Debt SettlementCommunity and Business Programs

DEPARTMENT OF AGRICULTURE

Farmers Home Administration

7 CFR Part 1956

RIN 0575-AB26

Debt Settlement--Community and Business Programs

AGENCY: Farmers Home Administration, USDA.

ACTION: Final rule.

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SUMMARY: The Farmers Home Administration (FmHA) amends its policies and

procedures governing debt settlement of Community Programs loans. These

changes are necessary to comply with Section 2384, Title XXIII, of the

Food, Agriculture, Conservation, and Trade Act of 1990 (Pub. L. 101-

624). This law is to establish and implement a program that is similar

to the program established under Section 353 of the Consolidated Farm

and Rural Development Act (7 U.S.C. 2001), except that the debt

restructuring and loan servicing procedures shall apply to delinquent

Community Facility hospital or health care program loans rather than

Farmer Program loans. The intended effect is to keep these facilities

in operation with manageable debt.

EFFECTIVE DATE: September 7, 1994.

FOR FURTHER INFORMATION CONTACT: Jennifer Barton, Loan Specialist,

Community Facilities Division, Farmers Home Administration, Room 6314,

South Agriculture Building, Washington, D.C. 20250, telephone: (202)

720-1504.

SUPPLEMENTARY INFORMATION

Classification

This rule has been determined to be significant/economically

significant and was reviewed by the Office of Management and Budget

under Executive Order 12866.

Environmental Impact Statement

This document has been reviewed in accordance with 7 CFR part 1940,

subpart G, ``Environmental Program.'' FmHA has determined 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 (Pub. L. 91-190), an

Environmental Impact Statement is not required.

Executive Order 12778

This regulation has been reviewed in light of Executive Order 12778

and meets the applicable standards provided in sections 2(a) and

(2)(b)(2) of that E.O. Provisions within this part which are

inconsistent with State law are controlling. All administrative

remedies pursuant to 7 CFR part 1900, subpart B, must be exhausted

prior to filing suit.

Intergovernmental Review

This action affects the following FmHA program as listed in the

Catalog of Federal Domestic Assistance: No. 10.766 Community Facility

Loans. This program is subject to the provisions of E.O. 12372 which

requires intergovernmental consultation with State and local officials.

(7 CFR part 3015, subpart V; 48 FR 29112, June 24, 1983, 49 FR 2267,

May 31, 1984, 50 FR 14088, April 10, 1985.)

Paperwork Reduction Act

The information collection requirements contained in this

regulation have been approved by the Office of Management and Budget

(OMB) under the provisions of 44 U.S.C. Chapter 35 and have been

assigned OMB control number 0575-0124 in accordance with the Paperwork

Reduction Act of 1980. This final rule does not revise or impose any

new information collection requirements from those approved by OMB.

Background Information

Section 2384 of the Food, Agriculture, Conservation, and Trade Act

of 1990, Pub. L. 101-624, amended the Consolidated Farm and Rural

Development Act and requires the Secretary of Agriculture to develop a

debt restructuring and loan servicing program for FmHA hospital or

health care facility borrowers. This program is similar to the loan

restructuring and servicing program in effect for delinquent Farmer

Program loans. This rule amends current FmHA regulations to implement

this program. The program is intended to facilitate the continued

operation of rural hospitals and health care facilities by implementing

all possible debt restructuring options available that will result in

an economically viable facility.

Given the congressional intent to provide rural hospitals and

health care facilities a debt restructuring option similar to that

provided Farmer Program borrowers, this regulation is modeled in a

general sense on the Farmer Program restructuring scheme. Under this

regulation, a hospital or health care debtor who is delinquent on its

FmHA loan, and is unable to cure its delinquency through more

traditional servicing methods, will be notified of the options

available for debt restructuring. The debtor can apply for

consideration by providing financial and operational information and

proposing its own plan for curing the delinquency.

