Unknown. Final rule

5,817 words·~26 min read·/register/2011/05/31/2011-13061

A research copy — for the controlling text, always check the official state or federal source. Not legal advice.

--- schema: federal-register doc_type: fedreg source_file: FR-2011-05-31.xml --- 76 104 Tuesday, May 31, 2011 Contents Agricultural Marketing Agricultural Marketing Service NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Nectarines and Peaches Grown in California; Withdrawal, 31295 2011-13482 Agriculture Agriculture Department See Agricultural Marketing Service See Animal and Plant Health Inspection Service See Farm Service Agency See Foreign Agricultural Service See Forest Service See National Institute of Food and Agriculture See Rural Business-Cooperative Service See Rural Housing Service See Rural Utilities Service Animal Animal and Plant Health Inspection Service RULES Importation of Horses From Contagious Equine Metritis-Affected Countries, 31220-31221 2011-13360 Antitrust Division Antitrust Division NOTICES National Cooperative Research and Production Act of 1993:

Versatile Onboard Traffic Embedded Roaming Sensors, etc., 31362 2011-13307 Army Army Department See Engineers Corps NOTICES Intent to License Government-Owned Inventions Exclusively, 31307-31308 2011-13347 Meetings: Board of Visitors, United States Military Academy, 31308 2011-13346 Arts and Humanities, National Foundation See National Foundation on the Arts and the Humanities Broadcasting Broadcasting Board of Governors NOTICES Meetings; Sunshine Act, 31300-31301 2011-13580 Bureau of Consumer Financial Protection RULES Identification of Enforceable Rules and Orders, 31222-31223 2011-13256 Centers Disease Centers for Disease Control and Prevention NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 31336-31337 2011-13333 Delegations of Authority, 31337 2011-13371 Centers Medicare Centers for Medicare & Medicaid Services NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 31337-31340 2011-13328 2011-13330 2011-13421 Medicare Program: Closure of St. Vincents Medical Center, 31340 2011-13478 Children Children and Families Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 31340-31341 2011-13300 Meetings:

President's Committee for People with Intellectual Disabilities, 31341-31342 2011-13337 Coast Guard Coast Guard RULES Safety Zones: M.I.T.'s 150th Birthday Celebration Fireworks, Charles River, Boston, MA, 31230-31232 2011-13322 Ocean City Air Show, Atlantic Ocean, Ocean City, MD, 31235-31237 2011-13329 Underwater Hazard, Gravesend Bay, Brooklyn, NY, 31233-31235 2011-13325 Vessel Traffic Service Lower Mississippi River; Correction, 31230 2011-13332 NOTICES Cruise Vessel Safety and Security Act of 2010:

Available Technology, 31350-31351 2011-13437 Safety Requirements and Manning Exemption Eligibility on Distant Water Tuna Fleet Vessels, 31351-31352 2011-13319 Commerce Commerce Department See Industry and Security Bureau See International Trade Administration See National Oceanic and Atmospheric Administration See Patent and Trademark Office Commission Fine Commission of Fine Arts NOTICES Meetings, 31307 2011-13349 Defense Department Defense Department See Army Department See Engineers Corps RULES Federal Acquisition Regulations:

Buy American Exemption for Commercial Information Technology—Construction Material, 31415 2011-12854 Contract Closeout, 31402-31410 2011-12852 Federal Acquisition Circular 2005-52; Introduction, 31394-31395 2011-12850 Federal Acquisition Circular 2005-52; Small Entity Compliance Guide, 31424 2011-12857 Oversight of Contractor Ethics Programs, 31416 2011-12855 Prohibition on Contracting with Inverted Domestic Corporations, 31410-31415 2011-12853 Sustainable Acquisition, 31395-31402 2011-12851 Technical Amendments, 31416-31423 2011-12856 Education Education Department NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 31310-31312 2011-13293 2011-13294 2011-13391 Federal Family Education Loan Program, 31312-31317 2011-13339 Privacy Act; Systems of Records, 31317-31318 2011-13414 Employment and Training Employment and Training Administration NOTICES Funding Availability: Cooperative Agreements under the Disability Employment Initiative, 31366-31367 2011-13327 Energy Department Energy Department See Federal Energy Regulatory Commission NOTICES Meetings: Advisory Board Natural Gas Subcommittee, 31318-31319 2011-13298 Biological and Environmental Research Advisory Committee;

Teleconference, 31319 2011-13510 Environmental Management Advisory Board, 31319-31320 2011-13511 Engineers Engineers Corps NOTICES Environmental Impact Statements; Availability, etc.: Combined Operational Plan, Miami-Dade County, FL, 31308-31309 2011-13348 Missouri River Recovery Implementation Committee Membership; Solicitation of Applications, 31309-31310 2011-13345 Environmental Protection Environmental Protection Agency RULES Approval and Promulgation of Air Quality Implementation Plans:

Pennsylvania; Determination of Attainment for the Pittsburgh-Beaver Valley 8-Hour Ozone Nonattainment Area, 31237-31239 2011-13275 Approval and Promulgation of Implementation Plans and Designations of Areas for Air Quality Planning Purposes Alabama, Georgia, and Tennessee: Determination of Attaining Data for the 1997 Annual Fine Particulate Standard for Chattanooga Area, 31239-31241 2011-13269 Approval and Promulgation of Implementation Plans: Extension of Attainment Date for the Charlotte-Gastonia-Rock Hill, North Carolina-South Carolina 1997 8-Hour Ozone Moderate Nonattainment Area, 31245-31252 2011-13278 Prevention of Significant Deterioration Program:

Delegation Agreement with Massachusetts Department of Environmental Protection, 31241-31242 2011-12950 State Implementation Plans: California, Santa Barbara County Air Pollution Control District; Revisions, 31242-31245 2011-13273 PROPOSED RULES Approvals and Promulgations of Implementation Plans: California; Interstate Transport of Pollution; Interference with Prevention of Significant Deterioration Requirement, 31263-31271 2011-13397 Preliminary Regulatory Determinations for the Third Contaminant Candidate List, 31271-31272 2011-13404 NOTICES Draft National Coastal Condition Report IV, 31327-31328 2011-13400 Meetings:

Good Neighbor Environmental Board, 31328 2011-13406 Radiogenic Cancer Risk Models and Projections for the U.S. Population (Blue Book), 31329-31330 2011-13395 Regional Project Waiver of Buy American Section of the American Recovery and Reinvestment Act: City of Marathon, FL, 31330-31331 2011-13401 Farm Service Farm Service Agency RULES Single Family Housing Guaranteed Loan Program, 31217-31220 2011-13061 Federal Aviation Federal Aviation Administration RULES Special Conditions:

Bombardier Model BD-700-1A10 and BD-700-1A11 Airplanes, Head-up Display with Video Synthetic Vision System, 31223-31225 2011-13341 Federal Communications Federal Communications Commission RULES Fixed and Mobile Services in Certain Mobile Satellite Service Bands, 31252-31260 2011-13379 Relay Services for Deaf-Blind Individuals, 31261 2011-12680 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 31331-31333 2011-13431 2011-13432 Federal Deposit Federal Deposit Insurance Corporation NOTICES Updated Listing of Financial Institutions in Liquidation, 31333-31334 2011-13361 Federal Emergency Federal Emergency Management Agency NOTICES Major Disaster Declarations:

Kentucky; Amendment No. 6, 31353 2011-13455 Missouri; Amendment No. 1, 31352 2011-13457 Wisconsin; Amendment No. 2, 31352-31353 2011-13456 Federal Energy Federal Energy Regulatory Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 31320-31322 2011-13475 Applications: Distrigas of Massachusetts LLC, 31323-31324 2011-13476 Union Electric Co. (dba Ameren Missouri), 31322-31323 2011-13316 Combined Filings, 31324-31325 2011-13468 Records Governing Off-the-Record Communications, 31325-31326 2011-13317 Requests Under Blanket Authorizations:

Gulf LNG Pipeline, LLC, 31326-31327 2011-13473 Federal Motor Federal Motor Carrier Safety Administration PROPOSED RULES Applicability of Regulations to Operators of Certain Farm Vehicles and Off-Road Agricultural Equipment, 31279-31282 2011-13035 Federal Reserve Federal Reserve System RULES Truth in Lending; Correction, 31221-31222 2011-12795 NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 31334 2011-13323 Federal Trade Federal Trade Commission NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals, 31334-31336 2011-13357 Fine Arts Commission See Commission of Fine Arts Fish Fish and Wildlife Service PROPOSED RULES Endangered and Threatened Wildlife and Plants: 12-Month Finding on a Petition to List Puerto Rican Harlequin Butterfly as Endangered, 31282-31294 2011-13224 Food and Drug Food and Drug Administration NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Current Good Manufacturing Practice Regulations for Finished Pharmaceuticals, 31342-31345 2011-13441 Cooperative Arrangement with Inter-American Institute for Cooperation in Agriculture, 31345-31348 2011-13440 Regulatory Review Period for Purposes of Patent Extensions:

ACTEMRA, 31349 2011-13388 Foreign Agricultural Foreign Agricultural Service NOTICES WTO Agricultural Safeguard Trigger Levels, 31295-31297 2011-13223 Forest Forest Service NOTICES Meetings: Dixie Resource Advisory Committee, 31297 2011-13326 Huron Manistee Resource Advisory Committee, 31298 2011-13334 Northern New Mexico Resource Advisory Committee, 31299 2011-13335 Ravalli County Resource Advisory Committee, 31297-31298 2011-13324 Sitka Resource Advisory Committee, 31297 2011-13363 South Gifford Pinchot Resource Advisory Committee, 31298-31299 2011-13338 Trinity County Resource Advisory Committee, 31297 2011-13331 General Services General Services Administration RULES Federal Acquisition Regulations:

Buy American Exemption for Commercial Information Technology—Construction Material, 31415 2011-12854 Contract Closeout, 31402-31410 2011-12852 Federal Acquisition Circular 2005-52; Introduction, 31394-31395 2011-12850 Federal Acquisition Circular 2005-52; Small Entity Compliance Guide, 31424 2011-12857 Oversight of Contractor Ethics Programs, 31416 2011-12855 Prohibition on Contracting with Inverted Domestic Corporations, 31410-31415 2011-12853 Sustainable Acquisition, 31395-31402 2011-12851 Technical Amendments, 31416-31423 2011-12856 Geological Geological Survey NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Ferrous Metals Surveys, 31357-31358 2011-13290 Health and Human Health and Human Services Department See Centers for Disease Control and Prevention See Centers for Medicare & Medicaid Services See Children and Families Administration See Food and Drug Administration See National Institutes of Health PROPOSED RULES HIPAA Privacy Rule Accounting of Disclosures under the Health Information Technology for Economic and Clinical Health Act, 31426-31449 2011-13297 Permanent Certification Program for Health Information Technology;

Revisions, 31272-31279 2011-13372 Homeland Homeland Security Department See Coast Guard See Federal Emergency Management Agency See U.S. Customs and Border Protection NOTICES Meetings: Privacy Compliance Basics and 2011 Developments, 31350 2011-13415 Housing Housing and Urban Development Department NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals: Congregate Housing Services Program, 31356 2011-13292 Technical Assistance Experience, Expertise, and Awards Received Matrices, 31356-31357 2011-13291 Industry Industry and Security Bureau NOTICES Meetings:

Regulations and Procedures Technical Advisory Committee, 31301 2011-13389 Interior Interior Department See Fish and Wildlife Service See Geological Survey See National Park Service International Trade Adm International Trade Administration NOTICES Scope Rulings, 31301-31303 2011-13385 International Trade Com International Trade Commission NOTICES Scheduling of an Expedited Five-Year Review Concerning the Antidumping Duty Order: Paper Clips from China, 31360 2011-13383 Justice Department Justice Department See Antitrust Division See National Institute of Corrections RULES Procedures Governing Administrative Review of a United States Trustees Decision to Deny a Chapter 12 or Chapter 13 Standing Trustees Claim of Actual, Necessary Expenses, 31225-31230 2011-12187 NOTICES Lodging of Consent Decree Under CERCLA, 31360-31361 2011-13280 Lodging of Consent Decree Under the Clean Air Act, 31361 2011-13301 Lodging of Consent Decree Under the Clean Water Act, 31361-31362 2011-13281 Lodging of Proposed Amendment to Consent Decree Under the Clean Water Act, 31362 2011-13352 Labor Department Labor Department See Employment and Training Administration NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Fire Brigades, 31364-31365 2011-13296 List of Products Requiring Federal Contractor Certification as to Forced or Indentured Child Labor; Revisions, 31365-31366 2011-13342 NASA National Aeronautics and Space Administration RULES Federal Acquisition Regulations: Buy American Exemption for Commercial Information Technology—Construction Material, 31415 2011-12854 Contract Closeout, 31402-31410 2011-12852 Federal Acquisition Circular 2005-52;

Introduction, 31394-31395 2011-12850 Federal Acquisition Circular 2005-52; Small Entity Compliance Guide, 31424 2011-12857 Oversight of Contractor Ethics Programs, 31416 2011-12855 Prohibition on Contracting with Inverted Domestic Corporations, 31410-31415 2011-12853 Sustainable Acquisition, 31395-31402 2011-12851 Technical Amendments, 31416-31423 2011-12856 National Archives National Archives and Records Administration NOTICES Meetings: Advisory Committee on the Records of Congress, 31367 2011-13402 National Foundation National Foundation on the Arts and the Humanities NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: IMLS Digital Collections and Content; An Assessment of Opening History, 31368-31369 2011-13481 Sustaining Digitized Special Collections and Archives Survey, 31367-31368 2011-13417 National Institute Corrections National Institute of Corrections NOTICES Cooperative Agreements: Document; Tools in Assessing Inmates' Risks and Needs; The Assessment Interview, 31363-31364 2011-13394 National Institute Food National Institute of Food and Agriculture NOTICES Request for Applications for the Veterinary Medicine Loan Repayment Program, 31299-31300 2011-13303 National Institute National Institutes of Health NOTICES Meetings:

Advisory Committee to the Director, 31349-31350 2011-13353 National Oceanic National Oceanic and Atmospheric Administration NOTICES Environmental Impact Statements; Availability, etc.: Washington Coastal Zone Management Program, 31303-31304 2011-13387 Meetings: New England Fishery Management Council, 2011-13276 31304-31305 2011-13277 Request for Nominations: Advisory Panel and Joint Management Committee; Pacific Whiting, 31305 2011-13377 National Park National Park Service NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Procedures for State, Tribal, and Local Government Historic Preservation Programs, 31358-31359 2011-13378 Environmental Impact Statements; Availability, etc.: Lake Clark National Park and Preserve, Alaska, 31359-31360 2011-13242 Nuclear Regulatory Nuclear Regulatory Commission NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 31369 2011-13304 Applications and Amendments to Facility Operating Licenses Involving No Significant Hazards Considerations, 31369-31379 2011-13211 Bulletin 2011-01, Mitigating Strategies;

Issuance, 31379 2011-13355 Environmental Assessments; Availability, etc.: ABB, Inc., License Amendment, Windsor, CT, 31379-31381 2011-13362 Proposed Revision 4 to Standard Review Plan on Electric Power, 31381-31382 2011-13358 Regulatory Guides; Issuance, 31382 2011-13359 Overseas Overseas Private Investment Corporation NOTICES Meetings; Sunshine Act, 31382-31383 2011-13507 Patent Patent and Trademark Office NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 31305-31306 2011-13366 Registered Patent Attorneys and Agents Admitted to Practice Before the USPTO:

Proposed Additions, 31306-31307 2011-13369 Peace Peace Corps NOTICES Agency Information Collection Activities; Proposals, Submissions, and Approvals, 31383 2011-13350 Railroad Retirement Railroad Retirement Board PROPOSED RULES Application for Annuity or Lump Sum, 31262-31263 2011-13056 Rural Business Rural Business-Cooperative Service RULES Single Family Housing Guaranteed Loan Program, 31217-31220 2011-13061 Rural Housing Service Rural Housing Service RULES Single Family Housing Guaranteed Loan Program, 31217-31220 2011-13061 Rural Utilities Rural Utilities Service RULES Single Family Housing Guaranteed Loan Program, 31217-31220 2011-13061 Securities Securities and Exchange Commission NOTICES Meetings;

Sunshine Act, 31383-31384 2011-13530 Self-Regulatory Organizations; Proposed Rule Changes: International Securities Exchange, LLC, 31385-31387 2011-13315 NASDAQ OMX PHLX LLC, 31384-31385 2011-13375 Small Business Small Business Administration NOTICES Disaster Declarations: Alabama; Amendment 2, 31388 2011-13310 Idaho, 31388-31389 2011-13311 Kentucky, 31387 2011-13308 Kentucky; Amendment 2, 31389 2011-13312 Mississippi; Amendment 2, 31389 2011-13313 Missouri; Amendment 1, 31388 2011-13343 Missouri;

Amendment 2, 31387-31388 2011-13344 North Dakota, 31389-31390 2011-13314 State Department State Department NOTICES Determination and Certification Under Section 40A of the Arms Export Control Act, 31390 2011-13386 Susquehanna Susquehanna River Basin Commission NOTICES Meetings, 31390-31392 2011-13289 Transportation Department Transportation Department See Federal Aviation Administration See Federal Motor Carrier Safety Administration Customs U.S. Customs and Border Protection NOTICES Agency Information Collection Activities;

Proposals, Submissions, and Approvals: Crewmans Landing Permit, 31353-31354 2011-13302 Determinations: Transit Connect Electric Vehicle, 31354-31355 2011-13384 Separate Parts In This Issue Part II Defense Department, 31394-31424 2011-12854 2011-12852 2011-12850 2011-12857 2011-12855 2011-12853 2011-12851 2011-12856 General Services Administration, 2011-12854 31394-31424 2011-12852 2011-12850 2011-12857 2011-12855 2011-12853 2011-12851 2011-12856 National Aeronautics and Space Administration, 2011-12854 31394-31424 2011-12852 2011-12850 2011-12857 2011-12855 2011-12853 2011-12851 2011-12856 Part III Health and Human Services Department, 31426-31449 2011-13297 Reader Aids Consult the Reader Aids section at the end of this page for phone numbers, online resources, finding aids, reminders, and notice of recently enacted public laws.

