31248 Federal Register / Vol. 65, No. 96 / Wednesday, May 17, 2000 / Rules and Regulations

the terms and conditions under which

these producers can supply the

additional power and energy needs of

the applicant, without RUS financial

assistance. Such solicitations should be

placed in at least three national

newspapers or trade publications, and

they meet all planning, coordination or

other requirements imposed by state

authorities, as well as the environmental

requirements of RUS.

(d) When solicitations are received in

accordance with paragraph (c) of this

section, the applicant will evaluate all

alternative proposals on an economic,

present-value basis, giving

consideration to cost-effectiveness,

reliability of service, the short-term and

long-term financial viability of the

supplier, and the financial risk to the

borrower and its creditors. The

applicant will keep RUS fully informed

on these evaluations and provide

supporting information and analysis as

requested by RUS.

(e) After evaluation of all proposals

received in accordance with paragraph

(c) of this section, and having informed

RUS of the results, the applicant may be

required to negotiate final proposals

with the entities submitting the best

acceptable offers. Contracts requiring

RUS approval will either be approved in

advance by the Administrator or contain

a provision that the contract is not valid

until approved, in writing, by the

Administrator. The Administrator will

approve the contracts in a timely

manner provided that the borrower has

met all applicable requirements,

including, among other matters,

evidence that the alternative source of

power selected is an economical and

effective alternative.

* * * * *

Dated: May 5, 2000.

Jill Long Thompson,

Under Secretary, Rural Development.

[FR Doc. 00–11986 Filed 5–16–00; 8:45 am]

BILLING CODE 3410–15–P

DEPARTMENT OF AGRICULTURE

Farm Service Agency

7 CFR Part 1951

RIN 0560–AF91

Disaster Set-Aside Program—Second

Installment Set-Aside

AGENCY: Farm Service Agency, USDA.

ACTION: Interim rule.

SUMMARY: The Farm Service Agency

(FSA) is amending the disaster set-aside

program requirement to allow FSA to

set aside portions of loan installments

that could not be made as scheduled

due to a natural disaster, as declared by

the President or Secretary of

Agriculture, or because of low

commodity prices received during the

1999 crop year. In addition, disaster setaside eligibility requirements are

amended to require borrowers to

develop a positive cash flow projection

which will at least permit the borrower

to pay all operating and family living

expenses and meet scheduled payments

on all debts for the next business

accounting year. These provisions will

allow the agency to service the loans of

farmers who have experienced losses

due to a natural disaster or low

commodity prices in an efficient and

timely manner while ensuring the future

viability of the operation.

DATES: The effective date for this rule is

May 17, 2000. Comments on this rule

must be submitted by July 17, 2000 to

be assured consideration.

ADDRESSES: Submit written comments

to Director, Farm Loan Programs, Loan

Servicing and Property Management

Division, United States Department of

Agriculture, Farm Service Agency,

STOP 0523, 1400 Independence

Avenue, SW, Washington, DC 20250–

0523.

FOR FURTHER INFORMATION CONTACT:

Michael Cumpton, telephone (202) 690-

4014; electronic mail: mike—

cumpton@wdc.fsa.usda.gov.

SUPPLEMENTARY INFORMATION:

Executive Order 12866

This rule has been determined to be

significant and was reviewed by the

Office of Management and Budget under

Executive Order 12866.

Regulatory Flexibility Act

In compliance with the Regulatory

Flexibility Act (5 U.S.C. 601, et seq.),

the undersigned certifies that this rule

will not have a significant economic

impact on a substantial number of small

entities. New provisions included in

this rule will not impact a substantial

number of small entities to a greater

extent than large entities. Large entities

are subject to these rules to the same

extent as small entities. Therefore, a

regulatory flexibility analysis was not

performed.

Environmental Impact Statement

It is the determination of FSA that

this action is not a major Federal action

significantly affecting the environment.

Therefore, in accordance with the

National Environmental Policy Act of

1969, and 7 CFR part 1940, subpart G,

an Environmental Impact Statement is

not required.

Executive Order 13132

The policies contained in this rule do

not have any substantial direct effect on

states, on the relationship between the

national government and the states, or

on the distribution of power and

responsibilities among the various

levels of government. Nor does this rule

impose substantial direct compliance

costs on state and local governments.

Therefore, consultation with the states

is not required.

Executive Order 12988

This rule has been reviewed in

accordance with Executive Order 12988,

Civil Justice Reform. In accordance with

this rule: (1) All State and local laws

and regulations that are in conflict with

this rule will be preempted; (2) no

retroactive effect will be given to this

rule; and (3) administrative proceedings

in accordance with 7 CFR part 11, and

7 CFR part 780 if the decision is made

by the FSA county committee or

personnel subordinate to the county

committee, must be exhausted before

bringing suit in court challenging action

taken under this rule.

