Notice of Funds Availability; American Rescue Plan Act of 2021 Section 1005 Loan Payment (ARPA), 28329-28332 [2021-11155]

Agencies

• DEPARTMENT OF AGRICULTURE
• Farm Service Agency

[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]


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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.

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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 https://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 https://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;

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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

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    (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

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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