Hispanic and Women Attachments.pdf

HISPANIC/WOMEN FARMERS CLAIMS PROCESS FRAMEWORK

I. PURPOSE

This document (Framework) describes a program (Program) for the United States to establish a voluntary administrative claims resolution process (Claims Process) for female and Hispanic farmers who allege discrimination by USDA in responding to applications for farm loans or loan servicing from 1981 to 2000,1 and who timely submit claims alleging discrimination by USDA in processing applications for farm loans or loan servicing on the basis of being female or Hispanic.

A. Payments

Successful claimants will be eligible for one of two levels of payments.

1. Tier 2 Payments

A Tier 2 payment of $50,000, plus tax relief on that award and debt relief from USDA on eligible farm loans, is available to any claimant who substantiates his or her claim with certain documentation and who proves the claim by substantial evidence. There is no cap on the number of claimants who may qualify for Tier 2 payments and no cap on the aggregate amount of money that may be paid to prevailing claimants under Tier 2 of the Program. The claims of claimants who do not apply for a Tier 2 payment or who fail to prove their claims by substantial evidence will automatically be reviewed for a Tier 1 payment. A Tier 2 payment may be made as soon as practicable after a final decision on the claim.

2. Tier 1 Payments

A Tier 1 payment is available to claimants who may lack certain documentation regarding their claim but can prove their claims by substantial evidence. Each successful Tier 1 claimant will receive a cash award of up to $50,000, plus tax relief on that award, and debt relief from USDA on eligible farm loans. Unlike Tier 2 payments, payments under Tier 1 are subject to a cap. Depending on the aggregate amount of funds paid out to Tier 2 claimants, between $1.23 and $1.33 billion will be available for the cash awards and tax relief under Tier 1. Each successful Tier 1 claimant will receive the same dollar amount, and therefore, the cash awards may be reduced pro rata depending on the number of successful claimants so as not to exceed the overall Tier 1 cap.

The base Tier 1 cap is $1.23 billion. If total Tier 2 payouts are $100 million or greater, the Tier 1 cap will remain at the base amount of $1.23 billion. On the other hand, if total Tier 2 payouts are less than $100 million, then the Tier 1 cap will increase by whatever

1 See Section VIII below for the Relevant Period when claimants must have farmed or attempted to farm for this Program to apply.

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portion of the $100 million is not paid out under Tier 2. For example, if $60 million is paid out under Tier II, the Tier I cap will increase by $40 million, raising the base Tier I cap to $1.27 billion.

Tier 1 payments will not be made until final decisions are reached on all Tier 1 and Tier 2 claims. Once final decisions are reached, a calculation will be made as to whether prorating is necessary for Tier 1 payments. That calculation will include payments being held because of ongoing audits as if those payments are being made. If at the conclusion of the audit process, pro rata payments owed to successful claimants would increase because payments are not owed on audited claims, additional payments will be made to successful claimants on a pro rata basis unless each such payment is less than $20, in which case no additional payments will be made. A similar process for determining the amounts to be provided will apply with respect to debt relief, but without an automatic exception for amounts below $20.

B. Amount of Tax Relief

Under both tiers, tax relief will be provided on behalf of each successful claimant, directly to the Internal Revenue Service, in a lump sum at the fixed rate of 25 % of the cash award issued by the Adjudicator, and 25 % of the outstanding principal amount of any debt relief provided by USDA. Tax relief on debt relief will not be paid on interest.

This amount is not intended to offset completely all taxes that any specific claimant may owe.

C. Amount of Debt Relief

Whether a claimant receives payment under Tier 1 or Tier 2, up to a total of $160 million in debt relief will be available from USDA to successful claimants, but only for eligible debt as described below. The amount of debt relief provided by USDA may be reduced pro rata to the extent USDA determines that the number of eligible claimants would cause the total cap on debt relief to be exceeded.

D. Sources of Funding

Cash awards and tax relief will be paid from the Judgment Fund. USDA will cover all other costs, including costs associated with outreach and the provision of notice, claims administration and adjudication, debt relief provided to successful claimants, and administrative costs associated with the provision of debt relief.

E. Claims Period

Claimants will have 180 days from the opening date of the Claims Period, to be announced by USDA, within which to file a complete Claims Package. An additional period will be permitted for the completion of certain incomplete Claims Packages, as described further below.

II. NOTICE

A. Summary Notice and Fact Sheet

USDA and its contractors will design a process to contact as many potentially eligible female and Hispanic farmers as practicable. A Summary Notice and Fact Sheet will be widely disseminated to solicit participation in the Claims Process, and a Claims Package will be provided, in a manner consistent with applicable attorney ethical requirements, to community advocacy groups and all persons who indicate interest in the Program.

The Summary Notice and the Fact Sheet will be broadcast via mail and media outreach, and efforts will be made through meetings and direct contacts with community advocacy groups, stakeholders, and potential claimants, to collect potential claimants’ names and contact information.

B. Claims Package and Additional Information

The Claims Administrator will send a Claims Package to any person who indicates an interest in the Program. The Administrator will include any additional instructions and information that he or she deems appropriate to facilitate the Claims Process, consistent with applicable ethical requirements.

