[Title 7 CFR ]
[Code of Federal Regulations (annual edition) - January 1, 2007 Edition]
[From the U.S. Government Printing Office]



[[Page i]]

          

          7


          Parts 700 to 899

                         Revised as of January 1, 2007


          Agriculture
          



________________________

          Containing a codification of documents of general 
          applicability and future effect

          As of January 1, 2007
          With Ancillaries
                    Published by:
                    Office of the Federal Register
                    National Archives and Records
                    Administration
                    A Special Edition of the Federal Register

[[Page ii]]

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                            Table of Contents



                                                                    Page
  Explanation.................................................       v

  Title 7:
    Subtitle B--Regulations of the Department of Agriculture 
      (Continued)
          Chapter VII--Farm Service Agency, Department of 
          Agriculture                                                5
          Chapter VIII--Grain Inspection, Packers and 
          Stockyard Administration (Federal Grain Inspection 
          Service), Department of Agriculture                      217
  Finding Aids:
      Material Approved for Incorporation by Reference........     375
      Table of CFR Titles and Chapters........................     377
      Alphabetical List of Agencies Appearing in the CFR......     395
      List of CFR Sections Affected...........................     405

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                     ----------------------------

                     Cite this Code: CFR
                     To cite the regulations in 
                       this volume use title, 
                       part and section number. 
                       Thus, 7 CFR 701.1 refers 
                       to title 7, part 701, 
                       section 1.

                     ----------------------------

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                               EXPLANATION

    The Code of Federal Regulations is a codification of the general and 
permanent rules published in the Federal Register by the Executive 
departments and agencies of the Federal Government. The Code is divided 
into 50 titles which represent broad areas subject to Federal 
regulation. Each title is divided into chapters which usually bear the 
name of the issuing agency. Each chapter is further subdivided into 
parts covering specific regulatory areas.
    Each volume of the Code is revised at least once each calendar year 
and issued on a quarterly basis approximately as follows:

Title 1 through Title 16.................................as of January 1
Title 17 through Title 27..................................as of April 1
Title 28 through Title 41...................................as of July 1
Title 42 through Title 50................................as of October 1

    The appropriate revision date is printed on the cover of each 
volume.

LEGAL STATUS

    The contents of the Federal Register are required to be judicially 
noticed (44 U.S.C. 1507). The Code of Federal Regulations is prima facie 
evidence of the text of the original documents (44 U.S.C. 1510).

HOW TO USE THE CODE OF FEDERAL REGULATIONS

    The Code of Federal Regulations is kept up to date by the individual 
issues of the Federal Register. These two publications must be used 
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    To determine whether a Code volume has been amended since its 
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EFFECTIVE AND EXPIRATION DATES

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Code a note has been inserted to reflect the future effective date. In 
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OMB CONTROL NUMBERS

    The Paperwork Reduction Act of 1980 (Pub. L. 96-511) requires 
Federal agencies to display an OMB control number with their information 
collection request.

[[Page vi]]

Many agencies have begun publishing numerous OMB control numbers as 
amendments to existing regulations in the CFR. These OMB numbers are 
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OBSOLETE PROVISIONS

    Provisions that become obsolete before the revision date stated on 
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1963, 1964-1972, 1973-1985, or 1986-2000, published in 11 separate 
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Sections Affected'' is published at the end of each CFR volume.

INCORPORATION BY REFERENCE

    What is incorporation by reference? Incorporation by reference was 
established by statute and allows Federal agencies to meet the 
requirement to publish regulations in the Federal Register by referring 
to materials already published elsewhere. For an incorporation to be 
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This material, like any other properly issued regulation, has the force 
of law.
    What is a proper incorporation by reference? The Director of the 
Federal Register will approve an incorporation by reference only when 
the requirements of 1 CFR part 51 are met. Some of the elements on which 
approval is based are:
    (a) The incorporation will substantially reduce the volume of 
material published in the Federal Register.
    (b) The matter incorporated is in fact available to the extent 
necessary to afford fairness and uniformity in the administrative 
process.
    (c) The incorporating document is drafted and submitted for 
publication in accordance with 1 CFR part 51.
    Properly approved incorporations by reference in this volume are 
listed in the Finding Aids at the end of this volume.
    What if the material incorporated by reference cannot be found? If 
you have any problem locating or obtaining a copy of material listed in 
the Finding Aids of this volume as an approved incorporation by 
reference, please contact the agency that issued the regulation 
containing that incorporation. If, after contacting the agency, you find 
the material is not available, please notify the Director of the Federal 
Register, National Archives and Records Administration, Washington DC 
20408, or call 202-741-6010.

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This index is based on a consolidation of the ``Contents'' entries in 
the daily Federal Register.
    A List of CFR Sections Affected (LSA) is published monthly, keyed to 
the revision dates of the 50 CFR titles.

[[Page vii]]


REPUBLICATION OF MATERIAL

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                              Raymond A. Mosley,
                                    Director,
                          Office of the Federal Register.

January 1, 2007.

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                               THIS TITLE

    Title 7--Agriculture is composed of fifteen volumes. The parts in 
these volumes are arranged in the following order: parts 1-26, 27-52, 
53-209, 210-299, 300-399, 400-699, 700-899, 900-999, 1000-1199, 1200-
1599, 1600-1899, 1900-1939, 1940-1949, 1950-1999, and part 2000 to end. 
The contents of these volumes represent all current regulations codified 
under this title of the CFR as of January 1, 2007.

    The Food and Nutrition Service current regulations in the volume 
containing parts 210-299, include the Child Nutrition Programs and the 
Food Stamp Program. The regulations of the Federal Crop Insurance 
Corporation are found in the volume containing parts 400-699.

    All marketing agreements and orders for fruits, vegetables and nuts 
appear in the one volume containing parts 900-999. All marketing 
agreements and orders for milk appear in the volume containing parts 
1000-1199.

    For this volume, Robert J. Sheehan was Chief Editor. The Code of 
Federal Regulations publication program is under the direction of 
Frances D. McDonald, assisted by Ann Worley.


[[Page 1]]



                          TITLE 7--AGRICULTURE




                  (This book contains parts 700 to 899)

  --------------------------------------------------------------------

  SUBTITLE B--Regulations of the Department of Agriculture (Continued)

                                                                    Part

chapter vii--Farm Service Agency, Department of Agriculture.         700

chapter viii--Grain Inspection, Packers and Stockyard 
  Administration (Federal Grain Inspection Service), 
  Department of Agriculture.................................         800

[[Page 3]]

  Subtitle B--Regulations of the Department of Agriculture (Continued)

[[Page 5]]



       CHAPTER VII--FARM SERVICE AGENCY, DEPARTMENT OF AGRICULTURE




  --------------------------------------------------------------------


  Editorial Note: 1. Nomenclature changes to chapter VII appear at 59 FR 
60299, Nov. 23, 1994, as corrected at 59 FR 66438, Dec. 27, 1994, and at 
60 FR 64297, Dec. 15, 1995.

             SUBCHAPTER A--AGRICULTURAL CONSERVATION PROGRAM
Part                                                                Page
701             Emergency Conservation Program and certain 
                    related programs previously administered 
                    under this part.........................           7
707             Payments due persons who have died, 
                    disappeared, or have been declared 
                    incompetent.............................          17
708             Record retention requirements--all programs.          19
SUBCHAPTER B--FARM MARKETING QUOTAS, ACREAGE ALLOTMENTS, AND PRODUCTION 
                               ADJUSTMENT
714             Refunds of penalties erroneously, illegally, 
                    or wrongfully collected.................          20
718             Provisions applicable to multiple programs..          22
                SUBCHAPTER C--REGULATIONS FOR WAREHOUSES
735             Regulations for the United States Warehouse 
                    Act.....................................          45
743

[Reserved]

                     SUBCHAPTER D--SPECIAL PROGRAMS
750             Soil Bank [Note]............................          59
760             Indemnity payment programs..................          59
761             General and administrative..................          83
762             Guaranteed farm loans.......................          84
764             Emergency farm loans........................         127
770             Indian tribal land aquisition loans.........         137
771             Boll Weevil Era Dication Loan Program.......         141
772             Servicing minor program loans...............         144
773             Special Apple Loan Program..................         150
774             Emergency Loan for Seed Producers Program...         154
780             Appeal regulations..........................         157
781             Disclosure of foreign investment in 
                    agricultural land.......................         164

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782             End-Use Certificate Program.................         170
783             Tree Assistance Program.....................         176
784             2004 ewe lamb replacement and retention 
                    payment program.........................         179
785             Certified state mediation program...........         184
        SUBCHAPTER E--PROVISIONS COMMON TO MORE THAN ONE PROGRAM
792             Debt settlement policies and procedures.....         191
795             Payment limitation..........................         200
                      SUBCHAPTER F--PUBLIC RECORDS
798             Availability of information to the public...         207
                 SUBCHAPTER G--ENVIRONMENTAL PROTECTION
799             Environmental quality and related 
                    environmental concerns--compliance with 
                    the National Environmental Policy Act...         209

[[Page 7]]



