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

54005 

Vol. 75, No. 171 

Friday, September 3, 2010 

DEPARTMENT OF AGRICULTURE 

Farm Service Agency 

7 CFR Parts 761, 762, 764, 765, and 766 

RIN 0560–AI04 

Conservation Loan Program 

AGENCY: Farm Service Agency, USDA. 

ACTION: Interim final rule. 

SUMMARY: The Farm Service Agency 

(FSA) is implementing the new 

Conservation Loan (CL) Program 

authorized by the Food, Conservation, 

and Energy Act of 2008 (the 2008 Farm 

Bill). This interim rule adds the CL 

Program provisions to the existing direct 

and guaranteed loan regulations. These 

provisions will provide CL Program 

eligibility and servicing options for the 

direct and guaranteed loans made 

through the CL Program. 

DATES: Effective Date: This rule is 

effective September 3, 2010. 

Comment Date: We will consider 

comments on this rule and on the 

information collection activities that we 

receive by November 2, 2010. 

ADDRESSES: We invite you to submit 

written comments on this interim rule 

and on the information collection. In 

your comment, include the volume, 

date, and page number of this issue of 

the Federal Register. You may also send 

comments about the information 

collection requests to the Desk Officer 

for Agriculture, Office of Information 

and Regulatory Affairs, Office of 

Management and Budget, Washington, 

DC 20503. You may submit comments 

by any of the following methods: 

• E-mail: 

connie.holman@wdc.usda.gov. 

• Fax: (202) 720–6797. 

• Mail: Director, Loan Making 

Division, FSA, USDA, 1400 

Independence Avenue, SW., Stop 0522, 

Washington, DC 20250–0522. 

• Hand Delivery or Courier: Deliver 

comments to FSA, LMD, 1280 Maryland 

Avenue, SW., Suite 240, Washington, 

DC 20024. 

• Federal eRulemaking Portal: Go to 

http://www.regulations.gov. Follow the 

online instructions for submitting 

comments. 

Comments may be inspected in the 

Office of the Director, LMD, FSA, at 

1280 Maryland Avenue, SW., Suite 240, 

Washington, DC, Monday through 

Friday between 8 a.m. and 4:30 p.m., 

except holidays. 

FOR FURTHER INFORMATION CONTACT: 

Connie Holman, Senior Loan Officer, 

LMD, FSA; telephone: (202) 690–0756; 

fax: (202) 720–6797; e-mail: 

connie.holman@wdc.usda.gov. Persons 

with disabilities or who require 

alternative means for communication 

(Braille, large print, audio tape, etc.) 

should contact the USDA Target Center 

at (202) 720–2600 (voice and TDD). 

SUPPLEMENTARY INFORMATION: 

Background 

Currently, FSA’s Farm Loan Programs 

(FLP) regulations do not specifically 

address financing needs for approved 

conservation practices. Section 5002 of 

the 2008 Farm Bill (Pub. L. 110–246) 

amends section 304 of the Consolidated 

Farm and Rural Development Act 

(CONACT) (7 U.S.C. 1924) to authorize 

the Secretary to make or guarantee 

qualified conservation loans to eligible 

borrowers to cover the cost of carrying 

out a qualified conservation project. 

FSA is inserting CL Program provisions 

in the existing direct and guaranteed 

loan regulations and is therefore 

amending 7 CFR parts 761, 762, 764, 

765, and 766 to include the CL program. 

This rule provides definitions, 

eligibility requirements, and program 

uses that will be specific only to the CL 

Program. The CL Program will also 

contain several specific exceptions that 

differ from many of FSA’s more 

stringent traditional loan program 

requirements such as family farm 

requirements, test for credit, and 

graduation based on section 304 of the 

CONACT. In addition, in many cases 

FSA will partner with cost share 

programs provided by the Natural 

Resources and Conservation Service 

(NRCS), USDA, to provide funding for 

the implementation of qualified 

conservation practices as outlined in an 

approved conservation plan developed 

by NRCS. 

Farm Loan Programs, General Program 

Administration 

The FLP General Program 

Administration regulations in 7 CFR 

part 761 include regulations addressing 

general provisions, supervised bank 

accounts, supervised credit, allocation 

of FLP funds to State offices. The 

regulations in 7 CFR part 761 provide 

the general and administrative 

regulations for both guaranteed and 

direct loans and will, therefore, apply to 

the CL Program. 

Abbreviations and Definitions 

Abbreviations and definitions used 

throughout FSA FLP are in 7 CFR 761.2. 

This rule adds abbreviations and 

definitions to that part that will be used 

for both the direct and guaranteed loans 

made through the CL Program. 

FSA will add abbreviations for 

‘‘Conservation Loan’’ and ‘‘Natural 

Resources and Conservation Service.’’ 

These abbreviations will be used 

frequently and will allow for 

consistency throughout regulations and 

between the direct and guaranteed loan 

programs. 

Section 304 of the CONACT specifies 

the following definitions: 

(1) ‘‘Qualified conservation loan’’ 

means ‘‘a loan, the proceeds of which 

are used to cover the costs to the 

borrower of carrying out a qualified 

conservation project.’’ 

(2) ‘‘Qualified conservation project’’ 

means ‘‘conservation measures that 

address provisions of a conservation 

plan of the eligible borrower.’’ 

(3) ‘‘Conservation plan’’ means 

a plan, approved by the Secretary, that, for 

a farming or ranching operation, identifies 

the conservation activities that will be 

addressed with loan funds provided under 

this section, including: 

(A) The installation of conservation 

structures to address soil, water, and related 

resources; 

(B) The establishment of forest cover for 

sustained yield timber management, erosion 

control, or shelter belt purposes; 

(C) The installation of water conservation 

measures; 

(D) The installation of waste management 

systems; 

(E) The establishment or improvement of 

permanent pasture; 

(F) Compliance with section 1212 of the 

Food Security Act of 1985; and 

(G) Other purposes consistent with the 

plan, including the adoption of any other 


erowe on DSK5CLS3C1PROD with RULES
54006 Federal Register / Vol. 75, No. 171 / Friday, September 3, 2010 / Rules and Regulations 

emerging or existing conservation practices, 

techniques, or technologies approved by the 

Secretary. 

FSA is adding definitions of 

‘‘qualified conservation loan’’ and 

‘‘qualified conservation project’’ into the 

regulations in § 761.2(b) with minor, 

nonsubstantive wording changes for 

consistency with the regulation. The 

defined terms will become 

‘‘conservation loan’’ and ‘‘conservation 

project’’. 

FSA, in coordination with NRCS, is 

also adopting a more technically 

adequate definition of ‘‘conservation 

plan’’ to mean: 

an NRCS-approved written record of the land 

user’s decisions and supporting information, 

for treatment of a land unit or water as a 

result of the planning process, that meets 

NRCS Field Office Technical Guide (FOTG) 

quality criteria for each natural resource (soil, 

water, air, plants, and animals) and takes into 

account economic and social considerations. 

The conservation plan describes the schedule 

of operations and activities needed to solve 

identified natural resource problems and 

takes advantage of opportunities at a 

conservation management system level. This 

definition only applies to the direct loans 

and guaranteed loans for the Conservation 

Loan Program. 

This definition of conservation plan 

provides consistency between FSA and 

NRCS procedures. FSA considers 

consistency especially important due to 

the statutory role that conservation 

plans play in eligibility for the CL 

Program. 

FSA is revising the current definition 

for ‘‘graduation.’’ The change to the 

‘‘graduation’’ definition of adding the 

words ‘‘except for Conservation Loans’’ 

is necessary because the CL Program 

does not include graduation provisions. 

Section 304 of the CONACT specifically 

states that section 333(1) and (3) 

graduation requirements do not apply. 

FSA is revising the definitions for 

‘‘beginning farmer’’ and ‘‘program loan’’ 

to add ‘‘CL’’ in the loan types listed in 

the definitions. 

FSA is adding the definition for 

‘‘streamlined conservation loan.’’ The 

definition is necessary because FSA will 

reduce paperwork requirements for 

applicants meeting certain criteria as 

discussed below. 

Loan Limitations 

FSA is amending 7 CFR 761.8 to 

specify that the existing loan limits will 

apply to both the direct and guaranteed 

loans made through the CL Program. 

Direct and guaranteed CL limits will 

count toward both the individual and 

combined real estate (Subtitle A of the 

CONACT) loan program limits 

previously established and specified in 

the regulation based on section 305 of 

the CONACT. That section limits direct 

CLs under section 304 to the smaller of 

the value of the security or $300,000. 

Guaranteed CLs also are subject to the 

existing combined guaranteed loan limit 

of $700,000 (adjusted by inflation) 

under section 305. 

Farm Assessment Requirements 

Periodically FSA FLP assesses each 

direct borrower’s farming operation to 

determine financial condition, 

organizational structure, management 

strengths, credit counseling and training 

needs, and the appropriate level of 

oversight. This assessment is completed 

with the borrower to develop a plan to 

enhance the borrower’s ability to 

progress in management skills 

financially to the point that the 

borrower is able to graduate from FSA 

and secure commercial credit. Section 

761.103 specifies key factors that must 

be evaluated, at a minimum, for each 

operation. FSA is amending § 761.103 to 

provide that, for the applicants who 

have demonstrated the ability to meet 

certain requirements, FSA will not 

require historical performance and 

supervisor plans as part of the 

application process that are standard to 

other FLP loan applications. These 

applicants will be required to have a 

debt to asset ratio of 40 percent or less, 

a net worth of 3 times the loan amount, 

and a Fair Isaac Corporation (known as 

FICO) score of 700 or more. FSA 

believes that CL borrowers who met 

these requirements have demonstrated a 

high level of management skills and 

financial security. All CL Program 

borrowers would still be required to 

provide a current balance sheet 

annually along with income tax records, 

which would enable FSA to complete 

an abbreviated assessment. Any 

negative trends noted between balance 

sheets must be evaluated and addressed 

in the assessment. 

