Unknown. Final rule

6,265 words·~28 min read·/register/2000/08/18/00-20679

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--- schema: federal-register doc_type: fedreg source_file: FR-2000-08-18.xml --- 65 161 Friday, August 18, 2000 Contents Agency Agency for Healthcare Research and Quality NOTICES Meetings: Technical Review Committee, 50536-50537 00-21098 Agriculture Agriculture Department See Farm Service Agency See Rural Business-Cooperative Service See Rural Housing Service See Rural Utilities Service Air Force Air Force Department NOTICES Air Force A-76 initiatives: Cost comparisons and direct conversions, 50504-50507 00-21062 Blind Blind or Severely Disabled, Committee for Purchase From People Who Are See Committee for Purchase From People Who Are Blind or Severely Disabled Centers Centers for Disease Control and Prevention NOTICES Agency information collection activities:

Submission for OMB review; comment request, 50537-50538 00-21048 Grants and cooperative agreements; availability,etc.: Human immunodeficiency virus (HIV)— Joint United Nations Programme on HIV/AIDS (UNAIDS), 50538-50539 00-21049 Grants and cooperative agreements; availablity, etc.: National Conference of State Legislatures, 50539 00-21050 Coast Guard Coast Guard PROPOSED RULES Drawbridge operations: Washington, 50480-50481 00-21124 Ports and waterway safety: Notification of arrival; addition of charterer or cargo owner to required information, 50481-50483 00-21125 Ports and waterways safety:

Lower Mississippi River; Vessel Traffic Service establishment, 50479-50480 00-21126 Commerce Commerce Department See International Trade Administration See National Oceanic and Atmospheric Administration Committee for Purchase Committee for Purchase From People Who Are Blind or Severely Disabled NOTICES Procurement list; additions and deletions, 50498-50499 00-21091 00-21092 Procurement list; additions and deletions; correction, 50499 00-21090 Defense Defense Department See Air Force Department See Navy Department Drug Drug Enforcement Administration NOTICES *Applications, hearings, determinations, etc.:* B.I.

Chemicals, Inc., 50566 00-21118 Brown, Alfred R., D.D.S., 50566-50567 00-21005 Church of the Living Tree, 50567 00-21006 ISP Freetown Fine Chemicals, Inc., 50568 00-21116 Lifepoint, Inc., 50568 00-21119 Penick Corp., 50568-50569 00-21121 Potter, William C., D.V.M, 50569-50570 00-21114 Roche Diagnostics Corp., 50570 00-21117 Roche Dianostics Corp., 50570 00-21120 Schuler, Graham Travers, M.D., 50570-50571 00-21004 Stephan Co., 50571 00-21115 Education Education Department NOTICES Agency information collection activities:

Proposed collection; comment request, 50507-50508 00-21042 Submission for OMB review; comment request, 50508-50509 00-21040 00-21041 Employment Employment Standards Administration NOTICES Minimum wages for Federal and federally-assisted construction; general wage determination decisions, 50574-50576 00-20771 Energy Energy Department See Federal Energy Regulatory Commission NOTICES Electricity export and import authorizations, permits, etc.: Western Systems Power Pool, 50509-50510 00-21122 Grants and cooperative agreements; availability, etc.:

Microbial Genome Program, 50510-50513 00-21123 EPA Environmental Protection Agency RULES Pesticides: tolerances in food, animal feeds, and raw agricultural commodities: Fosetyl-al, 50431-50438 00-21081 Pesticides; tolerances in food, animal feeds, and raw agricultural commodities: Acibenzolar-s-methyl, 50438-50446 00-21080 NOTICES Agency information collection activities: Submission for OMB review; comment request, 50520-50522 00-21074 00-21075 00-21076 Environmental statements; availability, etc.:

Agency statements— Comment availability, 50522-50523 00-21113 Pesticide programs: Organophosphates; risk assessments and public participation in risk management— Vinclozolin, 50523-50524 00-21082 Pesticide registration, cancellation, etc.: American Cyanamid Company, et al., 50524-50526 00-21083 Reports and guidance documents; availability, etc.: Pesticides cumulative risk assessment, 50526-50527 00-20998 Toxic and hazardous substances control: State implementation plans; adequacy status for transportation conformity purposes— Arizona, 50527-50528 00-21077 Water pollution control:

Sludge management (biosolids) program applications— Wisconsin, 50528-50531 00-21078 Farm Farm Service Agency RULES Program regulations: Farm loan programs account servicing policies; servicing shared appreciation agreements, 50401-50405 00-20679 FAA Federal Aviation Administration RULES Class D airspace, 50405 00-20944 PROPOSED RULES Airworthiness directives: General Electric Co., 50468-50470 00-21054 Pilatus Aircraft Ltd., 50466-50468 00-20967 Class E airspace, 50470-50471 00-19837 FCC Federal Communications Commission RULES Radio stations; table of assignments:

New York, 50449-50450 00-21003 FDIC Federal Deposit Insurance Corporation NOTICES Agency information collection activities: Proposed collection; comment request, 50531-50532 00-21001 Federal Emergency Federal Emergency Management Agency NOTICES Meetings: Technical Mapping Advisory Council, 50532 00-21097 Federal Energy Federal Energy Regulatory Commission NOTICES Electric rate and corporate regulation filings: Southern Co. and Southern Energy, Inc., et al., 50517-50520 00-21018 00-21019 *Applications, hearings, determinations, etc.:* Colorado Interstate Gas Co., 50513 00-21026 Columbia Gulf Transmission Co., 50513 00-21022 Discovery Gas Transmission LLC, 50513 00-21021 Dow Pipeline Co., 50514 00-21030 Entergy Nuclear Fitzpatrick, L.L.C., et al., 50514 00-21029 Kern River Gas Transmission Co., 50514-50515 00-21024 Natural Gas Pipeline Co. of America, 50515 00-21023 NRG Energy Center Dover LLC, et al., 50515 00-21031 Rumford Power Associates L.P., 50515-50516 00-21028 U-T Offshore System, L.L.C., 50516 00-21020 Wyoming Interstate Co., Ltd., 50516 00-21025 Young Gas Storage Co., Ltd., 50516-50517 00-21027 Federal Highway Federal Highway Administration PROPOSED RULES Engineering and traffic operations:

Truck size weight— Truck length and width exclusive devices, 50471-50479 00-20939 Federal Reserve Federal Reserve System NOTICES Agency information collection activities: Reporting and recordkeeping requirements, 50532-50533 00-21035 Banks and bank holding companies: Formations, acquisitions, and mergers, 50533 00-21034 Meetings; Sunshine Act, 50533-50534 00-21175 Reports and guidance documents; availability, etc.: Capital and accounting standards; differences among Federal banking and thrift agencies; report to Congress, 50534-50536 00-21036 Fish Fish and Wildlife Service PROPOSED RULES Migratory bird hunting:

Federal Indian reservations, off-reservation trust lands, and ceded lands, 50483-50496 00-21158 NOTICES Marine mammals: Incidental taking; authorization letters, etc.— BP Exploration; polar bears and Pacific walruses, 50556 00-20852 Meetings: Sport Fishing and Boating Partnership Council, 50556-50557 00-21051 Food Food and Drug Administration NOTICES Agency information collection activities: Proposed collection; comment request, 50539-50541 00-21009 00-21011 Submission for OMB review; comment request, 50541-50543 00-21007 Color additive petitions:

FEM, Inc., 50543 00-21012 Food additive petition: Cognis Corp; withdrawal, 50543 00-21008 Food additive petitions: Troy Corp.; withdrawal, 50543 00-21057 Meetings: Industry exchange conference and clinical trial requirements workshop, 50544 00-21010 Health Health and Human Services Department See Agency for Healthcare Research and Quality See Centers for Disease Control and Prevention See Food and Drug Administration See Health Care Financing Administration See Health Resources and Services Administration Health Health Care Financing Administration NOTICES Privacy Act:

Systems of records, 50544-50553 00-21060 00-21095 00-21096 Health Health Resources and Services Administration NOTICES Agency information collection activities: Proposed collection; comment request, 50553-50554 00-21059 Submission for OMB review; comment request, 50554-50555 00-21058 Housing Housing and Urban Development Department RULES Rulemaking; policy and procedures: Civil money penalties, 50591-50593 00-21037 NOTICES Grants and cooperative agreements; availability, etc.:

Facilities to assist homeless— Excess and surplus Federal property, 50555 00-20697 Immigration Immigration and Naturalization Service NOTICES Agency information collection activities: Proposed collection; comment request, 50571-50573 00-21014 00-21015 Submission for OMB review; comment request, 00-21016 50573-50574 00-21017 Interior Interior Department See Fish and Wildlife Service See Land Management Bureau See National Park Service See Surface Mining Reclamation and Enforcement Office NOTICES Agency information collection activities:

Proposed collection; comment request, 50555-50556 00-21093 IRS Internal Revenue Service RULES Income taxes, etc.: Electronically filed information returns; installation agreements; due date extension, 50405-50409 00-20851 NOTICES Agency information collection activities: Proposed collection; comment request, 50587-50588 00-21104 Grants and cooperative agreements; availability, etc.: Low Income Taxpayer Clinic Program, 50588 00-21105 International International Trade Administration NOTICES Antidumping:

Heavy forged hand tools from— China, 50499-50501 00-21106 Structural steel beams from— Korea, 50501-50503 00-21107 00-21108 International International Trade Commission NOTICES Meetings; Sunshine Act, 50566 00-21194 Justice Justice Department See Drug Enforcement Administration See Immigration and Naturalization Service See Juvenile Justice and Delinquency Prevention Office Juvenile Juvenile Justice and Delinquency Prevention Office NOTICES Meetings: Coordinating Council on Juvenile Justice and Delinquency Prevention, 50574 00-21102 Labor Labor Department See Employment Standards Administration Land Land Management Bureau RULES Minerals management:

Leasing of solid minerals other than coal and oil shale, 50446-50449 00-21039 NOTICES Agency information collection activities: Proposed collection; comment request, 50557-50561 00-21109 00-21110 00-21111 00-21112 Closure of public lands: Arizona, 50561 00-21066 Meetings: Resource Advisory Councils— Southwest, 50561 00-21052 Wild Horse and Burro Advisory Board, 50561-50562 00-20995 Resource management plans, etc.: Uncompahgre Basin Resource Area, CO, 50562-50563 00-21065 Maritime Maritime Administration NOTICES Coastwise trade laws; administrative waivers R’ ADVENTURE II, 50585-50586 00-21094 NOAA National Oceanic and Atmospheric Administration RULES Fishery conservation and management:

Northeastern United States fisheries— Summer flounder, scup, and black sea bass, 50463-50465 00-21100 NOTICES Committees; establishment, renewal, termination, etc.: Federal Advisory Committee on Marine Protected Areas; nominations, 50503-50504 00-21101 Permits: Marine mammals, 50504 00-21099 National Park National Park Service NOTICES Environmental statements; availability, etc.: Lassen Volcanic National Park, CA; management plan, 50563-50564 00-21086 Yellowstone National Park, MT; management plan, 50564 00-21088 Yosemite National Park, CA;

Merced Wild and Scenic River management plan, 50565 00-21085 National Park System: Emergency medical service program; policies and procedures, 50565 00-21089 National Register of Historic Places: Eligibility determinations, 50565 00-21087 Navy Navy Department NOTICES Meetings: Ocean Research Advisory Panel, 50507 00-21063 Nuclear Nuclear Regulatory Commission NOTICES Meetings: Reactor Safeguard Advisory Committee, 50576-50577 00-21061 Public Public Health Service See Agency for Healthcare Research and Quality See Centers for Disease Control and Prevention See Food and Drug Administration See Health Resources and Services Administration Railroad Railroad Retirement Board NOTICES Agency information collection activities:

Submission for OMB review; comment request, 50577 00-21068 00-21069 Research Research and Special Programs Administration RULES Hazardous materials: Hazardous materials transportation— Miscellaneous amendments, 50450-50463 00-20448 NOTICES Meetings: Pipeline safety— Integrity Management Council, 50586 00-21056 Rural Rural Business-Cooperative Service RULES Program regulations: Farm loan programs accont servicing policies; servicing shared appreciation agreements, 50401-50405 00-20679 Rural Rural Housing Service RULES Program regulations:

Farm loan programs account servicing policies; servicing shared appreciation agreements, 50401-50405 00-20679 NOTICES Grants and cooperative agreements; availability, etc.: Section 515 Rural Rental Housing Program and Section 521 Rental assistance for needs resulting from Hurricane Dennis, Floyd and Irene, 50497-50498 00-21032 RUS Rural Utilities Service RULES Program regulations: Farm loan programs account servicing policies; servicing shared appreciation agreements, 50401-50405 00-20679 SEC Securities and Exchange Commission NOTICES Self-regulatory organizations; proposed rule changes:

National Association of Securities Dealers, Inc., 50582-50584 00-21072 *Applications, hearings, determinations, etc.:* Public utility holding company filings, 50578-50582 00-21038 Social Social Security Administration NOTICES Agency information collection activities: Submission for OMB review; comment request, 50584 00-21013 Surface Surface Mining Reclamation and Enforcement Office RULES Permanent program and abandoned mine land reclamation plan submissions: West Virginia, 50409-50431 00-20800 Surface Surface Transportation Board NOTICES Railroad services abandonment:

Bangor & Aroostook Railroad Co., 50586-50587 00-20962 TVA Tennessee Valley Authority NOTICES Agency information collection activities: Proposed collection; comment request, 50584-50585 00-21071 Transportation Transportation Department See Coast Guard See Federal Aviation Administration See Federal Highway Administration See Maritime Administration See Research and Special Programs Administration See Surface Transportation Board NOTICES Agency information collection activities:

Submission for OMB review; comment request, 50585 00-21127 Treasury Treasury Department See Internal Revenue Service Separate Parts In This Issue Part II Housing and Urban Development , 50591-50593 00-21037 Reader Aids Consult the Reader Aids section at the end of this issue for phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws. 65 161 Friday, August 18, 2000 Rules and Regulations DEPARTMENT OF AGRICULTURE Rural Housing Service Rural Business-Cooperative Service Rural Utilities Service Farm Service Agency 7 CFR Part 1951 RIN 0560-AF78 Farm Loan Programs Account Servicing Policies—Servicing Shared Appreciation Agreements AGENCIES:

Rural Housing Service, Rural Business-Cooperative Service, Rural Utilities Service, Farm Service Agency, USDA. ACTION: Final rule. SUMMARY: This action amends the terms and servicing of Shared Appreciation Agreements. This final rule allows the remaining contributory value of capital improvements made during the term of the Shared Appreciation Agreement to be deducted when calculating the recapture amount under the agreement, reduces the maturity period of such agreements executed after the effective date of this issuance from 10 years to 5 years, and reduces the interest rate on Shared Appreciation loans from the Non-program loan rate to the Farm Loan Program Homestead Protection rate.

These changes will give borrowers an opportunity to repay a portion of the Farm Service Agency

(FSA)debt that was written off, while ensuring that the Government promptly recaptures some appreciation of the collateral. This rule also will encourage improvement of Agency security during the term covered by the Shared Appreciation Agreement. DATES: This regulation is effective on August 18, 2000. FOR FURTHER INFORMATION CONTACT: Michael C. Cumpton, telephone

(202)690-4014; electronic mail: mike_cumpton@wdc.fsa.usda.gov. SUPPLEMENTARY INFORMATION: Executive Order 12866 This rule has been determined to be significant and was reviewed by the Office of Management and Budget under Executive Order 12866. Regulatory Flexibility Act In compliance with the Regulatory Flexibility Act (5 U.S.C. 601-602), the undersigned has determined and certified by signature of this document that this rule will not have a significant economic impact on a substantial number of small entities. New provisions included in this rule will not impact a substantial number of small entities to a greater extent than large entities. Therefore, a regulatory flexibility analysis was not performed. Environmental Evaluation It is the determination of FSA that this action is not a major Federal action significantly affecting the environment. Therefore, in accordance with the National Environmental Policy Act of 1969, and 7 CFR part 1940, subpart G, an Environmental Impact Statement is not required. Executive Order 12988 This rule has been reviewed in accordance with Executive Order 12988, Civil Justice Reform. In accordance with this rule:

(1)All State and local laws and regulations that are in conflict with this rule will be preempted;

(2)except as specifically stated in this rule, 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 seeking judicial review. Executive Order 12372 For reasons contained in the notice related to 7 CFR part 3015, subpart V (48 FR 29115) June 24, 1983, the programs within this rule are excluded from the scope of E.O. 12372, which requires intergovernmental consultation with State and local officials. The Unfunded Mandates Reform Act of 1995 Title II of the Unfunded Mandates Reform Act of 1995

