26776 Federal Register / Vol. 65, No. 90 / Tuesday, May 9, 2000 / Proposed Rules

1Pub. L. 92–181, 85 Stat. 583 (Dec. 10, 1971). 2Pub. L. 102–552, 106 Stat. 4102 (Oct. 28, 1992).

guidelines. The staff will propose

sample case studies to exercise the

guidelines. Included in the

presentations will be a discussion of

stakeholder comments and responses.

The feedback from the advisory

committees will be incorporated into a

Commission paper, as appropriate, and

the paper will be submitted to the

Commission by August 21, 2000.

B. Step 2: Implement the Finalized

Guidelines into the Regulatory

Improvement Process

The guidelines, which will be used to

identify and assess performance-based

activities, will only be applied to new

initiatives. The basic process would be

institutionalized by incorporating the

elements into internal NRC procedures.

Regulatory requirements that are overly

prescriptive may be proposed for

improvement by members of the NRC

staff, industry, or the public (as a

petition for rulemaking, for example).

More widespread acceptance of the

guidelines would be likely if the

guidelines were also used by industry to

increase the level of performance-based

activities. For example, the guidelines

could be adopted for use by standards

developing organizations or industry

working groups as they develop

proposals for consideration by NRC.

NRC review of such proposals for

incorporation into the regulatory

framework would then be considerably

more streamlined.

The guidelines would serve as one of

the tools available to the staff to assess

whether a more performance-based

approach is appropriate for a given

regulatory initiative. If the evaluation

shows that safety improvements are

justified, relevant requirements

associated with the proposed change

(e.g. compliance with the Backfit Rule,

preparation of a regulatory analysis,

etc.) would be undertaken. If the

evaluation shows that unnecessary

regulatory burden can be reduced, the

proposed changes to requirements will

most likely be voluntary. In either case,

stakeholder input would be obtained in

a timely manner.

Dated at Rockville, Maryland, this 3rd day

of May, 2000.

Charles E. Rossi,

Director, Division of Systems Analysis and

Regulatory Effectiveness, Office of Nuclear

Regulatory Research.

[FR Doc. 00–11535 Filed 5–8–00; 8:45 am]

BILLING CODE 7590–01–P

FARM CREDIT ADMINISTRATION

12 CFR Part 611

RIN 3052–AC00

Organization; Stockholder Vote on

Like Lending Authority

AGENCY: Farm Credit Administration.

ACTION: Proposed rule.

SUMMARY: We propose new regulations

to carry out territorial consent

requirements of the Farm Credit Act of

1971, as amended (Act).1 Section 5.17 of

the Act allows Farm Credit System (FCS

or System) stockholders in certain areas

of the country to vote on charters

involving like lending authorities. The

charter amendments would provide

eligible customers the opportunity to

obtain lending services from more than

one association.

DATES: Please send your comments to us

by June 8, 2000.

ADDRESSES: You may send comments by

electronic mail to ‘‘reg-comm@fca.gov’’

or through the Pending Regulations

section of our Web site at

‘‘www.fca.gov.’’ You may also send

comments to Patricia W. DiMuzio,

Director, Regulation and Policy

Division, Office of Policy and Analysis,

Farm Credit Administration, 1501 Farm

Credit Drive, McLean, Virginia 22102–

5090 or fax them to (703) 734–5784. You

may review copies of all comments we

receive in the Office of Policy and

Analysis, Farm Credit Administration.

FOR FURTHER INFORMATION CONTACT:

Eric Howard, Senior Policy Analyst,

Office of Policy and Analysis, Farm

Credit Administration, McLean, VA

22102–5090, (703) 883–4498, TDD

(703) 883–4444,

or

Joy Strickland, Senior Counsel, Office of

General Counsel, Farm Credit

Administration, McLean, VA 22102–

5090, (703) 883–4020, TDD (703) 883–

4444.

SUPPLEMENTARY INFORMATION:

I. Objectives

We are committed to removing

territorial restrictions that prevent

customers of the FCS from choosing

their System lender. Recently, we

announced that direct lender

associations may apply for national

(also referred to as nationwide) charters.

In order to facilitate national charters,

stockholder votes must be conducted by

certain associations in Alabama,

Louisiana, Mississippi, and New

Mexico. Our objectives for the proposed

rule are to:

• Implement the stockholder

approvals required by statute; and

• Ensure stockholders are adequately

informed and votes are conducted

quickly and fairly.

II. Background

A. FCA Initiative

On July 14, 1998, the Farm Credit

Administration (FCA or Agency) Board

issued a Philosophy Statement on

Competition (Philosophy Statement).