Executive Order 12372

For reasons contained in the notice

related to 7 CFR part 3015, subpart V

(48 FR 29115, June 24, 1983), the

programs to which this rule pertains are

excluded from the scope of E.O. 12372,

requiring intergovernmental

consultation with State and local

officials.

The Unfunded Mandates Reform Act of

1995

Title II of the Unfunded Mandates

Reform Act of 1995 (UMRA), Pub. L.

104–4, requires Federal agencies to

assess the effects of their regulatory

actions on State, local, and tribal

governments or the private sector of

$100 million or more in any 1 year.

When such a statement is needed for a

rule, section 205 of the UMRA requires

FSA to prepare a written statement,

including a cost benefit assessment, for

proposed and final rules with ‘‘Federal

mandates’’ that may result in such

expenditures for State, local, or tribal

governments, in the aggregate, or to the

private sector. UMRA generally requires

agencies to consider alternatives and

adopt the most cost effective or least

burdensome alternative that achieves

the objectives of the rule.

This rule contains no Federal

mandates, as defined under title II of the

UMRA, for State, local, and tribal

governments or the private sector. Thus,

Federal Register / Vol. 65, No. 96 / Wednesday, May 17, 2000 / Rules and Regulations 31249

this rule is not subject to the

requirements of sections 202 and 205 of

UMRA.

Paperwork Reduction Act of 1995

The amendments to 7 CFR part 1951

contained in this rule require no

revisions to the information collection

requirements (0560–0164) that were

previously submitted to OMB on

October 12, 1999.

Federal Assistance Programs

These changes affect the following

FSA programs as listed in the Catalog of

Federal Domestic Assistance:

10.404—Emergency Loans

10.406—Farm Operating Loans

10.407—Farm Ownership Loans

Discussion of the Interim Rule

The Farm Service Agency (FSA)

publishes these amendments to subpart

T of part 1951 without prior notice and

comment because of the emergency

nature of the program and the eligibility

requirements involved. Publication as a

proposed rule for notice and comment

is impractical and contrary to the public

interest as discussed below.

The Disaster Set-Aside (DSA) program

was first made available to FSA Farm

Loan Programs (FLP) borrowers

beginning October 21, 1994, because of

the heavy flooding in the Midwest and

extreme drought in the South. Since that

time almost 20,000 borrowers have

received DSA assistance. The overall

success of the program can be attributed

to the relatively small amount of

paperwork required in applying for and

processing DSA requests. DSA gives

FLP borrowers a chance to recover from

their losses without having to incur

additional debt to pay creditors or

liquidate essential assets.

Because many delinquent borrowers

received a previous writedown of debt

under subpart S of 7 CFR part 1951,

they are ineligible for additional debt

forgiveness and most farm loans under

§ 373 of the Consolidated Farm and

Rural Development Act. As stated in the

interim rule designed to assist

borrowers for the 1998 crop year,

published at 64 FR 392 (January 5,

1999), an estimated 11,424 borrowers

would suffer to irreparable financial

harm without the interim rule taking

immediate effect. Since low commodity

prices continued to exist for the 1999

crop year, as well as the occurrence of

several natural disasters, the Agency

estimates that a similar number of

borrowers were affected in the 1999

crop year and became delinquent in

repayment of their FSA, FLP loan

installments due to these adverse

effects. Therefore, this rule will take

effect immediately without prior notice

and comment. There is justification for

the rule to become effective

immediately after publication;

nevertheless, FSA will accept public

comments on this interim rule for 60

days after the rule becomes effective.

Section 7 CFR 1951.954 generally

provides that each loan can only have

one set-aside installment outstanding (7

CFR 1951.954(b)(2)(i)). A borrower

could receive DSA again only if the

existing set-aside installment were paid

in full, or canceled through

restructuring under subpart S of 7 CFR

part 1951. This rule will allow

borrowers who were affected by low

commodity prices or by a natural

disaster in a county declared a disaster

by the President or Secretary to receive

a second installment set aside without

the first set-aside installment being paid

in full or canceled. Because widespread

disasters have occurred and low

commodity prices continued to exist in

the 1999 crop year, the Agency is

offering second installment DSAs for the

1999 crop year to borrowers who have

previously received DSA. Applications

must be filed by August 31, 2000, for

DSA due to low commodity prices. For

DSAs due to natural disasters,

borrowers in counties designated as

disaster areas and borrowers farming in

contiguous counties must file DSA

applications within 8 months of the

disaster designation.

