Supporting Statement for Paperwork Reduction (Continued)
U.S. Department of Agriculture
Commodity Credit Corporation
Farm Service Agency
OMB Control Number: 0560-0215
Representations for CCC and FSA Loans and Authorization to File a Financing Statement under the Revised Article 9 of the Uniform Commercial Code
Purpose:
The purpose of this document is to request an extension of a currently approved information collection. The current approval expires on October 31, 2011.
This information collection package is necessary to obtain continued approval for form CCC-10, Representations for Commodity Credit Corporation or Farm Service Agency Loans and Authorization to File a Financing Statement and Related Documents, which is used to gather information from Commodity Credit Corporation (CCC) and Farm Service Agency (FSA) loan applicants. The information is used to: (a) gather or verify basic data regarding the applicant which is required on a financing statement; and (b) to obtain their permission to file a financing statement prior to the execution of a security agreement.
Supporting Statement for Paperwork Reduction
Justification
Explain the circumstances that make the collection of information necessary.
CCC and FSA programs require loans be secured with collateral. The security interest is created and attaches to the collateral when: (1) value has been given, (2) the debtor has rights in the collateral or the power to transfer rights in the collateral, and, (3) the debtor has authenticated a security agreement that provides a description of the collateral. In order to perfect the security interest in collateral, a financing statement must be filed according to a State’s Uniform Commercial Code. This action ‘perfects’ the security interest and legally allows the lender to foreclose upon and liquidate the collateral in the event the borrower defaults on a loan. The revised Article 9 affects the manner in which CCC and FSA, as well as any other creditor, perfect and liquidate security interests in collateral.
The information obtained on CCC-10 is needed to not only obtain authorization from loan applicants to file a financing statement without their signature, but also to verify the exact legal name and location of the debtor. For most FSA programs, an applicant is identified by using their social security number or a tax identification number. While most FSA program applicants already have their name and identification number data on file with the FSA County Office, verification of this data is critical when it comes to financing statement transactions, because the applicant’s exact legal name must be entered on the financing statement under the revised
Article 9. Before form CCC-10 was developed and approved for use, this information was not required by either CCC or FSA. Also under revised Article 9, the debtor’s location, rather than the location of collateral, now determines the place to file a financing statement. The debtor’s location is its place of business, or chief executive office, if the debtor has more than one place of business. However, if the borrower is an entity which must register to come into existence, (e.g. corporation, Limited Liability Company, limited partnership) its location is the state in which the entity was organized.
Without obtaining the information from loan applicants, CCC and FSA would be unable to perfect a security interest in collateral used to secure loans. However, CCC and FSA limit the use of CCC-10 to the extent possible. For example, the application form for a Farm Loan Programs (FLP) loan (FSA-2001, approved under 0560-0237) includes the collections for the applicant’s “exact legal name” and location. In addition, FSA-2001 includes the authorization to file a financing statement prior to the execution of a security agreement in the existing certifications and authorizations. As a result, form CCC-10 will only be used for an FLP loan when an individual other than the applicant will be pledging security for the loan. This significantly decreases the use of the form for FLP.
2. Indicate how, by whom, and for what purpose the information is to be used.
Producers applying for CCC or FSA loans at USDA Service Centers, peanut Designated Marketing Associations (DMA’s), and cotton Loan Servicing Agents (LSA’s) will be asked to provide certain information on Form CCC-10. They may also obtain the form at the USDA eForms website, fill it out, and submit it to the appropriate person at the USDA Service Center, DMA, or LSA. Form CCC-10:
serves as CCC or FSA’s notice of intent to perfect its security interest
identifies the debtor’s exact full legal name, and if the debtor is an entity, the type and location of the entity
authorizes CCC or FSA to file financing statements prior to the execution of a security agreement.
3. Describe whether, and to what extent, the collection of information involves the use of automated, electronic, mechanical, or other technological collection techniques or other forms of information technology.
The form and instructions to fill it out is available through the USDA eForms web site at http://forms.sc.egov.usda.gov/eForms/welcomeAction.do?Home. Currently, a completed CCC-10 cannot be submitted electronically with a digital signature because the form may require multiple signatures. The respondents have the option to fax CCC-10.