The Philosophy Statement described the

FCA Board’s framework for the

Agency’s chartering, policy

development, and regulatory activities

involving System corporate structures

and related statutory authorities. The

FCA Board believes removing the

geographical constraints of System

entities will promote greater efficiency,

improve customer service, and ensure

that they continue to meet the current

and future needs of rural America. To

carry out our philosophy, we researched

strategies that conform to the Act and

increase opportunities for rural and

agricultural borrowers. Based on this

analysis, our first priority is to remove

geographic barriers by granting national

charters to FCS direct lender

associations.

We will accept applications from

institutions for charter amendments. To

facilitate the application process, we

will be furnishing additional guidance

to FCS institutions in the near future.

We note that the proposed voting

requirements only apply to the

geographic areas specifically referenced

in the Farm Credit Banks and

Associations Safety and Soundness Act

of 1992 (1992 amendments).2 Thus, they

do not apply to nationwide charter

requests outside of the areas covered by

the 1992 amendments or any other FCA

chartering actions not related to national

charters.

B. Statutory Requirements for

Stockholder Votes

Before we can grant full nationwide

charters, we must fulfill two

requirements of the Act affecting certain

institutions in four states. In the 1992

amendments, Congress required

stockholder voting on competitive

charters in these areas.

The 1992 amendments require

association stockholder votes in the

geographic area in which the Federal

Intermediate Credit Bank of Jackson or

its successor (AgFirst Farm Credit Bank)

is chartered to provide short-and

Federal Register / Vol. 65, No. 90 / Tuesday, May 9, 2000 / Proposed Rules 26777

3Pub. L. 100–233, 101 Stat. 1568 (Jan. 6, 1988).

4Under section 5.17(a)(20(b), for each of the

covered associations, only its affiliated bank board

of directors will vote on the question in proposed

§ 611.1152(c). 5Under section 5.17(a)(13) and (14), for each of

the covered associations, both the Farm Credit Bank

of Texas and the Farm Credit Bank of Wichita will

vote on the question in proposed § 611.1152(c).

intermediate-term credit and the Farm

Credit Bank of Texas is chartered to

provide long-term credit. The 1992

amendments also require the consent of

stockholders of three production credit

associations (PCAs) in New Mexico that

were reassigned pursuant to section 433

of the Agricultural Credit Act of 1987. 3

C. Statutory Requirements for Bank and

Certain New Mexico Association Boards

of Directors Votes

In addition to a stockholder vote by

each of the covered associations, the

1992 amendments require the approval

of the board of directors of their

affiliated banks. Thus, the boards of

directors of the Farm Credit Bank of

Texas, AgFirst Farm Credit Bank, and

the Farm Credit Bank of Wichita must

vote to approve the issuance of

competitive charters or charter

amendments in certain areas. The 1992

amendments also require the approval

of the board of directors of the New

Mexico PCAs that were reassigned.

III. The Proposed Regulations

We are proposing regulations to carry

out the statutory requirement for

stockholder approvals. In addition, we

believe the stockholders of the covered

associations should have the

opportunity to express their views on

the issue of other institutions being able

to lend in these geographic areas. We have two primary objectives in

setting up this approval process. The

FCA Board believes an expedited

process will be least burdensome to the

stockholders and institutions involved

and will best promote the

implementation of the Philosophy

Statement. We chose not to propose an

alternative for implementing the

statutory requirement. This alternative

would have required the stockholders in

the geographic areas covered by the

1992 amendments to vote on each

nationwide charter application we

receive. We believe that requiring

multiple votes would be both costly and

disruptive to the stockholders of the

associations covered by the 1992

amendments.

Our other primary objective is to

ensure that the process provides

stockholders with full and fair

disclosure on the issue of charter

amendments affecting the territory of

associations where they do business.

The discussion that follows explains

each section of the proposal.

A. Section 611.1150—Definitions Used

in the Proposed Regulations

We provide definitions of four key

terms in the proposed regulations. As

part of our goal to use plain language in

our regulations, we use the word ‘‘you’’

in the text of the proposed rule. We also

use the term ‘‘covered association,’’

which means the associations subject to

section 5.17(a)(2)(B), (a)(2)(C), (a)(13),

and (a)(14), specifically: First South

Production Credit Association;

Louisiana Federal Land Bank

Association, FLCA; Federal Land Bank

Association of North Alabama, FLCA;

Federal Land Bank Association of South

Alabama, FLCA; Federal Land Bank

Association of North Mississippi, FLCA;

FLBA of South Mississippi; Production

Credit Association of Southern New

Mexico; Production Credit Association

of Eastern New Mexico; and the

Production Credit Association of New

Mexico.

We define the term ‘‘days’’ to mean

calendar days unless otherwise

specified. We also define ‘‘we’’ or ‘‘us’’

to mean the FCA.

