[Federal Register Volume 65, Number 161 (Friday, August 18, 2000)]
[Rules and Regulations]
[Pages 50401-50405]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-20679]



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 Rules and Regulations
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  Federal Register / Vol. 65, No. 161 / Friday, August 18, 2000 / Rules 
and Regulations  

[[Page 50401]]



DEPARTMENT OF AGRICULTURE

Rural Housing Service

Rural Business-Cooperative Service

Rural Utilities Service

Farm Service Agency

7 CFR Part 1951

RIN 0560-AF78


Farm Loan Programs Account Servicing Policies--Servicing Shared 
Appreciation Agreements

AGENCIES: Rural Housing Service, Rural Business-Cooperative Service, 
Rural Utilities Service, Farm Service Agency, USDA.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: This action amends the terms and servicing of Shared 
Appreciation Agreements. This final rule allows the remaining 
contributory value of capital improvements made during the term of the 
Shared Appreciation Agreement to be deducted when calculating the 
recapture amount under the agreement, reduces the maturity period of 
such agreements executed after the effective date of this issuance from 
10 years to 5 years, and reduces the interest rate on Shared 
Appreciation loans from the Non-program loan rate to the Farm Loan 
Program Homestead Protection rate. These changes will give borrowers an 
opportunity to repay a portion of the Farm Service Agency (FSA) debt 
that was written off, while ensuring that the Government promptly 
recaptures some appreciation of the collateral. This rule also will 
encourage improvement of Agency security during the term covered by the 
Shared Appreciation Agreement.

DATES: This regulation is effective on August 18, 2000.

FOR FURTHER INFORMATION CONTACT: Michael C. Cumpton, telephone (202) 
690-4014; electronic mail: [email protected].

SUPPLEMENTARY INFORMATION:

Executive Order 12866

    This rule has been determined to be significant and was reviewed by 
the Office of Management and Budget under Executive Order 12866.

Regulatory Flexibility Act

    In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-
602), the undersigned has determined and certified by signature of this 
document that this rule will not have a significant economic impact on 
a substantial number of small entities. New provisions included in this 
rule will not impact a substantial number of small entities to a 
greater extent than large entities. Therefore, a regulatory flexibility 
analysis was not performed.

Environmental Evaluation

    It is the determination of FSA that this action is not a major 
Federal action significantly affecting the environment. Therefore, in 
accordance with the National Environmental Policy Act of 1969, and 7 
CFR part 1940, subpart G, an Environmental Impact Statement is not 
required.

Executive Order 12988

    This rule has been reviewed in accordance with Executive Order 
12988, 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) except as specifically stated in this rule, 
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 seeking judicial review.

Executive Order 12372

    For reasons contained in the notice related to 7 CFR part 3015, 
subpart V (48 FR 29115) June 24, 1983, the programs within this rule 
are excluded from the scope of E.O. 12372, which requires 
intergovernmental consultation with State and local officials.

The Unfunded Mandates Reform Act of 1995

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA) 
requires Federal agencies to assess the effects of their regulatory 
actions on State, local, and tribal governments or 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 requires FSA to prepare a written 
statement, including a cost/benefit assessment, for proposed and final 
rules with ``Federal mandates'' that may result in such expenditures 
for State, local, or tribal governments, in the aggregate, or to the 
private sector. UMRA generally requires agencies to consider 
alternatives and adopt the more cost effective or least burdensome 
alternative that achieves the objectives of the rule.
    This rule contains no Federal mandates, as defined under title II 
of the UMRA, for State, local, and tribal governments or the private 
sector. Thus, this rule is not subject to the requirements of sections 
202 and 205 of UMRA.

Executive Order 13132

    The policies contained in this rule do not have any substantial 
direct effect on States, on the relationship between the national 
government and the States, or on the distribution of power and 
responsibilities among the various levels of government. Nor does this 
rule impose substantial direct compliance costs on State and local 
governments. Therefore, consultation with the States is not required.

Paperwork Reduction Act

    The amendments to 7 CFR part 1951 contained in this rule require no 
revisions to the information collection requirements that were 
previously approved by OMB (0560-0161) under the provisions of 44 
U.S.C. chapter 35. A statement to this effect was published in the 
proposed rule on November 10, 1999 (64 FR 61221-61223) . No comments on 
the burden estimate were received.

