[Federal Register Volume 61, Number 252 (Tuesday, December 31, 1996)]
[Rules and Regulations]
[Pages 69004-69011]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-33264]
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DEPARTMENT OF AGRICULTURE
Federal Crop Insurance Corporation
7 CFR Part 404
Commodity Credit Corporation
7 CFR Part 1437
RIN 0560-AE85
Implementation of the Noninsured Crop Disaster Assistance Program
Provisions of the Federal Agriculture Improvement and Reform Act of
1996
AGENCIES: Commodity Credit Corporation, Federal Crop Insurance
Corporation, USDA.
ACTION: Final rule.
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SUMMARY: This final rule moves the noninsured crop disaster assistance
program (NAP) provisions currently in 7 CFR part 404 to 7 CFR part
1437, and implements the amendments to NAP made in Title I of the
Federal Agriculture Improvement and Reform Act of 1996 (the 1996 Act).
The 1996 Act changes the administration of the program from the Federal
Crop Insurance Corporation (FCIC) to the Secretary through the
Commodity Credit Corporation. The NAP program will continue to be
operated through the Farm Service Agency (FSA). Other amendments
include the addition of seed crops and aquaculture (including
ornamental fish) as crops eligible for benefits under this part, and
relaxes the acreage and production reporting requirements.
EFFECTIVE DATE: December 31, 1996.
FOR FURTHER INFORMATION CONTACT: Leona Dittus, Director, Emergency and
Noninsured Assistance Program Division, FSA, USDA, AG Box 0526, P. O.
Box 2415, Washington, D.C. 20013-2415. Telephone (202) 720-3168.
SUPPLEMENTARY INFORMATION:
Executive Order 12866
This final rule is issued in conformance with Executive Order 12866
and has been determined to be significant and has been reviewed by the
Office of Management and Budget.
Regulatory Flexibility Act
It has been determined that the Regulatory Flexibility Act is not
applicable to this rule because neither FSA nor the CCC is required by
5 U.S.C. 553 or any other provision of law to publish a notice of
proposed rulemaking with respect to the subject matter of this rule.
Environmental Evaluation
It has been determined by an environmental evaluation that this
action will have no significant impact on the quality of the human
environment. Therefore, neither an environmental assessment nor an
environmental impact statement is needed.
Executive Order 12778
The final rule has been reviewed in accordance with Executive Order
12778. The provisions of this final rule preempt State laws to the
extent such laws are inconsistent with the provisions of this rule. The
provisions of this rule are not retroactive. Before any judicial action
may be brought concerning the provisions of this rule, the
administrative remedies must be exhausted.
Executive Order 12372
This program is not subject to the provisions of Executive Order
12372, which require intergovernmental consultation with State and
local officials. See the Notice related to 7 CFR part 3015, subpart V,
published at 48 FR 29115 (June 24, 1983).
Unfunded Mandates
The provisions of the Unfunded Mandates Reform Act of 1995 are not
applicable to this rule because neither FSA nor CCC is required by 5
U.S.C. 553 or any other provision of the law to publish a notice of
proposed rulemaking with respect to the subject matter of this rule.
Small Business Regulatory Enforcement Fairness Act of 1996
The Agency gave notice of the proposed rule and accepted comments
from the public prior to the publication of the final rule. After the
publication of the final rule, Congress passed both the 1996 Act and
the Small Business Regulatory Enforcement Fairness Act of 1996. Due to
fact that this rule makes slight changes to a rule that was already
final when Congress passed these two Acts, it has been determined in
accordance with section 808 of the Small Business Regulatory
Enforcement Fairness Act of 1996, that it is impracticable, unnecessary
and contrary to the public interest to require this rule to conform to
the requirements of section 801 of that Act. Accordingly, this rule is
effective upon publication in the Federal Register.
Paperwork Reduction Act
The amendments to 7 CFR 1437 set forth in this final rule involve a
change in the existing information collection requirements. In
accordance with the Paperwork Reduction Act of 1995, CCC received
approval from OMB for the
[[Page 69005]]
collection of information in this rule that is not related to acreage
reports. That collection was cleared as a revision to OMB docket number
0563-0016 at the time this rule was proposed. No comments were received
regarding information collections contained in OMB docket 0563-0016.
Upon analysis of the current clearances of information collections
associated with the Noninsured Crop Disaster Assistance Program (NAP),
CCC found that information collection of acreage reports for this
program are not currently approved by OMB. The agency has submitted an
emergency information collection request (ICR) to OMB for the approval
of these reports as necessary for the proper functioning of the
program.
A copy of this emergency ICR, with applicable supporting
documentation, may be obtained from Sean O'Neill, FSA, ENAPD, NAB, room
6701-S, STOP 0526, P.O. Box 2415, Washington, DC 20013-2415. Comments
and questions about the ICR listed below should be directed to the
Office of Information and Regulatory Affairs, Attn. OMB Desk Officer
for Agriculture, Office of Management and Budget, Room 10202,
Washington, DC 20503 ((202) 395-7340).
