[Federal Register Volume 69, Number 84 (Friday, April 30, 2004)]
[Proposed Rules]
[Pages 23697-23699]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-9787]


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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 0575-AC57


Servicing of Delinquent Community and Business Programs Loans--
Workout Agreements

AGENCY: Rural Housing Service, USDA.

ACTION: Proposed rule.

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SUMMARY: The Rural Housing Service (RHS) proposes to amend the 
regulations utilized to service the Community Facilities and Business 
Programs loan program by adding requirements for servicing delinquent 
Community Facilities in conformance with the Debt Collection 
Improvement Act of 1996. The intended effect of this action is to 
establish a workout agreement with delinquent borrowers to collect 
delinquent loans prior to referral for treasury offset.

DATES: Written or e-mail comments must be received on or before June 
29, 2004.

ADDRESSES: You may submit comments to this rule by any of the following 
methods:
     Agency Web site: http://rdinit.usda.gov/regs/. 
Follow instructions for submitting comments on the Web site.
     E-Mail: [email protected]. Include the RIN 
Number in the subject line of the message.
     Federal eRulemaking Portal: http://www.regulations.gov. Follow the instructions for submitting comments.
     Mail: Submit written comments via the U.S. 
Postal Service to the Branch Chief, Regulations and Paperwork 
Management Branch, U.S. Department of Agriculture, STOP 0742, 1400 
Independence Avenue, SW., Washington, DC 20250-0742.
     Hand Delivery/Courier: Submit written comments 
via Federal Express Mail or another courier service requiring a street 
address to the Branch Chief, Regulations and Paperwork Management 
Branch, U.S. Department

[[Page 23698]]

of Agriculture, 300 7th Street, SW., 7th Floor, Washington, DC 20024.
    All written comments will be available for public inspection during 
regular work hours at the 300 7th Street, SW., 7th Floor, address 
listed above.

FOR FURTHER INFORMATION CONTACT: Dan Spieldenner, Community Programs 
Senior Loan Specialist, Rural Housing Service, U.S. Department of 
Agriculture, STOP 0787, 1400 Independence Ave., SW., Washington, DC 
20250-0787, telephone: (202) 720-9700.

SUPPLEMENTARY INFORMATION:

Classification

    This proposed rule has been determined to be not significant for 
the purposes of Executive Order 12866 and, therefore, has not been 
reviewed by the Office of Management and Budget (OMB).

Programs Affected

    The Catalog of Federal Domestic Assistance Program impacted by this 
action is 10.766, Community Facilities Loans and Grants.

Intergovernmental Review

    This program is subject to the provisions of Executive Order 12372, 
which requires intergovernmental consultation with State and local 
officials. RHS conducts intergovernmental consultations for each loan 
in the manner delineated in 7 CFR part 3015, subpart V.

Civil Justice Reform

    This rule has been reviewed under 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) no retroactive effect will be given to this rule; and 
(3) administrative proceedings of the National Appeals Division (7 CFR 
part 11) must be exhausted before bringing suit in court challenging 
action taken under this rule.

Environmental Impact Statement

    The action has been reviewed in accordance with 7 CFR part 1940, 
subpart G, ``Environmental Program.'' The Agency has determined that 
this 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, 42 U.S.C. 4321 et seq., 
an Environmental Impact Statement is not required.

Unfunded Mandates Reform Act

    Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), 2 
U.S.C. chapters 17A and 25, established requirements for Federal 
agencies to assess the effects of their regulatory actions on State, 
local, and tribal governments and the private sector. Under section 202 
of the UMRA, RHS 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, or 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 RHS to identify and 
consider a reasonable number of regulatory alternatives and adopt the 
least costly, most cost-effective, or least burdensome alternative that 
achieves the objectives of the rule. This 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. Therefore, 
this rule is not subject to the requirements of sections 202 and 205 of 
the UMRA.

