This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

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

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

41251

Vol. 62, No. 148

Friday, August 1, 1997

DEPARTMENT OF AGRICULTURE

Rural Housing Service

Rural Business-Cooperative Service

Rural Utilities Service

Farm Service Agency

7 CFR Part 1951

RIN 0560–AE98

Disaster Set-Aside Program—Second

Installment Set-Aside

AGENCIES: Rural Housing Service, Rural

Business-Cooperative Service, Rural

Utilities Service, Farm Service Agency,

USDA.

ACTION: Interim rule with request for

comments.

SUMMARY: The Farm Service Agency

(FSA) is amending the disaster set-aside

program requirements to allow a second

installment to be set-aside for borrowers

affected by a natural disaster in a county

declared a major disaster or emergency

by the President between January 1,

1997 and August 1, 1997. The impact of

these provisions will allow the agency

to service disaster victims in an efficient

and timely manner while keeping them

in business.

DATES: Effective August 1, 1997.

Comments must be submitted by

September 30, 1997.

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:

Kimberly R. Laris, Senior Loan Officer,

Farm Service Agency, U.S. Department

of Agriculture, Stop 0523, 1400

Independence Avenue, SW,

Washington, D.C. 20250–0523;

Telephone: 202–720–1659; Facsimile:

202–690–0949, e-mail:

klaris@usda.fsa.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

The issuing agencies certify that this

rule will not have a significant impact

on a substantial number of small entities

as defined in the Regulatory Flexibility

Act, Pub. L. 96–534, as amended (5

U.S.C. 601). Amendments included in

this rule will not impact small entities

to a greater extent than large entities or

individual farm borrowers.

Environmental Impact Statement

This document has been reviewed in

accordance with 7 CFR part 1940,

subpart G, ‘‘Environmental Program.’’

The issuing agencies have determined

that this action does not significantly

affect the quality of human

environment, and in accordance with

the National Environmental Policy Act

of 1969, Pub. L. 91–190, an

Environmental Impact Statement is not

required.

Executive Order 12988

This interim rule has been reviewed

under Executive Order 12988, Civil

Justice Reform. In accordance with this

rule: (1) All State and local laws and

regulations that are in conflict with this

rule will be preempted; (2) no

retroactive effect will be given to this

rule; (3) administrative proceedings in

accordance with 7 CFR parts 11 and 780

must be exhausted before bringing suit

in court challenging action taken under

this rule.

Executive Order 12372

For reasons set forth in the notice to

7 CFR part 3015, subpart V (48 FR

29115, June 24, 1983), the programs

within this rule are excluded from the

scope of Executive Order 12372, which

requires 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, establishes requirements for

Federal agencies to assess the effects of

their regulatory actions on State, local

and tribal governments and 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,

FSA generally must prepare a written

statement, including a cost-benefit

analysis, for proposed and final rules

with ‘‘Federal mandates’’ that may

result in expenditures to State, local, or

tribal governments, in the aggregate, or

to the private sector. When such a

statement is needed for a rule, section

205 of the UMRA generally requires

FSA to identify and consider a

reasonable number of regulatory

alternatives and adopt the least costly,

more cost-effective or least burdensome

alternative that achieves the objectives

of the rule.

This rule contains no Federal

mandates (under regulatory provisions

of Title II of the 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

The information collection

requirements contained in these

regulations were previously approved

by OMB pursuant to the Paperwork

Reduction Act of 1995 (44 U.S.C.

chapter 35) under OMB control number

0560–0164 through August 31, 1998.

The amendments set forth in this

interim rule do not contain additional

information collections that require

clearance by the OMB under the

provisions of 44. U.S.C. chapter 35.