Title: Annual Certification Requirements, Assignment of Payments,
and Power of Attorney (7 CFR Parts 12, 718, 1437, and 720).
OMB Control Number: 0560-0004.
Description: To be eligible for NAP benefits, producers must report
all acreage in the county of the eligible crop (for each planting in
the event of multiple planting) in which the producer has a share.
Because NAP assistance is calculated on a unit basis, similar to
catastrophic risk protection, it is necessary that producers report all
acreage of the crop in which they have an interest in the county, not
just the acreage which suffered a loss. The 1996 Act mandates the use
of a producer's actual production history over a four to ten year
period, necessitating precise records. The FSA-578 acreage report form
is used under the NAP to collect data used to determine a producer's
production of a crop and loss of production (on a yield basis) in the
event a disaster occurs. The acreage report is also used in determining
the estimated NAP area loss for a crop. If the annual planted acreage
were not known the task of determining area, crop, crop production, and
producer eligibility for the NAP could be difficult.
Executive Order 12612
It has been determined that this rule does not have sufficient
federalism implications to warrant the preparation of a Federalism
Assessment. The provisions contained in this rule will not have a
substantial direct effect on States or their political subdivisions, or
on the distribution of power and responsibilities among the various
levels of government.
Federal Assistance Programs
This program is listed in the Catalog of Federal Domestic
Assistance under No. 10.450.
Background
Title I of the Federal Agriculture Improvement and Reform Act of
1996 (the 1996 Act) enacted on April 4, 1996, changes the
administration of the noninsured crop disaster assistance program (NAP)
from Federal Crop Insurance (FCIC) to the Secretary of Agriculture
through the Commodity Credit Corporation. NAP will continue to be
operated through the Farm Service Agency. Because the program will now
be administered by the Commodity Credit Corporation (CCC), the NAP
regulations will be moved from 7 CFR part 404 to 7 CFR part 1437. Upon
publication of this rule, the current provision for NAP will be removed
from part 404 and that part will be reserved.
The regulation reflects a change in references from FCIC and FCIC
Manager to CCC and Executive Vice President, CCC, or a designee. Other
major changes include:
(1) Section 1437.11 is amended to include seed crops and
aquacultural species (including ornamental fish) as crops eligible for
benefits under this part.
(2) Section 1437.17 is amended to provide that producers are
required to report production for acreage previously reported to CCC as
being planted by the immediately subsequent crop year acreage reporting
date for the crop.
List of Subjects in 7 CFR Parts 404 and 1437
Agricultural commodities, Disaster assistance, reporting and
recordkeeping requirements.
For reasons set out in the Preamble and under the authority of 5
U.S.C. 553, 7 CFR Chapters IV and XIV are amended as set forth below:
CHAPTER XIV--[AMENDED]
1. Chapter XIV is amended by adding part 1437 to read as follows:
Part 1437--NONINSURED CROP DISASTER ASSISTANCE PROGRAM REGULATIONS
FOR THE 1996 AND SUCCEEDING CROP YEARS
Sec.
1437.1 Applicability.
1437.2 Administration.
1437.3 Definitions.
1437.4 Eligibility.
1437.5 Assistance
1437.6 Area.
1437.7 Yield Determinations.
1437.8 Acreage and Production Reports.
1437.9 Loss Requirements.
1437.10 Application for Payment and Notice of Loss.
1437.11 Payments for Reduced Yield and Prevented Planting.
1437.12 Multiple Benefits.
1437.13 Payment and income limitations.
1437.14 Violations of Highly Erodible Land and Wetland Conservation
Provisions
1437.15 Violations Regarding Controlled Substances.
1437.16 Misrepresentation and scheme or device.
1437.17 Refunds to the Corporation.
1437.18 Offsets and assignments.
1437.19 Cumulative Liability.
1437.20 Appeals.
1437.21 Estates, trusts, and minors.
1437.22 Death, incompetence, or disappearance.
1437.23 OMB control numbers.
Authority: 15 U.S.C. 714b and 714c; and 7 U.S.C. 7333
Sec. 1437.1 Applicability.
For the 1996 and susbsequent crop years, NAP is intended to provide
eligible producers of eligible crops with protection comparable to the
catastrophic risk protection plan of crop insurance. NAP is also
designed to help reduce production risks faced by producers of crops
for which Federal crop insurance under the Federal Crop Insurance Act,
as amended, is not available. NAP will reduce financial losses that
occur when natural disasters cause a catastrophic loss of production or
prevented planting of an eligible crop. Payment eligibility is based on
an expected yield for the area and the producer's approved yield based
on actual production history, or a transitional yield if sufficient
production records are not available. Production for both the
applicable area expected yield and the individual producer approved
yield for the unit must fall below specified percentages in order to be
eligible for payments under this part.
The provisions contained in this part are applicable to each
eligible producer and each eligible crop for which catastrophic
coverage is not otherwise available.
[[Page 69006]]
Sec. 1437.2 Administration.
(a) NAP is administered under the general supervision of the
Executive Vice-President, CCC (Administrator, Farm Service Agency), and
shall be carried out by State and county FSA committees (State and
county committees).
