This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

41581 

Vol. 74, No. 158 

Tuesday, August 18, 2009 

1The KSU studies discussed in this paragraph are 

available on the Internet at: http:// 

www.agrisk.umn.edu/cache/ARL01317.pdf and 

http://www.oznet.ksu.edu/library/agec2/ 

mf2474.pdf. 

DEPARTMENT OF AGRICULTURE 

Commodity Credit Corporation 

7 CFR Part 1436 

RIN 0560–AH60 

Farm Storage Facility Loan and Sugar 

Storage Facility Loan Programs 

AGENCY: Commodity Credit Corporation 

and Farm Service Agency, USDA. 

ACTION: Final rule. 

SUMMARY: The Commodity Credit 

Corporation (CCC) is amending the 

Farm Storage Facility Loan (FSFL) and 

Sugar Storage Facility Loan (SSFL) 

regulations to implement provisions of 

the Food, Conservation, and Energy Act 

of 2008 (the 2008 Farm Bill). The 2008 

Farm Bill adds hay and renewable 

biomass as eligible FSFL commodities, 

extends the maximum loan term to 12 

years, and increases the maximum loan 

amount to $500,000. This rule also adds 

fruits and vegetables (including nuts) as 

eligible facility loan commodities and 

adds cold storage facilities as eligible 

facilities pursuant to discretionary 

authority in the 2008 Farm Bill. This 

rule amends the regulations to clarify 

requirements for loan security and to 

allow for a partial loan disbursement 

during construction if certain conditions 

are met. This rule amends the FSFL 

program regulations, which include 

SSFLs; however, there are no changes to 

the specific requirements for SSFLs. 

DATES: Effective Date: August 17, 2009. 

FOR FURTHER INFORMATION CONTACT: 

DeAnn Allen, Program Manager, Price 

Support Division, FSA, USDA, STOP 

0512, 1400 Independence Ave., SW., 

Washington, DC 20250–0512; telephone: 

(202) 720–9889; facsimile: (202) 690– 

3307; e-mail: 

deann.allen@wdc.usda.gov. Persons 

with disabilities who require alternative 

means of communication (Braille, large 

print, audio tape, etc.) should contact 

the USDA Target Center at (202) 720– 

2600 (voice and TDD). 

SUPPLEMENTARY INFORMATION: 

Background 

The U.S. Department of Agriculture 

(USDA) Farm Service Agency (FSA) 

FSFL program provides low-interest 

financing for producers to build or 

upgrade farm storage and handling 

facilities. FSA was initially authorized 

to implement the FSFL program through 

the CCC Charter Act (15 U.S.C. 714b), 

which provides that CCC may make 

loans to grain producers needing grain 

storage facilities in areas where the 

Secretary determines there is a 

deficiency of such storage. When there 

was no documented shortage of storage, 

such as the period between 1982 and 

2000, the program did not operate. 

Section 1614 of the 2008 Farm Bill (Pub. 

L. 110–246, 7 U.S.C. 8789) authorizes 

changes to the FSFL program through 

2012 without the specific requirement 

that the Secretary determine that there 

is a deficit in grain storage. This rule 

therefore amends § 1436.2, 

‘‘Administration,’’ to remove a 

provision that the Deputy Administrator 

may suspend the program if there is no 

shortage of storage. 

The current FSFL program, which has 

been operating since May 2000, makes 

loans primarily for grain storage and 

drying equipment. This rule expands 

the program to include hay and 

renewable biomass as eligible facility 

loan commodities, as required by the 

2008 Farm Bill, and to include fruit and 

vegetables as eligible facility loan 

commodities, which is a discretionary 

addition permitted by the 2008 Farm 

Bill. 

The on-farm storage financed by the 

FSFL program allows producers 

flexibility in timing when to sell their 

crops. On-farm storage allows producers 

to avoid some fees associated with 

storing grain at commercial facilities 

(grain elevators). New uses for grain and 

other renewable biomass crops may 

increase the need for on-farm storage. In 

addition, the costs of building grain 

storage facilities are increasing. 

Most of the current participants in the 

program are grain producers, 

particularly corn, soybean, and wheat 

producers. Some dairy farms use the 

program to fund silage storage. The 

expansions in this rule will allow new 

groups to benefit from the program. 

Producers of fruits and vegetables are 

expected to participate in the FSFL 

program to fund short-term storage of 

perishable produce for farmers’ markets. 

Producers of hay are expected to 

participate in the program to fund 

storage of high quality hay for sale to the 

equine and cow-calf industry. 

Renewable biomass producers are 

expected to participate in the FSFL 

program to fund storage of these 

renewable plant materials to maintain 

the quality of the biomass between 

harvest and delivery to a purchaser. 

The amendments in this rule allowing 

larger loans will address the increasing 

cost for storage facilities. According to 

studies by Kansas State University, in 

FY 1999, the average cost to construct 

a bushel of grain storage was 

approximately $1.37 per bushel; by FY 

2007, the cost had increased to $1.80 

per bushel of grain storage.1 Producers 

are also constructing larger structures 

for grain storage. In FY 1999, the 

majority of the bins constructed stored 

between 10,000 to 50,000 bushels of 

grain. In FY 2007, grain bin 

manufacturers reported the majority of 

the bins constructed had the capacity to 

store between 100,000 and 200,000 

bushels of grain. The Kansas State 

University study in 2007 also found that 

producers are demanding larger grain 

bins. In general, larger buildings have a 

lower per bushel construction cost, but 

a higher total cost. An increasing 

percentage of FSFLs, over 5 percent in 

2008, are for the maximum dollar 

amount allowed in the current 

regulations. As specified in the 2008 

Farm Bill, the maximum cap is raised 

from $100,000 per borrower to $500,000 

per loan, which should address the 

demand for larger and more costly 

structures. 

The prior regulations and the 

amendments in this rule apply to both 

the FSFL program and the SSFL 

program, which is a sub-program of the 

main FSFL program. Since the SSFL 

program was established, CCC has only 

received one loan application. That loan 

application was withdrawn by the 

applicant before approval. Therefore, 

most of the discussion in this preamble 

focuses on the FSFL program for all the 


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eligible facility loan commodities except 

sugar. Section 1404 of the 2008 Farm 

Bill requires the SSFL program to not 

charge prepayment penalties; no change 

is needed in this rule to implement that 

provision because the existing 

regulation already specifies that the loan 

may be paid in full or part without any 

penalty at any time before maturity. 

This rule makes minor language changes 

to some of the provisions concerning 

SSFLs, to keep the provisions for SSFLs 

consistent with the provisions for the 

other eligible facility loan commodities, 

but makes no changes to the substantive 

requirements for SSFLs. 

New and Revised Definitions 

This rule amends § 1436.3, 

‘‘Definitions,’’ to add hay and renewable 

biomass to the definition of a ‘‘facility 

loan commodity,’’ as required by the 

2008 Farm Bill. The 2008 Farm Bill also 

gives the Secretary authority to include 

as eligible facility loan commodities 

‘‘other storable commodities (other than 

sugar) as determined by the Secretary.’’ 

Therefore, as a discretionary change, 

this rule adds fruits and vegetables as 

eligible facility loan commodities for 

FSFL. Fruits and vegetables include 

nuts. This rule adds definitions for hay 

and renewable biomass. 

Hay is defined as a grass or legume 

that has been cut and stored. Commonly 

used grass mixtures include rye grass, 

timothy, brome, fescue, coastal 

Bermuda, orchard grass, and other 

native species, depending on the region. 

Forage legumes include alfalfa and 

clovers. Hay will be considered to 

include grains where the entire plant, 

including the seeds, has been cut, 

stored, and used for animal feed, such 

as in the case of frost-damaged grain 

crops harvested as hay. Loans will not 

be made to store wheat straw or corn 

stalks used for bedding; these are not 

considered hay. 

‘‘Renewable biomass’’ is defined as 

any organic matter that is available on 

a renewable or recurring basis including 

renewable plant material such as feed 

grains or other agricultural commodities 

(including, but not limited to, soybeans 

and switchgrass), other plants and trees 

(excluding old-growth timber), algae, 

crop residue (including, but not limited 

to, corn stover, various straws and hulls, 

and orchard prunings), other vegetative 

waste material (including, but not 

limited to, wood waste, wood residues, 

and food and yard waste) used for the 

production of energy in the form of heat, 

electricity, and liquid, solid, or gaseous 

fuels. Manure from any source is not 

included. 

This definition is consistent with 

definitions of renewable biomass used 

by other USDA and Department of 

Energy (DOE) programs. If renewable 

biomass storage facilities are eligible for 

other loans or grants, such as those 

provided by USDA Rural Development 

or DOE, the amount of those benefits 

will be subtracted from the amount of 

the FFSL, so as to avoid duplication of 

benefits. This is consistent with the 

prior operation of the FSFL program. 

It also adds definitions for ‘‘cold 

storage facility,’’ ‘‘commercial facility,’’ 

and ‘‘commercial storage.’’ The 

definitions of ‘‘commercial storage’’ and 

‘‘commercial facility’’ are based on the 

terms commercial purpose and 

commercial operation that were 

previously in §§ 1436.6 and 1436.13. 

This rule moves the definitions related 

to commercial storage to § 1436.3, 

‘‘Definitions,’’ and amends them to 

include facilities for the new eligible 

facility loan commodities. 

The definition of ‘‘storage need 

requirement’’ is removed from the 

Definitions section, and expanded 

specific provisions for storage need 

requirements for each type of eligible 

commodity are added to § 1436.9, ‘‘Loan 

Amount and Loan Application 

Approvals.’’ 

This rule adds a definition for ‘‘resale 

collateral value’’ to clarify how FSA 

county committees will determine the 

value of loan collateral if the collateral 

is removed from its original location 

and sold. 

This rule removes the following terms 

that are no longer used in the rules: 

Person and Uniform Commercial Code. 