In order to be eligible for consideration for debt restructuring,

the debtor's delinquency must have been caused by factors outside the

debtor's control. In addition, the debtor must have acted in good faith

with regard to the FmHA loan. FmHA will make these determinations based

on the debtor's representation and the Agency's review of other

documents relevant to these preliminary matters.

Once the debtor provides the financial and operational information

required, FmHA will conduct a thorough analysis of the debtor's

operations. This analysis will typically include contracting for an

independent appraisal of the collateral securing the loan and

contracting with an independent expert to prepare an ``operations

review.'' This review will provide FmHA with information regarding the

facility's operations, its financial standing, and suggest alternatives

that could be implemented to address the delinquency.

Using the information obtained from these sources and in

consultation with the debtors and the experts, FmHA will calculate two

values as required by the statute. First, FmHA will determine the

loan's ``net recovery'' value. This value represents the current value

of the loan if FmHA were to foreclose. Generally, the value is

calculated by adding the value of assets securing the loan and

subtracting the costs that would be incurred if the loan was

foreclosed. Second, FmHA will determine the value of the restructured

loan. This value is determined after a proposed plan is developed for

the operation of the facility. That is, the operation and/or debt is

modified to determine if the debtor can attain a positive cash flow and

pay an adjusted debt service payment plus fund the FmHA Reserve

Account.

After the restructured loan value and the net recovery value are

calculated, FmHA can determine whether the debtor's request for debt

restructuring can be approved. As required by the statute, FmHA can

approve debt restructuring only if the value of the restructured loan

is greater than, or equal to, the net recovery value. Once the Agency

reaches this conclusion, the debtor will be notified of the results and

given its options. If possible, the debt will be restructured and the

facility will continue operations. If the net recovery value is greater

than the value of the restructured loan, the debtor may choose to pay

off the loan at the reduced net recovery value. If this option is not

chosen, the loan likely will be accelerated.

Finally, if the debtor's debt is restructured or if the debtor

elects to pay off the debt at the net recovery value, then the debtor

will be required to execute an Appreciation Recapture Agreement. As

explained in the statute, these Agreements allow the Agency to recoup a

part or all of the debt that is written down if the debtor's underlying

collateral appreciates in value over time and if the debtor sells the

collateral within 10 years.

Discussion of Comments

On January 13, 1993, a proposed rule was published in the Federal

Register (58 FR 4095) providing for a 30-day review and comment period

ending February 12, 1993. Six comments were received.

Several respondents stated that the $300,000 limit on the writedown

would not be enough to help many debtors and recommended that the rule

be amended to remove the writedown limit. The rule is amended to remove

the $300,000 limit. The writedown will be limited to the minimum amount

necessary to meet the level of the facility's ability to service the

debt.

One respondent recommended that the interest rate available under

the Rural Rental Housing program, Section 8, which permits loans at

rates as low as 1 percent, be extended to include health care

facilities located in designated health professional shortage areas.

Since FmHA's program regulations do not permit a reduction of interest

rates below the poverty line interest rate, FmHA will not reduce the

interest rate further.

Since publication of the proposed rule, the poverty line interest

rate for FmHA and RDA loans changed from 5.0 percent to 4.5 percent.

The final rule was changed to reference FmHA Instruction 440.1, Exhibit

B, Interest Rates, for FmHA and RDA loans instead of using 5.0 percent.

The loan servicing options available through this action will

result in debt restructuring packages which will provide significant

benefit to all rural areas.

One respondent recommended that the definition of net recovery

value be expanded to consider the potential net loss to the community

if the facility were sold.

The definition of net recovery value presently emphasizes that the

value of the assets should be calculated based upon the facility

continuing to operate as a going concern, not merely as an empty

building but as a facility continuing to offer health care services to

the community it serves. This value can be based on the facility

offering health care services which may, or may not, be similar to

those offered by the current operators. This is the most practical and

accurate method of determining the net recovery value of the facility.

