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

49591 

Vol. 73, No. 164 

Friday, August 22, 2008 

DEPARTMENT OF AGRICULTURE 

Rural Housing Service 

7 CFR Part 3550 

RIN 0575–AC69 

Direct Single Family Housing Loans 

and Grants 

AGENCY: Rural Housing Service, USDA. 

ACTION: Direct final rule. 

SUMMARY: Through this action, Rural 

Housing Service (RHS) is addressing the 

following: 

The Agency is revising the minimum 

insurance deductible amount and 

removing specific dollar limits with 

regards to insurance deductible clauses. 

The Agency also is clarifying the 

amount of dwelling coverage required to 

address current standards in the 

mortgage insurance industry and the 

coverage that the Agency may obtain 

when force-placed insurance is 

required. The intended effect is to make 

it easier for new homeowners to secure 

affordable insurance coverage and give 

the Agency sufficient flexibility to 

quickly react to changes in insurance 

costs and requirements. 

This action also is revising the 

applicant net asset limitation to increase 

it from $7,500 to $15,000 for non-elderly 

families and from $10,000 to $20,000 for 

elderly families. The intended effect is 

to require applicants to contribute a 

downpayment when their net assets 

exceed the stated limits. These limits 

have not been updated in over 10 years. 

Finally, this action updates the rural 

area definition to reference the effective 

date of census data collected through 

2010. 

This rule combines three actions 

under one notice. In the event that we 

receive adverse comments on any one 

section of this rule, we will proceed 

with the final implementation of the 

other portions not affected. No adverse 

comments are anticipated. 

DATES: This rule is effective without 

further action November 5, 2008 unless 

we receive written adverse comments or 

written notices of intent to submit 

adverse comments on or before October 

21, 2008. If adverse comment is 

received, RHS will publish a timely 

withdrawal of the rule in the Federal 

Register. 

ADDRESSES: You may submit comments 

to this rule by any of the following 

methods: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

• Mail: Submit written comments via 

the U.S. Postal Service to the Branch 

Chief, Regulations and Paperwork 

Management Branch, U.S. Department 

of Agriculture, STOP 0742, 1400 

Independence Avenue, SW., 

Washington, DC 20250–0742. 

• Hand Delivery/Courier: Submit 

written comments via Federal Express 

Mail or another mail courier service 

requiring a street address to the Branch 

Chief, Regulations and Paperwork 

Management Branch, U.S. Department 

of Agriculture, 300 7th Street, SW., 7th 

Floor, Suite 701, Washington, DC 20024. 

All written comments will be available 

for public inspection during regular 

work hours at the 300 7th Street, SW., 

address listed above. 

FOR FURTHER INFORMATION CONTACT: 

Teresa Sumpter, Loan Specialist, Rural 

Housing Service, Single Family Housing 

Direct Loan Division, Stop 0783, 1400 

Independence Avenue, SW., 

Washington, DC 20250–0783; 

Telephone: 202–720–1474; FAX: 202– 

720–2232; e-mail: 

Teresa.Sumpter@wdc.usda.gov. 

SUPPLEMENTARY INFORMATION: 

Classification 

This rule has been determined to be 

not significant and was not reviewed by 

the Office of Management and Budget 

(OMB) under Executive Order 12866. 

Paperwork Reduction Act of 1995 

The information collection 

requirements contained in this 

regulation have been approved by the 

Office of Management and Budget 

(OMB) under the provisions of 44 U.S.C. 

chapter 35 and have been assigned OMB 

control number 0575–0172, in 

accordance with the Paperwork 

Reduction Act (PRA) of 1995. This rule 

does not impose any new or modified 

information collection requirements. 

E-Government Act Compliance 

The Rural Housing Service is 

committed to complying with the EGovernment Act, to promote the use of 

the Internet and other information 

technologies to provide increased 

opportunities for citizen access to 

Government information and services, 

and for other purposes. 

Civil Justice Reform 

This rule has been reviewed under 

Executive Order 12988, Civil Justice 

Reform. In accordance with that 

Executive Order: (1) All State and local 

laws and regulations that are in conflict 

with this rule will be preempted; (2) no 

retroactive effect will be given to this 

rule; and (3) administrative proceedings 

in accordance with the regulations of 

the National Appeals Division of USDA 

at 7 CFR part 11 must be exhausted 

before bringing suit in court challenging 

action taken under this rule unless those 

regulations specifically allow bringing 

suit at an earlier time. 