Federal Assistance Programs

    These changes affect the following FSA programs as listed in the 
Catalog of Federal Domestic Assistance:
10.404--Emergency Loans
10.406--Farm Operating Loans
10.407--Farm Ownership Loans

Discussion of the Final Rule

    In response to the proposed rule published November 10, 1999, 45

[[Page 50402]]

respondents from 23 States commented. Comments were received from 
individuals, farm interest groups, attorneys, university professors, 
agricultural businesses, and State government officials. Comments and 
suggestions varied widely but focused primarily on the deduction of 
certain capital improvements when calculating Shared Appreciation 
Agreement recapture. The public comments are summarized as follows:

Reduction in Interest Rate on Amortized Shared Appreciation Agreement 
Recapture

    The proposal to reduce the interest rate charged on amortized 
Shared Appreciation Agreement recapture from the Non-Program rate 
(10.25% as of March 1, 2000) to the Homestead Protection rate (6.75% as 
of March 1, 2000) received 17 comments. Of these comments, 10 were 
favorable toward the change while seven disagreed and suggested 
modifications or additions to the proposed language.
    Two comments were similar in that they wished for the Shared 
Appreciation Agreement recapture amount to either be added to the 
program note and, therefore, receive program rates, or, be given the 
Farm Ownership rate (7.25% as of March 1, 2000). As stated in the 
proposed rule, the Homestead Protection rate was chosen as it is near 
the Federal borrowing rate and is already used in the Agency's 
Homestead Protection program. Therefore, this rate should give 
producers the greatest possible chance of success while still allowing 
FSA to collect the recapture funds due and protect its interests.
    One respondent approved of the Homestead Protection rate for future 
amortizations and stated that it should also be used if existing Shared 
Appreciation notes are to be reamortized. This comment was adopted. If 
restructure is required, the Homestead Protection rate will also be 
used when reamortizing Shared Appreciation loans.
    The other four respondents suggested that the rate be retroactive 
to various time periods, ranging from the inception of the Shared 
Appreciation Agreement program to the announcement of the proposed rule 
by the Secretary. The Agency has determined that the Homestead 
Protection rate will apply only to future Shared Appreciation Agreement 
recapture amortizations because the previous rates are fixed by the 
existing promissory notes. The payments shown on these notes created a 
positive cash flow in the farm business plan at the inception of 
existing Shared Appreciation loans. Therefore, Shared Appreciation 
loans will not be modified unless for reamortization in cases of 
delinquency or financial distress under 7 CFR part 1951, subpart S 
procedures where program loans are also involved. Under 7 CFR 
Sec. 1951.909, Shared Appreciation loans of eligible borrowers will be 
reamortized at the lesser of the original note interest rate, or the 
current Homestead Protection interest rate. The nonprogram loans will 
not be considered for any other servicing options under that section.

