Federal Register / Vol. 65, No. 92 / Thursday, May 11, 2000 / Rules and Regulations 30345

determine whether the new producers

requesting additional base have ability

to produce spearmint oil. The names of

all eligible new producers from each

region shall be placed in separate lots

per class of oil. For each class of oil,

separate drawings shall be held from a

list of all applicants from Region A,

from a list of all applicants from Region

B, and from a list of all remaining

applicants from Regions A and B

combined. If, in any marketing year,

there are no requests in a class of oil

from eligible new producers in a region,

such unused allotment base shall be

issued to two eligible new producers

whose names are selected by drawing

from a lot containing the names of all

remaining eligible new producers from

the other region for that class of oil. The

Committee shall immediately notify

each new producer whose name was

drawn and issue that producer an

allotment base in the appropriate

amount.

* * * * *

Dated: May 5, 2000.

Robert C. Keeney,

Deputy Administrator, Fruit and Vegetable

Programs.

[FR Doc. 00–11836 Filed 5–10–00; 8:45 am]

BILLING CODE 3410–02–P

DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Part 1436

RIN 0560–AG00

Farm Storage Facility Loan Program

AGENCY: Commodity Credit Corporation,

USDA.

ACTION: Interim rule.

SUMMARY: This rule implements the

Commodity Credit Corporation’s (CCC’s)

Farm Storage Facility Loan program

utilizing authority in the CCC Charter

Act. The program will provide financing

for producers to build or upgrade farm

storage and handling facilities.

DATES: This rule is effective May 11,

2000. Comments concerning this rule

should be received on or before June 12,

2000 to be assured consideration.

Comments on the information

collections in this rule must be received

by July 10, 2000 to be assured

consideration.

ADDRESSES: Comments must be

submitted to Grady Bilberry, Director,

Price Support Division, Farm Service

Agency, 1400 Independence Avenue,

S.W., STOP 0512, Washington, DC

20250–0512.

FOR FURTHER INFORMATION CONTACT:

Chris Kyer, (202) 720–7935 or e-mail

chris_kyer@wdc.fsa.usda.gov.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule is issued in conformance

with Executive Order 12866 and has

been determined to be economically

significant and has been reviewed by

the Office of Management and Budget.

Regulatory Flexibility Act

It has been determined that the

Regulatory Flexibility Act is not

applicable to this rule because the Farm

Service Agency is not required by 5

U.S.C. 553 or any other provision of law

to publish a notice of proposed

rulemaking with respect to the subject

matter of this rule.

Environmental Evaluation

It has been determined by an

Environmental Evaluation that this

program, as a whole, will have no

significant impact on the quality of the

human environment. Therefore, neither

an Environmental Assessment nor an

Environmental Impact Statement for the

program is needed. However, because it

is possible that individual projects may

have limited impacts on the local

environment, environmental

evaluations for each project will be

conducted to determine the need for

environmental assessment and/or

mitigation.

Executive Order 12988

This rule has been reviewed in

accordance with Executive Order 12988.

The provisions of this rule preempt

State laws to the extent such laws are

inconsistent with the provisions of this

rule. Before any legal action may be

brought regarding determinations of this

rule, the administrative appeal

provisions set forth at 7 CFR part 780

must be exhausted.

Executive Order 12372

This program is not subject to the

provisions of Executive Order 12372,

which require intergovernmental

consultation with State and local

officials. See the notice related to 7 CFR

part 3014, subpart V, published at 48 FR

29115 (June 24, 1983).

The Unfunded Mandates Reform Act of

1995

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. Thus, this rule is

not subject to the requirements of

sections 202 and 205 of the UMRA.

Paperwork Reduction Act of 1995

A Notice with request for comments

on the information collection is part of

this proposed rule. An emergency

information collection package has been

sent to OMB for review.

In accordance with the Paperwork

Reduction Act of 1995, this notice

announces the Commodity Credit

Corporation’s (CCC) request for approval

of a new information collection in

support of the Farm Storage Facility

Loan Program.

Title: 7 CFR 1436, Farm Storage

Facility Loan Program Regulations.

OMB Control Number: 0506–NEW.

Type of Request: Approval of an

information collection.

Abstract: This information is needed

to administer the CCC’s Farm Storage

Facility Loan Program. The information

will be gathered from producers needing

additional on-farm grain storage and

handling capacity to determine whether

they are eligible for loans.

Estimate of Burden: Public reporting

burden for this collection of information

is estimated to average 22 minutes per

producer.

Respondents: Eligible producers:

200.000.

Estimated Number of Respondents:

50,000.

Estimated Number of Responses per

Respondent: 2.

Estimated Total Annual Burden on

Respondents: 47,250 hours.

Proposed topics for comments are: (a)

Whether the collection of information is

necessary for the proper performance of

the functions of the agency, including

whether the information will have

practical utility; (b) the accuracy of the

agency’s estimate of burden including

the validity of the methodology and

assumptions used; (c) ways to enhance

the quality, utility, and clarity of the

information to be collected; or (d) ways

to minimize the burden of the collection

of information on those who are to

respond, including the use of

appropriate automated, electronic,

mechanical or other technological

collection techniques or other forms of

information technology.

