94-10618. Denying Credit to Applicants Delinquent on Federal Debt  

  • [Federal Register Volume 59, Number 85 (Wednesday, May 4, 1994)]
    [Unknown Section]
    [Page 0]
    From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
    [FR Doc No: 94-10618]
    
    
    [[Page Unknown]]
    
    [Federal Register: May 4, 1994]
    
    
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    DEPARTMENT OF AGRICULTURE
    Farmers Home Administration
    
    7 CFR Parts 1823, 1910, 1941, 1942, 1943, 1944, 1945, 1948, 1951, 
    and 1980
    
    RIN: 0575-AA66
    
     
    
    Denying Credit to Applicants Delinquent on Federal Debt
    
    AGENCY: Farmers Home Administration, USDA.
    
    ACTION: Proposed rule.
    
    -----------------------------------------------------------------------
    
    SUMMARY: The Farmers Home Administration (FmHA) proposes to amend its 
    regulations concerning program eligibility requirements. These 
    revisions will direct field offices to suspend processing of an 
    application if an applicant is found to be delinquent on a Federal debt 
    until the delinquency is resolved, and to deny credit if a Federal 
    judgment is found against an applicant. This action is necessary to 
    implement requirements of OMB Circular A-129, ``Policies for Federal 
    Credit Programs and Non-Tax Receivables.'' Denying credit to applicants 
    against whom there is a Federal judgment is mandated by provisions of 
    the Federal Debt Collections Procedures Act of 1990. The intended 
    effect of this action is to instruct field offices on how to obtain 
    more information to be used in determining loan, grant and loan 
    servicing eligibility.
    
    DATES: Comments must be submitted on or before July 5, 1994.
    
    ADDRESSES: Submit written comments in duplicate to the Office of the 
    Chief, Regulations Analysis and Control Branch, Farmers Home 
    Administration, USDA, South Building, room 6348, 14th and Independence 
    Avenue, SW., Washington, DC 20250. All written comments made pursuant 
    to this notice will be available for public inspection during regular 
    working hours at the above address.
    
    FOR FURTHER INFORMATION CONTACT: Daniel K. Wanamaker, Senior Financial 
    Analyst, Farmers Home Administration, U.S. Department of Agriculture, 
    room 6446, South Agriculture Building, Washington, DC 20250, Telephone 
    (202) 690-0501.
    
    SUPPLEMENTARY INFORMATION:
    
    Classification
    
        This rule has been determined not-significant for purposes of 
    Executive Order 12866 and therefore has not been reviewed by OMB.
    
    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, Public Law 91-190, an 
    Environmental Impact Statement is not required.
    
    Paperwork Reduction Act
    
        The information collection requirements contained in these 
    regulations 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 numbers 0575-0134, 0575-0141, 0575-0132, 0575-
    0097, 0575-0123, 0575-0074, 0575-0085, 0575-0083, 0575-0059, 0575-0045, 
    0575-0047, 0575-0062, 0575-0090, 0575-0130, 0575-0066, 0575-0079, 0575-
    0029, and 0575-0137 in accordance with the Paperwork Reduction Act of 
    1980 (44 U.S.C. 3507). The proposed rule does not revise or impose any 
    new information collection or recordkeeping requirement from those 
    approved by OMB.
    
    Intergovernmental Review
    
        These changes affect the following FmHA programs as listed in the 
    Catalog of Federal Domestic Assistance:
    
    10.404  Emergency Loans
    10.405  Farm Labor Housing Loans and Grants
    10.406  Farm Operating Loans
    10.407  Farm Ownership Loans
    10.410  Low Income Housing Loans (Section 502 Rural Housing Loans)
    10.411  Rural Housing Site Loans (Section 523 and 524 Site Loans)
    10.414  Resource Conservation and Development Loans
    10.415  Rural Rental Housing Loans
    10.416  Soil and Water Loans (SW Loans)
    10.417  Very Low Income Housing Repair Loans and Grants
    10.418  Water and Waste Disposal Systems for Rural Communities
    10.419  Watershed Protection and Flood Prevention Loans
    10.420  Rural Self-Help Housing Technical Assistance (Section 523 
    Technical Assistance)
    10.421  Indian Tribes and Tribal Corporation Loans
    10.422  Business and Industrial Loans
    10.423  Community Facility Loans
    10.434  Nonprofit Corporations Loan and Grant Program
    10.436  Technical Assistance and Training Grants
    
        Programs listed under numbers 10.404, 10.406, 10.407, 10.410, 
    10.417, 10.421, 10.428, and 10.435 are not subject to the provisions of 
    Executive Order 12372 which requires intergovernmental consultation 
    with State and local officials (7 CFR part 3015, subpart V, 48 FR 
    29115, June 24, 1983).
        Programs listed under numbers 10.405, 10.411, 10.414, 10.415, 
    10.416, 10.418, 10.419, 10.420, 10.422, 10.423, 10.427, 10.433, and 
    10.434 are subject to the provisions of Executive Order 12372 (7 CFR 
    3015, subpart V, 48 FR 29112, June 24, 1983; 49 FR 22675, May 31, 1984; 
    50 FR 14088, April 10, 1985).
    
    Regulatory Flexibility Act
    
        The Administrator of the Farmers Home Administration has determined 
    that this action will not have a significant economic impact on a 
    substantial number of small entities because it contains normal 
    business recordkeeping requirements and minimal essential reporting 
    requirements.
    
    Background Information
    
        The current loan application procedures require that an applicant 
    provide certification that it is not delinquent on a Federal debt. For 
    the purpose of verifying an applicant's certification, FmHA proposes to 
    amend its instructions by revising each eligibility section to instruct 
    the field offices to access the Department of Housing and Urban 
    Development's Credit Alert Interactive Voice System (CAIVRS) to verify 
    that the applicant is not delinquent on a Federal debt. If a 
    delinquency is found, processing of the application will be suspended. 
    The applicant will be notified that processing has been suspended and 
    will be asked to contact the appropriate Federal agency, at the 
    telephone number provided by CAIVRS, to resolve the delinquency. When 
    the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued. If the applicant is unable to 
    resolve the delinquency, or if an outstanding judgment obtained by the 
    United States in a Federal Court (other than the United States Tax 
    Court), which has been recorded, is found, assistance may be denied.
    
    List of Subjects
    
    7 CFR Part 1823
    
        Credit, Indians.
    
    7 CFR Part 1910
    
        Applications, Credit, Loan programs--agriculture, Loan programs--
    housing and community development, Low and moderate income housing, 
    Marital status discrimination, Sex discrimination.
    
    7 CFR Part 1941
    
        Crops, Livestock, Loan programs--agriculture, Rural areas, Youth.
    
    7 CFR Part 1942
    
        Business and industry, Community development, Community facilities, 
    Grant programs--housing and community development, Industrial park, 
    Loan programs--housing and community development, Loan programs--
    natural resources, Loan security, Rural areas, Soil conservation, Waste 
    treatment and disposal--domestic, Water supply--domestic.
    
    7 CFR Part 1943
    
        Credit, Loan programs--agriculture, Recreation, Water resources.
    
    7 CFR Part 1944
    
        Administrative practice and procedure, Aged, Farm labor housing, 
    Grant programs--housing and community development, Handicapped, Home 
    improvement, Loan programs--housing and community development, Low and 
    moderate income housing--rental, Migrant labor, Mobile homes, 
    Mortgages, Nonprofit organizations, Public housing, Rent subsidies, 
    Rural housing, Subsidies.
    
    7 CFR Part 1945
    
        Agriculture, Disaster assistance, Loan programs--agriculture.
    
    7 CFR Part 1948
    
        Business and industry, Coal, Community development, Community 
    facilities, Energy, Grant programs--housing and community development, 
    Housing, Nuclear energy, Planning, Rural areas, Transportation, 
    Economic development.
    
    7 CFR Part 1951
    
        Accounting servicing, Grant programs--housing and community 
    development, Reporting requirements, Rural areas.
    
    7 CFR Part 1980
    
        Agriculture, Grant programs--Nonprofit corporations, Loan 
    programs--agriculture, Loan programs--business and industry--Rural 
    development assistance, Loan programs--nonprofit corporations, Rural 
    areas, Loan programs--community programs, Rural development assistance.
    
        Therefore, as proposed, Chapter XVIII, Title 7, Code of Federal 
    Regulations is amended as follows:
    
    PART 1823--ASSOCIATION LOANS AND GRANTS--COMMUNITY FACILITIES, 
    DEVELOPMENT, CONSERVATION, UTILIZATION
    
        1. The authority citation for part 1823 continues to read as 
    follows:
    
        Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
    2.23; 7 CFR 2.70.
    
    Subpart N--Loans to Indian Tribes and Tribal Corporations
    
        2. Section 1823.403 is amended by adding paragraph (d) to read as 
    follows:
    
    
    Sec. 1823.403  Eligibility.
    
