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

55011 

Vol. 72, No. 188 

Friday, September 28, 2007 

DEPARTMENT OF AGRICULTURE 

Rural Utilities Service 

7 CFR Part 1782 

Rural Housing Service 

Rural Business-Cooperative Service 

Rural Utilities Service 

Farm Service Agency 

7 CFR Parts 1951, 1955, and 1956 

RIN 0572–AB59 

Servicing of Water Programs Loans 

and Grants 

AGENCY: Rural Utilities Service, USDA. 

ACTION: Final rule. 

SUMMARY: The Rural Utilities Service 

(RUS), an Agency delivering the United 

States Department of Agriculture’s Rural 

Development Utilities Programs, 

hereinafter referred to as Rural 

Development, consolidates and amends 

the regulations utilized to service water 

and waste loan and grant programs. The 

rule will combine the water and waste 

loan and grant servicing regulations 

found in 7 CFR parts 1951, 1955, and 

1956 into one regulation. Unnecessary 

and burdensome requirements for water 

and waste loan and grant servicing 

under the program will be eliminated. 

The streamlining of the water and waste 

loan and grant servicing regulation will 

allow the Agency to provide better 

service to entities needing assistance in 

resolving financial and economic 

problems in their communities and, in 

general, improve the quality of life in 

rural areas. Additionally, this rule 

implements Section 6018 of the Farm 

Security and Rural Investment Act of 

2002 (7 U.S.C. 1936a) for Rural 

Development’s Business, Housing and 

Utilities programs. 

EFFECTIVE DATE: October 29, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Anita O’Brien, Loan Specialist, Water 

and Environmental Programs, USDA 

Rural Development, Room 2230 South 

Building, Stop 1570, 1400 

Independence Ave., SW., Washington, 

DC 20250–1570. Telephone: (202) 690– 

3789, FAX: (202) 690–0649, E-mail: 

anita.obrien@usda.gov. 

SUPPLEMENTARY INFORMATION: 

Classification 

Executive Order 12866 

This rule has been determined to be 

not significant for purposes of Executive 

Order 12866 and, therefore, has not 

been reviewed by the Office of 

Management and Budget (OMB). 

Executive Order 12988 

This rule has been reviewed in 

accordance with Executive Order 12988, 

Civil Justice Reform. It has been 

determined that this final rule meets the 

applicable standards provided in 

section 3 of the Executive Order. In 

addition, all State and local laws and 

regulations that are in conflict with this 

rule will be preempted; no retroactive 

effect will be given to the rule; and in 

accordance with sec. 212(e) of the 

Department of Agriculture 

Reorganization Act of 1994 (7 U.S.C. 

6912(e)), appeal procedures must be 

exhausted before an action against the 

Department or its agencies may be 

initiated. 

Regulatory Flexibility Act Certification 

It has been determined that the 

Regulatory Flexibility Act is not 

applicable to this rule since Rural 

Development is not required by 5 U.S.C. 

551 et seq. or any other provision of law 

to publish a notice of final rulemaking 

with respect to the subject matter of this 

rule. 

Information Collection and 

Recordkeeping Requirements 

The information collection and 

recordkeeping requirements contained 

in this rule are currently approved 

under OMB control number 0575–0066 

in accordance with the Paperwork 

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

Chapter 35). The Agency has submitted 

an information collection package to 

OMB to establish a new OMB control 

number, 0572–0137, for the information 

collection covered by this rule and will 

transfer the applicable burden from 

0575–0066 to 0572–0137, when OMB 

approval is granted. 

National Environmental Policy Act 

Certification 

The Administrator has determined 

that this rule will not significantly affect 

the quality of the human environment 

as defined by the National 

Environmental Policy Act of 1969 (42 

U.S.C. 4321 et seq.). Therefore, this 

action does not require an 

environmental impact statement or 

assessment. 

Catalog of Federal Domestic Assistance 

The program described by this rule is 

listed in the Catalog of Federal Domestic 

Assistance Programs under numbers (1) 

10.760—Water and Waste Disposal 

System for Rural Communities, (2) 

10.761—Technical Assistance and 

Training Grants, (3) 10.762—Solid 

Waste Management Grants (4) 10.763— 

Emergency Community Assistance 

Grants, and (5) 10.770—section 306C 

Water and Waste Loans and Grants. This 

catalog is available on a subscription 

basis from the Superintendent of 

Documents, the United States 

Government Printing Office, 

Washington, DC 20402–9325, telephone 

number (202) 512–1800. 

Executive Order 12372 

This program is listed in the Catalog 

of Federal Domestic Assistance under 

numbers (1) 10.760—Water and Waste 

Disposal (WWD) System for Rural 

Communities, (2) 10.763—Emergency 

Community Assistance Grants, and (3) 

10.770—Water and Waste Loans and 

Grants (section 306C) and is subject to 

the provisions of Executive Order 12372 

which requires intergovernmental 

consultation with State and local 

officials. 

Unfunded Mandates 

This rule contains no Federal 

mandates (under the regulatory 

provision of title II of the Unfunded 

Mandates Reform Act of 1995) for State, 

local, and tribal governments or the 

private sector. Therefore, this rule is not 

subject to the requirements of sections 

202 and 205 of the Unfunded Mandates 

Reform Act. 

Executive Order 13132, Federalism 

The policies contained in this rule do 

not have any substantial direct effect on 


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55012 Federal Register / Vol. 72, No. 188 / Friday, September 28, 2007 / Rules and Regulations 

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 States is 

not required. 

Background 

The Rural Development water and 

waste program is administered by Water 

and Environmental Programs (WEP). 

The water and waste loan and grant 

programs are authorized by various 

sections of the Consolidated Farm and 

Rural Development Act (7 U.S.C. 1921 

et seq.), as amended. The regulations for 

these programs have not been 

completely reviewed for many years. 

The 1994 streamlining and 

reorganization of the Department of 

Agriculture provided an opportunity to 

review and rewrite the water and waste 

loan and grant servicing regulations. A 

task force was formed for that purpose. 

The aim of the task force was to make 

the regulations easier to understand, 

eliminate unnecessary requirements, 

and continue to protect the interest of 

the U.S. taxpayer. The program provides 

loan servicing options for communities 

facing financial problems. Servicing 

options should result in reasonable user 

costs for rural residents, rural 

businesses, and other rural users. 

Additionally, in order to provide 

uniformity, servicing provisions for 

grants are addressed in the 

Departmental Grant Regulations cited in 

1782.7. 

Major changes are as follows: 

1. Servicing regulations found in 7 

CFR parts 1951, 1955, and 1956 are 

combined into one regulation. 

2. The field staff is provided with 

more authority to service water and 

waste loans and grants. 

3. The application process for 

servicing actions has been streamlined 

to reduce unnecessary paperwork and 

improve service to the rural 

communities. There will be fewer 

regulations, and the number of pages in 

the Code of Federal Regulations will be 

greatly reduced. 

4. The functions of the former 

Farmers Home Administration (FmHA) 

and the Rural Development 

Administration (RDA) relating to the 

water and waste loan and grant 

programs authorized by various sections 

of the Consolidated Farm and Rural 

Development Act (7 U.S.C. 1926(a)), 

have been transferred to the Rural 

Development Utilities programs based 

on the Department of Agriculture 

Reorganization Act of 1994 (Pub. L. 