Reduction in Term of Future Shared Appreciation Agreements

    The proposal to change the term of future Shared Appreciation 
Agreements from 10 years to 5 years received 13 comments. Of these 
comments, six were in favor of the change, two suggested the term 
remain at 10 years, and four suggested modifications or additions to 
the proposed language. One felt the term should be 7\1/2\ years and 
another stated the program should be abolished.
    Abolishment of the program is not deemed reasonable given the 
success of the program. Since its inception over 10 years ago, the 
program has resulted in the recovery of over $58 million in debt 
written down. Approximately 6,300 Shared Appreciation Agreements remain 
outstanding, and approximately 5,000 borrowers have held to their terms 
under their Shared Appreciation Agreements. Shared appreciation is an 
important part of Agency writedown of borrower debt. After writedown, 
the Agency continues to provide assistance on the balance of the 
borrower debt for continued borrower operation of the farm.
    Two respondents suggesting alternate language supporting the 5 year 
term but felt the change should be retroactive to the 1999 announcement 
of the proposal by the Secretary. Retroactivity of the proposal is 
discussed above.
    Other comments, which were outside the scope of the proposed rule, 
centered around the requirements for recapture at the end of the term 
if the land is not sold and recapture of 75% of appreciation in the 
first 4 years and 50% thereafter. While these comments need not be 
addressed, the Agency notes that these requirements are dictated by 
statute (7 U.S.C. Sec. 2001(e)) and cannot be changed by regulation.
    One of the two respondents supporting the present 10-year Shared 
Appreciation Agreement term, stated that the 10-year term allowed the 
Government the greatest opportunity to recapture a large portion of the 
debt written off and also benefitted borrowers by giving them the 
maximum amount of time to recover from the financial hardship. The 
other proponent of the 10-year term felt the 5-year term could present 
some problems as many borrowers will be coming off a deferral at that 
time and could even be, based on the years of eligibility limitations 
currently in place, ineligible for further loans. The Agency has not 
adopted the comments to retain the 10-year term for Shared Appreciation 
Agreements. This term originally was adopted to allow borrowers a 
lengthy period during which to recover from the circumstances causing 
their delinquency and need for writedown. However, during this term, 
land appreciation exceeded expectations in many farming communities 
while farm income fell due to sustained low commodity and livestock 
prices. These factors have resulted in shared appreciation recapture 
amounts beyond the repayment abilities of many borrowers now at or near 
the end of the term of their agreements. Though these borrowers have 
successfully serviced their remaining debt after writedown, they now 
face liquidation because they cannot repay recapture due. The Agency 
has determined that future Shared Appreciation Agreements will be 
limited to 5 years to lower the risk of substantial appreciation in 
land values and increase the ability of borrowers to repay a portion of 
such appreciation to the Government. This proposed policy change was 
well supported by public comments. The Agency believes that 5 years is 
an adequate period of time for most borrowers to recover from the 
financial difficulties causing their delinquency. Furthermore, this 
term is adequate to protect the interests of the Government, and, in 
most cases, will allow more accurate planning by the borrower. The 
reduced term also will reduce the Agency's administrative burden in 
monitoring the agreements. Existing Shared Appreciation Agreements will 
continue under the 10-year term as agreed to by the borrower and the 
Government.
    One respondent supported a 7\1/2\-year term for Shared Appreciation 
Agreements as a compromise. The Agency rejects this unsupported comment 
in favor of a 5-year term for the reasons discussed above.

Deduction of Capital Improvements From Shared Appreciation Agreement 
Recapture

    The proposal to deduct the value of a dwelling, barn, grain storage 
bin or silo improved or added during the term of the Shared 
Appreciation Agreement from the value of the property at the maturity 
of the agreement received

[[Page 50403]]

