Notice of Funds Availability; American Rescue Plan Act of 2021 Section 1005 Loan Payment (ARPA)
| Published date | 26 May 2021 |
| Citation | 86 FR 28329 |
| Record Number | 2021-11155 |
| Section | Notices |
| Court | Agriculture Department,Farm Service Agency |
Federal Register, Volume 86 Issue 100 (Wednesday, May 26, 2021)
[Federal Register Volume 86, Number 100 (Wednesday, May 26, 2021)]
[Notices]
[Pages 28329-28332]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-11155]
========================================================================
Notices
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains documents other than rules
or proposed rules that are applicable to the public. Notices of hearings
and investigations, committee meetings, agency decisions and rulings,
delegations of authority, filing of petitions and applications and agency
statements of organization and functions are examples of documents
appearing in this section.
========================================================================
Federal Register / Vol. 86, No. 100 / Wednesday, May 26, 2021 /
Notices
[[Page 28329]]
DEPARTMENT OF AGRICULTURE
Farm Service Agency
[Docket ID FSA-2021-0005]
Notice of Funds Availability; American Rescue Plan Act of 2021
Section 1005 Loan Payment (ARPA)
AGENCY: Farm Service Agency, Department of Agriculture (USDA).
ACTION: Notification of funding availability.
-----------------------------------------------------------------------
SUMMARY: The Farm Service Agency (FSA) is issuing this first notice
announcing the availability of funds for eligible borrowers with direct
loans under the Farm Loan Programs (FLP) and Farm Storage Facility Loan
Program (FSFL) as authorized by section 1005 of the American Rescue
Plan Act of 2021 (ARPA). A subsequent notice addressing guaranteed
loans and remaining loan balances eligible under section 1005 will be
published within 120 days of publication of this NOFA. FSA will pay 120
percent of direct loan balances outstanding as of January 1, 2021, for
socially disadvantaged farmers and ranchers as that term is defined by
section 2501(a) of the Food, Agriculture, Conservation, and Trade Act
of 1990.
DATES:
Funding availability: Implementation will begin May 26, 2021
Comment Date: We will consider comments on the Paperwork Reduction
Act that we receive by: July 26, 2021.
ADDRESSES: We invite you to submit comments on the information
collection request. You may submit comments by any of the following
methods, although FSA prefers that you submit comments electronically
through the Federal eRulemaking Portal:
Federal eRulemaking Portal: Go to http://www.regulations.gov and search for Docket ID FSA-2021-0005. Follow the
online instructions for submitting comments.
Mail: Bruce Mair, Direct Loan Servicing Branch Chief, Farm
Loan Programs, Farm Service Agency, USDA, 1400 Independence Ave. SW,
Stop 0523, Washington, DC 20250. In your comment, specify the docket ID
FSA-2021-0005.
All comments received, including those received by mail, will be
posted without change and publicly available on http://www.regulations.gov.
FOR FURTHER INFORMATION CONTACT: Bruce Mair; telephone: (202) 720-1645;
or by email: [email protected].
SUPPLEMENTARY INFORMATION:
Background
Section 1005 of the American Rescue Plan Act of 2021 (ARPA)
provides funding and authorization for FSA to pay up to 120 percent of
direct and guaranteed loan outstanding balances as of January 1, 2021,
for certain loans of socially disadvantaged farmers and ranchers as
that term is defined in section 2501(a) of the Food, Agriculture
Conservation, and Trade Act of 1990 (7 U.S.C. 2279(a)). See ARPA
section 1005(b)(3). Section 2501(a) defines a socially disadvantaged
farmer or rancher as someone who is a member of a socially
disadvantaged group, which is further defined as a group whose members
have been subjected to racial or ethnic prejudice because of their
identity as members of a group without regard to their individual
qualities. See 7 U.S.C. 2279(a)(5)-(6). Through this notice, FSA is
announcing the immediate implementation of section 1005 of ARPA for
eligible direct loan FLP and FSFL borrowers who are socially
disadvantaged farmers or ranchers, as defined by section 2501(a).
