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.

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new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

78689 

Vol. 79, No. 250 

Wednesday, December 31, 2014 

DEPARTMENT OF AGRICULTURE 

Farm Service Agency 

7 CFR Parts 761, 762, 764, and 765 

RIN 0560–AI29 

Farm Loan Programs; Programs 

Changes 

AGENCY: Farm Service Agency, USDA. 

ACTION: Final rule. 

SUMMARY: The Farm Service Agency 

(FSA) is amending Farm Loan Programs 

(FLP) loan making and servicing 

regulations to reflect several changes 

required by the Agricultural Act of 2014 

(2014 Farm Bill). The changes were 

implemented administratively upon the 

passage of the 2014 Farm Bill; this rule 

makes conforming amendments in the 

FSA regulations. 

DATES: Effective: December 31, 2014. 

FOR FURTHER INFORMATION CONTACT: 

Bradley A. Johnson, telephone: (202) 

720–5847. Persons with disabilities or 

who require alternative means for 

communications (Braille, large print, 

audiotape, etc.) should contact the 

USDA Target Center at (202) 720–2600 

(voice). 

SUPPLEMENTARY INFORMATION: 

Background 

The FSA FLP direct loans and loan 

guarantees provide credit to farmers 

whose financial risk exceeds a level 

acceptable to commercial lenders. 

Through direct and guaranteed Farm 

Ownership loans (FO), Operating Loans 

(OL), and Conservation Loans (CL); 

direct Microloans (ML), direct 

Emergency Loans (EM) and Land 

Contract (LC) guarantees, FSA assists 

tens of thousands of farmers each year 

in starting and maintaining profitable 

farm businesses. FSA loan funds may be 

used to pay normal operating or family 

living expenses; make capital 

improvements; refinance certain debts; 

and purchase farmland, livestock, 

equipment, feed and other materials 

essential to farm operations. FSA 

services extend beyond the typical loan 

by offering farmers ongoing consultation 

and advice, to help to make their farm 

successful. These loans are a temporary 

source of credit. Farmers with direct 

loans generally are required to graduate 

to other credit when their financial 

condition will allow them to do so. 

In addition, the YL Program provides 

operating loans of up to $5,000 to 

eligible individual youths, ages 10 to 20, 

to finance income producing, 

agriculture related projects. The project 

must be of modest size, educational and 

initiated, developed and carried out by 

youths participating in 4-H Clubs, 

Future Farmers of America (FFA), or a 

similar organization. 

Throughout this rule, any reference to 

‘‘farm’’ or ‘‘farmer’’ also includes 

‘‘ranch’’ or ‘‘rancher’’, respectively. 

This rule makes changes in the FSA 

regulations required by several 

provisions of the 2014 Farm Bill (Pub. 

L. 113–79) regarding FSA’s loan making 

and servicing programs. More 

specifically, the changes: 

• Increase the percent of guarantee for 

CLs; 

• Reduce the interest rate for direct 

FOs made under a joint financing 

arrangement; 

• Eliminate the oil, gas, and mineral 

appraisal requirement; 

• Increase the maximum loan amount 

for a direct FO made under the 

downpayment program; 

• Eliminate the rural residency 

requirement for the YLs ; 

• Allow a borrower who had YL debt 

forgiveness to receive future 

Government loans under certain 

circumstances; 

• Exclude MLs to beginning or 

veteran farmers from the existing OL 

term limitations, and add a special ML 

interest rate available to beginning and 

veteran farmers; 

• Eliminate the term limit for 

guaranteed OLs; and 

• Amend the definition of a 

beginning farmer, specifically the 

maximum owned acreage requirement. 

CL; Increase Percent of Guarantee 

Guaranteed CLs promote conservation 

practices on farms that help protect 

natural resources, and provide credit for 

farmers to implement these 

conservation measures on their land. 

Unlike FSA’s traditional FO and OL 

Programs that are targeted toward family 

and less financially established farmers, 

eligibility requirements for the CL 

Program permit FSA to provide 

assistance to applicants who may not be 

a family farmer or are financially strong. 

Section 5002 of the 2014 Farm Bill 

amended section 304(e) of the 

Consolidated Farm and Rural 

Development Act (CONACT) (7 U.S.C. 

1924e) to increase the percent of 

guarantee for CLs from 75 percent to 80 

percent, and authorized a 90 percent 

guarantee for a qualified beginning or 

socially disadvantaged (SDA) farmer. 

Lenders will now be able to have a 

greater guarantee on CLs. 

Previously, CL received a 75 percent 

guarantee, which was less than the 

typical 90 percent guarantee on an FO 

or farm OL guarantee. Partially due to 

this lower percentage of guarantee, the 

use of CLs have been extremely limited 

since guaranteed FO or OL funds may 

also be used for conservation purposes. 