Comments should be sent to the Desk

Officer for Agriculture, Office of

Information and Regulatory Affairs,

Office of Management and Budget,

Washington, DC 20503 and to Chris

Kyer, USDA—Farm Service Agency—

Price Support Division, 1400

Independence Avenue, SW., STOP

0512, Washington, DC 20250–0512;

Telephone (202) 720–7935 or e-mail

chris_kyer@wdc,fsa.usda.gov. Copies

30346 Federal Register / Vol. 65, No. 92 / Thursday, May 11, 2000 / Rules and Regulations

of the information collection may be

obtained from Chris Kyer at the above

address.

All responses to this notice will be

summarized. All comments will also

become a matter of public record.

Executive Order 12612

It has been determined that this rule

does not have sufficient Federalism

implications to warrant the preparation

of a Federalism Assessment. The

provisions contained in this rule will

not have a substantial direct effect on

States or their political subdivisions, or

on the distribution of power and

responsibilities among the various

levels of government.

Immediate Effectiveness of This Rule

It has been determined that this rule

should be issued as an interim rule,

without prior comment, but subject to

modification on the consideration of

those comments that are timely

received. It has been determined that to

delay the implementation of the rule

pending comment would be

impracticable and contrary to the public

interest. That finding is based on the

current shortage of available storage,

rapidly changing market needs that are

forcing producers to consider new

storage arrangement on their farms, and

the lack of material adverse effect on

other parties. With respect to storage

availability, recent data indicates a

critical shortage of storage that

continues to deteriorate. The Deputy

Administrator for Commodity

Operations, Farm Service Agency,

recently completed an analysis of onfarm and commercial grain storage

utilization, which showed that the

utilization of both on-farm and

commercial storage had increased from

79 percent utilization in 1996 to 95

percent utilization in 1999. At the time

of the review, eleven key grain

producing states were utilizing over one

hundred percent of available storage

capacity when including temporary and

emergency storage. Four other states

were at ninety percent of storage

capacity. The fifteen states identified

with ninety percent or above utilization

of grain storage capacity are: Arkansas,

Colorado, Illinois, Indiana, Iowa,

Kansas, Louisiana, Michigan,

Minnesota, Mississippi, Missouri,

Nebraska, Ohio, South Dakota, and

Wisconsin. In 1998 the requests by

warehouse operators with CCC Uniform

Grain Storage Agreements for

emergency (on the ground) storage were

at a level of 192.3 million bushels; for

1999, that level increased to 238.1

million bushels.

Also, in the meantime, changing

market needs are putting pressure on

producers to build new facilities since

some buyers of grain seek to limit

purchases to specialty grains that are

not genetically modified or to segregate

either specialty crops or grains that are

not genetically modified. To meet those

demands, while utilizing the benefits of

genetically modified grains for other

markets, the producer may find it

necessary to grow different kinds of

grain in which case they may need

separate storage facilities in order to

guarantee the proper identity of the

grains. Many producers, however, will

not be able to meet that need without

the assistance provided for in this rule

and will not be able to do so in a timely

manner for this crop year unless this

rule is made effective immediately. In

addition, a delay in implementing this

rule could also mean that producers,

who otherwise might be helped and

who are the most in need, will be

unable to take full advantage of CCC’s

nonrecourse marketing assistance loan

program for the current marketing year.

For those producers who cannot store

their crops, the only program option

available is the loan deficiency payment

available at the time of harvest, thus

denying those producers the ability to

delay marketings until a more favorable

market situation might arise. Moreover,

the lack of adequate facilities can mean

that the producer also loses out on the

other guarantees and assistance that a

marketing loan can afford the producer

such as the special benefits that can

inure to a producer as a result of a

marketing loan when the producer has

reached the maximum limitation on the

amount of payments that the producer

can receive in the form of loan

deficiency payments or marketing loan

gains.

Storage conditions have not improved

materially in the last few months so as

to relieve the shortage of storage and,

therefore, there is a critical need to act

as quickly as possible. The public

interest in this respect has been

established by the Congressional

direction contained in Section 4(h) of

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

which requires a storage program

whenever it is determined that there is

a shortage of a storage. Furthermore,

while the need for immediate assistance

is critical, the potential harm to other

parties, by issuance of this rule as an

interim rule, is expected to be minimal

by comparison. In addition, the rule is

flexible enough so that, in the event that

any comments are received that would

dictate a reason to suspend the program,

a suspension could be imposed before

the response to the comments is

published. Even after the interim rule is

issued, it will take some time to

complete loan applications. As a result,

a delay in the start-up of the program

until comments could be received

would put availability of the program

beyond the time in which many

producers in need of storage could

obtain relief for the current crop year.

This could be damaging not only to the

producers themselves but also to the

effort to increase the marketability in all

markets of U.S.-produced grains.

Accordingly, for all the foregoing

reasons, it has been determined that the

provisions of this rule should be made

effective immediately.

The Small Business Regulatory

Enforcement Fairness Act

The finding made above, that this rule

should be made effective immediately,

applies for all purposes including, but

not limited, to the provisions of 5 U.S.C.