(b) State and county committees, and representatives and their
employees, do not have authority to modify or waive any of the
provisions of the regulations of this part.
(c) The State committee shall take any action required by these
regulations that the county committee has not taken. The State
committee shall also:
(1) Correct, or require a county committee to correct any action
taken by such county committee that is not in accordance with the
regulations of this part; or
(2) Require a county committee to withhold taking any action that
is not in accordance with this part.
(d) No provision or delegation to a State or county committee shall
preclude the Executive Vice President, CCC, or a designee, from
determining any question arising under the program or from reversing or
modifying any determination made by a State or county committee.
(e) The Deputy Administrator may authorize State and county
committees to waive or modify deadlines, except statutory deadlines,
and other program requirements in cases where lateness or failure to
meet such other requirements does not adversely affect operation of the
program.
(f) The State committee will, in accordance with this part,
recommend the geographical size and shape of the area where a natural
disaster has occurred, and whether the area eligibility requirement has
been satisfied. The recommendation of eligibility must be approved by
the Executive Vice President, CCC, or a designee.
(g) The Executive Vice President, CCC, or a designee, will
determine all yields and prices under this part.
Sec. 1437.3 Definitions.
The definitions set forth in this section shall be applicable for
all purposes of administering the noninsured crop disaster assistance
program. The terms defined in part 718 of this title and 1400 of this
chapter shall also be applicable, except where those definitions
conflict with the definitions set forth in this section.
Act means the Federal Agriculture Improvement and Reform Act of
1996, Public Law 104-127 (7 U.S.C. 7201 et seq).
Actual production history means the history determined in
accordance with part 400, subpart G, of this title, except that when
referring to NAP the terms of subpart G will mean as follows:
------------------------------------------------------------------------
Insurance terms NAP terms
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Agent..................................... Local office representative.
Claim..................................... Application for payment.
Claim for indemnity....................... Application for payment.
Indemnity payment......................... NAP payment.
Insurable acreage......................... Eligible acreage.
Insurable cause........................... Natural disaster.
Insurable crop............................ Eligible crop.
Insurance company......................... Provider.
Insurance purposes........................ NAP purposes.
Insured................................... Eligible producer.
Insured producer.......................... Eligible producer.
Uninsurable acreage....................... Ineligible acreage.
Uninsurable production.................... Ineligible production.
Uninsured cause of loss................... Assigned production
appraisal
Uninsured production...................... Ineligible production
------------------------------------------------------------------------
Approved yield means an actual production history yield calculated
and approved by CCC, used to determine any NAP payment in accordance
with part 400, subpart G, of this title.
Aquacultural species means any species of aquatic organism grown as
food for human consumption, or fish raised as feed for fish that are
consumed by humans, or ornamental fish propagated and reared in an
aquatic medium by a commercial operator on private property in water in
a controlled environment.
Area means the geographic region recommended by the State FSA
committee, and approved by CCC in accordance with Sec. 1437.6, where a
natural disaster has occurred which may qualify producers in the area
for NAP payments.
Assigned yield means a yield assigned for a crop year in the base
period, in accordance with part 400, subpart G, of this title, if the
producer does not file an acceptable production report by the
production reporting date.
Average market price means the price, or dollar equivalent on an
appropriate basis; for example, pound, bushel, ton, for an eligible
crop established by CCC for determining NAP payments. Such price will
be on a harvested basis without the inclusion of transportation,
storage, processing, packing, marketing or other post-harvest expenses
and will be based, in part, on historical data.
Catastrophic coverage means a catastrophic risk protection plan of
insurance offered by FCIC in accordance with part 402 of this title.
CCC means the Commodity Credit Corporation, a wholly owned
Government corporation within the United States Department of
Agriculture.
County expected yield means the eligible crop yield established by
the State FSA committee and approved by CCC for the county. Such yield
information may be obtained from National Agricultural Statistics
Service, Cooperative States Research, Education, and Extension Service,
credible nongovernmental studies, yields in similar areas, and similar
reference material. For planted annual crops, such yield will be based
on the acreage planted for harvest.
Crop year means the period of time within which the crop is
normally grown and designated by the calendar year in which the crop is
normally harvested in the area. For crops harvested over two calendar
years, the crop year will be the calendar year in which the majority of
the crop would have been harvested. For crops grown over more than two
calendar years, each year in the growing period will be considered as a
separate crop year designated by the calendar year in which the crop
sustained a loss. For crops for which catastrophic coverage is
available, the crop year will be as defined by such coverage.
Eligible crop means an agricultural commodity for which
catastrophic coverage is not available and which is commercially
produced for food or fiber as specified in this part. Eligible crop
shall also include floricultural, ornamental nursery, and Christmas
tree crops, turfgrass sod, seed crops, aquaculture (including
ornamental fish), and industrial crops. In the case of a crop that
historically has multiple plantings in the same crop year that are
planted or are prevented from being planted, each planting may be
considered a different crop for determining payments under this part.
In the case of a crop that has different varieties or types, each
variety or type may be considered a separate crop for determining
payments under this part, if CCC determines there is a significant
difference in price or yield between the varieties or types.