Regulatory Flexibility Act

    This rule has been reviewed with regard to the requirements of the 
Regulatory Flexibility Act (5 U.S.C. 601-612). 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 since this rulemaking action does not involve a new or 
expanded program.

Federalism

    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.

Implementation

    It is the policy of this Department that rules relating to public 
property, loans, grants, benefits, or contracts shall comply with 5 
U.S.C. 553, notwithstanding the exemption of that section with respect 
to such rules.

Paperwork Reduction Act

    The information collection and record keeping requirements 
contained in this regulation have been approved by the Office of 
Management and Budget (OMB) under the provisions of 44 U.S.C. chapter 
35 and were assigned OMB control number 0575-0066 in accordance with 
the Paperwork Reduction Act of 1995. Under the Paperwork Reduction Act 
of 1995, no person is required to respond to a collection of 
information unless it displays a valid OMB control number. The 
revisions in this rulemaking for part 1951 will require an amendment to 
the burden package and this modification will be made when the final 
rule is promulgated.

Discussion

    The Debt Collection Improvement Act of 1996 requires transfer of 
accounts that are more than 180 days delinquent to the Department of 
Treasury for collection by offset of Federal payments unless a suitable 
agreement for collection of the delinquent amount is negotiated between 
the borrower and the Federal agency. This change to regulation 
establishes requirements for negotiation of a ``Workout Agreement'' and 
the reporting requirements that are necessary to monitor the borrower's 
progress in resolving the delinquency. It also incorporates some 
administrative corrections.

List of Subjects in 7 CFR Part 1951

    Accounting servicing, Grant programs--housing and community 
development, Reporting requirements, Rural areas.
    Therefore, Chapter XVIII, Title 7, Code of Federal Regulations, is 
proposed to be 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. 1932; 7 U.S.C. 1989; 31 U.S.C. 
3716; 42 U.S.C. 1480.

Subpart E--Servicing of Community and Direct Business Programs 
Loans and Grants

    2. Section 1951.203 is amended by revising paragraph (a) to read as 
follows:


Sec.  1951.203  Definitions.

    (a) Approval official. An official who has been delegated loan and/
or grant approval authorities within applicable programs, subject to 
the dollar limitations of Exhibits A and B of subpart A of part 1901 of 
this chapter.
* * * * *
    3. Section 1951.222 is amended by revising paragraph (a)(1) to read 
as follows:


Sec.  1951.222  Subordination of security.

* * * * *
    (a) * * *

[[Page 23699]]

    (1) The request must be for subordination of a specific amount of 
the Rural Development indebtedness, and the amount must be within the 
approval official's authority as set forth in exhibits A and B of 
subpart A of part 1901 of this chapter (available in any Rural 
Development office).
* * * * *
    4. Section 1951.226 is amended in paragraph (b)(4)(ii) by removing 
the word ``below'' and adding in its place the phrase ``of this 
subpart.''
    5. Section 1951.230 is amended in paragraph (f)(2) by removing the 
phrase ``Form FmHA or its successor agency under Public Law 103-354 
442-46'' and adding in its place the phrase ``Form RD 1942-46.''
    6. Section 1951.242 is added to read as follows:


Sec.  1951.242  Servicing delinquent Community Facility loans.

    (a) For the purpose of this section, a loan is delinquent when a 
borrower fails to make all or part of a payment by the due date.
    (b) The delinquent loan borrower and the Agency, at its discretion, 
may enter into a written workout agreement.
    (c) For loans that are delinquent, the borrower must provide, 
monthly comparative financial statements in a format that is acceptable 
to the Agency by the 15th day of the following month. The Agency may 
waive this requirement if it would cause a hardship for the borrower or 
the borrower is actively marketing the security property.
    7. Section 1951.250 is amended by removing the last sentence.

    Dated: April 15, 2004.
James E. Selmon, III,
Acting Administrator, Rural Housing Service.
[FR Doc. 04-9787 Filed 4-29-04; 8:45 am]
BILLING CODE 3410-XV-P