FSA is requiring that if a CL borrower 

becomes financially distressed, 

delinquent, or receives any servicing 

options available in 7 CFR part 766, 

then all elements of the assessment 

must be included and addressed even if 

the loan was initially made under the 

reduced application exemption. This is 

necessary to fully assess the problem 

and correct any delinquency. 

Year-End Analysis 

Since certain CL Program applicants 

provide reduced documentation for loan 

approval, FSA believes it would be 

inconsistent to require significant 

additional information for routine 

monitoring of the borrower’s progress. 

Therefore, FSA is amending § 761.105 to 

exempt certain CL Program borrowers 

from a year-end analysis requirement. 

Borrowers that qualify for reduced 

documentation CLs will still be required 

to submit a current balance sheet 

annually with income tax records to 

facilitate FSA’s loan monitoring process. 

General Administrative Changes 

As discussed above, FSA is 

incorporating the CL Program into the 

existing FLP regulations in 7 CFR part 

761. Specifically, FSA is making the 

following changes to accommodate the 

addition of the new CL Program into the 

regulations: 

(1) In § 761.201 adding CL to the list 

of loans for allocation of funds; 

(2) In § 761.202 adding CL to the list 

of loans in the timing of allocations; 

(3) In § 761.204 adding CL to the list 

of loans in the methods of allocating 

funds to FSA State offices; 

(4) In § 761.205 adding CL to the list 

of loans for computing the formula 

allocation; CLs will be treated like Farm 

Ownership (FO) loans rather than OLs 

for formula allocation purposes since 

they are real estate (Subtitle A) loans; 

(5) In § 761.206 adding CL to the list 

of loans for pooling of unobligated 

funds allocated to State Offices; and 

(6) In § 761.208 adding CL to the list 

of loan types that will receive target 

participation rates for socially 

disadvantaged groups in accordance 

with section 355 of the CONACT. 

Section 304 of the CONACT specifies 

that in making or guaranteeing CLs, the 

following categories will be given 

funding priority (in addition to the 

target participation rates for socially 

disadvantaged farmers that are listed 

above in item 6): 

(a) Beginning farmers and socially 

disadvantaged farmers; 

(b) Owners or tenants who use the 

loans to convert to sustainable or 

organic agricultural production systems 

as defined in § 761.210; and 

(c) Producers who use the loans to 

build conservation structures or 

establish conservation practices to 

comply with the highly erodible land 

conservation exemptions (section 1212 

of the Food Security Act of 1985 (Pub. 

L. 99–198, commonly referred to as the 

1985 Farm Bill, 16 U.S.C. 3812)). 

Therefore, FSA is adding 7 CFR 

761.210 to establish direct and 

guaranteed CL funds priority. Thirtyfive percent of direct and guarantee CL 

funds will be targeted for these 

priorities in the first 6 months of each 

fiscal year. Once targets are removed 

from funding allocations, if a priority 

and a non-priority loan are approved on 

the same day, the priority request would 

always be funded before the nonVerDate Mar<15>2010 14:12 Sep 02, 2010 Jkt 220001 PO 00000 Frm 00002 Fmt 4700 Sfmt 4700 E:\FR\FM\03SER1.SGM 03SER1

erowe on DSK5CLS3C1PROD with RULES
Federal Register / Vol. 75, No. 171 / Friday, September 3, 2010 / Rules and Regulations 54007 

priority request. Additionally, 

approximately 15 percent of direct CL 

funds will be targeted for SDA 

participation rates in accordance with 

section 355 of the CONACT. Loans to 

SDA applicants will be funded first 

from funds targeted for SDA 

participation rates and when funds 

targeted for SDA participation are 

exhausted, then SDA loans will be 

funded from funds targeted for priority 

funding established by section 304 of 

the CONACT. 

Guaranteed Loans; CL Program 

FSA is making the following changes 

to accommodate the addition of the new 

CL Program into the guaranteed loan 

regulations: 

(1) In § 762.101 adding CL to the list 

of types of guarantees available through 

FSA; 

(2) In § 762.106 adding CL to the list 

of types of guarantees that can be made 

to qualify for Certified Lender status and 

to amend references that will change as 

a result of adding the CL Program into 

the regulations; 

(3) In § 762.120 adding CL to the list 

of types of guarantees for applicant 

eligibility; and 

(4) In § 762.128 adding CL to the list 

of types of guarantees that are subject to 

environmental requirements found in 

part 1940 subpart G; 

To determine whether a conservation 

project qualifies for a loan guarantee, 

FSA will rely on NRCS approved 

conservation plans. NRCS provides 

national leadership in the conservation 

of soil, water, and related natural 

resources. An approved NRCS 

conservation plan will provide evidence 

to support the eligibility of the 

applicant’s proposed conservation 

measure. Therefore, FSA is amending 

§ 762.110, ‘‘Loan Application,’’ to 

require applicants to obtain an approved 

NRCS conservation plan. The approved 

conservation plan must be included in 

a complete CL Program application 

package to apply for a loan guarantee. 

Unlike traditional FSA loan programs, 

section 304 of the CONACT explicitly 

excludes the inability to obtain 

commercial credit as an eligibility 

requirement for the CL Program. FSA 

has reviewed the implications of 

extending credit to farmers with strong 

financial positions and examined the 

existing application requirements for 

guarantees as it relates to the assessment 

of an applicant’s financial condition and 

ability to repay. Unlike applicants for 

FOs and OLs, some CL applicants will 

be very strong financially, with high 

debt service capacities and significantly 

more than adequate equity in assets to 

secure the requested loan. For CL 

applicants with exceptionally strong 

financial positions, it is not reasonable 

to require a lender to perform as 

intensive a cash flow analysis as is 

necessary for applicants with marginal 

financial positions. FSA is amending 

§ 762.110 also to provide that certain CL 

applicants will be eligible for reduced 

application materials if the applicant is 

current on all payments to all creditors 

including FSA, has a debt-to-asset ratio 

of 40 percent or less, has a net worth of 

at least 3 times the loan amount, and 

has a minimum FICO credit score of 

700. For entity applicants, because 

entity credit reports are not assigned 

FICO credit scores, FSA has determined 

that a majority of the individual entity 

members must have a personal FICO 

score of at least 700. Please note that the 

requirement for a majority of members 

to have a personal FICO credit score of 

at least 700 applies only to certain CLs. 

For CL guarantee applicants meeting all 

four of the above criteria, FSA is also 

amending § 762.110 to waive the cash 

flow budget requirement for a complete 

application. Since minimum standards 

to waive the cash flow budget 

requirement meet or exceed those of the 

private lending sector, these streamlined 

loan applications will minimize 

paperwork burden for loan guarantees, 

while only exposing FSA to a minimal 

risk of loss. The reduced paperwork 

requirement will not preclude the 

lender from requesting additional 

financial information, when necessary, 

as in their current non-guaranteed 

application procedures. These exempted 

application requirements are consistent 

with the direct CL Program, except that 

guaranteed CLs do not prohibit primary 

loan servicing within the past 5 years 

since such servicing is inapplicable to 

guaranteed loans. Other criteria were 

considered such as working capital and 

collateral position, but the criteria are 

most similar to practices used in the 

private lending sector when evaluating 

loan eligibility and FSA believes that 

these criteria will provide a strong and 

reliable indication of the likelihood that 

the loan will be repaid. 

FSA is also amending § 762.125 to 

provide an exception to the requirement 

that the operation must project a 

feasible plan to be added for CL Program 

streamlined guarantees. 

Since section 304 of the CONACT 

exempts CL applicants from the 

traditional test for credit eligibility 

relating to no credit elsewhere and 

graduation requirements, FSA is 

amending 7 CFR 762.110 to specify that 

the market placement program will not 

be applicable to the CL Program. The 

market placement program requires that 

when FSA determines that a direct 

applicant or borrower may qualify for 

guaranteed credit, the FSA may submit 

the applicant’s financial information to 

one or more guaranteed lenders for their 

review and if the lender indicates 

interest in providing financing to the 

applicant or borrower through the 

guaranteed loan program, FSA would 

assist in completing the application for 

a guarantee. 

Section 304 of the CONACT also 

explicitly exempts guaranteed CL 

applicants from the program eligibility 

requirement pertaining to the operation 

of a ‘‘family farm.’’ Family farms are 

farms where the majority of the labor 

and management decisions are provided 

by the farm family as specified in 7 CFR 

761.2. Therefore, FSA is amending 7 

CFR 762.120, ‘‘Applicant Eligibility,’’ to 

exempt CL applicants from both the test 

for credit and family farm eligibility 

requirements. This will facilitate timely 

implementation of conservation 

practices that would otherwise be 

postponed due to lack of monetary 

resources. 

FSA is amending 7 CFR 762.121 to 

address the use of funds disbursed 

under the guaranteed CL Program. The 

list of conservation activities that may 

be included in a conservation plan is 

not intended to be all-inclusive, but is 

given as guidance to implement the CL 

Program. Uses are consistent for both 

the guaranteed and direct loan 

programs, except that refinancing is 

only allowed using guaranteed CL funds 

and only if the lender and the applicant 

can demonstrate the need to refinance. 

FSA will place no additional 

conservation project approval burden on 

applicants and will accept NRCS 

approval of projects in conservation 

plans as sufficient to ensure that the 

project meets the criteria and intent of 

the CL Program. CL guarantees may be 

used for any conservation project 

included in the NRCS approved 

conservation plan for an applicant 

determined eligible under guaranteed 

CL regulations. 

FSA is amending § 762.124 to specify 

terms for CL guarantees. Terms will be 

limited to the life of the security 

pledged for the loan, but will not exceed 

20 years from the date of the note. This 

is consistent with loan programs 

administered by FSA in the past that 

funded conservation practices and 

limited the loan term to 20 years. FSA 

believes this term will provide 

applicants adequate time to repay CLs. 