III. THE CLAIMS ADMINISTRATOR

The Administrator will:

Establish and manage all aspects of the claims processing center.

Distribute the Claims Package (including the Claim Form, the Settlement

Agreement, and the Stipulation of Dismissal).

Operate a toll-free helpline that responds to inquiries by claimants or interested parties, or inquiries referred by USDA, and refers relevant questions to the Claims Adjudicator.

Manage all documents and information to help ensure privacy of individual claimants.

Manage all communications with claimants (including letters) related to Claims Packages.

Provide USDA, on a rolling basis, with lists of claimants.

Determine whether a Claims Package that was submitted is timely and complete and notify claimants of these determinations.

Forward to the Adjudicator for processing and resolution of all timely and complete Claims Packages.

Manage contacts with claimants after the submission of a Claims Package, and ensure that questions from claimants are addressed by the Administrator or the Adjudicator, as appropriate.

Construct a comprehensive web-based tracking database to manage Claims Packages through the entire process from initial contact to the Adjudicator’s decision.

Design and maintain the claims process website and implement all necessary updates.

Coordinate the payment process.

IV. THE CLAIMS ADJUDICATOR

The Adjudicator will:

Review each Claims Package that the Administrator has deemed timely and complete, and require claimants to submit additional documentation and evidence if, in the Adjudicator’s judgment, the additional documentation and evidence would be necessary or helpful in deciding the merits of the claim, or if the Adjudicator suspects fraud regarding the claim.

Issue a final decision granting or denying the claim and making a cash award to each successful claimant.

For any claims that are denied a Tier 2 payment, review such claims for Tier 1 eligibility.

For each successful claimant, identify all outstanding USDA loans and determine which loans are eligible for debt relief and which are not eligible.

Notify in writing both successful and unsuccessful claimants of the results of their adjudications.

Establish fraud controls and monitor and oversee audits as discussed below to ensure the integrity of the Claims Process.

Issue periodic reports to the USDA on the progress of the Claims Process and the results of adjudications.

V. PROCEDURAL PREREQUISITES

A. Signed Settlement Agreement

Any person who wishes to participate in the Claims Process must execute a Settlement Agreement, in the form provided in the Claims Package, waiving all credit-related discrimination claims that arose during the relevant time period, and must submit the executed Settlement Agreement to the Administrator by priority mail, first class mail postage prepaid, or overnight carrier, by fax, or by e-mail. If a claimant has any claims pending against USDA in any court or administrative proceeding alleging the same underlying discrimination as alleged in the Claim Form, including without limitation Love v. Vilsack and Garcia v. Vilsack, the claimant must also submit documents establishing the dismissal of such claims with prejudice.

B. Irrevocability

The Administrator’s acceptance of a timely and complete Claims Package is irrevocable.

No claimant whose Claims Package is accepted by the Administrator may under any circumstances or for any reason rescind the Settlement Agreement or initiate a claim arising out of the same underlying claims of discrimination against USDA in any court or administrative proceeding.

C. Release of Liability

Any individual who executes a Settlement Agreement and whose Claims Package is accepted as timely and complete will be releasing and forever discharging the United States, USDA, and any of their administrators or successors, departments, agencies, or establishments, and any officers, employees, agents, or successors of any such department, agency, or establishment from any claims that were raised, or could have been raised in Love v. Vilsack or Garcia v. Vilsack, had the claimant been a party to either of those lawsuits. If a claimant’s Claims Package is accepted by the Administrator as timely and complete, the release will become effective at the time the Claims Package is accepted. If a claimant’s Claims Package is rejected by the Administrator as untimely or incomplete, the release will become effective 45 days after the Administrator first issues notice that the Claims Package is defective. Before the expiration of the 45-day period, the claimant may withdraw from the Claims Process and file a complaint in federal court. A release pursuant to this provision does not affect the claimant’s right to cure a deficiency and participate in the Claims Process as provided herein.

D. Voluntary Participation

No person is required to participate in the Claims Process and each putative claimant has a right to seek counsel. The United States reserves the right to assert any available defenses in any administrative or court proceeding against any person covered by this process who chooses not to participate.

Any plaintiffs in Love v. Vilsack and Garcia v. Vilsack who elect to participate must execute the Settlement Agreement, in the form developed by the United States, waiving their court claims as provided herein in exchange for participation in the administrative claims process. They must submit the executed Settlement Agreement to the Administrator.

E. Oaths Under Penalty of Perjury

1. Oath by Claimant

A claimant who participates in the Claims Process must swear under oath with respect to the claim submitted as follows: “I swear under penalty of perjury that the information contained in the foregoing Claim Form is true and correct, and that any documents submitted along with the claim form are true and accurate copies.” Claimants who knowingly and willfully falsify facts, make materially false statements or representations, or otherwise violate 18 U.S.C. § 1001, are subject to the penalties provided therein, including fines and imprisonment. Claimants who make false, fictitious, or fraudulent claims may also be subject to fines or imprisonment as provided in 18 U.S.C. § 287.