A separate NOFA will be issued specifying the timeframes and
requirements for guaranteed loans and direct loans that no longer have
collateral and have been previously referred to the Department of
Treasury for debt collection for offset. All eligible direct loan
borrowers are included in this initial announcement except those who no
longer have collateral or an active farming operation. These borrowers
often have more complicated cases and may not have the same
opportunities to invest in their farming operation to manage tax
liabilities. FSA expects these cases to account for approximately 5
percent of eligible direct loan borrowers. Procedures for payments to
these borrowers will be addressed in a subsequent NOFA, which will also
include eligible guaranteed loan borrowers. For eligible direct loan
borrowers who also have guaranteed loans, their guaranteed loans will
be handled through the subsequent NOFA.
Definitions
The following definitions apply to this Notice:
Adjustment is a form of debt settlement that reduces the financial
obligation to FSA, conditioned upon the completion of payment of a
specified amount at a future time. An adjustment is not a final
settlement until all payments have been made under the agreement.
Bankruptcy estate is a legal entity created upon the filing of any
case under Title 11 of the United States Code, 11 U.S.C. 101-1532,
consisting of the legal and equitable interests in property of a
debtor.
CONACT means the Consolidated Farm and Rural Development Act, as
amended (7 U.S.C. 1921-2009cc-18).
Cooperative means an entity that has farming as its purpose, whose
members have agreed to share the profits of the farming enterprise and
is recognized as a farm cooperative by the laws of the state in which
the entity will operate a farm.
Corporation means a private domestic corporation created and
organized under the laws of the state in which it will operate a farm.
Direct Loan means a loan funded and serviced by FSA as the lender.
Eligible direct loan means a debt that had an outstanding balance
on January 1, 2021, and is any of the following:
FLP direct loan issued under subtitles A, B, or C of the
CONACT, including Conservation loans, Emergency loans, Farm Ownership
loans (including Down Payment loans), Grazing loans, Irrigation and
Drainage loans, Operating loans (including Youth loans and Microloans),
and Soil and Water loans;
FLP direct non-program loan and Softwood Timber Loans
where the original loan was issued under the CONACT; or
FSFL loan.
Eligible recipient means an individual or entity that is:
A borrower or co-borrower on FSA eligible direct loans on
January 1, 2021;
[[Page 28330]]
all eligible direct loan borrowers are included in this initial
announcement except those who no longer have collateral or an active
farming operation and whose loan has been previously referred to the
Department of Treasury for debt collection for offset; and
A member of a socially disadvantaged group as reflected on
FSA records at the time a payment is made. For entities and married
couples, at least one individual personally liable as a borrower or co-
borrower for the debt must be a member of a socially disadvantaged
group; or
An estate of a deceased eligible recipient.
Entity means a corporation, partnership, joint operation,
cooperative, limited liability company, or trust.
Estate is a legal entity created as a result of a person's death
and consists of the property of the deceased. The estate pays any debts
owed by the deceased and distributes the balance of the estate's assets
to the beneficiaries of the estate.
FLP means Farm Loan Programs, the FSA programs to make, guarantee,
and service loans to family farmers authorized under the CONACT and
implemented through the FSA regulations in 7 CFR parts 700-774.
FSFL means Farm Storage Facility Loans, the FSA program to make and
service loans for farm storage facilities authorized by the CCC Charter
Act (15 U.S.C. 714-714p) and the Food, Conservation and Energy Act of
2008 (7 U.S.C. 7971 and 8789) and implemented through the FSA
regulations in 7 CFR part 1436.
Guaranteed loan means a loan made pursuant to subtitles A, B, or C
of the CONACT and serviced by a lender for which FSA has entered into a
Lender's Agreement and for which FSA has issued a loan guarantee. This
term also includes guaranteed lines of credit.
Joint operation means an operation run by individuals who have
agreed to operate a farm or farms together as an entity, sharing
equally or unequally land, labor, equipment, expenses, or income, or
some combination of these items. The real and personal property is
owned separately or jointly by the individuals.