    * * * * *
        (d) Not be delinquent on any Federal debt or have a Federal 
    judgment lien against its property.
        (1) The District Office will check the Department of Housing and 
    Urban Development's Credit Alert Interactive Voice Response System 
    (CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
    ``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
    Inquiry,'' to determine if the applicant is delinquent on a Federal 
    debt. No decision to deny credit can be based solely on the results of 
    the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
    District Office will immediately suspend processing of the application. 
    The applicant will be notified that processing has been suspended and 
    will be asked to contact the appropriate Federal agency, at the 
    telephone number provided by CAIVRS, to resolve the delinquency. When 
    the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (2) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible to receive any 
    grant or loan until the judgment is paid in full or otherwise 
    satisfied. FmHA loan funds may not be used to satisfy the judgment. 
    Questions about whether or not a judgment is still outstanding should 
    be directed to the Office of the General Counsel. If the judgment 
    remains unsatisfied, or if the applicant is delinquent on a Federal 
    debt and is unable to resolve the delinquency, the application will be 
    rejected and the applicant will be notified of its right for an appeal 
    in accordance with subpart B of part 1900 of this chapter. The 
    Administrator may waive the rejection upon specific determination that 
    it is in the best interest of the Government to do so.
    
    PART 1910--GENERAL
    
        3. The authority citation for part 1910 continues to read as 
    follows:
    
        Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
    2.23; 7 CFR 2.70.
    
    Subpart A--Receiving and Processing Applications
    
        4. Section 1910.4 is amended by adding paragraph (g)(3) to read as 
    follows:
    
    
    Sec. 1910.4  Processing applications.
    
    * * * * *
        (g) * * *
        (3) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible for any loan or 
    grant until the judgment is paid in full or otherwise satisfied. FmHA 
    loan or grant funds may not be used to satisfy the judgment. Questions 
    about whether or not a judgment is still outstanding should be directed 
    to the Office of the General Counsel. The Administrator may waive this 
    restriction upon specific determination that it is in the best interest 
    of the Government to do so. A decision to deny a loan for this reason 
    is not appealable.
    * * * * *
        5. Section 1910.5 is amended by adding paragraph (e) to read as 
    follows:
    
    
    Sec. 1910.5  Evaluating applications.
    
    * * * * *
        (e) Delinquency on a Federal debt. Form FmHA 1910-3, ``Record of 
    Credit Alert Interactive Voice Response System (CAIVRS) Inquiry,'' will 
    be used to help determine if an applicant is delinquent on any Federal 
    debt.
    
    PART 1941--OPERATING LOANS
    
        6. The authority citation for Part 1941 continues to read as 
    follows:
    
        Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
    2.23; 7 CFR 2.70.
    
    Subpart A--Operating Loan Policies, Procedures, and Authorizations
    
        7. Section 1941.12 is amended in paragraphs (a)(1) and (b)(5)(i) in 
    the fourth sentence by changing the reference from ``INS Form G-641, 
    `Application for Verification of Information from Immigration and 
    Naturalization Records,' '' to ``INS Form G-639, `Verification Request 
    Form,' '' and in the last sentence by changing the reference from ``INS 
    Form G-641'' to ``INS Form G-639,'' by revising the introductory text 
    and paragraphs (a)(4) and (b)(5)(iii), and by adding paragraph (d) to 
    read as follows:
    
    
    Sec. 1941.12  Eligibility requirements.
    
        Subject to the restrictions listed in paragraph (d) of this 
    section, an applicant is eligible for loan assistance if the following 
    requirements are met:
        (a) * * *
        (4) Have the character (emphasizing credit history, past record of 
    debt repayment and reliability) and industry to carry out the proposed 
    operation. Past record of debt repayment will not be cause for a 
    determination that the applicant/borrower is not eligible if an honest 
    attempt has been made to meet the payment(s). However, delinquency on a 
    Federal debt shall cause the applicant to be ineligible for loan 
    assistance (other than for certain Farmer Program loans as provided in 
    Sec. 1941.14 of this subpart).
        (i) The County Office will use Form FmHA 1910-3, ``Record of Credit 
    Alert Interactive Voice Response System (CAIVRS) Inquiry,'' to check 
    the Department of Housing and Urban Development's CAIVRS to determine 
    if the applicant is delinquent on a Federal debt. No decision to deny 
    credit can be based solely on the results of the CAIVRS inquiry. If 
    CAIVRS identifies a delinquent Federal debt, the County Office will 
    immediately suspend processing of the application. The applicant will 
    be notified that processing has been suspended and will be asked to 
    contact the appropriate Federal agency, at the telephone number 
    provided by CAIVRS, to resolve the delinquency. When the applicant 
    provides FmHA with official documentation that the delinquency has been 
    paid in full or otherwise resolved, processing of the application will 
    be continued.
        (ii) If the applicant is delinquent on a Federal debt, and is 
    unable to resolve the delinquency, the application will be rejected 
    (unless applying for certain Farmer Program loans as providied in 
    Sec. 1914.14 of this subpart) and the applicant will be notified of its 
    right for an appeal in accordance with subpart B of part 1900 of this 
    chapter. The Administrator may waive this restriction upon specific 
    determination that it is in the best interest of the Government to do 
    so.
    * * * * *
        (b) * * *
        (5) * * *
        (iii) They and the entity itself must have the character 
    (emphasizing credit history, past record of debt repayment and 
    reliability) and industry to carry out the proposed operation. Past 
    record of debt repayment will not be cause for a determination that the 
    applicant/borrower is not eligible if an honest attempt has been made 
    to meet the payment(s). Delinquency on a Federal debt (other than a 
    Farmer Program debt, in accordance with Sec. 1941.14 of this subpart), 
    by the entity or any of its members shall cause the entity to be 
    ineligible.
        (A) The County Office will use Form FmHA 1910-3 to check the 
    Department of Housing and Urban Development's CAIVRS to determine if 
    the entity or any of its members is delinquent on a Federal debt. No 
    decision to deny credit can be based solely on the results of the 
    CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
    County Office will immediately suspend processing of the application. 
    The applicant will be notified that processing has been suspended and 
    will be asked to contact the appropriate Federal agency, at the 
    telephone number provided by CAIVRS, to resolve the delinquency. When 
    the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (B) If the applicant is delinquent on a Federal debt (other than a 
    Farmer Program debt) and is unable to resolve the delinquency, the 
    application will be rejected and the applicant will be notified of its 
    right for an appeal in accordance with subpart B of part 1900 of this 
    chapter. The Administrator may waive this restriction upon specific 
    determination that it is in the best interest of the Government to do 
    so.
    * * * * *
        (d) Restrictions. An applicant will be considered ineligible for 
    loan assistance under any of the following circumstances. A decision to 
    deny a loan for any of these reasons is not appealable.
        (1) In accordance with the Food Security Act of 1985 (Pub. L. 99-
    198), after December 23, 1985, if an individual or any member, 
    stockholder, partner, or joint operator of an entity is convicted under 
    Federal or State law of planting, cultivating, growing, producing, 
    harvesting, or storing a controlled substance (see 21 CFR part 1308, 
    which is exhibit C of this subpart (available in any FmHA office) for 
    the definition of ``controlled substance'') prior to loan approval in 
    any crop year, the individual or entity shall be ineligible for a loan 
    for the crop year in which the individual or member, stockholder, 
    partner, or joint operator of the entity was convicted and the four 
    succeeding crop years. Applicants will attest on Form FmHA 410-1, 
    ``Application for FmHA Services,'' that as individuals or that its 
    members, if an entity, have not been convicted of such crimes after 
    December 23, 1985.
        (2) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible for any Farmer 
    Program loan until the judgment is paid in full or otherwise satisfied. 
    FmHA loan funds may not be used to satisfy the judgment. Questions 
    about whether or not a judgment is still outstanding should be directed 
    to the Office of the General Counsel. The Administrator may waive this 
    restriction upon specific determination that it is in the best interest 
    of the Government to do so.
    
    PART 1942--ASSOCIATIONS
    
        8. The authority citation for part 1942 continues to read as 
    follows:
    
    
        Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
    2.23; 7 CFR 2.70.
    
    Subpart A--Community Facility Loans
    
        9. Section 1942.2 is amended by redesignating paragraphs (a)(2) 
    through (a)(4) as (a)(3) through (a)(5), by adding a new paragraph 
    (a)(2), and by revising newly redesignated paragraph (a)(3)(ii) to read 
    as follows:
    
    
    Sec. 1942.2  Processing applications.
    