Loan Terms, Eligible Storage, and 

Equipment 

Prior to this rule, the loan term for all 

storage facilities, except sugar facilities, 

was 7 years, and the useful life of a 

facility was required to be at least 10 

years. This rule changes the maximum 

loan term to 12 years in § 1436.7, ‘‘Loan 

Term,’’ and increases the required 

useful life of all facilities to a minimum 

of 15 years in § 1436.6, ‘‘Eligible Storage 

or Handling Equipment.’’ The 12 year 

loan term is required by the Farm Bill; 

the 15 year minimum useful life of the 

facility is a discretionary change made 

to ensure that the loan will be 

adequately secured throughout the loan 

term. For most structures, the useful life 

of the commodity storage facility, if 

properly maintained, is well over 15 

years. The required minimum useful life 

of a sugar facility is already set at 15 

years in the current regulations, and is 

not changing with this rule. This rule 

also amends § 1436.6 to specify that the 

loan collateral must be used for the 

purpose for which the storage facility 

was delivered, erected, constructed, 

assembled, or installed for the entire 

term of the loan. The intent of the 

program is to provide on-farm storage to 

producers for the storage of eligible 

facility loan commodities they produce 

and not for any other purpose. 

This rule amends § 1436.6 to allow 

the Deputy Administrator, Farm 

Programs, to approve rebuild kits that 

are not from the original manufacturer 

for oxygen-limiting storage structures. 

Rebuild kits typically include new parts 

for the purpose of rebuilding an existing 

structure to bring it back to a 

manufacturer’s specifications and may 

include, but are not limited to, nuts, 

bolts, washers, seals, gaskets, internal 

breather bags, a new base kit, and a new 

floor. Loans have been available for 

remanufactured oxygen-limiting storage 

structures built to the original 

manufacturer’s design specifications 

using rebuild kits, but the prior rule 

allowed only original manufacturer 

rebuild kits. This discretionary change 

is necessary because the original 

manufacturer for the majority of the 

original oxygen-limiting structures is no 

longer in business. There are a number 

of reputable companies manufacturing 

the rebuild kits. 

This rule amends § 1436.6 to add 

specific provisions for facilities and 

eligible cost items for hay, renewable 

biomass, and fruit and vegetable storage. 

In each case, the requirements are 

similar to those for other commodities, 

with the additional requirement for hay 

and renewable biomass that the flooring 

be suitable for the region in which the 

facility is located, and designed 

according to acceptable guidelines. This 

requirement is to ensure that the 

program makes loans for facilities that 

are appropriately designed for the 

intended purpose, and not for some 

other purpose. For fruit and vegetable 

cold storage facilities, the allowable cost 

items include building insulation to 

help limit the loss of cool air from the 

structure. 

No loans will be approved for any 

portable structures, portable handling 

and cooling equipment, or used or preowned structures and equipment. Loans 

may be approved for modifications to 

existing structures. Loans will not be 

made for existing structures, but may be 

made for new components added to 

existing structures. Remanufactured 

oxygen-limited structures rebuilt to the 

original specifications are not 

considered used, due to the extensive 

nature of the remanufacturing process. 

This rule amends § 1436.9, ‘‘Loan 

Amount and Loan Application 

Approvals,’’ to specify that any portion 

of a storage structure that is not used for 

storing facility loan commodities, such 


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as an office space or display area, will 

not be eligible for loan. The loan 

amount will be adjusted to exclude this 

ineligible space. This provision was 

already in the regulation, but is clarified 

and expanded. 

This rule further clarifies that FSFL 

structures are prohibited from being 

used for any commercial storage. The 

purpose of the FSFL program is to 

provide low-cost financing to producers 

to store the commodities that they 

produce. Accordingly, the program does 

not provide financing for commercial 

storage facilities. 

This rule amends § 1436.9 to add 

provisions regarding how storage need 

requirements will be determined for 

specific eligible facility loan 

commodities. These requirements were 

previously in the Definitions section. 

The purpose of these requirements is to 

ensure that CCC uses its limited 

resources to finance storage facilities 

that are of a capacity appropriate to the 

needs of the producer. Storage capacity 

for two years will be used to estimate 

the storage needs for hay and renewable 

biomass commodities. This is the same 

time period used for all of the other 

originally approved facility loan 

commodities in the current regulations. 

For fruits and vegetables, the cold 

storage need requirement will be 

determined based on production for one 

year. Fruits and vegetables are 

perishable commodities and their 

quality can only be maintained for a 

limited period of time. Cold storage 

facilities can extend this period of time, 

but a cold storage facility cannot 

maintain the quality of fruits and 

vegetables for longer than a year. 

Although apples may be stored from 

between 3 to 8 months, and carrots will 

maintain their quality for approximately 

6 months, the quality for many fruits 

and vegetables in cold storage can 

typically be maintained for only a week 

to 10 days. 

Eligible Borrowers 

Section 1614(b) of the 2008 Farm Bill 

(7 U.S.C. 8789(b)) requires that 

producers eligible for FSFLs have a 

satisfactory credit history, demonstrate 

the ability to repay the loan, and show 

a need for increased storage capacity. 

These requirements were already 

included in the regulations in § 1436.5, 

‘‘Eligible Borrowers.’’ This rule makes 

only minor changes, described below, to 

the regulations specifying borrower 

eligibility requirements. 

Prior to this rule, the regulations 

allowed a producer to construct storage 

using as eligibility the producer’s own 

share of the crop. On occasion, a crop 

share landlord or tenant requests to 

construct a storage structure to store all 

commodities produced on the farm but 

only one of the individuals wishes to 

assume liability for the loan. This rule 

amends § 1436.5 to address this 

situation. A new provision in this rule 

allows the Deputy Administrator, Farm 

Programs, to issue a waiver to use all 

production from the farm to compute 

FSFL eligibility for a crop share 

landlord or tenant. These waivers must 

be requested by the applicant in writing, 

and will be issued on a case by case 

basis. 

Prior to this rule, the regulations 

required borrowers to carry crop 

insurance on all crops of economic 

significance. However, crop insurance 

under the Federal Crop Insurance 

Program is not available for some of the 

renewable biomass commodities, and as 

an example, hay may not be an 

economically significant crop on a 

particular farm depending upon the 

total expected value of all crops grown 

by the applicant. This rule amends this 

section of the regulations to clarify that 

if crop insurance is not available for a 

commodity for which a producer is 

requesting FSFL, crop insurance is not 

a requirement. This rule also adds a 

requirement that borrowers with 

outstanding FSFLs must present proof 

of crop insurance annually to the FSA 

office servicing their loan, and clarifies 

that crop insurance or Noninsured Crop 

Disaster Assistance Program (NAP) 

coverage, if available, is required on all 

the commodities stored in the FSFLfunded facility, whether economically 

significant or not. 

Loans are approved and disbursed to 

a farming operation that is an eligible 

entity or an eligible producer at the time 

of approval. This rule amends § 1436.16 

‘‘Foreclosure, Liquidation, 

Assumptions, Sales or Conveyance, or 

Bankruptcy’’ to add one more available 

option to address the situation where 

changes are made to the farming 

operation after the loan is disbursed. 

This rule adds a new paragraph (d) to 

§ 1436.16 to specify that if any 

significant changes are made, as 

determined by CCC, to the legal or 

operating status of the farming operation 

with an outstanding FSFL, such as 

changing from a partnership to a 

corporation, or discontinuing farming, 

the borrower must do one of the 

following: 

• Find an eligible borrower or entity 

to assume the loan; 

• repay the loan; or 

• undergo new financial analysis as 

approved and determined by CCC to 

ensure that CCC’s interests are protected 

and it is determined by CCC that the 

current borrower is in a position to 

continue making the scheduled loan 

payments. 

The provisions for loan assumption or 

repayment are not changing; the 

financial analysis provision is a new 

option to allow flexibility in situations 

where changes are made to the farming 

operation after the loan is disbursed. 

This situation typically occurs when a 

borrower retires and wishes to maintain 

ownership of a structure but is no longer 

receiving a share of the crop. CCC will 

allow the loan to continue, provided the 

scheduled payments are made, the 

facility is not used as a commercial 

facility or operation, and one of the 

three provisions for addressing changes 

to the farming operation is met. 

Loan Terms, New Loan Limit 

Prior to this rule, the FSFL regulation 

at § 1436.9 limited FSFLs for all eligible 

facility loan commodities except sugar 

to a maximum of $100,000 for each 

borrower signing the note and security 

agreement. This rule increases that limit 

to $500,000 per loan, not per borrower, 

as required by the 2008 Farm Bill. This 

rule continues to specify the loan limit 

as 85 percent of the qualified costs to 

construct an on-farm storage structure, 

which is not a change from the prior 

regulation. With the new maximum 

limit of $500,000, it will be possible for 

an eligible borrower to construct a 

structure costing nearly $589,000. It will 

also be possible for a borrower to qualify 

for multiple loans for multiple facilities, 

but such borrower must separately 

qualify for each loan and CCC will 

administer each loan separately. 

As discussed earlier, the loan term is 

extended to a maximum of 12 years, as 

required by section 1614 of the 2008 

Farm Bill. This rule amends § 1436.7, 

‘‘Loan term,’’ to specify the loan term of 

7, 10, or 12 years, with the loan term 

determined by the amount of loan 

principal; within the specific options set 

by this rule, the borrower may choose 

the term as follows: 

• For a loan with the total principal 

of $100,000 or less, the term will be set 

at 7 years. 

• For loans from $100,000.01 through 

$250,000, the borrower can choose a 

loan term of 7 or 10 years. 

• For loans from $250,000.01 through 

$500,000, the borrower can choose a 

loan term of 7, 10, or 12 years. 

The requested loan term will be 

specified by the borrower at the time of 

loan application on the loan application 

form, as the required financial analysis 

must take into account the annual 

payment amount. The borrower may 

change the loan term prior to the final 

loan disbursement if the principal 

amount qualifies the loan for a different 


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term and if a new financial analysis 

indicates the annual payments will be 

manageable as determined by CCC. If a 

partial disbursement has been issued, 

the term on the amount disbursed can 

not be adjusted because the promissory 

note and the security agreement 

establishing the interest rate and loan 

term have already been completed and 

the lien perfected. 