103–354). Therefore, in order to 

enhance the delivery of borrower 

services and better assist the public, 

Rural Development is simplifying and 

rewriting regulations originally 

published by FmHA and RDA. All parts 

pertaining to the water and waste loan 

program will be moved into 7 CFR part 

1782. This action will have no effect on 

the RHS community facilities loan 

program, as this action makes no policy 

changes in the regulation with the 

exception of implementing Section 6018 

of the Farm Security and Rural 

Investment Act of 2002 (7 U.S.C. 1936a). 

The following programs are affected by 

these amendments: (1) Water and Waste 

Disposal Loans and Grants, (2) 

Watershed Loans and Advances, (3) 

Resource Conservation and 

Development Loans, (4) Technical 

Assistance and Training Grants, (5) 

Emergency Community Assistance 

Grants, (6) Solid Waste Management 

Grants, and (7) Section 306C Water and 

Waste Facility Loans and Grants to 

Alleviate Health Risks. 

5. Implement Sec. 6018 of the Farm 

Security and Rural Investment Act of 

2002 (Pub. L. 107–171). This change 

will allow the borrower or grant 

recipient to use property (real and 

personal) purchased or improved with 

the loan or grant funds or proceeds from 

the sale of property (real and personal) 

purchased with such funds, for another 

project or activity. Rural Development 

has included language to implement 

this provision in 7 CFR 1782.23. These 

provisions will also be applicable to 

Rural Development’s Business and 

Housing programs by adding § 1951.218 

to 7 CFR 1951, subpart E. 

Comments 

Rural Development published a 

proposed rulemaking in the Federal 

Register on November 15, 2004, 69 FR 

65546. One public comment was 

received; however, Rural Development 

did not receive any comments from 

outside Federal agencies. The one 

public comment received was in the 

form of a Web site entry. The comment 

pertained to the legislation authorizing 

the program, as follows: ‘‘Why should 

only rural areas get this taxpayer 

money? Certainly urban districts have 

just as many financial issues. I find this 

kind of legislation extremely 

discriminatory. A survey is unnecessary 

and wasteful of taxpayer dollars. There 

are 50 years of history of data facts—

there is no reason to survey. I would 

appreciate having sent to me a copy of 

the accomplishments of this little 

known agency for 2003.’’

Response: Water and Waste Disposal 

Loans and Grants are authorized by the 

Consolidated Farm and Rural 

Development Act (TITLE III OF THE 

AGRICULTURAL ACT OF 1961) (Pub. 

L. 87–128; 75 Stat. 294). Rural 

Development makes water and 

wastewater loans and grants in 

accordance with 7 CFR 1780. The 

Agency has posted the most recent 

Annual Report for Fiscal Year (FY) 2006 

at the following Web site address: 

http://www.usda.gov/rus/water/. Please 

view this report for an overview of the 

Water and Environmental Program and 

its accomplishments. Rural 

Development did not receive enough 

information in the comment to respond 

to the issue of a particular survey. No 

changes were made to the final 

regulation based on the comment 

received. However, changes were made 

to the regulation in § 1782.17. Review 

by the Agency of Circular No. A–129, 

issued by the Office of Management and 

Budget (OMB), led to the conclusion 

that subordination cannot be listed as a 

general option in its regulations. The 

Circular states that the Government’s 

claim should generally not be 

subordinated to the claims of other 

creditors since subordination increases 

the risk of loss to the Government. In a 

special circumstance, the Agency might 

seek a waiver of this requirement from 

OMB, but this would be on a case-bycase basis as dictated by the individual 

facts of the case. Therefore, 

subordination was removed as an option 

from § 1782.17. Also, the Agency 

determined that § 1782.17 lacked the 

criteria needed to make the 

determination that granting a parity lien 

is in the Government’s interest. The 

Agency has added such criteria to 

§ 1782.17. 

The Regulations 

Rural Development has completed a 

consolidation of regulations affecting 

WEP loans and grants. Prior to this rule 

becoming effective, WEP borrowers 

were affected, in part, by the following 

regulations: 

7 CFR part 1951, subpart A—Account 

Servicing Policies 

7 CFR part 1951, subpart D—Final 

Payment on Loans 

7 CFR part 1951, subpart E—Servicing 

of Community and Direct Business 

Programs Loans and Grants 

7 CFR part 1951, subpart F—Analyzing 

Credit Needs and Graduation of 

Borrowers 

7 CFR part 1951, subpart O—Servicing 

Cases Where Unauthorized Loan(s) or 

Other Financial Assistance Was 

Received—Community and Insured 

Business Programs 

7 CFR part 1955, subpart A—

Liquidation of Loans Secured by Real 


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Estate and Acquisition of Real and 

Chattel Property 

7 CFR part 1955, subpart B—

Management of Property 

7 CFR part 1955, subpart C—Disposal of 

Inventory Property 

7 CFR part 1956, subpart C—Debt 

Settlement—Community and 

Business Programs 

All of the above-mentioned 

regulations include regulatory 

provisions of other programs of the 

former FmHA such as farm loans, 

business and industrial loans, single 

family housing, and multi-family 

housing. Rural Development is 

consolidating all regulatory actions in 

the above-mentioned regulations which 

affect WEP loan and grant servicing into 

one new regulation—7 CFR part 1782. 

This consolidated regulation will clarify 

for our borrowers and grantees the 

available servicing tools and the 

requirements to utilize these tools. 

Additionally, Rural Development is 

removing all administrative processes 

from the regulations, leaving only 

regulatory actions that impact the 

public. This streamlining will make the 

regulation more concise and much 

easier to read and understand. A Staff 

Instruction will be issued that will 

include the administrative portion, 

which outlines agency internal 

processing procedures. The Staff 

Instruction will be available to the 

public upon request at no cost. 

Conclusion 

Rural Development believes the 

consolidation and streamlining of the 

regulations for this program will 

maximize the ability of the borrowers to 

use and understand the available 

servicing tools under this program. This 

consolidation is consistent with the 

Administration’s efforts to streamline 

Government functions, improve the 

efficiency and effectiveness of 

Government activities, and strive to be 

more borrower-friendly. This effort will 

enable Rural Development to reduce 

regulations, streamline operations, and 

provide servicing assistance with fewer 

staff resources. 

List of Subjects 

7 CFR Part 1782 

Accounting, Appeal procedures, 

Auditing, Debts, Delinquency, Grant 

programs—Agriculture, Insurance, Loan 

programs—Agriculture. 

7 CFR Part 1951 

Accounting, Credit, Grant programs—

Agriculture, Loan Programs—

Agriculture, Low and moderate-income 

housing loans—Rent subsidies, 

Reporting and recordkeeping 

requirements, Rural areas. 

7 CFR Part 1955 

Government property, Government 

property management, Surplus 

government property. 

7 CFR Part 1956 

Accounting, Loan programs—

Agriculture, Rural areas. 