To subscribe to the Federal Register Table of Contents LISTSERV electronic mailing list, go to http://listserv.access.gpo.gov and select Online mailing list archives, FEDREGTOC-L, Join or leave the list (or change settings); then follow the instructions. 76 104 Tuesday, May 31, 2011 Rules and Regulations DEPARTMENT OF AGRICULTURE Rural Housing Service Rural Business-Cooperative Service Rural Utilities Service Farm Service Agency 7 CFR Part 1980 RIN 0575-AC83 Single Family Housing Guaranteed Loan Program AGENCIES:

Rural Housing Service, Rural Business-Cooperative Service, Rural Utilities Service, Farm Service Agency, USDA. ACTION: Final rule. SUMMARY: This final rule implements two changes in the regulations for the Rural Housing Service

(RHS)Section 502 Single Family Housing Guaranteed Loan Program (SFHGLP) by eliminating the lender's published Department of Veterans Affairs

(VA)rate for first mortgage loans with no discount points as an option for a maximum interest rate on loans and by allowing the Secretary to seek indemnification from the originating lender if a loss is paid under certain circumstances. This action is taken to achieve savings for the taxpayer, simplify regulations, and promote efficiency in managing the SFHGLP. DATES: *Effective Date:* August 1, 2011. FOR FURTHER INFORMATION CONTACT: Joaquin Tremols, Acting Director, Single Family Housing Guaranteed Loan Division, USDA Rural Development, Room 2241, STOP 0784, 1400 Independence Ave., SW., Washington, DC 20250, Telephone:

(202)720-1465, E-mail: *joaquin.tremols@wdc.usda.gov.* SUPPLEMENTARY INFORMATION: Classification This final rule has been determined to be non-significant by the Office of Management and Budget

(OMB)under Executive Order 12866. Executive Order 12988 This rule has been reviewed under Executive Order 12988, Civil Justice Reform. Except where specified, all State and local laws and regulations that are in direct conflict with this rule will be preempted. Federal funds carry Federal requirements. No person is required to apply for funding under this program, but if they do apply and are selected for funding, they must comply with the requirements applicable to the Federal program funds. This rule is not retroactive. It will not affect agreements entered into prior to the effective date of the rule. Before any judicial action may be brought regarding the provisions of this rule, the administrative appeal provisions of 7 CFR part 11 must be exhausted. Unfunded Mandates Reform Act Title II of the Unfunded Mandates Reform Act of 1995 (UMRA), Public Law 104-4, establishes requirements for Federal agencies to assess the effect of their regulatory actions on State, local, and tribal governments and the private sector. Under section 202 of the UMRA, the Agency generally must prepare a written statement, including a cost-benefit analysis, for proposed and final rules with “Federal mandates” that may result in expenditures to State, local, or tribal governments, in the aggregate, or to the private sector, of $100 million, or more, in any one year. When such a statement is needed for a rule, section 205 of the UMRA generally requires the Agency to identify and consider a reasonable number of regulatory alternatives and adopt the least costly, most cost-effective, or least burdensome alternative that achieves the objectives of the rule. This rule contains no Federal mandates (under the regulatory provisions of Title II of the UMRA) for State, local, and tribal governments or the private sector. Therefore, this rule is not subject to the requirements of sections 202 and 205 of the UMRA. Environmental Impact Statement This document has been reviewed in accordance with 7 CFR part 1940, subpart G, “Environmental Program.” It is the determination of the Agency that this action does not constitute a major Federal action significantly affecting the quality of the human environment, and, in accordance with the National Environmental Policy Act of 1969, 42 U.S.C. 4321 *et seq.,* neither an Environmental Assessment nor an Environmental Impact Statement is required. Federalism—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 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. Regulatory Flexibility Act In compliance with the Regulatory Flexibility Act (5 U.S.C. 601 *et seq.* ) the undersigned has determined and certified by signature of this document that this rule change will not have a significant impact on a substantial number of small entities. This rule does not impose any significant new requirements on Agency applicants and borrowers, and the regulatory changes affect only Agency determination of program benefits for guarantees of loans made to individuals. Changes impacting lenders will impact all approved lenders doing business under this program. There is no distinction made between small and large lenders. Intergovernmental Consultation This program/activity is not subject to the provisions of Executive Order 12372, which require intergovernmental consultation with State and local officials. (See the Notice related to 7 CFR part 3015, subpart V, at 48 FR 29112, June 24, 1983; 49 FR 22675, May 31, 1984; 50 FR 14088, April 10, 1985.) Programs Affected This program is listed in the Catalog of Federal Domestic Assistance under Number 10.410, Very Low to Moderate Income Housing Loans (Section 502 Rural Housing Loans). Paperwork Reduction Act The information collection and record keeping requirements contained in this regulation have been approved by OMB in accordance with the Paperwork Reduction Act of 1995 (44 U.S.C. 3501 *et seq.* ). The assigned OMB control number is 0575-0078. E-Government Act Compliance The Rural Housing Service is committed to complying with the E-Government Act, to promote the use of the Internet and other information technologies to provide increased opportunities for citizen access to Government information and services, and for other purposes. Non-Discrimination Statement The U.S. Department of Agriculture

