TO: Office of the Secretary Administrator, Foreign Agricultural Service Administrator, National Agricultural Statistics Service Director, Office of Business and Program Integration Acting Deputy Administrator for Commodity Operations Deputy Administrator for Farm Programs Acting Deputy Administrator for Farm Loan Programs Deputy Administrator for Management Division Directors Director, Economic Policy and Analysis Staff

FROM: Jonathan Coppess Executive Vice President Commodity Credit Corporation

SUBJECT: Commodity Credit Corporation (CCC) Private Contracts (Section 4) and Reimbursable Agreements (Section 11) Requirements for Fiscal Years (FY) 2010 and 2011

In preparation for FY 2010, and to assist the development of the FY 2011 budget, the Farm Service Agency (FSA) has begun developing the FY 2010 and FY 2011 CCC Section 4 and Section 11 budgetary requirements. To ensure Agency requirements are addressed, we are requesting your assistance in identifying funding needs in these areas. Guidance covering this process is attached.

It is anticipated that there will be great demand for Section 11 resources in FY 2010 and FY 2011. Agency funding priorities will be given consideration, but some difficult decisions may need to be made in order to support new Department of Agriculture goals and activities that may arise. The amount available in FY 2010 for the normal ongoing Section 11 activities may be sizably reduced by these new activities. Total available Section 4 funding will be limited based on Office of Management and Budget guidance.

Please provide the Section 4 and Section 11 requested information by email to [email protected] and [email protected] by August 21, 2008. If you or your staff has any questions or comments regarding the information requested in the attached guidance, please contact Richard Pazdalski at (202) 720-0174.

Attachments Office of the Secretary Page 2

cc: AAOM, Rm. 3096-S Acting Director, OBF Deputy Director, OBF Director, BUD Acting Director, FMD, Stop 0581 Chief, FMD, PARLC, Stop 0581 Ralph Linden, OGC, Stop 1408 Chief, PB Portia Chapman, PB/DCS Lillie McComb, PB/DCS BUD Reader File PB Reader File

FSA/BUD/CPB/8-3-09/s:\BUD\Cpb\REIMBURSABLEAGREEMENTS\REQUEST_MEMOS\ FY10 11 Sect 4-11 Call Letter.doc/BUD-09-009

Reviewer Typist Writer Director Director AO BUD OBF Initials/ Date Guidance for the Submission of Commodity Credit Corporation (CCC) Section 4 and Section 11 Requirements for Fiscal Year (FY) 2010 and 2011

General Guidance

CCC Section 4 and Section 11 funding requests have come under increased scrutiny in recent years. Delays in approval of the Section 4 and Section 11 apportionments at the Departmental level and at OMB have prompted us to change the process used to prepare the requests. We are hopeful that these changes will expedite the approval of these requests in FY 2010.

In order to ensure the CCC budget is fully developed, please review your mission area and identify all operations that require a Section 4 private contract or a Section 11 reimbursable agreement. Any requirements identified should be directly related to CCC core activities and be closer to a CCC function than to the Agency’s appropriated function. Care should be taken that Section 4 and Section 11 funding is not requested for activities more appropriately funded, or already funded, under an existing appropriation. More importantly, a full explanation should be provided for any increase over the prior year amount.

Section 4

Private contracts financed by CCC funds are authorized by Section 4 of the CCC Charter Act and must be approved and apportioned by OMB. Section 4 funds cannot be requested for Information Technology equipment and services. Attachment 1 provides a listing of approved FY 2009 Section 4 funding and FY 2010 requirements projected during the development of last year’s budget. Requirements identified during last year’s budget development must be reviewed to determine if the requirement and funding level is still valid. An updated justification is required this year even if no changes are noted. Total available Section 4 funding will be limited to what was spent in FY 2006 less all “one-time” activities per OMB guidance in the FY 2008 and FY 2009 President’s Budget passback.

Section 11

Section 11 of the CCC Charter Act authorizes the CCC to enter into reimbursable agreements that directly support CCC farm and conservation programs. Section 11 limits the use of CCC funds for reimbursable agreements, transfers, and allotments of funds to State and Federal agencies and is currently capped at $56.1 million. This amount is not anticipated to change in the near future and includes loan service fees and other user fees that are subsequently transferred to the FSA Salaries and Expenses account.

Attachment 2 provides a listing of approved FY 2009 Section 11 reimbursable agreements. FY 2010 requirements must be reviewed to determine if the requirement and funding level is still valid. An updated justification is required this year even if no changes are noted. Process Overview and Timeline

Section 4 and Section 11 funding will be requested using Attachment 3, available at http://www.fsa.usda.gov/FSA/webapp?area=about&subject=landing&topic=bap-bu- cc. Funding requests for your mission area should be consolidated and submitted, by email, to the points of contact listed below, no later than August 21, 2009. Please use as the subject line “FY 2010/11 Section 4/11 Request.” FSA Budget Division will then review and forward all requests to the Administrator for review and decision. Decisions will be communicated to the requesting offices as soon as possible. Decisions are expected to be finalized in October 2009. All approved FY 2010 requirements will be planned for request as part of the FY 2010 apportionment process. Please keep in mind that these approved requirements will be subject to the Office of Budget and Program Analysis and OMB final review and approval. Approved FY 2011 requirements will be incorporated into the FY 2011 budget request.

FSA BUD Points of Contact for Section 4 and Section 11:

Richard Pazdalski 202-720-0174 [email protected]

Lillie McComb 202-720-2201 [email protected] Attachment 3

REQUEST FOR CCC REIMBURSABLE AGREEMENTS AND PRIVATE CONTRACTS

Activity: ______Performing Agency/Entity: ______Point(s) of Contact: ______Email Address: ______Agency: ______Phone: ______

Agency ______ALC ______Section 11 __ Previous Reimbursable Section 4 __ FY 2009 FY 2010 FY 2011 Agreement Number New __ Funding Funding Requested ______Delete __ $______$______$______Description:

Justification: (Describe the importance of the agreement and how the funding level was determined. Please explain the elements of the requested funding level AND relevance to CCC.) APPROVED BY: OGC: ______

Associate Administrator: ______

Administrator, FSA: ______