(a) General. Public Law 94-305 authorized SBA to assist farmers under its physical disaster and economic injury loan programs; and Pub. L. 96– 302 increased FmHA's responsiblity to meet the financial and other needs of farmers caused by disasters. It is the policy of USDA and FmHA to cooperate with SBA in the use of each Agency's respective loan making authorities, both disaster type and regular authorities, to compliment the activities of each other; and, to the extent possible, improve the delivery of disaster assistance to the agricultural segment of the country.

(b) How SBA disaster loans are made available. SBA physical and economic injury disaster loans are available in counties;

(1) Named by the FEMA under a major disaster or emergency declaration by the President; or

(2) Declared by the SBA Administrator.

(c) Notification of SBA disaster areas. The SBA Central Office will notify the FmHA National Office when its disaster loan program is made available. The National Office will advise State Directors, by letter, of the SBA disaster areas and State Directors will notify the appropriate County Supervisor(s).

(d) "Memorandum of Understanding Between SBA and FmHA Pertaining to Disaster Loan Assistance Programs". Exhibit B of Subparts B and D of Part 1945 is a Memorandum of Understanding between SBA and FmHA pertaining to Disaster Loan Assistance Programs, which was entered into on September 26, 1980, and which sets forth how and to what extent the two agencies will cooperate in serving the farm and rural communities affected by disasters.

§ 1945.27 Relationship between FCIC and FmHA.

(a) General. Exhibit A of Subpart N of Part 2000 of this chapter (a copy of which is available in any FmHA office) is a Memorandum of Understanding between FCIC and FmHA. This Memorandum of Understanding is intended to assist in maintaining and im

proving the working relationship between the FCIC and the FmHA by providing encouragement to regular and emergency loan FmHA borrowers to use All-Risk Crop Insurance, where available; assisting FmHA borrowers to obtain All-Risk Crop Insurance or other agricultural commodity insurance coverage; and exchanging information essential to the elimination of duplicating compensatory disaster benefits from the FCIC and FmHA for the same disaster losses.

(b) Annual meeting with FCIC. FmHA State Directors will meet with FCIC Regional Directors at least once each year to review the Memorandum of Understanding and rededicate their efforts and those of their respective Agency employees to comply with the agreements contained in the Memorandum of Understanding.

(c) Contact after EM actual loss loans are made available. After each disaster when EM loans are made available, State Directors are required to promptly contact the FCIC Regional Director to review the Memorandum of Understanding and agree on how each agency will fulfill its responsibilities in dealing with the disaster situation.

(d) Notification to County Offices. State Directors will provide instructions for actions to be taken by County Supervisors in maintaining a good working relationship with the FCIC staff.

[46 FR 28331, May 26, 1981, as amended at 47 FR 33487, Aug. 3, 1982]

88 1945.28-1945.29 [Reserved]

§ 1945.30 FmHA Emergency Loan Support Teams (ELST).

(a) Use of ELSTS. ELSTS are to be used when a disaster warrants immediate attention by FmHA in implementing the EM loan program. Also, ELSTS are used when such unusually large numbers of EM loan applications are received that personnel from other areas are required to be temporarily assigned to assist in rendering prompt service to the affected area(s).

(b) State Office ELST. Each State Director shall form an ELST to be deployed, when needed, in areas affected

by a major disaster, Presidential emergency, or a natural disaster. ELSTS shall assist the State Directors in expediting the making of EM loans to disaster victims.

(1) State Directors shall use the ELSTS formed in their State(s) and all other FmHA personnel within their State(s) in making EM loans available. If additional help is needed beyond that available in the State, including the use of overtime, temporary personnel, and/or private contractors, the State Director shall advise the National Office of these needs and request assistance.

(2) Upon request of a State Director, the Assistant Administrator, Farmer Programs, will consider detailing ELSTS from other States to assist in the making of EM loans.

(3) State ELSTS will consist of a team leader and team members, selected by the State Director.

(i) The State ELST can include Farmer Programs Specialists, County and Assistant County Supervisors, Office Management Assistants, County Office Assistants, and County Office Clerks.

(ii) So that no one person or County Office unit bears an unfair burden, State team members will be changed from time to time.

(iii) Team members will provide training in EM loan making and EM loan servicing to all County Office employees.

(iv) District Directors are responsible for notifying the State Director of any need to change a team member within their district.

(4) State ELSTS will be trained as follows:

(i) The National Office will hold training meetings or workshops for ELST leaders as needed; and

(ii) State ELST leaders will be responsible for training and keeping the State team and all other State personnel currently informed on all phases of EM loans.

tion: Director, Emergency Loan Division.

(c) National Office ELST Leaders. The National Office has established a cadre of ELST team leaders.

(1) National Office team leaders will be used as follows:

(i) Training of FmHA field personnel, other USDA personnel, and temporary personnel in the making of EM loans;

(ii) Assisting State Directors in the organizing and expediting of assistance to eligible disaster victims; and

(iii) Leading ELSTS in areas with an unusually large volume of EM loan applications.