This rule amends 7 CFR 762.129 and 

762.130 to increase the percent of 

guarantee for CL. The increase in CL 

guarantee to 80 percent and the even 

higher 90 percent guarantee to 

beginning or SDA farmers will increase 

the use of CL guarantees used to 

implement conservation practices, 

which benefit not only the farmer, but 

the environment as well. 

Direct FO as Part of Joint Financing 

Arrangement; Interest Rate 

Direct FOs made as part of a 

participation (joint financing) 

arrangement are eligible for a special 

joint financing interest rate. These loans 

require that a commercial lender or 

private party provide a portion of the 

financing, such that the FO does not 

exceed 50 percent of the total amount 

financed. FOs may be used to purchase 

a farm, enlarge an existing farm, 

construct or improve farm structures, 

pay closing costs, and for soil and water 

conservation and protection. Repayment 

terms may be as long as 40 years and the 

maximum FO indebtedness is limited to 

$300,000. 

Section 5003 of the 2014 Farm Bill 

amended section 307(a)(3) of the 

CONACT (7 U.S.C. 1927(a)(3)) to reduce 

the interest rate for FOs that are part of 

a joint financing arrangement. This joint 

financing interest rate is the direct FO 


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78690 Federal Register / Vol. 79, No. 250 / Wednesday, December 31, 2014 / Rules and Regulations 

regular interest rate minus 2 percent, 

with a floor of 2.5 percent. 

Previously, the joint financing interest 

rate for FOs was 5 percent and has been 

since March 24, 1997. For several years, 

the joint financing interest rate of 5 

percent has been higher than the direct 

FO interest rate. As a result, there has 

been no financial incentive for the 

farmer to finance a portion of the real 

estate purchase with another lender, 

unless she or he qualified as a beginning 

or SDA farmer who was able to receive 

a downpayment FO with a lower 

interest rate. 

This rule amends 7 CFR 764.154 to 

change the interest rate for FOs that are 

part of a joint financing arrangement. 

This reduced interest rate for FOs made 

under a joint financing agreement will 

encourage farmers to seek commercial 

lender financing, and therefore reduce 

FSA financing of the farm to 50 percent 

or less. FSA expects to be able to 

leverage the use of our typically limited 

direct FO funds, to assist an even greater 

number of eligible family farmers. 

Mineral Rights Appraisal; Eliminate 

Requirement 

FSA uses appraisals to determine the 

value of real and personal property. 

Appraisals ensure there is adequate 

security to support FSA loan making 

and servicing actions. 

Section 5004 of the 2014 Farm Bill 

eliminated the requirement that in order 

for FSA to have the rights to oil, gas, or 

other minerals as FO collateral, the 

products’ value must be considered in 

the appraised value of the real estate 

securing the loan. 

Section 307(d) of the CONACT (7 

U.S.C. 1927(d)), previously required that 

for FOs; the value of oil, gas, or other 

minerals must be included in the 

appraised value of the real estate 

security in order for FSA to have a valid 

lien on those products. This rule 

removes this mineral appraisal 

requirement in 7 CFR 761.7 and 765.252 

for all future FLP loans. For all loans 

made after February 7, 2014, the date of 

the 2014 Farm Bill was enacted, FSA 

will have a security interest in oil, gas, 

or other minerals on or under the 

property regardless of whether the value 

of those products were included in the 

appraisal value of the property. This 

security interest is reflected in the FSA 

mortgage forms. 

Downpayment FOs; Increase Maximum 

Loan Amount 

FSA downpayment FOs are used to 

assist beginning and SDA farmers in 

purchasing a farm. The loans have a 

lower interest rate than other FO loans 

and require participation by another 

lender, along with cash down payment 

requirement of 5 percent. 

Section 5005 of the 2014 Farm Bill 

amended section 310E(b)(1)(C) of the 

CONACT (7 U.S.C. 1935(b)(1)(C)) to 

increase the maximum loan limit for 

downpayment FOs to 45 percent of 

$667,000. This amount is $300,150; 

however, section 305 of the CONACT (7 

U.S.C. 1925) limits the maximum loan 

amount for each FO, including 

downpayment FOs, to $300,000. 

Previously, downpayment FOs were 

limited to a maximum of $225,000 (45 

percent of $500,000) and all other types 

of direct FOs were limited to $300,000. 

This difference in maximum loan 

amounts was a limiting factor in many 

loan transactions, particularly as loan 

amounts have increased due to rising 

farm real estate values. The rule amends 

7 CFR 764.203 to increase the maximum 

loan limit for downpayment FO loans to 

$300,000. 

YL; Eliminate Rural Residency 

Requirement 

FSA makes YL of up to $5,000 to 

eligible individual youths, ages 10 to 20, 

to finance income producing and 

agricultural related projects. The project 

must be modest in size, educational, 

and initiated, developed and carried out 

by youths participating in a 4-H Club, 

FFA, or similar organization. 