multiple comments from most of the 44 respondents who commented on the 
capital improvement provision of the proposed rule. These comments were 
widely varied among respondents and over 27 different and often 
divergent suggestions were made on how capital improvements should be 
addressed in the regulation. Of these comments, 39 offered suggestions 
on ways to expand the number of capital improvement items, six 
suggestions were made on eliminating or curtailing deductions, three 
suggested additional criteria to be considered beyond the improvements 
themselves, 16 addressed retroactivity of the deduction, and four 
suggested other changes to the method of determining shared 
appreciation.
    Thirty-one comments were made in support of the use of more 
generalized language and expanding the number and type of capital 
improvements which would be deducted from the value of the property at 
maturity. Of these, 17 suggested all capital improvements be included, 
10 made reference to those improvements for farm or real estate 
improvements (sometimes citing specific examples) and four, while 
proposing broad expansion of the type of items which would be 
considered capital improvements, also offered methods of defining or 
identifying a capital improvement. One individual stated improvements 
should be ``normal and customary'' while another stated that all 
``bonafide'' improvements should be included. Others respondents stated 
the item should be affixed to the real estate and have a useful life of 
over 1 year. Three of these respondents stated that a determination or 
definition of capital improvements could be based on those allowed by 
the Internal Revenue Service (IRS) when calculating basis or 
depreciation. It was proposed that this method or the use of actual 
costs could also be used to determine the value of the improvements to 
be deducted from the final appraised value. Some respondents felt the 
appraiser would be able to effectively identify and value a capital 
improvement while others stated this would be very difficult for the 
appraiser especially when existing facilities had been expanded. Some 
of the above individuals and the remaining respondents who wished to 
expand the list of capital improvements suggested many varied items be 
considered, including, labor, tiling, tobacco quota, terracing, 
fencing, orchards, shelter belts, vineyards, irrigation, leveling, 
underground pipe, rock removal, timber, ponds, hog buildings, dairy 
parlors, and improvements for wildlife or conservation. It was also 
suggested that the Agency only consider an item if it met the criteria 
of an authorized loan purpose but no Government loans funds were used 
in it's acquisition.
    Six comments were made suggesting curtailment of capital items 
which could be included. Two respondents stated no capital improvements 
should be considered and it was suggested that, especially in light of 
the proposed 5-year Shared Appreciation Agreement term, capital 
improvements should be very rare for operations which were in need of 
debt forgiveness. Suggestions were also made that all improvements must 
have received prior approval from the FSA, dwellings should only be 
excluded when needed and modest, and that improvements to existing 
facilities not be considered. Consideration of other criteria in the 
deduction of capital improvements, including financial status, 
commodity prices, and debt exceeding market value of the security, was 
proposed by three respondents. Increasing the amount of shared 
appreciation recapture based on any capital items removed during the 
shared appreciation term was also proposed in conjunction with 
deduction of capital improvements added to insure an ``apples-to-
apples'' comparison.
    These comments on capital improvements revealed a wide diversity of 
opinion on what capital items, if any, should be deducted in the shared 
appreciation calculation. Some respondents supported a list of items, 
while the majority suggested broad categories. Comments indicate that 
not only is the complete identification of appropriate capital 
improvements extremely difficult, but the valuation of these items, 
once identified, is equally complex. Based on this complexity, it has 
been determined that instead of attempting to redefine a capital 
improvement, FSA will incorporate, as suggested, IRS documentation 
methods to identify post-Shared Appreciation Agreement capital 
improvement additions. The remaining contributory value of any 
improvements to the FSA real estate security covered by the Shared 
Appreciation Agreement which were capitalized (not taken as annual 
operating expenses) on the tax records may be deducted from the final 
appraisal which establishes the Shared Appreciation Agreement recapture 
amount. The borrower will be responsible for providing appropriate tax 
documentation to verify this consideration, and the improvement must be 
affixed to the Agency's Shared Appreciation Agreement real estate 
security. The only other contributory value allowed to be deducted from 
the final appraised value will be the contributory value of the 
borrower's primary residence to the security if it was built on the 
security property during the term of the Shared Appreciation Agreement 
and the contributory value of any improvements made to the residence 
which actually added living area square footage.
    While some commentors questioned appraisers' abilities to identify 
and value capital improvements, the Agency believes that professionally 
certified and licensed appraisers are trained in this determination 
process and are, therefore, qualified to evaluate property values and 
property value breakdown. This position is consistent with the 
practices of other commercial and government lending institutions.
    Retroactivity of capital improvement deductions was addressed in 22 
responses. Sixteen responses suggested that any regulation that 
excluded capital improvements should be made retroactive to the 
beginning of the Shared Appreciation Agreement program; two preferred 
no retroactivity; two suggested retroactivity to the Secretary's 1999 
announcement of the proposed rule; one suggested that the new 
regulation apply retroactively to all who have not paid the recapture 
due, and one felt retroactivity should extend only to those who have an 
outstanding suspension agreement or amortized recapture debt.
    These responses clearly favor some degree of retroactivity with 
some respondents indicating a desire for complete retroactivity. This, 
of course, would require that the Government revisit over 5,000 Shared 
Appreciation Agreements which have been partially or fully triggered 
and review the circumstances surrounding the security at that time. 
This substantial administrative burden is not in the best interests of 
the Government and the taxpayers. However, the Agency has determined 
that retroactivity of this deduction should be and will be extended to 
any amount covered by a suspension agreement that has not yet been 
fully paid since the borrowers were not able to show repayment ability 
for this amount. Furthermore, this will involve significantly less of 
an administrative burden with only approximately 1,500 suspension 
agreements covered. Use of this deduction, however, may require another 
appraisal of the property to determine the contributory value of 
capital improvements if not identified prior to entering the suspension 
agreement. Section 1951.914(h)(8) has been amended accordingly.

[[Page 50404]]