(2) Upon request from a State Director, the Assistant Administrator, Farmer Programs, will consider detailing one or more National Office team leaders to assist in the training of personnel and organizing of EM loan processing activities.

§ 1945.31 FmHA Emergency Loan Assessment Teams (ELAT).

In widespread disaster areas where large numbers of EM loan applications are being received, the State Director will deploy ELATS to the affected areas to monitor EM loan processing activities, in order to minimize loan errors, especially in loss calculations and eligibility determinations. The team leader will keep the State Director informed by telephone and by submission of weekly written reports, setting forth the problems discovered and the corrective actions taken or to be taken. Such teams will be composed of State Office Farmer Programs staff members, District Directors or Assistant District Directors, Office Management Assistants, and auditors from the Office of Audit, if they desire to participate. State Directors will monitor the handling of this quality control measure and report their findings to the National Office.

88 1945.32-1945.34 [Reserved]

§ 1945.35 Special EM loan training.

(a) General. When it is evident that a large number of farmers were affected by a widespread disaster in a State, the National Office will send a qualified representative from the Emergen

cy Loan Division to the State to assist the State Director in conducting a training meeting(s) with State, District and County employees, provided there has not been a recent training meeting in that State.

(b) Purpose. A good training program is a must in disaster areas. This program should adequately instruct State and County Office personnel so that when the training is completed they will be well qualified to process EM loans without undue delay. The training meeting will last 2 days (16 hours) and include a workshop and a test.

(c) Objective. The basic objective of this training program is to keep State and County personnel properly trained in the currently correct methods of EM loan processing and loan making. This will result in more expeditious service to disaster victims during critical times and minimize erroneous interpretations of regulations by FmHA employees in administering the EM loan program.

(d) Comprehensive EM loan training package. A comprehensive EM loan training package has been developed for use by National Office and State Office personnel in training all EM loan writers (both regular and temporary employees). This package, including an application kit, will be used for the EM loan training meetings, and any subsequent EM loan training meetings conducted by State or District personnel.

§8 1945.36-1945.44 [Reserved]

§ 1945.45 Public information function.

A good public information program is a must in disaster areas. This program should inform farmers and the general public when and where EM loans are available. Also, the information will state the EM loan objectives, eligibility requirements, and type of assistance available. Public information functions will be performed according to Exhibit A of Subpart B of Part 2015 of this chapter, which is available in any FmHA office.

(a) Policy. This subpart prescribes the policies, procedures, and authorizations of the Farmers Home Administration (FmHA) for making Insured Emergency (EM) Loans to farmers, ranchers, and aquaculture operators (hereinafter referred to as farmers). FmHA's policy is to make loans to any otherwise qualified applicant without regard to race, color, religion, sex, national origin, marital status, age, or physical/mental handicap (provided the applicant can execute a legal contract). These regulations apply to borrowers and FmHA personnel involved in making EM loans.

(b) Program administration. The County Supervisor is the local contact person for loan processing and servicing activities.

§ 1945.52 Program objectives.

The objective of EM loans is to provide financial assistance to cover actual losses sustained by eligible farmers, make major adjustments, and provide annual production credit so that they can maintain sound farming operations after they have sustained substantial losses as a result of an authorized disaster. EM loans are made to assist eligible disaster victims in sustaining and rehabilitating their normal operations. This objective will be accomplished through the extension of credit and such supervisory assistance as is determined necessary to achieve the objectives of the loan and protect the Government's interest. Supervisory assistance will be given in accordance with the provisions of Subpart B of Part 1924 of this chapter.

§ 1945.53 [Reserved]

§ 1945.54 Definitions and abbreviations.

(a) Definitions—(1) Applicant. The person or entity carrying on the farming operation at the time of the disaster and requesting EM loan assistance from FmHA.

(2) Approval official. An FmHA field official who has been delegated loan and grant approval authorities within applicable loan programs, subject to the dollar limitations contained in tables available in any FmHA Office (see FmHA Instruction 1901-A Exhibit C).

(3) Aquaculture. The husbandry of aquatic organisms in a controlled or selected environment. Aquatic organisms are fish (the term "fish" includes any aquatic gilled animal commonly known as "fish", as well as mollusks, crustaceans, or other invertebrates produced under controlled conditions-that is, feeding, tending, harvesting, and such other activities as are necessary to properly raise and market the products-in ponds, lakes, streams, or similar holding areas), amphibians, reptiles, or aquatic plants. An aquaculture operation is considered to be a farm only if it is conducted on grounds which the applicant owns, leases, or has an exclusive right to use. An exclusive right to use must be evidenced by permit issued to the applicant and the permit must specifically identify the waters available to be used by the applicant only.

(4) Borrower. All parties liable for the loan or any part thereof.

(5) Calendar year. The 12-month period beginning January 1, and ending December 31.

(6) Consolidate. To combine and reschedule the rates and terms of two or more EM loans made for operating purposes. This also may include a new EM loan made for operating purposes.