This rule amends § 1436.12, ‘‘Interest 

and fees,’’ to clarify how the interest 

rate is determined for FSFLs. CCC 

borrows from the U. S. Treasury to fund 

the FSFL program. The FSFL interest 

rates are equivalent to the rate of 

interest charged on Treasury Securities 

of a comparable term and maturity. For 

this reason, the interest rate on the 7, 10, 

and 12 year FSFL loan terms may be 

different. The rates will be published on 

the FSA website and posted in the 

county office. 

This rule also amends § 1436.12 to 

specify that the loan application fee for 

FSFLs will be assessed per loan 

borrower and not per loan. The nonrefundable loan application fee for each 

FSFL is increased from not less than $45 

per loan to not less than $100 per 

borrower. This discretionary change is 

needed to cover the cost to CCC of 

making these loans. CCC is required to 

conduct lien searches, obtain credit 

reports, and file liens on the loan 

security for all borrowers on a loan. The 

cost to CCC for these lien searches, 

security filings, and credit reports has 

increased since the regulations were 

published in 2001. The purpose of the 

loan application fee is to cover the cost 

of the fees associated with the loan. 

Security for Loan 

This rule makes a number of changes 

to § 1436.8, ‘‘Security for Loan,’’ to 

implement provisions of the 2008 Farm 

Bill regarding loan security. Section 

1614(f)(2) of the 2008 Farm Bill (7 

U.S.C. 8789(f)(2)) provides that a 

severance agreement from the holder of 

any prior lien on the real estate parcel 

on which the storage facility is located 

will not be required if the borrower 

agrees to increase the down payment on 

the storage facility loan in an amount 

determined by the Secretary or provides 

another form of security acceptable to 

the Secretary. This rule amends the 

regulations to include this provision. 

CCC has determined that if the borrower 

increases the down payment from 15 

percent to 20 percent, severance 

agreements will not be required. This 

will only apply to loans $50,000 or less 

because all other loans already require 

additional security and in most 

instances when CCC has a mortgage on 

the real estate, the facility is not severed 

from the real estate. 

Section 1614(f)(3) of the 2008 Farm 

Bill (7 U.S.C. 8789(f)(3)) requires that 

CCC allow a borrower to use a parcel of 

real estate to secure a loan if this acreage 

is not subject to any other liens or 

mortgages superior to CCC’s lien 

interest, and is of adequate size and 

value to secure the loan and insure 

repayment. That is consistent with 

current CCC policy. This rule amends 

the regulations to specifically include 

this provision. 

This rule also amends § 1436.8 to 

require loans for $50,000 or less that are 

secured by collateral with no resale 

value, as determined by CCC, to have 

additional security. Additional security 

on loans of $50,000 or less has not been 

required in the past unless the aggregate 

outstanding FSFL balance for the 

borrower exceeds $50,000 or CCC 

determines as a result of financial 

analysis that additional security is 

required. Some FSFL facilities, such as 

poured cement open bunker silos, have 

nothing that can be removed and sold if 

a borrower defaults on the loan. CCC 

will now require county committees to 

determine if a structure has resale 

collateral value and if additional 

security is required for the loan. This 

change is needed to protect CCC’s 

interests in case of default. Most of the 

loans in the FSFL program are under 

$50,000. 

Disbursement 

Section 1614(e) of the 2008 Farm Bill 

(7 U.S.C. 8789(e)) requires the 

availability of one partial loan 

disbursement and the final loan 

disbursement. This rule amends 

§ 1436.10, ‘‘Down Payment,’’ and 

§ 1436.11, ‘‘Disbursements and 

Assignments,’’ to implement the new 

provisions regarding the partial and 

final loan disbursement. The partial 

loan disbursement must be requested by 

the borrower and will be made to 

facilitate the purchase and construction 

of an eligible facility. The partial loan 

disbursement will be available after a 

portion of the construction has been 

done and commensurate with the 

amount of construction completed on 

the approved structure. CCC has 

determined at this time that the 

maximum amount of the partial loan 

disbursement will be 50 percent of the 

projected and approved total loan 

amount, and cannot exceed $250,000. 

The borrower will need to provide 

acceptable documentation specifying 

the cost of the completed portion of the 

structure to CCC, then FSA will inspect 

the facility to verify the amount of the 

construction completed. Security 

required for the principal amount of the 

partial loan disbursement will be 

required before the partial disbursement 

is finalized. CCC will make the final 

loan disbursement after the borrower 

provides acceptable documentation 

specifying the total cost of the facility to 

CCC and after the facility is completely 

delivered, erected, constructed, 

assembled, or installed. An FSA 

representative will inspect and approve 

the facility prior to the final loan 

disbursement. All security needed to 

fully secure both the partial and final 

loan disbursements must be received 

before the final loan disbursement. 

For SSFLs, the option for a partial 

loan disbursement is not available, 

because section 1404 of 2008 Farm Bill, 

which amends 7 U.S.C. 7971(c), which 

contains provisions specific to SSFLs, 

does not include this provision. 

As a conforming change, this rule 

amends § 1436.10 to specify that the 

down payment will be made before 

either the partial or final loan 

disbursements. 

Fruits and Vegetables 

The discretionary change to add cold 

storage for fruits and vegetables into the 

farm storage facility loan program 

regulation is one avenue USDA is 

implementing to help farmers. The postharvest cooling of produce to remove 

the field heat is necessary to reduce 

incidents of microbial contamination. 

Cooling also extends the shelf life of 

produce. 

Cooling facilities are an expensive 

outlet for beginning and start-up 

growers. Many farmers indicate a need 

to have on-farm or proximate access to 

cooling facilities, but found that 

financing them was difficult given the 

seasonal nature of their use. With credit 

more difficult to obtain, many producers 

have found they are unable to get 

commercial lending for a cold storage 

facility. 

Small farms are diversifying to make 

a profit and with the emphasis of buying 

locally grown food, many small fruit 

and vegetable producers market their 

crops at farmers markets. To remove the 

field heat from their produce, a cold 

storage facility is needed to cool down 

their crops immediately after harvest 

and prior to trucking to a farmers 

market. Many producers must truck 

their produce to a cold storage facility 

up to 2 hours away to remove the field 

heat, and go back to retrieve it before 

proceeding to the market. 

The 2008 Farm Bill increased the loan 

limit from $100,000 per borrower to a 

maximum of $500,000 per loan. Even 

with the maximum loan amount, 

considering the cost of a cold storage 


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facility, only a small to moderate size 

facility could be constructed, thereby 

benefiting the small to mid size farmers. 

The smaller producers store their crops 

for a much shorter term and are 

constantly moving in and out a variety 

of different crops. 

A study entitled ‘‘2007 Pennsylvania 

Shipping Point Market Feasibility 

Study,’’ by Philip Gottwals, Duke 

Burruss, and Ali Church indicated that 

a self enclosed modular forced air 

cooling and cold storage facility that 

would meet the needs of the small 

producer cost approximately $28,000 in 

2007. This facility has a capacity of 20 

pallets and would remove field heat by 

forced air cooling and serve as a 

temporary cold storage room. The 

structure in this example is 8 feet × 40 

feet × 8.5 feet high equaling 2,720 cu. 

feet of storage space. The price is still 

around $28,000. 

A cold storage building measuring 40 

feet × 60 feet × 14 feet high where half 

of the structure (16,800 Cu. feet) was 

refrigerated for cold storage, cost 

$125,000. This is considered a small 

cold storage facility. 

The addition of cold storage facilities 

for fruits and vegetables will help the 

Department’s outreach goals and 

initiatives to expand access of USDA 

programs and services to underserved 

groups. Underserved groups include 

small farms, beginning farmers, and 

racial and ethnic minority groups. Only 

2 percent of all U.S. farms primarily 

grow vegetables, whereas vegetable 

production is the primary enterprise for 

6 percent of Black farmers, 13 percent 

of Asian farmers, and 9 percent of 

American Indian farmers. Fruits or nuts 

are the primary enterprise for 4 percent 

of all U.S. farms, but are the primary 

enterprise for 37 percent of Asian 

farmers and 16 percent of Hispanic 

origin farmers. Small farms and 

beginning farmers also are more likely 

to be involved in these farm enterprises. 

Therefore, adding these agricultural 

products to the eligible commodities 

increases the Departments outreach to 

these underserved groups. 

Specialty crops, which include fruits 

and vegetables, account for most directto-consumer sales, and are produced at 

a high frequency by small farmers. The 

direct-to-consumer sales through local 

markets play a pivotal role in 

maintaining the viability of family 

farmers by providing them direct access 

to markets close to home. Farmers who 

sell directly to their customers receive 

more of the full retail price for their 

food, which means that many small 

farmers are able to earn greater returns. 

Other Miscellaneous Changes 

This rule amends § 1436.4, 

‘‘Availability of Loans,’’ to designate 

where the producer must submit loan 

applications for renewable biomass 

commodity facilities and cold storage 

facilities for fruits and vegetables. This 

rule amends that section to specify that 

if the commodities will be produced on 

land that has farm records established in 

a county office, the application must be 

submitted to that office. If the 

commodities will be produced on land 

that does not have farm records 

established in a county office, the 

application must be submitted to the 

county FSA office that services the 

county where the facility will be 

located. This amendment is needed to 

clarify where the loan applications 

should be filed, because the new eligible 

facility loan commodities may be 

produced on land that does not 

currently have FSA farm records. 

This rule amends § 1436.9, ‘‘Loan 

Amount and Loan Application 

Approvals,’’ to allow the Deputy 

Administrator, Farm Programs, to set a 

limit for the approval authority of 

original loan applications by county and 

State FSA committees that is lower than 

the maximum loan amount. The intent 

of this amendment is to protect the 

financial interests of CCC. 