Section 5102 of the 2014 Farm Bill 

amended section 311(b)(1) of the 

CONACT (7 U.S.C. 1941(b)(1)) to 

eliminate the rural residency 

requirement for YL. Eligible youth in 

suburban and urban areas will now be 

eligible for YL. 

Previously, to be eligible for a YL the 

applicant had to reside in a rural area. 

FSA regulations further defined this as 

‘‘residing in a rural area, city, or town 

with a population of 50,000 or fewer 

people.’’ The rule amends 7 CFR 

764.302 to eliminate the rural residency 

requirement for YL. The removal of this 

requirement now allows FSA to extend 

YL assistance to youth residing in 

suburban and urban areas to finance 

eligible agricultural related projects. 

YL; Forgiveness of Debt 

Forgiveness of YL debt, due to 

circumstances beyond the borrower’s 

control, will no longer preclude the 

borrower from obtaining additional 

loans from any U.S. Government 

agency. Additionally, borrowers with 

YL debt forgiveness, or who are 

delinquent on a YL, will now be able to 

receive student loans. The servicing and 

collection of YLs is not affected by the 

statute and will continue under the 

present regulations. 

Section 5103 of the 2014 Farm Bill 

amended section 311(b) of the CONACT 

(7 U.S.C. 1941(b)) to authorize the 

Secretary of Agriculture to, on a case by 

case basis, provide debt forgiveness of a 

YL if the borrower was unable to repay 

the loan due to circumstances beyond 

the control of the borrower. The 

Secretary may also determine that the 

debt forgiveness was caused by national 

disaster, act of terrorism, or other manmade disaster that resulted in an 

inordinate level of damage severely 

affecting the YL borrower. The debt 

forgiveness provided by this section is 

not to be used by other Federal agencies 

in determining eligibility of the 

borrower for any loan made or 

guaranteed by that agency. 

In no case will a borrower provided 

debt forgiveness or a delinquent 

borrower be denied a loan or loan 

guarantee from the Federal government 

to pay for educational expenses of the 

borrower. As a practical matter, FSA has 

always provided debt forgiveness, in the 

form of debt settlement, to YL borrowers 

on the same terms as any other 

borrower. To determine if the 

forgiveness is beyond the borrower’s 

control, consideration of the 

circumstances will be added to the 

Agency Handbooks and this rule revises 

the definition of ‘‘debt forgiveness’’ in 7 

CFR 761.2. This will ensure that, if the 

inability to pay giving rise to the debt 

forgiveness was due to circumstances 

beyond the borrower’s control, it will 

not be used in consideration of a FSA 

loan application. As this is a mandate 

on the entire Federal Government with 

particular emphasis on loans for 

educational expenses, FSA will also 

make information regarding this change 

available to all YL borrowers who 

receive debt forgiveness and any other 

Federal agency that is considering a 

loan application from the borrower after 

debt forgiveness or while they are 

delinquent. 

With regard to YL debt servicing prior 

to debt forgiveness, the Debt Collection 

Improvement Act of 1996 (DCIA) (Pub. 

L. 104–134, April 26, 1996) requires that 

delinquent debts be reported to 

Treasury so that centralized collection 

can be pursued through the Treasury 

Offset Program and outside collection 

agencies. Section 373 of the CONACT (7 

U.S.C. 2008h) also limits FSA direct 

loan borrowers to only one debt 

forgiveness from FSA. These 

requirements were not changed by the 

2014 Farm Bill. 


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Federal Register / Vol. 79, No. 250 / Wednesday, December 31, 2014 / Rules and Regulations 78691 

ML; Exclude From OL Term Limit Rule 

and Special Interest Rate for Beginning 

or Veteran Farmers 

FSA initiated the ML Program in 2013 

to better serve the unique financial 

operating needs of beginning, niche, or 

the smallest of family farm operations. 

ML offers more flexible access to credit 

for these types of family farm 

operations, who often face limited 

financing options. 

Section 5106 of the 2014 Farm Bill 

amended section 311 of the CONACT (7 

U.S.C. 1941) to exclude MLs made to 

beginning or veteran farmers from the 

direct OL term limit. Section 12201 of 

the 2014 Farm Bill defines a ‘‘veteran 

farmer or rancher’’ as someone who has 

served in the Armed Forces of the 

United States and who has not farmed, 

or has farmed for 10 years or less. This 

rule amends 7 CFR 761.2 to include the 

definition of a veteran farmer. 

As previously mentioned, the term 

‘‘farm’’ or ‘‘farmer’’ also includes the 

term ‘‘ranch’’ or ‘‘rancher,’’ respectively. 

Therefore, all references to the term 

‘‘farm’’ or ‘‘farmer’’ will also 

respectively include ‘‘ranch’’ or 

‘‘rancher,’’ including the definition of a 

‘‘veteran farmer.’’ Once the farmer is no 

longer a beginning farmer or once a 

veteran has farmed more than 10 years, 

any ML they receive will count toward 

the OL term limit. Section 5106 of the 

2014 Farm Bill also amended section 

316 of the CONACT (7 U.S.C. 1946) to 

make available a special interest rate on 

ML equal to half the rate on 5-year 

treasuries plus 1 percent, but never less 

than 5 percent, to beginning or veteran 

farmers. 