        (a) * * *
    
    (2) Delinquency on a Federal Debt
    
        (i) The District Office will check the Department of Housing and 
    Urban Development's Credit Alert Interactive Voice Response System 
    (CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
    ``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
    Inquiry,'' to determine if the applicant is delinquent on a Federal 
    debt. No decision to deny credit can be based solely on the results of 
    the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
    District Office will immediately suspend processing of the application. 
    The applicant will be notified that processing has been suspended and 
    will be asked to contact the appropriate Federal agency, at the 
    telephone number provided by CAIVRS, to resolve the delinquency. When 
    the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (ii) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible to receive any 
    grant or loan until the judgment is paid in full or otherwise 
    satisfied. FmHA loan funds may not be used to satisfy the judgment. 
    Questions about whether or not a judgment is still outstanding should 
    be directed to the Office of the General Counsel. If the judgment 
    remains unsatisfied, or if the applicant is delinquent on a Federal 
    debt and is unable to resolve the delinquency, the application will be 
    rejected and the applicant will be notified of its right for an appeal 
    in accordance with subpart B of part 1900 of this chapter. The 
    Administrator may waive the rejection upon specific determination that 
    it is in the best interest of the Government to do so.
        (3) * * *
        (ii) The State Office shall maintain a working relationship with 
    the State agency or official that has been designated as the single 
    point of contact for the intergovernmental review process and give full 
    consideration to their comments when selecting preapplications to be 
    processed.
    * * * * *
    
    Subpart C--Fire and Rescue Loans
    
        10. Section 1942.111 is amended by adding paragraph (d) to read as 
    follows:
    
    
    1942.111  Applicant eligibility.
    
    * * * * *
    
    (d) Delinquency on a Federal Debt
    
        (1) The District Office will check the Department of Housing and 
    Urban Development's Credit Alert Interactive Voice Response System 
    (CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
    ``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
    Inquiry,'' to determine if the applicant is delinquent on a Federal 
    debt. No decision to deny credit can be based solely on the results of 
    the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
    District Office will immediately suspend processing of the application. 
    The applicant will be notified that processing has been suspended and 
    will be asked to contact the appropriate Federal agency, at the 
    telephone number provided by CAIVRS, to resolve the delinquency. When 
    the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (2) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible to receive any 
    grant or loan until the judgment is paid in full or otherwise 
    satisfied. FmHA loan funds may not be used to satisfy the judgment. 
    Questions about whether or not a judgment is still outstanding should 
    be directed to the Office of the General Counsel. If the judgment 
    remains unsatisfied, or if the applicant is delinquent on a Federal 
    debt and is unable to resolve the delinquency, the application will be 
    rejected and the applicant will be notified of its right for an appeal 
    in accordance with subpart B of part 1900 of this chapter.
        The Administrator may waive the rejection upon specific 
    determination that it is in the best interest of the Government to do 
    so.
    
    Subpart G--Rural Business Enterprise Grants and Television 
    Demonstration Grants
    
        11. Section 1942.305 is amended by adding paragraph (a)(4) to read 
    as follows:
    
    
    Sec. 1942.305  Eligibility and priority.
    
        (a) * * *
    
    (4) Delinquency on a Federal Debt
    
        (i) The District Office will check the Department of Housing and 
    Urban Development's Credit Alert Interactive Voice Response System 
    (CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
    ``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
    Inquiry,'' to determine if the applicant is delinquent on a Federal 
    debt. No decision to deny assistance can be based solely on the results 
    of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
    the District Office will immediately suspend processing of the 
    application. The applicant will be notified that processing has been 
    suspended and will be asked to contact the appropriate Federal agency, 
    at the telephone number provided by CAIVRS, to resolve the delinquency. 
    When the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (ii) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible to receive any 
    grant or loan until the judgment is paid in full or otherwise 
    satisfied. FmHA loan funds may not be used to satisfy the judgment. 
    Questions about whether or not a judgment is still outstanding should 
    be directed to the Office of the General Counsel. If the judgment 
    remains unsatisfied, or if the applicant is delinquent on a Federal 
    debt and is unable to resolve the delinquency, the application will be 
    rejected and the applicant will be notified of its right for an appeal 
    in accordance with subpart B of part 1900 of this chapter. The 
    Administrator may waive the rejection upon specific determination that 
    it is in the best interest of the Government to do so.
    * * * * *
    
    Subpart H--Development Grants for Community Domestic Water and 
    Waste Disposal Systems
    
        12. Section 1942.356 is amended by adding paragraph (a)(4) to read 
    as follows:
    
    
    Sec. 1942.356  Applicant eligibility and priority.
    
        (a) * * *
        (4) Applicant is not delinquent on a Federal debt.
        (i) The District Office will check the Department of Housing and 
    Urban Development's Credit Alert Interactive Voice Response System 
    (CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
    ``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
    Inquiry,'' to determine if the applicant is delinquent on a Federal 
    debt. No decision to deny assistance can be based solely on the results 
    of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
    the District Office will immediately suspend processing of the 
    application. The applicant will be notified that processing has been 
    suspended and will be asked to contact the appropriate Federal agency, 
    at the telephone number provided by CAIVRS, to resolve the delinquency. 
    When the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (ii) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible to receive any 
    grant or loan until the judgment is paid in full or otherwise 
    satisfied. FmHA loan funds may not be used to satisfy the judgment. 
    Questions about whether or not a judgment is still outstanding should 
    be directed to the Office of the General Counsel. If the judgment 
    remains unsatisfied, or if the applicant is delinquent on a Federal 
    debt and is unable to resolve the delinquency, the application will be 
    rejected and the applicant will be notified of its right for an appeal 
    in accordance with subpart B of part 1900 of this chapter. The 
    Administrator may waive the rejection upon specific determination that 
    it is in the best interest of the Government to do so.
    * * * * *
    
    Subpart I--Resource Conservation and Development (RCD) Loans and 
    Watershed (WS) Loans and Watershed Advances
    
        13. Section 1942.405 is amended by adding paragraph (f) to read as 
    follows:
    
    
    Sec. 1942.405  Eligibility.
    
    * * * * *
        (f) Applicant must not be delinquent on a Federal debt.
        (1) The District Office will check the Department of Housing and 
    Urban Development's Credit Alert Interactive Voice Response System 
    (CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
    ``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
    Inquiry,'' to determine if the applicant is delinquent on a Federal 
    debt. No decision to deny assistance can be based solely on the results 
    of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
    the District Office will immediately suspend processing of the 
    application. The applicant will be notified that processing has been 
    suspended and will be asked to contact the appropriate Federal agency, 
    at the telephone number provided by CAIVRS, to resolve the delinquency. 
    When the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (2) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible to receive any 
    grant or loan until the judgment is paid in full or otherwise 
    satisfied. FmHA loan funds may not be used to satisfy the judgment. 
    Questions about whether or not a judgment is still outstanding should 
    be directed to the Office of the General Counsel. If the judgment 
    remains unsatisfied, or if the applicant is delinquent on a Federal 
    debt and is unable to resolve the delinquency, the application will be 
    rejected and the applicant will be notified of its right for an appeal 
    in accordance with subpart B of part 1900 of this chapter. The 
    Administrator may waive the rejection upon specific determination that 
    it is in the best interest of the Government to do so.
    
    Subpart J--Technical Assistance and Training Grants
    
        14. Section 1942.457 is amended by adding paragraph (d) to read as 
    follows:
    
    
    Sec. 1942.457  Eligibility.
    
    * * * * *
        (d) The applicant must not be delinquent on a Federal debt.
        (1) The District Office will check the Department of Housing and 
    Urban Development's Credit Alert Interactive Voice Response System 
    (CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
    ``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
    Inquiry,'' to determine if the applicant is delinquent on a Federal 
    debt. No decision to deny assistance can be based solely on the results 
    of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
    the District Office will immediately suspend processing of the 
    application. The applicant will be notified that processing has been 
    suspended and will be asked to contact the appropriate Federal agency, 
    at the telephone number provided by CAIVRS, to resolve the delinquency. 
    When the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (2) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible to receive any 
    grant or loan until the judgment is paid in full or otherwise 
    satisfied. FmHA loan funds may not be used to satisfy the judgment. 
    Questions about whether or not a judgment is still outstanding should 
    be directed to the Office of the General Counsel. If the judgment 
    remains unsatisfied, or if the applicant is delinquent on a Federal 
    debt and is unable to resolve the delinquency, the application will be 
    rejected and the applicant will be notified of its right for an appeal 
    in accordance with subpart B of part 1900 of this chapter. The 
    Administrator may waive the rejection upon specific determination that 
    it is in the best interest of the Government to do so.
    
    Subpart K--Emergency Community Water Assistance Grants
    
        15. Section 1942.506 is amended by adding paragraph (c) to read as 
    follows:
    
    
    Sec. 1942.506  Eligibility.
    
    * * * * *
        (c) The applicant must not be delinquent on a Federal debt.
        (1) The District Office will check the Department of Housing and 
    Urban Development's Credit Alert Interactive Voice Response System 
    (CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
    ``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
    Inquiry,'' to determine if the applicant is delinquent on a Federal 
    debt. No decision to deny assistance can be based solely on the results 
    of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
    the District Office will immediately suspend processing of the 
    application. The applicant will be notified that processing has been 
    suspended and will be asked to contact the appropriate Federal agency, 
    at the telephone number provided by CAIVRS, to resolve the delinquency. 
    When the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (2) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible to receive any 
    grant or loan until the judgment is paid in full or otherwise 
    satisfied. FmHA loan funds may not be used to satisfy the judgment. 
    Questions about whether or not a judgment is still outstanding should 
    be directed to the Office of the General Counsel. If the judgment 
    remains unsatisfied, or if the applicant is delinquent on a Federal 
    debt and is unable to resolve the delinquency, the application will be 
    rejected and the applicant will be notified of its right for an appeal 
    in accordance with subpart B of part 1900 of this chapter. The 
    Administrator may waive the rejection upon specific determination that 
    it is in the best interest of the Government to do so.
    
    PART 1943--FARM OWNERSHIP, SOIL AND WATER AND RECREATION
    
        16. The authority citation for part 1943 continues to read as 
    follows:
    
        Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
    2.23; 7 CFR 2.70.
    