808 of the Small Business regulatory

Enforcement Fairness Act (SBREFA),

which provides that a rule may, without

regard to certain special Congressional

oversight measures provided for in

SBREFA, take effect at such time as the

agency may determine if the agency

finds for good cause that public notice

is impracticable, unnecessary, or

contrary to the public interest. For the

reasons set out, it has been determined

that delay would be contrary to the

public interest and that the rule should

be made effective immediately.

Cost Benefit Analysis Summary

U.S. grain storage capacity steadily

declined from 1987 to 1997. Storage

capacity has increased modestly since

its low in 1997, but increases have not

been sufficient to keep pace with

growing production. Despite persistent

harvest-time storage capacity shortfalls

and the advantages of on-farm storage

for producers, low commodity prices

and reduced farm income will limit the

ability of producers to significantly

expand their on-farm storage. The Farm

Storage Facility Loan Program will add

additional storage capacity in deficit

areas and help farmers adapt to identity

preserved storage and handling

requirements for genetically enhanced

organisms. One direct benefit to

producers from the Farm Storage

Facility Loan Program would be

reduced financing costs on facility

construction. Interest savings for a

farmer on the construction of a 15,000-

bushel grain bin could total as much as

$3,840 under the program when

compared with financing through some

commercial banks. Producers would

also benefit from the potential for higher

Federal Register / Vol. 65, No. 92 / Thursday, May 11, 2000 / Rules and Regulations 30347

market returns on their crops because

on-farm storage capacity creates pricing

and hedging opportunities that can

significantly increase marketing returns.

The Farm Storage Facility Loan Program

is expected to expand on-farm storage

by more than 750 million bushels over

the next 5 years.

Background

Section 5(b) of the CCC Charter Act

(15 U.S.C. 714c(b)) authorizes CCC to

use its general powers to make available

materials and facilities required in

connection with the production and

marketing of agricultural commodities.

Section 4(f) of the CCC Charter Act (15

U.S.C. 714b(h)) provides that the

Corporation may make loans to grain

producers needing storage facilities and

that loans shall be made in areas in

which the Secretary determines that

there is a deficiency of such storage.

CCC made loans for storage facilities

intermittently since 1948 and stopped

making new storage facility loans in

1982 based on studies that revealed that

producers had sufficient storage for

their crops. Since 1995, the storage

situation has changed. Storage capacity

utilization rates are running extremely

high and storage shortages exist in some

areas. The net decrease in storage

capacity from 1996 to 1998 has been

about 79.5 million bushels, of nearly 1

percent of total capacity. During this

same period, grain production increased

by nearly 8 percent, from 14 billion

bushels in 1996 to 15 billion bushels in

1998. As a result, there is insufficient

capacity to allow farmers to store their

grain, forcing farmers to sell at harvest

when prices are usually at their lowest.

CCC’s immediate intent is to use this

program to address the existing shortage

of grain storage. However, section 5(b)

of the CCC Charter Act, gives CCC broad

authority to make ‘‘available materials

and facilities required in connection

with the production and marketing of

agricultural commodities’’. Thus, CCC

will explore marking available facility

loans for the storage of commodities

harvested as other than grain such as

silage, alternative types of storage

arrangements such as ‘‘condominium

storage’’, or storage facilities for other

agricultural products. Since CCC has not

identified shortages in storage facilities

for other than whole grain or analyzed

the feasibility of alternative storage

arrangements, it would be improper to

implement such provisions under an

interim rule. CCC is seeking comments

during the comment period on all of

these aforementioned areas. Comments

received will be given consideration for

inclusion in the final rule.

On February 2, 2000, the Secretary

announced the availability of financing

for farm storage and handling facilities.

Based upon this announcement,

producers may have made commitments

to construct on-farm storage facilities.

The decision has been made to extend

loan eligibility to those producers who

took action on or after February 2, 2000

based on the Secretary’s announcement.

Although a similar program was

available in the past, this rule allows for

a new farm storage facility loan program

with terms and conditions that differ

from the previous program. The rule

calls for eligible producers to apply for

farm storage facility loans at their FSA

administrative county office. Producers

requesting loans must provide

information regarding the need for farm

storage capacity and the storage facility

they propose to construct. They must

also establish that they are eligible for

the program, and that the site proposed

for a storage structure does not

adversely impact the environment.

Specific eligibility requirements for

applicants are a satisfactory credit rating

as determined by CCC; no delinquent

Federal debt as defined by the Debt

Collection Improvement Act of 1996;

production of facility loan commodities;

proof of crop insurance from FCIC or a

private company; compliance with

USDA provisions for highly erodible

land and wetlands; ability to repay the

debt resulting from the program;

compliance with any applicable local

zoning, land use and building codes for

the applicable farm storage facility

structures; and need for new or

additional farm grain storage or

handling capacity. This information is

needed by CCC to make loans where

there is a bonafide need, and to make

loans that will be repaid on time.

County offices will use existing office

records to determine if the producer is

in compliance with highly erodible land

and wetlands provisions. The county

office will utilize a government wide

system to identify if the applicant is

delinquent on any Federal debt. The

applicant’s credit history will be

obtained using existing credit reporting

agencies that are contracted to FSA.