Unfunded Mandates Reform Act 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA), Public 

Law 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. Under section 202 of the UMRA, 

2 U.S.C. 1532, RHS 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, of 

$100 million or more in any one year. 

When such a statement is needed for a 

rule, section 205 of the UMRA generally 

requires RHS 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 the regulatory 

provisions of Title II of the UMRA) 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 UMRA. 


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49592 Federal Register / Vol. 73, No. 164 / Friday, August 22, 2008 / Rules and Regulations 

Programs Affected 

The programs affected by this final 

rule are 10.410 Very Low to Moderate 

Income Housing Loans and 10.417 Very 

Low-Income Housing Repair Loans and 

Grants. 

Intergovernmental Consultation 

For the reasons set forth in the final 

rule to 7 CFR part 3015, subpart V, and 

related notice (48 FR 29115) this 

program is not subject to Executive 

Order 12372 which requires 

intergovernmental consultation with 

State and local officials. 

Environmental Impact Statement 

This document has been reviewed in 

accordance with 7 CFR part 1940, 

subpart G, ‘‘Environmental Program.’’ It 

is the determination of RHS that this 

action does not constitute a major 

Federal action significantly affecting the 

quality of the human environment, and 

in accordance with the National 

Environmental Policy Act of 1969, 

Public Law 91–190, an Environmental 

Impact Statement is not required. 

Regulatory Flexibility Act 

This rule has been reviewed with 

regard to the requirements of the 

Regulatory Flexibility Act (5 U.S.C. 

601–612). The programs affected by this 

rule provide loans and grants to 

individuals. For this reason, the 

undersigned has determined and 

certified by signature of this document 

that this rule will not have a significant 

economic impact on a substantial 

number of small entities. This 

rulemaking action does not involve a 

new or expanded program. 

Federalism 

The policies contained in this rule do 

not have any substantial direct effect on 

States, on the relationship between the 

National government and the States, or 

on the distribution of power and 

responsibilities among the various 

levels of government. Nor does this rule 

impose substantial direct compliance 

costs on State and local governments. 

Therefore, consultation with the States 

is not required. 

Background 

1. According to 7 CFR 3550.61(b) and 

7 CFR 3550.110(b), the dwelling and 

any other essential buildings must be 

insured in an amount that is the lesser 

of the insurable value (cost of 

restoration) or the balance of the 

secured principal debt. Many 

companies are reluctant to issue policies 

when the coverage is well in excess of 

the replacement value of the home. This 

is a particular problem in areas with 

high windstorm and water damage that 

make it extremely difficult for 

borrowers/homeowners to secure 

affordable insurance coverage and 

almost impossible to pay the rates if 

they are located in a high risk area that 

may be subject to disasters such as 

hurricanes and tornadoes. New 

borrowers have escrow accounts set up 

that collect the insurance premium. 

Agency borrowers with loans made 

before escrow was available, prior to 

September 1996 when the Agency began 

centralized servicing of its portfolio, 

normally provide their own coverage. 

When a homeowner fails to provide 

insurance, the government force-places 

insurance coverage typically in the last 

known insured amount. This assures 

that the Government’s interests are 

protected and provides our customers 

the best opportunity to become 

successful homeowners. Force place 

insurance only provides insurance 

coverage to the Agency and does not 

provide any direct coverage or benefit to 

the borrower. 

With this action, the Agency is 

revising 7 CFR sections 3550.61 and 

3550.110 (Section 502 requests) to 

clarify the minimum insurance 

deductible amount, remove specific 

dollar limits with regards to insurance 

deductible clauses and clarify that 

borrowers with a secured indebtedness 

of $15,000 at the time of loan approval 

must secure and continually maintain 

hazard insurance coverage adequate to 

cover the government’s interest for the 

entire unpaid debt. Loss deductible 

clauses for required insurance coverage 

may not exceed generally accepted 

minimums based on current industry 

standards and local market conditions. 

These minimums will be established in 

the Agency handbook and available in 

any local Rural Development office. The 

intended effect is to make it easier for 

new homeowners to obtain affordable 

insurance coverage while allowing the 

Agency sufficient flexibility to quickly 

update its handbook guidance on 

insurance deductibles in order to react 

to changes in insurance costs and 

requirements and assure the 

Government’s interest in the property is 

adequately protected. 