B. Section 611.1151—What

Stockholders Must Decide

The proposed rule requires the

covered associations to call a vote of

their stockholders to decide the

following question:

Do you want a choice to borrow from

other Farm Credit System associations?

If stockholders vote to approve the

question, they will have the opportunity

to borrow from other System

associations that will be chartered to

lend in their current association’s

lending area. They will also continue to

have the opportunity to borrow from

their current association. Voting against

the question means other System

associations will not be chartered to

lend in their current association’s

lending area. However, the stockholders

will be able to continue to borrow from

their current association.

The FCA has several options for

carrying out the requirements of section

5.17. For example, the stockholders in

the areas covered by the 1992

amendments could vote on each request

for a nationwide charter in those areas.

There are currently 165 direct lender

associations within the System. We

expect requests for nationwide charters

from most of these associations. As a

result, we believe separate stockholder

votes for each request for nationwide

charters would be expensive and

disruptive to the individual

stockholders and the covered

associations. To reduce this burden, we

are proposing a streamlined process for

obtaining stockholder approval on this

issue. Thus, the stockholders of each

covered association will vote on

whether any other Farm Credit

association should be given a charter or

charter amendment that would allow it

to exercise lending authority in the

territory of the covered association.

C. Section 611.1152—Bank and Certain

New Mexico Association Boards of

Directors Voting Requirements

The proposed regulations implement

the approval requirements for bank and

certain New Mexico association boards

of directors’ votes. The approval

requirements differ depending on the

geographic area of the charter

amendment. For the former Jackson

district, the 1992 amendments require

the approval of the board of directors of

the Farm Credit Bank of Texas and

AgFirst Farm Credit Bank.4

For the reassignments under section

433 of the Act, the 1992 amendments

require the approval of the board of

directors of the Farm Credit Bank of

Texas and the Farm Credit Bank of

Wichita.5 In addition to the

stockholders’ and bank boards of

directors’ votes, the New Mexico

associations that were reassigned

pursuant to section 433 must conduct a

vote of their boards of directors.

The banks’ and certain New Mexico

associations’ boards of directors will

vote on the following question:

Should the Farm Credit

Administration issue a charter or charter

amendment that would allow any Farm

Credit System association to exercise

lending authority in the territory(ies)

now served by [list affected

association(s)]?

Our proposal requires these votes to

be completed and the results reported to

the FCA on the first business day

following notice by an independent

third party as described in section F

below.

D. Section 611.1153—Contents of the

Information Statement

The proposed rule identifies the

information necessary to ensure

stockholders receive complete

disclosure to enable them to make an

informed decision when voting on the

stockholder question. The Information

Statement must contain the following:

• Notice of Meeting;

• Proxy Ballot and Instructions;

26778 Federal Register / Vol. 65, No. 90 / Tuesday, May 9, 2000 / Proposed Rules

6Any financial projections must conform to the

guidance provided in Bookletter BL–007 entitled

‘‘Disclosure of Financial Forecasts’’ dated March 2,

1990. Partial forecasts or projected information will

be subject to the evaluative criteria set forth in this

Bookletter.

7When the association contracts with an

independent third party, the association must

instruct it as to which bank(s) must be notified of

the results of the stockholder vote.

• Brief Summary of the Question;

• Discussion of the Advantages and

Disadvantages of Approving the

Question;

• Association Board Statement or

Recommendation (Optional); and,

• Statement by the Farm Credit

Administration Board.

The Notice of Meeting (Notice) must

give the date, time, and place of the

stockholders’ meeting. The Notice must

include the question that will be

considered and voted on by the

stockholders. It must identify the

requirements for stockholder approval,

pursuant to proposed § 611.1157. It

must also contain a reference to the

proxy, proxy authorization, voting

instructions included in the Information

Statement, and the deadline for receipt

of the proxy at the headquarters office.

The Information Statement must be

provided to all equity holders, including

preferred stockholders, participation

certificate holders, and others not

eligible to vote. Although these nonvoting equity holders cannot vote on the

question, we are proposing to provide

them with the Information Statement to

keep them informed of the changes

affecting their Association.

The proposed rule contains customary

instructions for voting by proxy. The

proxy ballot and instructions must

allow stockholders to select someone

other than a director to serve as proxy,

provided that this person is a voting

stockholder and will attend the meeting.

The proxy ballot and instructions must

point out that a stockholder may cancel

the proxy at any time prior to balloting

at the stockholders’ meeting. The

documents must provide a space for the

stockholder to sign and date the proxy

authorization. The proxy ballot must be

separate from the proxy authorization to

ensure the stockholder’s rights to a

secret ballot as required by section 4.20

of the Act. Therefore, you must ensure

that there are no signatures on the

ballot.