Previously, only MLs made to 

beginning farmers were excluded from 

the OL term limit. This rule amends 7 

CFR 764.252 to expand the exclusion to 

include veteran farmers. 

In addition, previously the ML 

interest rate was either the regular OL 

rate or a limited resource rate. This rule 

amends 7 CFR 764.254 to add the 2014 

Farm Bill special ML interest rate that 

will be at the same rate as the limited 

resource OL rate, but will not be subject 

to special servicing reviews by FSA 

since it will not be considered a limited 

resource interest rate. For a beginning or 

a veteran farmer applying for a ML, they 

will now be able to choose between the 

direct OL interest rate and the special 

ML interest rate. These changes in the 

ML program will benefit both beginning 

and veteran farmers, who typically have 

fewer financial resources and limited 

options available to finance their 

farming operation. 

Guaranteed OL; Eliminate Term Limit 

Section 5107 of the 2014 Farm Bill 

amended section 319 of the CONACT (7 

U.S.C. 1949) to eliminate all guaranteed 

OL term limits. Family farmers will no 

longer be restricted in the number of 

years they can receive a guaranteed OL. 

Guaranteed OLs are used to assist 

family farmers to obtain credit for 

normal operating expenses, machinery, 

equipment, and livestock purchases, 

minor real estate repairs or 

improvement, and to refinance debt. 

The repayment term may vary, but are 

never longer than 7 years. OLs used to 

pay for normal operating expenses are 

set up as a line of credit and are 

typically repaid within 12 months. 

Previously, guaranteed OL borrowers 

were limited to no more than 15 years 

in which they could receive OLs. As a 

result, many family farmers who 

continued to have difficulty in meeting 

lender credit standards and had 

received 15 years of OL, were unable to 

receive additional guaranteed OLs. The 

rule amends 7 CFR 762.122 to eliminate 

all guaranteed OL term limits. These 

family farmers will now be able to 

obtain additional guaranteed OLs, 

which typically will provide them with 

access to credit on better rates and 

terms. 

Beginning Farmer; Amending 

Definition To Modify Acreage 

Ownership Limitation 

Section 5303 of the 2014 Farm Bill 

amended section 343 of the CONACT (7 

U.S.C. 1991) to change the owned real 

farm property limit from 30 percent of 

the median farm acreage to 30 percent 

of the average farm acreage. FSA makes 

and guarantees loans to beginning 

farmers who are unable to obtain 

financing from commercial lenders. 

Each fiscal year, FSA targets a portion 

of its direct and guaranteed FO and OL 

funds to beginning farmers. 

Previously, to meet FSA’s definition 

of a beginning farmer, the loan applicant 

must not have owned real farm property 

that exceeded 30 percent of the median 

farm acreage, except for an OL 

applicant. According to the 2012 Census 

of Agriculture, nationally the median 

size farm is 80 acres, while the average 

size farm is 434 acres. The farm acreage 

limit, previously based on the median, 

set a limit so low in many counties it 

precluded applicants who owned small 

acreages of real farm property from 

qualifying as a beginning farmer. This 

eliminated many otherwise qualified 

applicants from accessing FSA farm 

loan funds targeted to beginning 

farmers. The rule amends 7 CFR 761.2 

to change the owned real farm property 

limit. The farm acreage limit, now based 

on the average, will now allow many 

qualified applicants access to farm loan 

funds targeted to beginning farmers, 

which previously were not available to 

them. 

Notice and Comment 

In general, the Administrative 

Procedure Act (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, except when the rule 

involves a matter relating to public 

property, loans, grants, benefits, or 

contracts. This rule involved matters 

relating to loans and is therefore being 

published as a final rule without the 

opportunity for comments. 

Effective Date 

The Administrative Procedure Act 

provides generally that before rules are 

issued by Government agencies, the rule 

is required to be published in the 

Federal Register, and the required 

publication of a substantive rule is to be 

not less than 30 days before its effective 

date. One of the exceptions is when the 

agency finds good cause for not delaying 

the effective date. As noted above, the 

changes in this rule are conforming 

changes because the 2014 Farm Bill 

allowed no discretion in the changes 

and thus were implemented 

administratively after the enactment of 

the 2014 Farm Bill. Using the 

administrative procedure provisions in 

5 U.S.C. 553, FSA finds that there is 

good cause for making this rule effective 

less than 30 days after publication in the 

Federal Register. Therefore, this final 

rule is effective when published in the 

Federal Register. 