This rule also amends § 1436.9 to 

allow the State FSA committee the 

authority to extend the loan approval 

period for an additional 4 months for a 

total of 12 months from the original 

approval date. In the current rule, the 

initial loan approval period is set at 4 

months from the county or State 

committee approval date. The FSA State 

committee or its representative can 

currently extend approval for another 4 

months. This rule will change that to 

allow a second extension, for a total of 

12 months. Currently, if the producer 

cannot complete construction of the 

facility in 8 months, the State 

Committee has to send the loan 

approval to the FSA headquarters office 

to formally approve the extension. 

There are common reasons why a 

facility cannot be completed in 8 

months, such as weather, part defects, 

contractor scheduling issues, and other 

construction delays. The change will 

expedite and simplify the loan 

extension process for producers who 

have routine construction delays, by 

allowing a second loan extension to be 

made at the State committee level. Only 

the State committee will have the 

authority to extend the loan approval 

period to 12 months and that authority 

cannot be delegated. This change is 

permitted for all eligible facility loan 

commodities except sugar. The 

provisions regarding the extension for 

SSFLs remain unchanged. 

This rule amends § 1436.13, ‘‘Loan 

Installments, Delinquency, and 

Acceleration of Maturity Date,’’ to 

clarify that the producer’s first 

installment payment is due and payable 

to CCC one year from the date of each 

of the partial and final loan 

disbursements. Producers that request a 

partial disbursement, which will 

therefore also necessitate a final 

payment, will have two notes for the 

one loan with two payment schedules. 

One note will be for the partial 

disbursement and the second note will 

be for the final disbursement of the loan; 

there will be only one loan application 

required for the two notes. Producers 

that request a partial disbursement will 

have two annual installments due one 

year from each disbursement and 

annually on these dates until the loans 

have been paid in full. 

This section is also amended to clarify 

the procedure for rescheduling debts. 

Any rescheduling or alternate 

repayment arrangements on any 

outstanding loans will require prior 

written approval from the Deputy 

Administrator, Farm Programs. This is a 

discretionary change to protect CCC’s 

financial interest by assuring that proper 

procedure is followed in rescheduling 

any FSFL debts. 

This rule adds retail and wholesale 

cold storage facilities to the provisions 

prohibiting commercial facilities for 

outstanding FSFLs in this section. 

This section allows CCC to declare the 

entire loan immediately due and 

payable if the facility is used for a 

commercial operation, which is not a 

change from the previous rule. 

In addition, nonsubstantive, 

housekeeping changes are being made to 

the regulations to fix typos and add to 

the clarity, readability, plain language, 

and consistency of the regulations. 

Some examples of these changes 

include: 

• Clarifying the list of commodities to 

reflect the full list throughout the 

regulation, for example in the definition 

of ‘‘facility loan commodity,’’ some of 

the commodities had not been added 

the last time the regulations were 

revised; 

• Referring consistently to a 

commodity as a ‘‘facility loan 

commodity’’ instead of ‘‘grain’’ versus 

‘‘commodities’’ or ‘‘agricultural 

commodities.’’ The same type of 

wording change was made for 

commercial operations, facility, storage, 

and other terms where consistency was 

needed; 


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41586 Federal Register / Vol. 74, No. 158 / Tuesday, August 18, 2009 / Rules and Regulations 

• Clarifying which provisions apply 

to sugar and which do not apply; and 

• Replacing ‘‘shall’’ with ‘‘will’’ or 

‘‘must’’ based on context where deemed 

appropriate. 

Notice and Comment 

These regulations are exempt from 

notice and comment provisions of 5 

U.S.C. 553, as specified in section 

1601(c) of the 2008 Farm Bill, which 

requires that the regulations be 

promulgated and administered without 

regard to the notice and comment 

provisions of section 5 or title 5 of the 

United States Code or the Statement of 

Policy of the Secretary of Agriculture 

effective July 24, 1971 (36 FR 13804), 

relating to notices of proposed 

rulemaking and public participation in 

rulemaking. 

Executive Order 12866 

This final rule is economically 

significant and was reviewed by the 

Office of Management and Budget 

(OMB) under Executive Order 12866. A 

Cost Benefit Analysis is summarized 

below and is available from the contact 

information listed above. 

Summary of Economic Impacts 

The amendments to the FSFL program 

in this rule will add costs of $6 million 

in 2009, $28 million in 2010, $30 

million in 2011, and $32 million in 

2012 over the cost of the existing 

program. This rule was designated as 

economically significant based on 

original estimates that included the full 

cost of the program instead of the 

regulatory impact of the changes to the 

existing program. The majority of the 

increase in demand for loans will come 

from the increase in loan size eligibility 

from $100,000 to $500,000; the 

remaining increase will come from 

demand for storage of the additional 

eligible crops for storage (hay, fruits and 

vegetables, and renewable biomass). The 

total program cost includes a roughly 

3% increase per year in lending 

volumes, due to increased construction 

costs and capacity needs. 

The total benefit to producers per year 

from the FSFL program is about $10 

million per year in interest rate savings 

over what they would have had to pay 

to finance comparable loans from 

commercial lenders. Assuming that all 

those producers could have gotten a 

commercial loan and would have done 

so, commercial lenders have an 

equivalent $10 million loss in loan 

revenue per year. If credit markets 

remain tight, the benefits to producers 

could be larger, because the spread 

between FSFL rates and commercial 

rates might be larger. The availability of 

below-market rate loans for on-farm 

storage facilities has a small potential 

negative impact on commercial storage 

facilities, such as grain elevators. FSFL 

has funded less than 4% of the on-farm 

storage capacity in the U.S., so it is 

unlikely that the program is having a 

significant impact on commercial 

storage facilities at a national level, 

although there may be more significant 

localized effects in locations where 

FSFL has a relatively larger share of the 

new facility loan market. 

Regulatory Flexibility Act 

This rule is not subject to the 

Regulatory Flexibility Act because CCC 

is not required to publish a notice of 

proposed rulemaking for the subject 

matter of this rule. 

Environmental Review 

FSA has prepared a Programmatic 

Environmental Assessment (PEA) to 

evaluate the environmental 

consequences associated with 

implementing the changes to the FSFL 

Program authorized by the 2008 Farm 

Bill. The PEA notice is published 

elsewhere in this issue of the Federal 

Register. In consideration of the 

analysis documented in the PEA and the 

reasons outlined in the Finding of No 

Significant Impact (FONSI), the 

Preferred Alternative would not 

constitute a major Federal action that 

would significantly affect the quality of 

the human environment. Therefore, an 

environmental impact statement will 

not be prepared. 

Executive Order 12372 

This program is not subject to 

Executive Order 12372, which requires 

consultation with State and local 

officials. See the notice related to 7 CFR 

part 3015, subpart V, published in the 

Federal Register on June 24, 1983 (48 

FR 29115). 

Executive Order 12988 

The final rule has been reviewed 

under Executive Order 12988. This rule 

preempts State laws that are 

inconsistent with its provisions. This 

rule is not retroactive and does not 

preempt State or local laws, regulations, 

or policies unless they present an 

irreconcilable conflict with this rule. 

Before any judicial action may be 

brought regarding the provisions of this 

rule the administrative appeal 

provisions of 7 CFR parts 11 and 870 

must be exhausted. 

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. 

Executive Order 13175 

The policies contained in this rule do 

not impose substantial unreimbursed 

direct compliance costs on Indian tribal 

governments or have tribal implications 

that preempt tribal law. 

Unfunded Mandates 

This rule contains no Federal 

mandates under the regulatory 

provisions of Title II of the Unfunded 

Mandates Reform Act of 1995 (UMRA) 

for State, local, and tribal governments 

or the private sector. In addition, CCC 

was not required to publish a notice of 

proposed rulemaking for this rule. 

Therefore, this rule is not subject to the 

requirements of sections 202 and 205 of 

the UMRA. 

Small Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA) 

Section 1601(c)(3) of the 2008 Farm 

Bill requires that the Secretary use the 

authority in section 808 of title 5, 

United States Code, which allows an 

agency to forgo SBREFA’s usual 60-day 

Congressional Review delay of the 

effective date of a major regulation if the 

agency finds that there is a good cause 

to do so. This rule affects a large number 

of agricultural producers who are 

dependent upon these provisions for 

financing farm storage and need to 

know the details as soon as possible 

because it affects their planting, 

marketing, and building decisions. 

Accordingly, this rule is effective upon 

the date of filing for public inspection 

by the Office of the Federal Register. 

Federal Assistance Programs 

The changes in this rule affect the 

following FSA programs as listed in the 

Catalog of Federal Domestic Assistance: 

10.056—Farm Storage Facility Loans. 

Paperwork Reduction Act 

The regulations in this rule are 

exempt from requirements of the 

Paperwork Reduction Act (44 U.S.C. 

Chapter 35), as specified in section 

1601(c)(2) of the 2008 Farm Bill, which 

provides that these regulations be 

promulgated and administered without 

regard to the Paperwork Reduction Act. 

E-Government Act Compliance 

CCC is committed to complying with 

the E-Government Act, to promote the 


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Federal Register / Vol. 74, No. 158 / Tuesday, August 18, 2009 / Rules and Regulations 41587 

use of the Internet and other 

information technologies to provide 

increased opportunities for citizen 

access to Government information and 

services, and for other purposes. 

List of Subjects in 7 CFR Part 1436 

Administrative practice and 

procedure, Loan programs–agriculture, 

Penalties, Price support programs, 

Reporting and recordkeeping 

requirements. 

■ For the reasons discussed above, this 

rule amends 7 CFR part 1436 as follows: 

PART 1436—FARM STORAGE 

FACILITY LOAN PROGRAM 

REGULATIONS 

■ 1. Revise the authority citation for part 

1436 to read as follows: 

Authority: 7 U.S.C. 7971 and 8789; and 15 

U.S.C. 714–714p. 

§ 1436.1 [Amended] 

■ 2. Amend § 1436.1 by removing the 

word ‘‘state’’ and adding in its place the 

word ‘‘State’’. 

■ 3. Amend § 1436.2 as follows: 

■ a. Amend paragraphs (a), (c), 

introductory text, (d) and (f) second 

sentence, by removing the word ‘‘shall’’ 

each time it appears and adding in its 

place the word ‘‘will’’ and 

■ b. Revise paragraph (g) to read as set 

forth below. 