Federal Assistance Programs

10.404—Emergency Loans

10.406—Farm Operating Loans

10.407—Farm Ownership Loans

10.416—Soil and Water Loans

Discussion of the Interim Rule

FSA publishes this amendment 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. 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
41252 Federal Register / Vol. 62, No. 148 / Friday, August 1, 1997 / Rules and Regulations

drought in the South. Since that time,

approximately 12,000 borrowers have

received DSA assistance. The overall

success of the program can be attributed

to the small amount of paperwork

required in applying 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. The cost to the government is

substantially less under this servicing

program than any other servicing

program as no debt is written off, no

appraisal costs are incurred as under

subpart S of part 1951, and no

liquidation costs are incurred.

Many of the borrowers who received

DSA in 1994 and 1995 were again

affected by heavy snowfall and flooding

in the Midwest during the beginning

months of 1997. The President has

declared the majority of North Dakota,

South Dakota, and Minnesota as a

disaster area. Many of these borrowers

have received a previous writedown of

debt under subpart S of part 1951,

thereby making them ineligible for

additional writeoffs or emergency loans

as a result of § 373 of the Consolidated

Farm and Rural Development Act. The

expansion of the program to permit a

second debt set-aside, therefore, is

needed immediately to benefit these

disaster victims. While there is

justification for the rule to become

effective 10 days after publication, FSA

will accept public comments on the rule

for 60 days.

The existing regulations provide that

each loan can only have one set-aside

installment outstanding. The only way a

borrower could receive DSA again,

would be if the previous set-aside

installment were paid in full, or

cancelled through restructuring under

subpart S of part 1951. This rule will

allow borrowers, who were affected by

a natural disaster in a county declared

a major disaster or emergency by the

President between January 1, 1997 and

August 1, 1997, to receive a second

installment set-aside without having to

pay in full the first set-aside installment,

or cancel the set-aside altogether.

Borrowers who farmed in counties

contiguous to the county that was

declared a disaster area are not eligible

for the second installment set-aside

unless they also farmed in the county

declared a disaster area and meet all the

eligibility requirements. 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 part

1951.

If the borrower pays any portion of

the set-aside installments in the future,

the payment will be applied to the

oldest installment set-aside first.

Borrowers affected by a disaster

declared by the President prior to the

effective date of this rule will have 6

months from the date they are notified

of the program to apply for a second

installment set-aside.

The notification requirements

described in section 1951.953 are also

being amended in FSA’s internal

instructions to require notification of

DSA assistance quarterly instead of each

time an area is designated a disaster

area. The notification would include a

list of all designations outstanding,

including those received during the

preceding quarter. This will eliminate a

lot of confusion as well as provide a

reminder to the borrower of any

outstanding declarations to apply for

DSA and emergency loans.

A clarification is also being made to

§ 1951.954(b)(4). The amount that can

be set-aside was limited to the amount

the borrower was unable to pay FSA

from the production marketing period in

which the disaster occurred, or the

amount the borrower was unable to pay

other creditors and expenses, rounded

up to the nearest whole installment.

This was misleading. The other

creditors and expenses do not come into

play unless the FLP installment was

paid. As written, this would make

borrowers ineligible to receive DSA if

the lesser amount due other creditors

was less than their FLP installment

since section 1951.954(a)(6) requires all

FLP installments to be current after the

scheduled installments are set-aside. In

this case, all FLP installments would

not be current if the total of the FLP

installments was less than the other

creditors payments. The provision has

been clarified to state that if the

installment due immediately after the

disaster was paid, but other creditors

and expenses were not, the amount setaside will be the lesser of the amount

the borrower is unable to pay other

creditors and expenses, rounded up to

the nearest whole FLP installment, or

the next FLP installment due.

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, part 1951 Chapter XVIII,

title 7, Code of Federal Regulations 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, 42

U.S.C. 1480.

Subpart T—Disaster Set-Aside

Program

2. Section 1951.953 is amended by

removing and reserving paragraph (a)

and by revising paragraph (b) to read as

follows:

§ 1951.953 Notification and request for

DSA.