    Subpart A--Insured Farm Ownership Loan Policies, Procedures, and 
    Authorizations
    
        17. Section 1943.12 is amended in paragraphs (a)(1) and (b)(4)(i) 
    in the fourth sentence by changing the reference from ``INS Form G-641, 
    `Application for Verification of Information from Immigration and 
    Naturalization Records,''' to ``INS Form G-639, `Verification Request 
    Form,''' and in the last sentence by changing the reference from ``INS 
    Form G-641'' to ``INS Form G-639,'' by revising the introductory text 
    and paragraphs (a)(4) and (b)(4)(iii), and by adding paragraph (d) to 
    read as follows:
    
    
    Sec. 1943.12  Farm ownership loan eligibility requirements.
    
        Subject to the restrictions listed in paragraph (d) of this 
    section, an applicant is eligible for loan assistance if the following 
    requirements are met:
        (a) * * *
        (4) Have the character (emphasizing credit history, past record of 
    debt repayment, and reliability) and industry to carry out the proposed 
    operation. Past record of debt repayment will not be cause for a 
    determination that the applicant/borrower is not eligible if an honest 
    attempt has been made to make the payment(s). If an applicant is 
    delinquent on a Federal debt (other than a Farmer Program debt, in 
    accordance with Sec. 1941.14 of subpart A of part 1941 of this 
    chapter), it is automatically ineligible for loan assistance.
        (i) The County Office will use Form FmHA 1910-3, ``Record of Credit 
    Alert Interactive Voice Response System (CAIVRS) Inquiry,'' to check 
    the Department of Housing and Urban Development's CAIVRS to determine 
    if the applicant is delinquent on a Federal debt. No decision to deny 
    credit can be based solely on the results of the CAIVRS inquiry. If 
    CAIVRS identifies a delinquent Federal debt, the County Office will 
    immediately suspend processing of the application. The applicant will 
    be notified that processing has been suspended and will be asked to 
    contact the appropriate Federal agency, at the telephone number 
    provided by CAIVRS, to resolve the delinquency. When the applicant 
    provides FmHA with official documentation that the delinquency has been 
    paid in full or otherwise resolved, processing of the application will 
    be continued.
        (ii) If the applicant is delinquent on a Federal debt (other than a 
    Farmer Program debt), and is unable to resolve the delinquency, the 
    application will be rejected and the applicant will be notified of its 
    right for an appeal in accordance with subpart B of part 1900 of this 
    chapter. The Administrator may waive this restriction upon specific 
    determination that it is in the best interest of the Government to do 
    so.
    * * * * *
        (b) * * *
        (4) * * *
        (iii) Have the character (emphasizing credit history, past record 
    of debt repayment, and reliability) and industry to carry out the 
    proposed operation. This requirement must be met by the individual 
    members, stockholders, partners, or joint operators. Past record of 
    debt repayment will not be cause for a determination that the 
    applicant/borrower is not eligible if an honest attempt has been made 
    to make the payment(s). If the entity or any of its members is 
    delinquent on a Federal debt (other than a Farmer Program debt, in 
    accordance with Sec. 1941.14 of subpart A of part 1941 of this 
    chapter), the entity is automatically ineligible for loan assistance.
        (A) The County Office will use Form FmHA 1910-3 to check the 
    Department of Housing and Urban Development's CAIVRS to determine if 
    the entity or any of its members is delinquent on a Federal debt. No 
    decision to deny credit can be based solely on the results of the 
    CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
    County Office will immediately suspend processing of the application. 
    The applicant will be notified that processing has been suspended and 
    will be asked to contact the appropriate Federal agency, at the 
    telephone number provided by CAIVRS, to resolve the delinquency. When 
    the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (B) If the applicant is delinquent on a Federal debt (other than a 
    Farmer Program debt) and is unable to resolve the delinquency, the 
    application will be rejected and the applicant will be notified of its 
    right for an appeal in accordance with subpart B of part 1900 of this 
    chapter. The Administrator may waive this restriction upon specific 
    determination that it is in the best interest of the Government to do 
    so.
    * * * * *
        (d) Restrictions. An Applicant will be considered ineligible for 
    loan assistance under any of the following circumstances. A decision to 
    deny a loan for any of these reasons is not appealable.
        (1) In accordance with the Food Security Act of 1985 (Pub. L. 99-
    198), after December 23, 1985, if an individual or any member, 
    stockholder, partner, or joint operator of an entity is convicted under 
    Federal or State law of planting, cultivating, growing, producing, 
    harvesting, or storing a controlled substance (see 21 CFR part 1308, 
    which is exhibit C of subpart A of part 1941 of this chapter (available 
    in any FmHA office) for the definition of ``controlled substance'') 
    prior to loan approval in any crop year, the individual or entity shall 
    be ineligible for a loan for the crop year in which the individual or 
    member, stockholder, partner, or joint operator of the entity was 
    convicted and the four succeeding crop years. Applicants will attest on 
    Form FmHA 410-1, ``Application for FmHA Services,'' that as individuals 
    or that its members, if an entity, have not been convicted of such 
    crimes after December 23, 1985.
        (2) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible for any Farmer 
    Program loan until the judgment is paid in full or otherwise satisfied. 
    FmHA loan funds may not be used to satisfy the judgment. Questions 
    about whether or not a judgment is still outstanding should be directed 
    to the Office of the General Counsel. The Administrator may waive this 
    restriction upon specific determination that it is in the best interest 
    of the Government to do so.
    
    Subpart B--Insured Soil and Water Loan Policies, Procedures, and 
    Authorizations
    
        18. Section 1943.62 is amended in paragraphs (a)(1) and (b)(3) in 
    the fourth sentence by changing the reference from ``INS Form G-641, 
    `Application for Verification of Information from Immigration and 
    Naturalization Records,''' to ``INS Form G-639, `Verification Request 
    Form,''' and in the seventh sentence by changing the reference from 
    ``INS Form G-641'' to ``INS Form G-639,'' by revising the introductory 
    text and paragraphs (a)(4) and (b)(1), and by adding paragraph (c) to 
    read as follows:
    
    
    Sec. 1943.62   Soil and water loan eligibility requirements.
    
        Subject to the restrictions listed in paragraph (d) of this 
    section, an applicant is eligible for loan assistance if the following 
    requirements are met:
        (a) * * *
        (4) Have the character (emphasizing credit history, past record of 
    debt repayment and reliability), and industry necessary to carry out 
    the proposed operation. Past record of debt repayment will not be cause 
    for a determination that the applicant/borrower is not eligible if an 
    honest attempt has been made to make the payment(s). If an applicant is 
    delinquent on a Federal debt (other than a Farmer Program debt, in 
    accordance with Sec. 1941.14 of subpart A of part 1941 of this 
    chapter), it is automatically ineligible for loan assistance.
        (i) The County Office will use Form FmHA 1910-3, ``Record of Credit 
    Alert Interactive Voice Response System (CAIVRS) Inquiry,'' to check 
    the Department of Housing and Urban Development's CAIVRS to determine 
    if the applicant is delinquent on a Federal debt. No decision to deny 
    credit can be based solely on the results of the CAIVRS inquiry. If 
    CAIVRS identifies a delinquent Federal debt, the County Office will 
    immediately suspend processing of the application. The applicant will 
    be notified that processing has been suspended and will be asked to 
    contact the appropriate Federal agency, at the telephone number 
    provided by CAIVRS, to resolve the delinquency. When the applicant 
    provides FmHA with official documentation that the delinquency has been 
    paid in full or otherwise resolved, processing of the application will 
    be continued.
        (ii) If the applicant is delinquent on a Federal debt (other than a 
    Farmer Program debt), and is unable to resolve the delinquency, the 
    application will be rejected and the applicant will be notified of its 
    right for an appeal in accordance with subpart B of part 1900 of this 
    chapter. The Administrator may waive this restriction upon specific 
    determination that it is in the best interest of the Government to do 
    so.
    * * * * *
        (b) * * *
        (1) Have the character (emphasizing credit history, past record of 
    debt repayment and reliability), and industry necessary to carry out 
    the proposed operation. This requirement also must be met by the 
    individual members, stockholders, partners, or joint operators. Past 
    record of debt repayment will not be cause for a determination that the 
    applicant/borrower is not eligible if an honest attempt has been made 
    to make the payment(s). If the applicant (the entity or any of its 
    members) is delinquent on a Federal debt (other than a Farmer Program 
    debt, in accordance with Sec. 1941.14 of subpart A or part 1941 of this 
    chapter), the entity is automatically ineligible for loan assistance.
        (i) The County Office will use Form FmHA 1910-3 to check the 
    Department of Housing and Urban Development's CAIVRS to determine if 
    the entity or any of its members is delinquent on a Federal debt. No 
    decision to deny credit can be based solely on the results of the 
    CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
    County Office will immediately suspend processing of the application. 
    The applicant will be notified that processing has been suspended and 
    will be asked to contact the appropriate Federal agency, at the 
    telephone number provided by CAIVRS, to resolve the delinquency. When 
    the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (ii) If the applicant is delinquent on a Federal debt (other than a 
    Farmer Program debt) and is unable to resolve the delinquency, the 
    application will be rejected and the applicant will be notified of its 
    right for an appeal in accordance with subpart B of part 1900 of this 
    chapter. The Administrator may waive this restriction upon specific 
    determination that it is in the best interest of the Government to do 
    so.
    * * * * *
        (d) Restrictions. An applicant will be considered ineligible for 
    loan assistance under any of the following circumstances. A decision to 
    deny a loan for any of these reasons is not appealable.
        (1) In accordance with the Food Security Act of 1985 (Pub. L. 99-
    198), after December 23, 1985, if an individual or any member, 
    stockholder, partner, or joint operator of an entity is convicted under 
    Federal or State law of planting, cultivating, growing, producing, 
    harvesting, or storing a controlled substance (see 21 CFR part 1308, 
    which is exhibit C of subpart A of part 1941 of this chapter (available 
    in any FmHA office) for the definition of ``controlled substance'') 
    prior to loan approval in any crop year, the individual or entity shall 
    be ineligible for a loan for the crop year in which the individual or 
    member, stockholder, partner, or joint operator of the entity was 
    convicted and the four succeeding crop years. Applicants will attest on 
    Form FmHA 410-1, ``Application for FmHA Service,'' that as individuals 
    or that its members, if an entity, have not been convicted of such 
    crimes after December 23, 1985.
        (2) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible for any Farmer 
    Program loan until the judgment is paid in full or otherwise satisfied. 
    FmHA loan funds may not be used to satisfy the judgment. Questions 
    about whether or not a judgment is still outstanding should be directed 
    to the Office of the General Counsel. The Administrator may waive this 
    restriction upon specific determination that it is in the best interest 
    of the Government to do so.
    