Proof of crop insurance must be

provided by the applicant in the form of

an approved crop insurance application

or statement of coverage for the current

crop year. Applicants must provide

copies of local building permits, if

applicable, to demonstrate compliance

with local land use laws.

Applicants will be required to file

requests for farm storage facility loans

on form CCC–185, Loan Application for

Farm Storage Facility and Drying

Equipment Loan Program. The applicant

must provide information that is

generally unavailable to CCC from other

sources, such as, name, address, tax

identification number and phone

number of the person applying for the

loan; the purpose of the loan and the

amount of the loan requested; and

details about the type and cost of the

storage structure, and related handling

systems, or drying systems the applicant

proposes to install. This information

becomes the basis for the net cost of

eligible components which determines

the amount of the loan. Producers must

also provide specific commodity

production data that supports the

determination the producer requires

storage or that existing facility loan

commodity storage capacity is not

adequate. This will help insure that CCC

is not lending funds on capacity that is

not needed. The applicant must provide

information regarding whether the

facility equipment has been purchased,

delivered, or installed.

The applicant must sign CCC–185

when it is complete and will be

provided a copy. Information to support

the applicant’s request will also be

necessary. Financial information will be

obtained from the applicant to

determine if the applicant has the

means to provide the required down

payment and to make future loan

installments. The applicant will be

asked to verify debts and assets in order

to prepare an accurate balance sheet and

cash flow statement. The applicant will

be asked to sign the form authorizing

financial institutions and creditors to

release asset and debt information to

CCC. The applicant will be required to

sign a UCC–1 Financing Statement and

other forms as needed to grant CCC a

security interest in the proposed

structure and equipment. Upon

acceptance of a complete application, a

CCC representative will conduct a lien

search as needed.

Borrowers must maintain the

collateral in good condition; pay loan

installments and real estate taxes on

time, and maintain all peril structural,

and if applicable, flood insurance

policies. FSA will conduct annual

collateral checks. If installments are not

paid during each due and payable

period, collection activity will proceed

according to standard CCC policy.

List of Subjects in 7 CFR Part 1436

Applicability, administration,

definitions, availability of loans, eligible

borrowers, eligible storage facilities,

term of loan, security of loan, amount of

loan and loan application approvals,

downpayment, interest, repayment of

loan, taxes, maintenance,

30348 Federal Register / Vol. 65, No. 92 / Thursday, May 11, 2000 / Rules and Regulations

disbursements, sale or conveyance,

environmental compliance.

Accordingly, for the reasons set forth

in the preamble, the Commodity Credit

Corporation adds 7 CFR part 1436 to

read as follows:

PART 1436—FARM STORAGE FACILITY

LOAN PROGRAM REGULATIONS

Sec.

1436.1 Applicability.

1436.2 Administration.

1436.3 Definitions.

1436.4 Availability of loans.

1436.5 Eligible borrowers.

1436.6 Eligible storage facilities or handling

equipment.

1436.7 Term of loans.

1436.8 Security for loan.

1436.9 Loan amount and loan application

approvals.

1436.10 Down payment.

1436.11 Disbursements.

1436.12 Interest.

1436.13 Repayment of loan.

1436.14 Taxes.

1436.15 Maintenance.

1436.16 Sale or conveyance.

1436.17 Environmental compliance.

Authority: 15 U.S.C. 714 et seq.

PART 1436—FARM STORAGE

FACILITY LOAN PROGRAM

REGULATIONS

§ 1436.1 Applicability.

The regulations of this part provide

the terms and conditions under which

CCC may provide low-cost financing for

producers to build or upgrade on-farm

storage and handling facilities. Because

liens and security interests related to

this activity may be governed by state

law, CCC may adapt certain procedures

relating to those issues that may vary

between states.

§ 1436.2 Administration.

(a) The Farm Storage Facility Loan

Program shall be administered under

the general supervision of the Executive

Vice President, CCC or designee and

shall be carried out in the field by State

FSA committees, county FSA

committees and FSA employees.

(b) State FSA committees, county FSA

committees and FSA employees, do not

have the authority to modify or waive

any of the provisions of the regulations

of this part.

(c) The State FSA committee shall

take any action required by these

regulations that has not been taken by

the county committee. The State FSA

committee shall also:

(1) Correct, or require the county FSA

committee to correct, any action taken

by such county FSA committee that is

not in accordance with the regulations

of this part; and

(2) Require the county FSA committee

to withhold taking any action that is not

in accordance with the regulations of

this part.

(d) No provision or delegation herein

to a State or county FSA committee

shall preclude the Executive Vice

President, CCC, or a designee, or the

Administrator, FSA, or a designee, from

determining any question arising under

the program or from reversing or

modifying any determination made by

the State or county FSA committee.

(e) The Deputy Administrator, Farm

Programs, FSA, may authorize State and

county FSA committees to waive or

modify deadlines and other program

requirements in cases where lateness or

failure to meet such other requirements

does not adversely affect the operation

of the Farm Storage Facility Loan

Program.

(f) A representative of CCC may

execute Farm Storage Facility Loan

Program applications and related

documents only under the terms and

conditions determined and announced

by CCC. Any such document that is not

executed in accordance with such terms

and conditions, including any

purported execution prior to the date

authorized by CCC, shall be null and

void.