One respondent recommended that we add the availability of

writedown to servicing regulations without a mandate for a strict

servicing regimen to be initiated as soon as a debtor reaches the

delinquency time limitations. This respondent stated that a hospital

could be offered net recovery buy out and not have the ability to

obtain the buy out financing, at which point the Government would be

forced to accelerate the loan.

FmHA is concerned about maintaining health care in rural areas.

There is language in the rule which allows the Agency discretion in

such cases. The program is intended to facilitate the continued

operation of rural hospitals and health care facilities.

One respondent recommended a waiver of the $300,000 writedown limit

when dealing with facilities in designated health professional shortage

areas, those which are Medicare waivered acute-care facilities,

alternate rural health care delivery models, or facilities associated

with related programs that may be approved by appropriate State

licensing agencies.

As stated above, the $300,000 writedown limit has been removed.

Therefore, the final rule is changed from the proposed rule

published in the Federal Register on January 13, 1993, as follows: Debt

writedown. A one-time reduction of the debt owed to FmHA including

principal and interest. This reduction will be the minimum amount

necessary to meet the level of the facility's ability to service the

debt.

List of Subjects in 7 CFR Part 1956

Accounting, Loan programs--Agricultural, Rural areas.

Accordingly, Chapter XVIII, title 7, Code of Federal Regulations is

amended as follows:

PART 1956--DEBT SETTLEMENT

1. The authority citation for part 1956 continues to read as

follows:

Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 31

U.S.C. 3711; 7 CFR 2.23 and 2.70.

Subpart C--Debt Settlement--Community and Business Programs

2. Section 1956.102 is amended by redesignating the existing text

as paragraph (a), adding a heading to newly designated paragraph (a),

and by adding a new paragraph (b) to read as follows:

Sec. 1956.102 Application of policies.

(a) General. * * *

(b) For hospitals and health care facilities only. Loan servicing

and debt restructuring options according to Sec. 1956.143 of this

subpart must be exhausted before the other settlement authorities of

this subpart are applicable.

3. Section 1956.143 is added to read as follows:

Sec. 1956.143 Debt restructuring--hospitals and health care

facilities.

This section pertains exclusively to delinquent Community Facility

hospital and health care facility loans. Those facilities which are

nonprogram (NP) loans as defined in Sec. 1951.203 (f) of subpart E of

part 1951 of this chapter are excluded. The purpose of debt

restructuring is to keep the hospital or health care facility in

operation with manageable debt.

(a) Definitions. As used in this section, the following definitions

apply:

Consolidation. The combining of two or more debt instruments into

one instrument, normally accompanied by reamortization.

Debt writedown. A one-time reduction of the debt owed to FmHA

including principal and interest. This reduction will be the minimum

amount necessary to meet the level of the facility's ability to service

the debt. The writedown will be applied first to interest and then

principal.

Delinquency due to circumstances beyond the control of the debtor.

Includes situations such as: The debtor has less money than planned due

to unexpected and uncontrollable events such as unexpected loss of

service area population, unforeseeable costs incurred for compliance

with State or Federal regulatory requirements, or the loss of key

personnel.

Delinquent debtor. For purposes of this section, delinquency is

defined as being 180 days behind schedule on the FmHA payments. That

is, one full annual installment or the equivalent for monthly,

quarterly, or semiannual installments.

Eligibility. Applicants must be delinquent due to circumstances

beyond their control and have acted in good faith by trying to fulfill

the agreements with FmHA in connection with the delinquent loans.

Interest rate reduction. Reduction of the interest rate on the

restructured loan to as low as the poverty line interest rate in effect

on community and business programs loans.

Loan deferral. The temporary delay of principal and interest

payments for up to 6 months. The debtor must be able to demonstrate the

ability to pay the debt, as restructured, at the end of this delay

period.