CLs are exempted from the provision 

in § 762.125(a)(9) that prohibits loan 

funds from being used to support a noneligible enterprise. Non-eligible 

enterprises are defined in § 761.2 as a 

business that produces exotic animals, 


erowe on DSK5CLS3C1PROD with RULES
54008 Federal Register / Vol. 75, No. 171 / Friday, September 3, 2010 / Rules and Regulations 

birds, and fish; produces non-farm 

animals, ordinarily used for pets, 

companionship or pleasure; markets 

non-farm goods; or processes farm 

products when the majority of the 

commodities are not produced by the 

farming operation. The intent of the CL 

Program, as specified in section 304 of 

the CONACT is to provide funding for 

qualified conservation projects, not to 

limit funding based on the particular 

type of enterprise. All conservation 

projects included in an approved 

conservation plan are expected to result 

in a net benefit to the environment. 

Projects that support an enterprise that 

FSA considers to be a non-eligible 

enterprise as defined in § 761.2 will be 

eligible for CL financing. FSA believes 

this exception is in keeping with the 

intent of the CL Program. 

FSA will guarantee 75 percent of an 

approved CL. Other FSA guarantees 

cover up to 95 percent, but section 304 

of the CONACT specifically limits the 

CL guarantee to 75 percent. While the 

CONACT limits guarantee of the 

principal amount of CL, FSA also will 

apply the 75 percent limit to loan losses 

from interest, advances, and recapture 

debt consistent with its treatment of 

other FLP guaranteed loan maximum 

losses. FSA is making amendments to 

§§ 762.129 and 762.130 to specify the 75 

percent guarantee accordingly. 

FSA will use existing guaranteed loan 

servicing procedures for CLs. Existing 

servicing procedures provide lenders 

with servicing tools beyond what is 

available on their non-guaranteed loans. 

The existing servicing tools have proven 

to be effective in allowing lenders to 

assist their customers and in the overall 

success of the guaranteed loan portfolio. 

FSA is amending § 762.145 to: 

(1) Require that when the lender 

requests restructuring options, the 

lender must certify that the CL borrower 

is in compliance with the conservation 

plan. Conservation plans are directly 

tied to eligibility for the CL Program, 

therefore, eligibility for servicing 

options should be directly tied to 

continuing compliance with the 

conservation plan. 

(2) Specify that terms for restructuring 

guaranteed CLs cannot exceed 20 years 

from the date of the original note. 

FSA is also amending §§ 762.147 and 

762.148 to update existing citations. 

Direct CL Program 

FSA is changing the following to 

accommodate the addition of the new 

CL Program into the direct loan 

regulations: 

(1) In § 764.1, adding CL to the list of 

types of direct loans available through 

FSA; and 

(2) In §§ 764.102 and 764.103, 

amending references that change as a 

result of adding the CL Program into the 

regulations. 

As with the CL guarantee, to 

determine whether a conservation 

project qualifies for a CL direct loan, 

FSA will rely on the expertise of NRCS 

as related to conservation practices, and 

ultimately, conservation plans. An 

approved NRCS conservation plan will 

provide ample evidence to support the 

eligibility of the applicant’s proposed 

conservation measure. Therefore, FSA is 

amending § 764.51, ‘‘Loan Application,’’ 

to require CL applicants to obtain an 

NRCS-approved conservation plan. The 

approved conservation plan must be 

included in a complete CL application 

package. 

As explained above, section 304 of the 

CONACT explicitly excluded the 

inability to obtain commercial credit as 

an eligibility requirement for the CL 

program. FSA has reviewed the 

implications of extending credit to 

farmers with strong financial positions 

and examined the existing application 

requirements for FSA’s other direct loan 

programs as it relates to the assessment 

of an applicant’s financial condition and 

ability to repay. FSA is amending 

§ 764.51 to provide that CL applicants 

do not have to submit documentation of 

the inability to obtain sufficient credit 

elsewhere at reasonable rates and terms. 

Unlike applicants for FSA other 

traditional direct loan programs, some 

CL applicants will be very strong 

financially, with high debt service 

capacities and significantly more than 

adequate equity in assets to secure the 

loan requested. For CL applicants with 

exceptionally strong financial positions, 

FSA will significantly reduce the 

paperwork required of these applicants. 

FSA is amending § 764.51 to provide 

that certain CL applicants will be 

eligible for reduced application 

requirements if the applicant is current 

on all payments to all creditors 

including FSA, has not received 

primary loan servicing on any FLP debt 

within the past 5 years, has a debt-toasset ratio of 40 percent or less, has a 

net worth of at least 3 times the loan 

amount, and has a minimum FICO 

credit score of 700. For entity 

applicants, because entity credit reports 

are not assigned FICO credit scores, FSA 

has determined that a majority of the 

individual entity members must have a 

personal FICO score of at least 700. 

Please note that the requirement for a 

majority of members to have a personal 

FICO credit score of at least 700 applies 

only to loans granted to those who 

would be exempt from certain 

application requirements common to 

other loans. Other criteria were 

considered such as working capital and 

collateral position, but these criteria, 

which indicate a solid past history of 

debt repayment and the debt to asset 

ratio, net worth requirement, and 

minimum credit score, are most similar 

to practices used in the private lending 

sector when evaluating loan eligibility 

and will provide a strong and reliable 

indication of the likelihood that the loan 

will be repaid. 

FSA is also amending 7 CFR 764.53, 

‘‘Processing the Complete Application,’’ 

to specify that the market placement 

program requirements will not be 

applicable to the CL program as 

discussed above. 

Section 304 of the CONACT explicitly 

exempts the CL Program direct loans 

from the program eligibility requirement 

pertaining to their inability to obtain 

credit from conventional sources under 

section 333 and did not require 

operation of a family farm as under 

section 302(a)(3). Under regulations 

applicable to other FSA FLP, loan 

assistance is limited to owner-operators 

or tenant-operators of family farms who 

temporarily lack the financial resources 

to obtain conventional credit at 

reasonable rate and terms. The 

exemption for CLs allows operators 

outside the scope of a family farm 

operation with financial strength to 

obtain credit from other lenders, an 

additional way to fund conservation 

projects. These changes benefit the 

environment and support existing and 

new sustainable and organic food 

production systems within the United 

States. Therefore, FSA is amending 

7 CFR 764.101, ‘‘General Eligibility 

Requirements,’’ to exempt CL applicants 

from those requirements. FSA is also 

adding § 764.232 to limit CL eligibility 

to applicants meeting the eligibility 

requirements as specified in 7 CFR 

764.101 with the same exceptions. 

For FLP, as specified in 7 CFR 764. 

103(e), FSA generally requires a lien on 

all assets, valued at more than $5,000, 

that are not essential to the farming 

operation and not being converted to 

cash to reduce the loan amount. 

Currently, downpayment loans and 

youth loans are exempt from the lien 

requirement. CL Program direct loan 

applicants will also be exempt from the 

lien requirement because of their 

expected stronger financial condition as 

compared to other FLP borrowers. 

Therefore, FSA is amending 7 CFR 

764.103(e) to specify that the lien 

requirement and requirement to convert 

assets to cash do not apply to applicants 

for CL Program direct loans. 

FSA is adding new subpart F, 

‘‘Conservation Loan Program,’’ which 


erowe on DSK5CLS3C1PROD with RULES
Federal Register / Vol. 75, No. 171 / Friday, September 3, 2010 / Rules and Regulations 54009 

will include §§ 764.231 through 

764.235. Section 764.231 specifies the 

use of funds disbursed under the direct 

CL Program. The list of conservation 

activities that may be included in a 

conservation plan is not intended to be 

all inclusive, but is given as guidance to 

implement the CL Program. Uses will be 

consistent with the CL guarantee 

program except the direct CL Program 

will not have provisions to provide for 

refinancing debt. 

Limitations 

FSA is adding § 764.233, 

‘‘Limitations,’’ to require applicants to 

comply with all limitations specified for 

direct program loans in § 764.102 except 

the prohibition that limits the use of 

loan funds to establish or support a noneligible enterprise. As stated above for 

guaranteed loans, this exception is in 

keeping with the intent of the CL 

Program. 

Section 764.233, also requires that 

any duplicative financial assistance 

provided for the same purpose from 

another source will be applied to the 

borrower’s CL in accordance with 

§ 765.152. This will provide a 

mechanism for FSA to provide funds 

‘‘up front’’ for the construction of 

conservation projects and be able to 

collect any funds provided from other 

sources after construction or 

implementation is completed. 

Rates and Terms 

FSA is adding § 764.234 to specify 

rates and terms for direct CLs. The 

interest rate will be the same as FSA’s 

direct FO rate in accordance with 

section 307 of the CONACT. Loan rates 

are available at all FSA offices and on 

the FSA Web site. The interest rate will 

be at the lower of the rate in effect at 

the time of loan approval or at loan 

closing. 

Direct CL terms will be limited to the 

life of the security pledged for the loan, 

but will not exceed 7 years for chattel 

only loans and 20 years from the date 

of the note for other CLs. This is 

consistent with loan programs 

administered by FSA in the past that 

funded conservation practices and were 

limited the loan term to 20 years. FSA 

believes this term provides applicants 

adequate time to repay CLs. 

Security Requirements 

Section 764.235 is added to provide 

that direct CLs will be secured in 

accordance with the requirements 

specified in §§ 764.103–764.106, which 

is consistent with direct FO loans. FSA 

is adding security requirements and 

order of priority regulations to allow 

flexibility in securing direct CLs when 

NRCS-approved conservation practices 

are planned on real estate that is not 

owned by the applicant, or when the 

real estate is owned by the applicant, 

but taking a lien might impact the 

producer’s normal course of business. 

First priority will be to take a lien on 

any real estate, if available. FSA is not 

requiring a lien be taken on the real 

estate on which the project is being 

completed, but will accept a lien on any 

real estate that is adequate to fulfill 

security requirements specified in 

§§ 764.103–764.106. In cases where no 

real estate security is available, chattels 

may be used to secure direct CLs, 

provided that the chattels are 

determined adequate and acceptable to 

FSA. To assure that such loans are 

adequately secured until paid, loans 

secured by chattel property may not 

exceed a 7 year term. 