    PART 1944--HOUSING
    
        19. The authority citation for Part 1944 continues to read as 
    follows:
    
        Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
    2.23; 7 CFR 2.70.
    
    Subpart A--Section 502 Rural Housing Loan Policies, Procedures, and 
    Authorizations
    
        20. Section 1944.9 is amended by adding paragraph (f)(5) to read as 
    follows:
    
    
    Sec. 1944.9   Other eligibility requirements.
    
    * * * * *
        (f) * * *
        (5) The loan approval official will check the Department of Housing 
    and Urban Development's Credit Alert Interactive Voice Response System 
    (CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
    ``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
    Inquiry,'' to determine if the applicant is delinquent on a Federal 
    debt. No decision to deny credit can be based solely on the results of 
    the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
    loan approval official will immediately suspend processing of the 
    application. The applicant will be notified that processing has been 
    suspended and will be asked to contact the appropriate Federal agency, 
    at the telephone number provided by CAIVRS, to resolve the delinquency. 
    When the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued. An outstanding judgment obtained by 
    the United States in a Federal Court (other than the United States Tax 
    Court), which has been recorded, shall cause the applicant to be 
    ineligible to receive any grant or loan until the judgment is paid in 
    full or otherwise satisfied. FmHA loan funds may not be used to satisfy 
    the judgment. Questions about whether or not a judgment is still 
    outstanding should be directed to the Office of the General Counsel. If 
    the judgment remains unsatisfied, or if the applicant is delinquent on 
    a Federal debt and is unable to resolve the delinquency, the 
    application will be rejected and the applicant will be notified of its 
    right for an appeal in accordance with subpart B of part 1900 of this 
    chapter. The Administrator may waive the rejection upon specific 
    determination that it is in the best interest of the Government to do 
    so.
    
    Subpart D--Farm Labor Housing Loan and Grant Policies, Procedures, 
    and Authorizations
    
        21. Section 1944.157 is amended by adding paragraph (a)(10) to read 
    as follows:
    
    
    Sec. 1944.157  Eligibility requirements.
    
        (a) * * *
        (10) Not be delinquent on a Federal debt or have a judgment lien 
    against its property for a debt owed the United States.
        (i) The District Office will check the Department of Housing and 
    Urban Development's Credit Alert Interactive Voice Response System 
    (CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
    ``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
    Inquiry,'' to determine if the applicant is delinquent on a Federal 
    debt. No decision to deny credit can be based solely on the results of 
    the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
    District Office will immediately suspend processing of the application. 
    The applicant will be notified that processing has been suspended and 
    will be asked to contact the appropriate Federal agency, at the 
    telephone number provided by CAIVRS, to resolve the delinquency. When 
    the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (ii) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible to receive any 
    grant or loan until the judgment is paid in full or otherwise 
    satisfied. FmHA loan funds may not be used to satisfy the judgment. 
    Questions about whether or not a judgment is still outstanding should 
    be directed to the Office of the General Counsel. If the judgment 
    remains unsatisfied, or if the applicant is delinquent on a Federal 
    debt and is unable to resolve the delinquency, the application will be 
    rejected and the applicant will be notified of its right for an appeal 
    in accordance with subpart B of part 1900 of this chapter. The 
    Administrator may waive the rejection upon specific determination that 
    it is in the best interest of the Government to do so.
        (iii) For the purposes of this paragraph, applicant is defined as 
    the applicant entity. In the case of a limited partnership, the 
    applicant entity and each general partner will be considered.
    * * * * *
    
    Subpart E--Rural Rental and Rural Cooperative Housing Loan 
    Policies, Procedures, and Authorizations
    
        22. Section 1944.211 is amended by adding paragraph (a)(15) to read 
    as follows:
    
    
    Sec. 1944.211  Eligibility requirements.
    
        (a) * * *
        (15) Not be delinquent on a Federal debt or have a judgment lien 
    against its property for a debt owed the United States.
        (i) The District Office will check the Department of Housing and 
    Urban Development's Credit Alert Interactive Voice Response System 
    (CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
    ``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
    Inquiry,'' to determine if the applicant is delinquent on a Federal 
    debt. No decision to deny credit can be based solely on the results of 
    the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
    District office will immediately suspend processing of the application. 
    The applicant will be notified that processing has been suspended and 
    will be asked to contact the appropriate Federal agency, at the 
    telephone number provided by CAIVRS, to resolve the delinquency. When 
    the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (ii) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible to receive any 
    grant or loan until the judgment is paid in full or otherwise 
    satisfied. FmHA loan funds may not be used to satisfy the judgment. 
    Questions about whether or not a judgment is still outstanding should 
    be directed to the Office of the General Counsel. If the judgment 
    remains unsatisfied, or if the applicant is delinquent on a Federal 
    debt and is unable to resolve the delinquency, the application will be 
    rejected and the applicant will be notified of its right for an appeal 
    in accordance with subpart B of part 1900 of this chapter. The 
    Administrator may waive the rejection upon specific determination that 
    it is in the best interest of the Government to do so.
        (iii) For the purposes of this paragraph, applicant is defined as 
    the applicant entity. In the case of a limited partnership, the 
    applicant entity and each general partner will be considered.
    * * * * *
    
    Subpart J--Section 504 Rural Housing Loans and Grants
    
        23. Section 1944.467 is amended by revising paragraph (c) to read 
    as follows:
    
    
    Sec. 1944.467  Processing applications.
    
    * * * * *
        (c) Credit investigation. Credit reports will be used for all loans 
    of more than $7,500, and will be ordered at no cost to the applicant in 
    accordance with subpart B of part 1910 (available in any FmHA office). 
    Credit reports will not be used for grant assistance or loans of $7,500 
    or less. In all cases, before making a loan, the County Office will 
    check the Department of Housing and Urban Development's Credit Alert 
    Interactive Voice Response System (CAIVRS), following the Forms Manual 
    Insert for Form FmHA 1910-3, ``Record of Credit Alert Interactive Voice 
    Response System (CAIVRS) Inquiry,'' to determine if the applicant is 
    delinquent on a Federal debt. No decision to deny credit can be based 
    solely on the results of the CAIVRS inquiry. If CAIVRS identifies a 
    delinquent Federal debt, the County Office will immediately suspend 
    processing of the application. The applicant will be notified that 
    processing has been suspended and will be asked to contact the 
    appropriate Federal agency, at the telephone number provided by CAIVRS, 
    to resolve the delinquency. When the applicant provides FmHA with 
    official documentation that the delinquency has been paid in full or 
    otherwise resolved, processing of the application will be continued. An 
    outstanding judgment obtained by the United States in a Federal Court 
    (other than the United States Tax Court), which has been recorded, 
    shall cause the applicant to be ineligible to receive any grant or loan 
    until the judgment is paid in full or otherwise satisfied. FmHA loan 
    funds may not be used to satisfy the judgment. Questions about whether 
    or not a judgment is still outstanding should be directed to the Office 
    of the General Counsel. If the judgment remains unsatisfied, or if the 
    applicant is delinquent on a Federal debt and is unable to resolve the 
    delinquency, the application will be rejected and the applicant will be 
    notified of its right for an appeal in accordance with subpart B of 
    part 1900 of this chapter. The Administrator may waive the rejection 
    upon specific determination that it is in the best interest of the 
    Government to do so.
    * * * * *
    
    PART 1945--EMERGENCY
    
        24. The authority citation for part 1945 continues to read as 
    follows:
    
        Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
    2.23; 7 CFR 2.70.
    