2. Oath by Attorney

An attorney filing a claim on behalf of a claimant shall swear, under penalty of perjury, that: “to the best of the attorney’s knowledge, information, and belief formed after an inquiry reasonable under the circumstances, the claim is supported by existing law and the factual contentions have evidentiary support.”

VI. STATUTE OF LIMITATIONS AND MORATORIUM

A. Lifting of the Stay

The Government intends to file a motion seeking to end the tolling of the statute of limitations presently in effect for potential plaintiffs in the Love and Garcia cases at an appropriate time after the last day of the 180-day Claims Period. In order to participate in the Program, claimants must have submitted a Claims Package during the 180-day Claims Period discussed above, regardless of when the Government’s motion is filed and decided.

B. Moratorium on USDA Collection Actions for Claimants

USDA will cease all efforts to dispose of any foreclosed real property held in inventory that was formerly owned by persons who the Administrator finds timely submitted to the Administrator a complete Claims Package, a signed Settlement Agreement, and for Love and Garcia plaintiffs, a signed, file-stamped Stipulation of Dismissal with Prejudice.

USDA retains the option of liquidating real or chattel property under an order from a court or under the operation of applicable State law.

USDA also will refrain from foreclosing on real or chattel property owned by the claimant or accelerating the claimant’s loan account before the claim is dismissed or adjudicated; however, USDA may take any action up to but not including foreclosure or acceleration that is necessary to protect its interests. Interest will not accrue and no offsets will be taken on farm loan program loans held by persons whom the Administrator finds timely submitted a complete Claims Package and a signed Settlement Agreement during the Claims Period. Interest accrual and offsets will continue on all other loans, including, but not limited to, non-program loans. USDA may resume its efforts to dispose of any such property after a final decision denying the claim.

VII. DECISIONMAKING PROCESS

A. Determinations as to Timeliness

The Administrator will send a letter to all claimants whose claims are submitted following the expiration of the 180-day Claims Period (or for Claims submitted during the last thirty days of the Claims Period, more than thirty days after the Administrator issues notice that the Claims Package was incomplete), indicating that their Claims Package has been rejected as untimely and that this determination is final. No further information will be requested or accepted by the Administrator from claimants with untimely claims.

B. Determinations as to Completeness

For each Claims Package that the Administrator determines is timely filed, the Administrator shall determine whether it is complete. To be complete, a claims package, submitted by priority mail, first-class mail postage prepaid, or overnight carrier, by fax, or by email, must include the following information:

Responses to questions establishing basic eligibility for FSA programs.

All necessary documentation establishing that the claimant meets the Claims

Process criteria, including, for claimants seeking a Tier 2 payment, a copy of the farm loan application or other documents required.

An executed Settlement Agreement, and if applicable, copies of the Stipulation of

Dismissal with Prejudice, date-stamped by the court.

A signed Claim Form, authorizing the release to USDA, the Administrator, and the Adjudicator of all information necessary to verify the allegations contained in the Claim Form, and certifying the truth and accuracy of the information provided under penalty of perjury. The necessary information may include, where the Adjudicator or an authorized auditor determines it to be appropriate, Schedule F of the claimant’s tax returns, or a reasonable alternative, for purposes of determining whether the claimant has previously identified farming income.

If the Administrator determines that a Claims Package is complete, the Administrator will notify the claimant in writing and forward the Claims Package to the Adjudicator for processing and resolution. If the Administrator determines that a Claims Package is incomplete, the Administrator will notify the claimant or, if represented, his or her counsel, as to what is missing, and provide the claimant an opportunity, until the expiration of the 180-day Claims Period (or for Claims first submitted during the last thirty days of the Claims Period, until thirty days after the Administrator issues notice that the Claims Package was incomplete), to submit a complete Claims Package to the Administrator. The notification will also provide information regarding the point at which the claimant’s release becomes effective. If the Administrator determines that a

Claims Package that seeks a Tier 2 payment is incomplete with respect to the Tier 2 information but is complete with respect to a Tier 1 payment, the Administrator will accept the Claims Package for consideration for a Tier 1 payment and inform the claimant that additional information may be submitted, consistent with the deadlines otherwise applicable, for the Claim to first be considered for a Tier 2 payment instead.

There will be no exceptions to or extensions of the time frames set forth in this paragraph, and if the Administrator determines that the claimant has not timely provided all requested documents and information by the Deadline, the Administrator will deny the claim and notify the claimant of that determination.

C. Final Decisions

There will be no hearings by the Administrator or the Adjudicator in reviewing claims.

This process imposes no obligation on USDA to provide information, documents, or discovery to putative claimants. USDA has the right, but not the obligation, to submit information to the Adjudicator in response to any claim filed.

The Adjudicator’s decision on a claim (including a constructive application claim) will be based solely on the materials submitted by the claimant and any materials that USDA may provide in response.

Once a decision has been issued, the claimant will be informed of the decision in writing within a reasonable time.

There will be no appeals available to claimants or USDA to challenge decisions made by the Administrator or the Adjudicator, including without limitation the Administrator’s decision whether a claims package is timely and complete, the Adjudicator’s decision on a claim, or the Adjudicator’s decision as to the amount of debt eligible for debt relief.

