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

17371 

Vol. 74, No. 71 

Wednesday, April 15, 2009 

DEPARTMENT OF AGRICULTURE 

Animal and Plant Health Inspection 

Service 

9 CFR Part 71 

[Docket No. 00–094–2] 

RIN 0579–AB84 

Interstate Movement of Sheep and 

Goats 

Correction 

In rule document E9–7233 beginning 

on page 14703 in the issue of 

Wednesday, April 1, 2009, make the 

following correction: 

On page 14706, TABLE 1—SHEEP 

AND GOATS: IMPORTS AND 

EXPORTS, 2007 should be corrected as 

follows: 

TABLE 1—SHEEP AND GOATS: IMPORTS AND EXPORTS, 2007 

Item 

Imports Exports 

Numbers Value in 

millions Numbers Value in millions 

Sheep ............................................................................................................... 92 $0.058 116,618 $8.148 

Goats ............................................................................................................... 33 0.010 9,231 0.597 

Total .......................................................................................................... 125 0.068 125,849 8.745 

Source: Global Trade Atlas, November 2008. 

[FR Doc. Z9–7233 Filed 4–14–09; 8:45 am] 

BILLING CODE 1505–01–D 

FARM CREDIT SYSTEM INSURANCE 

CORPORATION 

12 CFR Part 1410 

RIN 3055–AA10 

Premiums 

AGENCY: Farm Credit System Insurance 

Corporation. 

ACTION: Direct final rule. 

SUMMARY: The Farm Credit System 

Insurance Corporation (FCSIC or 

Corporation) is issuing a direct final rule 

amending its premium regulations to 

reflect the amendments of the Farm 

Credit Act of 1971 that were made by 

the enactment of the Food, 

Conservation, and Energy Act of 2008. 

The purpose of the amended rule is to 

clarify the premium regulations and 

eliminate provisions of the premium 

regulations that are obsolete or 

inconsistent with the Farm Credit Act of 

1971, as amended. 

DATES: If we receive no significant 

adverse comment on or before May 15, 

2009, these regulations will be effective 

upon the expiration of 30 days after 

publication in the Federal Register 

during which either or both Houses of 

Congress are in session. We will publish 

notice of the effective date in the 

Federal Register. 

If we receive significant adverse 

comment on an amendment, paragraph, 

or section of the rule, and that provision 

may be addressed separately from the 

remainder of the rule, we will withdraw 

that amendment, paragraph, or section 

and adopt as final those provisions of 

the rule that are not the subject of a 

significant adverse comment. 

ADDRESSES: You may send comments by 

electronic mail through the ‘‘Contact 

Us’’ section of FCSIC’s Web site, 

http://www.fcsic.gov, or through the 

Governmentwide www.regulations.gov 

portal. You may also send comments to 

James M. Morris, General Counsel, at 

morrisj@fcsic.gov or by mail at the 

address listed below. Copies of all 

comments we receive may be reviewed 

in our office in McLean, Virginia. 

FOR FURTHER INFORMATION CONTACT: 

James M. Morris, General Counsel, Farm 


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17372 Federal Register / Vol. 74, No. 71 / Wednesday, April 15, 2009 / Rules and Regulations 

1Recommendation 95–4, referencing the 

Administrative Procedure Act (APA) ‘‘good cause’’ 

exemption at 5 U.S.C. 553(b)(B) (adopted June 15, 

1995). 

2 12 U.S.C. 2001 et seq. 

3Public Law 110–234 (2008), Public Law 110– 

246, 122 Stat. 1651 (2008). 

4 12 U.S.C. 2001 et seq. 

5The House and Senate passed H.R. 2419 over 

veto, enacting 14 of 15 Farm Bill titles into law. On 

May 22, 2008, H.R. 2419 became Public Law 110– 

234. Because one title of the Farm Bill was omitted 

from H.R. 2419, in June 2008, Congress passed a 

new bill, H.R. 6124, enacting 15 Farm Bill titles. On 

June 18, 2008, H.R. 6124 became Public Law 110– 

246. Corresponding amendments of the premium 

provisions of the Farm Credit Act were included in 

both H.R. 2419 and H.R. 6124. 