There is no graduation requirement 

for CL in the direct loan servicing 

because the 2008 Farm Bill exempts the 

CL Program from the test for credit 

requirement and graduation 

requirements. Graduation, as defined in 

7 CFR 761.2, means payment in full of 

all direct FLP loans made for operating, 

real estate, or both purposes by 

refinancing with other credit sources 

either with or without a FSA guarantee. 

Therefore, FSA is amending §§ 765.101, 

765.205, 765.206, 765.207, 765.253, and 

765.351 to provide that CLs are not 

subject to graduation requirements. 

FSA is amending § 766.107 to add CL 

to the list of FSA loans that can be 

rescheduled and to provide that the 

maximum term for servicing actions 

will be 20 years from the date of the 

original date instrument because the 

maximum term of any CL is 20 years. 

FSA is amending § 766.108 to add CL 

to the list of FSA loans that can be 

reamortized and to provide that the 

maximum term for servicing actions 

will be 20 years from the date of the 

original debt instrument because the 

maximum term of any CL is 20 years. 

Notice and Comment 

In general, the Administrative 

Procedures Act (APA, 5 U.S.C. 553) 

requires that a notice of proposed 

rulemaking be published in the Federal 

Register and interested persons be given 

an opportunity to participate in the 

rulemaking through submission of 

written data, views, or arguments with 

or without opportunity for oral 

presentation. Such notice is not 

required when the agency for good 

cause finds that notice and public 

procedure thereon are impracticable, 

unnecessary, or contrary to the public 

interest. 

Conservation of natural resources, 

including soil, air and water, is a high 

priority for this Administration. There is 

strong interest and participation from 

farmers in programs that support and 

encourage conservation practices. 

Conservation activities help to maintain 

or restore the productive capacity of 

working agricultural lands, preserve or 

restore habitat for threatened and 

endangered species, preserve or restore 

habitat for game birds and sports fish, 

increase the availability and 

accessibility of outdoor recreational 

activities, increase carbon sequestration 

reducing the impacts of global warming, 

and reduce the agricultural run-off that 

threatens the health of the Nation’s 

lakes, bays, and waterways; including 

the Chesapeake Bay, Mississippi Gulf, 

and Great Lakes. New conservation 

initiatives, including Presidential 

initiatives such as ‘‘A 21st Century 

Strategy for America’s Great Outdoors,’’ 

are being developed, placing greater 

emphasis on conservation measures; 

and highlighting that such measures are 

clearly in the public interest. 

Many farmers who need and want to 

implement conservation measures on 

their land, do not have the ‘‘up front’’ 

funds available to implement these 

practices. This is particularly true for 

farmers in the livestock sector who are 

experiencing low profitability, but may 

have the most critical need to 

implement conservation practices due 

to increasing pressure to minimize or 

eliminate: (1) Surface water quality 

deterioration from spills and manure 

runoff; (2) surface water quantity being 

depleted by larger operations; and (3) 

odor nuisance from large barns and 

manure storage. 

Many USDA conservation programs, 

such as the Environmental Quality 

Incentives Program (EQIP) and the 

Conservation Reserve Enhancement 

Program (CREP), provide only cost-share 

assistance, which is generally 50 to 90 

percent of the cost to implement the 

conservation practice. Farmers and 

ranchers are required to complete the 

practice and provide receipts prior to 

receiving the cost-share reimbursement. 

While these conservation projects are 

environmentally valuable, they may 

contribute very little to the economic 

productivity of the farming operation 

providing little incentive for private 

sector institutions to provide financing. 

This often means that implementation 

of environmentally vital conservation 

measures must be postponed because 

‘‘up front’’ capital is not available to the 

farmer. 

Accordingly, FSA finds that good 

cause exists to publish this rule as an 

interim rule, effective immediately. 


erowe on DSK5CLS3C1PROD with RULES
54010 Federal Register / Vol. 75, No. 171 / Friday, September 3, 2010 / Rules and Regulations 

Advance solicitation of comments for 

this rulemaking would be impractical 

and contrary to the public interest, as it 

would delay implementation of 

conservation projects that are critical to 

accomplishment of the Administration 

and Congress’ shared conservation 

objectives. By issuing these regulations 

as an interim rule, FSA still requests 

comments and will consider them in the 

development of the final rule. 

Executive Order 12866 

This Office of Management and 

Budget (OMB) designated this rule as 

significant under Executive Order 

12866, and, therefore, OMB reviewed 

this rule. A cost benefit assessment of 

this rule is summarized below and is 

available from the contact listed above. 

Summary of Economic Impacts 

The CL Program provides eligibility 

and servicing options to participants in 

certain conservation activities through 

FSA direct and guaranteed loan 

programs. More specifically, a direct or 

guaranteed FSA loan can be used to 

help fund any approved NRCS 

conservation plan, even if the project 

involves a non-eligible enterprise as 

defined by 7 CFR 761.2. This approach 

encourages the adoption of conservation 

practices that provide the maximum 

benefit to society, as discussed below. 

Because it is voluntary, the program will 

not impose any unnecessary burden on 

producers. 

The CL Program is expected to 

generate $14.5 million in annual direct 

loan obligations and $11.9 million in 

annual guaranteed obligations, much of 

which will be used to fund the 

producer’s share of NRCS cost-share 

projects. Lower interest rates and easier 

loan terms will result in greater demand 

for NRCS cost-share projects. With 

greater demand, it is expected that 

NRCS will be able to allocate limited 

funds among projects that would have 

greater environmental benefits to 

society. If the CL Program results in a 

5 percent increase in benefits, total 

annual benefits to society would 

increase by $1.41 million. 

Demand for CL funds is not expected 

to be limited to just NRCS cost-share 

projects. For example, a producer may 

use the CL Program without cost-share 

in circumstances where delays in 

implementation of conservation 

practices would risk loss of USDA 

benefits or constrain farm production. 

The CL Program is expected to 

encourage the implementation of 

conservation practices beyond what can 

be funded using available NRCS costshare funds. 

Environmental Review 

The requirements found in 7 CFR part 

1940, subpart G, must be met for the CL 

program consistent with the existing 

direct and guaranteed loan regulations. 

Executive Order 12372 

This program is not subject to 

Executive Order 12372, which requires 

consultation with State and local 

officials. See the notice related to 7 CFR 

part 3015, subpart V, published in the 

Federal Register on June 24, 1983 

(48 FR 29115). 

Executive Order 12988 

This rule has been reviewed in 

accordance with Executive Order 12988, 

Civil Justice Reform. This rule preempts 

State and local laws and regulations that 

are in conflict with this rule. Before any 

judicial action may be brought 

concerning the provisions of this rule, 

the administrative appeal provisions of 

7 CFR parts 11 and 780 must be 

exhausted. 

Executive Order 13132 

The policies in this rule would not 

have any substantial direct effect on 

States, the relationship between the 

Federal Government and the States, or 

the distribution of power and 

responsibilities among the various 

levels of government. Nor would this 

rule impose substantial direct 

compliance costs on State and local 

governments. Therefore, consultation 

with the States is not required. 

Executive Order 13175 

The policies contained in this rule 

would not have tribal implications that 

preempt tribal law. 

USDA will undertake, within 6 

months after this rule becomes effective, 

a series of regulation Tribal consultation 

sessions to gain input by Tribal officials 

concerning the impact of this rule on 

Tribal governments, communities, and 

individuals. These sessions will 

establish a baseline of consultation for 

future actions, should any become 

necessary, regarding this rule. Reports 

from these sessions for consultation will 

be made part of the USDA annual 

reporting on Tribal Consultation and 

Collaboration. USDA will respond in a 

timely and meaningful manner to all 

Tribal government requests for 

consultation concerning this rule and 

will provide additional venues, such as 

webinars and teleconferences, to 

periodically host collaborative 

conversations with Tribal leaders and 

their representatives concerning ways to 

improve this rule in Indian country. 

Unfunded Mandates 

This rule contains no Federal 

mandates under the regulatory 

provisions of Title II of the Unfunded 

Mandate Reform Act of 1995 (UMRA, 

Pub. L. 104–4) for State, local, or tribal 

governments, or the private sector. 

Therefore, this rule is not subject to the 

requirements of sections 202 and 205 of 

UMRA. 

Federal Assistance Programs 

The title and number of the Federal 

assistance programs in the Catalog of 

Federal Domestic Assistance to which 

this rule would apply are: 

10.099—Conservation Loans. 

10.404—Emergency Loans. 

10.406—Farm Operating Loans. 

10.407—Farm Ownership Loans. 

Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act of 1995 as specified in 44 

U.S.C. 3507(j), all the following 

information collection requests have 

been submitted for emergency approval 

to the Office of Management and Budget 

(OMB). FSA obtained a 6-month OMB 

approval in order to require persons to 

complete the information collection 

activities for the CL Program. 

FSA still plans to obtain the 3-year 

approval to continue the information 

collection so FSA is requesting 

comments from interested individuals 

and organizations on the CL Program 

information collection activities and 

changes in the information collection 

activities related to the regulatory 

changes in this rule. In all of these new 

information collection requests, FSA is 

inserting the CL provisions into the 

existing regulations to provide loans to 

the borrowers who are eligible to cover 

the costs of carrying out the qualified 

conservation project. 

The approved information collection 

request will be incorporated into the 

existing approved information 

collection requests (of the same titles) 

that will be up for a renewal this year. 

Due to the differences in expected 

applications for direct loans versus 

guaranteed loans, and the differences in 

the number of individuals required to 

submit the information (applicant 

versus both lender and applicant), even 

though the information collections are 

to implement the CL Program, the 

number of respondents varies for each 

of the information collection requests 

described below. 

Title: Farm Loan Programs; General 

Program Administration. 

OMB Control Number: 0560–New. 

Type of Request: New Collection. 

Abstract: This information collection, 

is required to support the regulation 


erowe on DSK5CLS3C1PROD with RULES
Federal Register / Vol. 75, No. 171 / Friday, September 3, 2010 / Rules and Regulations 54011 

changes in CFR 761, ‘‘Farm Loan 

Programs; General Program 

Administration,’’ that includes the new 

CL Program in both making and 

servicing all FLP loans and guarantees. 