VIII. CLAIMS REVIEW CRITERIA FOR APPROVAL OF CLAIMS

Claimants are limited to female or Hispanic farmers who applied for a farm loan or farm loan servicing and who allegedly suffered discrimination, or their lawfully recognized representatives, or if deceased, their estates. A claim brought by a person who is otherwise eligible for the Claims Process, who applied for a loan as a sole proprietorship, and who allegedly suffered discrimination is also cognizable, and the term “claimant” throughout the program includes both individuals in their personal capacity and in their capacity as sole proprietors. A claim brought by or on behalf of any other legal entity is not cognizable.

TIER 2 PAYMENTS

For each Claims Package that seeks a Tier 2 payment, the Claims Adjudicator will determine whether the claimant has established the following criteria by substantial evidence2:

The claimant is a female or Hispanic natural person.

If Hispanic, the claimant farmed, or attempted to farm, between January 1, 1981, and December 31, 1996, or between October 13, 1998, and October 13, 2000; or if female, the claimant farmed, or attempted to farm, between January 1, 1981, and December 31, 1996, or between October 19, 1998, and October 19, 2000 (collectively, Relevant Period).

The claimant owned or leased farm land during the Relevant Period or attempted to own or lease farm land during the Relevant Period.

The claimant submitted an application (and supporting documents) to USDA for a farm loan or farm-loan servicing3 during the Relevant Period. The claimant must

(a) provide either a copy of the loan application and supporting documents, or correspondence or other documents from USDA acknowledging receipt of, or otherwise reflecting the submission of, the application, and (b) authenticate such evidence by a sworn statement from the claimant under penalty of perjury. A claim of constructive application (in which the claimant allegedly attempted to apply but was discouraged by the agency) cannot result in a Tier 2 payment.

At the time the claimant applied for the loan or loan servicing, he or she met all applicable USDA regulatory requirements for the loan or loan servicing.

The farm loan(s) or farm-loan servicing for which the claimant applied was denied, provided late, approved for a lesser amount than requested, encumbered by a restrictive condition(s), or USDA failed to provide an appropriate loan service(s).

The USDA action was due to discrimination against the claimant, based on being Hispanic or female. The claimant must set forth specific facts that support the conclusion that the USDA action was due to such discrimination. Conclusory statements, formulaic allegations, and general impressions will not be sufficient.

Facts showing only that a Hispanic or female claimant was denied a loan or loan servicing (or received a loan or loan servicing on less favorable terms than requested) will not satisfy this element. Instead, the claimant must present specific facts that show by substantial evidence that the USDA action was due to discrimination based on the claimant being Hispanic or female.

2 “Substantial evidence” is defined as relevant evidence appearing in the record that a reasonable person might accept as adequate to support a conclusion after taking into account other evidence that fairly detracts from that conclusion.

3 The Program is limited to applications for credit from the FSA (or its predecessor agencies) under the Operating Loan (OL) program (excluding Youth Loans), Farm Ownership (FO) loan program, Emergency (EM) loan program, Economic Emergency (EE) loan program, or Soil and Water (SW) loan program.

USDA’s treatment of the loan or loan servicing application caused economic damage to the claimant. The claimant need not specify or prove the precise amount of such damage.

The applicant filed a written complaint with USDA on or before July 1, 1997, either individually or through a representative, alleging discrimination by USDA in response to an application for a loan or loan servicing, based on being Hispanic or female. Alternatively, the written complaint was filed on or before July 1, 1997, with a U.S. Government official. In order to meet this requirement, the claimant must provide a copy of a timely written complaint to a U.S. Government official, or of a document or correspondence from the relevant U.S. Government agency acknowledging receipt (or otherwise reflecting the filing) of such complaint, and authenticate such evidence by a sworn statement from the claimant.

TIER 1 PAYMENTS

For each Claims Package that seeks a Tier 1 payment or was deemed ineligible for a Tier 2 payment, the Claims Adjudicator will determine whether the claimant has established the following criteria by substantial evidence:

The claimant is a female or Hispanic natural person.

If Hispanic, the claimant farmed, or attempted to farm, between January 1, 1981, and December 31, 1996, or between October 13, 1998, and October 13, 2000; or if female, the claimant farmed, or attempted to farm, between January 1, 1981, and December 31, 1996, or between October 19, 1998, and October 19, 2000 (collectively, Relevant Period).

The claimant owned or leased farm land during the Relevant Period or attempted to own or lease farm land during the Relevant Period.

The claimant applied for a specific farm loan or farm-loan servicing4 at a specifically identified USDA office during the Relevant Period.

At the time the claimant applied for the loan or loan servicing, he or she met all applicable USDA regulatory requirements for the loan or loan servicing.

The farm loan(s) or farm-loan servicing for which the claimant applied was denied, provided late, approved for a lesser amount than requested, encumbered by a restrictive condition(s), or USDA failed to provide an appropriate loan service(s).

The USDA action was due to discrimination against the claimant, based on being Hispanic or female.

USDA’s treatment of the loan or loan servicing application caused economic damage to the claimant.