Net recovery value. A calculation of the net value of the

collateral and other assets held by the debtor. This value would be

determined by adding the fair market value of FmHA's interest in any

real property pledged as collateral for the loan, plus the value of any

other assets pledged or otherwise available for the repayment of the

debt, minus the anticipated administrative and legal expenses that

would be incurred in connection with the liquidation of the loan. This

value of the assets should be calculated based upon the facility

continuing to operate as a going concern. Therefore, the facility

should be valued not merely as an empty building but as a facility

continuing to offer health care services which may, or may not, be

similar to those offered by the current operators.

Operations review. A study of management and business operations of

the facility by an independent expert. For example, a study of a

hospital and nursing home would include such areas as: general and

administrative, dietary, housekeeping, laundry, nursing, physical

plant, social services, income potential, Federal, State, and insurance

payments, and rate analysis. Also, recommendations and conclusions are

to be included in the study which would indicate the creditworthiness

of the facility and its ability to continue as a going concern. In

analyzing a debtor's proposed restructuring plan, FmHA may contract for

the completion of an operations review. These reviews will be developed

by individuals and entities who have demonstrated an expertise in the

analysis of health care facilities from an operational and

administrative standpoint. FmHA will consider the following criteria

for selection: past experience in health care facility analysis, a

familiarity with the problems of rural health care facilities, a

knowledge of the particular area currently served by the facility in

question, and a willingness to work with both FmHA and the debtor in

developing a final plan for restructuring.

Restructured loan. A revision of the debt instruments including any

combination of the following: writing down of accumulated interest

charges and principal, deferral, consolidation, and adjustment of the

interest rates and terms, usually followed by reamortization.

(b) Debtor notification. All servicing actions permitted under

subpart E of part 1951 of this chapter are to be exhausted prior to

consideration for debt restructuring under this section. To this end,

the servicing official must ensure that the casefile clearly documents

that all servicing actions under subpart E of part 1951 of this chapter

have been exhausted and that the debtor is at least 1 full year's debt

service behind schedule for a minimum of 180 days. The debtor then

should be informed of the debt restructuring available under this

section by using language similar to that provided in Guide 1 of this

subpart (available in any FmHA Office) as follows:

(1) Any introductory paragraph;

(2) A paragraph concerning prior servicing attempts;

(3) A discussion of eligibility, as defined in this section,

including the provision that the debtor acted in good faith in

connection with their FmHA loan and that the delinquency was caused by

circumstances beyond their control;

(4) Two paragraphs that explain the goal of the debt restructuring

program;

(5) A paragraph stating that debt restructuring may include a

combination of servicing actions listed in paragraph (a) of this

section;

(6) Information that details what the debtor must do to apply for

restructuring. A response must be received within 45 days of receipt of

this letter to request consideration for debt restructuring and the

request must include projected balance sheets, budgets, and cash-flow

statements which include and clearly identify funding of the FmHA

reserve account for the next 3 years;

(7) A discussion of FmHA's analysis and calculation process; and

(8) A paragraph identifying the FmHA official who may be contacted

for assistance.

(c) State Director's restructuring determination. Upon receipt of

the delinquent debtor's request for debt restructuring consideration,

the State Director will:

(1) Within 15 days of receipt of debtor's request, if an operations

review is deemed necessary, send a memorandum to the Administrator

asking for program authority to contract for the review in accordance

with Exhibit D of FmHA Instruction 2024-A (available in any FmHA

Office). The name of the debtor involved and the projected amount of

funds anticipated to be spent for the contract should also be provided.

It is anticipated that an operations review will be necessary in most

cases and that the only exceptions would be for smaller health care

facilities or facilities that have developed a proposed plan that is

comprehensive and realistic. Upon receipt of the Administrator's

program contracting approval authority, a contract is to be awarded to

an organization qualified to perform an operations review as defined in

paragraph (a) of this section. The operations review normally will be

completed and delivered to FmHA within 60 days of the award date.