    Subpart D--Emergency Loan Policies, Procedures, and Authorizations
    
        25. Section 1945.162 is amended in paragraph (b)(1) in the fourth 
    sentence by changing the reference from ``INS Form G-641, `Application 
    for Verification of Information from Immigration and Naturalization 
    Records,''' to ``INS Form G-639, `Verification Request Form,''' and in 
    the last sentence by changing the reference from ``INS Form G-641'' to 
    ``INS Form G-639,'' by revising the introductory text and paragraph 
    (g), and by adding paragraph (n) to read as follows:
    
    
    Sec. 1945.162  Eligibility requirements.
    
        Subject to the restrictions listed in paragraph (n) of this 
    section, an applicant is eligible for loan assistance if the following 
    requirements are met:
    * * * * *
        (g) Training and experience. An applicant must have sufficient 
    applicable training or farming experience in managing and operating a 
    farm or ranch (1 year's complete production and marketing cycle within 
    the last 5 years immediately preceding the application) which indicates 
    the managerial ability necessary to assure reasonable prospects of 
    success in the proposed plan of operation and have the character 
    (emphasizing credit history, past record of debt repayment and 
    reliability), and industry necessary to carry out the proposed 
    operation. If an applicant is delinquent on a Federal debt (other than 
    a Farmer Program debt, in accordance with Sec. 1941.14 of subpart A of 
    part 1941 of this chapter), it is automatically ineligible for loan 
    assistance.
        (1) The County Office will use Form FmHA 1910-3, ``Record of Credit 
    Alert Interactive Voice Response System (CAIVRS) Inquiry,'' to check 
    the Department of Housing and Urban Development's CAIVRS to determine 
    if the applicant is delinquent on a Federal debt. No decision to deny 
    credit can be based solely on the results of the CAIVRS inquiry. If 
    CAIVRS identifies a delinquent Federal debt, the County Office will 
    immediately suspend processing of the application. The applicant will 
    be notified that processing has been suspended and will be asked to 
    contact the appropriate Federal agency, at the telephone number 
    provided by CAIVRS, to resolve the delinquency. When the applicant 
    provides FmHA with official documentation that the delinquency has been 
    paid in full or otherwise resolved, processing of the application will 
    be continued.
        (2) If the individual applicant (or entity, or any member of the 
    entity) is delinquent on a Federal debt (other than a Farmer Program 
    debt), and is unable to resolve the delinquency, the application will 
    be rejected and the applicant will be notified of its right for an 
    appeal in accordance with subpart B of part 1900 of this chapter. The 
    Administrator may waive this restriction upon specific determination 
    that it is in the best interest of the Government to do so.
    * * * * *
        (n) Restrictions. An applicant will be considered ineligible for 
    loan assistance under any of the following circumstances. A decision to 
    deny a loan for any of these reasons is not appealable.
        (1) In accordance with the Food Security Act of 1985 (Pub. L. 99-
    198), after December 23, 1985, if an individual or any member, 
    stockholder, partner, or joint operator of an entity is convicted under 
    Federal or State law of planting, cultivating, growing, producing, 
    harvesting, or storing a controlled substance (see 21 CFR part 1308, 
    which is exhibit C of subpart A of part 1941 of this chapter (available 
    in any FmHA office) for the definition of ``controlled substance'') 
    prior to loan approval in any crop year, the individual or entity shall 
    be ineligible for a loan for the crop year in which the individual or 
    member, stockholder, partner, or joint operator of the entity was 
    convicted and the four succeeding crop years. Applicants will attest on 
    Form FmHA 410-1, ``Application for FMHA Services,'' that as individuals 
    or that its members, if an entity, have not been convicted of such 
    crimes after December 23, 1985.
        (2) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible for any Farmer 
    Program loan until the judgment is paid in full or otherwise satisfied. 
    FmHA loan funds may not be used to satisfy the judgment. Questions 
    about whether or not a judgment is still outstanding should be directed 
    to the Office of the General Counsel. The Administrator may waive this 
    restriction upon specific determination that it is in the best interest 
    of the Government to do so.
    
    PART 1948--RURAL DEVELOPMENT
    
        26. The authority citation for Part 1948 continues to read as 
    follows:
    
        Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
    2.23; 7 CFR 2.70.
    
    Subpart B--Section 601--Energy Impacted Area Development Assistance 
    Program
    
        27. Section 1948.54 is amended by designating the text as paragraph 
    (a), and adding paragraph (b) to read as follows:
    
    
    Sec. 1948.54  Eligible applicants.
    
    * * * * *
        (b) The applicant must not be delinquent on a Federal debt.
        (1) The District Office will check the Department of Housing and 
    Urban Development's Credit Alert Interactive Voice Response System 
    (CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
    ``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
    Inquiry,'' to determine if the applicant is delinquent on a Federal 
    debt. No decision to deny assistance can be based solely on the results 
    of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
    the District Office will immediately suspend processing fo the 
    application. The applicant will be notified that processing has been 
    suspended and will be asked to contact the appropriate Federal agency, 
    at the telephone number provided by CAIVRS, to resolve the delinquency. 
    When the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (2) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible to receive any 
    grant or loan until the judgment is paid in full or otherwise 
    satisfied. FmHA loan funds may not be used to satisfy the judgment. 
    Questions about whether or not a judgment is still outstanding should 
    be directed to the Office of the General Counsel. If the judgment 
    remains unsatisfied, or if the applicant is delinquent on a Federal 
    debt and is unable to resolve the delinquency, the application will be 
    rejected and the applicant will be notified of its right for an appeal 
    in accordance with subpart B of part 1900 of this chapter. The 
    Administrator may waive the rejection upon specific determination that 
    it is in the best interest of the Government to do so.
    
    Subpart C--Intermediary Relending Program (IRP)
    
        28. Section 1948.117 is amended by adding paragraph (d) to read as 
    follows:
    
    
    Sec. 1948.117  Other regulatory requirements.
    
    * * * * *
        (d) The applicant must not be delinquent on a Federal debt.
        (1) The District Office will check the Department of Housing and 
    Urban Development's Credit Alert Interactive Voice Response System 
    (CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
    ``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
    Inquiry,'' to determine if the applicant is delinquent on a Federal 
    debt. No decision to deny assistance can be based solely on the results 
    of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
    the District Office will immediately suspend processing of the 
    application. The applicant will be notified that processing has been 
    suspended and will be asked to contact the appropriate Federal agency, 
    at the telephone number provided by CAIVRS, to resolve the delinquency. 
    When the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (2) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible to receive any 
    grant or loan until the judgment is paid in full or otherwise 
    satisfied. FmHA loan funds may not be used to satisfy the judgment. 
    Questions about whether or not a judgment is still outstanding should 
    be directed to the Office of the General Counsel. If the judgment 
    remains unsatisfied, or if the applicant is delinquent on a Federal 
    debt and is unable to resolve the delinquency, the application will be 
    rejected and the applicant will be notified of its right for an appeal 
    in accordance with subpart B of part 1900 of this chapter.
        The Administrator may waive the rejection upon specific 
    determination that it is in the best interest of the Government to do 
    so.
        29. Section 1948.128 is amended by redesignating paragraph (d) as 
    paragraph (e), and adding a new paragraph (d) to read as follows:
    
    
    Sec. 1948.128  Requests to make loans to ultimate recipients.
    
    * * * * *
        (d) If the ultimate recipient is a partnership or for-profit 
    corporation, the intermediary will provide certifications from each 
    general partner or stockholder owning a 10 percent or more interest as 
    to whether it is delinquent on any Federal debt or has a judgment lien 
    against its property for a debt owed the United States.
    * * * * *
    
    PART 1951--SERVICING AND COLLECTIONS
    
        30. The authority citation for Part 1951 continues to read as 
    follows:
    
        Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
    2.23; 7 CFR 2.70.
    
    Subpart E--Servicing of Community and Insured Business Programs 
    Loans and Grants
    
        31. Section 1951.230 is amended by adding paragraph (a)(13) to read 
    as follows:
    
    
    Sec. 1951.230  Transfer of security and assumption of loans.
    
        (a) * * *
        (13) The transferee must not be delinquent on a Federal debt or 
    have a Federal judgment lien against its property.
        (i) The District Office will check the Department of Housing and 
    Urban Development's Credit Alert Interactive Voice Response System 
    (CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
    ``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
    Inquiry,'' to determine if the transferee is delinquent on a Federal 
    debt. No decision to deny assistance can be based solely on the results 
    of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
    the District Office will immediately suspend processing of the 
    application. The transferee will be notified that processing has been 
    suspended and will be asked to contact the appropriate Federal agency, 
    at the telephone number provided by CAIVRS, to resolve the delinquency. 
    When the transferee provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (ii) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the transferee to be ineligible to receive any 
    grant or loan until the judgment is paid in full or otherwise 
    satisfied. FmHA loan funds may not be used to satisfy the judgment. 
    Questions about whether or not a judgment is still outstanding should 
    be directed to the Office of the General Counsel. If the judgment 
    remains unsatisfied, or if the transferee is delinquent on a Federal 
    debt and is unable to resolve the delinquency, the application will be 
    rejected and the transferee will be notified of its right for an appeal 
    in accordance with subpart B of part 1900 of this chapter. The 
    Administrator may waive the rejection upon specific determination that 
    it is in the best interest of the Government to do so.
    * * * * *
    
    PART 1980--GENERAL
    
        32. The authority citation for part 1980 continues to read as 
    follows:
    
        Authority: 7 U.S.C. 1989; 42 U.S.C. 1480; 5 U.S.C. 301; 7 CFR 
    2.23; 7 CFR 2.70.
    