2. 7 CFR 3550.64 and 7 CFR 

3550.103(e) (Section 504 requests) 

require elderly families with net family 

assets in excess of $10,000 and nonelderly families with net family assets in 

excess of $7,500 to apply the excess 

amount towards the down payment on 

the property. This limitation has not 

been updated in over 10 years. U.S. nonmetropolitan median income has 

increased from $33,200 in 1997 to 

$48,201 in 2006. While these figures 

indicate a rise in the median income, it 

should be noted that the dollar value of 

the net family assets would be similarly 

higher in dollars without a significant 

change in composition due to inflation 

over a long period of time. Thus, as 

households earn more money, they also 

must spend more. Based on this 

information, the Agency believes it is 

reasonable to relax the down payment 

requirements. In addition, many elderly 

applicants in this program are on fixed 

incomes and have set aside funds and/ 

or purchased financial instruments 

intended to be used to cover final 

expenses. The increase in the threshold 

amounts would allow these elderly 

applicants to maintain more funds for 

this purpose. Therefore, we propose to 

revise the regulation to increase the 

applicant net family asset limitation 

from $7,500 to $15,000 for non-elderly 

families and from $10,000 to $20,000 for 

elderly families. 

3. Finally, the rural area definition 

will be amended to comply with a 

change in Section 520 of the Housing 

Act of 1949 made by Public Law 106–

569, Section 705 (December 27, 2000) 

that extends the grandfathering of areas 

classified as a rural area prior to October 

1, 1990, through receipt of decennial 

census data for the year 2010 if the area 

has a population between 10,000 and 

25,000, is rural in character, and has a 

serious lack of credit for lower and 

moderate income families. 

List of Subjects in 7 CFR Part 3550 

Accounting, Grant programs, Housing 

and community development, Housing, 

Loan programs, Low and moderate 

income housing, Manufactured homes, 

Reporting and recordkeeping 

requirements, Rural areas, Subsidies. 

■ For the reasons stated in the preamble, 

chapter XXXV, Title 7 of the Code of 

Federal Regulations, is amended as 

follows: 

PART 3550—DIRECT SINGLE FAMILY 

HOUSING LOANS AND GRANTS 

■ 1. The authority citation for part 3550 

continues to read as follows: 

Authority: 5 U.S.C. 301; 42 U.S.C. 1480. 

Subpart A—General 

■ 2. Section 3550.10 is amended in 

paragraph (3) of the definition for 

‘‘Rural area’’ by replacing ‘‘2000’’ with 

‘‘2010.’’

Subpart B—Section 502 Origination 

■ 3. Section 3550.61 is amended by 

revising the section heading and 

paragraphs (a), (b) and (d)(1) to read as 

follows: 


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Federal Register / Vol. 73, No. 164 / Friday, August 22, 2008 / Rules and Regulations 49593 

§ 3550.61 Insurance (loans only). 

(a) Borrower responsibility. Any 

borrower with a secured indebtedness 

in excess of $15,000 at the time of loan 

approval must furnish and continually 

maintain hazard insurance on the 

security property, with companies, in 

amounts, and on terms and conditions 

acceptable to RHS including a ‘‘loss 

payable clause’’ payable to RHS to 

protect the Government’s interest. 

(b) Amount. The borrower is required 

to insure the dwelling and any other 

essential buildings in an amount equal 

to the insurable value of the dwelling 

and other essential buildings. However, 

in cases where the borrower’s 

outstanding secured indebtedness is less 

than the insurable value of the dwelling 

and other essential buildings, the 

borrower may elect a lower coverage 

provided it is not less than the 

outstanding secured indebtedness. If the 

borrower fails, or is unable, to insure the 

secured property, RHS will force place 

insurance and charge the cost to the 

borrower’s account. Force place 

insurance only provides insurance 

coverage to the Agency and does not 

provide any direct coverage or benefit to 

the borrower. The amount of the lenderplaced coverage will generally be the 

property’s last known insured value. 

* * * * * 

(d) * * * 

(1) Loss deductible clauses for 

required insurance coverage may not 

exceed the generally accepted 

minimums based on current industry 

standards and local market conditions. 

* * * * * 

■ 4. Section 3550.64 is revised to read 

as follows: 

§ 3550.64 Down payment. 

Elderly families must use any net 

family assets in excess of $20,000 

towards a down payment on the 

property. Non-elderly families must use 

net family assets in excess of $15,000 

towards a down payment on the 

property. Applicants may contribute 

assets in addition to the required down 

payment to further reduce the amount to 

be financed. 