(2) Contract for an appraisal to be performed by an independent,

qualified fee appraiser. Note: To the extent possible, the appraisal

should be scheduled for completion no later than the completion date of

the operations review.

(3) Complete an analysis of the operations review, appraisal, and

other documented information, and make an eligibility determination.

(i) Eligibility determination. The State Director must conclude

that the debtor is eligible for debt restructuring consideration. This

conclusion will be clearly documented in the casefile based on a review

of the following:

(A) The debtor acted in good faith with regard to the delinquent

loan. The casefile must reflect the debtor's cooperation in exploring

servicing alternatives. The casefile should contain no evidence of

fraud, waste, or conversion by the debtor, and no evidence that the

debtor violated the loan agreement or FmHA regulations.

(B) The delinquency was caused by circumstances beyond the control

of the debtor. This determination will be based on the debtor's

narrative on this issue, which is a required part of the application

for debt restructuring, and a separate review of the debtor's casefile

and operations.

(C) As part of the application for debt restructuring, the debtor

submitted a proposed operating plan that presents feasible alternatives

for addressing the delinquency.

(ii) Debtor determined eligible. If the debtor is determined to be

eligible for debt restructuring, a determination of a net recovery

value and level of debt the facility will support will be made. It is

anticipated that meetings with the debtor, the contractor who performed

the operations review, and others, as appropriate, could be necessary

to develop these values; although it should be emphasized throughout

these meetings that any calculations and conclusions reached are

preliminary in nature, pending final review by the Administrator. For

debt restructuring calculations and computing a feasible cash-flow

projection, the following order and combinations of loan servicing

actions will be followed:

(A) Loan deferral for up to 6 months.

(B) Interest rate reduction to not less than the poverty line rate

as determined by FmHA Instruction 440.1, exhibit B (available in any

FmHA Office). Interest rate reduction will be considered only in

conjunction with an extension of the term of the loan to the remaining

useful life of the facility or 40 years, whichever is less.

(C) Debt writedown. Other creditors of the debtor, representing a

substantial portion of the total debt, are expected to participate in

the development of a restructuring plan which includes debt writedown.

Debt writedown participation by other creditors should be on a pro rata

basis with the FmHA writedown. However, failure of these creditors to

agree to participate in the plan shall not preclude the use of

principal and interest writedown by FmHA if it is determined that this

option results in the least cost to the Federal Government.

(iii) Debtor determined ineligible. If the State Director concludes

that the debtor is not eligible for debt restructuring consideration

for any of the reasons listed in paragraph (c)(3)(i) of this section,

then the debtor will be notified by a letter that includes the

following information:

(A) The basis for the determination;

(B) The next step in servicing the loan: possible acceleration if

the delinquency is not cured; and

(C) The debtor may appeal this determination in accordance with

subpart B of part 1900 of this chapter.

(iv) State Director's recommendation. Upon completion of the

determination of net recovery value and restructured debt in accordance

with paragraph (c)(3)(ii) of this section, and prior to formal

presentation to the borrower, the State Director will forward a

recommendation to the National Office with the following documentation:

(A) That all other servicing efforts have been exhausted as

required in paragraph (b) of this section.

(B) Financial statements including balance sheets, income and

expense, cash-flows for the most recent actual year, and projections

for the next 3 years. The amount of FmHA's restructured debt and

reserve account requirements are to be clearly indicated on the

projected statements. Also, operating statistics including number of

beds, patient days of care, outpatient visits, occupancy percentage,

etc., for the same periods of time must be included.

(C) Copies of the operations review, developed for the particular

loan, and appraisal.

(D) Calculations of the net recovery value.

(E) Debt restructuring calculations including a listing of the

various servicing combinations used in these calculations as contained

in paragraph (c)(3)(ii) of this section. For example:

(1) Interest rate reduced from the applicant's current rate on all

loans to the poverty line rate as determined by FmHA instruction 440.1,

exhibit B (available in any FmHA Office); and

(2) Extension of the terms from 25 to 30 years.