Executive Order 12866 and 13563 

Executive Order 12866, ‘‘Regulatory 

Planning and Review,’’ and Executive 

Order 13563, ‘‘Improving Regulation 

and Regulatory Review,’’ direct agencies 

to assess all costs and benefits of 

available regulatory alternatives and, if 

regulation is necessary, to select 

regulatory approaches that maximize 

net benefits (including potential 

economic, environmental, public health 

and safety effects, distributive impacts, 

and equity). Executive Order 13563 

emphasizes the importance of 

quantifying both costs and benefits, of 

reducing costs, of harmonizing rules, 

and of promoting flexibility. 

The Office of Management and Budget 

(OMB) designated this rule as not 


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78692 Federal Register / Vol. 79, No. 250 / Wednesday, December 31, 2014 / Rules and Regulations 

significant under Executive Order 

12866, ‘‘Regulatory Planning and 

Review,’’ and, therefore, OMB was not 

required to review this final rule. 

Regulatory Flexibility Act 

In accordance with the Regulatory 

Flexibility Act (5 U.S.C. 601–612), as 

amended by the Small Business 

Regulatory Enforcement Fairness Act of 

1996 (SBREFA), generally require an 

agency to prepare a regulatory flexibility 

analysis of any rule subject to the notice 

and comment rulemaking requirements 

under APA or any other law, unless the 

agency certifies that the rule will not 

have a significant economic impact on 

a substantial number of small entities. 

All FSA direct loan borrowers and all 

farm entities affected by this rule are 

small businesses according to the North 

American Industry Classification 

System and the U. S. Small Business 

Administration. There is no diversity in 

size of the entities affected by this rule, 

and the costs to comply with it are the 

same for all entities. 

In this rule, FSA is revising 

regulations that affect both loan making 

and loan servicing. FSA does not expect 

these changes to impose any additional 

cost to the lenders or borrowers. 

Therefore, FSA certifies that this rule 

will not have a significant economic 

impact on a substantial number of small 

entities. 

Environmental 

The environmental impacts of this 

rule have been considered in a manner 

consistent with the provisions of the 

National Environmental Policy Act 

(NEPA, 42 U.S.C. 4321–4347), the 

regulations of the Council on 

Environmental Quality (40 CFR parts 

1500–1508), and the FSA regulations for 

compliance with NEPA (7 CFR part 

1940, subpart G). The changes contained 

in the rule are all mandatory changes 

required by the 2014 Farm Bill and 

involved no discretion by FSA, either in 

whether to implement or how to 

implement the changes; therefore, they 

are not subject to review under NEPA. 

FSA is making these changes through a 

final rule to update the regulations to 

match the changes previously 

implemented administratively with an 

agency directive in February 2014. As 

such, FSA will not prepare an 

environmental assessment or 

environmental impact statement for this 

regulatory action. 

Executive Order 12372 

Executive Order 12372, 

‘‘Intergovernmental Review of Federal 

Programs,’’ requires consultation with 

State and local officials. The objectives 

of the Executive Order are to foster an 

intergovernmental partnership and a 

strengthened Federalism, by relying on 

State and local processes for State and 

local government coordination and 

review of proposed Federal Financial 

assistance and direct Federal 

development. For reasons set forth in 

the Notice to 7 CFR part 3015, subpart 

V (48 FR 29115, June 24, 1983), the 

programs and activities within this rule 

are excluded from the scope of 

Executive Order 12372. 

Executive Order 12988 

This final rule has been reviewed in 

accordance with Executive Order 12988, 

‘‘Civil Justice Reform.’’ This rule will 

not preempt State and local laws and 

regulations unless they represent an 

irreconcilable 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 are 

to be exhausted. 

Executive Order 13132 

This rule has been reviewed under 

Executive Order 13132, ‘‘Federalism.’’ 

The policies contained in this rule do 

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 does this rule 

impose substantial direct compliance 

costs on State and local governments. 

Therefore, consultation with the States 

is not required. 

Executive Order 13175 

This rule has been reviewed in 

accordance with the requirements of 

Executive Order 13175, ‘‘Consultation 

and Coordination with Indian Tribal 

Governments.’’ Executive Order 13175 

requires Federal agencies to consult and 

coordinate with tribes on a governmentto-government basis on policies that 

have tribal implications, including 

regulations, legislative comments or 

proposed legislation, and other policy 

statements or actions that have 

substantial direct effects on one or more 

Indian tribes, on the relationship 

between the Federal Government and 

Indian tribes or on the distribution of 

power and responsibilities between the 

Federal Government and Indian tribes. 

FSA has assessed the impact of this 

rule on Indian tribes and determined 

that this rule does not, to our 

knowledge, have tribal implications that 

require tribal consultation under 

Executive Order 13175. If a Tribe 

requests consultation, FSA will work 

with the USDA Office of Tribal 

Relations to ensure meaningful 

consultation is provided where changes, 

additions, and modifications identified 

in this rule are not expressly mandated 

by the 2014 Farm Bill. 