* * * * *

(b) Deadline to apply. All FLP

borrowers liable for the debt must

request DSA within 8 months from the

date the disaster was designated, except

borrowers applying for a second

installment set-aside for disasters

declared by the President between

January 1, 1997 and August 1, 1997,

have 6 months from the date of the

notification letter to apply. Borrowers

may only be considered for DSA one

time for each disaster.

* * * * *

3. Section 1951.954 is amended in

paragraph (a)(1) by adding a sentence at

the end of the paragraph and revising

(b)(2) and (b)(4) to read as follows:

§ 1951.954 Eligibility and loan limitation

requirements.

(a) * * *

(1) * * * If the borrower is applying

for a second installment to be set-aside,

the disaster area operated must have

been in a county declared a major

disaster or emergency by the President

between January 1, 1997 and August 1.

1997.

* * * * *

(b) * * *

(2) Only one unpaid installment for

each farm loan may be set-aside. Except

for Presidential disaster declarations

between January 1, 1997 and August 1,

1997, if there is an installment still setaside from a previous disaster, the loan

is not eligible for DSA. For Presidential

declarations between January 1, 1997

and August 1, 1997, borrowers who

already have one installment set-aside

from a previous disaster may set-aside a

second installment. If the set-aside is

later paid in full, or cancelled through

restructuring under subpart S of this

part, the set-aside will no longer exist

and, therefore, the loan may be

considered for Disaster Set-Aside (DSA)

in the future.

(3) * * *

(4) The amount set-aside shall be

limited to the amount the borrower is
Federal Register / Vol. 62, No. 148 / Friday, August 1, 1997 / Rules and Regulations 41253

unable to pay Farm Service Agency

(FSA) from the production and

marketing period in which the disaster

occurred. However, if the installment

due immediately after the disaster was

paid, but other creditors and expenses

were not, the amount set-aside will be

the lesser of the amount the borrower is

unable to pay other creditors and

expenses, rounded up to the nearest

whole installment, or the next

installment due. Expenses which the

borrower is unable to pay may include

the following year’s operating and

family living expenses if the income or

commodities lost from the disaster year

would have been used for these

purposes, or if normal income security

from the disaster year is approved for

release under subpart A of 7 CFR part

1962 or otherwise authorized under

subpart B of 7 CFR part 1924 for these

purposes. Under no circumstances will

a portion of the installment be set-aside

leaving a balance still due. The portion

not set-aside must be paid by the

borrower on or before the date Exhibit

A of FmHA Instruction 1951–T

(available in any FSA office) is signed.

* * * * *

4. Section 1951.957 is amended by

revising paragraph (b)(7) to read as

follows:

§ 1951.957 Eligibility determination and

processing.

* * * * *

(b) * * *

(7) Payments applied to the amount

set-aside will be applied first to interest

and then to principal. If more than one

installment is set-aside on the loan,

payments will be applied to the oldest

installment set-aside until paid in full,

before applying payments to the second

installment set-aside.

* * * * *

Signed at Washington, D.C., on July 22,

1997.

James W. Schroeder,

Acting Under Secretary for Farm and Foreign

Agricultural Services.

[FR Doc. 97–20280 Filed 7–31–97; 8:45 am]

BILLING CODE 3410–05–P

FARM CREDIT ADMINISTRATION

12 CFR Part 602

RIN 3052–AB77

Releasing Information

AGENCY: Farm Credit Administration.

ACTION: Final rule.

SUMMARY: The Farm Credit

Administration (FCA or Agency),

through the FCA Board, issues a final

rule amending its regulations governing

the release of information. The objective

of this action is to conform applicable

FCA regulations to the requirements of

the Freedom of Information Act (FOIA),

5 U.S.C. 552, as amended by the

Electronic Freedom of Information Act

Amendments of 1996 (1996

Amendments), Pub. L. 104–231, and to

clarify the address of the FCA official

who receives FOIA requests for records.