§ 1436.2 Administration. 

* * * * * 

(g) The purpose of the Farm Storage 

Facility Loan program is to provide CCC 

funded loans for producers of grains, 

oilseeds, pulse crops, sugar, hay, 

renewable biomass, fruits and 

vegetables (including nuts), and other 

storable commodities, as determined by 

the Secretary, to construct or upgrade 

storage and handling facilities for the 

eligible facility loan commodities they 

produce. 

■ 4. Amend § 1436.3 as follows: 

■ a. Amend the undesignated 

introductory paragraph, by removing the 

word ‘‘shall’’ each time it appears and 

adding in its place the word ‘‘will’’, 

■ b. Add new definitions, in 

alphabetical order, for the terms ‘‘cold 

storage facility,’’ ‘‘commercial facility,’’ 

‘‘commercial storage,’’ ‘‘hay,’’ 

‘‘renewable biomass,’’ and ‘‘resale 

collateral value’’ as set forth below, 

■ c. Revise the definitions of 

‘‘collateral’’ and ‘‘facility loan 

commodity’’ to read as set forth below, 

and 

■ d. Remove the definitions of 

‘‘person,’’ ‘‘storage need requirement,’’ 

and ‘‘Uniform Commercial Code’’. 

§ 1436.3 Definitions. 

* * * * * 

Collateral means the storage structure; 

the drying, handling, and cold storage 

equipment; and any other equipment 

securing the loan. 

Cold storage facility means a facility 

or rooms within a facility that are 

specifically designed and constructed 

for the cold temperature storage of 

perishable commodities. The 

temperature and humidity in these 

facilities must be able to be regulated to 

specified conditions required for the 

commodity requiring storage. 

Commercial facility means any 

structure, used in connection with or by 

any commercial operation including, 

but not limited to, grain elevators, 

warehouses, dryers, processing plants, 

or cold storage facilities used for the 

storage and handling of any agricultural 

product, whether paid or unpaid. Any 

structure suitable for the storage of an 

agricultural product that is in working 

proximity to any commercial storage 

operation will be considered to be part 

of a commercial storage operation. 

Commercial storage means the storing 

of any agricultural product, whether 

paid or unpaid, for persons other than 

the owner of the structure, except for 

family members and tenants or 

landlords with a share in the eligible 

facility loan commodity requiring 

storage. 

* * * * * 

Facility loan commodity means corn, 

grain sorghum, oats, wheat, barley, rice, 

raw or refined sugar, soybeans, 

sunflower seed, canola, rapeseed, 

safflower, flaxseed, mustard seed, 

crambe, sesame seed, other oilseeds as 

determined and announced by CCC, dry 

peas, lentils, or chickpeas harvested as 

whole grain, peanuts, hay, renewable 

biomass, and fruits and vegetables 

(including nuts). Corn, grain sorghum, 

wheat, and barley are included whether 

harvested as whole grain or other than 

whole grain. 

* * * * * 

Hay means a grass or legume that has 

been cut and stored. Commonly used 

grass mixtures include rye grass, 

timothy, brome, fescue, coastal 

Bermuda, orchard grass, and other 

native species, depending on the region. 

Forage legumes include alfalfa and 

clovers. 

* * * * * 

Renewable biomass means any 

organic matter that is available on a 

renewable or recurring basis including 

renewable plant material such as feed 

grains or other agricultural commodities 

(including, but not limited to, soybeans 

and switchgrass), other plants and trees 

(excluding old-growth timber), algae, 

crop residue (including, but not limited 

to, corn stover, various straws and hulls, 

and orchard prunings), other vegetative 

waste material (including, but not 

limited to, wood waste, wood residues, 

and food and yard waste) used for the 

production of energy in the form of heat, 

electricity, and liquid, solid, or gaseous 

fuels. Manure from any source is not 

included. 

Resale collateral value means 

collateral that can be sold and moved to 

a new location for which compensation 

equal to the outstanding loan value can 

be expected. 

* * * * * 

■ 5. Revise § 1436.4 to read as follows: 

§ 1436.4 Application for loans. 

(a) An application for a loan must be 

submitted: 

(1) For all loans, except loans for 

renewable biomass storage facilities and 

cold storage facilities for fruits and 

vegetables, to the administrative county 

office that maintains the records of the 

farm or farms to which the application 

applies. With State office approval, 

loans may be made or serviced by a 

county office other than the 

administrative county office. 

(2) For loans for renewable biomass 

storage facilities and cold storage 

facilities for fruits and vegetables, to the 

administrative county FSA office that 

maintains the records of the farm or 

farms to which the application applies, 

if the facility will be located on land 

that has farm records established at the 

county office. If the commodities will be 

produced on land that does not have 

farm records established at the county 

office, the application must be 

submitted to the county FSA office that 

services the county where the facility 

will be located. 

(b) Upon request, the applicant must 

furnish information and documents as 

the State or county committee deems 

reasonably necessary to support the 

application. This may include financial 

statements, receipts, bills, invoices, 

purchase orders, specifications, 

drawings, plats, or written authorization 

of access. 

(c) For sugar storage facility loans, a 

loan application must be submitted to 

the county FSA office that maintains the 

applicant’s records. If no such records 

exist, loan applications must be 

submitted to the county office serving 

the headquarters location of the sugar 

processor. 

(d) Submitting an application does 

not ensure loan approval nor create any 

liability on behalf of CCC. Borrowers 

who authorize delivery, site 


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41588 Federal Register / Vol. 74, No. 158 / Tuesday, August 18, 2009 / Rules and Regulations 

preparation, or construction actions 

without an approved loan, do so at their 

own risk. 

■ 6. Amend § 1436.5 as follows: 

■ a. Amend paragraph (a)(4) by adding 

the words ‘‘as determined’’ immediately 

before the words ‘‘by CCC;’’ 

■ b. Revise paragraphs (a)(5) and (a)(6) 

to read as set forth below, 

■ c. Amend paragraph (a)(7) by 

removing the acronym ‘‘USDA’’ and 

adding, in its place the words ‘‘the U.S. 

Department of Agriculture (USDA)’’, 

■ d. Amend paragraph (a)(11) by adding 

the words ‘‘or a crop insurance 

violation’’ immediately after the word 

‘‘violation,’’ and 

■ e. In paragraph (b), introductory text, 

remove the word ‘‘related’’. 

§ 1436.5 Eligible borrowers. 

(a) * * * 

(5) Demonstrates a need for increased 

storage capacity as determined by CCC 

if the applicant is applying for a loan for 

a storage structure. The Deputy 

Administrator, Farm Programs, may 

issue a waiver, if requested, on a case 

by case basis if a crop share landlord or 

tenant requests to construct a structure 

to store commodities produced on the 

farm but only one of the two wishes to 

accept loan liability; 

(6) Annually provides proof of crop 

insurance offered under the Federal 

Crop Insurance Program for insurable 

crops of economic significance on all 

farms operated by the borrower in the 

county where the storage facility is 

located. Crop insurance or Noninsured 

Crop Disaster Assistance Program (NAP) 

coverage, if available, is required on all 

the commodities stored in the FSFLfunded facility, whether economically 

significant or not; crop insurance under 

the Federal Crop Insurance Program 

may not be available for certain 

renewable biomass commodities; 

* * * * * 

■ 7. Amend § 1436.6 as follows: 

■ a. Revise paragraphs (a), introductory 

text, and (a)(2) to read as set forth 

below, 

■ b. In paragraph (a)(1) remove the 

number ‘‘10’’ and add, in its place, the 

number ‘‘15’’, 

■ c. In paragraph (a)(3) remove the 

number ‘‘10’’ and add, in its place, the 

number ‘‘15’’ and remove the word 

‘‘and’’ at the end, 

■ d. In paragraph (a)(4) remove the 

number ‘‘10’’ and add, in its place, the 

number ‘‘15’’ and remove the period at 

the end and add, in its place, a 

semicolon. 

■ e. Add new paragraphs (a)(5) and 

(a)(6) to read as set forth below, 

■ f. Revise paragraph (b) introductory 

text to read as set forth below, 

■ g. Amend paragraph (b)(3) to remove 

the word ‘‘grain’’ and add, in its place, 

the words ‘‘eligible facility loan 

commodity’’, 

■ h. Amend paragraph (b)(4) to remove 

the word ‘‘grain’’ and add, in its place, 

the words ‘‘eligible facility loan 

commodity’’ and remove the word 

‘‘and’’ at the end, 

■ i. Amend paragraph (b)(5) to remove 

the word ‘‘grain’’ and add, in its place, 

the words ‘‘eligible facility loan 

commodity’’ and remove the period at 

the end and add, in its place ‘‘; and’’, 

■ j. Add new paragraph (b)(6) to read as 

set forth below, 

■ k. Revise paragraphs (c), introductory 

text, (c)(3), and (c)(5) to read as set forth 

below, 

■ l. Revise paragraph (d) to read as set 

forth below, 

■ m. Amend paragraph (e) in the first 

sentence to add the words ‘‘for all 

eligible facility loan commodities except 

sugar and fruits and vegetables’’ 

immediately after the word ‘‘Loans’’ and 

remove the number ‘‘10’’ and add, in its 

place, the number ‘‘15’’, 

■ n. Add introductory text to paragraph 

(f) to read as set forth below, 

■ o. Remove paragraph (f)(1), 

■ p. Redesignate paragraph (f)(2) as 

paragraph (f)(1) and amend newly 

designated paragraph (f)(1) in the first 

sentence, by removing the words ‘‘For 

sugar-related loans, the’’ and adding, in 

their place, the word ‘‘The’’, 

■ q. Redesignate paragraph (f)(4) as 

paragraph (f)(2) and remove the words 

‘‘For sugar-related loans,’’ and add, in 

their place, the words ‘‘Sugar storage 

facility’’, 

■ r. Revise paragraph (f)(3) introductory 

text to read as set forth below, and 

■ s. Add paragraph (g) to read as set 

forth below. 

§ 1436.6 Eligible storage or handling 

equipment. 