■ Therefore, chapters XVII and XVIII of 

title 7, Code of Federal Regulations, are 

amended as follows: 

CHAPTER XVII—RURAL UTILITIES 

SERVICE, DEPARTMENT OF 

AGRICULTURE 

■ 1. Part 1782 is added to read as 

follows: 

PART 1782—SERVICING OF WATER 

AND WASTE PROGRAMS 

Sec. 

1782.1 Purpose. 

1782.2 Objectives. 

1782.3 Definitions. 

1782.4 Availability of forms and 

regulations. 

1782.5 Nondiscrimination. 

1782.6 [Reserved]. 

1782.7 Grants. 

1782.8 Payments. 

1782.9 Environmental requirements. 

1782.10 Audit requirements. 

1782.11 Refinancing requirements. 

1782.12 Sale or exchange of security 

property. 

1782.13 Transfer of security and 

assumption of loans. 

1782.14 Protection of service areas—7 

U.S.C. 1926(b). 

1782.15 Mergers and consolidations. 

1782.16 Defeasance of Agency 

indebtedness. 

1782.17 Parity lien. 

1782.18 [Reserved]. 

1782.19 Third party agreements. 

1782.20 Debt settlement. 

1782.21 [Reserved]. 

1782.22 Exception authority. 

1782.23 Use of Rural Development loans 

and grants for other purposes. 

1782.24–1782.99 [Reserved]. 

1782.100 OMB control number. 

Authority: 5 U.S.C. 301; 7 U.S.C. 1981; 16 

U.S.C. 1005. 

§ 1782.1 Purpose. 

This part outlines the Rural Utilities 

Service’s (RUS), an agency delivering 

the United States Department of 

Agriculture’s (USDA) Rural 

Development Utilities Programs, 

hereinafter referred to as Rural 

Development and/or Agency, policies 

and procedures for servicing direct and 

insured Water and Waste Disposal 

(WWD) loans and grants; Watershed 

loans and advances; Resource 

Conservation and Development loans; 

Technical Assistance and Training 

grants; Emergency Community Water 

Assistance grants; Solid Waste 

Management grants; and section 306C 

WWD loans and grants. 

§ 1782.2 Objectives. 

Loan and grant servicing is provided 

by Rural Development in order to assist 

recipients in complying with the 

established objectives and requirements 

for loans and grants, repaying loans on 

schedule, acting in accordance with any 

necessary agreements, and protecting 

Rural Development’s financial interest. 

Servicing by Rural Development 

includes, but is not limited to, the 

review of budgets, management reports, 

audits, and financial statements; 

performing operational inspections; 

providing, arranging, or recommending 

technical assistance; evaluating 

environmental impacts of proposed 

actions by the borrower; and performing 

civil rights compliance and graduation 

reviews. 

§ 1782.3 Definitions. 

The following definitions apply to 

this part: 

Acceleration. A written notice 

informing the borrower that the total 

unpaid principal and interest is due and 

payable immediately. 

Adjustment. Satisfaction of a debt, 

including release of liability, when 

acceptance by the Agency is 

conditioned upon completion of 

payment of the adjusted amount at a 

specific time or times, with or without 

the payment of any consideration when 

the adjustment offer is approved. An 

adjustment is not a final settlement until 

all payments under the adjustment 

agreement have been made. 

Administrator. Administrator of the 

Rural Utilities Service, an agency 

delivering the United States Department 

of Agriculture’s Utilities Programs. 

Agency. The Rural Utilities Service, 

an Agency delivering the United States 

Department of Agriculture’s Rural 

Development Utilities Programs, or any 

employee acting on its behalf in 

accordance with appropriate delegations 

of authority. 

Assumption of debt. Agreement by 

one party to legally bind itself to pay the 

debt incurred by another. 

Borrower. Recipient of Agency or 

predecessor Agency loan assistance. 

Cancellation. Final discharge of debt 

with a release of liability. 

Charge-off. Write off of a debt and 

termination of servicing activity without 

release of liability. A charge-off is a 

decision by the Agency to remove debt 

from Agency receivables, however, 

future payments may be received. 


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Compromise. Satisfaction of a debt 

including a release of liability by 

accepting a lump-sum payment of less 

than the total amount owed. 

Defeasance. Defeasance is the use of 

invested proceeds from a new bond 

issue to repay outstanding bonds in 

accordance with the repayment 

schedule of the outstanding bonds. The 

new issue supersedes the contractual 

agreements from the prior issue. 

Disposition of facility. Relinquishing 

control of a facility to another entity. 

False information. Information, 

known by the applicant to be incorrect, 

provided with the intent to obtain 

benefits which would not have been 

obtainable based on correct information. 

Government. The United States of 

America, acting through the Agency. 

USDA, Rural Development and Agency 

may be used interchangeably 

throughout this part. 

Grantee. Recipient of Agency or 

predecessor Agency grant assistance, 

technical assistance, or services. 

Letter of Conditions. A written 

document that describes the conditions 

which the borrower and/or grantee must 

meet for funds to be advanced and the 

loan and/or grant to be closed. 

Liquidation. Satisfaction of a debt 

through the sale of a borrower’s assets 

and discharge of liabilities. 

Parity Lien. A lien having an equal 

lien position to another lender’s lien on 

a borrower’s asset. 

Reasonable rates and terms. The 

prevailing commercial rates and terms 

in the industry that borrowers are 

expected to pay when borrowing for 

similar purposes and periods of time. 

Rural Development. The mission area 

of the Under Secretary for Rural 

Development. Rural Development State 

and local offices administer the water 

and waste programs on behalf of the 

Agency. 

Rural Utilities Service (RUS). An 

Agency of the United States Department 

of Agriculture’s Rural Development 

mission area established pursuant to 

section 232 of the Department of 

Agriculture Reorganization Act of 1994 

(Pub. L. 103–354). 

Servicing office. The USDA office 

which maintains the official file of the 

borrower or grantee and is responsible 

for the routine servicing of the loan and/ 

or grant account. 

Servicing official. USDA official who 

has been delegated loan and grant 

approval and servicing authorities 

subject to any dollar limitations within 

applicable programs. 

Settlement. Compromise, adjustment, 

cancellation, or charge-off of a debt 

owed USDA. The term ‘‘settlement’’ is 

used for convenience in referring to 

compromise, adjustment, cancellation, 

or charge-off action, individually or 

collectively. 

Unliquidated obligations. Obligated 

loan or grant funds that have not been 

advanced. 

USDA. United States Department of 

Agriculture. 

Voluntary conveyance. A method by 

which title to security is voluntarily 

transferred to the Government. 

§ 1782.4 Availability of forms and 

regulations. 

Information about the availability of 

forms, regulations, bulletins, and 

procedures referenced in this chapter 

are available in any office of Rural 

Development USDA, Washington, DC 

20250–1500 or at the Web site http:// 

www.usda.gov/rus/water. 

§ 1782.5 Nondiscrimination. 

Each instrument of conveyance 

required for a transfer, assumption, sale 

of facility, or other servicing action 

under this subpart will comply with 

Title VI of the Civil Rights Act of 1964 

(Pub. L. 88–352), Title IX of the 

Education Amendments of 1972 (Pub. L. 