The claimant filed an administrative discrimination complaint with USDA, either individually or through a representative, during the Relevant Period. In

4 The Program is limited to applications for credit from the FSA (or its predecessor agencies) under the Operating Loan (OL) program (excluding Youth Loans), Farm Ownership (FO) loan program, Emergency (EM) loan program, Economic Emergency (EE) loan program, or Soil and Water (SW) loan program.

determining whether a complaint was forwarded to USDA by a representative, the Claims Adjudicator shall consider all of the available evidence, including representations made to the claimant and “presumptions of regularity that attach to the conduct of government officials.”

For any claimant who did not actually apply for a farm loan and whose claim is based on an allegation of “constructive application,” a claimant must establish, by substantial evidence, each of the following eligibility criteria:

The claimant is a female or Hispanic person, except as provided above, and farmed, or attempted to farm, during the Relevant Period.

The claimant owned or leased specifically identified farm land during the Relevant Period or attempted to own or lease specifically identified farm land during the Relevant Period.

The claimant made a bona fide effort to apply for a farm loan or farm-loan servicing during the relevant period.

At the time the claimant attempted to apply for the loan or loan servicing, he or she met the eligibility criteria for the loan or loan servicing under the USDA’s rules.

Such attempt to apply must be established by a complaint detailing each of the following elements:

o Time period of the effort to apply;

o Type of loan sought;

o Type of operation planned, and how those plans were consistent with farming operations in that county/area in that year;

o Physical location of the FSA or FmHA county office where the loan was sought;

o The names of other commercial or agricultural banks in the area from which the claimant unsuccessfully sought a loan.

USDA actively discouraged the application. Active discouragement may be established by evidence, already held by the claimant, that a specifically identified USDA official indicated that, at the time the claimant wanted to apply:

o there were no funds available and therefore no application would be provided;

o there were no application forms available;

o USDA was not accepting or processing applications; or o the claimant would not qualify for a loan or loan servicing and therefore should not apply.

The USDA action was due to discrimination against the claimant based on being

Hispanic or female.

Claimants seeking relief under the constructive application provisions will be required to submit, in addition to the evidence required above, at a minimum:

A sworn, verified, or notarized written witness statement from someone who witnessed the alleged incident; or

A contemporaneous written complaint of that incident filed with USDA, either individually or through a representative, within one (1) year of the alleged discriminatory action. The phrase “filed with USDA” shall encompass complaints lodged with other persons if evidence establishes that the recipient of the complaint forwarded it to USDA. In determining whether a complaint was forwarded to USDA, the Claims Adjudicator shall consider all of the available evidence, including representations made to the claimant and “presumptions of regularity that attach to the conduct of government officials.”

IX. DEBT RELIEF PROCEDURE

A. Debt Relief Eligibility Criteria

No claimant whose Claims Package is rejected by the Administrator or whose claim is denied by the Adjudicator, or who the Adjudicator finds does not have eligible debt, is eligible to receive debt relief. USDA will assist the Adjudicator, to the extent necessary, to identify all debts accrued by a claimant during the Relevant Period that are subject to forgiveness. Each claimant must also make a good faith attempt to identify any outstanding farm loans, by year of obligation and by loan number, held by the claimant.

For each successful claimant who seeks debt relief, the Adjudicator will determine whether the claimant has established, by substantial evidence, each of the following:

Relevant Period: The debt at issue must have been obligated, rescheduled, re-amortized, or serviced during the Relevant Period; and

Nexus Between Successful Claim and the Loan at Issue:

o The claimant must show unfair treatment in any aspect of a credit transaction concerning the loan application at issue; and o There must be a causal connection between the act(s) of discrimination by USDA forming the basis of claimant’s successful claim and the adverse credit action(s) on the debt at issue.

B. Forward-Sweep Provision

If the Adjudicator determines that a nexus exists between a claimant’s successful credit claim and the adverse credit actions on a debt, as described above, then USDA will, subject to the total cap on debt relief, discharge the claimant’s outstanding debt to USDA that was incurred during the Relevant Period, or affected by, the program(s) that was/were the subject of the credit claim(s) resolved in the claimant’s favor by the Adjudicator, and that were issued after the earliest loan as to which discrimination was found.

This “forward-sweep” approach to debt relief will therefore require the Adjudicator to identify the following with respect to the claimant:

(1) Each loan or loan application that was affected by the act(s) that formed the basis of claimant’s successful credit claim; and

(2) All subsequent loans in the same loan program(s) until the end of the Relevant Period.5

The Adjudicator’s decision as to which debts are eligible for debt relief will be final and binding. USDA will cancel only those debts identified for cancellation by the Adjudicator and subject to the forward sweep provisions. Claimants will remain responsible for continuing timely payments on any debts that are not identified for cancellation by the Adjudicator. USDA will be able to initiate or continue collection actions on any delinquent debts that are not identified by the Adjudicator as eligible for debt relief.

C. Debt Cancellation Procedures

In providing debt relief to successful claimants, USDA will not make any monetary payments. Rather, USDA will provide such relief by administratively cancelling debts for eligible loans obligated within the Relevant Period. For loans deemed eligible by the Claims Adjudicator for debt relief, USDA will cancel the principal amount, accrued interest, and any cost items associated with the program loan, to the extent the cap on debt relief allows.