(F) Information concerning discussions with the debtor and their

agreement or disagreement with the calculations and recommendations.

(G) If debt restructuring is proposed:

(1) A draft of Form FmHA 1951-33, if applicable, and any other

necessary comments or requirements that may be required by OGC and Bond

Counsel in Sec. 1951.223 (c)(3) and (4) of subpart E of part 1951 of

this chapter.

(2) A draft of Form FmHA 1956-1, if applicable. Complete only parts

I, II, VI, and VIII. Part VI, ``Debtor's Offer and Certification,''

will be in a separate attachment and contain the adjusted unpaid

principal amount for which FmHA approval is requested. In Part VI of

the form, type ``see attached.''

(H) If the proposed restructured debt will not cash-flow or is less

than the net recovery value, omit the items in paragraph (c)(3)(iv)(G)

of this section.

(d) National Office processing of State Director's request.

(1) After reviewing the recommendation to either debt restructure

or liquidate for the net recovery value, the Administrator, after

concurring, modifying, or not concurring in the recommendation, will

return the submission for further processing.

(2) If a debt writedown is used in the restructuring process, the

amount will be included in the National Office transmittal memorandum.

The draft Form FmHA 1956-1 will not need to be finalized and returned

to the Administrator for signature. The State Director's signature on

the final copy will be sufficient. However, a copy of the National

Office memorandum is to be attached to the form when completed.

(e) Debtor notification of debt restructuring and net recovery

value calculations. The State Director will provide a copy of the basis

for the debt restructuring or net recovery determination to the debtor.

(1) If the value of the restructured loan is equal to, or greater

than, the recovery value, the debtor will be made an offer to accept

the restructured debt by using language similar to that provided in

Guide 2 of this subpart (available in any FmHA Office) and including

the following paragraphs:

(i) An introductory paragraph indicating that FmHA has concluded

its consideration of the debtor's request;

(ii) A paragraph indicating FmHA's approval of the debt

restructuring request and that acceptance must be received by FmHA

within 45 days from receipt of this letter; and

(iii) That the debtor's acceptance will require the execution of a

Shared Appreciation Agreement similar to Guide 4 of this subpart

(available in any FmHA Office) and possible new debt instruments

accompanied by Bond Counsel opinions.

(2) If the debt analysis calculations indicate that a restructured

debt would be less than the net recovery value of the security, a

letter using language similar to that provided in Guide 3 of this

subpart (available in any FmHA Office), will be sent to the debtor that

includes the following paragraphs:

(i) An introductory paragraph indicating that FmHA has concluded

its consideration of the debtor's request;

(ii) Paragraphs indicating that:

(A) The debtor may pay FmHA the net recovery value of the loan. The

debtor will be given 30 days from receipt of this letter to inform FmHA

of its intent, 90 days to finalize the payoff, and will be notified

that an election to pay off FmHA would require the execution of a Net

Recovery Buy Out Recapture Agreement, similar to that provided in Guide

5 of this subpart (available in any FmHA Office); or

(B) If the debt is not paid off at the net recovery value, FmHA

will proceed to liquidate the loan.

(f) Debtor responses to debt restructuring and net recovery value

calculations. Responses from the debtor will be handled as follows:

(1) Acceptance of FmHA's restructured debt offer. When a debtor

accepts the offer for debt restructuring, processing will be in

accordance with Sec. 1951.223 (c) of subpart E of part 1951 of this

chapter using the adjusted unpaid principal and outstanding accrued

interest at the Administrator's approved interest rate and terms. The

debtor will be required to execute a Shared Appreciation Agreement

which will provide that, should the debtor sell or transfer title to

the facility within the next 10 years, FmHA is entitled to a portion of

any gain realized. This agreement will include language similar to that

found in Guide 4 of this subpart (available in any FmHA Office). The

original of Form FmHA 1956-1, with appropriate attachments signed by

the State Director, and a copy of the Shared Appreciation Agreement

will be sent to the Finance Office. Note: All documents pertaining to

this transaction will be sent to the Finance Office in one single

complete package; and

(2) Acceptance by debtor to pay off loan at the recovery value.