6 12 CFR 1410.4. 

7 12 CFR part 1410. 

Credit System Insurance Corporation, 

1501 Farm Credit Drive, McLean, VA 

22102, 703–883–4380, TTY 703–883– 

4390, Fax 703–790–9088. 

SUPPLEMENTARY INFORMATION: 

Regulatory Flexibility Act 

Pursuant to section 605(b) of the 

Regulatory Flexibility Act (Pub. L. 96– 

354, 5 U.S.C. 601 et seq.), it is certified 

that the rule will not have significant 

impact on a substantial number of small 

entities. Each of the banks in the Farm 

Credit System (FCS or System), 

considered together with its affiliated 

associations, has assets and annual 

income in excess of the amounts that 

qualify them as small entities. 

Therefore, System banks are not ‘‘small 

entities’’ as defined in the Regulatory 

Flexibility Act. 

Direct Final Rulemaking 

We are amending our premium 

regulations using the ‘‘direct final’’ 

procedure for rulemaking. Direct final 

rulemaking permits agencies to adopt 

noncontroversial rules on an expedited 

basis, without going through the usual 

proposed and final stages of notice-andcomment rulemaking. This process 

enables us to reduce the time and 

resources we need to develop, review, 

and publish a noncontroversial final 

rule while still affording the public an 

adequate opportunity to comment on or 

object to the rule. Direct final 

rulemaking was recommended by the 

Administrative Conference of the 

United States.1

In direct final rulemaking, we notify 

the public that a rule will become final 

on a specified future date unless we 

receive significant adverse comment 

during the comment period specified in 

the notice. A significant adverse 

comment is one where the commenter 

explains why the rule would be 

inappropriate (including challenges to 

its underlying premise or approach), 

ineffective, or unacceptable without a 

change. In general, a significant adverse 

comment would raise an issue serious 

enough to warrant a substantive 

response from us in a notice-andcomment rulemaking. 

We believe these amendments are 

noncontroversial. As discussed below, 

the provisions of the Farm Credit Act of 

1971 (Act) 2 that govern FCSIC 

premiums were recently amended. 

Some of FCSIC’s existing premium 

regulations are inconsistent with the 

amended provisions of the Act. 

Generally, regulatory provisions that are 

inconsistent with subsequent statutory 

amendments are invalidated by 

operation of law. The Corporation 

wishes to amend its regulations in order 

to minimize any potential for confusion 

and clarify the regulations. This rule 

withdraws regulations that are 

inconsistent with the amended 

provisions of the Act and clarifies the 

effect of these amended statutory 

provisions. 

We do not anticipate significant 

adverse comment on this rulemaking. If 

we receive no significant adverse 

comment, we will publish a notice of 

the effective date of the rule in 

accordance with applicable law. 

If we do receive significant adverse 

comment during the comment period, 

we will publish a notice of withdrawal 

of the relevant portions of this rule. Our 

notice will also indicate how further 

rulemaking would proceed. 

Background 

The Farm Credit System Insurance 

Corporation (FCSIC or Corporation) 

insures the timely payment of principal 

and interest on insured debt obligations 

issued by Farm Credit System banks. 

On March 23, 2007, the Corporation’s 

Board of Directors adopted a legislative 

proposal requesting that the Congress 

amend the Act to, inter alia, base 

premiums on the outstanding insured 

debt obligations instead of loans, and 

permit the Corporation to collect a 

broader range of premiums on insured 

debt. 

Provisions incorporating the 

legislative proposal became a part of 

versions of proposed Farm Bills in the 

House and Senate. Ultimately, 

enactment of the Food, Conservation, 

and Energy Act (FCE Act) 3 in 2008 

amended the provisions of the Farm 

Credit Act of 1971 4 that govern FCSIC 

premiums to include 5 the Corporation’s 

proposed changes. 