(UMRA)requires Federal agencies to assess the effects of their regulatory actions on State, local, and tribal governments or the private sector of $100 million or more in any 1 year. When such a statement is needed for a rule, section 205 of the UMRA requires FSA to prepare a written statement, including a cost/benefit assessment, for proposed and final rules with “Federal mandates” that may result in such expenditures 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, as defined under title II of the UMRA, for State, local, and tribal governments or the private sector. Thus, this rule is not subject to the requirements of sections 202 and 205 of 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 1951 contained in this rule require no revisions to the information collection requirements that were previously approved by OMB (0560-0161) under the provisions of 44 U.S.C. chapter 35. A statement to this effect was published in the proposed rule on November 10, 1999 (64 FR 61221-61223) . No comments on the burden estimate were received. Federal Assistance Programs These changes affect the following FSA programs as listed in the Catalog of Federal Domestic Assistance: 10.404—Emergency Loans 10.406—Farm Operating Loans 10.407—Farm Ownership Loans Discussion of the Final Rule In response to the proposed rule published November 10, 1999, 45 respondents from 23 States commented. Comments were received from individuals, farm interest groups, attorneys, university professors, agricultural businesses, and State government officials. Comments and suggestions varied widely but focused primarily on the deduction of certain capital improvements when calculating Shared Appreciation Agreement recapture. The public comments are summarized as follows: Reduction in Interest Rate on Amortized Shared Appreciation Agreement Recapture The proposal to reduce the interest rate charged on amortized Shared Appreciation Agreement recapture from the Non-Program rate (10.25% as of March 1, 2000) to the Homestead Protection rate (6.75% as of March 1, 2000) received 17 comments. Of these comments, 10 were favorable toward the change while seven disagreed and suggested modifications or additions to the proposed language. Two comments were similar in that they wished for the Shared Appreciation Agreement recapture amount to either be added to the program note and, therefore, receive program rates, or, be given the Farm Ownership rate (7.25% as of March 1, 2000). As stated in the proposed rule, the Homestead Protection rate was chosen as it is near the Federal borrowing rate and is already used in the Agency's Homestead Protection program. Therefore, this rate should give producers the greatest possible chance of success while still allowing FSA to collect the recapture funds due and protect its interests. One respondent approved of the Homestead Protection rate for future amortizations and stated that it should also be used if existing Shared Appreciation notes are to be reamortized. This comment was adopted. If restructure is required, the Homestead Protection rate will also be used when reamortizing Shared Appreciation loans. The other four respondents suggested that the rate be retroactive to various time periods, ranging from the inception of the Shared Appreciation Agreement program to the announcement of the proposed rule by the Secretary. The Agency has determined that the Homestead Protection rate will apply only to future Shared Appreciation Agreement recapture amortizations because the previous rates are fixed by the existing promissory notes. The payments shown on these notes created a positive cash flow in the farm business plan at the inception of existing Shared Appreciation loans. Therefore, Shared Appreciation loans will not be modified unless for reamortization in cases of delinquency or financial distress under 7 CFR part 1951, subpart S procedures where program loans are also involved. Under 7 CFR § 1951.909, Shared Appreciation loans of eligible borrowers will be reamortized at the lesser of the original note interest rate, or the current Homestead Protection interest rate. The nonprogram loans will not be considered for any other servicing options under that section. Reduction in Term of Future Shared Appreciation Agreements The proposal to change the term of future Shared Appreciation Agreements from 10 years to 5 years received 13 comments. Of these comments, six were in favor of the change, two suggested the term remain at 10 years, and four suggested modifications or additions to the proposed language. One felt the term should be 7 1/2 years and another stated the program should be abolished. Abolishment of the program is not deemed reasonable given the success of the program. Since its inception over 10 years ago, the program has resulted in the recovery of over $58 million in debt written down. Approximately 6,300 Shared Appreciation Agreements remain outstanding, and approximately 5,000 borrowers have held to their terms under their Shared Appreciation Agreements. Shared appreciation is an important part of Agency writedown of borrower debt. After writedown, the Agency continues to provide assistance on the balance of the borrower debt for continued borrower operation of the farm. Two respondents suggesting alternate language supporting the 5 year term but felt the change should be retroactive to the 1999 announcement of the proposal by the Secretary. Retroactivity of the proposal is discussed above. Other comments, which were outside the scope of the proposed rule, centered around the requirements for recapture at the end of the term if the land is not sold and recapture of 75% of appreciation in the first 4 years and 50% thereafter. While these comments need not be addressed, the Agency notes that these requirements are dictated by statute (7 U.S.C. § 2001(e)) and cannot be changed by regulation. One of the two respondents supporting the present 10-year Shared Appreciation Agreement term, stated that the 10-year term allowed the Government the greatest opportunity to recapture a large portion of the debt written off and also benefitted borrowers by giving them the maximum amount of time to recover from the financial hardship. The other proponent of the 10-year term felt the 5-year term could present some problems as many borrowers will be coming off a deferral at that time and could even be, based on the years of eligibility limitations currently in place, ineligible for further loans. The Agency has not adopted the comments to retain the 10-year term for Shared Appreciation Agreements. This term originally was adopted to allow borrowers a lengthy period during which to recover from the circumstances causing their delinquency and need for writedown. However, during this term, land appreciation exceeded expectations in many farming communities while farm income fell due to sustained low commodity and livestock prices. These factors have resulted in shared appreciation recapture amounts beyond the repayment abilities of many borrowers now at or near the end of the term of their agreements. Though these borrowers have successfully serviced their remaining debt after writedown, they now face liquidation because they cannot repay recapture due. The Agency has determined that future Shared Appreciation Agreements will be limited to 5 years to lower the risk of substantial appreciation in land values and increase the ability of borrowers to repay a portion of such appreciation to the Government. This proposed policy change was well supported by public comments. The Agency believes that 5 years is an adequate period of time for most borrowers to recover from the financial difficulties causing their delinquency. Furthermore, this term is adequate to protect the interests of the Government, and, in most cases, will allow more accurate planning by the borrower. The reduced term also will reduce the Agency's administrative burden in monitoring the agreements. Existing Shared Appreciation Agreements will continue under the 10-year term as agreed to by the borrower and the Government. One respondent supported a 7 1/2 -year term for Shared Appreciation Agreements as a compromise. The Agency rejects this unsupported comment in favor of a 5-year term for the reasons discussed above. Deduction of Capital Improvements From Shared Appreciation Agreement Recapture The proposal to deduct the value of a dwelling, barn, grain storage bin or silo improved or added during the term of the Shared Appreciation Agreement from the value of the property at the maturity of the agreement received multiple comments from most of the 44 respondents who commented on the capital improvement provision of the proposed rule. These comments were widely varied among respondents and over 27 different and often divergent suggestions were made on how capital improvements should be addressed in the regulation. Of these comments, 39 offered suggestions on ways to expand the number of capital improvement items, six suggestions were made on eliminating or curtailing deductions, three suggested additional criteria to be considered beyond the improvements themselves, 16 addressed retroactivity of the deduction, and four suggested other changes to the method of determining shared appreciation. Thirty-one comments were made in support of the use of more generalized language and expanding the number and type of capital improvements which would be deducted from the value of the property at maturity. Of these, 17 suggested all capital improvements be included, 10 made reference to those improvements for farm or real estate improvements (sometimes citing specific examples) and four, while proposing broad expansion of the type of items which would be considered capital improvements, also offered methods of defining or identifying a capital improvement. One individual stated improvements should be “normal and customary” while another stated that all “bonafide” improvements should be included. Others respondents stated the item should be affixed to the real estate and have a useful life of over 1 year. Three of these respondents stated that a determination or definition of capital improvements could be based on those allowed by the Internal Revenue Service