(g) The Deputy Administrator may

suspend this program at any time when

it appears that there is no shortage of

storage that needs to be addressed or

where some other reason shall arise for

which it appears that the program goals

can be achieved more efficiently in a

manner different from that provided for

this part.

§ 1436.3 Definitions.

The following definitions shall be

applicable to the program authorized by

this part and will be used in all aspects

of administering this program:

Aggregate outstanding balance means

the sum of the outstanding balances of

all loans disbursed to the applicant.

Assumption means the act or

agreement by which one borrower takes

over or assumes the mortgage debt of

another borrower.

Collateral means the storage structure,

drying equipment or handling

equipment securing the loan.

Consent, disclaimer, severance, or

subordination agreement means an

agreement under which a party may

consent to the security interest of

another in property, disclaim security

interest in property, or subordinate

security interest in property to the

interest of another party.

Facility loan commodity means

wheat, rice, soybeans, sunflower seed,

canola, rapeseed, safflower, flaxseed,

mustard seed, crambe, other oilseeds as

determined and announced by CCC,

corn, grain sorghum, oats, or barley

harvested as whole grain.

Financing statement. means a

document that gives legal notice of a

lien on chattel property when properly

filed or recorded.

Non-movable or non-salable collateral

means either collateral the county

committee determines cannot be sold

and moved to a new location because of

the type of construction or collateral

that has deteriorated to the point that it

has no sale recovery value.

Person means any individual, group

of individuals, partnership, corporation,

estate, trust, association, cooperative, or

other business enterprise, or other legal

entity who is, or whose members are, a

citizen or citizens of, or legal resident

alien in the United States.

Uniform Commercial Code means the

multi-state code of laws covering

commercial transactions such as sales,

negotiable instruments, and secured

transactions.

§ 1436.4 Availability of loans.

(a) An application for a loan shall be

submitted to the administrative county

office that maintains the records of the

farm or farms to which the application

applies. Upon request, the applicant

shall furnish information and

documents as the state or county

committee deems reasonably necessary

to support the application. This may

include financial statements, receipted

bills, invoices, purchase orders,

specifications, drawings, plats, or

written authorization of ingress and

egress.

(b) Producers who authorize actions

without an approved loan, do so at their

own risk and without creating any

liability on behalf of CCC except for

producers who between February 2,

2000 and May 11, 2000 took action

based on the announcement of the

program. Such action may include, but

is not limited to, entering into purchase

contracts, purchases of materials, taking

delivery of parts, site preparation, and

construction.

§ 1436.5 Eligible borrowers.

(a) The term ‘‘eligible borrower’’

means any person who, as landowner,

landlord, operator, producer, tenant,

leaseholder, or sharecropper:

(1) Has a satisfactory credit history,

and demonstrates an ability to repay the

debt arising under this program;

Federal Register / Vol. 65, No. 92 / Thursday, May 11, 2000 / Rules and Regulations 30349

(2) Has no delinquent Federal debt

defined by the Debt Collection

Improvement Act of 1996;

(3) Is a producer of a facility loan

commodity;

(4) Demonstrates a need for increased

storage capacity;

(5) Provides proof of crop insurance

from FCIC or a private company;

(6) Is in compliance with USDA

provisions for highly erodible land and

wetlands conservation according to 7

CFR part 12;

(7) Demonstrates compliance with any

applicable local zoning, land use, and

building codes for the applicable farm

storage facility structures;

(8) Provides proof of flood insurance

if CCC determines such insurance is

necessary to protect the interests of

CCC, and proof of all peril structural

insurance, to CCC annually; and

(9) Demonstrates compliance with the

National Environmental Policy Act

regulations at 40 CFR, parts 1500

through 1508.

(b) [Reserved]

§ 1436.6 Eligible storage facilities for

handing equipment.

(a) 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. Eligible storage and

handling facilities shall include the

following:

(1) New conventional-type cribs or

bins designed and engineered for whole

grain storage and having a useful life of

at least 10 years;

(2) Oxygen-limiting and other upright

silo-type structures designed for whole

grain storage and having a useful life of

at least 10 years; and

(3) Flat-type storage structures for

which the primary use is to store whole

grain.

(b) The calculation of the loan amount

may include costs associated with

building or improving an eligible

storage and handling facility, including:

(1) Permanently affixed grain

handling equipment and grain drying

equipment, including perforated floors

considered to be essential to the proper

functioning of the grain storage system;

(2) Safety equipment such as lighting,

inside and outside ladders;

(3) Equipment to improve, maintain,

or monitor the quality of stored grain,

such as cleaners, moisture testers, and

heat detectors;

(4) Electrical equipment, including

labor and materials for installation, such

as lighting, motors, and wiring integral

to the proper operation of the grain

storage and handling equipment; and

(5) Concrete foundations, aprons, pits,

and pads (including site preparation,

labor and materials) essential to the

proper operation of the grain storage

and handling equipment.