As amended, the Act’s provisions 

assess premiums that are generally 

based on each bank’s pro rata share of 

outstanding insured debt obligations 

(rather than on loans), aligning 

premiums with the obligations that 

FCSIC insures. The amendments reduce 

the total insured debt obligations on 

which premiums are assessed by 90 

percent of Federal governmentguaranteed loans and investments and 

80 percent of State governmentguaranteed loans and investments, and 

deduct similar percentages of such 

guaranteed loans and investments when 

calculating the ‘‘secure base amount.’’ If 

the Farm Credit Insurance Fund is 

below the secure base amount, the 

amended Act requires that each insured 

Farm Credit System bank pay FCSIC the 

premium due from the bank, which 

shall be equal to (a) the adjusted average 

outstanding insured obligations 

multiplied by 0.0020; and (b) the 

average principal outstanding on loans 

in nonaccrual status and average 

amount outstanding of other than 

temporarily impaired investments 

multiplied by 0.0010; subject to FCSIC’s 

power to reduce the premium in its sole 

discretion. 

The statutory amendments also 

clarified that FCSIC may collect 

premiums more frequently than 

annually. The amended Act provides 

that each insured System bank shall file 

with the Corporation a certified 

statement showing the amount of the 

premium due the Corporation from the 

bank. The Act mandates that each 

insured System bank shall pay to the 

Corporation the premium payments 

required under the statute not more 

frequently than once in each calendar 

quarter, in such manner and at such one 

or more times as the Board of Directors 

shall prescribe. The certified statement 

is to be filed on a date to be determined 

in the sole discretion of the Corporation. 

Under existing regulations, the certified 

statement and payments must be 

received by January 31.6 No change is 

being made to this date. 

In June 2008, the Corporation’s Board 

of Directors took action to implement 

the amendments of the Act’s premium 

provisions. The Board implemented 

(effective on July 1, 2008) the new 

premium rates and calculation method 

and adjusted the premiums pursuant to 

the Corporation’s authority under 

section 5.55(a)(3) of the Act, as amended 

by the FCE Act. Consistent with the 

Corporation’s past practice of generally 

adjusting premium rates quarterly, the 

new rates were made effective at the 

beginning of the next quarter, July 1, 

2008. 

The Corporation has existing 

regulations concerning premiums.7 The 

Corporation has concluded that some of 

those regulations are inconsistent with 


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Federal Register / Vol. 74, No. 71 / Wednesday, April 15, 2009 / Rules and Regulations 17373 

8 12 CFR 1410.6. 

the provisions of the Act, as amended 

by the FCE Act. Generally, regulatory 

provisions that are inconsistent with 

subsequent statutory amendments are 

invalidated by operation of law. The 

Corporation is amending its regulations 

in order to minimize any potential for 

confusion and clarify the regulations. 

The rule withdraws regulations that are 

inconsistent with the FCE Act and 

clarifies the effect of the premium 

provisions of the Act as amended by the 

FCE Act. 

The provisions of the amended rule 

are consistent with the June 2008 action 

of the FCSIC Board of Directors 

implementing the new statutory 

premium calculations as of July 1, for 

the second half of 2008. The amended 

provisions of the Act are not applied 

retroactively and premiums are 

calculated under the old method for the 

first half of 2008. 

In order to provide a measured and 

structured transition to the new 

premium levels, the Board of Directors, 

in its June action, also exercised its 

discretion under section 5.55(a)(3) of the 

Act to reduce the premiums from the 20 

basis points rate imposed by the 

amended Act to an annualized rate of 15 

basis points on the adjusted average 

outstanding insured obligations for the 

3rd quarter of 2008, and to an 

annualized rate of 18 basis points on the 

adjusted average outstanding insured 

obligations for the 4th quarter of 2008. 

The amended rule reflects these rates. 

The Corporation is generally limiting 

its current regulatory amendments to 

those that are necessary in order to 

eliminate provisions that are obsolete or 

inconsistent with the FCE Act. 