FSA records show that 25 percent of

borrowers who receive DSA become

immediately become delinquent the

year following the set-aside. This is a

much higher percentage than borrowers

who have their debt restructured under

subpart S of 7 CFR part 1951. In order

to ensure the future viability of the

farming operation, save borrower equity

and reduce government losses,

eligibility requirements for DSA have

been amended to require borrowers to

develop a cash flow projection for the

next business accounting year. The cash

flow projection must show that the

borrower will at least be able to pay all

operating expenses and taxes, provide

for essential family living expenses and

meet scheduled payments on all debts.

The positive cash flow projection must

be prepared in accordance with 7 CFR

1924.56(b).

This rule will allow such borrowers to

receive immediate financial relief from

their FLP obligations in a more

expedient manner than under subpart S

of 7 CFR part 1951. When the borrower

pays any portion of the set-aside

installments in the future, the payment

will be applied to the oldest installment

set-aside.

List of Subjects in 7 CFR Part 1951

Accounting, Credit, Disaster

assistance, Loan programs—agriculture,

Loan programs—housing and

community development, Low and

moderate income housing.

Accordingly, 7 CFR part 1951 is

amended as follows:

PART 1951—SERVICING AND

COLLECTIONS

1. The authority citation for part 1951

continues to read as follows:

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

U.S.C. 3716; 42 U.S.C. 1480.

Subpart T—Disaster Set-Aside

Program

2. Amend § 1951.951 by revising the

second sentence to read as follows:

§ 1951.951 Purpose

* * * The DSA program is available

to Farm Loan Program (FLP) borrowers,

as defined in subpart S of this part, who

suffered losses as a result of a natural

disaster or low commodity prices in

1999. * * *

3. Amend § 1951.952 by revising the

second sentence to read as follows:

§ 1951.952 General

* * * The intent of this program is to

relieve some of the borrower’s

immediate financial stress caused by a

disaster or low commodity prices and

avoid foreclosure by the Government.

***

4. Amend § 1951.953 by revising

paragraph (b) to read as follows:

§ 1951.953 Notification and request for

DSA.

(a) * * *

(b) Deadline to apply. All FLP

borrowers liable for the debt must

request DSA within 8 months from the

date the disaster was designated, in

accordance with 7 CFR part 1945,

subpart A. Applications due to low

commodity prices in 1999 must be

received on or before August 31, 2000.

* * * * *

5. Amend § 1951.954 as follows:

a. Revise paragraphs (a)(1)(ii),

(a)(1)(iii), (a)(5), and (b)(2)(i);

b. Redesignate paragraphs (a)(6) and

(a)(7) as (a)(7) and (a)(8), respectively,

and add new paragraph (a)(6).

The revisions and additions read as

follows:

§ 1951.954 Eligibility and loan limitation

requirements.

(a) * * *

(1) * * *

(ii) If the borrower is applying for a

second installment to be set aside based

31250 Federal Register / Vol. 65, No. 96 / Wednesday, May 17, 2000 / Rules and Regulations

on a declared disaster, the borrower

must have operated in a county declared

a major disaster by the President or the

Secretary, or in a county contiguous to

such a county, and the Agency must

have determined that second set-asides

can be processed and approved for

declared disasters in the specified year.

The first set aside must have been

provided for a previous crop year.

(iii) All FLP borrowers may apply for

an installment to be set aside based on

low commodity prices during 1999. If

the borrower is applying for a second

installment to be set aside based on low

commodity prices, the first set-aside

must have been provided for a previous

crop year. County location, or proximity

to a disaster declared county is not a

consideration when the DSA is justified

by low commodity prices.

* * * * *

(5) As a direct result of the declared

disaster or the 1999 low commodity

prices, both pursuant to paragraph (a)(1)

of this section, the borrower does not

have sufficient income available to pay

all family living and operating expenses,

other creditors, and FSA. This

determination will be based on the

borrower’s actual production, income

and expense records for the disaster or

affected year and any other records

required by the servicing official.

Compensation received for losses shall

be considered as well as increased

expenses incurred because of a disaster.

Consideration will also be given to

insufficient income for the next

production and marketing period

following the affected year if the

borrower establishes that production

will be reduced or expenses increased

as a result of the disaster or the 1999

low commodity prices.

(6) For the next business accounting

year, the borrower must develop a

positive cash flow projection showing

that the borrower will at least be able to

pay all operating expenses and taxes

due during the year, essential family

living expenses and meet scheduled

payments on all debts. The cash flow

projection must be prepared in

accordance with 7 CFR 1924.56. The

borrower will provide any

documentation required to support the

cash flow projection.