Subpart C—Section 504 Origination 

and Section 306C Water and Waste 

Disposal Grants 

■ 6. Section 3550.103 is amended by 

revising paragraph (e) to read as follows: 

§ 3550.103 Eligibility requirements. 

* * * * * 

(e) Need and use of personal 

resources. Applicants must be unable to 

obtain financial assistance at reasonable 

terms and conditions from non-RHS 

credit or grant sources and lack the 

personal resources to meet their needs. 

In cases where the household is 

experiencing medical expenses in 

excess of three percent of the 

household’s income, this requirement 

may be waived or modified. Elderly 

families must use any net family assets 

in excess of $20,000 to reduce their 

section 504 request. Non-elderly 

families must use any net family assets 

in excess of $15,000 to reduce their 

section 504 request. Applicants may 

contribute assets in excess of the 

aforementioned amounts to further 

reduce their request for assistance. The 

definition of assets for this purpose is 

net family assets as described in 

§ 3550.54 of subpart B of this part, less 

the value of the dwelling and a 

minimum adequate site. 

* * * * * 

■ 7. Section 3550.110 is amended by 

revising paragraphs (a), (b) and (d)(1) to 

read as follows: 

§ 3550.110 Insurance (loans only). 

(a) Borrower responsibility. Any 

borrower with a secured indebtedness 

in excess of $15,000 at the time of loan 

approval must furnish and continually 

maintain hazard insurance on the 

security property, with companies, in 

amounts, and on terms and conditions 

acceptable to RHS including a ‘‘loss 

payable clause’’ payable to RHS to 

protect the Government’s interest. 

(b) Amount. The borrower is required 

to insure the dwelling and any other 

essential buildings in an amount equal 

to the insurable value of the dwelling 

and other essential buildings. However, 

in cases where the borrower’s 

outstanding secured indebtedness is less 

than the insurable value of the dwelling 

and other essential buildings, the 

borrower may elect a lower coverage 

provided it is not less than the 

outstanding secured indebtedness. If the 

borrower fails, or is unable to insure the 

secured property, RHS will force place 

insurance and charge the cost to the 

borrower’s account. Force place 

insurance only provides insurance 

coverage to the Agency and does not 

provide any direct coverage or benefit to 

the borrower. The amount of the lenderplaced coverage generally will be the 

property’s last known insured value. 

* * * * * 

(d) * * * 

(1) Loss deductible clauses for 

required insurance coverage may not 

exceed the generally accepted 

minimums based on current and local 

market conditions. 

* * * * * 

Dated: July 28, 2008. 

Russell T. Davis, 

Administrator, Rural Housing Service. 

[FR Doc. E8–19350 Filed 8–21–08; 8:45 am] 

BILLING CODE 3410–XV–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Part 179 

[Docket No. FDA–1999–F–2405] (formerly 

1999F–5522) 

Irradiation in the Production, 

Processing and Handling of Food 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Final rule. 

SUMMARY: The Food and Drug 

Administration (FDA) is amending the 

food additive regulations to provide for 

the safe use of ionizing radiation for 

control of food-borne pathogens, and 

extension of shelf-life, in fresh iceberg 

lettuce and fresh spinach (hereinafter 

referred to in this document as ‘‘iceberg 

lettuce and spinach’’) at a dose up to 4.0 

kiloGray (kGy). This action is in partial 

response to a petition filed by The 

National Food Processors Association 

on behalf of The Food Irradiation 

Coalition. 

DATES: This rule is effective August 22, 

2008. Submit written or electronic 

objections and requests for a hearing by 

September 22, 2008. See section VI of 

this document for information on the 

filing of objections. 

ADDRESSES: You may submit written or 

electronic objections and requests for a 

hearing identified by Docket No. FDA–

1999–F–2405] (formerly 1999F–5522, by 

any of the following methods: 

Electronic Submissions 

Submit electronic objections in the 

following way: 

• Federal eRulemaking Portal: http:// 

www.regulations.gov. Follow the 

instructions for submitting comments. 

Written Submissions 

Submit written objections in the 

following ways: 

• FAX: 301–827–6870. 

• Mail/Hand delivery/Courier [For 

paper, disk, or CD-ROM submissions]: 

Division of Dockets Management (HFA–

305), Food and Drug Administration, 

5630 Fishers Lane, rm. 1061, Rockville, 

MD 20852. 

To ensure more timely processing of 

objections, FDA is no longer accepting 

objections submitted to the agency by email. FDA encourages you to continue 


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