             SUBCHAPTER A_AGRICULTURAL CONSERVATION PROGRAM





PART 701_EMERGENCY CONSERVATION PROGRAM AND CERTAIN RELATED PROGRAMS 
PREVIOUSLY ADMINISTERED UNDER THIS PART--Table of Contents




Sec.
701.1 Administration.
701.2 Definitions.
701.3 Scope.
701.4 Producer eligibility.
701.5 Land eligibility.
701.6-701.9 [Reserved]
701.10 Qualifying minimum cost of restoration.
701.11 Prohibition on duplicate payments.
701.12 Eligible ECP practices.
701.13 Submitting requests.
701.14 Onsite inspections.
701.15 Starting practices before cost-share request is submitted; non-
          entitlement to payment; payment subject to the availability of 
          funds.
701.16 Practice approval.
701.17-701.20 [Reserved]
701.21 Filing payment application.
701.22 Eligibility to file for cost-share assistance.
701.23 Eligible costs.
701.24 Dividing cost-share among more than one participant.
701.25 Practices carried out with aid from ineligible persons.
701.26 Maximum cost-share percentage.
701.27 Maximum ECP payments per person.
701.28-701.30 [Reserved]
701.31 Maintenance and proper use of practices.
701.32 Failure to comply with program provisions.
701.33 Death, incompetency, or disappearance.
701.34 Appeals.
701.35 Compliance with regulatory measures.
701.36 Schemes and devices and claims avoidances.
701.37 Loss of control of property during the practice life span.
701.38-701.40 [Reserved]
701.41 Cost-share assistance not subject to claims.
701.42 Assignments.
701.43 Information collection requirements.
701.44 Agricultural Conservation Program (ACP) contracts.
701.45 Forestry Incentives Program (FIP) contracts.
701.50 2005 hurricanes.
701.51 Definitions.
701.52 Availability of funding.
701.53 Debris removal and water for livestock.
701.54 Oysters.
701.55 Nursery.
701.56 Poultry.
701.57 Private non-industrial forest land.

    Authority: Pub. L. 95-334, 92 Stat. 420, 16 U.S.C. 2201 et. seq.; 
Pub. L. 109-149, Division B, sec. 101.

    Source: 69 FR 10302, Mar. 4, 2004, unless otherwise noted.



Sec. 701.1  Administration.

    (a) Subject to the availability of funds, this part provides the 
terms, conditions and requirements of the Emergency Conservation Program 
(ECP) administered by the Farm Service Agency (FSA).
    (b) ECP is administered by the Administrator, FSA through the Deputy 
Administrator, FSA, and shall be carried out in the field by State and 
county FSA committees (State and county committees), subject to the 
availability of funds. Except as otherwise provided in this rule, 
discretionary determinations to be made under this rule will be made by 
the Deputy Administrator. Matters committed to the discretion of the 
Deputy Administrator shall be considered in all cases to be permissive 
powers and no person shall, under any circumstances, be considered to be 
entitled to an exercise of such power in their favor.
    (c) State and county committees, and representatives and employees, 
do not have authority to modify or waive any regulations in this part.
    (d) The State committee may take any action authorized or required 
of the county committee by this part, but which the county committee has 
not taken, such as:
    (1) Correct or require a county committee to correct any action 
taken by such county committee that is not in accordance with this part; 
or
    (2) Require a county committee to withhold taking any action that is 
not in accordance with this part.
    (e) No provision or delegation herein to a State or county committee 
shall

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preclude the Administrator, FSA, 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.
    (f) The Deputy Administrator may authorize State and county 
committees to waive or modify deadlines and other requirements in cases 
where lateness or failure to meet such other requirements does not 
adversely affect the operation of the program.
    (g) The Deputy Administrator may limit the authority of state and 
county committees to approve cost share in excess of specified amounts.
    (h) Data furnished by the applicants will be used to determine 
eligibility for program benefits. Furnishing the data is voluntary; 
however, the failure to provide data could result in program benefits 
being withheld or denied.
    (i) FSA may consult with any other USDA agency for such assistance 
as is determined by FSA to be necessary to implement the ECP. FSA is 
responsible for the technical aspects of ECP but may enter into a 
Memorandum of Agreement with another party to provide technical 
assistance. If this limitation results in significant hardship to 
producers in a county the State committee may request in writing that 
the Deputy Administrator waive this requirement for that county.
    (j) The provisions in this part shall not create an entitlement in 
any person to any ECP cost share or claim or any particular notice or 
form or procedure.
    (k) Additional terms and conditions may be set forth in the 
application or the forms participants will be required to sign for 
participation in the ECP.



Sec. 701.2  Definitions.

    (a) The terms defined in part 718 of this chapter shall be 
applicable to this part and all documents issued in accordance with this 
part, except as otherwise provided in this section.
    (b) The following definitions shall apply to this part:
    Agricultural producer means an owner, operator, or tenant of a farm 
or ranch used to produce for food or fiber, crops (including but not 
limited to, grain or row crops; seed crops; vegetables or fruits; hay 
forage or pasture; orchards or vineyards; flowers or bulbs; or field 
grown ornamentals) or livestock (including but not limited to, dairy or 
beef cattle; poultry; swine; sheep or goats; fish or other animals 
raised by aquaculture; other livestock or fowl) for commercial 
production. Producers of animals raised for recreational uses only are 
not considered agricultural producers.
    Annual agricultural production means production of crops for food or 
fiber in a commercial operation that occurs on an annual basis under 
normal conditions.
    Applicant means a person who has submitted to FSA a request to 
participate in the ECP.
    Cost-share payment means the payment made by FSA to assist a program 
participant under this part to establish practices required to address 
qualifying damage suffered in connection with a qualifying disaster.
    Deputy Administrator means the Deputy Administrator for Farm 
Programs, FSA, the ECP Program Manager, or designee.
    Farmland means land devoted to agricultural production, including 
land used for aquaculture, or other land as may be determined by the 
Deputy Administrator.
    Program year means the applicable Federal fiscal year.



Sec. 701.3  Scope.

    (a) FSA will provide cost-share assistance to farmers and ranchers 
to rehabilitate farmland damaged by wind erosion, floods, hurricanes, or 
other natural disasters as determined by the Deputy Administrator, and 
to carry out emergency water conservation measures during periods of 
severe drought.
    (b) The objective of the ECP is to make cost-share assistance 
available to eligible participants on eligible land for certain 
practices, to rehabilitate farmland damaged by floods, hurricanes, wind 
erosion, or other natural disasters, and for the installation of water 
conservation measures during periods of severe drought.
    (c) Payments may also be made under this part for:

[[Page 9]]

    (1) Emergency water conservation or water enhancement measures 
(including measures to assist confined livestock) during periods of 
severe drought; and
    (2) Floodplain easements for runoff and other emergency measures 
that the Deputy Administrator determines is necessary to safeguard life 
and property from floods, drought, and the products of erosion on any 
watershed whenever fire, flood, or other natural occurrence is causing 
or has caused, a sudden impairment of the watershed.
    (d) Payments under this part are subject to the availability of 
appropriated funds and any limitations that may otherwise be provided 
for by Congress.



Sec. 701.4  Producer eligibility.

    (a) To be eligible to participate in the ECP the Deputy 
Administrator must determine that a person is an agricultural producer 
with an interest in the land affected by the natural disaster, and that 
person must be liable for or have paid the expense that is the subject 
of the cost share. The applicant must be a landowner or user in the area 
where the qualifying event has occurred, and must be a party who will 
incur the expense that is the subject of the cost share.
    (b) Federal agencies and States, including all agencies and 
political subdivisions of a State, are ineligible to participate in the 
ECP.
    (c) All producer eligibility is subject to the availability of funds 
and an application may be denied for any reason.



Sec. 701.5  Land eligibility.

    (a) For land to be eligible, the Deputy Administrator must determine 
that land that is the subject of the cost share:
    (1) Will have new conservation problems caused as a result of a 
natural disaster that, if not treated, would:
    (i) Impair or endanger the land;
    (ii) Materially affect the productive capacity of the land;
    (iii) Represent unusual damage that, except for wind erosion, is not 
of the type likely to recur frequently in the same area; and
    (iv) Be so costly to repair that Federal assistance is or will be 
required to return the land to productive agricultural use. Conservation 
problems existing prior to the disaster are not eligible for cost-share 
assistance.
    (2) Be physically located in a county in which the ECP has been 
implemented; and
    (3) Be one of the following:
    (i) Land expected to have annual agricultural production,
    (ii) A field windbreak or a farmstead shelterbelt on which the ECP 
practice to be implemented involves removing debris that interferes with 
normal farming operations on the farm and correcting damage caused by 
the disaster; or
    (iii) A farm access road on which debris interfering with the normal 
farming operation needs to be removed.
    (b) Land is ineligible for cost share if the Deputy Administrator 
determines that it is, as applicable:
    (1) Owned or controlled by the United States;
    (2) Owned or controlled by States, including State agencies or other 
political subdivisions of a State;
    (3) Protected by a levee or dike that was not effectively and 
properly functioning prior to the disaster, or is protected, or intended 
to be protected, by a levee or dike not built to U.S. Army Corps of 
Engineers, NRCS, or comparable standards;
    (4) Adjacent to water impoundment reservoirs that are subject to 
inundation when the reservoir is filled to capacity;
    (5) Land on which levees or dikes are located;
    (6) Subject to frequent damage or susceptible to severe damage 
according to paragraph (c) of this section;
    (7) Subject to flowage or flood easements and inundation when water 
is released in normal operations;
    (8) Between any levee or dike and a stream, river, or body of water, 
including land between two or more levees or dikes;
    (9) Located in an old or new channel of a stream, creek, river or 
other similar body of water, except that land located within or on the 
banks of an irrigation canal may be eligible if the Deputy Administrator 
determines that the canal is not a channel subject to flooding;