92–318), section 504 of the 

Rehabilitation Act of 1973 (Pub. L. 93–

112), and other Federal statutes and 

regulations issued pursuant thereto that 

prohibit discrimination on the basis of 

race, color, national origin, handicap, 

religion, age, or sex in programs or 

activities receiving Federal financial 

assistance. Such provisions apply for as 

long as the property continues to be 

used for the same or similar purposes 

for which the Federal assistance was 

extended, or for so long as the purchaser 

owns it, whichever is later. 

§ 1782.6 [Reserved] 

§ 1782.7 Grants. 

Servicing actions relating to Agency 

grants are governed by the provisions of 

several regulations and executive 

orders, including, but not limited to, 7 

CFR parts 3015, 3016, 3017, 3018, 3019, 

3021, and 3052 as applicable, and 

Executive Order (E.O.) 12803. Grantees 

remain responsible for property 

acquired with grant funds in accordance 

with terms of a grant agreement and 

applicable regulations. 

§ 1782.8 Payments. 

Payments will be applied in 

accordance with the terms of the debt 

instrument. Information on nontypical 

payments can be obtained from the 

Servicing official or office. All new 

borrowers will use pre-authorized debits 

as required in their Letter of Conditions. 

§ 1782.9 Environmental requirements. 

Servicing actions involving lease or 

sale of Agency-owned property will be 

reviewed for compliance with 7 CFR 

part 1794 as required in § 1794.3. The 

appropriate environmental review will 

be completed prior to approval of the 

servicing action. 

§ 1782.10 Audit requirements. 

Audits for loans will be required in 

accordance with § 1780.47 of this 

chapter. If the borrower becomes 

delinquent or is experiencing problems, 

the servicing official will require an 

audit or other documentation deemed 

necessary to resolve the delinquency. 

The provisions of 7 CFR 3052 address 

audit requirements for recipients of 

Federal grants. 

§ 1782.11 Refinancing requirements. 

If at any time it appears to the 

Government that the borrower is able to 

refinance the amount of the 

indebtedness then outstanding, in 

whole or in part, by obtaining a loan for 

such purposes from responsible 

cooperative or private credit sources, at 

reasonable rates and terms, the borrower 

will, upon request of the Government, 

apply for and accept such loan in 

sufficient amount to repay the 

Government and will take all such 

actions as may be required in 

connection with such loan. 

§ 1782.12 Sale or exchange of security 

property. 

A cash sale of all or a portion of a 

borrower’s assets or an exchange of 

security property may be approved 

subject to the conditions set forth in this 

section. 

(a) Approval conditions. Approval 

may be given when the servicing official 

determines that: 

(1) The consideration is for the full 

amount of the debt or the present fair 

market value as determined by an 

appraisal completed by a qualified Rural 

Development employee or an 

independent appraiser as determined 

appropriate by the approval official; 

(2) The sale or exchange will not 

prevent carrying out the purpose of the 

loan; 

(3) The remaining property is 

adequate security for the loan and the 

transaction will not adversely affect the 

Agency’s security position; 

(4) If the property to be sold or 

exchanged will be used for similar 

purposes that the loan was made, the 

purchaser will: 

(i) Execute Form RD 400–4, 

‘‘Assurance Agreement.’’ The 

instrument of conveyance will contain 

the civil rights covenant referenced in 7 

CFR 1901.202(e); and 


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(ii) Provide the Agency with a written 

agreement assuming all rights and 

obligations of the original borrower, and 

(5) Proceeds remaining after paying 

any reasonable and necessary selling 

expenses are to be used for one or more 

of the following purposes: 

(i) To pay Agency debt, pay on debts 

secured by a prior lien, and pay on 

debts secured by a parity or subsequent 

lien if it is to the Agency’s advantage; 

(ii) To purchase or acquire property 

more suited to the borrower’s needs, 

providing the Agency’s security position 

is maintained; and 

(iii) To develop or enlarge the facility 

if necessary to improve the borrower’s 

debt-paying ability, place the operation 

on a sounder financial basis, or further 

the loan objectives and purposes. 

(b) Sale of assets financed with 

Agency grants. The requirements for the 

sale or disposition of assets financed 

with Agency grants are determined by 

the terms of the grant agreement, 7 CFR 

parts 3015, 3016, and 3019, and E.O. 

12803, as applicable. 

(c) Release from liability. If a borrower 

can no longer meet the objectives of the 

loan, the property may be sold. If the 

full amount of the borrower’s debt is 

paid or assumed, the State Director may 

release the borrower from liability. 

§ 1782.13 Transfer of security and 

assumption of loans. 

It is the Agency’s policy to approve 

transfers and assumptions to transferees 

that will continue the original purpose 

of the loan. Assistant Administrator 

written concurrence is required when 

the transfer exceeds the State Director’s 

loan approval authority. The transfer 

will be approved in accordance with the 

following requirements: 

(a) General requirements for 

transferees. The fulfillment of the 

following requirements for transfers will 

be determined by the approval official, 

in his or her discretion: 

(1) The transferees must meet the 

eligibility requirements of 7 CFR part 

1780 and provide the same information 

required in 7 CFR part 1780, subpart B, 

for application processing. 

(2) The transfer will not be 

disadvantageous to the Government as 

determined by the approval official. 

(3) If the Agency debt(s) exceeds the 

present market value of the security as 

determined by an appraisal, the 

transferee will assume an amount at 

least equal to the present market value. 

(4) The Agency must concur in plans 

for disposition of funds in any reserve 

account, including project construction 

bank accounts. A reserve account may 

be considered as a transferable asset. 

(5) The transferee will assume all of 

the borrower’s responsibilities regarding 

loans. The transferee will also agree to 

accept the original loan conditions plus 

any conditions set forth by the Agency 

with regard to the transfer. 

(6) A current appraisal will be 

completed to establish the present 

market value of the security when the 

full debt is not being assumed. 

(7) There must be no lien, judgement, 

or similar claims of other parties against 

the Agency security being transferred 

unless the transferee is willing to accept 

such claims. The Agency must also 

determine that the claims will not 

prevent the transferee from repaying the 

Agency debt, meeting all operating and 

maintenance costs, and maintaining 

required reserves. The written consent 

of any other lienholder will be obtained 

where required. 

(8) A letter of conditions establishing 

requirements to be met in connection 

with the transfer will be issued, and the 

transferee will be required to execute 

Form RD 1942–46, ‘‘Letter of Intent to 

Meet Conditions,’’ prior to closing of the 

transfer. 

(9) The transferee will obtain 

insurance according to Agency 

requirements. 

(10) The effective date of the transfer 

is the date the transfer is closed, which 

is the same date Form RD 1951–15, 

‘‘Community Programs Assumption 

Agreement,’’ or other appropriate 

assumption agreement which is 

executed and delivered by all necessary 

parties. 

(11) Title to all assets will be 

conveyed from the transferor to the 

transferee unless all parties concerned, 

including the Agency, agree upon other 

arrangements. All instruments of 

conveyance will contain the necessary 

nondiscrimination covenant as referred 

to in § 1782.5. 

(12) If the transfer and assumption is 

to one or more members of the 

borrower’s organization, there must not 

be a loss to the Government. 

(13) The State Director is authorized 

to approve transfers to eligible 

transferees at the same interest rate as 

on the borrower’s note(s) or bond(s). 