(c) Ineligible storage and handling

equipment with respect to which no

loans for installation or related costs

shall be disbursed under this part

include:

(1) Portable grain drying equipment

and portable augers;

(2) Structures of a temporary nature

that require the weight or bulk of the

stored commodity to maintain its shape

(such as fences or bags);

(3) Structures that are bunker-type,

horizontal, or open silos;

(4) Structures that are not suitable for

storing the facility loan commodities for

which a need is determined; and

(5) Storage structures to be used for

commercial purposes. Commercial

purpose is defined as the storage and

handling of grain, whether paid or

unpaid, for persons other than the loan

applicant. State FSA committees may

allow, subject to the approval of the

Deputy Administrator, Farm Programs,

FSA, exceptions to this requirement if

an applicant is otherwise eligible and

the intent and purpose of the Farm

Storage Facility Loan program is being

met. Any facility that is in working

proximity to any commercial storage

operation, shall be considered to be part

of a commercial storage operation.

(d) Loans may be approved for

financing additions to more

modifications of an existing storage

facility to increase storage capacity if

the county FSA committee determines

that the modification is necessary to

increase the storage capacity of the unit

and is not for maintenance, repair, or

replacement of items such as motors,

fans, or wiring.

§ 1436.7 Term of loan.

The maximum term of the loan shall

be 7 years from the date of execution of

a promissory note and security

agreement. No extensions of the loan

term will be granted.

§ 1436.8 Security for loan.

(a) All loans shall be secured by a

promissory note and security agreement

covering the farm storage facility. The

promissory note and security agreement

shall grant CCC a security interest in the

collateral and shall be perfected in the

manner specified in accordance with

applicable state law. CCC’s security

interest in the collateral shall constitute

the sole security interest in such

collateral except for prior liens on the

underlying realty that by operation of

law attaches to the collateral if it is or

becomes a fixture. If any such prior lien

on the realty will attach to the collateral,

a waiver, severance, or subordination of

such lien must be obtained in writing

from each person having an interest in

the real estate on which the collateral is

to be located. No additional liens or

encumbrances may be placed on the

storage facility after the loan is

approved unless CCC approves

otherwise in writing.

(b) A lien on the real estate on which

the farm storage facility is located will

be required on all loans in the form of

a real estate mortgage, deed of trust, or

other security instrument approved by

the CCC. For loan amounts exceeding

$50,000, CCC’s interest in the real estate

shall be superior to all other lien

holders. If the real estate is covered by

a prior lien, a lien may be obtained by

means of a subordination agreement

prescribed by CCC. CCC will not require

such an agreement from any agency of

the Department of Agriculture.

(c) Real estate liens may cover an

acreage of 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

(2) The acreage is large and valuable

enough, in the approving authority’s

opinion, to insure repayment of the

loan.

(d) Notwithstanding paragraphs (a),

(b) and (c) of this section, a borrower, in

lieu of such liens as are otherwise

required by those paragraphs, may

provide a letter of credit, bond, or other

form of security, as approved by CCC.

(e) If an existing structure is

remodeled and an addition becomes an

attached, integral part of the existing

storage structure, CCC’s security interest

shall include the existing storage

structure.

(f) The cost of filing and recording all

real estate liens and later subordinations

will be paid by the borrower. CCC shall

pay such costs relating to filing and

recording financing statements.

§ 1436.9 Loan amount and loan application

approvals.

(a) The cost on which the loan shall

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

cost established by the State FSA

committee.

(b) The net cost for storage and

handling equipment may include

purchase price, sales tax, shipping, and

delivery charges. The net cost shall not

include secondhand material or any

30350 Federal Register / Vol. 65, No. 92 / Thursday, May 11, 2000 / Rules and Regulations

other item that is determined by the

approving authority to be ineligible for

loan.

(c) The principal amount of any farm

storage facility loan shall be 75 percent

of the net cost of the applicant’s needed

storage or handling equipment not to

exceed $100,000. Borrowers are limited

to obtaining one loan per fiscal year

under this part.

(d) The aggregate outstanding balance

of all facility loans for any one borrower

may not exceed $100,000.

(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 shall be

prorated. Only costs associated with the

applicant’s needed storage capacity will

be loan-eligible.

(f) The county FSA committee may

approve applications, if loan funds are

available, up to the maximum approval

amount unless the State FSA committee

establishes a lower limit for country

FSA committee approval authority.

(g) Loan approvals will expire four

months after the date of approval unless

extended in writing for an additional

four months by the State FSA

committee.

§ 1436.10 Down payment.

(a) A minimum down payment

representing the difference between the

net cost of the storage facility and the

amount of the loan determined in

accordance with § 1436.9 shall be made

by the loan applicant to the supplier or

contractor before the loan is disbursed.

(b) The down payment shall be in

cash unless some other form of payment

is approved by CCC.

(c) The down payment may not

include any trade-in, discount, rebate,

credit, deferred payment, post-dated

check, or promissory note to the

supplier or contractor.

§ 1436.11 Disbursement.

(a) Disbursement of the loan by CCC

will be made when the farm storage

facility has been delivered, erected,

constructed, assembled, or installed and

a CCC representative has inspected and

approved such facility.

(b) Disbursement 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.

(c) Disbursement may be made jointly

to the borrower and the contractor or

supplier, except disbursement may be

made to the borrower if CCC determines

the borrower has paid the contractor or

supplier all amounts that are due and

owing with respect to the facility.

§ 1436.12 Interest.