    Subpart B--Farmer Program Loans
    
        33. Section 1980.175 is amended in paragraphs (b)(1)(i) and 
    (b)(2)(iv)(A) in the fourth sentence by changing the reference from 
    ``INS Form G-641, `Application for Verification of Information from 
    Immigration and Naturalization Records,''' to ``INS Form G-639, 
    `Verification Request Form,''' and in the last sentence by changing the 
    reference from ``INS Form G-641'' to ``INS Form G-639,'' by revising 
    the introductory text of paragraph (b), by revising paragraphs 
    (b)(1)(iv), (b)(1)(v), (b)(2)(iv)(C) and (b)(2)(iv)(D), and by adding 
    paragraph (b)(3) to read as follows:
    
    
    Sec. 1980.175  Operating loans.
    
    * * * * *
        (b) Loan eligibility requirements. Subject to the restrictions 
    listed in paragraph (b)(3) of this section, an applicant is eligible 
    for loan assistance if the following requirements are met:
        (1) * * *
        (iv) Have the character (emphasizing credit history, past record of 
    debt repayment and reliability), and industry to carry out the proposed 
    operation. Past record of debt repayment will not be cause for a 
    determination that the applicant is not eligible if an honest attempt 
    has been made to meet the obligation. If an applicant is delinquent on 
    a Federal debt (other than a Farmer Program debt, in accordance with 
    Sec. 1941.14 of subpart A of part 1941 of this chapter), it is 
    automatically ineligible for loan assistance.
        (A) The County Office will use Form FmHA 1910-3, ``Record of Credit 
    Alert Interactive Voice Response System (CAIVRS) Inquiry,'' to check 
    the Department of Housing and Urban Development's CAIVRS to determine 
    if the applicant is delinquent on a Federal debt. No decision to deny 
    credit can be based solely on the results of the CAIVRS inquiry. If 
    CAIVRS identifies a delinquent Federal debt, the County Office will 
    immediately suspend processing of the application. The applicant will 
    be notified that processing has been suspended and will be asked to 
    contact the appropriate Federal agency, at the telephone number 
    provided by CAIVRS, to resolve the delinquency. When the applicant 
    provides FmHA with official documentation that the delinquency has been 
    paid in full or otherwise resolved, processing of the application will 
    be continued.
        (B) If the applicant is delinquent on a Federal debt (other than a 
    Farmer Program debt), and is unable to resolve the delinquency, the 
    application will be rejected and the applicant will be notified of its 
    right for an appeal in accordance with subpart B of part 1900 of this 
    chapter. The Administrator may waive this restriction upon specific 
    determination that it is in the best interest of the Government to do 
    so.
        (v) Honestly endeavor to carry out the applicant's/borrower's 
    undertakings and obligations. This would include, but is not limited 
    to, providing current, complete, and truthful information when applying 
    for assistance and making every reasonable effort to meet the 
    conditions and terms of the proposed loan.
    * * * * *
        (2) * * *
        (iv) * * *
        (C) They and the entity itself must have the character (emphasizing 
    credit history, past record of debt repayment and reliability), and 
    industry to carry out the proposed operation. Past record of debt 
    repayment will not be cause for a determination that the applicant is 
    not eligible if an honest attempt has been made to meet the obligation. 
    If the applicant (the entity or any of its members) is delinquent on a 
    Federal debt (other than a Farmer Program debt, in accordance with 
    Sec. 1941.14 of subpart A of part 1941 of this chapter), it is 
    automatically ineligible for loan assistance.
        (1) The County Office will use Form FmHA 1910-3 to check the 
    Department of Housing and Urban Development's CAIVRS to determine if 
    the applicant is delinquent on a Federal debt. No decision to deny 
    credit can be based solely on the results of the CAIVRS inquiry. If 
    CAIVRS identifies a delinquent Federal debt, the County Office will 
    immediately suspend processing of the application. The applicant will 
    be notified that processing has been suspended and will be asked to 
    contact the appropriate Federal agency, at the telephone number 
    provided by CAIVRS, to resolve the delinquency. When the applicant 
    provides FmHA with official documentation that the delinquency has been 
    paid in full or otherwise resolved, processing of the application will 
    be continued.
        (2) If the applicant is delinquent on a Federal debt (other than a 
    Farmer Program debt) and is unable to resolve the delinquency, the 
    application will be rejected and the applicant will be notified of its 
    right for an appeal in accordance with subpart B of part 1900 of this 
    chapter. The Administrator may waive this restriction upon specific 
    determination that it is in the best interest of the Government to do 
    so.
        (D) They and the entity itself will honestly endeavor to carry out 
    the applicant's/borrower's undertakings and obligations. This would 
    include, but is not limited to, providing current, complete, and 
    truthful information when applying for assistance and making every 
    reasonable effort to meet the conditions and terms of the proposed 
    loan.
    * * * * *
        (3) Restrictions. An applicant will be considered ineligible for 
    loan assistance under any of the following circumstances. A decision to 
    deny a loan for any of these reasons is not appealable.
        (i) In accordance with the Food Security Act of 1985 (Pub. L. 99-
    198) after December 23, 1985, if an individual or any member, 
    stockholder, partner, or joint operator of an entity is convicted under 
    Federal or State law of planting, cultivating, growing, producing, 
    harvesting or storing a controlled substance (see 21 CFR part 1308, 
    which is exhibit C of subpart A of part 1941 of this chapter (available 
    in any FmHA office) for the definition of ``controlled substance'') 
    prior to loan approval in any crop year, the individual or entity shall 
    be ineligible for a loan for the crop year in which the individual or 
    member, stockholder, partner, or joint operator of the entity was 
    convicted and the four succeeding crop years. Applicants will attest on 
    Form FmHA 410-1, ``Application for FmHA Services,'' that as individuals 
    or that its members, if an entity, have not been convicted of such 
    crimes after December 23, 1985.
        (ii) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible for any Farmer 
    Program loan or loan guarantee until the judgment is paid in full or 
    otherwise satisfied. FmHA loan funds may not be used to satisfy the 
    judgment. Questions about whether or not a judgment is still 
    outstanding should be directed to the Office of the General Counsel. 
    The Administrator may waive this restriction upon specific 
    determination that it is in the best interest of the Government to do 
    so.
    * * * * *
        34. Section 1980.185 is amended in paragraphs (b)(1)(i) and 
    (b)(2)(iii) in the fourth sentence by changing the reference from ``INS 
    Form G-641, `Application for Verification of Information from 
    Immigration and Naturalization Records,''' to ``INS Form G-639, 
    `Verification Request Form,''' and in the last sentence by changing the 
    reference from ``INS Form G-641'' to ``INS Form G-639,'' by revising 
    the introductory text of paragraph (b), by revising paragraphs 
    (b)(1)(iv), (b)(1)(v), (b)(2)(i) and (b)(2)(ii), and by adding 
    paragraph (b)(3) to read as follows:
    
    
    Sec. 1980.185  Soil and Water loans.
    