The maturity of the debt instrument for 

the assumed debt may not exceed the 

lesser of the repayment period 

authorized in 7 CFR part 1780 for a 

‘‘new’’ loan or the expected life of the 

facility. 

(14) Agency National Office 

concurrence is required for transfers not 

in compliance with paragraphs (a)(1) 

through (13) of this section. 

(b) Loan requirements for eligible 

transferees. If a loan is evidenced and 

secured by a note and lien on real or 

chattel property, Form RD 1951–15, or 

other appropriate assumption agreement 

will be executed by the transferee. If a 

bond secures a loan, transfer documents 

will be developed by bond counsel and 

approved by the Office of the General 

Counsel (OGC), USDA. 

(1) Loans being transferred and 

assumed may be combined when the 

security is the same, new terms are 

being provided, a new debt instrument 

will be issued, and the loans have the 

same interest rate and are for the same 

purpose. If applicable, 7 CFR part 1780 

will govern the preparation of any new 

debt instruments required. 

(2) A loan may be made in connection 

with a transfer if the transferee meets all 

eligibility and other requirements for 

the kind of loan being made. Such a 

loan will be considered as a separate 

loan and must be evidenced by a 

separate debt instrument. However, it is 

permissible to have one authorizing 

loan resolution or ordinance if 

permitted by State statutes. 

(3) Any development funds remaining 

in a bank account that are not refunded 

to the Agency will be transferred to a 

bank account for the transferee. This 

will occur simultaneously with the 

closing of the transfer, and the funds 

will be used in completing planned 

development. 

(c) Release from liability. Transferors 

may be released from liability when 

their debt is paid in full or when the 

debt is settled in accordance with 

§ 1782.20 of this part. 

(d) Transfer of facility financed with 

Agency grants. The requirements for the 

sale or disposition of assets financed 

with Agency grants are determined by 

the terms of the grant agreement, 7 CFR 

parts 3015, 3016, and 3019, and E.O. 

12803, as applicable. 

§ 1782.14 Protection of service areas—7 

U.S.C. 1926(b). 

(a) 7 U.S.C. 1926(b) was enacted to 

protect the service area of Agency 

borrowers with outstanding loans, or 

those loans sold in the sale of assets 

authorized by the ‘‘Joint Resolution 

Making Continuing Appropriations for 

the Fiscal Year 1987, Pub. L. 99–591, 

100 Stat. 3341 (1986),’’ from loss of 

users due to actions or activities of other 

entities in the service area of the Agency 

financed system. Without this 

protection, other entities could extend 

service to users within the service area, 

and thereby undermine the purpose of 

the congressionally mandated water and 

waste loan and grant programs and 

jeopardize the borrower’s ability to 

repay its Agency debt. 

(b) Responsibility for initiating action 

in response to those actions prohibited 

by 7 U.S.C. 1926(b) rests with the 

borrower. 


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§ 1782.15 Mergers and consolidations. 

Mergers and consolidations will be 

processed the same as a transfer and 

assumption, although approvals by the 

Agency will give consideration to the 

differences under the applicable law 

regarding the type of transaction under 

consideration and the unique facts 

involved in each transaction. Mergers 

occur when two or more entities 

combine in such a manner that only one 

remains in existence. Consolidations 

occur when two or more entities 

combine to form a new consolidated 

entity, and the original entities cease to 

exist. In both mergers and 

consolidations, the surviving or 

emerging entity acquires the assets and 

assumes the liabilities of the entity or 

entities that ceased to exist. 

§ 1782.16 Defeasance of Agency 

indebtedness. 

Defeasance, or amending outstanding 

loan instruments and agreements to 

permit defeasance of Agency debt 

instruments, is prohibited. 

§ 1782.17 Parity lien. 

In order for the Agency to agree to a 

parity lien position, the borrower must 

submit a written request to the servicing 

office. 

(a) The written request for parity must 

contain the following items: 

(1) An explanation of the purpose of 

the request for parity; amount of loan for 

which parity is requested; description of 

security property; type of security 

instrument; name and address of 

financial institution requesting the 

transaction; and other information 

determined necessary by the servicing 

official to evaluate the request. 

(2) Current financial statements or an 

audit, if available or determined 

necessary by the servicing official. 

(3) An annual operating budget which 

projects income and expenses for a 

typical year’s operation. If construction 

is involved, the budget must be 

projected through the first full year of 

operation following completion of the 

planned improvements. 

(4) A copy of the proposed security 

instrument. 

(5) A certification from the borrower 

that the Agency debt cannot be 

refinanced at reasonable rates and 

terms. 

(6) An appraisal, when the primary 

security is real estate or determined 

necessary by the servicing official in 

order to determine the adequacy of loan 

security or repayment ability. 

(7) A certification that any 

development work will comply with 

subpart C of part 1780 of this chapter. 

(b) Requests for parity must comply 

with requirements of paragraph (a) of 

this section, requirements as specified 

in the bond or loan documents, the 

requirements as specified in 7 CFR part 

1780, subpart D, and as provided in 

applicable State law. 

(c) If the borrower has met all of the 

requirements in paragraphs (a) and (b) 

of this section and the proposal is 

determined to be in the Government’s 

interest, the Agency will then grant 

approval of the borrower’s request for 

parity. The following factors will be 

considered in assessing whether the 

request is in the Government’s interest: 

(1) The value of the added assets 

compared with the amount of new debt 

to be secured; 

(2) The value of the assets already 

pledged under the security documents, 

and any effects of the proposed 

transaction on the value of those assets; 

(3) The ratio of the total outstanding 

debt secured under the security 

documents to the value of all assets 

pledged as security under the security 

documents; 

(4) The borrower’s ability to repay its 

debt owed to the Government; 

(5) The overall financial viability of 

the borrower; 

(6) The borrower’s current 

relationship with the Agency (i.e. no 

defaults under the loan documents); 

(7) Such other factors that may be 

relevant in individual cases, as 

determined by the Agency. 

§ 1782.18 [Reserved] 

§ 1782.19 Third party agreements. 

The State Director may authorize 

third party operation, maintenance, and 

management of an Agency financed 

facility. The borrower’s attorney must 

review the contract, management 

agreement, written lease, or other third 

party agreement and issue an opinion to 

the Agency as to their legal sufficiency. 

The borrower shall retain the legal 

authority necessary for owning, 

constructing, operating, and 

maintaining the facility. 

§ 1782.20 Debt Settlement. 

Pursuant to 7 U.S.C. 1981, this section 

prescribes policies for debt settlement of 

Water and Waste Disposal loans; 

Watershed loans and advances; 

Resource Conservation and 

Development loans; and 306 (c) Water 

and Waste Facility loans. Within the 

Omnibus Consolidated Rescissions and 

Appropriations Act of 1996 (Public Law 

104–134) is the Debt Collection 

Improvement Act of 1996. This law 

provides that any non-tax debt or claim 

owed to the United States that has been 

delinquent for a period of 180 days shall 

be turned over to the Secretary of the 

Treasury for appropriate action to 

collect or terminate collection actions 

on the debt or claim. Debt that is in 

litigation or foreclosure, with a 

collection agency or designated Federal 

debt collection center, or that will be 

disposed of under an asset sales 

program, is exempt from transfer to the 

Secretary. 