(a) Loans shall bear interest at the rate

equivalent to the rate of interest charged

on Treasury securities of comparable

maturity on the date the loan is

approved.

(b) The interest rate for each loan will

remain in effect for the term of the loan.

(c) The loan applicant shall pay a

non-refundable application fee of at

least $45 to CCC

§ 1436.13 Payment of loan.

(a) Equal installments of principal

plus interest will be amortized over the

loan term. Installments are due and

payable by no later than the last day of

each 12 month period of the loan, until

the principal plus interest has been paid

in full.

(b) The payment of each installment

may be by cash, money order, wire

transfer, or by personal, certified, or

cashier’s check. Repayment shall be

applied first to accrued interest and

then to principal.

(c) A claim will be established in

accordance with 7 CFR part 1403 for the

principal and accrued interest amount

due and late payment interest for any

installment that is not paid within 30

days after the due and payable date.

(d) Loan amounts outstanding,

whether or not overdue, may be

collected from payments that the

borrower may otherwise be due to

receive as marketing loan gains or other

payments under 7 CFR part 1421 or 7

CFR part 1427. In the even that a claim

is established against a borrower for any

amount due under this part, the

provisions of 7 CFR part 1403 may be

used to recover the debt from other

Federal payments or loans.

(e) CCC may declare the entire

indebtedness immediately due and

payable if the borrower violates any of

the terms and conditions of this part,

fails to pay any installment on time, or

breaches any of the terms and

conditions of any of the instruments

executed in connection with the loan, or

if the collateral is used in connection

with any unauthorized commercial

operation including, but not limited to,

elevators, warehouses, dryers or

processing plants, during the life of the

loan.

(f) The loan may be paid in full or in

part at any time before maturity.

(g) Upon payment of a loan, CCC shall

release CCC’s security interest in the

collateral.

§ 1436.14 Taxes.

The borrower must pay all real and

personal property taxes that may affect

CCC’s security interest in all collateral

securing the note evidencing the loan.

To protect its interests, CCC may pay

any unpaid taxes with respect to the

collateral securing a loan made in

accordance with this part, and if CCC

does so, the borrower shall reimburse

CCC for such payment, and if unpaid by

the borrower, such debt shall become

part of the current installment due.

§ 1436.15 Maintenance.

(a) The borrower must maintain the

loan collateral in a condition suitable

for the storage of one or more of the

facility loan commodities.

(b) Until the loan has been repaid, the

borrower shall be liable for all damages

to or destruction of the collateral. CCC

shall not assume any loss of the loan

collateral.

(c) CCC shall conduct annual

collateral checks to insure compliance

with this section.

(d) Structures must be insured against

all perils in all cases and must also be

insured against flooding if the structure

is located in a flood plain, as

determined by CCC. Proof of flood

insurance, if required, and proof of all

peril structural insurance, must be

provided to CCC annually. CCC must be

listed as a loss payee on all peril and

flood insurance policies.

(e) CCC shall have rights in ingress

and egress where the facility is located.

Failure of the borrower to secure such

access will render a borrower ineligible

for the loan and, if a loan has already

been made shall constitute a loan

violation for which the remaining

balance of the loan shall became due

immediately.

§ 1436.16 Sale or conveyance.

(a) The collateral or land securing a

loan may be sold by CCC whenever CCC

has declared the entire indebtedness

immediately due and owing under this

part or when the borrower voluntarily

conveys the collateral to CCC before

repaying the loan. Before a borrower

sells or conveys the facilities or other

property securing a loan without

repaying the loan in full, the borrower

shall obtain approval for the sale or

conveyance from the county FSA

committee.

(b) Assumption of a farm storage

facility loan is permitted.

§ 1436.17 Environmental compliance.

(a) Except as otherwise specified in

this section, prior to approval of any

farm storage facility loan, an

environmental evaluation will be

completed to determine if the proposed

action will have any adverse impacts on

the environmental and cultural

resources.

(b) If it is determined that a proposed

action or group of proposed actions will

Federal Register / Vol. 65, No. 92 / Thursday, May 11, 2000 / Rules and Regulations 30351

1 42 U.S.C. 6294. The statute also requires the

Department of Energy (‘‘DOE’’) to develop test

procedures that measure how much energy the

appliances use, and to determine the representative

average cost a consumer pays for the different types

of energy available. 2Reports for clothes washers are due March 1.

not result in any adverse impact, the

action will be considered as being

categorically excluded for the purpose

of compliance with the National

Environmental Policy Act (NEPA), 40

CFR parts 1500 through 1508.

(c)(1) If adverse environmental

impacts, either direct or indirect, are

identified, an environmental assessment

will be completed in accordance with

the Council on Environmental Quality’s

Regulations for Implementing the

Procedural Provisions of NEPA to the

extent required by law.

(2) The environmental assessment

will be used to develop an action that

results in no significant environmental

impact on the human environment or

cultural resources.

(3) No action will be approved that

has been determined to have significant

impacts on the human environment or

cultural resources.

(d)(1) In order to minimize the

exposure to environmental liabilities

from the presence of contamination on

real estate collateral, an evaluation will

be made of the economic and

environmental risks to the real estate

collateral posted by the presence of

hazardous substances and petroleum

products.