Expected area yield means the eligible crop yield established and
approved by CCC for the geographic area.
Forage means land covered with grass or other vegetation, produced
under such range management practices as are necessary to sustain
sufficient quality and quantity of grass or vegetation each year to be
suitable for grazing or mechanical harvest to feed livestock in a
commercial operation. NAP benefits
[[Page 69007]]
for forage produced on any Federal or state owned lands are available
only for seeded forage.
Good farming practices means the cultural practices generally used
in the area for the crop to make normal progress toward maturity and
produce at least the individual unit approved yield. The practices are
normally those recognized by Cooperative State Research, Education, and
Extension Service as compatible with agronomic and weather conditions
in the area.
Harvested means a single harvest crop is considered harvested when
the producer has, by hand or mechanically, removed the crop from the
field. Crops with multiple harvests in one year or harvested over
multiple years are considered harvested when the producer has, by hand
or mechanically, removed at least one mature crop from the field. The
crop is considered harvested once it is removed from the field and
placed in a truck or other conveyance, except:
(1) Hay is considered harvested when in the bale, whether removed
from the field or not; and
(2) Grazing is not considered harvesting for the purpose of
determining a payment rate factor.
Livestock means any farm or other animal excluding aquacultural
species and, including but not limited to domestic avian, ruminant,
equine, and swine species grown or maintained for any purpose.
Local office means the FSA office or other USDA office designated
by CCC.
Native forage means grass or other vegetation occurring naturally
without seeding.
Natural disaster means damaging weather, including but not limited
to drought, hail, excessive moisture, freeze, tornado, hurricane,
excessive wind, or any combination thereof; or adverse natural
occurrence such as earthquake, flood, or volcanic eruption; or related
condition, including but not limited to heat, insect infestation, or
disease, which occurs as a result of an adverse natural occurrence or
damaging weather occurring prior to or during harvest that directly
causes, accelerates, or exacerbates the destruction or deterioration of
an eligible crop, as determined by the Secretary.
Ornamental fish means a decorative fish produced in a commercial
fishery for sale.
Ornamental nursery crop means a decorative plant grown in a
container or controlled environment for commercial sale.
Prevented planting means the inability to plant a crop with proper
equipment during the planting period for the crop or commodity. A
producer must prove that the producer intended to plant the eligible
crop and that such crop could not be planted due to natural disaster
reasonably related to the basis for the area designation under
Sec. 1437.6, as determined by the Executive Vice President. The natural
disaster that caused the prevented planting must have occurred after
the final planting date for the previous crop year and before the final
planting date for the crop year in which a request for NAP payment was
made. For crops with multiple plantings in a single crop year and one
crop has been harvested, the natural disaster must occur, after the
harvest of the harvested crop and before the end of the planting period
for the next planting of the crop.
Production report means a written record showing the commodity's
annual production and used to determine the producer's yield for NAP
purposes. The report contains yield history by unit, if applicable,
including planted acreage for annual crops, eligible acreage for
perennial crops, and harvested and FCIC or CCC appraised production for
the previous crop years. This report must be supported by verifiable
written records, measurement of farm-stored production, or by other
records of production approved by CCC. Information contained in an
application for payment is considered a production report for the unit
for the crop year for which the application was filed.
Qualifying gross revenues means:
(1) With respect to a person who receives more than 50 percent of
such person's gross income from farming, ranching, and forestry
operations, the annual gross income for the taxable year from such
operations; and
(2) With respect to a person who receives 50 percent or less of
such person's gross income from farming, ranching, and forestry
operations, the person's total gross income for the taxable year from
all sources.
Reseeded or replanted crop means the same crop planted on the same
acreage after the first planting of the crop has failed.
Seed crop means a crop produced for the purpose of, or intended for
use as, commercial propagation for sale.
Seeded forage means acreage which is mechanically seeded with
grasses or other vegetation at regular intervals, at least every 7
years, in accordance with good farming practices.
Share means the producer's percentage of interest in the eligible
crop as an owner, operator, or tenant. For the purpose of determining
eligibility for payments under this part, the producer's share will not
exceed the producer's share at the earlier of the time of loss or the
beginning of harvest. Acreage or interest attributed to a spouse,
child, or member of the same household may be considered part of the
producer's share unless such individual is considered to be a separate
person under part 1400 of this chapter.
Type or Variety means a scientifically recognized subspecies of a
crop or commodity having a particular characteristic or set of
characteristics.
Unit means, for NAP, all acreage of the eligible crop in the county
for the crop year:
(1) In which the person has 100 percent crop share; or
(2) Which is owned by one person and operated by another person on
a share basis.
Land rented for cash, a fixed commodity payment, or any
consideration other than a share in the crop on such land will be
considered as owned by the lessee. No unit other than that stated
herein will be permitted.
Sec. 1437.4 Eligibility.