(a) General requirements for debt 

settlement. (1) The debt or any 

extension thereof on which settlement is 

requested must be due and payable. The 

debt will be due and payable either 

under the terms of the note or other 

instrument, or by acceleration, unless 

the debt is to be cancelled without 

application under paragraph (e)(2) of 

this section or charged off under 

paragraph (f) of this section. 

(2) Normally, all security will be 

disposed of prior to the date of 

application for debt settlement unless it 

is necessary to abandon security 

through the debt settlement process. In 

such cases, debt settlement may proceed 

if the servicing official determines that 

further collection efforts would be 

ineffective, uneconomical, and not in 

the best interests of the Government. 

(3) Debtors will not be permitted to 

sell security and use the proceeds as 

part or all of a compromise/adjustment 

debt settlement offer. 

(4) Requests for debt settlement will 

consist of Form RD 1956–1 

‘‘Application For Settlement of 

Indebtedness,’’ current financial 

information, description and estimated 

market value of collateral, and status of 

operation (i.e., number of users, 

compliance with environmental issues, 

etc.). 

(5) Office of General Counsel (OGC) 

advice on compliance with State or 

Federal statutes that may affect the debt 

settlement action must be requested. 

(b) Debts ineligible for settlement. 

Debts will not be settled if: 

(1) Referral to the Office of Inspector 

General and/or to OGC is contemplated 

or pending because of suspected 

criminal violation, 

(2) Civil action to protect the interest 

of the Government is contemplated or 

pending, 

(3) An investigation for suspected 

fiscal irregularity is contemplated or 

pending, or 

(4) The debtor requests settlement of 

a claim that has been referred to or a 

judgment obtained by the United States 

Attorney. The settlement offer and any 

related payment must be submitted 

directly to the United States Attorney 

for consideration. 

(c) Types of debt settlement. 

Typically, debt settlement will be 

accomplished through compromise/ 


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adjustment, charge-off, or cancellation. 

Any debt remaining after the security 

has been liquidated, by sale or transfer, 

will be cancelled if there are no other 

assets from which to collect the debt. 

The servicing official will proceed with 

advice from OGC and the National 

Office, as required. 

(d) Compromise and adjustment. 

Debts may be compromised or adjusted 

and security retained by the debtor, 

provided: 

(1) The debtor is unable to pay the 

indebtedness in full, 

(2) The debtor has offered an amount 

equal to the present fair market value of 

all security or facility financed, and 

(3) The debtor has offered any 

additional amount that the debtor is 

able to pay. 

(e) Cancellation. Non-judgment debts, 

regardless of the amount, may be 

cancelled with or without application 

by the debtor. 

(1) With application by the debtor. 

Debts may be cancelled upon 

application of the debtor, subject to the 

following conditions: 

(i) The servicing official furnishes a 

favorable recommendation concerning 

the cancellation; 

(ii) There is no known security for the 

debt and the debtor has no other assets 

from which the debt could be collected; 

(iii) The debtor is unable to pay any 

part of the debt, and has no reasonable 

prospect of being able to do so; and 

(iv) The debt or any extension thereof 

is due and payable under the terms of 

the note or other instrument or due to 

acceleration by written notice prior to 

the date of application. 

(2) Without application by debtor. 

Debts may be cancelled upon a 

favorable recommendation of the 

servicing official in the following 

instances: 

(i) Debtors discharged in bankruptcy. 

If there is no security for the debt, debts 

discharged in bankruptcy shall be 

cancelled by the use of Form RD 1956–

1. A copy of the Bankruptcy Court’s 

Discharge Order must be attached. 

(ii) Impractical to obtain debtor’s 

signature. Debts may be cancelled if it 

is impractical to obtain a signed 

application and the requirements of 

paragraphs (e)(1) of this section are met. 

Form RD 1956–1 will document the 

specific reason(s) why it was impossible 

or impracticable to obtain the signature 

of the debtor. If the debtor refused to 

sign the application, the reason(s) 

should be documented. 

(f) Charge-off—(1) Judgment debts. 

Judgment debts, regardless of the 

amount, may be charged off without the 

debtor’s signature upon a favorable 

recommendation of the servicing official 

provided: 

(i) The United States Attorney’s file is 

closed, and 

(ii) The requirements of paragraph 

(e)(2)(ii) of this section, if applicable, 

have been met, or 2 years have elapsed 

since any collections were made on the 

judgment. The debtor must also have no 

equity in the property subject to the lien 

or upon which a lien can be obtained. 

(2) Non-judgment debts. Debts that 

cannot be settled under other sections of 

this part may be charged off without the 

debtor’s signature upon a favorable 

recommendation of the servicing official 

in the following instances: 

(i) When OGC advises in writing that 

the claim is legally without merit or that 

evidence necessary to prove the claim in 

court cannot be provided; or 

(ii) When there is no known security 

for the debt, the debtor has no other 

assets from which the debt could be 

collected, and the debtor: 

(A) Is unable to pay any part of the 

debt and has no reasonable prospect of 

being able to do so; or 

(B) Is able to pay part or all of the debt 

but refuses to do so, and OGC provides 

an opinion to the effect that the 

Government cannot enforce collection 

of a significant amount from assets or 

income. 

§ 1782.21 [Reserved] 

§ 1782.22 Exception authority. 

The Administrator may, in individual 

cases, make an exception to any 

requirement or provision of this part 

which is not inconsistent with the 

authorizing statute or other applicable 

law and is determined to be in the 

Government’s interest. Requests for 

exceptions must be made in writing by 

the State Director and supported with 

documentation to explain the adverse 

effect on the Government’s interest, 

propose alternative course(s) of action, 

and show how the adverse affect will be 

eliminated or minimized if the 

exception is granted. The exception 

decision will be documented in writing, 

signed by the Administrator, and 

retained in the files. 

§ 1782.23 Use of Rural Development loans 

and grants for other purposes. 

(a) If, after making a loan or a grant, 

the Administrator determines that the 

circumstances under which the loan or 

grant was made have sufficiently 

changed to make the project or activity 

for which the loan or grant was made 

available no longer appropriate, the 

Administrator may allow the borrower 

or grantee to use property (real and 

personal) purchased or improved with 

the loan or grant funds, or proceeds 

from the sale of property (real and 

personal) purchased with such funds, 

for another project or activity that: 

(1) Will be carried out in the same 

area as the original project or activity; 

(2) Meets the criteria for a loan or 

grant described in section 381E(d) of the 

Consolidated Farm and Rural 

Development Act (Pub. L. 87–128), as 

amended; and 

(3) Satisfies such additional 

requirements as are established by the 

Administrator. 

(b) If the new use of the property is 

under the authority of another USDA 

Agency Administrator, the other 

Administrator will be consulted on 

whether the new use will meet the 

criteria of the other program. Since the 

new project or activity must be carried 

out in the same area as the original 

project or activity, a new rural area 

determination will not be necessary. 

(c) Borrowers and grantees that wish 

to use the proceeds for other purposes 

may make their request through the 

appropriate Rural Development State 

Office. Permission to use this option 

will be exercised on a case-by-case-basis 

on applications submitted through the 

State Office to the Administrator for 

consideration. If the proposal is 

approved, the Administrator will issue 

a memorandum to the State Director 

outlining the conditions necessary to 

complete the transaction. 