[[Page 10]]

    (10) In greenhouses or other confined areas, including but not 
limited to, land in corrals, milking parlors, barn lots, or feeding 
areas;
    (11) Land on which poor farming practices, such as failure to farm 
on the contour, have materially contributed to damaging the land;
    (12) Unless otherwise provided for, not considered to be in annual 
agricultural production, such as land devoted to stream banks, channels, 
levees, dikes, native woodland areas, roads, and recreational uses; or
    (13) Devoted to trees including, but not limited to, timber 
production.
    (c) To determine the likely frequency of damage and of the 
susceptibility of the land to severe damage under paragraph (b)(6) of 
this section, FSA will consider all relevant factors, including, but not 
limited to, the location of the land, the history of damage to the land, 
and whether the land was or could have been protected by a functioning 
levee or dike built to U. S. Army Corps of Engineers, NRCS, or 
comparable standards. Further, in making such determinations, 
information may be obtained and used from the Federal Emergency 
Management Agency or any other Federal, State (including State agencies 
or political subdivisions), or other entity or individual providing 
information regarding, for example, flood susceptibility for the land, 
soil surveys, aerial photographs, or flood plain data or other relevant 
information.



Sec. Sec. 701.6-701.9  [Reserved]



Sec. 701.10  Qualifying minimum cost of restoration.

    (a) To qualify for assistance under Sec. 701.3(a), the eligible 
damage must be so costly that Federal assistance is or will be required 
to return the land to productive agricultural use or to provide 
emergency water for livestock.
    (b) The Deputy Administrator shall establish the minimum qualifying 
cost of restoration. Each affected State may be allowed to establish a 
higher minimum qualifying cost of restoration.
    (c) A producer may request a waiver of the qualifying minimum cost 
of restoration. The waiver request shall document how failure to grant 
the waiver will result in environmental damage or hardship to the 
producer and how the waiver will accomplish the goals of the program.

[69 FR 10302, Mar. 4, 2004; 69 FR 22377, Apr. 26, 2004]



Sec. 701.11  Prohibition on duplicate payments.

    (a) Duplicate payments. Participants are not eligible to receive 
funding under the ECP for land on which the participant has or will 
receive funding under:
    (1) The Wetland Reserve Program (WRP) provided for in 7 CFR part 
1467;
    (2) The Emergency Wetland Reserve Program (EWRP) provided for in 7 
CFR part 623;
    (3) The Emergency Watershed Protection Program (EWP), provided for 
in 7 CFR part 624, for the same or similar expenses.
    (4) Any other program that covers the same or similar expenses so as 
to create duplicate payments, or, in effect, a higher rate of cost share 
than is allowed under this part.
    (b) Refund. Participants who receive any duplicate funds, payments, 
or benefits shall refund any ECP payments received.

[69 FR 10302, Mar. 4, 2004, as amended at 71 FR 30265, May 26, 2006]



Sec. 701.12  Eligible ECP practices.

    (a) Cost-share assistance may be offered for ECP practices to 
replace or restore farmland, fences, or conservation structures to a 
condition similar to that existing before the natural disaster. No 
relief under this part shall be allowed to address conservation problems 
existing before the disaster.
    (b) The practice or practices made available when the ECP is 
implemented shall be only those practices authorized by FSA for which 
cost-share assistance is essential to permit accomplishment of the 
program goals.
    (c) Cost-share assistance may be provided for permanent vegetative 
cover, including establishment of the cover where needed, only in 
conjunction with eligible structures or installations where cover is 
needed to prevent erosion and/or siltation or to accomplish some other 
ECP purpose.

[[Page 11]]

    (d) Practice specifications shall represent the minimum levels of 
performance needed to address the ECP need.



Sec. 701.13  Submitting requests.

    (a) Subject to the availability of funds, the Deputy Administrator 
shall provide for an enrollment period for submitting ECP cost-share 
requests.
    (b) Requests may be accepted after the announced enrollment period, 
if such acceptance is approved by the Deputy Administrator and is in 
accordance with the purposes of the program.



Sec. 701.14  Onsite inspections.

    An onsite inspection must be made before approval of any request for 
ECP assistance.



Sec. 701.15  Starting practices before cost-share request is submitted; 
non-entitlement to payment; payment subject to the availability of funds.

    (a) Subject to paragraphs (b) and (c) of this section, costs will 
not be shared for practices or components of practices that are started 
before a request for cost share under this part is submitted with the 
applicable county FSA office.
    (b) Costs may be shared for drought and non-drought ECP practices or 
components of practices that are started before a request is submitted 
with the county FSA office, only if:
    (1) Considered and approved on a case-by-case basis in accordance 
with instructions of the Deputy Administrator;
    (2) The disaster that is the basis of a claim for cost-share 
assistance created a situation that required the producer to take 
immediate action to prevent further losses;
    (3) The Deputy Administrator determines that the request for 
assistance was filed within a reasonable amount of time after the start 
of the enrollment period; and
    (4) The practice was started no more than 60 days before the ECP 
designation was approved for the applicable county office.
    (c) Any action taken prior to approval of a claim is taken at the 
producer's own risk.
    (d) An application for relief may be denied for any reason.
    (e) All payments under this part are subject to the availability of 
funds.



Sec. 701.16  Practice approval.

    (a) Requests shall be prioritized before approval based on factors 
deemed appropriate by FSA, which include, but are not limited to:
    (1) Type and degree of damage;
    (2) Type of practices needed to address the problem;
    (3) Availability of funds;
    (4) Availability of technical assistance;
    (5) Environmental concerns;
    (6) Safety factors; or
    (7) Welfare of eligible livestock.
    (b) Requests for cost-share assistance may be approved if:
    (1) Funds are available; and
    (2) The requested practice is determined eligible.



Sec. Sec. 701.17-701-20  [Reserved]



Sec. 701.21  Filing payment application.

    Cost-share assistance is conditioned upon the availability of funds 
and the performance of the practice in compliance with all applicable 
specifications and program regulations.
    (a) Completion of practice. After completion of the approved 
practice, the participant must certify completion and request payment by 
the payment request deadline. FSA will provide the participant with a 
form or another manner to be used to request payment.
    (b) Proof of completion. Participants shall submit to FSA, at the 
local county office, the information needed to establish the extent of 
the performance of approved practices and compliance with applicable 
program provisions.
    (c) Payment request deadline. The time limits for submission of 
information shall be determined by the Deputy Administrator. The payment 
request deadline for each ECP practice will be provided in the agreement 
after the application is approved. Time limits may be extended where 
failure to submit required information within the applicable time limits 
is due to reasons beyond the control of the participant.

[[Page 12]]



Sec. 701.22  Eligibility to file for cost-share assistance.

    Any eligible participant, as defined in this part, who paid part of 
the cost of an approved practice may file an application for cost-share 
payment.



Sec. 701.23  Eligible costs.

    (a) Cost-share assistance may be authorized for all reasonable costs 
incurred in the completion of the practice, up to the maximums provided 
in Sec. Sec. 701.26 and 701.27.
    (b) Eligible costs shall be limited as follows:
    (1) Costs for use of personal equipment shall be limited to those 
incurred beyond the normal operation of the farm or ranch.
    (2) Costs for personal labor shall be limited to personal labor not 
normally required in the operation of the farm or ranch.
    (3) Costs for the use of personal equipment and labor must be less 
than that charged for such equipment and labor by commercial contractors 
regularly employed in such areas.
    (4) Costs shall not exceed those needed to achieve the minimum 
performance necessary to resolve the problem being corrected by the 
practice. Any costs above those levels shall not be considered to be 
eligible costs for purposes of calculations made under this part.
    (c) Costs shall not exceed the practice specifications in Sec. 
701.12(d) for cost-share calculations.
    (d) The gross amount on which the cost-share eligibility may be 
computed will not include any costs that were reimbursed by a third 
party including, but not limited to, an insurance indemnity payment.
    (e) Total cost-share payments from all sources shall not exceed the 
total of eligible costs of the practice to the applicant.



Sec. 701.24  Dividing cost-share among more than one participant.

    (a) For qualifying cost-share assistance under this part, the cost 
shall be credited to the participant who personally performed the 
practice or who paid to have it performed by a third party. If a payment 
or credit was made by one participant to another potential participant, 
paragraph (c) of this section shall apply.
    (b) If more than one participant contributed to the performance of 
the practice, the cost-share assistance for the practice shall be 
divided among those eligible participants in the proportion they 
contributed to the performance of the practice. FSA may determine what 
proportion was contributed by each participant by considering the value 
of the labor, equipment, or material contributed by each participant and 
any other factors deemed relevant toward performance.
    (c) Allowance by a participant of a credit to another participant 
through adjustment in rent, cash or other consideration, may be 
considered as a cost of a practice to the paying party only if FSA 
determines that such credit is directly related to the practice. An 
applicant who was fully reimbursed shall be considered as not having 
contributed to the practice performance.