The Information Statement must

include a brief summary of the question.

The summary must provide background

information on the FCA Board’s

Philosophy Statement. The summary

must also include information on the

territory currently served by the covered

association. Finally, the summary must

describe the question approval process.

The Information Statement must also

include a discussion of the advantages

and disadvantages of approving the

question to the stockholders of the

covered association. The discussion

must present a balanced view of the

advantages and disadvantages and

provide justification for all statements

that project future financial results, such

as changes in operating costs, stock

retirements, interest rates, earnings, and

services available to customers.6

The boards of directors of the covered

associations may include an optional

statement on the question. This

statement may include the directors’

views and recommendation on the

question and the reasons for the

recommendation.

To further streamline the process, the

FCA is including a model Information

Statement with this proposal. We note,

however, that although most of the

requirements in the proposed rule are

standard in stockholder disclosures, one

item is unique. The FCA Board believes

the disclosure should include

information on its philosophy on

competition to ensure that the

stockholders can make an informed

vote.

E. Section 611.1154—Timeframes for

Implementing the Regulations

We are proposing a streamlined, fasttrack process for implementing the rule.

As previously discussed, we expect

many requests for nationwide charters

in the near future. The FCA Board

believes the timely and efficient

implementation of the Philosophy

Statement and nationwide charters has

the potential for lowering the cost of

credit and improving service for

customers. Thus, we are proposing a

specific timeline for obtaining

stockholder decisions on the question.

The first step in the timeline is

preparing the Information Statement.

The covered associations must prepare

and send the Information Statement to

the FCA within 20 days of the effective

date of this rule. We are requiring

submission by facsimile, electronic

transmission, overnight mail, or similar

expedited delivery method so we can

review and approve the statement in the

most efficient manner. In addition,

FCA’s model Information Statement

should shorten the time necessary for

the associations to prepare the

document. We also note that after the

FCA Board adopts the final regulations,

we send them to Congress for a 30-day

review period before they are effective.

As a result, the associations will have at

least 50 days after we adopt the rule to

submit the Information Statement. We

are proposing a 10-business day review

period for the FCA, but plan to act on

the Information Statements as quickly as

possible. To ensure that the Information

Statement provides accurate and

complete information to stockholders on

the question, we may change the

Information Statement or require the

association to change it.

When the associations receive FCA

approval, they will have 14 days to

duplicate and mail the statement. The

proposal requires that the association

hold a stockholder meeting 16 days after

distribution of the statement. This

includes the standard 5-day mailing

time and 10 days for stockholder

review. As a result, the stockholder

meeting will take place on the first

business day following the 10-day

stockholder review period.

F. Sections 611.1155 and 611.1156—

Vote Tabulation and Notification

The proposed regulations require that

the stockholder votes be tabulated by an

independent third party within 2

business days of the meeting. Use of an

independent third party is a standard

measure to ensure accuracy and

objectivity. The independent third party

must notify the association, the

appropriate banks, and the FCA of the

results of the vote on the same day they

are tabulated.7 Within 10 days, the

independent third party will provide us

a certified copy of the stockholders’ vote

on the question.

G. Sections 611.1157, 611.1158,

611.1159 and 611.1160—Miscellaneous

Issues

For all the required votes, the

proposed regulations incorporate the

standard condition for approval or

disapproval of the question by a

majority of those stockholders and

board members voting, at duly

authorized meetings, according to the

bylaws of the institution.

The proposal also requires the

associations to notify the stockholders

of the results of the votes referenced in

§§ 611.1151 and 611.1152 within 10

days of the stockholder meeting. In

order for the associations to do this, we

are requiring the banks’ boards of

directors to notify the associations of

their votes within 2 business days.

The proposed regulations contain the

following prohibition: No director,

officer, employee, or agent of a bank or

an association may make any

representation that appears to be a

statement or recommendation of the

FCA on the merits of the question. The

FCA’s position will be included in the

Information Statement as required in

proposed § 611.1153(a)(6).

Federal Register / Vol. 65, No. 90 / Tuesday, May 9, 2000 / Proposed Rules 26779

Finally, in the event the stockholders’

and boards of directors’ votes identified

in proposed §§ 611.1151 and 611.1152,

are not conducted, the proposed

regulations provide that FCA will

conduct the voting process.

List of Subjects in 12 CFR Part 611

Accounting, Agriculture, Banks,

banking, Rural areas.