§ 1782.24–1782.99 [Reserved] 

§ 1782.100 OMB Control Number. 

The information collection 

requirements in this part are approved 

by the Office of Management and 

Budget (OMB) and assigned OMB 

Control Number 0572–0137. 

CHAPTER XVIII—RURAL HOUSING 

SERVICE, RURAL BUSINESS—

COOPERATIVE SERVICE, RURAL UTILITIES 

SERVICE, AND FARM SERVICE AGENCY, 

DEPARTMENT OF AGRICULTURE 

PART 1951—SERVICING AND 

COLLECTIONS 

■ 2. The authority citation for part 1951 

continues to read as follows: 

Authority: 5 U.S.C. 301; 7 U.S.C. 1932 

Note, 7 U.S.C. 1989; 31 U.S.C. 3716, 42 

U.S.C. 1480. 

Subpart A—Account Servicing Policies 

■ 3. Amend § 1951.1 by adding the 

following sentence to the end of the 

section: 

§ 1951.1 Purpose. 

* * * This subpart does not apply to 

Water and Waste Programs of the Rural 

Utilities Service, Watershed loans, or 


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Resource Conservation and 

Development loans, which are serviced 

under part 1782 of this title. 

Subpart D—Final Payment on Loans 

■ 4. Revise § 1951.151 to read as 

follows: 

§ 1951.151 Purpose. 

This subpart prescribes 

authorizations, policies, and procedures 

of the Farm Service Agency (FSA), Rural 

Housing Service (RHS), and Rural 

Business-Cooperative Service (RBS), 

herein referred to as ‘‘Agency,’’ for 

processing final payment on all loans. 

This subpart does not apply to Direct 

Single Family Housing customers or to 

the Rural Rental Housing, Rural 

Cooperative Housing, or Farm Labor 

Housing Program of the RHS. This 

subpart does not apply to Water and 

Waste Programs of the Rural Utilities 

Service, Watershed loans, and Resource 

Conservation and Development loans, 

which are serviced under part 1782 of 

this title. 

Subpart E—Servicing of Community 

and Direct Business Programs Loans 

and Grants 

■ 5. Revise § 1951.201 to read as 

follows: 

§ 1951.201 Purposes. 

This subpart prescribes the Rural 

Development mission area policies, 

authorizations, and procedures for 

servicing the following programs: 

Community Facility loans and grants, 

Rural Business Enterprise/Television 

Demonstration grants; loans for Grazing 

and other shift-in-land-use projects; 

Association Recreation loans; 

Association Irrigation and Drainage 

loans; Direct Business loans; Economic 

Opportunity Cooperative loans; Rural 

Renewal loans; Energy Impacted Area 

Development Assistance Program 

grants; National Nonprofit Corporation 

grants; System for Delivery of Certain 

Rural Development Programs panel 

grants; in part 4284 of this title, Rural 

and Cooperative Development Grants, 

Value-Added Producer Grants, and 

Agriculture Innovation Center Grants. 

Rural Development State Offices act on 

behalf of the Rural Business-Cooperative 

Service and the Farm Service Agency as 

to loan and grant programs formerly 

administered by the Farmers Home 

Administration and the Rural 

Development Administration. Loans 

sold without insurance to the private 

sector will be serviced in the private 

sector and will not be serviced under 

this subpart. The provisions of this 

subpart are not applicable to such loans. 

Future changes to this subpart will not 

be made applicable to such loans. This 

subpart does not apply to Water and 

Waste Programs of the Rural Utilities 

Service, Watershed loans, and Resource 

Conservation and Development Loans, 

which are serviced under part 1782 of 

this title. 

■ 6. Add § 1951.218 to read as follows: 

§ 1951.218 Use of Rural Development 

loans and grants for other purposes. 

(a) If, after making a loan or a grant, 

the Administrator determines that the 

circumstances under which the loan or 

grant was made have sufficiently 

changed to make the project or activity 

for which the loan or grant was made 

available no longer appropriate, the 

Administrator may allow the loan 

borrower or grant recipient to use 

property (real and personal) purchased 

or improved with the loan or grant 

funds, or proceeds from the sale of 

property (real and personal) purchased 

with such funds, for another project or 

activity that: 

(1) Will be carried out in the same 

area as the original project or activity; 

(2) Meets the criteria for a loan or 

grant described in section 381E(d) of the 

Consolidated Farm and Rural 

Development Act, as amended; and 

(3) Satisfies such additional 

requirements as are established by the 

Administrator. 

(b) For the purpose of this section, 

Administrator means the Administrator 

of the Rural Housing Service or Rural 

Business-Cooperative Service that has 

the delegated authority to administer 

the loan or grant program that covers the 

property or the proceeds from the sale 

of property proposed to be used in 

another way. 

(c) If the new use of the property is 

under the authority of another 

Administrator, the other Administrator 

will be consulted on whether the new 

use will meet the criteria of the other 

program. Since the new project or 

activity must be carried out in the same 

area as the original project or activity, a 

new rural area determination will not be 

necessary. 

(d) Borrowers and grantees that wish 

to take advantage of this option may 

make their request through the 

appropriate Rural Development State 

Office. Permission to use this option 

will be exercised on a case-by-case-basis 

on applications submitted through the 

State Office to the Administrator for 

consideration. If the proposal is 

approved, the Administrator will issue 

a memorandum to the State Director 

outlining the conditions necessary to 

complete the transaction. 

Subpart F—Analyzing Credit Needs 

and Graduation of Borrowers 

■ 7. Revise § 1951.251 to read as 

follows: 

§ 1951.251 Purpose. 

This subpart prescribes the policies to 

be followed when analyzing a direct 

borrower’s need for continued Agency 

supervision, further credit, and 

graduation. All loan accounts will be 

reviewed for graduation in accordance 

with this subpart, with the exception of 

Guaranteed, Rural Development Loan 

Funds, and Rural Rental Housing loans 

made to build or acquire new units 

pursuant to contracts entered into on or 

after December 15, 1989, and 

Intermediary Relending Program loans. 

The term ‘‘Agency’’ used in this subpart 

refers to the Farm Service Agency 

(FSA), Rural Housing Service (RHS), or 

Rural Business-Cooperative Service 

(RBS), depending upon the loan 

program discussed herein. This subpart 

does not apply to RHS direct single 

family housing (SFH) customers. In 

addition, this subpart does not apply to 

Water and Waste Programs of the Rural 

Utilities Service, Watershed loans, 

Resource Conservation and 

Development loans, which are serviced 

under part 1782 of this title. 

Subpart O—Servicing Cases Where 

Unauthorized Loan(s) or Other 

Financial Assistance Was Received—

Community and Insured Business 

Programs 

■ 8. Revise § 1951.701 to read as 

follows: 

§ 1951.701 Purpose. 

