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Revision of Indian Tribal Land Acquisition Program Loan Regulations
Note: EPA no longer updates this information, but it may be useful as a reference or resource.
[Federal Register: March 14, 2003 (Volume 68, Number 50)]
[Proposed Rules]
[Page 12309-12310]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr14mr03-10]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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DEPARTMENT OF AGRICULTURE
Farm Service Agency
7 CFR Part 770
RIN 0560-AG87
Revision of Indian Tribal Land Acquisition Program Loan
Regulations
AGENCY: Farm Service Agency, USDA.
ACTION: Proposed rule.
-----------------------------------------------------------------------
SUMMARY: This rule proposes to clarify and revise the Indian Tribal
Land Acquisition Program (ITLAP) regulations for borrowers who apply
for a rental value write-down. The rule proposes to change the method
for determining the rental value of security for purposes of a write-
down, adds a definition of ``rental value,'' clarifies other write-down
eligibility provisions, and limits new loan eligibility for borrowers
who have received a write-down in the past. These changes are intended
to reduce the borrower's costs of applying for a rental value write-
down, and reduce the burden on Agency employees in processing requests.
DATES: Comments on the proposed rule must be received on or before May
13, 2003, to be assured of consideration.
ADDRESSES: Mail comments on the proposed rule to: Veldon Hall,
Director, Farm Loan Programs, Loan Servicing and Property Management
Division, Farm Service Agency, USDA, 1400 Independence Avenue, SW.,
Stop 0523, Washington, DC 20250-0523, or hand deliver to Suite 500,
1250 Maryland Avenue, SW., Washington, DC 20024 during normal business
hours. All comments and supporting documents on this rule may be viewed
by contacting the information contact listed below. All comments
received, including names and addresses, will become a matter of public
record.
FOR FURTHER INFORMATION CONTACT: Mel Thompson, Senior Loan Officer,
Farm Service Agency; telephone: 202-720-7862; facsimile: 202-690-1196;
e-mail: mel_thompson@wdc.fsa.usda.gov. Persons with disabilities 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:
Executive Order 12866
This rule has been determined under Executive Order 12866 to be not
significant and was not reviewed by the Office of Management and
Budget.
Regulatory Flexibility Act
The Agency certifies that this rule will not have a significant
economic effect on a substantial number of small entities, because it
does not require additional actions by the borrower. The Agency,
therefore, is not required to perform a Regulatory Flexibility Analysis
as required by the Regulatory Flexibility Act, Pub. L. 96-534, as
amended (5 U.S.C. 601). This rule does not impact small entities to a
greater extent than large entities.
Environmental Evaluation
The environmental impacts of this proposed rule have been
considered in accordance with the provisions of the National
Environmental Policy Act of 1969 (NEPA), 42 U.S.C. 4321 et seq., the
regulations of the Council on Environmental Quality (40 CFR Parts 1500-
1508), and the FSA regulations for compliance with NEPA, 7 CFR parts
799, and 1940, subpart G. FSA completed an environmental evaluation and
concluded the rule requires no further environmental review. No
extraordinary circumstances or other unforeseeable factors exist which
would require preparation of an environmental assessment or
environmental impact statement. A copy of the environmental evaluation
is available for inspection and review upon request.
Executive Order 12988
This rule has been reviewed in accordance with E.O. 12988, Civil
Justice Reform. In accordance with that Executive Order: (1) All State
and local laws and regulations that are in conflict with this rule will
be preempted; (2) no retroactive effect will be given to this rule; and
(3) administrative proceedings in accordance with 7 CFR parts 11 and
780 must be exhausted before requesting judicial review.
Executive Order 12372
As stated in the Notice related to 7 CFR part 3015, subpart V (48
FR 29115, June 24, 1983) the programs and activities within this rule
do not require consultation with state and local officials under the
scope of Executive Order 12372.
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, and tribal governments or the
private sector of expenditures of $100 million or more in any one year.
This rule contains no Federal mandates, as defined by title II of the
UMRA; therefore, this rule is not subject to sections 202 and 205 of
the UMRA.
Executive Order 13132
The policies contained in this rule do not have any substantial
direct effect on states, on the relationship between the national
government and the states, or on the distribution of power and
responsibilities among the various levels of government. Nor does this
rule impose substantial direct compliance costs on state and local
governments. Therefore, consultation with the states is not required.
Paperwork Reduction Act
The amendments to 7 CFR part 770 contained in this proposed rule
require no revisions to the information collection requirements that
were previously approved by OMB and assigned OMB control number 0560-
0198 under the provisions of 44 U.S.C. chapter 35, nor do they
significantly affect the aggregate information collection burden of the
Agency. Removing the requirement for an appraisal and replacing it with
a market value rent study report, which is much smaller in scope,
reduces the amount of information provided by the appraiser at the
expense of the borrower. The number of estimated annual respondents and
the time burden to provide a copy of the report is the same.
Federal Assistance Program
The proposed changes affect the following program listed in the
Catalog of Federal Domestic Assistance:
[[Page 12310]]
10.421--Indian Tribes and Tribal Corporation Loans.