For the reasons stated in the

preamble, we propose to amend part

611 of chapter VI, title 12 of the Code

of Federal Regulations to read as

follows:

PART 611—ORGANIZATION

1. The authority citation for part 611

continues to read as follows:

Authority: Secs. 1.3, 1.13, 2.0, 2.10, 3.0,

3.21, 4.12, 4.15, 4.20, 4.21, 5.9, 5.10, 5.17,

7.0–7.13, 8.5(e) of the Farm Credit Act (12

U.S.C. 2011, 2021, 2071, 2091, 2121, 2142,

2183, 2203, 2208, 2209, 2243, 2244, 2252,

2279a—2279f–1, 2279aa–5(e)); secs. 411 and

412 of Pub. L. 100–233, 101 Stat. 1568, 1638;

secs. 409 and 414 of Pub. L. 100–399, 102

Stat. 989, 1003, and 1004.

2. Add subpart J to read as follows:

Subpart J—Stockholder Vote on Like

Lending Authority

Sec.

611.1150 What definitions are used in this

subpart?

611.1151 What must your stockholders

decide?

611.1152 What votes must be conducted by

bank and certain association boards of

directors?

611.1153 What must the Information

Statement contain?

611.1154 What is the timeframe for this

vote?

611.1155 How are the votes tabulated?

611.1156 Who is notified of the results of

the stockholder vote?

611.1157 How many votes are needed for

passage of the questions?

611.1158 What notifications must be made?

611.1159 Are there additional

requirements?

611.1160 What if the votes are not

conducted?

Appendix A to Subpart J—Model Information

Statement

Subpart J—Stockholder Vote on Like

Lending Authority

§ 611.1150 What definitions are used in

this subpart?

(a) Days means calendar days unless

otherwise noted.

(b) You or covered associations means

the associations subject to section

5.17(a)(2)(B), (a)(2)(C), (a)(13) and (a)(14)

of the Farm Credit Act of 1971, as

amended, specifically First South

Production Credit Association;

Louisiana Federal Land Bank

Association, FLCA; Federal Land Bank

Association of North Alabama, FLCA;

Federal Land Bank Association of South

Alabama, FLCA; Federal Land Bank

Association of North Mississippi, FLCA;

FLBA of South Mississippi; Production

Credit Association of Southern New

Mexico; Production Credit Association

of Eastern New Mexico; and the

Production Credit Association of New

Mexico.

(c) We or us means the Farm Credit

Administration.

§ 611.1151 What must your stockholders

decide?

(a) You must conduct a vote of your

voting stockholders, voting in person or

by proxy, at a duly authorized meeting,

on this question:

Do you want a choice to borrow from other

Farm Credit System associations?

(b) Before the vote on the question,

you must prepare an Information

Statement, obtain Farm Credit

Administration approval of it, and

distribute it to your stockholders.

§ 611.1152 What votes must be conducted

by bank and certain association boards of

directors?

(a) On the first business day following

the notice from the independent third

party required by § 611.1156(a), the

board of directors of the Farm Credit

Bank of Texas, AgFirst Farm Credit

Bank, and the Farm Credit Bank of

Wichita must vote on the question in

paragraph (c) of this section and report

the results to us.

(b) On the first business day following

the notice from the independent third

party required by § 611.1156(a), the

boards of directors of Production Credit

Association of Southern New Mexico,

Production Credit Association of

Eastern New Mexico, and the

Production Credit Association of New

Mexico must vote on the question in

paragraph (c) of this section and report

the results to us.

(c) The boards of directors listed in

paragraphs (a) and (b) of this section,

voting at duly authorized meetings,

must vote on the following question:

Should the Farm Credit Administration

issue a charter or charter amendment that

would allow any Farm Credit System

association to exercise lending authority in

the territory(ies) now served by [list affected

association(s)]?

§ 611.1153 What must the Information

Statement contain?

(a) The Information Statement must

include the question in § 611.1151(a)

and must substantially conform to the

model Information Statement provided

as an appendix to this subpart. The

Information Statement must include a:

(1) Notice of meeting;

(2) Proxy ballot and instructions;

(3) Brief summary of the question;

(4) Discussion of the advantages and

disadvantages of approving the

question;

(5) Association board statement or

recommendation (optional); and

(6) Statement by the Farm Credit

Administration Board.

(b) We may also require additional

information in the Information

Statement to ensure stockholders have

accurate and adequate information.

§ 611.1154 What is the timeframe for this

vote?

(a) Within 20 days of the effective

date of this section, you must prepare

and send the Information Statement to

us by facsimile, electronic transmission,

overnight mail, or similar expedited

delivery method.

(b) Not later than 10 business days

after receipt of the Information

Statement, we will review the

Information Statement and notify you of

our approval or denial. We may change

the Information Statement or require

you to change it to ensure that it

provides accurate and complete

information to stockholders on the

question.

(c) Within 14 days of receipt of our

approval of the Information Statement,

you must mail the Information

Statement to your voting stockholders.

(d) A 10-day stockholder review

period will begin on the sixth day after

the day you mail the Information

Statement.