    * * * * *
        (b) Soil and Water loan eligibility requirements. Subject to the 
    restrictions listed in paragraph (b)(3) of this section, an applicant 
    is eligible for loan assistance if the following requirements are met:
        (1) * * *
        (iv) Have the character (emphasizing credit history, past record of 
    debt repayment and reliability) and industry to carry out the proposed 
    operation. Past record of debt repayment will not be cause for a 
    determination that the applicant is not eligible if an honest attempt 
    has been made to meet the obligation. If an applicant (the entity or 
    any of its members) is delinquent on a Federal debt (other than a 
    Farmer Program debt, in accordance with Sec. 1941.14 of subpart A of 
    part 1941 of this chapter), it is automatically ineligible for loan 
    assistance.
        (A) The County Office will use Form FmHA 1910-3 to check the 
    Department of Housing and Urban Development's CAIVRS to determine if 
    the applicant is delinquent on a Federal debt. No decision to deny 
    credit can be based solely on the results of the CAIVRS inquiry. If 
    CAIVRS identifies a delinquent Federal debt, the County Office will 
    immediately suspend processing of the application. The applicant will 
    be notified that processing has been suspended and will be asked to 
    contact the appropriate Federal agency, at the telephone number 
    provided by CAIVRS, to resolve the delinquency. When the applicant 
    provides FmHA with official documentation that the delinquency has been 
    paid in full or otherwise resolved, processing of the application will 
    be continued.
        (B) If the applicant is delinquent on a Federal debt (other than a 
    Farmer Program debt), and is unable to resolve the delinquency, the 
    application will be rejected and the applicant will be notified of its 
    right for an appeal in accordance with subpart B of part 1900 of this 
    chapter. The Administrator may waive this restriction upon specific 
    determination that it is in the best interest of the Government to do 
    so.
        (v) Honestly endeavor to carry out the applicant's/borrower's 
    undertakings and obligations. This would include, but is not limited 
    to, providing current, complete, and truthful information when applying 
    for assistance and making every reasonable effort to meet the 
    conditions and terms of the proposed loan.
    * * * * *
        (2) * * *
        (i) Along with all of its members, stockholders, partners, or joint 
    operators have the character (emphasizing credit history, past record 
    of debt repayment and reliability) and industry to carry out the 
    proposed operation. Past record of debt repayment will not be cause for 
    a determination that the applicant is not eligible if an honest attempt 
    has been made to meet the obligation. If the applicant (the entity or 
    any of its members) is delinquent on a Federal debt (other than a 
    Farmer Program debt, in accordance with Sec. 1941.14 of subpart A of 
    part 1941 of this chapter), it is automatically ineligible for loan 
    assistance.
        (A) The County Office will use Form FmHA 1910-3 to check the 
    Department of Housing and Urban Development's CAIVRS to determine if 
    the applicant is delinquent on a Federal debt. No decision to deny 
    credit can be based solely on the results of the CAIVRS inquiry. If 
    CAIVRS identifies a delinquent Federal debt, the County Office will 
    immediately suspend processing of the application. The applicant will 
    be notified that processing has been suspended and will be asked to 
    contact the appropriate Federal agency, at the telephone number 
    provided by CAIVRS, to resolve the delinquency. When the applicant 
    provides FmHA with official documentation that the delinquency has been 
    paid in full or otherwise resolved, processing of the application will 
    be continued.
        (B) If the applicant is delinquent on a Federal debt (other than a 
    Farmer Program debt) and is unable to resolve the delinquency, the 
    application will be rejected and the applicant will be notified of its 
    right for an appeal in accordance with subpart B of part 1900 of this 
    chapter. The Administrator may waive this restriction upon specific 
    determination that it is in the best interest of the Government to do 
    so.
        (ii) Along with all of its members, stockholders, partners or joint 
    operators, honestly endeavor to carry out the applicant's/borrower's 
    undertakings and obligations. This would include, but is not limited 
    to, providing current, complete, and truthful information when applying 
    for assistance and making every reasonable effort to meet the 
    conditions and terms of the proposed loan.
    * * * * *
        (3) Restrictions. An applicant will be considered ineligible for 
    loan assistance under any of the following circumstances. A decision to 
    deny a loan for any of these reasons is not appealable.
        (i) In accordance with the Food Security Act of 1985 (Pub. L. 99-
    198) after December 23, 1985, if an individual or any member, 
    stockholder, partner, or joint operator of an entity is convicted under 
    Federal or State law of planting, cultivating, growing, producing, 
    harvesting or storing a controlled substance (see 21 CFR part 1308, 
    which is exhibit C of subpart A of part 1941 of this chapter (available 
    in any FmHA office) for the definition of ``controlled substance'') 
    prior to loan approval in any crop year, the individual or entity shall 
    be ineligible for a loan for the crop year in which the individual or 
    member, stockholder, partner, or joint operator of the entity was 
    convicted and the four succeeding crop years. Applicants will attest on 
    Form FmHA 410-1, ``Application for FmHA Services,'' that as individuals 
    or that its members, if an entity, have not been convicted of such 
    crimes after December 23, 1985.
        (ii) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible for any Farmer 
    Program loan until the judgment is paid in full or otherwise satisfied. 
    FmHA loan funds may not be used to satisfy the judgment. Questions 
    about whether or not a judgment is still outstanding should be directed 
    to the Office of the General Counsel. The Administrator may waive this 
    restriction upon specific determination that it is in the best interest 
    of the Government to do so.
    * * * * *
    
    Subpart E--Business and Industrial Loan Program
    
        35. Section 1980.406 is added to read as follows:
    
    
    Sec. 1980.406  Delinquency on a Federal debt.
    
        (a) The District Office will check the Department of Housing and 
    Urban Development's Credit Alert Interactive Voice Response System 
    (CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
    ``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
    Inquiry,'' to determine if the applicant is delinquent on a Federal 
    debt. No decision to deny credit can be based solely on the results of 
    the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
    District Office will immediately suspend processing of the application. 
    The applicant will be notified that processing has been suspended and 
    will be asked to contact the appropriate Federal agency, at the 
    telephone number provided by CAIVRS, to resolve the delinquency. When 
    the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (b) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible to receive any 
    grant, loan or loan guarantee until the judgment is paid in full or 
    otherwise satisfied. FmHA loan funds may not be used to satisfy the 
    judgment. Questions about whether or not a judgment is still 
    outstanding should be directed to the Office of the General Counsel. If 
    the judgment remains unsatisfied, or if the applicant is delinquent on 
    a Federal debt and is unable to resolve the delinquency, the 
    application will be rejected and the applicant will be notified of its 
    right for an appeal in accordance with subpart B of part 1900 of this 
    chapter. The Administrator may waive the rejection upon specific 
    determination that it is in the best interest of the Government to do 
    so.
    
    Subpart G--Nonprofit National Corporations Loan and Grant Program
    
        36. Section 1980.606 is amended by adding paragraph (f) to read as 
    follows:
    
    
    Sec. 1980.606   NNC eligibility.
    
    * * * * *
        (f) Not be delinquent on a Federal Debt. This applies to both the 
    applicant and the ultimate recipients that are to be funded from 
    Federal funds.
        (1) The National Office will check the Department of Housing and 
    Urban Development's Credit Alert Interactive Voice Response System 
    (CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
    ``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
    Inquiry,'' to determine if the applicant is delinquent on a Federal 
    debt. No decision to deny assistance can be based solely on the results 
    of the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, 
    the National Office will immediately suspend processing of the 
    application. The applicant will be notified that processing has been 
    suspended and will be asked to contact the appropriate Federal agency, 
    at the telephone number provided by CAIVRS, to resolve the delinquency. 
    When the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (2) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible to receive any 
    grant, loan or loan guarantee until the judgment is paid in full or 
    otherwise satisfied. FmHA loan funds may not be used to satisfy the 
    judgment. Questions about whether or not a judgment is still 
    outstanding should be directed to the Office of the General Counsel. If 
    the judgment remains unsatisfied, or if the applicant is delinquent on 
    a Federal debt and is unable to resolve the delinquency, the 
    application will be rejected and the applicant will be notified of its 
    right for an appeal in accordance with subpart B of part 1900 of this 
    chapter. The Administrator may waive the rejection upon specific 
    determination that it is in the best interest of the Government to do 
    so.
    
    Subpart I--Community Programs Guaranteed Loans
    
        37. Section 1980.851 is amended by adding paragraph (a)(1)(vii) to 
    read as follows:
    
    
    Sec. 1980.851  Processing applications.
    
        (a) * * *
        (1) * * *
        (vii) Determination of delinquency on a Federal debt.
        (A) The District Office will check the Department of Housing and 
    Urban Development's Credit Alert Interactive Voice Response System 
    (CAIVRS), following the Forms Manual Insert for Form FmHA 1910-3, 
    ``Record of Credit Alert Interactive Voice Response System (CAIVRS) 
    Inquiry,'' to determine if the applicant is delinquent on a Federal 
    debt. No decision to deny credit can be based solely on the results of 
    the CAIVRS inquiry. If CAIVRS identifies a delinquent Federal debt, the 
    District Office will immediately suspend processing of the application. 
    The applicant will be notified that processing has been suspended and 
    will be asked to contact the appropriate Federal agency, at the 
    telephone number provided by CAIVRS, to resolve the delinquency. When 
    the applicant provides FmHA with official documentation that the 
    delinquency has been paid in full or otherwise resolved, processing of 
    the application will be continued.
        (B) An outstanding judgment obtained by the United States in a 
    Federal Court (other than the United States Tax Court), which has been 
    recorded, shall cause the applicant to be ineligible to receive any 
    grant or loan until the judgment is paid in full or otherwise 
    satisfied. FmHA loan funds may not be used to satisfy the judgment. 
    Questions about whether or not a judgment is still outstanding should 
    be directed to the Office of the General Counsel. If the judgment 
    remains unsatisfied, or if the applicant is delinquent on a Federal 
    debt and is unable to resolve the delinquency, the application will be 
    rejected and the applicant will be notified of its right for an appeal 
    in accordance with subpart B of part 1900 of this chapter. The 
    Administrator may waive the rejection upon specific determination that 
    it is in the best interest of the Government to do so.
    * * * * *
        Dated: April 7, 1994.
    Bob Nash,
    Under Secretary for Small Community and Rural Development.
    [FR Doc. 94-10618 Filed 5-3-94; 8:45 am]
    BILLING CODE 3410-07-U
    
    
    

Document Information

Published:
05/04/1994
Department:
Agriculture Department
Entry Type:
Uncategorized Document
Action:
Proposed rule.
Document Number:
94-10618
Dates:
Comments must be submitted on or before July 5, 1994.
Pages:
0-0 (1 pages)
Docket Numbers:
Federal Register: May 4, 1994
CFR: (29)
7 CFR 1823.403
7 CFR 1910.4
7 CFR 1910.5
7 CFR 1914.14
7 CFR 1941.12
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