Sec. 701.25  Practices carried out with aid from ineligible persons.

    Any assistance provided by someone other than the eligible 
participant, including assistance from a State or Federal agency, shall 
be deducted from the participant's total costs incurred for the practice 
for the purpose of computing ECP cost shares. If unusual conditions 
exist, the Deputy Administrator may waive deduction of such 
contributions upon a request from the State committee and demonstration 
of the need for such a waiver.



Sec. 701.26  Maximum cost-share percentage.

    (a) In addition to other restrictions that may be applied by FSA, an 
ECP participant shall not receive more than 75 percent of the lesser of 
the participant's total actual cost or of the total allowable costs, as 
determined by this part, to perform the practice.
    (b) However, notwithstanding paragraph (a) of this section, a 
qualified limited resource producer that participates in the ECP may 
receive no more than 90 percent of the participant's actual cost to 
perform the practice or 90 percent of the total allowable costs for the 
practice as determined under this part.

[[Page 13]]

    (c) In addition to other limitations that apply, in no case shall 
the ECP payment exceed 50 percent of what the Deputy Administrator has 
determined is the agricultural value of the affected land.



Sec. 701.27  Maximum ECP payments per person.

    A person, as defined in part 1400 of this title, is limited to a 
maximum cost-share of $200,000 per person, per disaster.



Sec. Sec. 701.28-701.30  [Reserved]



Sec. 701.31  Maintenance and proper use of practices.

    (a) Each participant receiving cost-share assistance is responsible 
for the required maintenance and proper use of the practice. Some 
practices have an established life span or minimum period of time during 
which they are expected to function as a conservation practice with 
proper maintenance. Cost-share assistance shall not be authorized for 
normal upkeep or maintenance of any practice.
    (b) If a practice is not properly maintained for the established 
life span, the participant may be required to refund all or part of 
cost-share assistance received. The Deputy Administrator will determine 
what constitutes failure to maintain a practice and the amount that must 
be refunded.



Sec. 701.32  Failure to comply with program provisions.

    Costs may be shared for performance actually rendered even though 
the minimum requirements otherwise established for a practice have not 
been satisfied if a reasonable effort was made to satisfy the minimum 
requirements and if the practice, as performed, will adequately address 
the need for the practice.



Sec. 701.33  Death, incompetency, or disappearance.

    In case of death, incompetency, or disappearance of any participant, 
any cost-share payment due shall be paid to the successor, as determined 
in accordance with part 707 of this chapter.



Sec. 701.34  Appeals.

    Part 11 of this title and part 780 of this chapter apply to 
determinations made under this part.



Sec. 701.35  Compliance with regulatory measures.

    Participants who perform practices shall be responsible for 
obtaining the authorities, permits, rights, easements, or other 
approvals necessary to the performance and maintenance of the practices 
according to applicable laws and regulations. The ECP participant shall 
be wholly responsible for any actions taken with respect to the project 
and shall, in addition, be responsible for returning and refunding any 
ECP cost shares made, where the purpose of the project cannot be 
accomplished because of the applicants' lack of clearances or other 
problems.



Sec. 701.36  Schemes and devices and claims avoidances.

    (a) If FSA determines that a participant has taken any action 
designed to defeat, or has the effect of defeating, the purposes of this 
program, the participant shall be required to refund all or part of any 
of the program payments otherwise due or paid that participant or 
related person for that particular disaster. These actions include, but 
are not limited to, failure to properly maintain or deliberately 
destroying a practice and providing false or misleading information 
related to practices, costs, or arrangements between entities or 
individuals that would have an effect on ``person'' determinations made 
under this part.
    (b) All or any part of cost-share assistance that otherwise would be 
due any participant may be withheld, or required to be refunded, if the 
participant has adopted, or participated in, any scheme or device 
designed to evade the maximum cost-share limitation that applies to the 
ECP or to evade any other requirement or provision of the program or 
this part.
    (c) If FSA determines that a participant has employed any scheme or 
device to deprive any other person of cost-share assistance, or engaged 
in any actions to receive payments under this part that also were 
designed to avoid claims of the United States or its

[[Page 14]]

instrumentalities or agents against that party, related parties, or 
third parties, the participant shall refund all or part of any of those 
program payments paid to that participant for the project.
    (d) For purposes of this section, a scheme or device can include, 
but is not limited to, instances of coercion, fraud, or 
misrepresentation regarding the claim for ECP assistance and the facts 
and circumstances surrounding such claim.
    (e) A participant who has knowingly supplied false information or 
filed a false claim shall be ineligible for cost-share assistance 
related to the disaster for which the false information was filed, or 
for any period of time FSA deems appropriate. False information or a 
false claim includes, but is not limited to, a request for payment for a 
practice not carried out, a false billing, or a billing for practices 
that do not meet required specifications.



Sec. 701.37  Loss of control of the property during the practice life span.

    In the event of voluntary or involuntary loss of control of the land 
by the ECP cost-share recipient during the practice life-span, if the 
person acquiring control elects not to become a successor to the ECP 
agreement and the practice is not maintained, each participant who 
received cost-share assistance for the practice may be jointly and 
severally liable for refunding any ECP cost-share assistance related to 
that practice. The practice life span, for purposes of this section, 
includes any maintenance period that is essential to its success.



Sec. Sec. 701.38-701.40  [Reserved]



Sec. 701.41  Cost-share assistance not subject to claims.

    Any cost-share assistance or portion thereof due any participant 
under this part shall be allowed without regard to questions of title 
under State law, and without regard to any claim or lien against any 
crop or property, or proceeds thereof, except liens and other claims of 
the United States or its instrumentalities. The regulations governing 
offsets and withholdings at parts 792 and 1403 of this title shall be 
applicable to this program and the provisions most favorable to a 
collection of the debt shall control.



Sec. 701.42  Assignments.

    Participants may assign ECP cost-share assistance payments, in whole 
or in part, according to part 1404 of this title.



Sec. 701.43  Information collection requirements.

    Information collection requirements contained in this part have been 
approved by the Office of Management and Budget under the provisions at 
44 U.S.C. Chapter 35 and have been assigned OMB Number 0560-0082.



Sec. 701.44  Agricultural Conservation Program (ACP) contracts.

    Contracts for ACP that are, or were, administered under this part or 
similar contracts executed in connection with the Interim Environmental 
Quality Incentives Program, shall, unless the Deputy Administrator 
determines otherwise, be administered under, and be subject to, the 
regulations for ACP contracts and the ACP program that were contained in 
the 7 CFR, parts 700 to 899, edition revised as of January 1, 1998, and 
under the terms of the agreements that were entered into with 
participants.



Sec. 701.45  Forestry Incentives Program (FIP) contracts.

    The regulations governing the FIP as of July 31, 2002, and contained 
in the 7 CFR, parts 700 to 899, edition revised as of January 1, 2002, 
shall continue to apply to FIP contracts in effect as of that date, 
except as provided in accord with a delegation of the administration of 
that program and such delegation and actions taken thereunder shall 
apply to any other FIP matters as may be at issue or in dispute.



Sec. 701.50  2005 hurricanes.

    In addition benefits elsewhere allowed by this part, claims related 
to calendar year 2005 hurricane losses may be allowed to the extent 
provided for in Sec. Sec. 701.50 through 701.57. Such claims under 
those sections will be limited to losses in counties that were

[[Page 15]]

declared disaster counties by the President or the Secretary because of 
2005 hurricanes and to losses to oyster reefs. Claims under Sec. Sec. 
701.51 through 701.57 shall be subject to all normal ECP limitations and 
provisions except as explicitly provided in those sections.

[71 FR 30265, May 26, 2006]



Sec. 701.51  Definitions.

    The following definitions apply to Sec. Sec. 701.52 through 701.57:
    Above-ground irrigation facilities means irrigation pipes, 
sprinklers, pumps, emitters, and any other integral part of the above 
ground irrigation system.
    Barn means a structure used for the housing of animals or farm 
equipment.
    Commercial forest land means forest land with trees intended to be 
harvested for commercial purposes that has a productivity potential 
greater than or equal to 20 cubic feet per year of merchantable timber.
    Date of loss means the date the hurricane damage occurred in 
calendar year 2005.
    Eligible county means any county that was declared a disaster county 
by the President or the Secretary because of a calendar year 2005 
hurricane, that otherwise meets the eligibility requirements of this 
part.
    Forest management plan means a plan of action and direction on 
forest lands to achieve a set of results usually specified as goals or 
objectives consistent with program policies prepared or approved by a 
natural resource professional, such as a State forestry agency 
representative.
    Poultry house means a building used to house live poultry for the 
purpose of commercial food production.
    Private non-industrial forest land means rural commercial forest 
lands with existing tree cover, or which are suitable for growing trees, 
that are owned by a private non-industrial forest landowner as defined 
in this section.
    Private non-industrial forest landowner means, for purposes of the 
ECP for forestry, an individual, group, association, corporation, Indian 
tribe, or other legal private entity owning non-industrial private 
forest land or who receives concurrence from the landowner for making 
the claim in lieu of the owner, and for practice implementation and who 
holds a lease on the land for a minimum of 10 years. Owners or lessees 
principally engaged in the primary processing of raw wood products are 
excluded from this definition. Owners of land leased to lessees who 
would be excluded under the previous sentence are also excluded.
    Shade house means a metal or wood structure covered by a material 
used for shade purposes.