Accordingly, new regulatory definitions 

are not being added. While two new 

terms, ‘‘investment’’ and ‘‘other than 

temporarily impaired,’’ were added by 

the FCE Act, those terms can be 

interpreted as accounting terms. If 

experience under the new statutory 

provisions leads us to believe that these 

or other terms should be defined, those 

definitions will be added later. 

A section of the existing regulations 8

provides that copies of the certified 

statements are available from the 

Corporation. The Corporation is 

amending this section to remove 

outdated references, but is not otherwise 

amending this provision. The banks and 

others may obtain copies of the current 

certified statements for 2008 by 

contacting the Corporation. 

The FCE Act amendments clarified 

that, in addition to FCSIC’s regulatory 

authority under title V of the Farm 

Credit Act, FCSIC has authority to adopt 

rules and regulations concerning 

provisions in title I of the Farm Credit 

Act that govern Farm Credit System 

banks passing along cost of insurance 

premiums. We note that section 1.12(b) 

of the Act, as amended by the FCE Act, 

no longer specifies how the Farm Credit 

System banks pass the cost of premiums 

to associations and other financing 

institutions, but requires that the banks 

do so ‘‘in an equitable manner, as 

determined by the Corporation.’’ This 

change gives the Farm Credit System 

banks flexibility in allocating premium 

costs to associations and other financing 

institutions. At this time, the 

Corporation is not amending regulations 

concerning section 1.12(b) or the 

manner in which the cost of such 

premiums are passed to associations 

and other financing institutions. 

List of Subjects in 12 CFR Part 1410 

Banks, Banking, Insurance, Reporting 

and recordkeeping requirements. 

■ For the reasons stated in the preamble, 

part 1410 of chapter XIV, title 12 of the 

Code of Federal Regulations is amended 

as follows: 

PART 1410—PREMIUMS 

■ 1. The authority citation for part 1410 

is revised to read as follows: 

Authority: Secs. 12 U.S.C. 2020, 2277a–4, 

2277a–5, 2277a–7. 

■ 2. Amend § 1410.2 as follows: 

■ a. Revise paragraph (b); 

■ b. Add the words ‘‘or investments’’ 

after the words ‘‘Governmentguaranteed loans’’ in the heading of 

paragraph (d); and 

■ c. Add the words ‘‘or investments’’ 

after the words ‘‘loans or credits’’ each 

place they appear in the introductory 

text of paragraph (d); and 

■ d. Remove the words ‘‘the Federal 

Intermediate Credit Bank of Jackson 

and’’ from paragraph (e). 

The revision reads as follows: 

§ 1410.2 Definitions. 

* * * * * 

(b) Average principal outstanding 

means the average annual principal 

outstanding on a daily basis using 

balances as of the close of each day. In 

computing the average annual principal 

outstanding in this manner, the closing 

balance of the most recent past business 

day shall be the closing balance for days 

when an institution is closed. 

* * * * * 

■ 3. Revise § 1410.3 to read as follows: 

§ 1410.3 Calculation and reporting of 

premiums due. 

(a) Reporting. For purposes of 

computing premiums, each insured 

bank shall, without limitation, report all 

information concerning the insured 

bank; each direct lending association 

that is receiving (or has received) funds 

provided through the insured bank; and 

each other financing institution that is 

receiving (or has received) funds 

provided through the insured bank; that 

the Corporation determines is necessary 

in order to compute the premiums due 

under the Act. 

(b) Calculating the premium payment 

for periods from July 1, 2008 through 

December 31, 2008. (1) The premium 

payment for the 3rd Quarter 2008 

(defined for purposes of this section as 

the period from July 1, 2008 through 

September 30, 2008) and the premium 

payment for the 4th Quarter 2008 

(defined for purposes of this section as 

the period October 1, 2008, through 

December 31, 2008) shall be equal to 25 

percent of the amount computed by 

applying the premium calculation 

formulas contained in sections 5.55 and 

5.56 of the Act (unless reduced by the 

Corporation acting under section 

5.55(a)(3) of the Act or under paragraph 

(d) of this section) to the insured bank 

during the 3rd Quarter 2008 or 4th 

Quarter 2008, respectively. 