(IRS)when calculating basis or depreciation. It was proposed that this method or the use of actual costs could also be used to determine the value of the improvements to be deducted from the final appraised value. Some respondents felt the appraiser would be able to effectively identify and value a capital improvement while others stated this would be very difficult for the appraiser especially when existing facilities had been expanded. Some of the above individuals and the remaining respondents who wished to expand the list of capital improvements suggested many varied items be considered, including, labor, tiling, tobacco quota, terracing, fencing, orchards, shelter belts, vineyards, irrigation, leveling, underground pipe, rock removal, timber, ponds, hog buildings, dairy parlors, and improvements for wildlife or conservation. It was also suggested that the Agency only consider an item if it met the criteria of an authorized loan purpose but no Government loans funds were used in it's acquisition. Six comments were made suggesting curtailment of capital items which could be included. Two respondents stated no capital improvements should be considered and it was suggested that, especially in light of the proposed 5-year Shared Appreciation Agreement term, capital improvements should be very rare for operations which were in need of debt forgiveness. Suggestions were also made that all improvements must have received prior approval from the FSA, dwellings should only be excluded when needed and modest, and that improvements to existing facilities not be considered. Consideration of other criteria in the deduction of capital improvements, including financial status, commodity prices, and debt exceeding market value of the security, was proposed by three respondents. Increasing the amount of shared appreciation recapture based on any capital items removed during the shared appreciation term was also proposed in conjunction with deduction of capital improvements added to insure an “apples-to-apples” comparison. These comments on capital improvements revealed a wide diversity of opinion on what capital items, if any, should be deducted in the shared appreciation calculation. Some respondents supported a list of items, while the majority suggested broad categories. Comments indicate that not only is the complete identification of appropriate capital improvements extremely difficult, but the valuation of these items, once identified, is equally complex. Based on this complexity, it has been determined that instead of attempting to redefine a capital improvement, FSA will incorporate, as suggested, IRS documentation methods to identify post-Shared Appreciation Agreement capital improvement additions. The remaining contributory value of any improvements to the FSA real estate security covered by the Shared Appreciation Agreement which were capitalized (not taken as annual operating expenses) on the tax records may be deducted from the final appraisal which establishes the Shared Appreciation Agreement recapture amount. The borrower will be responsible for providing appropriate tax documentation to verify this consideration, and the improvement must be affixed to the Agency's Shared Appreciation Agreement real estate security. The only other contributory value allowed to be deducted from the final appraised value will be the contributory value of the borrower's primary residence to the security if it was built on the security property during the term of the Shared Appreciation Agreement and the contributory value of any improvements made to the residence which actually added living area square footage. While some commentors questioned appraisers' abilities to identify and value capital improvements, the Agency believes that professionally certified and licensed appraisers are trained in this determination process and are, therefore, qualified to evaluate property values and property value breakdown. This position is consistent with the practices of other commercial and government lending institutions. Retroactivity of capital improvement deductions was addressed in 22 responses. Sixteen responses suggested that any regulation that excluded capital improvements should be made retroactive to the beginning of the Shared Appreciation Agreement program; two preferred no retroactivity; two suggested retroactivity to the Secretary's 1999 announcement of the proposed rule; one suggested that the new regulation apply retroactively to all who have not paid the recapture due, and one felt retroactivity should extend only to those who have an outstanding suspension agreement or amortized recapture debt. These responses clearly favor some degree of retroactivity with some respondents indicating a desire for complete retroactivity. This, of course, would require that the Government revisit over 5,000 Shared Appreciation Agreements which have been partially or fully triggered and review the circumstances surrounding the security at that time. This substantial administrative burden is not in the best interests of the Government and the taxpayers. However, the Agency has determined that retroactivity of this deduction should be and will be extended to any amount covered by a suspension agreement that has not yet been fully paid since the borrowers were not able to show repayment ability for this amount. Furthermore, this will involve significantly less of an administrative burden with only approximately 1,500 suspension agreements covered. Use of this deduction, however, may require another appraisal of the property to determine the contributory value of capital improvements if not identified prior to entering the suspension agreement. Section 1951.914(h)(8) has been amended accordingly. Comments received on other portions of § 1951.914 included the use of amortized Shared Appreciation Agreement recapture in conservation contracts, the use of sale prices instead of appraised values to determine recapture amounts during the term of the Shared Appreciation Agreement, the use of acceleration as a trigger in Shared Appreciation Agreements, and negotiation of appraisals. These comments are beyond the scope of the proposed rule and will not be addressed. Modifications to the regulatory provisions covering these issues were not proposed and are not included in the final rule. The Agency has clarified the § 1951.914 reference to “current appraisal” by referring to § 761.7. The latter section, in part, sets out the requirements for real estate appraisals. Good cause is shown for making this rule effective upon publication because of the need to implement the Homestead Protection interest rate and the consideration of capital improvements in the calculation of shared appreciation recapture. During the last 18 months, both natural disasters and low commodity prices have adversely affected many producers with maturing Shared Appreciation Agreements as they have become unable to pay recapture amounts due. Many agreements now are coming due and need the benefits provided by this rule. Without the lower Homestead Protection interest rate (6.75% as of March 1, 2000), these borrowers must pay the substantially higher Non-Program interest rate (10.25% as of March 1, 2000) if their shared appreciation debts are amortized under current regulations. The borrowers also will not benefit from the capital improvement deduction unless their shared appreciation debt is suspended with additional interest accrual. Furthermore, payment on many shared appreciation agreements is currently suspended for one year in accordance with 7 CFR 1951.914(h), so implementation of this regulation is needed to resolve the accounts before or when suspension ends. Under this rule, the suspended debts may be reduced to account for capital improvements on the property only during the suspension period. After suspension, the borrower also may qualify for amortization at the lower Homestead Protection interest rate. Therefore, immediate implementation of this rule is necessary to help these borrowers with recapture debts coming due. The Agency is also amending its regulations in this rule to remove from the Code of Federal Regulations administrative notices, response forms and formulas for calculations required to determine eligibility for its programs that are currently published as exhibits to 7 CFR. 1951, subpart S. Section 331D(c) of the Consolidated Farm and Rural Development Act (Con Act) requires that the notices mandated by that section be published in the Agency's regulations. Sections 331D(a) and