[71 FR 30265, May 26, 2006]



Sec. 701.52  Availability of funding.

    Payments under Sec. Sec. 701.53 through 701.57 are subject to the 
availability of funds under Public Law 109-149.

[71 FR 30265, May 26, 2006]



Sec. 701.53  Debris removal and water for livestock.

    Subject to the other eligibility provisions of this part, an ECP 
participant addressing damage in an eligible county from hurricanes 
during calendar year 2005 may be allowed up to 90 percent of the 
participant's actual cost or of the total allowable cost for cleaning up 
structures such as barns, shade houses and above-ground irrigation 
facilities, for removing poultry house debris, including carcasses, and 
for providing water for livestock.

[71 FR 30265, May 26, 2006]



Sec. 701.54  Oysters.

    (a) Notwithstanding Sec. 701.5(b), but otherwise subject to the 
other eligibility provisions of this part except as provided explicitly 
in this section, assistance may be made available under this section for 
the eligible cost of refurbishing public or private oyster reefs damaged 
in calendar year 2005 by a 2005 hurricane. Oyster bed refurbishing 
consists of removing mud from public and private oyster beds, staking 
out the leased areas, reestablishing the oyster beds using crushed 
limestone, recycled oyster shells, or other available and suitable 
approved cultch materials, reseeding the oyster beds, and related 
actions approved by FSA.
    (b) Notwithstanding Sec. 701.26, an ECP participant shall not 
receive more than 90 percent of the participant's actual

[[Page 16]]

cost or of the total allowable cost described in paragraph (a) of this 
section.
    (c) The provisions of Sec. 701.26(c) limiting ECP payments to 50 
percent of the agricultural value of the land do not apply to oyster bed 
rehabilitation and refurbishing.

[71 FR 30265, May 26, 2006]



Sec. 701.55  Nursery.

    (a) Subject to the other eligibility provisions of this part except 
as provided explicitly in this section, assistance may be made available 
in an eligible county under this section for the cost of removing 
nursery debris such as nursery structures, shade houses, and above 
ground irrigation facilities, where such debris was created in calendar 
year 2005 by a 2005 hurricane.
    (b) Notwithstanding Sec. 701.26, an otherwise eligible ECP 
participant may be allowed up to 90 percent of the participant's actual 
cost or of the total allowable cost for losses described in paragraph 
(a) of this section.

[71 FR 30265, May 26, 2006]



Sec. 701.56  Poultry.

    (a) Subject to the other eligibility provisions of this part except 
as provided explicitly in this section, assistance may be allowed under 
this section for uninsured losses in calendar year 2005 to a poultry 
house in an eligible county due to a 2005 hurricane.
    (b) Claimants under this section may be allowed an amount up to the 
lesser of:
    (1) The lesser of 50 percent of the participant's actual or the 
total allowable cost of the reconstruction or repair of a poultry house, 
or
    (2) $50,000 per poultry house.
    (c) The total amount of assistance provided under this section and 
any indemnities for losses to a poultry house paid to a poultry grower, 
may not exceed 90 percent of the total costs associated with the 
reconstruction or repair of a poultry house.
    (d) Poultry growers must provide information on insurance payments 
on their poultry houses. Copies of contracts between growers and poultry 
integrators may be required.
    (e) Assistance under this section is limited to amounts necessary 
for reconstruction and/or repair of a poultry house to the same size as 
before the hurricane.
    (f) Assistance is limited to poultry houses used to house poultry 
for commercial enterprises. A commercial poultry enterprise is one with 
a dedicated structure for poultry and a number of poultry that exceeds 
actual non-commercial uses of poultry and their products at all times, 
and from which poultry or related products are actually, and routinely, 
sold in commercial quantities for food, fiber, or eggs. Unless otherwise 
approved by FSA, a commercial quantity is a quantity per week that would 
normally exceed $100 in sales.
    (g) Poultry houses with respect to which claims are made under this 
section must be reconstructed or repaired to meet current building 
standards.

[71 FR 30265, May 26, 2006]



Sec. 701.57  Private non-industrial forest land.

    (a) Subject to the other eligibility provisions of this part except 
as provided explicitly in this section, assistance made available under 
this section with respect to private, non-industrial forest land in an 
eligible county for costs related to reforestations, rehabilitation, and 
related measures undertaken because of losses in calendar year 2005 
caused by a 2005 hurricane. To be eligible, a non-industrial private 
forest landowner must have suffered a loss of, or damage to, at least 35 
percent of forest acres on commercial forest land of the forest 
landowner in a designated disaster county due to a 2005 hurricane or 
related condition. The 35 percent loss shall be determined based on the 
value of the land before and after the hurricane event.
    (b) During the 5-year period beginning on the date of the loss, the 
eligible private non-industrial forest landowner must:
    (1) Reforest the eligible damaged forest acres in accordance with a 
forest management plan approved by FSA that is appropriate for the 
forest type where the forest management plan is developed by a person 
with appropriate forestry credentials, as determined by the Deputy 
Administrator;

[[Page 17]]

    (2) Use the best management practices included in the forest 
management plan; and
    (3) Exercise good stewardship on the forest land of the landowner 
while maintaining the land in a forested state.
    (c) Notwithstanding Sec. 701.26, an ECP participant shall not 
receive under this section more than 75 percent of the participant's 
actual cost or of the total allowable cost of reforestation, 
rehabilitation, and related measures.
    (d) Payments under this section shall not exceed a maximum of $150 
per acre for any acre.
    (e) Requests will be prioritized based upon planting tree species 
best suited to the site as stated in the forest management plan.

[71 FR 30265, May 26, 2006]



PART 707_PAYMENTS DUE PERSONS WHO HAVE DIED, DISAPPEARED, OR HAVE BEEN 
DECLARED INCOMPETENT--Table of Contents




Sec.
707.1 Applicability.
707.2 Definitions.
707.3 Death.
707.4 Disappearance.
707.5 Incompetency.
707.6 Death, disappearance, or incompetency of one eligible to apply for 
          payment pursuant to the regulations in this part.
707.7 Form of application.

    Authority: 54 Stat. 728, as amended, sec. 121, 70 Stat. 197, sec. 
375, 52 Stat. 66, as amended, sec. 124(i), 75 Stat. 300, sec. 307(h), 76 
Stat. 617, sec. 318, 76 Stat. 622, sec. 324(2), 76 Stat. 630, sec. 704, 
68 Stat. 911, secs. 4, 8(b), 49 Stat. 164, 1149, as amended, sec. 
101(4), 76 Stat. 606, sec. 3, 77 Stat. 45, sec. 4, 62 Stat. 1070; 5 
U.S.C. 301, 7 U.S.C. 1334 note, 1339, 1375, 1379j, 1385, 1783, 1809; 16 
U.S.C. 590d, 590h(b), 590(e), 590p(h), 15 U.S.C. 714b(d)(j)(k).

    Source: 30 FR 6246, May 5, 1965, unless otherwise noted.



Sec. 707.1  Applicability.

    This part applies to all programs in title 7 of the Code of Federal 
Regulations which are administered by the Farm Service Agency under 
which payments are made to eligible program participants. This part also 
applies to all other programs to which this part is applicable by the 
individual program regulations.



Sec. 707.2  Definitions.

    ``Person'' when relating to one who dies, disappears, or becomes 
incompetent, prior to receiving payment, means a person who has earned a 
payment in whole or in part pursuant to any of the programs to which 
this part is applicable. ``Children'' shall include legally adopted 
children who shall be entitled to share in any payment in the same 
manner and to the same extent as legitimate children of natural parents. 
``Brother'' or ``sister'', when relating to one who, pursuant to the 
regulations in this part, is eligible to apply for the payment which is 
due a person who dies, disappears, or becomes incompetent prior to the 
receipt of such payment, shall include brothers and sisters of the half 
blood who shall be considered the same as brothers and sisters of the 
whole blood. ``Payment'' means a payment by draft, check or certificate 
pursuant to any of the Programs to which this part is applicable. 
Payments shall not be considered received for the purposes of this part 
until such draft, check or certificate has been negotiated or used.



Sec. 707.3  Death.