(a) For all eligible facility loan 

commodities, except sugar and fruits 

and vegetables, loans may be made only 

for the purchase and installation of 

eligible storage facilities, and 

permanently affixed drying and 

handling equipment, or for the 

remodeling of existing storage facilities 

or permanently affixed drying and 

handling equipment as provided in this 

section. The loan collateral must be 

used for the purpose for which it was 

delivered, erected, constructed, 

assembled, or installed for the entire 

term of the loan. Eligible storage and 

handling facilities include the 

following: 

* * * * * 

(2) New oxygen-limiting storage 

structures or remanufactured oxygenlimiting storage structures built to the 

original manufacturer’s design 

specifications using original 

manufacturer’s rebuild kits or kits from 

a supplier approved by the Deputy 

Administrator, Farm Programs, and 

other upright silo-type structures 

designed for whole grain storage or 

other than whole grain storage and with 

a useful life of at least 15 years; and 

* * * * * 

(5) New structures suitable for storing 

hay that are built according to 

acceptable design guidelines from the 

Cooperative State Research, Education, 

and Extension Services (CSREES) or 

land-grant universities and with a useful 

life of at least 15 years; and 

(6) New structures suitable for storing 

renewable biomass that are built 

according to acceptable industry 

guidelines and with a useful life of at 

least 15 years. 

(b) For all eligible facility loan 

commodities, except sugar and fruits 

and vegetables, the calculation of the 

loan amount may include costs 

associated with building, improving, or 

renovating an eligible storage or 

handling facility, including: 

* * * * * 

(6) Flooring appropriate for storing 

hay and renewable biomass suitable for 

the region where the facility is located 

and designed according to acceptable 

guidelines from CSREES or land-grant 

universities. 

(c) For all eligible facility loan 

commodities, except sugar and fruits 

and vegetables, no loans will be made 

for installation or related costs of: 

* * * * * 

(3) Used structures or handling 

equipment, not including 

remanufactured oxygen-limiting storage 

structures built to the manufacturer’s 

original design specifications as 

specified in paragraph (a)(2) of this 

section; 

* * * * * 

(5) Storage structures to be used as a 

commercial facility. Any facility that is 

in working proximity to any commercial 

storage operation will be considered to 

be part of a commercial storage 

operation; and 

* * * * * 

(d) Loans for all eligible facility loan 

commodities, except sugar and fruits 

and vegetables, may be approved for 

financing additions to or modifications 

of an existing storage facility with an 

expected useful life of at least 15 years 

if the county committee determines 

there is a need for the capacity of the 

structure, but loans will not be 

approved solely for the replacement of 


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worn out items such as motors, fans, or 

wiring. 

* * * * * 

(f) The provisions of this paragraph 

apply only to sugar storage facility 

loans. 

* * * * * 

(3) No sugar storage facility loans will 

be made for: 

* * * * * 

(g) The provisions of this paragraph 

apply only to fruit and vegetable cold 

storage facility loans. 

(1) For cold storage facility loans, the 

loan amount may include costs 

associated with the purchase, 

installation, building, improving, 

remodeling, or renovating an eligible 

storage or handling facility. Costs 

associated with the construction of a 

permanently installed cold storage 

facility include, but are not limited to, 

the following: An insulated cement slab 

floor, insulation for walls and ceiling 

(including, but not limited to, loose fill 

cellulose, foam insulation sheets, 

sprayed-on and foam-in-place 

materials), and a vapor barrier. 

(2) Eligible facilities include, but are 

not limited to, the following: 

(i) A new cold storage facility of wood 

pole and post construction, steel, or 

concrete, that is suitable for storing the 

fruits and vegetables produced by the 

borrower and with a useful life of at 

least 15 years; 

(ii) New walk-in prefabricated 

permanently installed cold storage 

coolers that are suitable for storing the 

producer’s fruits and vegetables and 

with a useful life of at least 15 years; 

(iii) Permanently affixed equipment 

necessary for a cold storage facility such 

as refrigeration units or system and 

circulation fans; 

(iv) Permanently installed equipment 

to maintain or monitor the quality of 

produce stored in a cold storage facility; 

(v) Electrical equipment, including 

labor and materials for installation, such 

as lighting, motors, and wiring integral 

to the proper operation of a cold storage 

facility. 

(3) For cold storage facility loans, 

loans may be approved for financing 

additions or modifications to an existing 

storage facility with an expected useful 

life of at least 15 years if CCC 

determines there is a need for the 

capacity of the structure. 

(4) No cold storage facility loans will 

be made for: 

(i) Portable structures; 

(ii) Portable handling and cooling 

equipment; 

(iii) Used or pre-owned structures, or 

cooling and handling equipment; or 

(iv) Structures that are not suitable for 

a fruit or vegetable cold storage facility. 

■ 8. Revise § 1436.7 to read as set forth 

below: 

§ 1436.7 Loan term. 

(a) For eligible facility loan 

commodities other than sugar, the term 

of the loan will be 7, 10, or 12 years, 

based on the total loan principal, from 

the date a promissory note and security 

agreement is completed on both the 

partial and final loan disbursements. 

The applicant will choose, if applicable, 

a loan term when submitting the loan 

application and total cost estimates. 

(1) For a loan with the principal of 

$100,000 or less, the term is 7 years. 

(2) For loans from $100,000.01 

through $250,000, the borrower will 

choose a term of 7 or 10 years. 

(3) For loans from $250,000.01 

through $500,000, the borrower will 

choose a loan term of 7, 10, or 12 years. 

(b) No extensions of the loan term will 

be granted. The loan balance and all 

related costs are due at the end of the 

loan term. 

(c) For a sugar-related loan: 

(1) CCC, at its discretion, may 

authorize a maximum loan term of 15 

years. The minimum loan term of a 

sugar-related loan is 7 years. 

(2) The loan balance and costs are due 

at the end of the loan term, which will 

be established on the date the 

promissory note and security agreement 

is executed. 

■ 9. Revise § 1436.8 to read as follows: 

§ 1436.8 Security for loan. 

(a) Except as agreed to by CCC, all 

loans must be secured by a promissory 

note and security agreement covering 

the farm storage facility and such other 

assurances as CCC may demand, subject 

to the following: 

(1) The promissory note and security 

agreement must grant CCC a security 

interest in the collateral and must be 

perfected in the manner specified in the 

laws of the State where the collateral is 

located. 

(2) CCC’s security interest in the 

collateral must be the sole security 

interest in such collateral except for 

prior liens on the underlying real estate 

that by operation of law attach to the 

collateral if it is or will become a 

fixture. If any such prior lien on the real 

estate will attach to the collateral, a 

severance agreement must be obtained 

in writing from each holder of such a 

lien, including all government or USDA 

agencies. No additional liens or 

encumbrances may be placed on the 

storage facility after the loan is 

approved unless CCC approves 

otherwise in writing. 

(b) For any loan amounts of $50,000 

or less, CCC will not require a severance 

agreement from the holder of any prior 

lien on the real estate parcel on which 

the storage facility is located, if the 

borrower: 

(1) Agrees to increase the down 

payment on the storage facility loan 

from 15 percent to 20 percent; or 

(2) Provides other security such as an 

irrevocable letter of credit, bond, or 

other form of security, as approved by 

CCC. 

(c) For loan amounts exceeding 

$50,000, or when the aggregate 

outstanding balance will exceed $50,000 

or for loans in which the approving 

county or State committee determines, 

as a result of financial analysis, that 

additional security is required, a lien on 

the real estate parcel on which the farm 

storage facility is located is required in 

the form of a real estate mortgage, deed 

of trust, or other security instrument 

approved by USDA’s Office of the 

General Counsel, provided further that: 

(1) CCC’s interest in the real estate 

must be superior to all other liens, 

except a loan may be secured by a junior 

lien on real estate when the loan is 

adequately secured and a severance 

agreement is obtained from prior lien 

holders. 

(2) A loan will be considered to be 

adequately secured when the real estate 

security for the loan is at least equal to 

the loan amount. 

(3) If the real estate is covered by a 

prior lien, a lien waiver may be obtained 

by means of a subordination agreement 

approved for use in the State by USDA’s 

Office of the General Counsel. CCC will 

not require such an agreement from any 

agency of USDA. 

(d) Title insurance or a title opinion 

is required for loans secured by real 

estate. 

(e) Real estate liens, with prior CCC 

approval, may cover land separate from 

the collateral if a lien on the underlying 

real estate is not feasible and if: 

(1) The borrower owns the separate 

acreage and the acreage is not subject to 

any other liens or mortgages that are 

superior to CCC’s lien interest and 

(2) The acreage is of adequate size and 

value at the time of the application as 

determined by the county committee to 

adequately secure and insure repayment 

of the loan. 

(f) A borrower, in lieu of such liens 

required by this section, may provide an 

irrevocable letter of credit, bond, or 

other form of security, as approved by 

CCC. 

(g) If an existing structure is 

remodeled and an addition becomes an 

attached, integral part of the existing 

storage structure, CCC’s security interest 

will include the remodeled addition as 

well as the existing storage structure. 


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41590 Federal Register / Vol. 74, No. 158 / Tuesday, August 18, 2009 / Rules and Regulations 

(h) For all farm storage facility loans, 

except sugar loans, the borrower must 

pay the cost of loan closings by 

attorneys, title opinions, title insurance, 

title searches, filing, and recording all 

real estate liens, fixture filings, 

appraisals if requested by the borrower, 

and all subordinations. CCC will pay 

costs relating to credit reports, collateral 

lien searches, and filing and recording 

financing statements for the collateral. 

(i) All loans of $50,000 or less that are 

secured with collateral with no resale 

value, as determined by CCC, may 

require additional security. 

(j) For sugar storage facility loans, in 

addition to other requirements in this 

section, additional security, including 

real estate, chattels, crops in storage, 

and other assets owned by the 

applicant, is required if deemed 

necessary by CCC to adequately secure 

the loan. A sugar storage facility loan 

will generally be considered to be 

adequately secured when the CCCdetermined value of security for the 

loan is equal to at least 125 percent of 

the loan amount. 