(USDA)prohibits discrimination in all its programs and activities on the basis of race, color, national origin, age, disability, and where applicable, sex, marital status, familial status, parental status, religion, sexual orientation, genetic information, political beliefs, reprisal, or because all or part of an individual's income is derived from any public assistance program. (Not all prohibited bases apply to all programs.) Persons with disabilities who require alternative means for communication of program information (Braille, large print, audiotape, etc.) should contact USDA's TARGET Center at

(202)720-2600 (voice and TDD). To file a complaint of discrimination, write to USDA, Director, Office of Civil Rights, 1400 Independence Avenue, SW., Washington, DC 20250-9410, or call

(800)795-3272 (voice) or

(202)720-6382 (TDD). USDA is an equal opportunity provider, employer, and lender. Background In the spring of 2009, the Inspector General completed an audit of the controls over lending activities in the SFHGLP. The audit evaluated the systems and processes to ensure that lenders

(1)submit accurate and legitimate borrower eligibility data and

(2)set interest rates on loans within Agency guidelines. The audit report made a number of recommendations for what the SFHGLP can do to streamline operations, prevent fraud, and improve efficiency in its mission. As a result of the audit a proposed rule was published in the **Federal Register** on May 19, 2010 (75 FR 27949). Under the existing SFHGLP regulation, lenders may set an interest rate for a loan that does not exceed the higher of the Lender's published rate for VA first mortgage loans with no discount points or the current Federal National Mortgage Association (Fannie Mae) rate as defined in 7 CFR 1980.302(a), currently defined as the current Fannie Mae posted yield for 90-day delivery (Actual/Actual), plus six-tenths of 1 percent for 30-year fixed rate conventional loans, rounded up to the nearest one-quarter of 1 percent. The first change made by this final rule eliminates the lender's published VA rate for first mortgage loans with no discount points as an option for a maximum interest rate on loans. The effect of this action is to create a more uniform, simpler standard for interest rates under the SFHGLP, whereby lenders will always use the current Fannie Mae rate as the rate ceiling. The Fannie Mae rate is the interest rate guidance most widely utilized by approved lenders. It is also the most accessible to lenders and the Agency when documenting loan files to ensure affordable interest rates are extended to SFHGLP borrowers. The second change made by this final rule relates to the rights of the Secretary when the Secretary has to pay a claim under the guarantee for the loan and the original lender did not originate the loan in accordance with the program requirements. This change allows the Secretary in certain circumstances to seek indemnification from the originating lender for the Secretary's loss. This change promises to save taxpayer money and incentivize due care on the part of lenders by allowing the Government to recoup the funds it pays out in the event of a claim under the guarantee where the original lender did not comply with SFHGLP requirements. Discussion of Public Comments Received on the May 19, 2010 Proposed Rule The Agency received comments from three different sources in response to the Proposed Rule. These comments came from advocacy groups and a community bank. One commenter submitted a comment on the Single Family Housing Direct Loan Program and expressed general concern about the affordability of housing for low-income families. The Agency acknowledges this comment and notes that the changes being adopted will affect only the Guaranteed Loan Program. One commenter agreed with the Agency that the Fannie Mae published rate is used by a much broader base of investors than the VA index and stated that the rule change creating a uniform standard will cause only minimal disruptions in business while lenders implement the new policy. This commenter requested that the final rule provide at least a 60-day implementation period to allow lenders to make necessary system changes. The Agency notes that the effective date of the final rule is 60 days from the date of publication in the **Federal Register** . The commenter also recommended that the Agency revise the rule to require that the Ginnie Mae index be used if the Fannie Mae index is not available. The commenter made this recommendation because the commenter is concerned about future changes to government sponsored enterprises (GSEs). The Agency is aware of the vulnerabilities surrounding the GSEs and the potential for future changes; however, the Agency believes it would be premature to name a backup index at this time. Additionally, Ginnie Mae does not publish a similar index. The Agency, therefore, has made no changes to the final rule in response to this comment. One commenter expressed concern that the proposed indemnification policy is too broad. The commenter agreed that indemnification is appropriate in cases where a lender commits fraud, but the commenter expressed concern about a lender being required to provide indemnification due to an oversight by the lender or deception by the borrower. The Agency has revised the rule to clarify and limit the circumstances under which indemnification may be required. These changes, which address the commenter's concerns, are described in greater detail below. Another commenter made similar comments. The commenter agreed that indemnification is appropriate in cases of lender fraud or lender negligence, but the commenter expressed concern about lenders being held liable due to unforeseen circumstances or circumstances beyond their control. This commenter recommended four specific changes to the rule. First, the commenter stated that lender indemnification for fraud should exclude fraud committed by a third party, such as a borrower, real estate agent, or seller. The Agency does not intend to seek indemnification when fraud was committed by a third party and the lender had no knowledge of such fraud. The Agency has revised the rule to clarify that indemnification will apply “when there was fraud or misrepresentation in connection with origination of the loan of which the originating Lender had actual knowledge at the time it became such Lender or which the originating Lender participated in or condoned.” Second, the commenter stated that indemnification should not be automatic in cases where the Agency pays a claim within 24 months of closing. The commenter wrote that lenders should not be subject to indemnification when borrowers default on their loans due to circumstances beyond the lender's control. The Agency disagrees with the commenter that indemnification is automatic. A prerequisite to indemnification in the proposed rule was a determination by the Agency that the Lender did not originate a loan in accordance with the requirements in 7 CFR part 1980, subpart D. Further, the Agency has revised the rule to clarify what conditions must be satisfied before the Agency can require indemnification after paying a claim within 24 months of loan closing. Third, the commenter recommended that in order for a lender to be liable due to misrepresentation, the misrepresentation must be proven by clear and convincing evidence and the misrepresentation must have been discoverable prior to loan closing. The Agency has revised the rule to provide clarification regarding the circumstances under which indemnification may be required. If RHS pays a loss claim within 24 months of loan origination as a result of the originating lender's nonconforming action or failure to act, RHS may seek indemnification if:

(1)The originating lender utilized unsupported data or omitted material information when submitting the request for a conditional commitment to RHS;

(2)the originating lender failed to properly verify and analyze the applicant's income and employment history in accordance with Agency guidelines;

(3)the originating lender failed to address property deficiencies identified in the appraisal or inspection report that affect the health and safety of the occupants or the structural integrity of the property; or

(4)the originating lender used an appraiser that was not properly licensed or certified, as appropriate, to make residential real estate appraisals in accordance with 7 CFR 1980.334(a). In addition, RHS may seek indemnification at any time, regardless of how long ago the loan closed, if RHS determines that there was fraud or misrepresentation in connection with the origination of the loan of which the originating lender had actual knowledge at the time it became such lender or which the originating lender participated in or condoned and RHS paid a loss claim as a result of the originating lender's nonconforming action or failure to act. In this context, misrepresentation includes negligent misrepresentation. With regard to the commenter's other suggestion, the Agency has decided not to incorporate the “clear and convincing evidence” standard into the rule. The Agency will seek indemnification only when an analysis of all available evidence establishes that indemnification is appropriate under the standards set forth in the rule. Lenders are protected in that a decision to require indemnification from the lender may be appealed to the USDA National Appeals Division (NAD), and the final determination of NAD shall be reviewable by any United States District Court of competent jurisdiction according to NAD regulations at 7 CFR part 11. Fourth, the commenter requested that program violations be limited to only material program violations that adversely affect the program. The Agency agrees with the commenter that indemnification is appropriate only where the lender's violation is material. As discussed above, the Agency has revised the rule to clarify and limit the circumstances under which indemnification may be required. The Agency may seek indemnification only when RHS pays a claim under the loan note guarantee as a result of the originating Lender's nonconforming action or failure to act. The commenter also expressed concern about whether lenders would have appeal rights. As noted above, indemnification will be treated as an adverse decision, and the lender may appeal the decision. The Agency has revised section 1980.399(a)(2) of the rule to make clear that the Lender may appeal an indemnification decision alone, without the participation of the borrower. One commenter stated that the Agency's indemnification policy should be like the Federal Housing Administration's policy in that it should apply only to the originating lender and not to the servicer. The Agency agrees and has clarified that indemnification may only be sought from originating lenders. As noted in 7 CFR 1980.309(f), lenders are fully responsible for their own actions and the actions of those acting on their behalf, including during loan origination. One commenter asked for clarification whether the same indemnification standards would apply to loans that are manually underwritten and loans that are submitted through the Guaranteed Underwriting System (GUS). The Agency will apply the same indemnification standards to all guaranteed loans. List of Subjects in 7 CFR Part 1980 Home improvement, Loan programs—Housing and community development, Mortgage insurance, Mortgages, Rural areas. For the reason stated in the preamble, Chapter XVIII, Title 7 of the Code of Federal Regulations is amended as follows: PART 1980—GENERAL 1. The authority citation for part 1980 continues to read as follows: Authority: 5 U.S.C. 301 and 7 U.S.C. 1989. Subpart E also issued under 7 U.S.C. 1932(a). Subpart D—Rural Housing Loans 2. Section 1980.308 is revised to read as follows: § 1980.308 Full faith and credit and indemnification.