Information collections established by 

the regulation are necessary to ensure 

that program applicants and 

participants meet statutory eligibility 

requirements, loan funds are used for 

authorized purposes, and the 

Government’s interest in security is 

adequately protected. Specific 

information collection requirements 

include financial information in the 

form of a balance sheet and cash flow 

projections used in loan making and 

servicing decisions; information needed 

to establish joint bank accounts in 

which loan funds, proceeds derived 

from the sale of loan security or 

insurance proceeds may be deposited; 

collateral pledges from financial 

institutions when the balance of a 

supervised bank account will exceed 

$100,000; and documentation that 

construction plans and specifications 

comply with State and local building 

standards. 

Estimate of Burden: Public reporting 

for this collection of information is 

estimated to average 75 minutes per 

response. 

Respondents: Individuals or 

households, businesses or other for 

profit and farms. 

Estimated Number of Respondents: 

3,038. 

Estimated Average Number of 

Responses per Respondent: 2. 

Estimated Total Annual Number of 

Responses: 3,038. 

Estimated Total Annual Burden on 

Respondents: 3,767 hours. 

Once this information collection is 

approved, it will be incorporated into 

existing collection package 0560–0238. 

Title: Guaranteed Farm Loans. 

OMB Control Number: 0560–New. 

Type of Request: New Collection. 

Abstract: This information collection 

is required to support the regulation 

changes in 7 CFR part 762, ‘‘Guaranteed 

Farm Loans,’’ which establishes the 

requirement for loan making and loan 

servicing of FSA’s new CL Program 

guaranteed loans. Information 

collections established in the regulation 

are necessary for FSA to evaluate the 

lender’s request for guarantee including 

eligibility, loan repayment, if security 

requirements can be met, monitor and 

account for security, liquidation, and 

lender’s loss claims. 

Estimate of Burden: Public reporting 

for this collection of information is 

estimated to average 48 minutes per 

response. 

Type of Respondents: Individuals or 

households, businesses or other for 

profit and farms. 

Estimated Number of Respondents: 

5,063. 

Estimated Average Number of 

Responses per Respondent: 1.3. 

Estimated Total Annual Number of 

Responses: 5,756. 

Estimated Total Annual Burden on 

Respondents: 5,357 hours. 

Once this information collection is 

approved, it will be incorporated into 

existing collection package 0560–0155. 

Title: Direct Loan Making. 

OMB Control Number: 0560–New. 

Type of Request: New Collection. 

Abstract: This information collection 

is required to support the regulation 

changes in 7 CFR part 764, ‘‘Direct Loan 

Making,’’ which establishes the 

requirements for most of FSA’s direct 

loan programs including the new CL 

Program. Information collections 

established in the regulation are 

necessary for FSA to evaluate the loan 

applicant’s request and determine if 

eligibility, loan repayment, and security 

requirements can be met. 

Estimate of Burden: Public reporting 

for this collection of information is 

estimated to average 26 minutes per 

response. 

Type of Respondents: Individuals or 

households, businesses or other for 

profit and farms. 

Estimated Number of Respondents: 

23,821. 

Estimated Average Number of 

Responses per Respondent: 1.05. 

Estimated Total Annual Number of 

Responses: 29,992 hours. 

Estimated Total Annual Burden on 

Respondents: 15,309 hours. 

Once this information collection is 

approved, it will be incorporated into 

existing collection package 0560–0237. 

Title: Direct Loan Servicing—Regular. 

OMB Control Number: 0560–New. 

Type of Request: New Collection. 

Abstract: This information collection 

is required to support the regulation 

changes in 7 CFR part 765, ‘‘Direct Loan 

Servicing—Regular,’’ which establishes 

the requirements related to routine 

servicing actions associated with direct 

loans including the new CL Program. 

Information collections established in 

the regulation are necessary for FSA to 

monitor and account for loan security, 

including proceeds derived from the 

sale of security, and to process a 

borrower’s requests for subordination or 

partial release of security. 

Estimate of Burden: Public reporting 

for this collection of information is 

estimated to average 29 minutes per 

response. 

Type of Respondents: Individuals or 

households, businesses or other for 

profit and farms. 

Estimated Number of Respondents: 

1,817. 

Estimated Average Number of 

Responses per Respondent: 1.48. 

Estimated Total Annual Number of 

Responses: 1669. 

Estimated Total Annual Burden on 

Respondents: 594 hours. 

Once this information collection is 

approved, it will be incorporated into 

existing collection package 0560–0236. 

Title: Direct Loan Servicing—Special. 

OMB Control Number: 0560–New. 

Type of Request: New Collection. 

Abstract: This information collection 

is required to support the regulation 

changes in 7 CFR part 766, ‘‘Direct Loan 

Servicing—Special,’’ which establishes 

the requirements for servicing 

financially distressed and delinquent 

direct loan borrowers. The information 

collections established in the regulation 

are necessary for FSA to evaluate a 

borrower’s request for disaster set-aside, 

primary loan servicing (including 

reamortization, rescheduling, deferral, 

write down, and conservation 

contracts), and homestead protection. 

Estimate of Burden: Public reporting 

for this collection of information is 

estimated to average 31 minutes per 

response. 

Type of Respondents: Individuals or 

households, businesses or other for 

profit and farms. 

Estimated Number of Respondents: 

576. 

Estimated Average Number of 

Responses per Respondent: 1. 

Estimated Total Annual Number of 

Responses: 576. 

Estimated Total Annual Burden on 

Respondents: 216 hours. 

Once this information collection is 

approved, it will be incorporated into 

existing collections package 0560–0233. 

We are requesting comments on all 

aspects of this information collection to 

help us to: 

(1) Evaluate whether the collection of 

information is necessary for the proper 

performance of FSA’s functions, 

including whether the information will 

have practical utility; 

(2) Evaluate the accuracy of FSA’s 

estimate of burden including the 

validity of the methodology and 

assumptions used; 

(3) Enhance the quality, utility and 

clarity of the information to be 

collected; and 

(4) Minimize the burden of the 

collection of information on those who 

are to respond, including through the 

use of appropriate automated, 

electronic, mechanical, or other 


erowe on DSK5CLS3C1PROD with RULES
54012 Federal Register / Vol. 75, No. 171 / Friday, September 3, 2010 / Rules and Regulations 

technological collection techniques or 

other forms of information technology. 

All comments received in response to 

this notice, including names and 

addresses when provided, will be a 

matter of public record. Comments will 

be summarized and included in the 

submission for Office of Management 

and Budget approval. 

E-Government Act Compliance 

FSA is committed to complying with 

the E-Government 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. 

List of Subjects 

7 CFR Part 761 

Accounting, Loan programs 

agriculture, Rural areas. 

7 CFR Part 762 

Agriculture, Banks, banking, Credit, 

Loan programs—agriculture. 

7 CFR Part 764 

Agriculture, Disaster assistance, Loan 

programs—agriculture. 

7 CFR Part 765 

Agriculture, Agricultural 

commodities, Credit, Livestock, Loan 

programs—agriculture. 

7 CFR Part 766 

Agriculture, Agricultural 

commodities, Credit, Livestock, Loan 

programs—agriculture. 

■ For reasons discussed above, this rule 

amends 7 CFR chapter VII as follows: 

PART 761—FARM LOAN PROGRAMS; 

GENERAL PROGRAM 

ADMINISTRATION 

■ 1. The authority citation for part 761 

continues to read as follows: 

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

■ 2. Amend § 761.2 as follows: 

■ a. In paragraph (a), add abbreviations, 

in alphabetical order, for ‘‘CL’’ and 

‘‘NRCS’’ to read as set forth below; 

■ b. In paragraph (b), amend paragraph 

(1) of the definition of ‘‘beginning 

farmer’’ by removing the words ‘‘OL or 

FO loan’’ and adding, in their place, the 

words ‘‘CL, FO, or OL’’; 

■ c. In paragraph (b), add definitions, in 

alphabetical order, for ‘‘conservation 

loan’’, ‘‘conservation plan’’, 

‘‘conservation practice’’, ‘‘conservation 

project’’, and ‘‘streamlined conservation 

loan’’ and revise the definition of 

‘‘graduation’’ to read as set forth below; 

and 

■ d. In paragraph (b), amend the 

definition of ‘‘program loans’’ by adding 

the acronym and punctuation ‘‘CL,’’ 

immediately before the acronym ‘‘FO’’. 

§ 761.2 Abbreviations and definitions. 

* * * * * 

(a) * * * 

CL Conservation Loan. 

* * * * * 

NRCS National Resources and 

Conservation Service, USDA. 

* * * * * 

(b) * * * 

* * * * * 

Conservation loan means a loan made 

to eligible applicants to cover the costs 

to the applicant of carrying out a 

qualified conservation project. 

Conservation plan means an NRCSapproved written record of the land 

user’s decisions and supporting 

information, for treatment of a land unit 

or water as a result of the planning 

process, that meets NRCS Field Office 

Technical Guide (FOTG) quality criteria 

for each natural resource (soil, water, 

air, plants, and animals) and takes into 

account economic and social 

considerations. The conservation plan 

describes the schedule of operations and 

activities needed to solve identified 

natural resource problems and takes 

advantage of opportunities at a 

conservation management system level. 

This definition only applies to the direct 

loans and guaranteed loans for the 

Conservation Loan Program. 

Conservation practice means a 

specific treatment that is planned and 

applied according to NRCS standards 

and specifications as a part of a resource 

management system for land, water, and 

related resources. 

Conservation project means 

conservation measures that address 

provisions of a conservation plan. 

* * * * * 

Graduation means the payment in full 

of all direct FLP loans, except for CLs, 

made for operating, real estate, or both 

purposes by refinancing with other 

credit sources either with or without an 

Agency guarantee. 