Discussion of the Proposed Rule
This proposed rule revises and clarifies the write-down servicing
policies of the Farm Service Agency's Indian Tribal Land Acquisition
Loan Program. The first proposed change is to clarify ``rental value''.
Applicants and borrowers have misunderstood this term. Therefore, a
definition is added in the proposed rule at Sec. 770.2(b). A second
revision changes the current appraisal needed to apply for a rental
value write-down. An appraisal provides a substantial amount of
information at the borrower's expense that is not necessary for
calculating rental value write-downs. The information FSA needs can be
provided by a rental value market study report prepared by a certified
general appraiser. This change will dramatically reduce the borrower's
costs. Also, since it requires less work for the appraiser, it reduces
the appraiser's delay in completing the report, thus reducing FSA's
processing time.
A third change is proposed in the eligibility requirements for both
ITLAP land value and rental value write-downs. The eligibility
requirements currently in the reamortization paragraph at Sec.
770.10(a)(1) are being proposed for the write-down sections as well in
Sec. Sec. 770.10(e)(3)(v) and (e)(4)(v). These standards would require
borrowers to submit complete application forms and establish that the
delinquency is beyond the borrowers' control which cannot be brought
current within one year and borrowers cannot meet the annual loan
payments. These eligibility requirements will help assure that write-
downs will be provided only to those financially distressed borrowers
who are faced with circumstances outside their control. Several FSA
loan servicing programs contain similar eligibility requirements. See 7
CFR 1951.909(c).
For rental value write-downs, the current rule at Sec.
770.10(e)(4)(iv) prevents additional write-downs only when the specific
ITLAP loan has received a rental value write-down previously and the
specific loan has received a land value write-down within the last 5
years. The proposed rule would modify this paragraph to preclude an
additional rental value write-down when any loan has ever received a
rental value write-down or any loan has received a land value write-
down within the last 5 years. The proposed revisions will limit FSA's
losses when it provides rental value write-downs.
Similarly, the proposed rule seeks to add an additional loan
eligibility requirement to Sec. 770.3. Since write-downs are the
consequence of a borrower's seriously deteriorating financial
condition, the proposed rule adds a requirement for additional ITLAP
loan eligibility requiring that borrowers must not have received an
ITLAP rental value or land value write-down within the last five years.
The additional eligibility requirement will enable FSA to make more
creditworthy loans and decrease the possibility of further Agency
losses.
The proposed rule will result in better service and substantial
monetary and time savings for borrowers who apply for a write-down
based on rental value. In addition, it will increase the protection of
the taxpayers from potential loss and reduce the agency official's
burden in administering the servicing of the Indian Tribal Land
Acquisition Program Loans.
List of Subjects in 7 CFR Part 770
Agriculture, Credit, Indians, Rural areas, Loan Programs.
Accordingly, for the reasons stated in the preamble, 7 CFR part 770
is proposed to be amended as follows:
PART 770--INDIAN TRIBAL LAND ACQUISITION LOANS
1. The authority citation for part 770 continues to read as
follows:
Authority: 5 U.S.C. 301, 25 U.S.C. 490.
2. Amend Sec. 770.2 by adding an abbreviation in paragraph (a) and
a definition in paragraph (b) to read as follows:
Sec. 770.2 Abbreviations and definitions.
(a) Abbreviations.
* * * * *
USPAP: Uniform Standards of Professional Appraisal Practice.
(b) Definitions.
* * * * *
Rental Value is the potential annual rental income of a parcel of
real estate as determined by a market analysis of annual rental incomes
of like real estate in the subject property area.
* * * * *
3. Amend Sec. 770.3 by adding paragraph (h) to read as follows:
Sec. 770.3 Eligibility requirements.
* * * * *
(h) Have not received a write-down as provided in Sec. 770.10(e)
within the preceding 5 years.
4. Amend Sec. 770.10 by adding paragraph (e)(3)(v), revising
paragraphs (e)(4)(iii) and (e)(4)(iv) and adding paragraph (e)(4)(v) to
read as follows:
Sec. 770.10 Servicing.
* * * * *
(e) Debt Write-down.
* * * * *
(3) Land Value Write-down.
* * * * *
(v) The borrower must meet the eligibility requirements of
paragraphs (a)(1)(ii), or (iii) of this section.
(4) Rental Value Write-down.
* * * * *
(iii) The borrower provides a current market value rent study
report for the land for the preceding 5 years, which identifies the
average rental value. The report must be prepared by a Certified
General Appraiser and meet the requirements of USPAP.
(iv) The borrower has not previously received a write-down under
this paragraph on any loan and has not had a loan written down within
the last 5 years under paragraph (e)(3) of this section.
(v) The borrower must meet the eligibility requirements of
paragraph (a) (1) (ii), or (iii) of this section.
Signed in Washington, DC, on February 26, 2003.
James R. Little,
Administrator, Farm Service Agency.
[FR Doc. 03-6162 Filed 3-13-03; 8:45 am]
BILLING CODE 3410-05-P