Unfunded Mandates 

Title II of the Unfunded Mandates 

Reform Act of 1995 (UMRA, Pub. L. 

104–4) requires Federal agencies to 

assess the effects of their regulatory 

actions on State, local, or Tribal 

governments or the private sector. 

Agencies generally must prepare a 

written statement, including a cost 

benefit analysis, for final rule with 

Federal mandates that may result in 

expenditures of $100 million or more in 

any 1 year for State, local, or Tribal 

governments, in the aggregate, or to the 

private sector. UMRA generally requires 

agencies to consider alternatives and 

adopt the 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 

Unfunded Mandates Reform Act of 1995 

(UMRA, Pub. L. 104–4) for State, local, 

or Tribal governments, or private sector. 

Therefore, this rule is not subject to the 

requirements of sections 202 and 205 of 

UMRA. 

Paperwork Reduction Act 

This regulatory changes in this final 

rule do not require any changes to the 

currently information collection request 

of OMB control numbers, 0560–0155, 

0560–0233, 0560–0236, 0560–0237, 

0560–0238 and 0560–0230. 

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 other purposes. 

Federal Assistance Programs 

The title and number of the Federal 

assistance programs, as found in the 

Catalog of Federal Domestic Assistance, 

to which this final rule would apply are: 

10.099 Conservation Loans; 10.404 

Emergency Loans; 10.406 Farm 

Operating Loans; and10.407 Farm 

Ownership Loans. 

List of Subjects 

7 CFR Part 761 

Accounting, Loan programs— 

agriculture, Rural areas. 


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Federal Register / Vol. 79, No. 250 / Wednesday, December 31, 2014 / Rules and Regulations 78693 

7 CFR Part 762 

Agriculture, Banks, Banking, Credit, 

Loan programs—agriculture, 

Agricultural commodities, Livestock. 

7 CFR Part 764 

Agriculture, Disaster assistance, Loan 

programs—agriculture, Agricultural 

commodities, Livestock. 

7 CFR Part 765 

Agriculture, Credit, Loan programs— 

agriculture, Agricultural commodities, 

Livestock. 

For the reasons discussed above, FSA 

amends 7 CFR chapter VII as follows: 

PART 761—FARM LOAN PROGRAM; 

GENERAL PROGRAM 

ADMINISTRATION 

The authority citation for part 761 

continues to read as follows: 

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

Subpart A—General Provisions 

■ 1. Amend § 761.2(b) as follows: 

■ a. Amend the definition of ‘‘Beginning 

farmer’’ in paragraph (5) by removing 

the word ‘‘median’’ each time it appears 

and adding the word ‘‘average’’ in its 

place; 

■ b. Revise the definition of ‘‘Debt 

forgiveness’’; and 

■ c. Add the definition of ‘‘Veteran 

farmer’’ in alphabetical order. 

The additions read as follows: 

§ 761.2 Abbreviations and definitions. 

* * * * * 

(b) * * * 

* * * * * 

Debt forgiveness is a reduction or 

termination of a debt under the Act in 

a manner that results in a loss to the 

Agency. 

(1) Debt forgiveness may be through: 

(i) Writing down or writing off a debt 

pursuant to 7 U.S.C. 2001; 

(ii) Compromising, adjusting, 

reducing, or charging off a debt or claim 

pursuant to 7 U.S.C. 1981; or 

(iii) Paying a loss pursuant to 7 U.S.C. 

2005 on a FLP loan guaranteed by the 

Agency. 

(2) Debt forgiveness does not include: 

(i) Debt reduction through a 

conservation contract; 

(ii) Any writedown provided as part 

of the resolution of a discrimination 

complaint against the Agency; 

(iii) Prior debt forgiveness that has 

been repaid in its entirety; 

(iv) Consolidation, rescheduling, 

reamortization, or deferral of a loan; or 

(v) Forgiveness of YL debt, due to 

circumstances beyond the borrower’s 

control. 

The Agency will use the criteria in 7 

CFR 766.104(a)(1) to determine if the 

circumstances were beyond the 

borrower’s control. 

* * * * * 

Veteran farmer is a farmer who has 

served in the Armed Forces (as defined 

in 38 U.S.C. 101(10)) and who— 

(1) has not operated a farm; or 

(2) has operated a farm for not more 

than 10 years. 

* * * * * 

§ 761.7 [Amended] 

■ 2. In § 761.7, remove paragraph (b)(3). 

PART 762—GUARANTEED FARM 

LOANS 

■ 3. The authority citation for part 762 

continues to read as follows: 

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

§ 762.122 [Amended] 

■ 4. In § 762.122, remove paragraph (b) 

and redesignate paragraphs (c) through 

(e) as (b) through (d). 

■ 5. In § 762.129, revise paragraphs (a), 

(b) and (c) to read as follows: 

The revision reads as follows: 

§ 762.129 Percent of guarantee and 

maximum loss. 

