01-21725. 1998 Crop Loss Disaster Assistance Program

AGENCY:

Commodity Credit Corporation, USDA.

ACTION:

Notice.

SUMMARY:

The Commodity Credit Corporation (CCC) is issuing this notice to inform all interested parties of the revised eligibility requirements for benefits under the 1998 Crop Loss Disaster Assistance Program (CLDAP) multi-year provision. CLDAP was originally authorized by the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriation Act, 1999 (Public Law 105-277). All interested parties must file applications at the address specified below prior to close of business on September 14, 2001.

FOR FURTHER INFORMATION CONTACT:

Rebecca Davis, Compliance Branch, FSA, USDA; Telephone: [phone].

SUPPLEMENTARY INFORMATION:

Background

Section 1102 of the Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 1999 (Public Law 105-277) provided $875 million to provide assistance to producers who incurred multi-year losses due to disasters. Accordingly, the Secretary developed the multi-year Crop Loss Disaster Assistance Program (CLDAP) and promulgated regulations to carry out that program. See 7 CFR part 1477. Under the provisions of the 1998 CLDAP, the Farm Service Agency (FSA) defined multi-year losses as crop losses by a producer in at least 3 of the 5 years from 1994 through 1998. The program benefits under this multi-year option were based on a percentage of the total dollar amount the producer received from the combination of crop insurance indemnities, non-insured crop disaster assistance program (NAP), and the 1994 ad hoc disaster assistance program during that 5-year period.

To expedite the disbursement of assistance, crop insurance indemnity information from the Risk Management Agency was interfaced electronically with FSA program payment records to determine the producers eligible for the multi-year assistance and the amount of such benefit. Both Agencies record monetary benefits issued to producers and policy holders by either a social security or taxpayer ID number. Therefore, when payments and indemnities were credited to the same ID number in at least 3 of the 5 years, the producer was determined eligible.

Some producers may have changed ID numbers when they restructured their businesses, or changed the nature of their operations from an individual to a corporation. FSA tried to the maximum extent practicable to allow for changes in ID numbers that were beyond the producers' control such as changes due to death of an insured, or husbands and wives who may have changed operations and operating numbers. Because of changing ID numbers, some producers with losses in three of the five years may not have been issued benefits under the multi-year CLDAP.

Congress intervened. Section 259 of the Agricultural Risk Protection Act of 2000 (Public Law 106-224), directs the Secretary to restore eligibility by making payments to an individual or entity that was determined otherwise ineligible for the multi-year benefits in the amount equal to what the individual or entity would have received had the individual or entity not changed the legal structure, but reduced by any single year payment already received. Additionally, a producer with interests in multiple farming operations, none of which previously received 1998 CLDAP benefits, may now be eligible for payment based on the producer's interest in such eligible losses experienced by each of the respective farming operations which otherwise would not have been eligible for compensation. Section 259 of the Agricultural Risk Protection Act of 2000 was not originally provided funding to carry out its direction.

Congress revisited the funding issue and in section 315 of the Grain Standards and Warehouse Improvement Act of 2000 (Public Law 106-472) amended section 259 of the Agricultural Risk Protection Act of 2000, to authorize the Secretary to use the funds, facilities, and authorities of the Commodity Credit Corporation (CCC).

Action: The purpose of this notice is to inform affected parties that a producer that was determined otherwise ineligible may now be eligible for 1998 CLDAP benefits under the terms of this revision if the change in operation was from an individual to an entity which included the individual; from an entity to an individual who was included in the entity; or, if an individual had an interest in multiple operations. If a producer previously received CLDAP benefits under the 1998 single-year option, and is now determined eligible under the multi-year option, the producer will receive only the difference if the calculated multi-year benefit is greater. Total CLDAP benefits are subject to the $80,000 limitation per “person” as defined in 7 CFR part 1400, and the national payment factor applicable to CLDAP as previously utilized.

Eligible producers include those that: (1) Previously filed an application but did not meet eligibility requirements; (2) now meet the eligibility requirements, but did not previously submit an application; and (3) received a payment for a single-year loss, did not initially qualify for multi-year benefits, but now qualify for multi-year benefits under the revised eligibility requirements. However, this provision does not restore eligibility for additional payments where producers were deemed to be eligible for whatever reason. Producers that are not sure as to their revised eligibility should file an application.