DATES: The regulation shall become

effective October 2, 1997, or upon the

expiration of 30 days after publication

during which either or both Houses of

Congress are in session, whichever is

later. A document announcing the

effective date will be published in the

Federal Register.

FOR FURTHER INFORMATION CONTACT:

John Hays, Policy Analyst, Regulation

Development Division, Office of

Policy Development and Risk Control,

Farm Credit Administration, McLean,

VA 22102–5090, (703) 883–4498, TDD

(703) 883–4444,

or

Jane Virga, Senior Attorney, Legal

Counsel Division, Office of General

Counsel, Farm Credit Administration,

McLean, VA 22102–5090, (703) 883–

4020, TDD (703) 883–4444.

SUPPLEMENTARY INFORMATION: Through

the Electronic Freedom of Information

Act Amendments of 1996, Congress

amended the FOIA to address, among

other things, the timing of agency

responses to FOIA requests. The FOIA

was amended to increase the time limit

for agency responses from 10 to 20

working days. Another time-related

amendment requires agencies to

promulgate regulations under which

requests for expedited processing will

be considered and to grant such requests

upon a showing of a compelling need.

These amendments are effective October

2, 1997.

In response to the amendment of the

FOIA, the FCA is amending its

regulations at part 602, subpart B, as a

final rule. The amendments to part 602,

subpart B, reflect the requirements of

the FOIA, as amended, and are not

interpretative. The 1996 Amendments

provide Federal agencies with no

discretion and require the time-related

amendments to be effective on October

2, 1997. Moreover, the regulations that

the FCA adopts to implement the 1996

Amendments and to clarify the address

of the Freedom of Information Officer

are ministerial, minor, technical, and

noncontroversial. For these reasons, the

FCA finds good cause to determine that

public notice and comments for this

regulation are unnecessary, impractical,

and contrary to the public interest,

pursuant to the Administrative

Procedure Act, 5 U.S.C. 553(a)(3)(B).

Sections 602.260 and 602.261(a) and

(d) are amended to reflect that the

Agency will have 20 days within which

to respond to FOIA requests for records.

Section 602.260 is also amended to

provide that FOIA requests for records

should be addressed to the Freedom of

Information Officer, Farm Credit

Administration, 1501 Farm Credit Drive,

McLean, VA 22102–5090.

Finally, the FCA has added new

§ 602.261(e) to address the new

requirement that the Agency promulgate

regulations concerning the granting of a

request for expedited processing of a

FOIA request upon a requester’s

showing of a compelling need for the

information. The new regulation

requires the Freedom of Information

Officer to notify a requester within 10

calendar days after receipt of such a

request whether the Agency granted

expedited processing and, if so, to

process the request as soon as

practicable. The regulation defines

‘‘compelling need’’ to mean that a

failure to obtain the requested records

on an expedited basis could reasonably

be expected to pose an imminent threat

to the life or physical safety of an

individual, or, with respect to a request

made by a person primarily engaged in

disseminating information, that there is

an urgency to inform the public

concerning actual or alleged Federal

Government activity. The regulation

further provides that a requester

demonstrate a compelling need by a

statement certified by the requester to be

true and correct to the best of such

person’s knowledge and belief. The

procedures for expedited processing

apply to both requests for information

and to administrative appeals.

The remaining provisions of the 1996

Amendments to the FOIA do not require

amendment of the FCA’s regulations

governing the release of information at

part 602.

List of Subjects in 12 CFR Part 602

Courts, Freedom of information,

Government employees.

For the reasons stated in the

preamble, part 602 of chapter VI, title 12

of the Code of Federal Regulations is

amended to read as follows:

PART 602—RELEASING

INFORMATION

1. The authority citation for part 602

is revised to read as follows:

Authority: Secs. 5.9, 5.17 of the Farm

Credit Act (12 U.S.C. 2243, 2252); 5 U.S.C.