* * * * * 

Streamlined Conservation Loan 

means a direct or guaranteed CL made 

to eligible applicants based on reduced 

documentation. 

* * * * * 

■ 3. Revise § 761.8 paragraphs (a)(1) 

introductory text, (a)(1)(iii), (a)(3), (a)(4), 

and (a)(6) to read as follows: 

§ 761.8 Loan limitations. 

(a) * * * 

(1) Farm Ownership, Downpayment 

loans, Conservation loans, and Soil and 

Water loans: 

* * * * * 

(iii) Any combination of a direct Farm 

Ownership loan, direct Conservation 

loan, direct Soil and Water loan, 

guaranteed Farm Ownership loan, 

guaranteed Conservation loan, and 

guaranteed Soil and Water loan- 

$700,000 (for fiscal year 2000 and 

increased each fiscal year in accordance 

with paragraph (b) of this section); 

* * * * * 

(3) Any combination of guaranteed 

Farm Ownership loan, guaranteed 

Conservation loan, guaranteed Soil and 

Water loan, and guaranteed Operating 

loan-$700,000 (for fiscal year 2000 and 

increased each fiscal year in accordance 

with paragraph (b) of this section); 

(4) Any combination of direct Farm 

Ownership loan, direct Conservation 

loan, direct Soil and Water loan, direct 

Operating loan, guaranteed Farm 

Ownership loan, guaranteed 

Conservation loan, guaranteed Soil and 

Water loan, and guaranteed Operating 

loan-the amount in paragraph (a)(1)(ii) 

of this section plus $300,000; 

* * * * * 

(6) Any combination of direct Farm 

Ownership loan, direct Conservation 

loan, direct Soil and Water loan, direct 

Operating loan, guaranteed Farm 

Ownership, guaranteed Conservation 

loan, guaranteed Soil and Water loan, 

guaranteed Operating loan, and 

Emergency loan-the amount in 

paragraph (a)(1)(ii) of this section plus 

$800,000. 

* * * * * 

■ 4. Amend § 761.103 as follows: 

■ a. In paragraphs (b)(6), (b)(8), and 

(b)(9) add the words and punctuation ‘‘, 

except for streamlined CL’’ immediately 

before the semicolon in each paragraph; 

■ b. In paragraph (c), second sentence, 

remove the words and punctuation ‘‘, a 

loan evaluation,’’; 

■ c. Revise paragraph (d) to read as set 

forth below; and 

■ d. Add paragraph (e) to read as set 

forth below. 

§ 761.103 Farm assessment. 

* * * * * 

(d) The Agency reviews the 

assessment to determine a borrower’s 

progress at least annually. The review 

will be in the form of an office visit, 

field visit, letter, phone conversation, or 

year-end analysis, as determined by the 

Agency. For streamlined CLs, the 

borrower must provide a current 

balance sheet and income tax records. 

Any negative trends noted between the 

previous years’ and the current years’ 


erowe on DSK5CLS3C1PROD with RULES
Federal Register / Vol. 75, No. 171 / Friday, September 3, 2010 / Rules and Regulations 54013 

information must be evaluated and 

addressed in the assessment of the 

streamlined CL borrower. 

(e) If a CL borrower becomes 

financially distressed, delinquent, or 

receives any servicing options available 

under part 766 of this chapter, all 

elements of the assessment in paragraph 

(b) of this section must be addressed. 

§ 761.105 [Amended] 

■ 5. Amend § 761.105 paragraph (a)(1) 

by adding the words ‘‘except for 

streamlined CLs’’ immediately after the 

words ‘‘direct loan’’. 

§ 761.201 [Amended] 

■ 6. Amend § 761.201 paragraph (a)(1) 

by adding the acronym and punctuation 

‘‘, CL,’’ immediately after the acronym 

‘‘FO’’. 

§ 761.202 [Amended] 

■ 7. Amend § 761.202, in the first 

sentence, by adding the acronym and 

punctuation ‘‘, CL,’’ immediately after 

the acronym ‘‘FO’’. 

§ 761.204 [Amended] 

■ 8. Amend § 761.204, introductory text, 

by adding the acronym and punctuation 

‘‘, CL,’’ immediately after the acronym 

‘‘FO’’. 

§ 761.205 [Amended] 

■ 9. Amend § 761.205 as follows: 

■ a. In paragraph (a) introductory text by 

adding the acronym and punctuation ‘‘, 

CL,’’ immediately after the acronym 

‘‘FO’’; and; 

■ b. In paragraph (b)(1) in the table by 

removing the words ‘‘FO and’’ each time 

it appears and adding, in its place, the 

words ‘‘FO, CL, and’’ and by removing 

the words ‘‘FO loans’’ each time they 

appear and adding in their place the 

words ‘‘FOs and CLs’’. 

§ 761.206 [Amended] 

■ 10. Amend § 761.206, first sentence, 

by adding the acronym and punctuation 

‘‘, CL,’’ immediately after the acronym 

‘‘FO’’. 

§ 761.208 [Amended] 

■ 11. Amend § 761.208 as follows: 

■ a. In paragraph (a)(1) by adding the 

acronym and punctuation ‘‘, CL,’’ 

immediately after the acronym ‘‘FO’’ and 

■ b. In paragraph (b) introductory text 

by adding the words and punctuation 

‘‘and CL,’’ immediately after the 

acronym ‘‘FO’’ each time it appears. 

§ 761.210 [Redesignated as § 761.211] 

■ 12. Redesignate § 761.210 as 

§ 761.211. 

■ 13. Add § 761.210 to read as follows: 

§ 761.210 CL funds. 

(a) The following applicants and 

conservation projects will receive 

priority for CL funding: 

(1) Beginning farmer or socially 

disadvantaged farmer, 

(2) An applicant who will use the 

loan funds to convert to a sustainable or 

organic agriculture production system 

as evidenced by one of the following: 

(i) A conservation plan that states the 

applicant is moving toward a 

sustainable or organic production 

system, or 

(ii) An organic plan, approved by a 

certified agent and the State organic 

certification program, or 

(iii) A grant awarded by the 

Sustainable Agriculture Research and 

Education (SARE) program of the 

National Institute of Food and 

Agriculture, USDA. 

(3) An applicant who will use the 

loan funds to build conservation 

structures or establish conservation 

practices to comply with 16 U.S.C. 3812 

(section 1212 of the Food Security Act 

of 1985) for highly erodible land. 

(b) [Reserved] 

PART 762—GUARANTEED FARM 

LOANS 

■ 14. The authority citation for part 762 

continues to read as follows: 

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

■ 15. In § 762.101, revise the first 

sentence in paragraph (a) to read as 

follows: 

§ 762.101 Introduction. 

(a) * * * This subpart contains 

regulations governing Operating loans, 

Farm Ownership loans, and 

Conservation loans guaranteed by the 

Agency. * * * 

* * * * * 

§ 762.106 [Amended] 

■ 16. Amend § 762.106 as follows: 

■ a. In paragraph (b)(4) by removing the 

words ‘‘or Soil and Water (SW)’’ and by 

adding, in its place the words ‘‘CL, or 

SW’’; 

■ b. In paragraph (c)(3) by adding the 

acronym and punctuation ‘‘CL,’’ 

immediately after the acronym ‘‘FO,’’; 

and 

■ c. In paragraph (g)(2)(ix) by adding at 

the end the reference ‘‘and (c)(8)’’. 

■ 17. Amend § 762.110 as follows: 

■ a. Revise paragraphs (a)(1)(iv) and 

(a)(1)(vi), and add paragraphs (a)(1)(vii) 

and (a)(1)(viii), to read as set forth 

below; 

■ b. Revise paragraph (b) introductory 

text to read as set forth below; 

■ c. Revise paragraph (c)(2), redesignate 

paragraph (c)(3) as paragraph (c)(5), and 

add paragraphs (c)(3) and (c)(4) to read 

as set forth below; 

■ d. Redesignate paragraphs (d) through 

(g) as (e) through (h); 

■ e. Add paragraph (d) to read as set 

forth below; and 

■ f. In newly redesignated paragraph (h), 

first sentence, remove the word ‘‘When’’ 

and add, in its place, the words ‘‘Except 

for CL guarantees, when’’. 

§ 762.110 Loan application. 

(a) * * * 

(1) * * * 

(iv) Cash flow budget, unless waived 

when conditions in paragraph (d) of this 

section are met; 

* * * * * 

(vi) A plan for servicing the loan; 

(vii) For CL guarantees, a copy of the 

conservation plan; 

(viii) To request consideration for 

priority funding for CL guarantees, 

plans to transition to organic or 

sustainable agriculture when the funds 

requested will be used to facilitate the 

transition. 

* * * * * 

(b) Loans over $125,000. A complete 

application for loans over $125,000 will 

require items specified in paragraph (a) 

of this section, plus the following items 

unless waived when conditions in 

paragraph (d) of this section are met: 

* * * * * 

(c) * * * 

(2) A loan narrative; 

(3) For CL guarantees, a copy of the 

conservation plan; 

(4) To request consideration for 

priority funding for CL guarantees, 

plans to transition to organic or 

sustainable agriculture when the funds 

requested will be used to facilitate the 

transition. 

* * * * * 

(d) Streamlined CL guarantee. For CL 

guarantee applicants meeting all the 

following criteria, the cash flow budget 

requirement in this section will be 

waived: 

(1) Be current on all payments to all 

creditors including the Agency (if 

currently an Agency borrower), 

(2) Debt to asset ratio is 40 percent or 

less, 

(3) Balance sheet indicates a net 

worth of 3 times the requested loan 

amount or greater, and 

(4) FICO credit score is at least 700. 

For entity applicants, the FICO credit 

score of the majority of the individual 

members of the entity must be at least 

700. 

* * * * * 

■ 18. Amend § 762.120 as follows: 

■ a. Revise the introductory text to read 

as set forth below, 


erowe on DSK5CLS3C1PROD with RULES
54014 Federal Register / Vol. 75, No. 171 / Friday, September 3, 2010 / Rules and Regulations 

■ b. Add introductory text to paragraph 

(h) to read as set forth below, 

■ c. Amend paragraph (k) introductory 

text by removing the word ‘‘Entity’’ and 

adding, in its place, the words ‘‘Except 

for CL, entity’’. 