(7) Cooperative. An entity which has farming as its purpose and whose members have agreed to share the profits of the farming enterprise. The entity must be recognized as a farm cooperative by the laws of the State(s) in which the entity will operate a farm(s).

(8) Corporation. For the purpose of this subpart, a private domestic corpo

ration recognized as a corporation and authorized to carry on farming, ranching, or aquaculture operations under the laws of the State(s) in which the entity will operate a farm(s).

(9) Deferment. To postpone the payment of interest in part and/or principal in whole or in part.

(10) Eligible area. A county or similar political subdivision in which EM loans are made available.

(11) Established farmer. An individual or a principal of a legal entity who was actively participating in the operation and management of the farming operation at the time of the disaster, spends a substantial portion of time in carrying out the farming operation, and had planted a crop or had purchased livestock which were on the farm at the time of the disaster. If the applicant is a cooperative, a corporation or a partnership, it must be primarily engaged in farming, i.e., the entity applicant must derive over fifty percent (50%) of its gross income from the farming operation.

(12) Farm. A tract or tracts of land, improvements, and other appurtenances considered to be farm property which are used or will be used in the production of crops or livestock. This includes aquaculture operations which meet the requirements set forth in paragraph (a)(3) of this section and includes nonfarm operations which meet the requirements set forth in paragraph (a)(21) of this section. It also includes a residence which, although physically separate from the farm acreage, is ordinarily treated as a part of the farm in the local community.

(13) Farmer. One who conducts a farming or ranching enterprise. One who actively manages an aquatic operation or performs such duties as are necessary to properly raise and market the products of an aquatic operation. A farmer can be an individual, a cooperative, a corporation, or a partnership.

(14) Farming enterprise. The business of producing and marketing crops, livestock, livestock products, and aquatic organisms through the utilization and management of land, water, labor, capital, and basic raw materials.

(i) Single enterprise. An enterprise which constitutes an integral part of an applicant's total farming operation. The following are examples of single enterprises:

(A) Individual cash crops.

(B) Individual feed crops to be fed to, or pasture to be grazed by, livestock owned by the applicant.

(C) Individual types of livestock operations, i.e., beef, dairy, hog, poultry, and aquaculture operations.

(D) Small acreages of several cash crops may be combined to constitute a single enterprise.

(ii) Basic part of a farming operation. Any single enterprise which normally generates sufficient income to be considered essential to the success of the total farming operation.

(15) Fixture. Generally, an item attached to a building or other structure or to land in such a way that it cannot be removed without defacing or dismantling the structure, or substantially damaging the item itself.

(16) Hazard insurance. Includes coverage against losses due to fire, windstorm, lightning, hail, explosion, business interruption, riot, civil commotion, aircraft, vehicles, marine, smoke, builder's risk, public liability, property damage, flood or mudslide, workmen's compensation, or any similar insurance that is available and needed to protect the security, or that which is required by law.

(17) Incidence period. The specific date or dates during which a disaster occurred.

(18) Insured loan. An EM loan made directly by FmHA as lender from the Agricultural Credit Insurance Fund, and serviced by FmHA personnel.

(19) Majority or controlling interest. Any individual or a combination of individuals owning more than a 50 percent interest in a cooperative, corporation, or partnership.

(20) Market value. The amount which a willing buyer would pay a willing, but not forced, seller in a completely voluntary sale.

(21) Nonfarm enterprise. Any business enterprise, including a recreational enterprise, which provides less than 50 percent of the total net income from all sources (farm and nonfarm), which is needed to supplement farm

income. It must provide goods or services for which there is a need and a reasonably reliable market.

(22) Normal year's production. The yield per acre or production per animal as established by eliminating the poorest year of the 5-year production history taken from actual farm records, Agricultural Stabilization and Conservation Service (ASCS) records of acres grown and proven (actual) yields, county averages, or State averages (where county averages are not available), immediately preceding the disaster year and averaging the remaining 4 years' production. The applicant may select the year to be eliminated. The year selected to be eliminated must be the same year for all farm enterprises and for all crops, livestock, and livestock products that constitute a part of the applicant's farming operation in that year. Average yield or production records used will be provided by the State Crop and Livestock Reporting Service, State Office of the Statistical Reporting Service (SRS), or similar State or Federal body. When this information is published by county, county averages will be used. If published only by State, the State average will be used throughout the State. A uniform source(s) will be used in each State for the yield per acre or production per animal data and the source(s) will be provided in a State supplement. For tobacco and other crops under acreage-poundage control the normal year's production will be the pounds per acre as authorized by ASCS for the disaster year.

(i) In those States where neither a county nor State average is published for an enterprise(s), the State Director, with the advice of representatives of other Federal and State Agricultural agencies, will establish county or State averages and advise County Offices of these averages in a State supplement. State Directors and Farmer Program Chiefs in adjoining States should consult with each other before releasing the figures.

(ii) If an applicant presents actual reliable records for at least 4 of the 5 years immediately preceding the disaster which verify a higher normal production than that established in ac