Debt relief will be applied to accounts only after all claims have been adjudicated.

Awards of debt relief may be reduced on a pro rata basis if the total amount of outstanding debt to be forgiven exceeds the $160 million cap on debt relief. If USDA determines that it is necessary to reduce the amount of debt relief on a pro rata basis, USDA will attempt to fully cancel as many eligible debts as possible for claimants who have more than one debt eligible for relief. If USDA is unable to fully cancel all such debts, USDA may, in its discretion, partially cancel eligible debts, or service and/or restructure such debts.

Any debt relief provided through this settlement process will not affect an individual’s future eligibility for USDA programs. Such relief will not be treated as prior debt forgiveness to the claimant. USDA will identify all persons who receive debt relief in the direct loan database pursuant to the Claims Process so that those individuals face no additional barriers when they apply for USDA programs at a future date.

X. FRAUD PREVENTION

5 For example, if the Adjudicator finds in favor of a claimant with respect to a Farm Operating Loan application that USDA denied in 1994, and USDA then made a Farm Operating Loan to the same claimant for the same property in 1995, the 1995 Operating Loan will be discharged even though the claimant did not allege discrimination with respect to the 1995 Operating Loan.

A. Reviews, Audits and Monitoring

The claims materials will make clear that USDA will take whatever actions it deems appropriate to review, audit, and monitor the proceedings, including submission of responses to Claims Packages in selected cases, and the Department of Justice may monitor proceedings as it deems appropriate.

The Summary Notice and the Fact Sheet will highlight the fraud-protection measures to which claims will be subjected.

1. Reviews for Fraud and Unlawful Activity

Random reviews will be conducted at a reasonable rate to deter and identify fraud, identity theft, and other possible criminal activities. Such reviews will include, without limitation, verifying the identity of the claimant, the truthfulness of allegations contained in the Claims Package, the location of the claimed farm property or farm business, and whether there are unusual concentrations of claims in particular areas. USDA will establish a point person for communications to the Adjudicator regarding the review process. USDA and the Adjudicator will determine the proper entity or entities to conduct these reviews. The Department of Justice may refer claims or processes for review.

2. Performance Audits

The Secretary of Agriculture will request the Inspector General of the Department of Agriculture to, within 180 days of the adjudication of selected claims, and subsequently as appropriate, conduct a performance audit based on a statistically significant estimate obtained through a randomized sample of adjudicated claims to determine if the claims review process is adequate and functioning as prescribed so that funds are distributed only to eligible applicants. Audits will be provided to the Secretary of Agriculture and the Attorney General.

For the purposes of conducting the performance audit, the Inspector General shall have access, upon request, to the Claims Administrator, the Claims Adjudicator, and related officials, and to any information and records generated, used, or received by them, including but not limited to names and addresses.

3. Monitoring for Efficiency of the Claims Process

USDA will monitor and oversee the efficiency of the Administrator’s actions.

4. Timing of Payments

Payments to claimants who are selected for audits will be withheld until the audit is complete and there has been no finding of fraud, identity theft, or other criminal activity.

Performance audits or audits for efficiency of the claims process will not affect the timing of payments made to successful claimants.

B. Referrals

Referrals of any claims that appear fraudulent must be made by USDA and/or the adjudicator to USDA’s Inspector General, who will refer claims as appropriate to the Department of Justice, the appropriate US Attorney’s Office, or an appropriate law enforcement agency. The Department of Justice and/or the appropriate US Attorney’s Office on their own initiative may consider claims that appear fraudulent and/or refer them to an appropriate law enforcement authority.

C. Transparency

In order to ensure full transparency of the administration of claims, the Claims Administrator shall provide to the Secretary of Agriculture, the Inspector General of USDA, and the Attorney General, any requested information regarding claims determinations and the distribution of funds.

D. Government Accountability Office

Either upon his own initiative or at USDA’s request, the Comptroller General of the United States may evaluate the internal controls (including internal controls concerning fraud and abuse) created to carry out the Claims Process, and may report to Congress on the results of this evaluation. Solely for purposes of conducting the evaluation, the Comptroller General shall have access, upon request, to the Claims Administrator, the Claims Adjudicator, and related officials, appointed in connection with the Claims Process, and to any information and records generated, used, or received by them, including names and addresses.

E. Consent to Disclosure

Claimants consent to the disclosure of information and documents associated with claims to government agencies and officials for the purposes described in Section X.

XI. ATTORNEYS’ FEES

Any fees paid to any attorney representing a claimant in this process from the award issued by the Adjudicator must be paid directly by the claimant to his or her attorney.

Such fees paid out of the cash award shall not exceed $1,000 per claimant.

No attorneys’ fees will be paid by USDA or the Department of Justice or any other agency or department of the United States. The amount of awards will not be increased for those claimants who are represented by an attorney. No claimant is required to retain an attorney, and neither USDA, nor the Administrator, nor the Adjudicator will recommend that a claimant retain counsel or retain a specific attorney or law firm, or discourage a claimant from obtaining counsel or using a specific attorney or law firm.

However, if claimants have legal questions, they will be advised to consult with counsel or another legal service provider..