4. Describe efforts to identify duplication.
Some of the information collected on CCC-10 may already be available at the county office in the form of information gathered to make payment limit determinations. However, an applicant was previously not required to provide their full legal name. Therefore, the information gathered on the CCC-10 will serve to verify and/or update the information already on file. Also, the
CCC-10 is a combined effort between CCC and FSA to gather information that can be used for five FSA loan programs, thus eliminating the need for a separate form for each loan program.
Methods to Minimize burden on small businesses or other small entities (Item 5 of OMB Form 83-1), describes any methods used to minimize burden.
CCC-10 is identical for all applicants without regard to their volume or business. Therefore, no additional burden is being placed on businesses of any particular size.
Describe the consequence to Federal program or policy activities if the collection is not conducted or is conducted less frequently.
All information will be collected the first time a producer applies for a CCC or FSA loan. If the information has not changed, for subsequent loan applications there is no need to gather it again. If this information is not collected, CCC and FSA will not be able to disburse loans because a security interest would not be perfected.
Special circumstances.
Any special circumstances that would cause an information collection to be conducted in a manner:
requiring respondents to report information to the agency more often than quarterly; There are no circumstances that would require information more than quarterly from an applicant.
requiring respondents to prepare a written response to a collection of information in fewer than 30 days after receipt of it; There are no circumstances that would require a respondent to prepare a written response to a collection of information in fewer than 30 days after receipt of it.
requiring respondents to submit more than an original and two copies of any document; There are no special circumstances requiring respondents to submit more than an original and two copies of any document.
requiring respondents to retain records, other than health, medical, government contract, grain-in-aid, or tax records for more than three years; There are no special circumstances requiring respondents to retain records, other than health, medical, government contract, grain-in-aid, or tax records for more than three years.
using statistical sampling, that is not designed to produce valid and reliable results that can be generalized to the universe of study; There are no special circumstances that would be used in connection with a statistical survey.
requiring the use of a statistical data classification that has not been reviewed and approved by OMB; There are no special circumstances that would require the use of a statistical data classification that has not been reviewed and approved by OMB.
requiring a pledge of confidentiality; There are no special circumstances that include a pledge of confidentiality that is not supported by authority established in statute or regulation.
requiring respondents to submit proprietary trade secret; This agency protects confidentiality to the extent permitted by law.
Federal Register Notice, Summarization of Comments and Consultation with Persons outside the Agency.
A Federal Register notice was published on March 16, 2011, at 76 FR 14370 announcing FSA's intention to renew a currently approved information collection. No comments were received in response to the Federal Register request for comments. The form was also sent to Mr. Sam Willet, National Corn Growers Association, Suite 510, 122 C Street NW, Washington, D.C. 20001; Mr. Steve Irwin, Iowa State Bank, P. O. Box 486, Sac City, Iowa 50583; and Mrs. Kay Fortier, 9011 111th Ave N.W., Wildrose, North Dakota 58795. There were no comments received from these three individuals.
Explain any decision to provide any payment or gift to respondents.
Respondents may be eligible for loan benefits under the applicable loan program and will be subject to the applicable loan eligibility requirements. No other incentive will be provided for completing CCC-10.
Confidentiality Provided To Respondents.
All information collected will be treated as confidential as indicated on the form and in conformance with the Privacy Act and Freedom of Information Act.
Questions Of A Sensitive Nature.
There are no personal questions of a sensitive nature, such as sexual preference, religious beliefs, and other matters that are commonly considered private. Although some loan applicants may consider their farm operating information to be sensitive information, that information is fundamental to the perfection of a security interest in collateral and is required under the Uniform Commercial Code. CCC and FSA will be unable to approve a loan without the information.
Estimates of Burden.
See the attached FSA-85-1 for a burden break down for the form.