(a) Eligible crops are any commercial agricultural crop (excluding
livestock and their by-products), commodity, or acreage of a commodity
grown for food or fiber for which catastrophic coverage is not
available under part 402 of this title. Different types or varieties of
a crop or commodity may be treated as a separate eligible crop, if CCC
determines there is a significant difference in price or yield.
(b) NAP payments will be made available for:
(1) Any commercial crop grown for food;
(2) Any commercial crop planted and grown for livestock
consumption, including but not limited to grain and forage crops;
(3) Any commercial crop grown for fiber, excluding trees grown for
wood, paper, or pulp products;
(4) Any commercially produced aquacultural species (including
ornamental fish);
(5) Floriculture crops;
(6) Ornamental nursery crops;
(7) Christmas tree crops;
(8) Turfgrass sod;
(9) Industrial crops;
(10) Seed Crops; and
(11) Any crop, for which crop insurance under the Federal Crop
Insurance Act is available in the county, that is affected by a natural
disaster that is not named as an insurable peril under the producer's
crop insurance policy.
(c) NAP payments will not be available for any acreage in any area
for any crop for which catastrophic coverage is available, unless the
loss
[[Page 69008]]
was caused by a natural disaster that is not covered by catastrophic
coverage and all other eligibility requirements under this part are
satisfied.
Sec. 1437.5 Assistance.
(a) Producers who are eligible to receive NAP payments for crop
years 1996 through 1998 will receive assistance against loss in yield
greater than 50 percent of the producer's approved yield for the
eligible crop payable at 60 percent of the established average market
price for the crop.
(b) Producers who are eligible to receive NAP payments after crop
year 1998 will receive assistance against loss in yield greater than 50
percent of the producer's approved yield for the eligible crop payable
at 55 percent of the established average market price for the crop.
(c) CCC will adjust the NAP payment rate for crops that are
produced with significant and variable expenses that are not incurred
because the crop acreage was prevented from being planted or planted
but not harvested.
(d) NAP payments will be determined by unit based on all the
acreage and production of the crop and eligible prevented from being
planted acreage of the crop.
(e) Each producer's NAP payment will be based on the producer's
share of the eligible crop.
Sec. 1437.6 Area.
(a) For the purposes of this part, acreage affected by a natural
disaster, or any adjustment thereto, will be included in the area
recommended by the state FSA committee and submitted to CCC for
approval, regardless of whether the commodity produced on the affected
acreage suffered a loss.
(b) Except for eligible areas identified in paragraph (f) of this
section, an approved area shall include at least five producers of
crops on separate and distinct farms for which the area has been
approved for NAP payments. Notwithstanding this provision, CCC may
approve an area having fewer than five producers if the Executive Vice
President, or a designee, determines that such area will suffer
significant economic consequences as a result of the disaster.
(c) An area may be designated as follows:
(1) A county;
(2) Aggregated acreage that is at least 320,000 acres; or
(3) Aggregated acreage with not less than $80 million average value
for all crops produced annually.
(d) If the aggregated acreage affected by the natural disaster does
not meet the minimum requirement specified in paragraph (c) (2) or (3)
of this section, the aggregated acreage will be expanded by adding
acres from around the affected acreage, until the minimum requirement
is met.
(e) The area may not be defined in any manner that intentionally
includes or excludes producers or crops.
(f) Notwithstanding the provisions of paragraphs (a) and (c) of
this section, for areas outside the 50 states of the United States, the
area shall include 10 or more producers of the crop except CCC may
approve an area outside the 50 United States having fewer than 10
producers of the crop for which the area is requested if the Executive
Vice President determines that such area will suffer significant
economic consequences as a result of the disaster.
Sec. 1437.7 Yield determinations.
(a) CCC will establish expected area yields for eligible crops for
each county or area for which the NAP is available, using available
information, which may include, but is not limited to, National
Agricultural Statistics Service data, Cooperative State Research,
Education, and Extension Service records, Federal Crop Insurance
Corporation data, credible nongovernment studies, yields in similar
areas, and reported approved yield data. For planted annual crops, such
yields will be based on the acreage planted for harvest.
(b) CCC may make county yield adjustments taking into consideration
different yield variations due to different farming practices in the
county such as: irrigated, nonirrigated, organic, nonorganic, different
types and varieties of a crop and intended use.
(c) In establishing expected area yields for eligible crops:
(1) If the approved area corresponds to a single county, the
expected area yield will be the yield established by CCC for that
county, including any adjustments permitted by this section;
(2) If the approved area encompasses portions of counties or more
than one county, the expected area yield will be the weighted average
of the yields established by CCC for those counties in the area,
including any adjustments permitted by this section; and
(3) CCC may adjust expected area yields if:
(i) The cultural practices, including the age of the planting or
plantings, are different from those used to establish the yield; or
(ii) The expected area yield established on a state or county level
is determined to be incorrect for the area.
(d) CCC will establish approved yields for purposes of providing
assistance under this part. Approved yields for the eligible crop will
be based on the producer's actual production history in accordance with
the provisions of part 400, subpart G, of this title.
(e) The approved yield established for the producer for the year in
which the NAP payments are offered will be equal to the average of the
consecutive crop year yields, as established by CCC, reported and
certified by that producer for that eligible crop.