■ d. Redesignate paragraph (l) as 

paragraph (n), and 

■ e. Add paragraphs (l) and (m) to read 

as set forth below: 

§ 762.120 Applicant eligibility. 

Unless otherwise provided, applicants 

must meet all of the following 

requirements to be eligible for a 

guaranteed OL, FO, or CL. 

* * * * * 

(h) Test for credit. Except for CL 

guarantees, 

* * * * * 

(l) For CL entity applicants. Entity 

applicants for CL guarantees must meet 

the following eligibility criteria: 

(1) The majority interest holders of 

the entity must meet the requirements of 

paragraph (d), (f), and (g) of this section; 

(2) The entity must be controlled by 

farmers engaged primarily and directly 

in farming or ranching in the United 

States after the loan is made; 

(3) The entity members are not 

themselves entities; and 

(4) The entity must be authorized to 

operate a farm in the State or States in 

which the farm is located. 

(m) For CL individual applicants. 

Individual applicants for CL guarantees 

must be farmers or ranchers in the 

United States. 

* * * * * 

■ 19. Amend § 762.121 by redesignating 

paragraphs (c) and (d) as paragraphs (d) 

and (e) and adding paragraph (c) to read 

as follows: 

§ 762.121 Loan purposes. 

* * * * * 

(c) CL Purposes. Loan funds disbursed 

under a CL guarantee may be used for 

any conservation activities included in 

a conservation plan including, but not 

limited to: 

(1) The installation of conservation 

structures to address soil, water, and 

related resources; 

(2) The establishment of forest cover 

for sustained yield timber management, 

erosion control, or shelter belt purposes; 

(3) The installation of water 

conservation measures; 

(4) The installation of waste 

management systems; 

(5) The establishment or improvement 

of permanent pasture; 

(6) Other purposes including the 

adoption of any other emerging or 

existing conservation practices, 

techniques, or technologies; and 

(7) Refinancing indebtedness incurred 

for any authorized CL purpose, when 

refinancing will result in additional 

conservation benefits. 

* * * * * 

§ 762.122 [Amended] 

■ 20. Amend § 762.122(c) by removing 

the acronym ‘‘FO’’ and by adding, in its 

place, the words ‘‘FO or CL’’. 

■ 21. Amend § 762.124 as follows: 

■ a. Redesignate paragraphs (d) and (e) 

as paragraphs (e) and (f), 

■ b. Add paragraph (d) to read as set 

forth below, and 

■ c. In newly redesignated paragraph (e) 

introductory text, remove the words ‘‘FO 

or OL’’ and add, in its place, the words 

‘‘FO, OL, or CL’’. 

§ 762.124 Interest rates, terms, charges, 

and fees. 

* * * * * 

(d) CL terms. Each loan must be 

scheduled for repayment over a period 

not to exceed 20 years from the date of 

the note or such shorter period as may 

be necessary to assure that the loan will 

be adequately secured, taking into 

account the probable depreciation of the 

security. 

* * * * * 

■ 22. Amend § 762.125 as follows: 

■ a. In paragraph (a), immediately 

following the heading, add introductory 

text to read as set forth below; 

■ b. In paragraph (a)(2), remove the 

reference and words ‘‘as defined in 

§ 762.102(b)’’; 

■ c. In paragraph (a)(9), second 

sentence, remove the word 

‘‘Guaranteed’’ and add in its place, the 

words ‘‘Except for CL, guaranteed’’; and 

■ d. In paragraph (b) add introductory 

text to read as set forth below. 

§ 762.125 Financial feasibility. 

(a) * * * Except for streamlined CL 

guarantees, the following requirements 

must be met and applications processed 

as specified in § 762.110(d): 

* * * * * 

(b) * * * Except for streamlined CL 

guarantees, the following requirements 

must be met and applications processed 

as specified in § 762.110(d): 

* * * * * 

§ 762.128 [Amended] 

■ 23. Amend § 762.128, paragraph (a), 

first sentence, by removing the words 

‘‘OL and FO’’ and adding in its place the 

words ‘‘OL, FO, and CL’’. 

■ 24. Amend § 762.129 as follows: 

■ a. In paragraph (a) first sentence by 

removing the word ‘‘The’’ and adding, in 

its place, the words ‘‘Except for CLs, the’’ 

and add a new sentence at the end as 

set forth below; and 

■ b. In paragraph (c) by removing the 

word ‘‘All’’ and adding, in its place, the 

words ‘‘Except for CLs, all’’. 

§ 762.129 Percent of guarantee and 

maximum loss. 

(a) * * * For CLs, the percent of 

guarantee will be 75 percent. 

* * * * * 

■ 25. Revise § 762.130 by revising 

paragraph (a)(2)(ii) to read as follows: 

§ 762.130 Loan approval and issuing the 

guarantee. 

(a) * * * 

(2) * * * 

(ii) For PLP lenders, if the 14 day time 

frame is not met, the proposed 

guaranteed loan will automatically be 

approved, subject to funding, and 

receive an 80 or 95 percent guarantee for 

FO or OL loans, and 75 percent 

guarantee for CL, as appropriate. 

* * * * * 

■ 26. Amend § 762.145 as follows: 

■ a. In paragraph (b)(2)(i) remove the 

reference and words ‘‘as defined in 

§ 762.102(b)’’; 

■ b. Add paragraphs (b)(10) and 

(c)(1)(iii) to read as set forth below; and 

■ c. Revise paragraph (e)(5) to read as 

set forth below. 

§ 762.145 Restructuring guaranteed loans. 

* * * * * 

(b) * * * 

(10) For CL, the lender must certify 

that the borrower remains in 

compliance with the approved 

conservation plan. 

(c) * * * 

(1) * * * 

(iii) CL will be amortized over the 

remaining term or rescheduled with an 

uneven payment schedule. The maturity 

date cannot exceed 20 years from the 

date of the original note. 

* * * * * 

(e) * * * 

(5) The loan will be restructured with 

regular payments at terms no shorter 

than 5 years for a line of credit and OL 

term note; and no shorter than 20 years 

for FO and CL, unless required to be 

shorter by paragraphs (c)(1)(i) through 

(iii) of this section. 

* * * * * 

§ 762.147 [Amended] 

■ 27. Amend § 762.147, paragraph 

(b)(1)(i)(A), last sentence, by removing 

the reference ‘‘§ 762.141(b)’’ and by 

adding, in its place, the reference 

‘‘§ 762.142(b)’’. 

§ 762.148 [Amended] 

■ 28. Amend § 762.148, paragraph 

(d)(3), last sentence, by removing the 


erowe on DSK5CLS3C1PROD with RULES
Federal Register / Vol. 75, No. 171 / Friday, September 3, 2010 / Rules and Regulations 54015 

reference ‘‘§ 762.149(a)(vi)’’ and by 

adding, in its place, the reference 

‘‘§ 762.149(i)(4)’’. 

PART 764—DIRECT LOAN MAKING 

■ 29. The authority citation for part 764 

continues to read as follows: 

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

■ 30. Amend § 764.1 by revising 

paragraphs (b)(2) and (b)(3), and adding 

paragraph (b)(4) to read as follows: 

§ 764.1 Introduction. 

* * * * * 

(b) * * * 

(2) OL, including Youth loans; 

(3) EM; and 

(4) CL. 

■ 31. Amend § 764.51 as follows: 

■ a. In paragraph (b) introductory text, 

remove the reference ‘‘(e) of this section’’ 

and adding, in its place, the reference 

‘‘(f) of this section’’; 

■ b. In paragraph (b)(6), remove the 

word ‘‘Documentation’’ and add, in its 

place, the words ‘‘Except for CL, 

documentation’’; 

■ c. In paragraph (b)(13), at the end, 

remove the word ‘‘and’’; 

■ d. Revise paragraph (b)(14) to read as 

set forth below; 

■ e. Add paragraphs (b)(15) and (b)(16) 

to read as set forth below; 

■ f. Redesignate paragraphs (d) and (e) 

as paragraphs (e) and (f); and 

■ g. Add paragraph (d) to read as set 

forth below. 

§ 764.51 Loan application. 

* * * * * 

(b) * * * 

(6) Except for CL, documentation that 

the applicant and each member of an 

entity applicant cannot obtain sufficient 

credit elsewhere on reasonable rates and 

terms, including a loan guarantee to the 

Agency; 

* * * * * 

(14) For EM loans, a statement of loss 

or damage on the appropriate Agency 

form; 

(15) For CL only, a conservation plan 

as defined in § 761.2 of this chapter; and 

(16) For CL only, and if the applicant 

wishes to request consideration for 

priority funding, plans to transition to 

organic or sustainable agriculture when 

the funds requested will be used to 

facilitate the transition. 

* * * * * 

(d) For a CL Program streamlined 

application, the applicant must meet all 

of the following: 

(1) Be current on all payments to all 

creditors including the Agency (if 

currently an Agency borrower). 

(2) Have not received primary loan 

servicing on any FLP debt within the 

past 5 years. 

(3) Have a debt to asset ratio that is 

40 percent or less. 

(4) Have a balance sheet that indicates 

a net worth of 3 times the requested 

loan amount or greater. 

(5) Have a FICO credit score from the 

Agency obtained credit report of at least 

700. For entity applicants, the FICO 

credit score of the majority of the 

individual members of the entity must 

be at least 700. 

(6) Submit the following items: 

(i) Items specified in paragraphs 

(b)(1), (b)(2), (b)(3), (b)(7), (b)(11), 

(b)(15), and (b)(16) of this section, 

(ii) A current financial statement less 

than 90 days old, and 

(iii) Upon Agency request, other 

information specified in paragraph (b) of 

this section necessary to make a 

determination on the loan application. 

* * * * * 

■ 32. Revise § 764.53 paragraph (d) to 

read as follows: 

§ 764.53 Processing the complete 

application. 