(e) A meeting of the stockholders

must take place on the first business day

following the end of the 10-day

stockholder review period.

§ 611.1155 How are the votes tabulated?

The votes will be tabulated by an

independent third party within 2

business days of the stockholder

meeting.

§ 611.1156 Who is notified of the results of

the stockholder vote?

(a) On the day the votes are tabulated,

the independent third party must report

the results to you, the appropriate

bank(s), and us.

(b) Within 10 days of the stockholder

meeting, the independent third party

must provide the Farm Credit

Administration with a certified copy of

the stockholders’ vote on the question.

§ 611.1157 How many votes are needed for

passage of the questions?

The votes in §§ 611.1151 and

611.1152 will be determined by the

majority of those voting, in person or by

proxy as appropriate, at a duly

26780 Federal Register / Vol. 65, No. 90 / Tuesday, May 9, 2000 / Proposed Rules

* Please sign exactly as your name appears on the

above label.

** When signing as an executor, administrator,

trustee, or guardian on behalf of a corporation or

partnership, please sign your name on the first line

and indicate your full representative title on the

second line.

authorized meeting in accordance with

the associations’ or banks’ quorum

requirements.

§ 611.1158 What notifications must be

made?

(a) You must notify the stockholders

of the results of the votes referenced in

§§ 611.1151 and 611.1152 within 10

business days.

(b) The board of directors of the Farm

Credit Bank of Texas and the AgFirst

Farm Credit Bank must notify each of

the covered associations with which

they have a funding relationship of the

results of the vote in § 611.1152(a)

within 2 business days.

(c) The board of directors of the Farm

Credit Bank of Texas and the Farm

Credit Bank of Wichita must notify the

Production Credit Association of

Southern New Mexico, the Production

Credit Association of Eastern New

Mexico, and the Production Credit

Association of New Mexico of the

results of the vote in § 611.1152(a)

within 2 business days.

§ 611.1159 Are there additional

requirements?

No director, officer, employee, or

agent of a bank or an association may

make any representation that appears to

be a statement or recommendation of

the Farm Credit Administration on the

merits of the question. The Farm Credit

Administration’s position will be

included in the Information Statement.

§ 611.1160 What if the votes are not

conducted?

In the event the stockholder and

boards of directors votes identified in

§§ 611.1151 and 611.1152, are not

conducted in accordance with this

subpart, the Farm Credit Administration

will conduct the voting process.

Appendix A to Subpart J—Model

Information Statement

Table of Contents

A–1 Notice of Stockholders’ Meeting of X

Association

A–2 Proxy Instructions and Ballot

A–3 Proxy Form

A–4 Ballot (For Use as Proxy Ballot or

Voting in Person) X Association

A–5 Brief Summary of the Question

A–6 Advantages and Disadvantages of

Approving the Question

A–7 X Association Board Statement

(Optional)

A–8 Statement of the FCA Board

Note: Appendix A contains a model

information statement to aid in compliance

with subpart J of part 611.

A–1—Notice of Stockholders’ Meeting of X

Association

A meeting of the stockholders of X

Association will be held at (location) located

at (address), on (date), beginning at (time).

At this meeting, you will be asked to vote

on the following question:

Do you want a choice to borrow from other

Farm Credit System associations?

The Farm Credit Administration (FCA)

Board will accept applications from direct

lender associations for national (also referred

to as nationwide) charters. National charters

would enable other Farm Credit System

(System) lenders to make loans in the

territory now served by your Association. As

a result, you could have greater choice of

System lenders in your area.

The Farm Credit Act of 1971, as amended

(Act), requires approval by the voting

stockholders of your Association before the

FCA can issue a charter or amend a charter

that would allow any System lender to make

loans, of the same type as those that your

Association can make, in the geographic

territory now served by your Association. For

the question to be approved, a majority of the

voting stockholders of X Association voting,

in person or by proxy, at a duly authorized

meeting of such stockholders, must vote to

approve the question. The Act requires other

approvals before nationwide charters can be

issued in the territory served by X

Association. The approvals are explained in

the brief summary of the question (Appendix

A–5).

Attached is a packet of information related

to the question. The packet includes a brief

summary of the question; advantages/

disadvantages of allowing other System

associations to exercise lending authority for

eligible customer in the geographic territory;

a Board of Directors’ Statement (optional);

and a statement by the FCA Board.

Information on balloting and proxies is

included under Appendix A–2, including the

deadline of (date) for receipt of the proxy

forms by your Association. If you have any

questions about the Information Statement or

the question, you may discuss them at the

stockholders’ meeting on (date). Your board

of directors urges you to vote in person or by

proxy at the stockholders’ meeting.