    (a) Where any person who is otherwise eligible to receive a payment 
dies before the payment is received, payment may be made upon proper 
application therefor, without regard to claims of creditors other than 
the United States, in accordance with the following order of precedence:
    (1) To the administrator or executor of the deceased person's 
estate.
    (2) To the surviving spouse, if there is no administrator or 
executor and none is expected to be appointed, or if an administrator or 
executor was appointed but the administration of the estate is closed 
(i) prior to application by the administrator or executor for such 
payment or (ii) prior to the time when a check, draft, or certificate 
issued for such payment to the administrator or executor is negotiated 
or used.
    (3) If there is no surviving spouse, to the sons and daughters in 
equal shares. Children of a deceased son or daughter of a deceased 
person shall be entitled

[[Page 18]]

to their parent's share of the payment, share and share alike. If there 
are no surviving direct descendants of a deceased son or daughter of 
such deceased person, the share of the payment which otherwise would 
have been made to such son or daughter shall be divided equally among 
the surviving sons and daughters of such deceased person and the estates 
of any deceased sons or daughters where there are surviving direct 
descendants.
    (4) If there is no surviving spouse and no direct descendant, 
payment shall be made to the father and mother of the deceased person in 
equal shares, or the whole thereof to the surviving father or mother.
    (5) If there is no surviving spouse, no direct descendant, and no 
surviving parent, payment shall be made to the brothers and sisters of 
the deceased person in equal shares. Children of a deceased brother or 
sister shall be entitled to their parent's share of the payment, share 
and share alike. If there are no surviving direct descendants of the 
deceased brother or sister of such deceased person, the share of the 
payment which otherwise would have been made to such brother or sister 
shall be divided equally among the surviving brothers and sisters of 
such deceased person and the estates of any deceased brothers or sisters 
where there are surviving direct descendants.
    (6) If there is no surviving spouse, direct descendant, parent, or 
brothers or sisters or their descendants, the payment shall be made to 
the heirs-at-law in accordance with the law of the State of domicile of 
the deceased person.
    (b) If any person who is entitled to payment under the above order 
of precedence is a minor, payment of his share shall be made to his 
legal guardian, but if no legal guardian has been appointed payment 
shall be made to his natural guardian or custodian for his benefit, 
unless the minor's share of the payment exceeds $1,000, in which event 
payment shall be made only to his legal guardian.
    (c) Any payment which the deceased person could have received may be 
made jointly to the persons found to be entitled to such payment or 
shares thereof under this section or, pursuant to instructions issued by 
the Farm Service Agency, a separate payment may be issued to each person 
entitled to share in such payment.



Sec. 707.4  Disappearance.

    (a) In case any person otherwise eligible to receive payment 
disappears before receiving the payment, such payment may be made upon 
proper application therefor, without regard to claims of creditors other 
than the United States, to one of the following in the order mentioned:
    (1) The conservator or liquidator of his estate, if one be duly 
appointed.
    (2) The spouse.
    (3) An adult son or daughter or grandchild for the benefit of his 
estate.
    (4) The mother or father for the benefit of his estate.
    (5) An adult brother or sister for the benefit of his estate.
    (6) Such person as may be authorized under State law to receive 
payment for the benefit of his estate.
    (b) A person shall be deemed to have disappeared if (1) he has been 
missing for a period of more than 3 months, (2) a diligent search has 
failed to reveal his whereabouts, and (3) such person has not 
communicated during such period with other persons who would be expected 
to have heard from him. Evidence of such disappearance must be presented 
to the county committee in the form of a statement executed by the 
person making the application for payment, setting forth the above 
facts, and must be substantiated by a statement from a disinterested 
person who was well acquainted with the person who has disappeared.



Sec. 707.5  Incompetency.

    (a) Where any person who is otherwise eligible to receive a payment 
is adjudged incompetent by a court of competent jurisdiction before the 
payment is received, payment may be made, upon proper application 
therefor, without regard to claims of creditors other than the United 
States, to the guardian or committee legally appointed for such 
incompetent person. In case no guardian or committee has been appointed, 
payment, if not more than $1,000, may be made without regard to claims 
of creditors other than

[[Page 19]]

the United States, to one of the following in the order mentioned for 
the benefit of the incompetent person:
    (1) The spouse.
    (2) An adult son, daughter, or grandchild.
    (3) The mother or father.
    (4) An adult brother or sister.
    (5) Such person as may be authorized under State law to receive 
payment for him (see standard procedure prescribed for the respective 
region).
    (b) In case payment is more than $1,000, payment may be made only to 
such person as may be authorized under State law to receive payment for 
the incompetent.



Sec. 707.6  Death, disappearance, or incompetency of one eligible to 
apply for payment pursuant to the regulations in this part.

    In case any person entitled to apply for a payment pursuant to the 
provisions of Sec. 707.3, Sec. 707.4, Sec. 707.5, or this section, 
dies, disappears, or is adjudged incompetent, as the case may be, after 
he has applied for such payment but before the payment is received, 
payment may be made upon proper application therefor, without regard to 
claims of creditors other than the United States, to the person next 
entitled thereto in accordance with the order of precedence set forth in 
Sec. 707.3, Sec. 707.4, or Sec. 707.5, as the case may be.



Sec. 707.7  Form of application.

    Persons desiring to claim payment in accordance with this part 707 
may do so on Form FSA-325, ``Application for Payment of Amounts Due 
Persons Who Have Died, Disappeared, or Have Been Declared Incompetent''. 
If the person who died, disappeared, or was declared incompetent did not 
apply for payment by filing the applicable program application for 
payment form, such program application for payment must also be filed in 
accordance with applicable regulations. If the payment is made under the 
Naval Stores Conservation Program, Part II of the Form FSA-325 shall be 
executed by the local District Supervisor of the U.S. Forest Service. In 
connection with applications for payment under all other programs 
itemized in Sec. 707.1, Form FSA-325, and program applications for 
payments where required, shall be filed with the FSA county office where 
the person who earned the payment would have been required to file his 
application.



PART 708_RECORD RETENTION REQUIREMENTS_ALL PROGRAMS--Table of Contents




    Authority: Sec. 4, 49 Stat. 164, secs. 7-17, 49 Stat. 1148, as 
amended; 16 U.S.C. 590d, 590g-590q.



Sec. 708.1  Record retention period.

    For the purposes of the programs in this chapter, no receipt, 
invoice, or other record required to be retained by any agricultural 
producer as evidence tending to show performance of a practice under any 
such program needs to be retained by such producer more than two years 
following the close of the program year of the program.

[25 FR 105, Jan. 7, 1960. Redesignated at 26 FR 5788, June 29, 1961]

[[Page 20]]



 SUBCHAPTER B_FARM MARKETING QUOTAS, ACREAGE ALLOTMENTS, AND PRODUCTION 
                               ADJUSTMENT





PART 714_REFUNDS OF PENALTIES ERRONEOUSLY, ILLEGALLY, OR WRONGFULLY 
COLLECTED--Table of Contents




Sec.
714.35 Basis, purpose, and applicability.
714.36 Definitions.
714.37 Instructions and forms.
714.38 Who may claim refund.
714.39 Manner of filing.
714.40 Time of filing.
714.41 Statement of claim.
714.42 Designation of trustee.
714.43 Recommendation by county committee.
714.44 Recommendation by State committee.
714.45 Approval by Deputy Administrator.
714.46 Certification for payment.

    Authority: Secs. 372, 375, 52 Stat. 65, as amended, 66, as amended; 
7 U.S.C. 1372, 1375.

    Source: 35 FR 12098, July 29, 1970, unless otherwise noted.



Sec. 714.35  Basis, purpose, and applicability.

    (a) Basis and purpose. The regulations set forth in this part are 
issued pursuant to the Agricultural Adjustment Act of 1938, as amended, 
for the purpose of prescribing the provisions governing refunds of 
marketing quota penalties erroneously, illegally, or wrongfully 
collected with respect to all commodities subject to marketing quotas 
under the Act.
    (b) Applicability. This part shall apply to claims submitted for 
refunds of marketing quota penalties erroneously, illegally, or 
wrongfully collected on all commodities subject to marketing quotas 
under the Act. It shall not apply to the refund of penalties which are 
deposited in a special deposit account pursuant to sections 314(b), 
346(b), 356(b), or 359 of the Agricultural Adjustment Act of 1938, as 
amended, or paragraph (3) of Pub. L. 74, 77th Congress, available for 
the refund of penalties initially collected which are subsequently 
adjusted downward by action of the county committee, review committee, 
or appropriate court, until such penalties have been deposited in the 
general fund of the Treasury of the United States after determination 
that no downward adjustment in the amount of penalty is warranted. All 
prior regulations dealing with refunds of penalties which were contained 
in this part are superseded upon the effective date of the regulations 
in this part.



Sec. 714.36  Definitions.

    (a) General terms. In determining the meaning of the provisions of 
this part, unless the context indicates otherwise, words imparting the 
singular include and apply to several persons or things, words imparting 
the plural include the singular, words imparting the masculine gender 
include the feminine as well, and words used in the present tense 
include the future as well as the present. The definitions in part 719 
of this chapter shall apply to this part. The provisions of part 720 of 
this chapter concerning the expiration of time limitations shall apply 
to this part.
    (b) Other terms applicable to this part. The following terms shall 
have the following meanings:
    (1) ``Act'' means the Agricultural Adjustment Act of 1938, and any 
amendments or supplements thereto.
    (2) ``Claim'' means a written request for refund of penalty.
    (3) ``Claimant'' means a person who makes a claim for refund of 
penalty as provided in this part.
    (4) ``County Office'' means the office of the Agricultural 
Stabilization and Conservation County Committee.
    (5) ``Penalty'' means an amount of money collected, including 
setoff, from or on account of any person with respect to any commodity 
to which this part is applicable, which has been covered into the 
general fund of the Treasury of the United States, as provided in 
section 372(b) of the Act.
    (6) ``State office'' means the office of the Agricultural 
Stabilization and Conservation State Committee.