* * * * *

(b) * * *

(2) * * *

(i) Except as provided in paragraph (a)

of this section, only one unpaid

installment for each FLP loan may be

set-aside.

* * * * *

6. In subpart T of part 1951, revise all

references to ‘‘FC’’ to read ‘‘FLP’’.

Signed in Washington, DC, on May 8, 2000.

August Schumacher, Jr.,

Under Secretary for Farm and Foreign

Agricultural Services.

[FR Doc. 00–12335 Filed 5–16–00; 8:45 am]

BILLING CODE 3410–05–P

FEDERAL DEPOSIT INSURANCE

CORPORATION

12 CFR Part 361

RIN 3064–AB12

Minority and Women Outreach

Program—Contracting

AGENCY: Federal Deposit Insurance

Corporation.

ACTION: Final rule.

SUMMARY: The Board of Directors of the

Federal Deposit Insurance Corporation

(FDIC) is amending its regulation

establishing an outreach program for

minority- and women-owned businesses

and announcing its policy to utilize that

portion of the Federal Affirmative

Action Contracting Program, set forth in

the Federal Acquisition Regulations,

providing contracting benefits to Small

Disadvantaged Businesses. The FDIC

will no longer grant a price incentive

based solely on race and gender criteria.

The FDIC will, however, continue its

outreach programs for minorities and

women, and entities owned by them.

EFFECTIVE DATE: May 10, 2000.

FOR FURTHER INFORMATION CONTACT:

Martin Blumenthal, Counsel, Legal

Division, Corporate Operations Branch,

Corporate Legal Issues Section,

Contracting Law Unit (202) 736–0756;

David McDermott, Chief, Policy and

Compliance Unit, Acquisition and

Corporate Services Branch, Division of

Administration, (202) 942–3434; Rita

Wiles Ross, Counsel, Legal Division,

Corporate Operations Branch, Legal

Operations Section, Legal Services Unit,

(202) 736–3072; or Judith M. Wood,

Chief, Diversity Branch, Office of

Diversity and Economic Opportunity,

(202) 416–2456.

SUPPLEMENTARY INFORMATION:

I. Background

In 1989, with enactment of the

Financial Institutions Reform, Recovery

and Enforcement Act (FIRREA),

Congress mandated that the FDIC

augment its program for contracting

activities by prescribing

‘‘regulations to establish and oversee

minority outreach program [s] * * * to

ensure inclusion, to the maximum extent

possible, of minorities and women, and

entities owned by minorities and women

* * * in all contracts entered into by the

agency * * *’’ 12 U.S.C. 1833e(c).

In response, the FDIC adopted a

regulation that obligates and requires

the Corporation to engage in outreach

efforts to identify and register minorityand women-owned businesses

(MWOBs) that can provide the goods

and services utilized by the FDIC. 12

CFR 361.6(b); Minority and Women

Outreach Program—Contracting, 57 FR

15004 (April 24, 1992). In addition, to

ensure that MWOBs are ‘‘being included

in each solicitation, the solicitation

process will include: * * * (3)

Allowing qualified MWOBs a 3% price

incentive and additional technical

consideration for competitively bid

services; * * *’’ 12 CFR 361.8(b)(3).

However, the Supreme Court has held

that all such racial classifications,

whether imposed by federal, state, or

local governments, must be analyzed by

a reviewing court under strict scrutiny.

Adarand Constructors, Inc. v. Pen ̃a, 515

U.S. 200, 227; 115 S.Ct. 2097, 2113

(1995). Thereafter, in 1996, the

Department of Justice invited public

comments on a system designed to

reform affirmative action in federal

procurement in response to Adarand. 61

FR 26042, May 23, 1996. Continuing in

that vein, in 1998, the Department of

Defense, the General Services

Administration, and the National

Aeronautics and Space Administration

published a revision to the Federal

Acquisition Regulations (FAR)

implementing a new program of

affirmative action in federal

procurement. 63 FR 52426, September

30, 1998.

In this program, each year, the

Department of Commerce makes a

determination as to which industries

demonstrate the results of past

discrimination and are thereby eligible

for a benefit in federal contracting. The

Department of Commerce also

determines the size of a price evaluation

adjustment, not to exceed 10%, to be

available in those industries. In the first

year of the program, eligible industries

that are generally used by the FDIC

include accounting firms, asset

managers, information technology

contractors, office services, and building

services. The amount of the price

evaluation adjustment for 1999 is 10%.

The price evaluation adjustment is

available to firms certified as Small

Disadvantaged Businesses (SDBs) by the

Small Business Administration (SBA).

An SDB is a small business firm that is

at least 51% owned by individuals who

are both socially and economically

disadvantaged. Socially disadvantaged

individuals include Black Americans,