(a) Percent of guarantee. The percent 

of guarantee will not exceed 90 percent 

based on the credit risk to the lender 

and the Agency both before and after the 

transaction. The Agency will determine 

the percentage of guarantee. See 

paragraph (b) of this section for 

exceptions. 

(b) Exceptions. The guarantee will be 

determined by the Agency except: 

(1) For OLs and FOs, the guarantee 

will be issued at 95 percent if: 

(i) The sole purpose of a guaranteed 

FO or OL is to refinance an Agency 

direct farm loan. When only a portion 

of the loan is used to refinance a direct 

Agency loan, a weighted percentage of 

a guarantee will be provided; or 

(ii) When the purpose of a guaranteed 

FO is to participate in the downpayment 

loan program; or 

(iii) When a guaranteed OL is made to 

a farmer who is participating in the 

Agency’s down payment loan program. 

The guaranteed OL must be made 

during the period that a borrower has 

the down payment loan outstanding; or 

(iv) When a guaranteed OL is made to 

a farmer whose farm land is subject to 

the jurisdiction of an Indian tribe and 

whose loan is secured by one or more 

security instruments that are subject to 

the jurisdiction of an Indian tribe. 

(2) For CLs, the guarantee will be 

issued at 80 percent; however, the 

guarantee will be issued at 90 percent if: 

(i) The applicant is a qualified SDA 

farmer; or 

(ii) The applicant is a qualified 

beginning farmer. 

(c) CLP and PLP guarantees. All 

guarantees issued to CLP or PLP lenders 

will not be less than 80 percent. 

* * * * * 

§ 762.130 [Amended] 

■ 6. In § 762.130(a)(2)(ii) remove ‘‘75’’ 

and add ‘‘80 or 90’’ in its place. 

PART 764—DIRECT LOAN MAKING 

■ 7. The authority citation for part 764 

continues to read as follows: 

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

Subpart E—Downpayment Loan 

Program 

■ 8. Revise § 764.154(a)(3) to read as 

follows: 

§ 764.154 Rates and terms. 

(a) * * * 

(3) If the FO loan is part of a joint 

financing arrangement and the amount 

of the Agency’s loan does not exceed 50 

percent of the total amount financed, 

the interest rate charged will be the 

greater of the following: 

(i) The Agency’s Direct Farm 

Ownership rate, available in each 

Agency office, minus 2 percent; or 

(ii) 2.5 percent. 

* * * * * 

■ 9. Revise § 764.203(b)(3) to read as 

follows: 

§ 764.203 Limitations. 

* * * * * 

(b) * * * 

(3) $667,000; subject to the direct FO 

dollar limit specified in 7 CFR 

761.8(a)(1)(i). 

* * * * * 

Subpart G—Operating Loan Program 

■ 10. Revise § 764.252 to read as 

follows: 

§ 764.252 Eligibility requirements. 

(a) The applicant must comply with 

the general eligibility requirements 

established in § 764.101. 

(b) The applicant and anyone who 

will sign the promissory note, except as 

provided in paragraph (c) of this 

section, must not have received debt 

forgiveness from the Agency on any 

direct or guaranteed loan. 

(c) The applicant and anyone who 

will sign the promissory note, may 

receive direct OL loans to pay annual 

farm operating and family living 

expenses, provided that the applicant 


tkelley on DSK3SPTVN1PROD with RULES
78694 Federal Register / Vol. 79, No. 250 / Wednesday, December 31, 2014 / Rules and Regulations 

meets all other applicable requirements 

under this part, if the applicant: 

(1) Received a write-down under 

section 353 of the Act; 

(2) Is current on payments under a 

confirmed reorganization plan under 

Chapter 11, 12, or 13 of Title 11 of the 

United States Code; or 

(3) Received debt forgiveness on not 

more than one occasion after April 4, 

1996, resulting directly and primarily 

from a Presidentially-designated 

emergency for the county or contiguous 

county in which the applicant operates. 

Only applicants who were current on all 

existing direct and guaranteed FLP 

loans prior to the beginning date of the 

incidence period of a Presidentiallydesignated emergency and received debt 

forgiveness on that debt within 3 years 

after the designation of such emergency 

meet this exception. 

(d) In the case of an entity applicant, 

the entity must be: 

(1) Controlled by farmers engaged 

primarily and directly in farming in the 

United States; and 

(2) Authorized to operate the farm in 

the State in which the farm is located. 

(e) The applicant and anyone who 

will sign the promissory note, may close 

an OL in no more than 7 calendar years, 

either as an individual or as a member 

of an entity, except as provided in 

paragraphs (e)(1) through (4) of this 

section. The years may be consecutive 

or nonconsecutive, and there is no limit 

on the number of OLs closed in a year. 

Microloans made to a beginning farmer 

or a veteran farmer are not counted 

toward this limitation. Youth loans are 

not counted toward this limitation. The 

following exceptions apply: 

(1) This limitation does not apply if 

the applicant and anyone who will sign 

the promissory note is a beginning 

farmer. 