(2) If the evaluation made under

paragraph (d)(1) of this section reveals

that the collateral is or may be

contaminated, then the applicant will be

notified and given an option of offering

as collateral other real estate that is free

from contamination or remediating the

contamination on the original site

offered as collateral.

Signed at Washington, D.C., on May 8,

2000.

Keith Kelly,

Executive Vice President, Commodity Credit

Corporation.

[FR Doc. 00–11833 Filed 5–10–00; 8:45 am]

BILLING CODE 3410–05–M

FEDERAL TRADE COMMISSION

16 CFR Part 305

Rule Concerning Disclosures

Regarding Energy Consumption and

Water Use of Certain Home Appliances

and Other Products Required Under

the Energy Policy and Conservation

Act (‘‘Appliance Labeling Rule’’)

AGENCY: Federal Trade Commission.

ACTION: Final rule.

SUMMARY: Federal Trade Commission

amends its Appliance Labeling Rule by

publishing new ranges of comparability

to be used on required labels for clothes

washers. These ranges of comparability

supersede the ranges published on

March 27, 2000, 65 FR 16132, which

become effective July 14, 2000;

however, manufacturers are not

required to use those March 27, 2000

ranges.

EFFECTIVE DATE: September 18, 2000.

FOR FURTHER INFORMATION CONTACT:

James Mills, Attorney, Division of

Enforcement, Federal Trade

Commission, Washington, D.C. 20580

(202–326–3035).

SUPPLEMENTARY INFORMATION: The

Appliance Labeling Rule (‘‘Rule’’) was

issued by the Commission in 1979, 44

FR 66466 (Nov. 19, 1979), in response

to a directive in the Energy Policy and

Conservation Act of 1975. 1 The Rule

covers eight categories of major

household appliances. Clothes washers

are among those categories. The Rule

also covers pool heaters, 59 FR 49556

(Sept. 28, 1994), and contains

requirements that pertain to fluorescent

lamp ballasts, 54 FR 28031 (July 5,

1989), certain plumbing products, 58 FR

54955 ((Oct. 25, 1993), and certain

lighting products, 59 FR 25176 (May 13,

1994, eff. May 15, 1995).

The Rule requires manufacturers of all

covered appliances and pool heaters to

disclose specific energy consumption or

efficiency information (derived from the

DOE test procedures) at the point of sale

in the form of an ‘‘EnergyGuide’’ label

and in catalogs. It also requires

manufacturers of furnaces, central air

conditioners, and heat pumps either to

provide fact sheets showing additional

cost information, or to be listed in an

industry directory showing the cost

information for their products. The Rule

requires manufacturers to include, on

labels and fact sheets, an energy

consumption or efficiency figure and a

‘‘range of comparability.’’ This range

shows the highest and lowest energy

consumption or efficiencies for all

comparable appliance models so

consumers can compare the energy

consumption or efficiency of other

models (perhaps competing brands)

similar to the labeled model. The Rule

also requires manufacturers to include,

on labels for some products, a secondary

energy usage disclosure in the form of

an estimated annual operating cost

based on a specified DOE national

average cost for the fuel the appliance

uses.

Section 305.8(b) of the Rule requires

manufacturers, after filing an initial

report, to report certain information

annually to the Commission by

specified dates for each product type.2

These reports, which are to assist the

Commission in preparing the ranges of

comparability, contain the estimated

annual energy consumption or energy

efficiency ratings for the appliances

derived from tests performed pursuant

to the DOE test procedures. Because

manufacturers regularly add new

models to their lines, improve existing

models, and drop others, the data base

from which the ranges of comparability

are calculated is constantly changing.

To keep the required information

consistent with these changes, under

Section 305.10 of the Rule the

Commission will publish new ranges if

an analysis of the new information

indicates that the upper or lower limits

of the ranges have changed by more

than 15%. Otherwise, the Commission

will publish a statement that the prior

ranges remain in effect for the next year.

Manufacturers of clothes washers

have made the required 2000

submissions of data for this product

category. In analyzing the data, the

Commission has grouped the figures in

accordance with the revisions to

Appendix F (Clothes Washers)

published on March 27, 2000, 65 FR

16132, which eliminated the toploading and front-loading categories for

clothes washers.

Accordingly, the Commission is

publishing these new 2000 ranges of

comparability in the format of the

revised Appendix for the clothes washer

category. Today’s ranges of

comparability supersede the ranges

(which were based on 1999

submissions) that were published along

with the March 27, 2000 amendment

eliminating the top-loading and frontloading categories, which have an

effective date of July 14, 2000; however,

manufacturers are not required to use

those ranges.

In consideration of the foregoing, the

Commission revises Appendix F of its

Appliance Labeling Rule by publishing

the following ranges of comparability

for use in required disclosures

(including labeling) for clothes washers

manufactured on or after September 18,

2000. In addition, as of September 18,

2000, manufactured must base the

disclosures of estimated annual

operating cost required at the bottom of

the EnergyGuide for clothes washers on

the 2000 Representative Average Unit

Costs of Energy for electricity (8.03

cents per kilo Watt-hour) and natural

gas (68.8 cents per therm) that were

published by DOE on February 7, 2000