If you are a nonvoting stockholder or

holder of participation certificates, you

cannot vote on the question. However, we

sent you this Information Statement to keep

you informed of the changes affecting your

Association.

lllllllllllllllllllll

Name, Chief Executive Officer

Enclosures

A–2—Proxy Instructions and Ballot

If you are entitled to vote and are unable

to attend the meeting in person, you may

appoint a proxy to vote as you direct. The

following are instructions for completing the

Proxy Ballot and Proxy Form:

1. Complete the Proxy Ballot.

a. Mark either ‘‘APPROVE’’ or

‘‘DISAPPROVE’’ in the appropriate box on

the Ballot. Unmarked Proxy Ballots will be

voted to approve the question.

b. Enclose Proxy Ballot in the Ballot

Envelope provided. Seal the envelope.

2. Complete the Proxy Form.

a. If you prefer, you may name as your

proxy someone other than the directors

named on the Proxy Form by writing in the

name of the person in the blank space

provided. Please note that for your vote to

count, the person you name as proxy must

be a voting stockholder of the association and

must be present at the stockholders’ meeting.

b. Date and sign the Proxy Form in the

space indicated.

3. Enclose your signed and dated Proxy

Form and sealed Ballot Envelope in the

business reply envelope provided. Mail to

your Association in the pre-addressed return

envelope provided.

For your vote to count, your Proxy Ballot

and Proxy Form must be received in the

association office no later than (time) on

(date) or delivered to an election official prior

to balloting at the stockholders’ meeting. You

have the right to cancel your proxy at any

time prior to the beginning of balloting at the

stockholders’ meeting.

A–3—Proxy Form

I, lll, as holder of stock and authorized

to vote such stock in X Association, cancel

any previous proxies and appoint (Name),

Director, X Association, as my proxy, or I

appoint lll, as my proxy to attend the

association stockholders’ meeting on (date),

and any continuation or adjournment of the

meeting, to vote for me on the question, and

to act for me with the same effect as if I were

personally present.

I understand that I may cancel this proxy

and the authority it represents at any time

prior to balloting at the stockholders’

meeting. Unless cancelled, this proxy will

expire upon the official announcement of the

results of the vote on the question. I also

understand that, if necessary, the person I

name as my proxy can substitute someone

else as my proxy and can later cancel that

substitution.

lllllllllllllllllllll

Date:

lllllllllllllllllllll

Signature*

lllllllllllllllllllll

Representative Title**

A–4—Ballot (For Use as Proxy Ballot or

Voting in Person) X Association

QUESTION: Do you want a choice to

borrow from other Farm Credit System

associations?

I direct that my Ballot be voted as follows:

l APPROVE (Voting to approve means

you will have the opportunity to borrow

from:

• Your current association; and

• Other Farm Credit System associations

that will be chartered to allow them to lend

in your current association’s lending area, as

explained in the enclosed Information

Statement.)

Federal Register / Vol. 65, No. 90 / Tuesday, May 9, 2000 / Proposed Rules 26781

l DISAPPROVE (Voting against means

other Farm Credit System associations will

not be chartered to allow them to lend in

your current association’s lending area.

However, you will be able to continue to

borrow from your current association, as

explained in the enclosed Information

Statement.)

If I do not direct how this ballot shall be

voted, I intend it to be cast to APPROVE the

question.

Note: For your vote to count, your Proxy

Ballot and Proxy Form must be received in

the association office no later than (time) on

(date) or delivered to an election official prior

to balloting at the stockholders’ meeting. You

have the right to cancel your proxy at any

time prior to the beginning of balloting at the

stockholders’ meeting.

A–5—Brief Summary of the Question

In a July 14, 1998, Philosophy Statement,

the FCA Board expressed its view that

competition is beneficial for customers and

will help ensure that the System will

continue to meet the current and future

needs of rural America. To facilitate

competition and improve services for all

farmers, ranchers, and other eligible

customers, the FCA Board indicated its

support for several measures including the

removal of geographical restrictions of

System entities.

The FCA Board will accept applications for

national charters from System direct lender

associations in the near future. Before the

FCA can grant applications for full

nationwide charters, however, the Agency

must carry out two requirements of the Act

that call for stockholder voting in certain

areas of the country. Congress required

stockholder voting in the geographic area in

which the Federal Intermediate Credit Bank

of Jackson or its successor (AgFirst Farm

Credit Bank) is chartered to provide shortand intermediate-term credit and the Farm

Credit Bank of Texas is chartered to provide

long-term credit. Congress also required the

consent of stockholders of three production

credit associations in New Mexico pursuant

to section 433 of the Agricultural Credit Act

of 1987.