(f) If a producer receives an assigned yield for a year of natural
disaster because production records were not submitted by the
production reporting deadline, the producer will be ineligible to
receive an assigned yield for the year of the next natural disaster
unless adequate production records for the eligible crop from all the
interim crop years are provided to the local office. The producer shall
receive a zero yield for those years the producer is ineligible to
receive an assigned yield.
(g) CCC will select certain producers on a random or targeted basis
and require those selected to provide records acceptable to CCC to
support the information provided. Producers may also be required to
support the yield certification at the time of loss adjustment or on
post-audit. Each certification must be supported by records acceptable
to CCC. Failure to produce records acceptable to CCC will result in CCC
establishing the yield in accordance with actual production history and
may subject the producer to criminal and civil false claims actions
under various Federal statutes as well as refund of any amount
received. In addition, sanctions, as set out at Sec. 1437.16, may be
imposed for false certification.
(h) Records acceptable to CCC may include:
(1) commercial receipts, settlement sheets, warehouse ledger
sheets, or load summaries if the eligible crop was sold or otherwise
disposed of through commercial channels provided the records are
reliable or verifiable; and
(2) Such documentary evidence as is necessary in order to verify
the information provided by the producer if the eligible crop has been
sold, fed to livestock, or otherwise disposed of other than through
commercial channels such as contemporaneous measurements, truck scale
tickets, and contemporaneous diaries, provided the records are reliable
or verifiable.
(i) Any producer who has a contract to receive a guaranteed payment
for production, as opposed to delivery, of an eligible crop will have
the production adjusted upward by the amount of the production
corresponding
[[Page 69009]]
to the amount of the contract payment received.
(j)(1) Producers will not be eligible to receive an assigned yield
if the acreage of the crop in a county for the crop year has increased
by more than 100 percent over any year in the preceding seven crop
years, unless:
(i) The producer provides adequate records of production costs,
acres planted, and yield for the crop year for which NAP payments are
being sought; or
(ii) CCC determines that the records provided under this paragraph
are inadequate. CCC may require proof that the eligible crop could have
been marketed at a reasonable price had the crop been harvested.
(2) The provisions of this section will not apply if:
(i) The crop has been inspected prior to the occurrence of a loss
by a third party acceptable to CCC; or
(ii) The FSA county executive director, with the concurrence of the
FSA state director, makes a recommendation for an exemption from the
requirements and such recommendation is approved by CCC.
Sec. 1437.8 Acreage and production reports.
(a) Producers must file one or more acreage reports at the local
office no later than the date specified by CCC for each crop the
producer wants to insure future eligibility for the NAP program. The
acreage report may be filed by the farm operator. Any producer will be
bound by the acreage report filed by the farm operator unless the
producer files a separate acreage report prior to the acreage reporting
date.
(b) Acreage reports required by paragraph (a) must include all of
the following information:
(1) All acreage in the county of the eligible crop (for each
planting in the event of multiple planting) in which the producer has a
share;
(2) The producer's share at the time of planting or the beginning
of the crop year;
(3) The FSA farm serial number;
(4) The crop, practice, and intended use;
(5) All persons sharing in the crop (including the identity of any
person having an interest in the crop as producer) and the person's
employer identification number or social security number, if the person
wishes to receive any payment under the Act;
(6) The date the crop was planted; and
(7) Acreage prevented from being planted.
(c) For each crop for which an acreage report is filed in
accordance with this section, the producer must report the production
for that acreage by the immediately subsequent crop year acreage
reporting date for the crop.
(d) A person's failure to submit the required information by the
designated acreage reporting dates may result in the denial of payments
under this part. If there is a change of ownership, operation, or share
within the farming operation after the acreage reporting date, the
local office must be notified not later than 30 calendar days after the
change and proof of the change must be provided to maintain eligibility
for payments under this part.
Sec. 1437.9 Loss requirements.
(a) To qualify for payment under this part, the loss or prevented
planting of the eligible crop must be due to a natural disaster.
(b) Assistance under this part will not cover losses due to:
(1) The neglect or malfeasance of the producer;
(2) The failure of the producer to reseed or replant to the same
crop in the county where it is customary to reseed or replant;
(3) The failure of the producer to follow good farming practices
for the commodity and practice;
(4) Water contained or released by any governmental, public, or
private dam or reservoir project, if an easement exists on the acreage
affected for the containment or release of the water;
(5) Failure or breakdown of irrigation equipment or facilities; or
(6) Except for tree crops and perennials, inadequate irrigation
resources at the beginning of the crop year.
(c) A producer of an eligible crop will not receive payments under
this part unless the projected average or actual yield for the crop, or
an equivalent measurement if yield information is not available, in the
area falls below 65 percent of the expected area yield. Once this area,
and all other, eligibility requirements have been satisfied:
(1) A reduced yield payment will be made to a producer if the total
quantity of the eligible crop that the producer is able to harvest on
the unit is less than 50 percent of the approved yield for the crop due
to natural disaster reasonably related to the basis for the area
designation under Sec. 1437.6, factored for the share of the producer
for the crop. Production from the entire unit will be used to determine
whether the producer qualifies for a payment under this part. The
quantity will not be reduced for any quality consideration unless a
zero value is established; and
(2) A prevented planting payment under this part will be made if
the producer is prevented from planting more than 35 percent of the
total eligible acreage intended for planting to the eligible crop.