Sec. 714.37  Instructions and forms.

    The Deputy Administrator shall cause to be prepared and issued such

[[Page 21]]

instructions and forms as are necessary for carrying out the regulations 
in the part.



Sec. 714.38  Who may claim refund.

    Claim for refund may be made by:
    (a) Any person who was entitled to share in the price or 
consideration received by the producer with respect to the marketing of 
a commodity from which a deduction was made for the penalty and bore the 
burden of such deduction in whole or in part.
    (b) Any person who was entitled to share in the commodity or the 
proceeds thereof, paid the penalty thereon in whole or in part and has 
not been reimbursed therefor.
    (c) Any person who was entitled to share in the commodity or the 
proceeds thereof and bore the burden of the penalty because he has 
reimbursed the person who paid such penalty.
    (d) Any person who, as buyer, paid the penalty in whole or in part 
in connection with the purchase of a commodity, was not required to 
collect or pay such penalty, did not deduct the amount of such penalty 
from the price paid the producer, and has not been reimbursed therefor.
    (e) Any person who paid the penalty in whole or in part as a surety 
on a bond given to secure the payment of penalties and has not been 
reimbursed therefor.
    (f) Any person who paid the whole or any part of the sum paid as a 
penalty with respect to a commodity included in a transaction which in 
fact was not a marketing of such commodity and has not been reimbursed 
therefor.



Sec. 714.39  Manner of filing.

    Claim for refund shall be filed in the county office on a form 
prescribed by the Deputy Administrator. If more than one person is 
entitled to file a claim, a joint claim may be filed by all such 
persons. If a separate claim is filed by a person who is a party to a 
joint claim, such separate claim shall not be approved until the 
interest of each person involved in the joint claim has been determined.



Sec. 714.40  Time of filing.

    Claim shall be filed within 2 years after the date payment was made 
to the Secretary. The date payment was made shall be deemed to be the 
date such payment was deposited in the general fund of the Treasury as 
shown on the certificate of deposit on which such payment was scheduled.



Sec. 714.41  Statement of claim.

    The claim shall show fully the facts constituting the basis of the 
claim; the name and address of and the amount claimed by every person 
who bore or bears any part or all of the burden of such penalty; and the 
reasons why such penalty is claimed to have been erroneously, illegally, 
or wrongfully collected. It shall be the responsibility of the county 
committee to determine that any person who executes a claim as agent or 
fiduciary is properly authorized to act in such capacity. There should 
be attached to the claim all pertinent documents with respect to the 
claim or duly authenticated copies thereof.



Sec. 714.42  Designation of trustee.

    Where there is more than one claimant and all the claimants desire 
to appoint a trustee to receive and disburse any payment to be made to 
them with respect to the claim, they shall be permitted to appoint a 
trustee. The person designated as trustee shall execute the declaration 
of trust.



Sec. 714.43  Recommendation by county committee.

    Immediately upon receipt of a claim, the date of receipt shall be 
recorded on the face thereof. The county committee shall determine, on 
the basis of all available information, if the data and representations 
on the claim are correct. The county committee shall recommend approval 
or disapproval of the claim, and attach a statement to the claim, signed 
by a member of the committee, giving the reasons for their action. After 
the recommendation of approval or disapproval is made by the county 
committee, the claim shall be promptly sent to the State committee.



Sec. 714.44  Recommendation by State committee.

    A representative of the State committee shall review each claim 
referred by the county committee. If a claim is

[[Page 22]]

sent initially to the State committee, it shall be referred to the 
appropriate county committee for recommendation as provided in Sec. 
714.43 prior to action being taken by the State committee. Any necessary 
investigation shall be made. The State committee shall recommend 
approval or disapproval of the claim, attaching a statement giving the 
reasons for their action, which shall be signed by a representative of 
the State committee. After recommending approval or disapproval, the 
claim shall be promptly sent to the Deputy Administrator.



Sec. 714.45  Approval by Deputy Administrator.

    The Deputy Administrator shall review each claim forwarded to him by 
the State committee to determine whether, (a) the penalty was 
erroneously, illegally, or wrongfully collected, (b) the claimant bore 
the burden of the payment of the penalty, (c) the claim was timely 
filed, and (d) under the applicable law and regulations the claimant is 
entitled to a refund. If a claim is filed initially with the Deputy 
Administrator, he shall obtain the recommendations of the county 
committee and the State committee if he deems such action necessary in 
arriving at a proper determination of the claim. The claimant shall be 
advised in writing of the action taken by the Deputy Administrator. If 
disapproved, the claimant shall be notified with an explanation of the 
reasons for such disapproval.



Sec. 714.46  Certification for payment.

    An officer or employee of the Department of Agriculture authorized 
to certify public vouchers for payment shall, for and on behalf of the 
Secretary of Agriculture, certify to the Secretary of the Treasury of 
the United States for payment all claims for refund which have been 
approved.



PART 718_PROVISIONS APPLICABLE TO MULTIPLE PROGRAMS--Table of Contents




                      Subpart A_General Provisions

Sec.
718.1 Applicability.
718.2 Definitions.
718.3 State committee responsibilities.
718.4 Authority for farm entry and providing information.
718.5 Rule of fractions.
718.6 Controlled substance.
718.7 Furnishing maps.
718.8 Administrative county.
718.9 Signature requirements.
718.10 Time limitations.
718.11 Disqualification due to federal crop insurance fraud.

            Subpart B_Determination of Acreage and Compliance

718.101 Measurements.
718.102 Acreage reports.
718.103 Prevented planted and failed acreage.
718.104 Late-filed and revised acreage reports.
718.105 Tolerances, variances, and adjustments.
718.106 Non-compliance and fraudulent acreage reports.
718.107 Acreages.
718.108 Measuring acreage including skip row acreage
718.109 Deductions.
718.110 Adjustments.
718.111 Notice of measured acreage.
718.112 Redetermination.

    Subpart C_Reconstitution of Farms, Allotments, Quotas, and Bases

718.201 Farm constitution.
718.202 Determining the land constituting a farm.
718.203 County committee action to reconstitute a farm.
718.204 Reconstitution of allotments, quotas, and bases.
718.205 Substantive change in farming operation, and changes in related 
          legal entities.
718.206 Determining farms, tracts, allotments, quotas, and bases when 
          reconstitution is made by division.
718.207 Determining allotments, quotas, and bases when reconstitution is 
          made by combination.

              Subpart D_Equitable Relief From Ineligibility

718.301 Applicability.
718.302 Definitions and abbreviations.
718.303 Reliance on incorrect actions or information.
718.304 Failure to fully comply.
718.305 Forms of relief.
718.306 Finality.
718.307 Special relief approval authority for State Executive Directors.

    Authority: 7 U.S.C. 1311 et seq., 1501 et seq., 1921 et seq., 7201 
et seq., 15 U.S.C. 714b.

[[Page 23]]


    Source: 61 FR 37552, July 18, 1996, unless otherwise noted.



                      Subpart A_General Provisions

    Source: 68 FR 16172, Apr. 3, 2003, unless otherwise noted.



Sec. 718.1  Applicability.

    (a) This part is applicable to all programs set forth in chapters 
VII and XIV of this title which are administered by the Farm Service 
Agency (FSA). This rule governs how FSA monitors marketing quotas, 
allotments, base acres and acreage reports. The regulations affected are 
those that establish procedures for measuring allotments and program 
eligible acreage, and determining program compliance.
    (b) The provisions of this part will be administered under the 
general supervision of the Administrator, FSA, and shall be carried out 
in the field by State and county FSA committees (State and county 
committees).
    (c) State and county committees, and representatives and employees 
thereof, do not have authority to modify or waive any regulations in 
this part.
    (d) No provisions or delegation herein to a State or county 
committee shall preclude the Administrator, FSA, 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 and other requirements in cases 
where lateness or failure to meet such other requirements does not 
adversely affect the operation of the program.



Sec. 718.2  Definitions.