(a)*Full faith and credit.* The loan note guarantee constitutes an obligation supported by the full faith and credit of the United States and is incontestable except for fraud or misrepresentation of which the Lender has actual knowledge at the time it becomes such Lender or which the Lender participates in or condones. Misrepresentation includes negligent misrepresentation. A note which provides for the payment of interest on interest shall not be guaranteed. Any guarantee or assignment of a guarantee attached to or relating to a note which provides for the payment of interest on interest is void. Notwithstanding the prohibition of interest on interest, interest may be capitalized in connection with reamortization over the remaining term with written concurrence of RHS. The loan note guarantee will be unenforceable to the extent any loss is occasioned by violation of usury laws, negligent servicing, or failure to obtain the required security regardless of the time at which RHS acquires knowledge of the foregoing. Negligent servicing is defined as servicing that is inconsistent with this subpart and includes the failure to perform those services which a reasonably prudent lender would perform in servicing its own loan portfolio of loans that are not guaranteed. The term includes not only the concept of a failure to act, but also not acting in a timely manner or acting contrary to the manner in which a reasonably prudent lender would act up to the time of loan maturity or until a final loss is paid. Any losses occasioned will be unenforceable to the extent that loan funds are used for purposes other than those authorized in this subpart. When the lender conducts liquidation in an expeditious manner, in accordance with the provisions of § 1980.374 of this subpart, the loan note guarantee shall cover interest until the claim is paid within the limit of the guarantee.

(b)*Indemnification.* If RHS determines that a Lender did not originate a loan in accordance with the requirements in this subpart, and RHS pays a loss claim under the loan note guarantee as a result of the originating Lender's nonconforming action or failure to act, RHS may revoke the originating Lender's eligibility status in accordance with § 1980.309(h) of this subpart and may also require the originating Lender:

(1)To indemnify RHS for the loss, if the payment under the guarantee was made within 24 months of loan closing, when one or more of the following conditions is satisfied:

(i)The originating Lender utilized unsupported data or omitted material information when submitting the request for a conditional commitment to RHS;

(ii)The originating Lender failed to properly verify and analyze the applicant's income and employment history in accordance with Agency guidelines;

(iii)The originating Lender failed to address property deficiencies identified in the appraisal or inspection report that affect the health and safety of the occupants or the structural integrity of the property;

(iv)The originating Lender used an appraiser that was not properly licensed or certified, as appropriate, to make residential real estate appraisals in accordance with § 1980.334(a) of this subpart; or,

(2)To indemnify RHS for the loss, regardless of how long ago the loan closed, if RHS determines that there was fraud or misrepresentation in connection with the origination of the loan of which the originating Lender had actual knowledge at the time it became such Lender or which the originating Lender participated in or condoned. Misrepresentation includes negligent misrepresentation. 3. Section 1980.320 is revised to read as follows: § 1980.320 Interest rate. The interest rate must not exceed the established, applicable usury rate. Loans guaranteed under this subpart must bear a fixed interest rate over the life of the loan. The rate shall be agreed upon by the borrower and the Lender and must not be more than the current Fannie Mae rate as defined in § 1980.302(a) of this subpart. The Lender must document the rate and the date it was determined. 4. Section 1980.353(c)(4) is revised to read as follows: § 1980.353 Filing and processing applications.

(c)* * *

(4)Anticipated loan rates and terms, the date and amount of the Fannie Mae rate used to determine the interest rate, and the Lender's certification that the proposed rate is in compliance with § 1980.320 of this subpart. 5. Section 1980.399(a)(2) is revised to read as follows: § 1980.399 Appeals.

(a)* * *

(2)The Lender may appeal without the borrower where RHS has:

(i)Denied or reduced the amount of a loss payment to the Lender; or

(ii)Required an originating Lender to indemnify RHS for a loss payment. Dated: April 15, 2011. Dallas Tonsanger, Under Secretary, Rural Development. Dated: April 21, 2011. Michael Scuse, Acting Under Secretary, Farm and Foreign Agricultural Services. [FR Doc. 2011-13061 Filed 5-27-11; 8:45 am]

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