Your association serves the [counties/states

of xxx], and (insert either (1) has territory

that is within the geographic area of the

successor to the former Federal Intermediate

Credit Bank of Jackson or (2) reaffiliated

under section 433.] As a result, you are being

asked whether you approve the FCA’s

issuance of charters to associations that

would allow them to make similar loans to

you and other eligible customers in the

territory of your Association.

Approval of the question does not,

however, guarantee that other associations

will be chartered to lend in your

Association’s territory. Following the

stockholder vote on the question, the board

of directors of the [insert appropriate bank]

[and insert associations if this Information

Statement refers to section 5.17 (a)(13) and

(a)(14)] will also vote on the question. The

question must be approved by a majority of

the stockholders voting and a majority of the

board of directors of the banks [and

associations, if appropriate] before another

System lender may be chartered to make

similar loans in the territory of your

Association. If approved by all parties

involved, the FCA may grant requests from

other FCS associations to serve the territory

currently served by your Association.

A–6—Advantages and Disadvantages of

Approving the Question

There are advantages and disadvantages of

your approval of the question. The following

is a brief discussion of the principal

advantages and disadvantages to the

stockholders of your Association. This

discussion does not claim to provide a

complete analysis of all the expected

outcomes of approval of the question. In

addition, there can be no assurance that any

expected advantage or disadvantage below

will take place in whole or part. The

realization of any advantages and

disadvantages depends on how each

association implements its nationwide

charter. You should also consider that the

advantages and disadvantages affect not only

you but all other eligible FCS customers and

potential customers.

ADVANTAGES

Allowing other System associations to

make loans in the territory of your

Association may provide System customers

in the [insert geographic area] with more

choices for credit. You may have a greater

choice of financial products because System

lenders offer different loan products, interest

rates, and repayment options. If the question

is approved, you may have the freedom to

select the System lender of your choice.

Competition for loans within a geographic

area may also provide associations the

opportunity and incentive to become more

efficient and more competitive. This

competition is likely to lower the cost of

credit and improve the quality of service for

you and other customers.

System lenders across the country may be

better able to develop niche products and

thus offer specialized lending services to

customers in the territory of your Association

and across the country. You may be able to

obtain your main source of operational

funding from one lender and specialized

services from another. Nationwide charters

may also enable System lenders to provide

seamless credit to agricultural producers

regardless of the producer’s geographic

location. E-commerce services may be

enhanced after territorial restrictions are

removed.

Finally, approval of this question may

heighten awareness of each System lender’s

public policy mission for service within its

original chartered territory. The FCA will

continue to ensure that each System

association fulfills its responsibility to make

services available to all eligible customers

within its current chartered territory.

DISADVANTAGES

As System lenders compete for customers,

some associations may become less viable if

added competitive pressures reduce profit

margins. In addition, if the challenges

associated with greater competition are not

met, the capital investment of stockholders

may be at a higher risk. There are 165

associations that may request nationwide

charters. As a result, the management of your

Association may be under increased pressure

to provide efficient and cost effective

services.

In the long run, some associations may be

forced to cut back or eliminate certain

services. Also, associations entering new

geographic areas may primarily focus on

larger or more profitable borrowers while less

attention may be given to the more marginal

borrowers in the associations’ new and

existing chartered territories.

Some associations may not be competitive

in their present form and may have to merge

or take other corporate restructuring actions

to remain viable.

A–7—X Association Board Statement

(Optional)

The Association board of directors may

state its views and recommendation on the

question and elaborate on the reasons for its

recommendation.

A–8—Statement of the FCA Board

This statement will be provided during

FCA’s review period.

Dated: May 4, 2000.

Nan P. Mitchem,

Acting Secretary, Farm Credit Administration

Board.

[FR Doc. 00–11551 Filed 5–8–00; 8:45 am]

BILLING CODE 6705–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 39

[Docket No. 99–SW–57–AD]

Airworthiness Directives; Schweizer

Aircraft Corporation Model 269A,

269A–1, 269B, 269C, 269C–1, 269D,

and TH–55A Helicopters

AGENCY: Federal Aviation

Administration, DOT.

ACTION: Notice of proposed rulemaking

(NPRM).

SUMMARY: This document proposes the

supersedure of an existing airworthiness

directive (AD) applicable to Schweizer

Aircraft Corporation (Schweizer) Model

269A, 269A–1, 269B, 269C, 269C–1, and

269D helicopters. That AD currently

requires inspecting the tail rotor

swashplate shaft (shaft) nut for

looseness and, if loose, inspecting the

shaft for proper size; subsequently

inspecting the shafts not previously

inspected; and replacing any undersized

shaft prior to further flight. This new

action would reduce the applicability by

specifying certain serial number tail

rotor pitch control (pitch control)

assemblies and shipping dates but

would add the Schweizer Model TH–