Producers must have intended to plant the crop and prove that they were
prevented from planting the crop due to natural disaster reasonably
related to the basis for the area designation under Sec. 1437.6, and
the producer may be required to prove that such producer had the
resources available to plant, grow, and harvest the crop, as
applicable.
(d) NAP payments under this part for prevented planting will not be
available for:
(1) Tree crops and other perennials, unless the producer can prove
resources were available to plant, grow, and harvest the crop, as
applicable;
(2) Land that planting history or conservation plans indicate would
remain fallow for crop rotation purposes; or
(3) Land used for conservation purposes or intended to be or
considered to have been left unplanted under any program administered
by USDA, including the Conservation Reserve Program and Wetland Reserve
Program.
Sec. 1437.10 Application for payment and notice of loss.
(a) Any person with a share in the eligible crop who would be
entitled to a payment under this part must provide a notice of damage
or loss within 15 calendar days after the occurrence of the prevented
planting (the end of the planting period) or recognizable damage to the
crop. The notice must be filed at the local office serving the area
where the producer's unit is located. The farm operator may provide the
notice for all producers with an interest in the crop. All producers on
a farm will be bound by the operator's filing or failure to file the
application for payment unless the individual producers elect to timely
file their notice.
(b)(1) Applications for payments under this part must be filed, on
Form FCI-74, by the applicant with the local office no later than the
first acreage reporting date for the crop in the crop year immediately
following the crop year in which the loss occurred.
(2) If the producer chooses not to harvest the crop, all eligible
acres and crop units for which the producer intends to make an
application for payment must be left intact until the units have been
appraised or released by an FCIC or CCC approved loss adjuster.
(3) If the producer harvests the crop, the producer must provide
such documentary evidence of crop production as CCC may require which
[[Page 69010]]
may include leaving representative samples of the crop for inspection.
(c) Failure to make timely application or to supply the required
documentary evidence shall result in the denial of payments under this
part.
Sec. 1437.11 Payments for reduced yields and prevented planting.
In the event that the area loss requirement has been satisfied for
the crop and either:
(a) The producer has sustained a loss in yield in excess of 50
percent of the producer's approved yield established for the crop, the
NAP low yield payment will be determined by:
(1) Multiplying the producer's approved yield by the total eligible
acreage planted to the eligible crop;
(2) Multiplying the product of paragraph (a)(1) by 50 percent;
(3) Subtracting the total production from the total eligible
acreage from the result in paragraph (a)(2);
(4) Multiplying the product of paragraph (a)(3) by the producer's
share of the eligible crop;
(5) Multiplying the result of paragraph (a)(4) by the applicable
payment factor in accordance with Sec. 1437.5(c); and
(6) Multiplying the result in paragraph (a)(5) by:
(i) For the 1996 through 1998 crop years, 60 percent of the average
market price, as determined by CCC, or any comparable coverage, as
determined by CCC; or
(ii) For the 1999 and subsequent years, 55 percent of the average
market price, as determined by CCC, or any comparable coverage, as
determined by CCC; or
(b) The producer has been unable to plant at least 35 percent of
the acreage intended for the eligible crop, the NAP payment will be
determined by:
(1) Multiplying the producer's acreage intended to be planted to
the eligible crop by 35 percent;
(2) Subtracting the result in (b)(1) from the number of eligible
prevented planting acres as determined in Sec. 1437.9(c)(2);
(3) Multiplying the result of (b)(2) by the producer's share of the
eligible crop;
(4) Multiplying the producer's approved yield by the result of
(b)(3);
(5) Multiplying the result of (b)(4) by the approved prevented
planting payment factor in accordance with Sec. 1437.5(c); and
(6) Multiplying the result of (b)(5) by:
(i) For the 1996 through 1998 crop years, 60 percent of the average
market price, as determined by CCC, or any comparable coverage, as
determined by CCC; or
(ii) For the 1999 and subsequent years, 55 percent of the average
market price, as determined by CCC, or any comparable coverage, as
determined by CCC.
Sec. 1437.12 Multiple benefits.
If a producer is eligible to receive payments under this part and
benefits under any other program administered by the Secretary for the
same crop loss, the producer must choose whether to receive the other
program benefits or payments under this part. The producer is not
eligible for both. Such election does not relieve the producer from the
requirements of making a production and acreage report. However, if the
other USDA program benefits are not available until after an
application for benefits has been filed under this part, the producer
may refund the total amount of the payment to the local office from
which the payment was received.
Sec. 1437.13 Payment and income limitations.
(a) NAP payments shall not be made:
(1) In excess of $100,000 per person per crop year under this part,
or
(2) To a person who has qualifying gross revenues in excess of $2
million for the most recent tax year preceding the year for which
assistance is requested.