(2) In accord with paragraph (b)(1) of 

this section, the premium payment for 

the 3rd Quarter 2008 (having been 

reduced by the Corporation acting under 

section 5.55(a)(3) of the Act) shall be 

equal to 25 percent of the following 

amount: 

(i) The average outstanding insured 

obligations issued by the bank for the 

period, after deducting from the 

obligations the percentages of the 

guaranteed portions of loans and 

investments described in section 

5.55(a)(2) of the Act, multiplied by 

0.0015; and 

(ii) The product obtained by 

multiplying— 

(A) The sum of— 

(1) The average principal outstanding 

for the period on loans made by the 

bank (computed in accord with section 

5.55 of the Act) that are in nonaccrual 

status; and 

(2) The average amount outstanding 

for the period of other-than-temporarily 

impaired investments made by the bank 

(computed in accord with section 5.55 

of the Act); 

(B) By 0.0010. 

(3) In accord with paragraph (b)(1) of 

this section, the premium payment for 

the 4th Quarter 2008 (having been 

reduced by the Corporation acting under 

section 5.55(a)(3) of the Act) shall be 

equal to 25 percent of the following 

amount: 

(i) The average outstanding insured 

obligations issued by the bank for the 


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17374 Federal Register / Vol. 74, No. 71 / Wednesday, April 15, 2009 / Rules and Regulations 

period, after deducting from the 

obligations the percentages of the 

guaranteed portions of loans and 

investments described in section 

5.55(a)(2) of the Act, multiplied by 

0.0018; and 

(ii) The product obtained by 

multiplying— 

(A) The sum of— 

(1) The average principal outstanding 

for the period on loans made by the 

bank (computed in accord with section 

5.55 of the Act) that are in nonaccrual 

status; and 

(2) The average amount outstanding 

for the period of other-than-temporarily 

impaired investments made by the bank 

(computed in accord with section 5.55 

of the Act); 

(B) By 0.0010. 

(c) Calculating the premium payment 

for periods in 2009 and subsequent 

years. (1) The premium payment for 

periods in calendar year 2009 and 

subsequent years shall be equal to the 

amount computed by applying the 

premium calculation formulas 

contained in sections 5.55 and 5.56 of 

the Act (unless reduced by the 

Corporation acting under section 

5.55(a)(3) of the Act or under paragraph 

(d) of this section) to the insured bank 

during the period. 

(2) In accord with paragraph (c)(1) of 

this section, the premium payment for 

the period shall (unless reduced by the 

Corporation acting under section 

5.55(a)(3) of the Act or under paragraph 

(d) of this section) be equal to: 

(i) The average outstanding insured 

obligations issued by the bank for the 

period, after deducting from the 

obligations the percentages of the 

guaranteed portions of loans and 

investments described in section 

5.55(a)(2), multiplied by 0.0020; and 

(ii) The product obtained by 

multiplying— 

(A) The sum of— 

(1) The average principal outstanding 

for the period on loans made by the 

bank (computed in accord with section 

5.55 of the Act) that are in nonaccrual 

status; and 

(2) The average amount outstanding 

for the period of other than temporarily 

impaired investments made by the bank 

(computed in accord with section 5.55 

of the Act); 

(B) By 0.0010. 

(d) Secure base amount. In addition to 

the Corporation’s authority to reduce 

premiums under section 5.55(a)(3) of 

the Act, upon reaching the secure base 

amount determined by the Corporation 

in accordance with section 5.55 of the 

Act, the annual premium to be paid by 

each insured bank, computed in 

accordance with paragraphs (b) and (c) 

of this section, shall be reduced by a 

percentage determined by the 

Corporation so that the aggregate of the 

premiums payable by all of the Farm 

Credit banks for the following calendar 

year is sufficient to ensure that the 

Insurance Fund balance is maintained at 

not less than the secure base amount. 