Limited Liability Company means a business structure combining the
pass-through taxation of a partnership or sole proprietorship with the
limited liability of a corporation organized pursuant to the laws of
the state in which it will operate a farm.
Offer notice means the letter sent to eligible borrowers that will
notify them of the payment amount, obtain direct deposit payment
information and verifying eligible and ineligible loans.
Partnership means an entity consisting of two or more individuals
who have agreed to operate a farm as one business unit. The entity must
be recognized as a partnership by the laws of the State in which the
partnership will operate a farm. It also must be authorized to own both
real and personal property and to incur debt in its own name.
Primary borrower means the borrower who was designated as the
operator of the farm or ranch when the loan was closed. For formal
entities, the primary borrower is the entity while members are co-
borrowers. For informal joint operations, at the time of application
the applicants designate the individual identified as the primary
borrower.
Recapture is the amount that FSA or lenders are entitled to recover
from a direct or guaranteed loan borrower in consideration for FSA or
the lender writing down a portion of their direct or guaranteed loan
debt when the loan was secured by real estate and the real estate
increased in value. Recapture also includes the act of collecting
shared appreciation.
Socially Disadvantaged Farmer or Rancher means a farmer or rancher
who is a member of a socially disadvantaged group whose members have
been subjected to racial or ethnic prejudice because of their identity
as members of a group without regard to their individual qualities, as
defined by section 2501(a) of the Food, Agriculture, Conservation, and
Trade Act of 1990 (7 U.S.C. 2279(a)). Members of socially disadvantaged
groups include, but are not limited to:
American Indians or Alaskan Natives;
Asians;
Blacks or African Americans;
Native Hawaiians or other Pacific Islanders; and
Hispanics or Latinos.
The Secretary of Agriculture will determine on a case-by-case basis
whether additional groups qualify under this definition in response to
a written request with supporting explanation.
Sole Proprietor means a business owned and operated by an
individual with no legal distinction between the owner and the
business.
Trust means an entity that under applicable state law meets the
criteria of being a trust of any kind but does not meet the criteria of
being a farm cooperative, private domestic corporation, partnership, or
joint operation.
Determining Amount of Payments
ARPA section 1005 permits the Secretary of Agriculture to provide
payments to a lender directly to pay off an eligible loan, to an
eligible recipient, or a combination of both. Payments for eligible
direct loans will be equal to 120 percent of the outstanding
indebtedness owed on eligible direct loans as of January 1, 2021.
Undisbursed balances of eligible direct loans will not count toward the
outstanding indebtedness owing as of January 1, 2021.
In order to determine the amount of the payment, FSA will make
adjustments for eligible recipients with the following types of cases:
Where FSA has entered into an adjustment agreement with
the borrower, the adjustment agreement will be reversed and the payment
to the eligible borrower will be calculated on the full debt as of
January 1, 2021, rather than on the lesser amount owing on the
adjustment agreement.
Shared Appreciation Agreement: the recapture amount will
be waived.
Initial Notification Process
Eligible recipients do not need to take any action until receipt of
a payment offer from FSA. However, eligible recipients may, if
necessary, update their demographic information in FSA records by
contacting their Local FSA Service Center. Within 45 days of the
publication of this NOFA, FSA anticipates sending an offer notice to
eligible recipients with eligible direct loans. The offer notice will
explain:
Eligibility based on the current information on record;
FSA's calculation of payments, including proposed
distribution of payments;
Remaining balances on loans that are not included as
eligible direct loans (if any) (for example, Economic Emergency loans
or loans disbursed after January 1, 2021);
Any eligible loans that will be addressed through a
subsequent NOFA (that is, guaranteed FLP loans and direct loans that no
longer have collateral and have been previously referred to the
Department of Treasury for debt collection for offset); and
That borrowers should be aware of potential implications
of receipt of direct payments during bankruptcy.