    Comments received on other portions of Sec. 1951.914 included the 
use of amortized Shared Appreciation Agreement recapture in 
conservation contracts, the use of sale prices instead of appraised 
values to determine recapture amounts during the term of the Shared 
Appreciation Agreement, the use of acceleration as a trigger in Shared 
Appreciation Agreements, and negotiation of appraisals. These comments 
are beyond the scope of the proposed rule and will not be addressed. 
Modifications to the regulatory provisions covering these issues were 
not proposed and are not included in the final rule.
    The Agency has clarified the Sec. 1951.914 reference to ``current 
appraisal'' by referring to Sec. 761.7. The latter section, in part, 
sets out the requirements for real estate appraisals.
    Good cause is shown for making this rule effective upon publication 
because of the need to implement the Homestead Protection interest rate 
and the consideration of capital improvements in the calculation of 
shared appreciation recapture. During the last 18 months, both natural 
disasters and low commodity prices have adversely affected many 
producers with maturing Shared Appreciation Agreements as they have 
become unable to pay recapture amounts due. Many agreements now are 
coming due and need the benefits provided by this rule. Without the 
lower Homestead Protection interest rate (6.75% as of March 1, 2000), 
these borrowers must pay the substantially higher Non-Program interest 
rate (10.25% as of March 1, 2000) if their shared appreciation debts 
are amortized under current regulations. The borrowers also will not 
benefit from the capital improvement deduction unless their shared 
appreciation debt is suspended with additional interest accrual. 
Furthermore, payment on many shared appreciation agreements is 
currently suspended for one year in accordance with 7 CFR 1951.914(h), 
so implementation of this regulation is needed to resolve the accounts 
before or when suspension ends. Under this rule, the suspended debts 
may be reduced to account for capital improvements on the property only 
during the suspension period. After suspension, the borrower also may 
qualify for amortization at the lower Homestead Protection interest 
rate. Therefore, immediate implementation of this rule is necessary to 
help these borrowers with recapture debts coming due.
    The Agency is also amending its regulations in this rule to remove 
from the Code of Federal Regulations administrative notices, response 
forms and formulas for calculations required to determine eligibility 
for its programs that are currently published as exhibits to 7 CFR. 
1951, subpart S. Section 331D(c) of the Consolidated Farm and Rural 
Development Act (Con Act) requires that the notices mandated by that 
section be published in the Agency's regulations. Sections 331D(a) and 
(b) of the Con Act require the Agency to send borrowers at least 90 
days past due a notice which contains:

a summary of all primary loan service programs, preservation loan 
service programs, debt settlement programs, and appeal procedures, 
including the eligibility criteria and terms and conditions of such 
programs and procedures.

    Accordingly, FSA will retain as exhibits in the Code of Federal 
Regulations Exhibit A of 7 CFR 1951, subpart S, which is the cover 
letter to the required notice sent to borrowers who are 90 days past 
due, and Exhibit A, Attachment 1, the required summary notice. Since 
Sec. 331D(c) does not mandate that FSA publish all of its notices, FSA 
is removing from 7 CFR 1951, subpart S, Exhibit A-Attachments 2, 3, 4, 
5, 5-A, 6, 6-A, 9, 9-A, 10, 10-A, Exhibit B, Exhibit B-Attachment 1, 
Exhibit C, Exhibit C-1, Exhibit E, Exhibit E, Attachments 1 and 2, 
Exhibit F, Exhibit F-Attachments 1 and 2, Exhibit I, Exhibit J, Exhibit 
J-Attachment 1, Exhibit J-1, Exhibit J-1, Attachment 1, Exhibit K, 
Exhibit K-Attachment-1, Exhibit L and Exhibit M. FSA will continue to 
use these Exhibits and Attachments for administrative purposes. They 
are available from any FSA office.

List of Subjects in 7 CFR Part 1951

    Account servicing, Credit, Debt restructuring, Loan programs-
Agriculture, Loan Programs--Housing and Community Development.

    Accordingly, 7 CFR part 1951 is amended as follows:

PART 1951--SERVICING AND COLLECTIONS

    1. The authority citation for part 1951 continues to read as 
follows:

    Authority: 5 U.S.C. 301; 7 U.S.C. 1989; 31 U.S.C. 3716; 42 
U.S.C. 1480.

Subpart S--Farm Loan Programs Account Servicing Policy

    2. Revise the third sentence in Sec. 1951.909 paragraph 
(e)(2)(viii)(A) to read as follows:


Sec. 1951.909  Processing primary loan service programs requests.

* * * * *
    (e) * * *
    (2) * * *
    (viii) * * *
    (A) * * * SA loans will be reamortized at the current Homestead 
Protection program interest rate in effect on the date of approval or 
the rate on the original amortized note, whichever is less.

    3. In Sec. 1951.914 the section heading, paragraphs (b) 
introductory text, (c)(1), (c)(2), (e)(6), (e)(11) and (h)(8) are 
revised, paragraphs (e)(10), (e)(11), (h)(9), (h)(10), and (h)(11) are 
added, and paragraphs (e)(9), (e)(10), (h)(9), and (h)(10) are 
reserved:


Sec. 1951.914  Servicing shared appreciation agreements.