The Corporation shall announce any 

such percentage no later than December 

31 of the year prior to the January in 

which such premiums are to be paid. 

§ 1410.4 [Amended] 

■ 4. Amend § 1410.4 as follows: 

■ a. Remove paragraph (a); 

■ b. Redesignate paragraphs (b) and (c) 

as paragraphs (a) and (b), respectively; 

■ c. Remove the heading from newly 

designated paragraph (a) and add the 

word ‘‘Payments.’’ as the new heading; 

and 

■ d. Add the words, ‘‘sections 5.55 and 

5.56 of the Act, and’’ after the words ‘‘in 

accordance with’’ in the first sentence of 

newly designated paragraph (a). 

§ 1410.6 [Amended] 

■ 5. Amend § 1410.6(a) as follows: 

■ a. Remove the words ‘‘The following 

forms are available from the 

Corporation:’’ from paragraph (a) 

introductory text; and 

■ b. Remove paragraphs (a)(1) and (a)(2). 

Dated: April 9, 2009. 

Roland E. Smith, 

Secretary to the Board, Farm Credit System 

Insurance Corporation. 

[FR Doc. E9–8535 Filed 4–14–09; 8:45 am] 

BILLING CODE 6710–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 23 

[Docket No. CE293; Special Conditions No. 

23–233–SC] 

Special Conditions: Spectrum 

Aeronautical, LLC Model Freedom 

S–40 Airplane Special Conditions for 

Flight Performance, Flight 

Characteristics, and Operating 

Limitations 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final special conditions; request 

for comments. 

SUMMARY: These special conditions are 

issued for the Spectrum Aeronautical, 

LLC Model Freedom S–40 airplane. This 

airplane will have a novel or unusual 

design feature(s) associated with engine 

location, certain performance, flight 

characteristics and operating limitations 

necessary for this type of airplane. The 

applicable airworthiness regulations do 

not contain adequate or appropriate 

safety standards for this design feature. 

These special conditions contain the 

additional safety standards that the 

Administrator considers necessary to 

establish a level of safety equivalent to 

that established by the existing 

airworthiness standards. 

DATES: The effective date of these 

special conditions is April 2, 2009. We 

must receive your comments by June 1, 

2009. 

ADDRESSES: Mail your comments in 

duplicate to: Federal Aviation 

Administration, Regional Counsel, 

ACE–7, Attn: Rules Docket No. CE293, 

901 Locust, Room 506, Kansas City, 

Missouri 64106; or deliver your 

comments in duplicate to the Regional 

Counsel at the above address. 

Comments must be marked: Docket No. 

CE293. Comments may be inspected in 

the Rules Docket weekdays, except 

Federal holidays, between 7:30 a.m. and 

4 p.m. 

FOR FURTHER INFORMATION CONTACT: Ross 

Schaller, Federal Aviation 

Administration, Aircraft Certification 

Service, Small Airplane Directorate, 

ACE–111, 901 Locust, Room 301, 

Kansas City, Missouri, 816–329–4162, 

fax 816–329–4090. 

SUPPLEMENTARY INFORMATION: The FAA 

has determined that notice and 

opportunity for prior public comment 

hereon are impracticable because these 

procedures would significantly delay 

issuance of the approval design and 

thus delivery of the affected aircraft. In 

addition, the substance of these special 

conditions has been subject to the 

public comment process in several prior 

instances with no substantive comments 

received. The FAA therefore finds that 

good cause exists for making these 

special conditions effective upon 

issuance. 

Comments Invited 

We invite interested people to take 

part in this rulemaking by sending 

written comments, data, views, or 

arguments. The most helpful comments 

reference a specific portion of the 

special conditions, explain the reason 

for any recommended change, and 

include supporting data. Send us your 

written comments in duplicate. 

We will file in the docket all 

comments we receive, as well as a 

report summarizing each substantive 

public contact with FAA personnel 

about these special conditions. You may 

inspect the docket before and after the 

comment closing date. If you wish to 


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