(b) Simple interest on payments to the producer which are delayed
will be computed on the net payments ultimately found to be due, from
and including the 31st day after the latter of the date the producer
signs, dates, and submits a properly completed application for payment
on the designated form, the date disputed applications are adjudicated,
or the date the area and crop is approved for NAP payments. Interest
will be paid unless the reason for failure to timely pay is due to the
producer's failure to provide information or other material necessary
for the computation or payment.
Sec. 1437.14 Violations of Highly Erodible Land and Wetland
Conservation Provisions.
The provisions of part 12 of this title, apply to this part.
Sec. 1437.15 Violations Regarding Controlled Substances.
The provisions of Sec. 718.11 of this title apply to this part.
Sec. 1437.16 Misrepresentation and scheme or device.
(a) If CCC determines that any producer has misrepresented any fact
or has knowingly adopted, participated in, or benefitted from, any
scheme or device that has the effect of defeating, or is designed to
defeat the purpose of this part, such producer will not be eligible to
receive any payments applicable to the crop year for which the scheme
or device was adopted.
(b) If any misrepresentation, scheme or device, or practice has
been employed for the purpose of causing CCC to make a payment which
otherwise would not make under this part:
(1) CCC will withhold all or part of the payment that would
otherwise be due.
(2) All amounts paid by CCC to any such producer, applicable to the
crop year in which the offense occurred, must be refunded to CCC
together with interest and other amounts as determined in accordance
with this part.
(3) CCC may impose such other penalties or administrative sanctions
as authorized by section Sec. 1437.19.
(c) Scheme and device may include, but is not limited to:
(1) Concealing any information having a bearing on the application
of the rules of this part;
(2) Submitting false information to the CCC or any county or state
FSA committee; or
(3) Creating fictitious entities for the purpose of concealing the
interest of a person in the farming operation.
Sec. 1437.17 Refunds to the CCC.
In the event that there is a failure to comply with any term,
requirement, or condition for payment made in accordance with this
part, or the payment was established as a result of erroneous
information provided by any person, or was erroneously computed, all
such payments or overpayments will be refunded to CCC on demand, plus
interest determined in accordance with part 1403 of this chapter.
Sec. 1437.18 Offsets and assignments.
(a) Except as provided in paragraph (b), any payment or portion
thereof to any person shall be made without regard to questions of
title under State law and without regard to any claim or lien against
the crop, or proceeds thereof, in favor of the owner or any other
creditor except agencies of the U.S. Government. The regulations
governing offsets and withholdings found at part 1403 of this chapter
shall be applicable to payments under this part.
(b) Any producer entitled to any payment may assign any payments in
accordance with regulations governing assignment of payment found at
part 1404 of this chapter.
Sec. 1437.19 Cumulative liability.
(a) The liability of any producer for any payment or refunds, which
is
[[Page 69011]]
determined in accordance with this part to be due to CCC will be in
addition to any other liability of such producer under any civil or
criminal fraud statute or any other statute or provision of law
including, but not limited to, 15 U.S.C. 714; 18 U.S.C. 286, 287, 371,
641, 651, 1001, 1014; 15 U.S.C. 714m; and 31 U.S.C. 3729.
(b) All producers on the unit receiving payments under this part
will be jointly and severally liable to repay any unearned payments
under this part.
Sec. 1437.20 Appeals.
The appeal, reconsideration, or review of all determinations made
under this part, except the eligibility provisions for crops, areas, or
producers for which there are no appeal rights because they are
determined rules of general applicability, must be in accordance with
part 780 of this title.
Sec. 1437.21 Estates, trusts, and minors.
(a) Program documents executed by persons legally authorized to
represent estates or trusts will be accepted only if such person
furnishes evidence of the authority to execute such documents.
(b) A minor who is otherwise eligible will be eligible for payments
under this part only if such person meets one of the following
requirements:
(1) The minor establishes that the right of majority has been
conferred on the minor by court proceedings or by statute;
(2) A guardian has been appointed to manage the minor's property
and the applicable program documents are executed by the guardian; or
(3) A bond is furnished under which the surety guarantees any loss
incurred for which the minor would be liable had the minor been an
adult.
Sec. 1437.22 Death, incompetence, or disappearance.
In the case of death, incompetence or disappearance of any person
who is eligible to receive payments under this part, such payments will
be disbursed in accordance with part 18 of this title.
Sec. 1437.23 OMB control numbers.
These regulations amend the information collection requirements
previously approved by the Office of Management and Budget (``OMB'')
under OMB control number 0563-0016.
Chapter IV [AMENDED]
Part 404 [REMOVED]
2. 7 CFR part 404 is removed.
Signed at Washington, D.C., on December 24, 1996.
Bruce R. Weber,
Acting Executive Vice President, Commodity Credit Corporation.
Signed at Washington, D.C., on December 27, 1996.
Kenneth D. Ackerman,
Manager, Federal Crop Insurance Corporation.
[FR Doc. 96-33264 Filed 12-30-96; 8:45 am]
BILLING CODE 3410-05-P
