
of the definition of a ``Farm.''
17. Section 1980.174, paragraph (a) introductory text is revised to
read as follows:
Sec. 1980.174 Percentage of guarantee.
* * * * *
(a) The maximum percentage of guarantee is 90 percent, except in
the following situations when lenders will be provided a 95 percent
guarantee:''
* * * * *
Sec. 1980.175 [Corrected]
18. Section 1980.175 is amended by:
a. Revising the third and fourth sentences of paragraph (b) to
read, ``Further, the applicant, and anyone who will execute the
promissory note, cannot be delinquent on any federal debt. This
restriction will not apply if the Federal delinquency is cured on or
before the loan closing date.''
b. Amending the first sentence of paragraph (c)(2)(ii) by adding
after the word ``creditors'' the phrase ``or the lender.''
c. Revising the first sentence of paragraph (d)(1) to read, ``No
guaranteed OL loan shall be made to any applicant after the 15th year
that an applicant, or any individual signing the promissory note,
received direct or guaranteed OL loans.''
Sec. 1980.180 [Corrected]
19. Section 1980.180 is amended by:
a. Removing the last sentence of paragraph (a).
b. Removing the word ``Agency'' and adding the word ``lender'' in
its place in the last two sentences of paragraph (c)(1).
c. Adding the phrase ``FO or OL'' after the word ``authorized'' in
paragraph (c)(5).
Sec. 1980.190 [Corrected]
20. Section 1980.190(e) is amended by removing the phrase ``but not
more than 90 percent'' and adding the phrase, ``but not more than that
allowed under applicable program regulations'' in its place.
Signed at Washington, D.C., on May 16, 1997.
Richard O. Newman,
Acting Administrator, Farm Service Agency.
[FR Doc. 97-13702 Filed 5-23-97; 8:45 am]
BILLING CODE 3410-05-P