(b)of the Con Act require the Agency to send borrowers at least 90 days past due a notice which contains: a summary of all primary loan service programs, preservation loan service programs, debt settlement programs, and appeal procedures, including the eligibility criteria and terms and conditions of such programs and procedures. Accordingly, FSA will retain as exhibits in the Code of Federal Regulations Exhibit A of 7 CFR 1951, subpart S, which is the cover letter to the required notice sent to borrowers who are 90 days past due, and Exhibit A, Attachment 1, the required summary notice. Since § 331D(c) does not mandate that FSA publish all of its notices, FSA is removing from 7 CFR 1951, subpart S, Exhibit A-Attachments 2, 3, 4, 5, 5-A, 6, 6-A, 9, 9-A, 10, 10-A, Exhibit B, Exhibit B-Attachment 1, Exhibit C, Exhibit C-1, Exhibit E, Exhibit E, Attachments 1 and 2, Exhibit F, Exhibit F-Attachments 1 and 2, Exhibit I, Exhibit J, Exhibit J-Attachment 1, Exhibit J-1, Exhibit J-1, Attachment 1, Exhibit K, Exhibit K-Attachment-1, Exhibit L and Exhibit M. FSA will continue to use these Exhibits and Attachments for administrative purposes. They are available from any FSA office. List of Subjects in 7 CFR Part 1951 Account servicing, Credit, Debt restructuring, Loan programs-Agriculture, Loan Programs—Housing and Community Development. Accordingly, 7 CFR part 1951 is amended as follows: PART 1951—SERVICING AND COLLECTIONS 1. The authority citation for part 1951 continues to read as follows: Authority: 5 U.S.C. 301; 7 U.S.C. 1989; 31 U.S.C. 3716; 42 U.S.C. 1480. Subpart S—Farm Loan Programs Account Servicing Policy 2. Revise the third sentence in § 1951.909 paragraph (e)(2)(viii)(A) to read as follows: § 1951.909 Processing primary loan service programs requests.