(2) This limitation does not apply if 

the applicant’s land is subject to the 

jurisdiction of an Indian tribe, the loan 

is secured by one or more security 

instruments subject to the jurisdiction of 

an Indian tribe, and commercial credit 

is generally not available to such farm 

operations. 

(3) If the applicant, and anyone who 

will sign the promissory note, has 

closed direct OL loans in 4 or more 

previous calendar years as of April 4, 

1996, the applicant is eligible to close 

OL loans in any 3 additional years after 

that date. 

(4) On a case-by-case basis, may be 

granted a one-time waiver of OL term 

limits for a period of 2 years, not subject 

to administrative appeal, if the 

applicant: 

(i) Has a financially viable operation; 

(ii) And in the case of an entity, the 

members holding the majority interest, 

applied for commercial credit from at 

least two lenders and were unable to 

obtain a commercial loan, including an 

Agency-guaranteed loan; and 

(iii) Has successfully completed, or 

will complete within one year, borrower 

training. Previous waivers to the 

borrower training requirements are not 

applicable under this paragraph. 

■ 11. Add § 764.254(a)(4) to read as 

follows: 

§ 764.254 Rates and terms. 

(a) * * * 

(4) The Agency’s Direct ML OL 

interest rate on an ML to a beginning 

farmer or veteran farmer is available in 

each Agency office. ML borrowers in 

these groups have the option of 

choosing the ML OL interest rate or the 

Direct OL interest rate in effect at the 

time of approval, or if lower, the rate in 

effect at the time of closing. 

* * * * * 

§ 764.302 [Amended] 

■ 12. In § 764.302, remove paragraph (d) 

and redesignate paragraphs (e) through 

(f) as paragraphs (d) through (e). 

PART 765—DIRECT LOAN 

SERVICING—REGULAR 

■ 13. The authority citation for part 765 

continues to read as follows: 

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

Subpart F—Required Use and 

Operation of Agency Security 

■ 14. Revise § 765.252(b)(1) to read as 

follows: 

§ 765.252 Lease of security. 

* * * * * 

(b) * * * 

(1) For FO loans made from December 

23, 1985, to February 7, 2014, and loans 

other than FO loans secured by real 

estate and made from December 23, 

1985, to November 1, 2013, the value of 

the mineral rights must have been 

included in the original appraisal in 

order for the Agency to obtain a security 

interest in any oil, gas, and other 

mineral associated with the real estate 

security. 

* * * * * 

Signed on December 16, 2014. 

Val Dolcini, 

Administrator, Farm Service Agency. 

[FR Doc. 2014–30172 Filed 12–30–14; 8:45 am] 

BILLING CODE 3410–05–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 29 

[Docket No. FAA–2014–1090; Special 

Conditions No. 29–037–SC] 

Special Conditions: Airbus Helicopters 

Deutschland GmbH Model MBB– 

BK117D–2 Helicopters; Use of 30- 

Minute Power Rating 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final special conditions; request 

for comments. 

SUMMARY: These special conditions are 

issued for the Airbus Helicopters 

Deutschland GmbH Model MBB–BK117 

D–2 helicopter. This model helicopter 

will have the novel or unusual design 

feature of a 30-minute power rating, 

generally intended to be used for 

hovering at increased power for search 

and rescue missions. The applicable 

airworthiness regulations do not contain 

adequate or appropriate safety standards 

for this design feature. These special 

conditions contain the additional safety 

standards that the Administrator 

considers necessary to establish a level 

of safety equivalent to that established 

by the existing airworthiness standards. 

DATES: This action is effective on Airbus 

Helicopters Deutschland GmbH Model 

MBB–BK117D–2 Helicopters on 

December 19, 2014. 

We must receive your comments by 

March 2, 2015. 

ADDRESSES: Send comments identified 

by docket number FAA–2014–1090 

using any of the following methods: 

D Federal eRegulations Portal: Go to 

http://www.regulations.gov and follow 

the online instructions for sending your 

comments electronically. 

D Mail: Send comments to Docket 

Operations, M–30, U.S. Department of 

Transportation (DOT), 1200 New Jersey 

Avenue SE., Room W12–140, West 

Building Ground Floor, Washington, DC 

20590–0001. 

D Hand Delivery of Courier: Take 

comments to Docket Operations in 

Room W12–140 of the West Building 

Ground Floor at 1200 New Jersey 

Avenue SE., Washington, DC, between 8 

a.m., and 5 p.m., Monday through 

Friday, except Federal holidays. 

D Fax: Fax comments to Docket 

Operations at 202–493–2251. 

Privacy: The FAA will post all 

comments it receives, without change, 

to http://regulations.gov, including any 

personal information the commenter 

provides. Using the search function of 

the docket Web site, anyone can find 


tkelley on DSK3SPTVN1PROD with RULES