The offer notice will be sent to the primary borrower and eligible
recipient(s) and will provide three options:
(1) Accept the offer and conditions;
(2) Schedule a meeting to discuss with FSA before making a decision
(for example to discuss the loan calculation, if an error is
identified); or
[[Page 28331]]
(3) Decline the offer.
Only the eligible recipient(s) must sign the document either
accepting or declining to initiate the payments.
The eligible recipient(s) must certify the information in the offer
notice. Acceptance of the offer indicates concurrence with the payment
calculations and the indicated distribution of funds, and verification
as eligible recipient(s).
If an offer has not been formally accepted or declined after 30
days, FSA will send a reminder letter and make a phone call or send an
email if that contact information is on file. If a response to accept
or decline an offer is not received after 60 days from the date of the
initial offer, FSA will provide a second reminder notification to those
borrowers that a payment will not be processed unless contacted by the
eligible recipient. Should FSA establish a final deadline, it will be
publicly announced and a final notification will be provided to
borrowers at least 30 days in advance of the deadline.
Distributing Payments
FSA will distribute payments as follows:
(1) The amount to pay off the eligible direct loan(s) will be
directly applied to such loans by FSA; and
(2) The additional 20 percent will be paid in accordance with the
offer notice.
Any payment will be issued electronically as stated in the offer
notice. FSA will credit payments as of January 1, 2021, and ensure
payments made on accounts after January 1, 2021, are reversed and
refunded to customers that have accepted the payment. Refunds will
occur at the time the direct loan payoff is being completed. If the
loan was paid in full after January 1, 2021, the ARPA payment will be
calculated based on the balance outstanding as of January 1, 2021.
Both the payment to FSA to payoff outstanding loans and the
additional 20 percent to the borrower will be reported to the Internal
Revenue Service (IRS) as income using form IRS-1099 G, in accordance
with applicable requirements. Borrowers should consult with a tax
professional to discuss any tax implications. ARPA is subject to appeal
rights pursuant to 7 CFR parts 11 and 780.
USDA will work with non-governmental organizations (NGO) funded
through FSA Cooperative Agreements to provide technical assistance.
Technical assistance by USDA and its cooperators will be provided to
borrowers free of charge. Borrowers are not required or expected to pay
any fees to access these ARPA benefits.
The USDA makes no representation whether any payment directly to a
borrower in a pending bankruptcy case constitutes property of the
bankruptcy estate. Borrowers should consult bankruptcy professionals or
counsel to discuss the impact of bankruptcy on any payments received
under ARPA.
Paperwork Reduction Act Requirements
In accordance with the Paperwork Reduction Act of 1995 (44 U.S.C.
Chapter 35), FSA is requesting comments from interested individuals and
organizations on the information collection request associated with
ARPA. After the 60-day period ends, the information collection request
will be submitted to the Office of Management and Budget (OMB) for a 3-
year approval to cover ARPA information collection.
To start the ARPA information collection approval, prior to
publishing this document, FSA received emergency approval from OMB for
6 months. The emergency approval covers ARPA information collection
activities.
Title: American Rescue Plan Act of 2021 Section 1005 Loan Payment
(ARPA),
OMB Control Number: 0560-New.
Type of Request: New Collection.
Abstract: This information collection is required to support all
ARPA information collection requests to provide payments to the
eligible borrowers under section 1005 of ARPA. FSA will provide the
loan information, the calculation of payments, and other required
information to the borrower to review and to sign the offer to indicate
acceptance or rejection of the offer.
For the following estimated total annual burden on respondents, the
formula used to calculate the total burden hour is the estimated
average time per response multiplied by the estimated total annual
responses.
Public reporting burden for this information collection is
estimated to include the time for reviewing instructions, searching
existing data sources, gathering and maintaining the data needed and
completing and reviewing the collections of information.
Type of Respondents: FLP direct and FSFL borrowers.
Estimated Annual Number or Respondents: 24,000.
Estimated Number of Responses per Respondent: 1.
Estimated Total Annual Responses: 24,000.
Estimated Average Time per Response: 15 minutes.
Estimated Total Annual Burden on Respondents: 6,000 hours.