The applicant's share will be: (1) 100 percent share of the insurance indemnity, NAP benefit, or ad hoc disaster assistance received as an individual, when applicable; and (2) his/her direct or indirect share of the same earned through a joint operation or entity that has not previously qualified for a multi-year benefit. Attribution shall be used in the benefit calculation process. For embedded entities, the Agency will attribute shares until the fifth level is reached. Additionally, all eligibility requirements for the 1998 program year, including payment eligibility, conservation compliance and gross revenue compliance provisions, must have been met by each of the joint operations and entities contributing to the qualifying loss calculations.

Applicant's meeting all eligibility requirements for CLDAP will be eligible for benefits not to exceed the $80,000 per “person” CLDAP payment limitation and subject to the national payment factor, regardless of the number of different farming operations used to qualify. Each applicant must certify that gross revenue provisions are not exceeded by any of the farming operations used for qualification by applying the procedure applicable to the 1998 CLDAP. If one or more “persons” do not meet the gross revenue provisions, the indemnification for that “person” cannot be used in computing eligibility. The 1997 tax year will be used in determining eligibility under the gross revenue provision. If the joint operation or entity used for qualification dissolved in a prior year, FSA will use the last tax year available.

Producers will be required to provide proof of crop insurance indemnities, NAP benefits and ad hoc disaster assistance received for each farming operation used in the qualification process. This information must be recorded on Form CCC-540MY, Crop Loss Disaster Assistance Program Application for Multi-Year Benefits, for each respective farming operation and crop year. This information will be used in determining eligibility and calculating the multi-year benefit. Joint operation/entity member share data shall be verified with CCC-502, Farm Operating Plan for Payment Eligibility Review, information on file with the Agency for the respective program year. If the CCC-502 information is not on file for the joint operation/entity member, this information will be required to identify members and shares. Additional documentation may be required to substantiate the certification such as legal documents and agreements, annual reports, corporate minutes, etc.

Individual producers may obtain Form CCC-540MY in person, by mail, by telephone, or by facsimile from any FSA office. In addition, applicants may download a copy of the CCC-540MY through the Internet at www.sc.egov.usda.gov.

To apply for benefits, producers must submit: (1) Form CCC-540MY, and include supporting documentation of any crop insurance indemnity, NAP benefits and ad hoc disaster assistance received for each year, entity and joint operation used for qualification; (2) Applicable Form CCC-502, Farm Operating Plan For Payment Eligibility Review, and related information for each year, entity and joint operation used for qualification; (3) Form AD-1026, Highly Erodible Land and Wetland Conservation Compliance, for each entity and joint operation used for qualification; (4) Form CCC-548, Gross Revenue Certification Statement, for each individual and entity used for qualification; (5) copies of all Forms CCC-540, Crop Loss Disaster Assistance Program, and CCC-540A, Notice of Loss/Production Worksheet 1998 Crop Loss Disaster Assistance Program, previously submitted, including any applications submitted for each individual, entity and joint operation used for qualification; and (6) records of 1998 CLDAP benefits previously approved or received, including records for each entity and joint operation used for qualification.

Applications with supporting documentation will be accepted from the date this notice is published through September 14, 2001. The applicant must send all required documents to the following address: USDA/ Farm Service Agency, Room 3643-S, STOP 0517, 1400 Independence Avenue SW, Washington, DC 20250-0517. Applicants are requested to designate the program on the envelope as “Multi-Year Revised Eligibility Determination Request.” All completed applications must be received at the specified address by the close of business on September 14, 2001. All late and incomplete applications will be returned to the applicants with a denial of program benefits.

For additional information, affected producers should contact the Farm Service Agency Service Center in the county in which they originally or would have applied for benefits under the 1998 CLDAP. Eligibility determinations will be made upon receipt of all of the necessary data.

Signed at Washington, DC, on June 29, 2001.

James R. Little,

Acting Executive Vice President, Commodity Credit Corporation.