XII. DUAL MEMBERSHIP ISSUES

A. Single Recovery

A farmer who is both Hispanic and female is limited to a single claim in this Claims Process. A farmer whose family member or corporation or entity has been compensated for the same underlying claim as alleged in the Claim Form in an administrative or court proceeding or through a settlement may not recover in the Claims Process. Multiple claimants operating a single farm operation are limited to one claim per farm operation.

B. Other Legal Actions

Any farmer who would otherwise be eligible to participate in this Claims Process, but who also asserted claims in any other administrative or civil proceeding alleging any lending discrimination on any prohibited basis by USDA during the Relevant Period and who received final resolution of his or her claim, or who has not complied with the terms of Part V.D, will not be eligible to participate in this Claims Process. The Administrator will obtain or be provided with the names of all persons who previously received Final Agency Decisions, Court Orders or dismissals, or any other final resolutions of their claims. The Claims Administrator will also be provided with the names of all participants in the resolution processes in the cases in the United States District Court for the District of Columbia entitled Timothy C. Pigford v. Thomas Vilsack (Pigford I), In re: Black Farmers Discrimination Litigation (Pigford II), and, if applicable, Marilyn Keepseagle v. Thomas Vilsack (Keepseagle). Claims Packages submitted for consideration in this claims process by persons who participated in Pigford I or Pigford II will be denied by the Claims Administrator. Native American farmers who are also Hispanic or female cannot participate in both this claims process and any claims process created in Keepseagle with respect to the same underlying claim of discrimination.

XIII. DISCLAIMER

This document provides general guidance and does not confer any rights upon potential claimants or bind USDA or the United States in any way. The United States reserves the right to modify the terms of this Program or the contents of this document at any time.

NOTICE TO WOMEN AND HISPANIC FARMERS AND RANCHERS:

COMPENSATION FOR CLAIMS OF DISCRIMINATION

If you believe that the United States Department of Agriculture (USDA) improperly denied farm loan benefits to you between 1981 and 2000 because you are Hispanic, or because you are female, you may be eligible to apply for compensation. You may be eligible if:

1. you sought a farm loan or farm-loan servicing from USDA during that period; and

2. the loan was denied, provided late, approved for a lesser amount than requested, approved with restrictive conditions, or USDA failed to provide an appropriate loan service; and

3. you believe these actions occurred because you are Hispanic or female.

If you want to register your name to receive a claims package, you can call the Farmer and

Rancher Call Center at 1-888-508-4429 or access the following website:

www.farmerclaims.gov

In 2011, a Claims Administrator will begin mailing claims packages to those who have requested one through the Call Center or website. The claims package will have detailed information about the eligibility and claims process.

In order to participate, you must submit a claim to the Claims Administrator by the end of the claims period.

If you are currently represented by counsel regarding allegations of discrimination against USDA or in a lawsuit claiming discrimination by USDA, you should contact your counsel regarding this claims process.

USDA Cannot Provide Legal Advice to You.

You are not required to hire an attorney to file a claim, but you may contact a lawyer or other legal services provider in your community for additional guidance.

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EXHIBIT B

ATTACHMENT 2

SUMMARY OF CLAIMS PROCESS – WOMEN AND HISPANIC FARMERS AND RANCHERS

The United States Government is establishing a claims process to make available $1.33 billion or more1 to farmers who alleged discrimination by the U.S. Department of Agriculture (USDA) based on being female, or based on being Hispanic, in making or servicing farm loans during certain periods between 1981 and 2000. If you qualify and submit a timely claim, you could receive an award of up to $50,000 in cash. USDA will also provide a total of up to $160 million in debt relief to successful claimants who currently owe USDA money for eligible farm loans. Successful claimants will also receive an additional amount equal to 25% of the combined cash award plus debt relief, to help pay federal taxes that may be owed. Your claim will be decided by a claims adjudicator with independent decision-making authority.

Claimants who submit certain required documents and meet other requirements will each receive a “Tier 2” payment of $50,000. Other claimants who do not provide such documents or otherwise do not meet the standards required for a Tier 2 payment but can successfully prove their claims may receive “Tier 1” compensation. Claimants under Tier 1 will be eligible to receive an award up to $50,000, which might be reduced as Tier 1 funds will be divided among successful claimants. Total funds made available for Tier 1 awards will be between $1.23 billion and $1.33 billion, depending on the funds awarded to Tier 2 claimants. The total funds made available for Tier 2 awards will not be capped.

DO YOU QUALIFY?:

You must satisfy the following criteria to recover:

• You are Hispanic or female;

• If you are Hispanic, you farmed, or attempted to farm, between January 1, 1981, and

December 31, 1996, or between October 13, 1998, and October 13, 2000;

• If you are female, you farmed, or attempted to farm, between January 1, 1981, and

December 31, 1996, or between October 19, 1998, and October 19, 2000;

• You were the owner-operator or a tenant-operator of farm property, or attempted to own or lease farm land, during the same time periods listed above;

• You applied for a farm loan or for farm-loan servicing at a USDA office during the same time periods listed above; or for those seeking a Tier 1 payment only, you made a bona fide effort to apply for a farm loan or for farm-loan servicing, and USDA actively discouraged the application during the same time periods;

• Your application for a farm loan from USDA was denied, provided late, approved for a lesser amount than requested, or restricted, or USDA failed to provide you an appropriate loan service;

• You believe USDA discriminated against you because you are Hispanic or female;

• USDA’s treatment of your loan or loan application led to economic damage to you;

• You filed a discrimination complaint with USDA, either individually or through a representative, alleging that USDA discriminated against you based on your being Hispanic or female, in connection with a loan application or loan; and

• You have not participated in, and will not participate later in, any other resolution or claims process with USDA involving the same claims.