This subpart prescribes the policies 

and procedures for servicing 

Community and Business Program loans 

and/or grants made by Rural 

Development when it is determined that 

the borrower or grantee was not eligible 

for all or part of the financial assistance 

received in the form of a loan, grant, or 

subsidy granted, or any other direct 

financial assistance. It does not apply to 

guaranteed loans. Loans sold without 

insurance by Rural Development to the 

private sector will be serviced in the 

private sector and will not be serviced 

under this subpart. The provisions of 

this subpart are not applicable to such 

loans. Future changes to this subpart 

will not be made applicable to such 

loans. This subpart does not apply to 

Water and Waste Programs of the Rural 

Utilities Service, Watershed loans, and 

Resource Conservation and 

Development Loans, which are serviced 

under part 1782 of this title. 


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PART 1955—PROPERTY 

MANAGEMENT 

■ 9. The authority citation for part 1955 

continues to read as follows: 

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

42 U.S.C. 1480. 

Subpart A—Liquidation of Loans 

Secured by Real Estate and 

Acquisition of Real and Chattel 

Property 

■ 10. Revise § 1955.1 to read as follows: 

§ 1955.1 Purpose. 

This subpart delegates authority and 

prescribes procedures for the 

liquidation of loans to individuals and 

to organizations as identified in § 1955.3 

of this subpart. It pertains to the Farm 

Credit programs of the Farm Service 

Agency (FSA), Multi-Family Housing 

(MFH) and Community Facility (CF) 

programs of the Rural Housing Service 

(RHS), and direct programs of the Rural 

Business-Cooperative Service (RBS). 

Guaranteed RBS loans are liquidated 

upon direction from the Deputy 

Administrator, Business Programs, RBS. 

This subpart does not apply to RHS 

single family housing loans, or to CF 

loans sold without insurance in the 

private sector. These CF loans will be 

serviced in the private sector, and future 

revisions to this subpart no longer apply 

to such loans. This subpart does not 

apply to the Rural Rental Housing, Rural 

Cooperative Housing, or Farm Labor 

Housing Programs of RHS. In addition, 

this subpart does not apply to Water and 

Waste Programs of the Rural Utilities 

Service, Watershed loans, and Resource 

Conservation and Development loans, 

which are serviced under part 1782 of 

this title. 

Subpart B—Management of Property 

■ 11. Revise the introductory text of 

§ 1955.51 to read as follows: 

§ 1955.51 Purpose. 

This subpart delegates authority and 

prescribes policies and procedures for 

the Rural Housing Service (RHS), Rural 

Business-Cooperative Service (RBS), 

and Farm Service Agency (FSA), herein 

referred to as ‘‘Agency.’’ This subpart 

does not apply to RHS single family 

housing loans or community program 

loans sold without insurance to the 

private sector. These community 

program loans will be serviced by the 

private sector, and future revisions to 

this subpart no longer apply to such 

loans. This subpart does not apply to 

the Rural Rental Housing, Rural 

Cooperative Housing, or Farm Labor 

Housing Program of RHS. In addition, 

this subpart does not apply to Water and 

Waste Programs of the Rural Utilities 

Service, Watershed loans, and Resource 

Conservation and Development loans, 

which are serviced under part 1782 of 

this title. This subpart covers: 

* * * * * 

Subpart C—Disposal of Inventory 

Property 

■ 12. Revise § 1955.101 to read as 

follows: 

§ 1955.101 Purpose. 

This subpart delegates program 

authority and prescribes policies and 

procedures for the sale of inventory 

property including real estate, related 

real estate rights, and chattels. It also 

covers the granting of easements and 

rights-of-way on inventory property. 

Credit sales of inventory property to 

ineligible (non-program (NP)) 

purchasers will be handled in 

accordance with Subpart J of Part 1951 

of this chapter, except Community and 

Business Programs (C&BP) and MultiFamily Housing (MFH) which will be 

handled in accordance with this 

Subpart. In addition, credit sales of 

Single Family Housing (SFH) properties 

converted to MFH will be handled in 

accordance with this Subpart. This 

subpart does not apply to Single Family 

Housing (SFH) inventory property or to 

the Rural Rental Housing, Rural 

Cooperative Housing, and Farm Labor 

Housing Programs. In addition, this 

subpart does not apply to Water and 

Waste Programs of the Rural Utilities 

Service, Watershed loans, and Resource 

Conservation and Development loans, 

which are serviced under part 1782 of 

this title. 

PART 1956—DEBT SETTLEMENT 

■ 13. The authority citation for part 

1956 continues to read as follows: 

Authority: 5 U.S.C. 301; 7 U.S.C. 1981; 31 

U.S.C 3711; 42 U.S.C. 1480. 

Subpart C—Debt Settlement—

Community and Business Programs 

■ 14. Revise § 1956.101 to read as 

follows: 

§ 1956.101 Purpose. 

This subpart delegates authority and 

prescribes policies and procedures for 

debt settlement of Community Facility 

loans; Association Recreation loans; 

Rural Renewal loans; direct Business 

and Industry loans; and Shift-in-landuse loans. Settlement of Economic 

Opportunity Cooperative loans, Claims 

Against Third Party Converters, Nonprogram loans, Rural Business 

Enterprise/Television Demonstration 

Grants, Rural Development Loan Fund 

loans, Intermediary Relending Program 

loans, Nonprofit National Corporations 

Loans and Grants, and 601 Energy 

Impact Assistance Grants, is not 

authorized under independent statutory 

authority, and settlement under these 

programs is handled pursuant to the 

Federal Claims Collection Joint 

Standards, 4 CFR parts 101–105, as 

described in § 1956.147 of this subpart. 

In addition, this subpart does not apply 

to Water and Waste Programs of the 

Rural Utilities Service, Watershed loans, 

and Resource Conservation and 

Development loans, which are serviced 

under part 1782 of this title. 

Dated: September 12, 2007. 

Thomas C. Dorr, 

Under Secretary, Rural Development. 

[FR Doc. 07–4756 Filed 9–27–07; 8:45 am] 

BILLING CODE 3410–15–P 

NUCLEAR REGULATORY 

COMMISSION 

10 CFR Parts 2 and 171 

RIN 3150–AI15 

NRC Size Standards; Revision 

Confirmation of Effective Date 

AGENCY: Nuclear Regulatory 

Commission. 

ACTION: Direct Final rule: Confirmation 

of effective date. 

SUMMARY: The Nuclear Regulatory 

Commission (NRC) is confirming the 

effective date of October 24, 2007, for a 

direct final rule that was published in 

the Federal Register on August 10, 2007 

(72 FR 44951). This direct final rule 

amended the NRC’s regulations 

concerning the size standard it uses to 

qualify an NRC licensee as a small 

entity under the Regulatory Flexibility 

Act and has made the same change to 

its annual fee rule. 

DATES: Effective Date: The effective date 

of October 24, 2007 is confirmed for this 

direct final rule. 

ADDRESSES: Documents related to this 

rulemaking, including comments 

received, may be examined at the NRC 

Public Document Room, Room O–1F23, 

11555 Rockville Pike, Rockville, MD 

20852. These same documents are 

available electronically at the NRC’s 

Electronic Reading Room at http:// 

www.nrc.gov/NRC/reading-rm/ 

adams.html. From this site, the public 

can gain entry into ADAMS, which 

provides text and image files of NRC’s 

public documents. If you do not have 

access to ADAMS or if there are 


rwilkins on PROD1PC63 with RULES