(k) For sugar storage facility loans, 

paragraph (h) of this section is not 

applicable. However, the borrower must 

pay all loan making fees and closing 

costs. This includes, but is not limited 

to, attorney fees for loan closings, 

environmental assessments and studies, 

chattel and real estate appraisals, title 

opinions, title insurance, title searches, 

and filing and recording all real estate 

liens, fixture filings, subordinations, 

credit reports, collateral lien searches, 

and filing and recording financing 

statements for the collateral. 

■ 10. Revise § 1436.9 to read as follows: 

§ 1436.9 Loan amount and loan application 

approvals. 

(a) The cost on which the loan will be 

based is the net cost of the eligible 

facility, accessories, and services to the 

applicant after discounts and rebates, 

not to exceed a maximum per-bushel, 

-ton or, -cubic foot cost established by 

the FSA State committee. 

(b) The net cost for all storage 

facilities and handling equipment: 

(1) May include the following: All real 

estate lien related fees paid by the 

borrower, including attorney fees, 

except for filing fees; environmental and 

historic review fees including 

archaeological study fees; the facility 

purchase price; sales tax; shipping; 

delivery charges; site preparation costs; 

installation cost; material and labor for 

concrete pads and foundations; material 

and labor for electrical wiring; electrical 

motors; off-farm paid labor; on-farm site 

preparation and construction equipment 

costs not to exceed commercial rates 

approved by the county committee; and 

new on-farm material approved by the 

county committee. 

(2) May not include secondhand 

material or any other item determined 

by the approving authority to be 

ineligible for loan. 

(c) The maximum total principal 

amount of the farm storage facility loan 

is 85 percent of the net cost of the 

applicant’s needed storage or handling 

facility, including equipment, not to 

exceed $500,000 per loan. 

(d) The storage need requirement for 

eligible facility loan commodities will 

be determined as follows: 

(1) For facility loan commodities, 

except sugar and fruits and vegetables: 

(i) Multiply the average of the 

applicant’s share of the acres farmed for 

the most recent three years for each type 

of facility loan commodity requiring 

suitable storage at the proposed facility; 

(ii) By a yield determined reasonable 

by the county committee; 

(iii) Multiply by two (for 2 years 

production); and 

(iv) Subtract existing storage capacity 

in the units of measurement, such as 

bushels, tons, or cubic feet, for the type 

of storage needed to determine 

remaining storage need. 

(v) Compare capacity of proposed 

facility with storage need (calculated as 

specified in paragraphs (d)(1)(i)–(iv) of 

this section) to determine if applicant is 

eligible for additional storage. 

(2) For sugar storage facility loans, 

(i) Identify past processing volume 

and marketing allotments; 

(ii) Use the processor’s projection of 

processing volume, available storage 

capacity, volume not to be marketed due 

to marketing allotment, and other 

appropriate factors affecting the 

processor’s storage need to estimate the 

storage need requirement, and 

(iii) Compare capacity of proposed 

facility with storage need (estimated as 

specified in paragraphs (d)(2)(i)–(ii) of 

this section) to determine if additional 

storage is required. 

(3) For cold storage facilities for fruits 

and vegetables: 

(i) Multiply the average of the 

applicant’s share of the acres farmed for 

the most recent three years for each 

eligible fruit and vegetable commodity 

requiring cold storage at the proposed 

facility; 

(ii) By a yield determined reasonable 

by the county committee; 

(iii) Determine cold storage needed 

(calculated as specified in paragraphs 

(d)(3)(i)–(ii) of this section) with the 

assistance of CSREES, land-grant 

university, or ARS publications; and 

(iv) Subtract existing cold storage 

capacity to determine remaining storage 

need. 

(v) Compare capacity of proposed 

cold storage facility with cold storage 

need (calculated as specified in 

paragraphs (d)(3)(i)–(iv) of this section) 

to determine if applicant is eligible for 

additional cold storage. 

(4) For all eligible facility loan 

commodities, except sugar, if acreage 

data is not available, including 

prevented planted acres, or data is not 

applicable to the storage need, a 

reasonable acreage projection may be 

made for newly acquired farms, changes 

in cropping operations, or in facility 

loan commodity crops being grown for 

the first time. 

(e) When a storage structure has a 

larger capacity than the applicant’s 

needed capacity, as determined by CCC, 

the net cost eligible for a loan will be 

prorated. Only costs associated with the 

applicant’s needed storage capacity will 

be considered eligible for loan under 

this part. 

(f) Any borrower with an outstanding 

loan must use the financed structure 

only for the storage of eligible facility 

loan commodities. If a borrower uses 

such structure for other purposes such 

as office space or display area, the loan 

amount will be adjusted for the 

ineligible space as determined by CCC. 

(g) The FSA county committee may 

approve applications, if loan funds are 

available, up to the maximum approval 

amount unless the Deputy 

Administrator, Farm Programs, or the 

FSA State committee establishes a lower 

limit for county committee approval 

authority. 

(h) Farm storage facility loan 

approvals, for all eligible facility loan 

commodities except sugar, will expire 4 

months after the date of approval unless 

extended in writing for an additional 4 

months by the FSA State Committee. A 

second 4 month extension, for a total of 

12 months from the original approval 

date, may be approved by the FSA State 

Committee. This authority will not be 

re-delegated. Sugar storage facility loan 

approvals will expire 8 months after the 

date of approval unless extended in 

writing for an additional 4 months by 

the FSA State Committee. 

(i) For sugar storage facility loans, 

paragraphs (c) and (g) of this section do 

not apply. 

(j) For sugar storage facility loans, the 

agency approval officials may only 

approve loans, subject to available 

funds. 

§ 1436.10 [Amended] 

■ 11. Amend § 1436.10 as follows: 

■ a. In paragraph (a), remove the word 

‘‘shall’’ and add, in its place, the word 

‘‘will’’ and remove the words ‘‘before 

the loan is disbursed’’ and add, in their 


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Federal Register / Vol. 74, No. 158 / Tuesday, August 18, 2009 / Rules and Regulations 41591 

place, the words ‘‘before either the 

partial or final loan disbursements’’ and 

■ b. In paragraph (b), remove the word 

‘‘shall’’ and add, in its place, the word 

‘‘must.’’ 

■ 12. Revise § 1436.11 to read as 

follows: 

§ 1436.11 Disbursements and 

assignments. 

(a) At the request of the borrower, one 

partial disbursement of loan principal 

and one final loan disbursement will be 

available. The partial loan disbursement 

will be made to facilitate the purchase 

and construction of an eligible facility 

and will be made after the approved 

applicant has completed construction 

on part of the structure. County FSA 

personnel will inspect and verify the 

amount of construction completed. 

(1) The amount of the partial loan 

disbursement will be determined by 

CCC and made after the borrower 

provides acceptable documentation for 

that portion of the completed 

construction to the County Committee. 

(2) Security required for the amount 

of the partial loan disbursement will be 

required before the partial loan 

disbursement is finalized. 

(3) The final disbursement of the loan 

by CCC will be made after the farm 

storage facility has been completely and 

fully delivered, erected, constructed, 

assembled, or installed and a CCC 

representative has inspected and 

approved such facility. 

(4) All additional security needed to 

fully secure both the partial and final 

loan disbursements must be received 

before the final loan disbursement. 

(b) Both the partial and final loan 

disbursements will be made only if the 

borrower furnishes satisfactory evidence 

of the total cost of the facility and 

payment of all debts on the facility in 

excess of the amount of the loan. If 

deemed appropriate by CCC, the partial 

and final disbursement may have 

separate notes and separate security 

instruments. 

(c) Both the partial and final loan 

disbursement will be made jointly to the 

borrower and the contractor or supplier, 

except disbursement may be made to 

the borrower solely where CCC 

determines, based upon information 

made available to CCC by the borrower, 

that the borrower has paid the 

contractor or supplier all amounts that 

are due and owing with respect to the 

facility and that all applicable liens, 

security interests, or other 

encumbrances have been released. 

(d) A release of liability will be 

required from all contractors and 

suppliers providing goods and services 

to the loan applicant. 

(e) Loan proceeds cannot be assigned. 

(f) For sugar storage facility loans, 

only one disbursement will be made 

and such disbursement will be regarded 

as a final disbursement. 

■ 13. Revise § 1436.12 to read as 

follows: 

§ 1436.12 Interest and fees. 

(a) Loans will bear interest at the rate 

equivalent, as determined by CCC, to 

the rate of interest charged on Treasury 

securities of comparable term and 

maturity on the date the loan is initially 

approved. 

(b) The interest rate for each loan will 

remain in effect for the term of the loan. 

(c) Each borrower on a loan 

application must pay a non-refundable 

application fee in such amount 

determined appropriate by CCC; the fee 

will be not less than $100 per borrower. 

The loan application fee is determined 

based on the cost of the fees associated 

with the loan, including, but not limited 

to, the cost to CCC for lien searches, 

security filings, and credit reports. 

(d) For sugar storage facility loans, 

paragraph (c) of this section does not 

apply. 

■ 14. Amend § 1436.13 as follows: 

■ a. In paragraph (a), in the second 

sentence, remove the words ‘‘the loan,’’ 

and add, in their place, the words ‘‘each 

of the partial and final loan 

disbursements,’’ 

■ b. In paragraph (b), in the second 

sentence, remove the word ‘‘Repayment 

shall’’ and add, in its place, the words 

‘‘Each payment will’’, 

■ c. Revise paragraph (c) to read as set 

forth below, 

■ d. In paragraph (d), remove the word 

‘‘shall’’ and add, in its place, the word 

‘‘will’’, 

■ e. In paragraph (e), remove the word 

‘‘operation’’ and add, in its place, the 

word ‘‘facility’’ and remove the words 

‘‘dryers or processing plants.’’ and add, 

in their place, the words ‘‘dryers, 

processing plants, or retail or wholesale 

cold storage facilities.’’, 

■ f. In paragraph (f)(2), remove the word 

‘‘debtors’’ and add, in its place, the 

word ‘‘debtor’s,’’ and 

■ g. In paragraph (h), remove the word 

‘‘shall’’ and add, in its place, the word 

‘‘will’’. 