FSA is requesting comments on all aspects of this information
collection to help us to:
(1) Evaluate whether the collection of information is necessary for
the proper performance of the functions of FSA, including whether the
information will have practical utility;
(2) Evaluate the accuracy of the FSA's estimate of burden including
the validity of the methodology and assumptions used;
(3) Enhance the quality, utility, and clarity of the information to
be collected; and
(4) Minimize the burden of the collection of information on those
who are to respond, including through the use of appropriate automated,
electronic, mechanical, or other technological collection techniques or
other forms of information technology.
All comments received in response to this document, including names
and addresses when provided, will be a matter of public record.
Comments will be summarized and included in the submission for Office
of Management and Budget approval.
Environmental Review
The environmental impacts have been considered in a manner
consistent with the provisions of the National Environmental Policy Act
(NEPA, 42 U.S.C. 4321-4347), the regulations of the Council on
Environmental Quality (40 CFR parts 1500-1508), and the FSA regulation
for compliance with NEPA (7 CFR part 799).
As previously stated, ARPA includes provisions for paying up to 120
percent of direct and guaranteed loan balances as of January 1, 2021,
for FSA borrowers who belong to socially disadvantaged groups as
defined in section 2501(a) of the Food, Agriculture Conservation, and
Trade Act of 1990 (7 U.S.C. 2279(a)). The limited discretionary aspects
of ARPA do not have the potential to impact the human environment as
they are administrative. Accordingly, these discretionary aspects are
covered by the FSA Categorical Exclusions specified in 7 CFR
799.31(b)(1)(xiii) (partial or complete release of loan collateral) and
799.31(b)(1)(xvii) (restructuring of loans and writing down of debt).
No Extraordinary Circumstances (Sec. 799.33) exist. As such, the
implementation of ARPA and the participation in ARPA do not constitute
major Federal actions that would significantly affect the quality of
the human environment, individually or cumulatively. Therefore, FSA
will not prepare an environmental assessment or
[[Page 28332]]
environmental impact statement for this action and this document serves
as documentation of the programmatic environmental compliance decision
for this federal action.
Federal Assistance Programs
The title and number of the Federal assistance programs, as found
in the Catalog of Federal Domestic Assistance, to which this document
applies is 10.136.
USDA Non-Discrimination Policy
In accordance with Federal civil rights law and U.S. Department of
Agriculture (USDA) civil rights regulations and policies, USDA, its
Agencies, offices, and employees, and institutions participating in or
administering USDA programs are prohibited from discriminating based on
race, color, national origin, religion, sex, gender identity (including
gender expression), sexual orientation, disability, age, marital
status, family or parental status, income derived from a public
assistance program, political beliefs, or reprisal or retaliation for
prior civil rights activity, in any program or activity conducted or
funded by USDA (not all bases apply to all programs). Remedies and
complaint filing deadlines vary by program or incident.
Persons with disabilities who require alternative means of
communication for program information (for example, braille, large
print, audiotape, American Sign Language, etc.) should contact the
responsible Agency or USDA TARGET Center at (202) 720-2600 (voice and
TTY) or contact USDA through the Federal Relay Service at (800) 877-
8339. Additionally, program information may be made available in
languages other than English.
To file a program discrimination complaint, complete the USDA
Program Discrimination Complaint Form, AD-3027, found online at https://www.usda.gov/oascr/how-to-file-a-program-discrimination-complaint and
at any USDA office or write a letter addressed to USDA and provide in
the letter all the information requested in the form. To request a copy
of the complaint form, call (866) 632-9992. Submit your completed form
or letter to USDA by mail to: U.S. Department of Agriculture, Office of
the Assistant Secretary for Civil Rights, 1400 Independence Avenue SW,
Washington, DC 20250-9410 or email: [email protected].
USDA is an equal opportunity provider, employer, and lender.
Zach Ducheneaux,
Administrator, Farm Service Agency.
[FR Doc. 2021-11155 Filed 5-24-21; 8:45 am]
BILLING CODE 3410-05-P