As stated on the CCC-10, CCC and FSA continue to use the information on the CCC-10 for future loans until the signer of the form notifies CCC or FSA of any changes. The number of annual respondents for CCC marketing assistance loans is reduced. But, the number of annual respondents for CCC Farm Storage Facility loans (FSFL) was increased because cold storage facilities for fruits and vegetables, and hay and renewable biomass storage facilities for producers of these commodities are now eligible for loan. Many of the producers of fruits, vegetables, hay, and renewable biomass are new customers of CCC and FSA, and will be required to complete the CCC-10 if they apply for FSFL’s. However, new applicants for any CCC and FSA loans must submit a CCC-10. Accordingly, the average annual respondents are estimated as follows:
CCC marketing assistance loans 45,000
CCC Farm Storage Facility loans 8,000
Farm Loan Programs 2,500
55,500 estimated annual respondents
(Note: Farm Loan Programs includes direct operating, farm ownership, and
emergency loans)
The total annual burden associated with applicant’s preparing the form is estimated to be 4,607 hours. This was calculated based on 55,500 respondents taking five minutes (.083/hour) to complete the form for CCC and FSA programs. (55,500 x .083/hour = 4,607 hours) It is estimated that fifty percent of the applicants will travel one hour (round trip) to the Service Center to apply for loan programs. This results in additional 27,750 hours in travel time. (The remaining fifty percent are expected to apply by facsimile.)
Estimated annual cost to the public is $626,755.09 which is based on the annual burden of 32,357 (27,750 + 4,607) hours times an average hourly wage of $19.37 (32,357 hours x $19.37 = $626,755.09). The average hourly wage of $19.37 was obtained from a publication by the Bureau of Labor Statistics, U. S. Department of Labor (USDL-11-0682) released May 13, 2011. This is the average hourly earnings on private nonfarm payrolls but was used because figures showing total farm income include a large portion of off-farm income which can inflate the total hourly earnings of the majority of loan applicants.
Total Annual Costs Burden to Respondents.
This information collection and reporting burden does not impose any burden cost on respondents for capital, start-up, operation, maintenance, or the purchase of services.
Estimated Annual Cost to the Federal Government.
The estimated annual cost to the Federal Government is $101,498.96 ($4,440 + $97,058.96) based on the following cost components:
Cost for printing of application and instruction page is estimated at $4,440.00. This figure is based on a cost of $.08 for each application form and the instruction page attached to the form. (27,750 applicants x 2 pages x $.08 = $4,440. Costs were not included for the approximate 50 percent of the applicants that will print at home from the Internet.)
The cost of gathering, maintaining, retrieving, and disseminating the data is $97,058.96. This figure is based on requiring at least 5 minutes (.083/hour) per response times the average FSA employee wage of $21.07. (55,500 applicants x .083/hour x $21.07 = $97,058.96.) The average FSA field employee wage was obtained from the office of FSA’s Deputy Administrator for Field Operations and is Grade 7 Step 5.
Change in Burden.
There was no change in the total burden since the last OMB approval but the number of respondents for the different FSA loan programs was adjusted. Producers are required to file CCC-10 only if doing so for the first time or if any of the data on the form has changed. Due to the higher commodity prices, fewer producers are using the Marketing Assistance Loan program and the number of respondents for that program was lowered. The FSFL program is seeing many new producers who have not previously done business with CCC and FSA. This is why the number of respondents in each category for FSFL increased. Therefore, unless the producer is new to CCC or FSA loan programs or if any of the data applicable to the form has changed based upon a quick review of the data by the applicant, the CCC-10 is carried forward from one year to the next.
Tabulation, Analysis, and Publication Plans.
The information collected is not planned for publication.
Reasons Display of Expiration Date of OMB Approval is Inappropriate.
The agency is seeking continued approval to not display the OMB expiration date on form
CCC-10. Forms are now available on a public e forms site and on an intranet site available to only FSA employees. Forms may be revised prior to the OMB expiration date. When revisions occur, field offices are advised to discontinue use of any existing stocks and to use the new version of the form. The Agency is concerned that outdated forms could be inadvertently used by some employees who may assume the form remains valid until the OMB date expires.
Exceptions to 83-I Certification Statement.
The agency is able to certify compliance with all provisions under Item 19 of OMB Form 83-I.
How is this information collection related to the Customer Service Center? Will this information be part of their one stop shopping?
Yes, this information is part of one-stop shopping at a USDA Service Center because both CCC and FSA loan programs are available to producers through USDA Service Centers. A CCC-10 used for a CCC program should provide the same information for a FSA funded loan application. Also, the application form and instructions are available through the USDA eForms web site.
| File Type | application/msword |
| Author | helpdesk |
| Last Modified By | maryann.ball |
| File Modified | 2011-07-22 |
| File Created | 2011-07-22 |