* * * * *
    (b) When shared appreciation is due. For agreements entered into on 
or after August 18, 2000, the term of the agreement is five years. 
Shared appreciation is due at the end of either a five or ten year 
term, as specified in the Shared Appreciation Agreement, or sooner, if 
one of the following events occur:
* * * * *
    (c) * * *
    (1) The value of the real estate security at the time of maturity 
of the Shared Appreciation agreement (current market value) shall be 
the appraised value of the security at the highest and best use less 
the increase in the value of the security resulting from capital 
improvements added during the term of the Shared Appreciation Agreement 
(contributory value) as set out herein. The current market value of the 
real estate security property will be determined based on a current 
appraisal in accordance with 7 CFR Sec. 761.7 and subject to the 
following:
    (i) Upon request, the borrower will identify any capital 
improvements that have been added to the property since the execution 
of the Shared Appreciation Agreement.
    (ii) The appraisal must specifically identify the contributory 
value of capital improvements made to the Agency real estate security 
during the term of the Shared Appreciation Agreement in order to make 
deductions for that value under this subsection.
    (iii) For calculation of Shared Appreciation recapture, the 
remaining contributory value of capital improvements added during the 
term of the Shared Appreciation Agreement will be deducted from the 
current market value of the property. Such capital improvements must 
also meet at least one of the following criteria:
    (A) It is the borrower's primary residence. If the new residence is

[[Page 50405]]

affixed to the real estate security as a replacement for a home which 
existed on the security property when the Shared Appreciation Agreement 
was originally executed, or, the square footage of the original 
dwelling was expanded, only the value added to the real property by the 
new or expanded portion of the original dwelling (if it added value) 
will be deducted from the current market value.
    (B) The item is an improvement to the real estate with a useful 
life of over 1 year and is affixed to the property. The item must have 
been capitalized and not taken as an annual operating expense on the 
borrower's Federal income tax records. The borrower must provide copies 
of appropriate tax documentation to verify that capital improvements 
claimed for shared appreciation recapture reduction are capitalized on 
borrower income taxes.
    (2) In the event of a partial sale, an appraisal of the property 
being sold may be required to determine the market value at the time 
the Shared Appreciation Agreement was signed if such value cannot be 
obtained through another method.
* * * * *
    (e) * * *
    (6) The interest rate will be the Farm Loan Program Homestead 
Protection rate contained in RD Instruction 440.1 (available in any FSA 
office).
* * * * *
    (11) If the borrower has no outstanding Farm Loan Program loans and 
becomes delinquent on the Shared Appreciation loan, the Shared 
Appreciation loan will be serviced in accordance with subpart J of this 
part. If the borrower has outstanding Farm Loan Programs loans, and 
becomes delinquent or financially distressed in accordance with 
Sec. 1951.906, the Shared Appreciation loan will be considered for 
reamortization in accordance with Sec. 1951.909(e).
* * * * *
    (h) * * *
    (8) If the real estate that is the subject of the Shared 
Appreciation Agreement during the suspension period is conveyed, the 
suspended amount, plus any accrued interest shall be come immediately 
due and payable by the borrower in accordance with paragraph (c) of 
this section.
* * * * *
    (11) Capital improvement deductions are available to a borrower on 
any unpaid recapture amount under an existing Suspension Agreement in 
accordance with 1951.914(c).
* * * * *

    4. Exhibit A--Attachments 2, 3, 4, 5, 5-A, 6, 6-A, 9, 9-A, 10, 10-
A, Exhibit B, Exhibit B--Attachment 1, Exhibit C, Exhibit C-1, Exhibit 
E, Exhibit E, Attachments 1 and 2, Exhibit F, Exhibit F--Attachments 1 
and 2, Exhibit I, Exhibit J, Exhibit J--Attachment 1, Exhibit J-1, 
Exhibit J-1, Attachment 1, Exhibit K, Exhibit K--Attachment 1, Exhibit 
L and Exhibit M of 7 CFR part 1951, subpart S are removed.

    Signed in Washington, D.C., on August 8, 2000.
August Schumacher, Jr.,
Under Secretary for Farm and Foreign Agricultural Service.
[FR Doc. 00-20679 Filed 8-17-00; 8:45 am]
BILLING CODE 3410-05-P