(e)* * *

(2)* * *

(viii)* * *

(A)* * * SA loans will be reamortized at the current Homestead Protection program interest rate in effect on the date of approval or the rate on the original amortized note, whichever is less. 3. In § 1951.914 the section heading, paragraphs

(b)introductory text, (c)(1), (c)(2), (e)(6), (e)(11) and (h)(8) are revised, paragraphs (e)(10), (e)(11), (h)(9), (h)(10), and (h)(11) are added, and paragraphs (e)(9), (e)(10), (h)(9), and (h)(10) are reserved: § 1951.914 Servicing shared appreciation agreements.

(b)*When shared appreciation is due.* For agreements entered into on or after August 18, 2000, the term of the agreement is five years. Shared appreciation is due at the end of either a five or ten year term, as specified in the Shared Appreciation Agreement, or sooner, if one of the following events occur:

(c)* * *

(1)The value of the real estate security at the time of maturity of the Shared Appreciation agreement (current market value) shall be the appraised value of the security at the highest and best use less the increase in the value of the security resulting from capital improvements added during the term of the Shared Appreciation Agreement (contributory value) as set out herein. The current market value of the real estate security property will be determined based on a current appraisal in accordance with 7 CFR § 761.7 and subject to the following:

(i)Upon request, the borrower will identify any capital improvements that have been added to the property since the execution of the Shared Appreciation Agreement.

(ii)The appraisal must specifically identify the contributory value of capital improvements made to the Agency real estate security during the term of the Shared Appreciation Agreement in order to make deductions for that value under this subsection.

(iii)For calculation of Shared Appreciation recapture, the remaining contributory value of capital improvements added during the term of the Shared Appreciation Agreement will be deducted from the current market value of the property. Such capital improvements must also meet at least one of the following criteria:

(A)It is the borrower's primary residence. If the new residence is affixed to the real estate security as a replacement for a home which existed on the security property when the Shared Appreciation Agreement was originally executed, or, the square footage of the original dwelling was expanded, only the value added to the real property by the new or expanded portion of the original dwelling (if it added value) will be deducted from the current market value.

(B)The item is an improvement to the real estate with a useful life of over 1 year and is affixed to the property. The item must have been capitalized and not taken as an annual operating expense on the borrower's Federal income tax records. The borrower must provide copies of appropriate tax documentation to verify that capital improvements claimed for shared appreciation recapture reduction are capitalized on borrower income taxes.

(2)In the event of a partial sale, an appraisal of the property being sold may be required to determine the market value at the time the Shared Appreciation Agreement was signed if such value cannot be obtained through another method.

(e)* * *

(6)The interest rate will be the Farm Loan Program Homestead Protection rate contained in RD Instruction 440.1 (available in any FSA office).

(11)If the borrower has no outstanding Farm Loan Program loans and becomes delinquent on the Shared Appreciation loan, the Shared Appreciation loan will be serviced in accordance with subpart J of this part. If the borrower has outstanding Farm Loan Programs loans, and becomes delinquent or financially distressed in accordance with § 1951.906, the Shared Appreciation loan will be considered for reamortization in accordance with § 1951.909(e).

(h)* * *

(8)If the real estate that is the subject of the Shared Appreciation Agreement during the suspension period is conveyed, the suspended amount, plus any accrued interest shall be come immediately due and payable by the borrower in accordance with paragraph

(c)of this section.

(11)Capital improvement deductions are available to a borrower on any unpaid recapture amount under an existing Suspension Agreement in accordance with 1951.914(c). 4. Exhibit A—Attachments 2, 3, 4, 5, 5-A, 6, 6-A, 9, 9-A, 10, 10-A, Exhibit B, Exhibit B—Attachment 1, Exhibit C, Exhibit C-1, Exhibit E, Exhibit E, Attachments 1 and 2, Exhibit F, Exhibit F—Attachments 1 and 2, Exhibit I, Exhibit J, Exhibit J—Attachment 1, Exhibit J-1, Exhibit J-1, Attachment 1, Exhibit K, Exhibit K—Attachment 1, Exhibit L and Exhibit M of 7 CFR part 1951, subpart S are removed. Signed in Washington, D.C., on August 8, 2000. August Schumacher, Jr., Under Secretary for Farm and Foreign Agricultural Service. [FR Doc. 00-20679 Filed 8-17-00; 8:45 am]

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