1 Depending on the number of successful claimants, more than $1.33 billion may be made available. Further details are available at www.farmerclaims.gov.

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EXHIBIT C

ATTACHMENT 3

If you allege that you did not apply but made a bona fide effort to apply for a farm loan or for farm-loan servicing and USDA actively discouraged the application during the same time periods, you may qualify for Tier 1 and will also be required to submit:

A sworn, verified, or notarized written statement from someone who witnessed the alleged incident; or

A contemporaneous written, rather than oral, complaint of that incident, filed with the USDA within one (1) year of the alleged discriminatory action.

You may apply for a Tier 2 payment of $50,000 if you submit a copy of the loan application and supporting documents, or related correspondence from USDA, , and a copy of a written discrimination complaint that you submitted to USDA within one year of the event. To receive a Tier 2 payment, you must also provide additional, specific information about the alleged discrimination. Otherwise, you will be eligible for a Tier 1 payment of an amount up to $50,000.

THE CLAIMS PROCESS:

1. Obtaining a Claim Package: You may request a Claim Package by calling 1-888-508- 4429 or going to www.farmerclaims.gov. Later this year, the Claims Administrator will begin mailing Claim Packages, which will contain forms and instructions for participating in the claims process, to all interested persons. The Claims Administrator will also have a toll-free helpline to provide information about the process.

2. Entering Claims Process: You must enter into the settlement agreement included in the Claim Package, agreeing to the claims process and waiving your right to file a lawsuit. Once you decide to enter into the claims process, the only recovery available is that offered by the claims process.

Decisions in the claims process are not appealable.

3. Submitting Claim to Claims Administrator: USDA will announce the start of the claims period, which will start in 2011 and last 180 days. You must submit a claim within that period.

4. Review of Claims. Every claim must be sworn to under penalty of perjury. USDA reserves the right to submit evidence to the Claims Adjudicator regarding any claim. All claims will be subject to random audits and other reviews, and fraudulent claims will be denied and subject to potential prosecution.

5. Determination by Claims Adjudicator: Based on the Claim Package you submit, the Claims Adjudicator will determine whether you are eligible to recover, with either a Tier 1 or Tier 2 payment, for your claim. USDA will provide loan balances for claimants seeking debt forgiveness. The Claims Adjudicator will decide if you meet the burden of proving your claim of discrimination. The decisions of the Claims Adjudicator are final and not appealable.

ASSISTANCE WITH FILING A CLAIM:

A community organization for female or Hispanic farmers may be of assistance. USDA is not permitted to complete the Claims Package for you or provide you with legal advice. If you have questions, you may http://www.farmerclaims.gov/� consult with counsel or another legal service provider. USDA does not require that you hire an attorney to participate in the claims process.

SUCCESSFUL CLAIMANTS WILL RECEIVE A CASH AWARD:

If the Claims Adjudicator approves your claim, you will receive a Tier 2 cash award of $50,000, or a Tier 1 cash award up to $50,000. USDA may also provide debt relief by forgiving the outstanding balances of loans that were connected to alleged discrimination. In addition, you will receive an additional amount equal to 25% of the combined cash award plus debt relief to help pay federal taxes that may be owed.

Because of the cap on Tier 1 awards and the cap on debt relief, the actual amount of any Tier 1 award may be reduced, and debt relief may be prorated.

WD 05‐2103 (Rev.‐10) was first posted on www.wdol.gov on 06/22/2010

REGISTER OF WAGE DETERMINATIONS UNDER | U.S. DEPARTMENT OF LABOR

THE SERVICE CONTRACT ACT | EMPLOYMENT STANDARDS ADMINISTRATION

By direction of the Secretary of Labor | WAGE AND HOUR DIVISION

| WASHINGTON D.C. 20210

| Wage Determination No.: 2005‐2103 Shirley F. Ebbesen Division of | Revision No.: 10 Director Wage Determinations | Date of Revision: 06/15/2010 States: District of Columbia, Maryland, Virginia

Area: District of Columbia Statewide Maryland Counties of Calvert, Charles, Frederick, Montgomery, Prince George's, St Mary's Virginia Counties of Alexandria, Arlington, Fairfax, Falls Church, Fauquier, King George, Loudoun, Prince William, Stafford **Fringe Benefits Required Follow the Occupational Listing**

OCCUPATION CODE TITLE FOOTNOTE RATE

01000 Administrative Support And Clerical Occupations 01011 Accounting Clerk I 15.08 01012 Accounting Clerk II 16.92…