Processing of this transaction will be in accordance with Sec. 1956.124

of this subpart. However, the account does not need to be accelerated.

The debtor will be required to execute a Net Recovery Buy Out Recapture

Agreement, similar to that found in Guide 5 of this subpart (available

in any FmHA Office). The original of Form FmHA 1956-1, with appropriate

attachments signed by the State Director, and a copy of the recorded

Net Recovery Buy Out Recapture Agreement will be sent to the Finance

Office. The executed Net Recovery Buy Out Recapture Agreement will be

recorded in the county in which the facility is located. The Finance

Office will credit the accounts of debtors who entered into Net

Recovery Buy Out Recapture Agreements with the amount paid by the

debtor (net recovery value). Note: All documents pertaining to this

transaction will be sent to the Finance Office in one single complete

package.

(g) Collection and processing of recapture.

(1) When FmHA becomes aware of the sale or transfer of title to the

facility on which there is an effective Net Recovery Buy Out Recapture

Agreement (Guide 5 of this subpart available in any FmHA Office) or a

Shared Appreciation Agreement (Guide 4 of this subpart available in any

FmHA Office) outstanding and a determination is made that a recapture

is appropriate, FmHA will notify the debtor of the following:

(i) Date and amount of recapture due; and

(ii) FmHA action to be taken if debtor does not respond within the

designated timeframe with the amount of recapture due.

(2) When the recapture is received, the payment will be processed

on Form FmHA 451-2 as a miscellaneous collection in accordance with

subpart B of part 1951 of this chapter. The Form FmHA 451-2 along with

a copy of the Net Recovery Buy Out Recapture Agreement (Guide 5 of this

subpart available in any FmHA Office) or Shared Appreciation Agreement

(Guide 4 of this subpart available in any FmHA Office), as appropriate,

will be forwarded to the Finance Office.

(3) When the amount of the recapture has been paid and credited to

the debtor's account, the debtor will be released from liability by

using Form FmHA 1965-8, ``Release from Personal Liability,'' modified

as appropriate.

(h) No recapture due. If FmHA determines there is no recapture due,

the Net Recovery Buy Out Recapture Agreement (Guide 5 of this subpart

available in any FmHA Office) or Shared Appreciation Agreement (Guide 4

of this subpart available in any FmHA Office) will be appropriately

annotated, the Recapture Agreement released from the record, and the

Agreement returned to the debtor.

4. Section 1956.147 is amended by revising the word ``borrower'' to

read ``debtor'' in paragraphs (a)(3)(iv) and (a)(3)(v)(B).

5. Section 1956.150 is revised to read as follows:

Sec. 1956.150 OMB Control Number.

The reporting requirements contained in this regulation have been

approved by the Office of Management and Budget and assigned OMB

control number 0575-0124. Public reporting burden for this collection

of information is estimated to vary from \1/2\ hour to 30 hours per

response with an average of 8.14 hours per response, including the time

for reviewing instructions, searching existing data sources, gathering

and maintaining the data needed, and completing and reviewing the

collection of information. Send comments regarding this burden estimate

or any other aspect of this collection of information, including

suggestions for reducing this burden, to Department of Agriculture,

Clearance Officer, OIRM, Ag Box 7630, Washington, D.C. 20250; and to

the Office of Information and Regulatory Affairs, Office of Management

and Budget, Washington, D.C. 20503.

Dated: August 15, 1994.

Bob J. Nash,

Under Secretary, Small Community and Rural Development.

[FR Doc. 94-21877 Filed 9-6-94; 8:45 am]

BILLING CODE 3410-32-P