* * * * * 

(d) Except for CL requests, if based on 

the Agency’s review of the application, 

it appears the applicant’s credit needs 

could be met through the guaranteed 

loan program, the Agency will assist the 

applicant in securing guaranteed loan 

assistance under the market placement 

program as specified in § 762.110(h) of 

this chapter. 

* * * * * 

§ 764.101 [Amended] 

■ 33. Amend § 764.101 as follows: 

■ a. In paragraph (e) introductory text, 

first sentence, remove the word ‘‘The’’ 

and add, in its place, the words ‘‘Except 

for CL, the’’; 

■ b. In paragraph (j) remove the 

reference ‘‘subpart J’’ and add, in its 

place, the reference ‘‘subpart K’’; and 

■ c. Add as introductory text in 

paragraph (k) the words and 

punctuation ‘‘Except for CL:’’. 

§ 764.102 [Amended] 

■ 34. Amend § 764.102 paragraph (a) by 

removing the reference ‘‘H of this part’’ 

and adding, in its place, the reference ‘‘I 

of this part’’. 

§ 764.103 [Amended] 

■ 35. Amend § 764.103 as follows: 

■ a. In paragraphs (a) and (b) 

introductory text, first sentence, by 

removing the reference ‘‘H of this part’’ 

and adding, in its place, the reference ‘‘I 

of this part’’; and 

■ b. In paragraph (e), last sentence, by 

removing the words ‘‘loans and youth’’ 

and adding, in its place, the words 

‘‘loans, conservation loans, or youth’’. 

Subparts F Through J [Redesignated] 

■ 36. Redesignate subparts F through J 

as subparts G through K and add new 

subpart F to read as follows: 

Subpart F—Conservation Loan 

Program 

Sec. 

764.231 Conservation loan uses. 

764.232 Eligibility requirements. 

764.233 Limitations. 

764.234 Rates and terms. 

764.235 Security requirements. 

764.236–764.250 [Reserved] 

§ 764.231 Conservation loan uses. 

(a) CL funds may be used for any 

conservation activities included in a 

conservation plan including, but not 

limited to: 

(1) The installation of conservation 

structures to address soil, water, and 

related resources; 

(2) The establishment of forest cover 

for sustained yield timber management, 

erosion control, or shelter belt purposes; 

(3) The installation of water 

conservation measures; 

(4) The installation of waste 

management systems; 

(5) The establishment or improvement 

of permanent pasture; and 

(6) Other purposes including the 

adoption of any other emerging or 

existing conservation practices, 

techniques, or technologies. 

(b) [Reserved] 

§ 764.232 Eligibility requirements. 

(a) The applicant: 

(1) Must comply with general 

eligibility requirements specified in 

§ 764.101 except paragraphs (e) and (k) 

of that section; 

(2) And anyone who will sign the 

promissory note, must not have received 

debt forgiveness from the Agency on 

any direct or guaranteed loan; and 

(3) Must be the owner-operator or 

tenant-operator of a farm and be 

engaged in agricultural production after 

the time of loan is closed. In the case of 

an entity: 

(i) The entity is controlled by farmers 

engaged primarily and directly in 

farming in the United States; 

(ii) The entity must be authorized to 

operate a farm in the State in which the 

farm is located. 

(b) [Reserved] 

§ 764.233 Limitations. 

(a) The applicant must comply with 

the general limitations specified in 


erowe on DSK5CLS3C1PROD with RULES
54016 Federal Register / Vol. 75, No. 171 / Friday, September 3, 2010 / Rules and Regulations 

§ 764.102 except § 764.102(f), which 

does not apply to applicants for the CL 

Program. 

(b) The applicant must agree to repay 

any duplicative financial benefits or 

assistance to CL. 

§ 764.234 Rates and terms. 

(a) Rates. The interest rate: 

(1) Will be the Agency’s Direct Farm 

Ownership rate, available in each 

Agency office. 

(2) Charged will be the lower rate in 

effect either at the time of loan approval 

or loan closing. 

(b) Terms. The following terms apply 

to CLs: 

(1) The Agency schedules repayment 

of a CL based on the useful life of the 

security. 

(2) The maximum term for loans 

secured by chattels only will not exceed 

7 years from the date of the note. 

(3) In no event will the term of the 

loan exceed 20 years from the date of 

the note. 

§ 764.235 Security requirements. 

(a) The loan must be secured: 

(1) In accordance with requirements 

established in §§ 764.103 through 

764.106; and 

(2) In the order of priority as follows: 

(i) By real estate, if available, and then 

(ii) By chattels, if determined 

acceptable by the Agency. 

(b) [Reserved] 

§§ 764.236–764.250 [Reserved] 

PART 765—DIRECT LOAN 

SERVICING—REGULAR 

■ 37. The authority citation for part 765 

continues to read as follows: 

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

■ 38. In § 765.101, add paragraph (g) to 

read as follows: 

§ 765.101 Borrower graduation 

requirements. 

* * * * * 

(g) CLs are not subject to graduation 

requirements under this part. 

■ 39. In § 765.152, revise paragraph 

(b)(6) to read as follows: 

§ 765.152 Types of payments. 

* * * * * 

(b) * * * 

(6) Refunds of duplicate program 

benefits or assistance to be applied on 

CL or EM loans; or 

* * * * * 

§§ 765.205–765.207 and 765.253 

[Amended] 

■ 40. In addition to the amendment set 

forth above, in 7 CFR part 765, remove 

the word ‘‘graduate’’ and add, in its 

place, the words ‘‘graduate on any 

program except for CL’’ in the following 

places: 

■ a. In § 765.205 paragraph (b)(6), 

■ b. In § 765.206 paragraph (b)(5), 

■ c. In § 765.207 paragraph (c), and 

■ d. In § 765.253 paragraph (b). 

§ 765.351 [Amended] 

■ 41. Amend § 765.351, paragraph 

(a)(8), by removing the word ‘‘credit’’ 

and adding, in its place, the words 

‘‘credit on any program except for CL’’. 

PART 766—DIRECT LOAN 

SERVICING—SPECIAL 

■ 42. The authority citation for part 766 

continues to read as follows: 

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

1981(d) and 1989. 

■ 43. Amend § 766.107 as follows: 

■ a. In paragraph (b) introductory text, 

add the acronym and punctuation ‘‘CL,’’ 

immediately after the acronym ‘‘OL,’’ 

■ b. Revise paragraph (c)(2) to read as 

set forth below, and 

■ c. Add paragraphs (c)(3) and (c)(4) to 

read as set forth below. 

§ 766.107 Consolidation and rescheduling. 

* * * * * 

(c) * * * 

(2) Except for CL and RL loans, the 

repayment period cannot exceed 15 

years from the date of the consolidation 

and rescheduling. 

(3) The repayment schedule for RL 

loans may not exceed 7 years from the 

date of rescheduling. 

(4) The repayment schedule for CLs 

may not exceed 20 years from the date 

of the original note or assumption 

agreement. 

* * * * * 

■ 44. Amend § 766.108 as follows: 

■ a. In paragraph (a) introductory text, 

add the acronym and punctuation ‘‘CL,’’ 

immediately after the acronym ‘‘RHF,’’ 

and 

■ b. Add paragraph (b)(2)(v) to read as 

set forth below. 

§ 766.108 Reamortization. 

* * * * * 

(b) * * * 

(2) * * * 

(v) CLs may not exceed 20 years from 

the date of the original note or 

assumption agreement. 

* * * * * 

Signed in Washington, DC, August 31, 

2010. 

Jonathan W. Coppess, 

Administrator, Farm Service Agency. 

[FR Doc. 2010–22070 Filed 9–2–10; 8:45 am] 

BILLING CODE 3410–05–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Part 510 

[Docket No. FDA–2010–N–0002] 

New Animal Drugs; Change of 

Sponsor’s Name and Address 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Final rule. 

SUMMARY: The Food and Drug 

Administration (FDA) is amending the 

animal drug regulations to reflect a 

change of sponsor’s name from 

Alpharma, Inc., to Alpharma LLC. The 

sponsor’s mailing address will also be 

changed. 

DATES: This rule is effective September 

3, 2010. 

FOR FURTHER INFORMATION CONTACT: 

David R. Newkirk, Center for Veterinary 

Medicine (HFV–100), Food and Drug 

Administration, 7500 Standish Pl., 

Rockville, MD 20855, 240–276–8307, 

email: david.newkirk@fda.hhs.gov. 

SUPPLEMENTARY INFORMATION: Alpharma, 

Inc., 440 Rte. 22, Bridgewater, NJ 08807 

has informed FDA that it has changed 

its name and address to Alpharma LLC, 

400 Crossing Blvd., Bridgewater, NJ 

08807. Accordingly, the agency is 

amending the regulations in 21 CFR 

510.600(c) to reflect this change. 

This rule does not meet the definition 

of ‘‘rule’’ in 5 U.S.C. 804(3)(A) because 

it is a rule of ‘‘particular applicability.’’ 

Therefore, it is not subject to the 

congressional review requirements in 

5 U.S.C. 801–808. 

List of Subjects in 21 CFR Part 510 

Administrative practice and 

procedure, Animal drugs, Labeling, 

Reporting and recordkeeping 

requirements. 

■ Therefore, under the Federal Food, 

Drug, and Cosmetic Act and under 

authority delegated to the Commissioner 

of Food and Drugs and redelegated to 

the Center for Veterinary Medicine, 21 

CFR part 510 is amended as follows: 

PART 510—NEW ANIMAL DRUGS 

■ 1. The authority citation for 21 CFR 

part 510 continues to read as follows: 

Authority: 21 U.S.C. 321, 331, 351, 352, 

353, 360b, 371, 379e. 

■ 2. In § 510.600, in the table in 

paragraph (c)(1), revise the entry for 

‘‘Alpharma Inc.’’; and in the table in 

paragraph (c)(2), revise the entry for 

‘‘046573’’ to read as follows: 


erowe on DSK5CLS3C1PROD with RULES