§ 1436.13 Loan installments, delinquency, 

and acceleration of maturity date. 

* * * * * 

(c) When installments are not paid on 

the due date: 

(1) CCC will generally mail a demand 

for payment to the debtor after the due 

date has passed. 

(2) If the installment is not paid 

within 30 calendar days of the due date 

or if a new due date acceptable to CCC 

has not been established based on a 

financial plan submitted by the debtor, 

CCC may send two subsequent written 

demands at approximately 30 calendar 

day intervals unless CCC needs to take 

other action to protect the interests of 

CCC. 

(3) If the debtor files an appeal 

according to § 1436.18, CCC will 

generally cease collection action until 

the appeal process is complete, 

however, CCC may withhold any 

payments due the debtor and, 

depending on the outcome of the 

appeal, any payments due the debtor 

may later be offset and applied to 

reduce the indebtedness. 

(4) In lieu of a foreclosure on the 

collateral or the land securing a loan in 

the case of a delinquency, CCC may 

permit a rescheduling of the debt or 

other measures consistent with the 

collection of other debts under the 

provisions of part 1403 of this chapter. 

Any rescheduling or alternate 

repayment arrangements will be 

permitted only with prior approval from 

the Deputy Administrator, Farm 

Programs. Alternately, CCC may 

implement such other collection 

procedures as it deems appropriate. 

* * * * * 

§ 1436.14 [Amended] 

■ 15. Amend § 1436.14 by adding the 

words ‘‘or land’’ immediately after the 

word ‘‘collateral’’ both times it appears 

and in the second sentence, remove the 

word ‘‘shall’’ both times it appears, and 

add, in its place, the word ‘‘will’’. 

■ 16. Amend § 1436.15 as follows: 

■ a. In paragraphs (a), (b), (c), and (e), 

remove the word ‘‘shall’’ each time it 

appears and add, in its place, the word 

‘‘will’’ and 

■ b. Revise paragraph (f) to read as set 

forth below: 

§ 1436.15 Maintenance, liability, insurance, 

and inspections. 

* * * * * 

(f) For sugar storage facility loans, in 

addition to the requirements of 

paragraph (d) of this section, sugar 

processors must also insure the contents 

of storage structures used as collateral 

for a sugar storage facility loan against 

all perils. 

■ 17. Amend § 1436.16 as follows: 

■ a. Revise the section heading to read 

as set forth below, 

■ b. In paragraph (a)(2), second 

sentence, remove the word ‘‘state’’ and 

add, in its place, the word ‘‘State’’, 

■ c. In paragraph (a)(3), introductory 

paragraph, second sentence, remove the 

word ‘‘shall’’ and add, in its place, the 

word ‘‘will’’, 


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41592 Federal Register / Vol. 74, No. 158 / Tuesday, August 18, 2009 / Rules and Regulations 

■ d. In paragraph (a)(4), remove the 

word ‘‘nonmovable’’ and add, in its 

place, the words ‘‘non-movable or nonsalable’’, 

■ e. In paragraph (a)(5), introductory 

text, second sentence, remove the word 

‘‘shall’’ and add, in its place, the word 

‘‘will’’, 

■ f. In paragraph (b)(1) remove the word 

‘‘shall’’ both times it appears and add, 

in its place, the word ‘‘must’’, 

■ g. In paragraph (b)(2), remove the 

word ‘‘shall’’ and add, in its place, the 

word ‘‘will’’, 

■ h. In paragraph (c), second sentence, 

remove the word ‘‘shall’’ both times it 

appears and add, in its place, the word 

‘‘must’’ and remove the word 

‘‘borrowers’’ and add, in its place, the 

word ‘‘borrower’s’’ 

■ i. Redesignate paragraph (d) as 

paragraph (e), 

■ j. Add new paragraph (d) to read as set 

forth below, and 

■ k. In redesignated paragraph (e) 

remove the word ‘‘shall’’ and add, in its 

place, the word ‘‘will’’. 

§ 1436.16 Foreclosure, liquidation, 

assumptions, sales or conveyance, or 

bankruptcy. 

* * * * * 

(d) If any significant changes are made 

to the legal or operating status of the 

farming operation with an outstanding 

Farm Storage Facility Loan, the 

borrower must do one of the following: 

(1) Find an eligible borrower or entity 

to assume the loan as specified in 

paragraph (b) of this section, 

(2) Repay the loan, or 

(3) Undergo new financial analysis, as 

approved and determined by CCC, to 

ensure CCC’s interests are protected and 

that the current borrower is in a position 

to continue making the scheduled loan 

payments. 

* * * * * 

1436.19 [Amended] 

■ 18. Amend § 1436.19 as follows: 

■ a. In paragraph (a), first sentence, by 

removing the word ‘‘shall’’ and adding, 

in its place, the word ‘‘will’’ and by 

adding the sentence ‘‘FSFL borrowers 

are subject to the nondiscrimination 

provisions applicable to Federally 

assisted programs contained in 7 CFR 

parts 15 and 15b.’’ at the end and 

■ b. In paragraph (b), by removing the 

words ‘‘national origin, sex, marital 

status, or’’ and adding, in their place, 

the words ‘‘national origin, disability, 

sex, marital status, familial status, 

parental status, sexual orientation, 

genetic information, political beliefs, 

reprisal, or’’ and by adding at the end 

the sentence ‘‘FSFL is subject to the 

nondiscrimination provisions 

applicable to Federally conducted 

programs contained in 7 CFR parts 15d 

and 15e.’’ 

Signed in Washington, DC, on August 11, 

2009. 

Jonathan W. Coppess, 

Executive Vice President, Commodity Credit 

Corporation and Administrator, Farm Service 

Agency. 

[FR Doc. E9–19652 Filed 8–17–09; 8:45 am] 

BILLING CODE 3410–05–P 

DEPARTMENT OF COMMERCE 

Economic Development Administration 

13 CFR Parts 313 and 315 

[Docket No. 090429810–91212–02] 

RIN 0610–AA65 

Revisions to the Trade Adjustment 

Assistance for Firms Program 

Regulations and Implementation 

Regulations for the Community Trade 

Adjustment Assistance Program 

AGENCY: Economic Development 

Administration, Department of 

Commerce. 

ACTION: Final rule. 

SUMMARY: On May 5, 2009, the 

Economic Development Administration 

(‘EDA’) published a notice of proposed 

rulemaking to reflect the amendments 

made to the Trade Act of 1974, as 

amended, by the Trade and 

Globalization Adjustment Assistance 

Act of 2009 (‘TGAAA’), which was 

included as subtitle I within the 

American Recovery and Reinvestment 

Act of 2009. The notice of proposed 

rulemaking provided a public comment 

period from May 5, 2009 through June 

4, 2009. The TGAAA provides that the 

Secretary of Commerce must establish 

the Community Trade Adjustment 

Assistance Program by August 1, 2009, 

under which EDA would provide 

technical assistance under section 274 

of the Trade Act to communities 

impacted by trade to facilitate the 

economic adjustment of those 

communities. The TGAAA amendments 

to the Trade Act took effect on May 17, 

2009, 90 days after enactment. As a 

result of the enactment of the TGAAA, 

EDA promulgates this final rule to 

provide regulations to implement the 

Community Trade Adjustment 

Assistance Program and makes specific 

changes to the Trade Adjustment 

Assistance for Firms Program 

regulations. 

DATES: This rule is effective as of August 

18, 2009. 

FOR FURTHER INFORMATION CONTACT: 

Jamie Lipsey, Attorney Advisor, Office 

of Chief Counsel, Economic 

Development Administration, 

Department of Commerce, Room 7005, 

1401 Constitution Avenue, NW., 

Washington DC 20230; telephone: (202) 

482–4687. 

SUPPLEMENTARY INFORMATION: 

Background 

EDA published a notice of proposed 

rulemaking (the ‘NPRM’) in the Federal 

Register (74 FR 20647) on May 5, 2009. 

The NPRM reflects the amendments 

made to the Trade Act of 1974, as 

amended (19 U.S.C. 2341 et seq.) (the 

‘Trade Act’), by the Trade and 

Globalization Adjustment Assistance 

Act of 2009 (the ‘TGAAA’), which was 

included as subtitle I to the American 

Recovery and Reinvestment Act of 2009 

(Pub. L. 111–5, 123 Stat. 115, at 367). 

The TGAAA authorized the Trade 

Adjustment Assistance for Communities 

(‘Community TAA’) Program and made 

amendments to certain provisions 

affecting the Trade Adjustment 

Assistance for Firms (‘TAAF’) Program, 

which EDA currently administers 

through a network of 11 Universityaffiliated and non-profit Trade 

Adjustment Assistance Centers (each, a 

‘TAAC’) located throughout the nation. 

This final rule promulgates the 

Community TAA Program regulations 

and makes specific changes to the TAAF 

Program regulations, both of which 

implement the amendments to the 

Trade Act made by the TGAAA. It also 

reflects EDA’s current practices and 

policies in administering the TAAF 

Program that have evolved since the 

promulgation of EDA’s current 

regulations. Chapter 3 of title II of the 

Trade Act authorizes the TAAF 

Program, under which technical 

assistance is provided to Firms that 

have lost domestic sales and 

employment due to increased imports of 

similar or competitive goods. Chapter 4 

of title II of the Trade Act establishes the 

Community TAA Program, which is 

designed to help local economies adjust 

to changing trade patterns through the 

coordination of Federal, State, and local 

resources and the creation and 

implementation of community-based 

development strategies to help address 

trade impacts. 

Capitalized terms used but not 

otherwise defined in this final rule have 

the meanings ascribed to them in EDA’s 

regulations set out in 13 CFR chapter III 

(see, e.g., 13 CFR 300.3, 303.2, 315.2, 

and 315.15). A complete discussion of 

the changes made to EDA’s regulations 

was provided in the NPRM and is not 

repeated here. 


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