    Except as provided in individual parts of chapters VII and XIV of 
this title, the following terms shall be as defined herein:
    Administrative variance (AV) means the amount by which the 
determined acreage of tobacco may exceed the effective allotment and be 
considered in compliance with program regulations.
    Allotment means an acreage for a commodity allocated to a farm in 
accordance with the Agricultural Adjustment Act of 1938, as amended.
    Allotment crop means any tobacco crop for which acreage allotments 
are established pursuant to part 723 of this chapter.
    Barley means barley that follows the standard planting and 
harvesting practice of barley for the area in which the barley is grown.
    Base acres means the quantity of acres established according to part 
1413 of this title.
    CCC means the Commodity Credit Corporation.
    Combination means consolidation of two or more farms or parts of 
farms, having the same operator, into one farm.
    Common ownership unit means a distinguishable parcel of land 
consisting of one or more tracts of land with the same owners, as 
determined by FSA.
    Constitution means the make-up of the farm before any change is made 
because of change in ownership or operation.
    Controlled substances means the term set forth in 21 CFR part 1308.
    Corn means field corn or sterile high-sugar corn that follows the 
standard planting and harvesting practices for corn for the area in 
which the corn is grown. Popcorn, corn nuts, blue corn, sweet corn, and 
corn varieties grown for decoration uses are not corn.
    County means the county or parish of a state. For Alaska, Puerto 
Rico and the Virgin Islands, a county shall be an area designated by the 
State committee with the concurrence of the Deputy Administrator.
    County committee means the FSA county committee.
    Crop reporting date means the latest date the Administrator, FSA 
will allow the farm operator, owner, or their agent to submit a crop 
acreage report in order for the report to be considered timely.
    Cropland. (a) Means land which the county committee determines meets 
any of the following conditions:
    (1) Is currently being tilled for the production of a crop for 
harvest. Land which is seeded by drilling, broadcast or other no-till 
planting practices shall be considered tilled for cropland definition 
purposes;

[[Page 24]]

    (2) Is not currently tilled, but it can be established that such 
land has been tilled in a prior year and is suitable for crop 
production;
    (3) Is currently devoted to a one-row or two-row shelter belt 
planting, orchard, or vineyard;
    (4) Is in terraces that, were cropped in the past, even though they 
are no longer capable of being cropped;
    (5) Is in sod waterways or filter strips planted to a perennial 
cover;
    (6) Is preserved as cropland in accordance with part 1410 of this 
title; or
    (7) Is land that has newly been broken out for purposes of being 
planted to a crop that the producer intends to, and is capable of, 
carrying through to harvest, using tillage and cultural practices that 
are consistent with normal practices in the area; provided further that, 
in the event that such practices are not utilized other than for reasons 
beyond the producer's control, the cropland determination shall be void 
retroactive to the time at which the land was broken out.
    (b) Land classified as cropland shall be removed from such 
classification upon a determination by the county committee that the 
land is:
    (1) No longer used for agricultural production;
    (2) No longer suitable for production of crops;
    (3) Subject to a restrictive easement or contract that prohibits its 
use for the production of crops unless otherwise authorized by the 
regulation of this chapter;
    (4) No longer preserved as cropland in accordance with the 
provisions of part 1410 of this title and does not meet the conditions 
in paragraphs (a)(1) through (a)(6) of this definition; or
    (5) Converted to ponds, tanks or trees other than those trees 
planted in compliance with a Conservation Reserve Program contract 
executed pursuant to part 1410 of this title, or trees that are used in 
one-or two-row shelterbelt plantings, or are part of an orchard or 
vineyard.
    Current year means the year for which allotments, quotas, acreages, 
and bases, or other program determinations are established for that 
program. For controlled substance violations, the current year is the 
year of the actual conviction.
    Deputy Administrator means Deputy Administrator for Farm Programs, 
Farm Service Agency, U.S. Department of Agriculture or their designee.
    Determination means a decision issued by a State, county or area FSA 
committee or its employees that affects a participant's status in a 
program administered by FSA.
    Determined acreage means that acreage established by a 
representative of the Farm Service Agency by use of official acreage, 
digitizing or planimetering areas on the photograph or other 
photographic image, or computations from scaled dimensions or ground 
measurements.
    Direct and counter-cyclical program (DCP) cropland means land that 
currently meets the definition of cropland, land that was devoted to 
cropland at the time it was enrolled in a production flexibility 
contract in accordance with part 1413 of this title and continues to be 
used for agricultural purposes, or land that met the definition of 
cropland on or after April, 4, 1996, and continues to be used for 
agricultural purposes and not for nonagricultural commercial or 
industrial use.
    Division means the division of a farm into two or more farms or 
parts of farms.
    Entity means a corporation, joint stock company, association limited 
partnership, irrevocable trust, estate, charitable organization, or 
other similar organization including any such organization participating 
in the farming operation as a partner in a general partnership, a 
participant in a joint venture, a grantor of a revocable trust, or as a 
participant in a similar organization.
    Extra Long Staple (ELS) Cotton means cotton that follows the 
standard planting and harvesting practices of the area in which the 
cotton is grown, and meets all of the following conditions:
    (1) American-Pima, Sea Island, Sealand, all other varieties of the 
Barbandense species of cotton and any hybrid thereof, and any other 
variety of cotton in which 1 or more of these varieties is predominant; 
and,

[[Page 25]]

    (2) The acreage is grown in a county designated as an ELS county by 
the Secretary; and,
    (3) The production from the acreage is ginned on a roller-type gin.
    Family member means an individual to whom a person is related as 
spouse, lineal ancestor, lineal descendant, or sibling, including:
    (1) Great grandparent;
    (2) Grandparent;
    (3) Parent;
    (4) Child, including a legally adopted child;
    (5) Grandchild
    (6) Great grandchildren;
    (7) Sibling of the family member in the farming operation; and
    (8) Spouse of a person listed in paragraphs (1) through (7) of this 
definition.
    Farm means a tract, or tracts, of land that are considered to be a 
separate operation under the terms of this part provided further that 
where multiple tracts are to be treated as one farm, the tracts must 
have the same operator and must also have the same owner except that 
tracts of land having different owners may be combined if all owners 
agree to the treatment of the multiple tracts as one farm for these 
purposes.
    Farm inspection means an inspection by an authorized FSA 
representative using aerial or ground compliance to determine the extent 
of producer adherence to program requirements.
    Farm number means a number assigned to a farm by the county 
committee for the purpose of identification.
    Farmland means the sum of the DCP cropland, forest, acreage planted 
to an eligible crop acreage as specified in 1437.3 of this title and 
other land on the farm.
    Field means a part of a farm which is separated from the balance of 
the farm by permanent boundaries such as fences, permanent waterways, 
woodlands, and croplines in cases where farming practices make it 
probable that such cropline is not subject to change, or other similar 
features.
    GIS means Geographic Information System or a system that stores, 
analyzes, and manipulates spatial or geographically referenced data. GIS 
computes distances and acres using stored data and calculations.
    GPS means Global Positioning System or a positioning system using 
satellites that continuously transmit coded information. The information 
transmitted from the satellites is interpreted by GPS receivers to 
precisely identify locations on earth by measuring distance from the 
satellites.
    Grain sorghum means grain sorghum of a feed grain or dual purpose 
variety (including any cross that, at all stages of growth, having 
characteristics of a feed grain or dual purpose variety) that follows 
the standard planting and harvesting practice for grain sorghum for the 
area in which the grain sorghum was planted. Sweet sorghum is not 
considered a grain sorghum.
    Ground measurement means the distance between 2 points on the 
ground, obtained by actual use of a chain tape, GPS with a minimum 
accuracy level as determined by the Deputy Administrator, or other 
measuring device.
    Joint operation means a general partnership, joint venture, or other 
similar business organization.
    Landlord means one who rents or leases farmland to another.
    Measurement service means a measurement of acreage or farm-stored 
commodities performed by a representative of FSA and paid for by the 
producer requesting the measurement.
    Measurement service after planting means determining a crop or 
designated acreage after planting but before the farm operator files a 
report of acreage for the crop.
    Measurement service guarantee means a guarantee provided when a 
producer requests and pays for an authorized FSA representative to 
measure acreage for FSA and CCC program participation unless the 
producer takes action to adjust the measured acreage. If the producer 
has taken no such action, and the measured acreage is later discovered 
to be incorrect, the acreage determined pursuant to the measurement 
service will be used for program purposes for that program year.
    Minor child means an individual who is under 18 years of age. State 
court proceedings conferring majority on an individual under 18 years of 
age will

[[Page 26]]

not change such an individual's status as a minor.
    Nonagricultural commercial or industrial use means land that is no 
longer suitable for producing annual or perennial crops, including 
conserving uses, or forestry products.
    Normal planting period means that period during which the crop is 
normally planted in the county, or area within the county, with the 
expectation of producing a normal crop.
    Normal row width means the normal distance between rows of the crop 
in the field, but not less than 30 inches for all crops.
    Oats means oats that follows the standard planting and harvesting 
practice of oats for the area in which the oats are grown.
    Operator means an individual, entity, or joint operation who is 
determined by the FSA county committee to be in control of the farming 
operations on the farm.
    Owner means one who has legal ownership of farmland, including:
    (1) Any agency of the Federal Government, however, such agency shall 
not be eligible to receive any payment pursuant to such contract;
    (2) One who is buying farmland under a contract for deed;
    (3) One who has a life-estate in the property; or
    (4) For purposes of enrolling a farm in a program authorized by 
chapters VII and XIV of this title:
    (i) One who has purchased a farm in a foreclosure proceeding; and
    (A) The redemption period has not passed; and
    (B) The original owner has not redeemed the property.
    (ii) One who meets the provisions of paragraph (d)(1)(i) of this 
definition shall be entitled to receive benefits in accordance with an 
agency program only to the extent the owner complies with all program 
requirements.
    (5) One who is an heir to property but cannot provide legal 
documentation to confirm ownership of the property, if such heir 
certifies to the ownership of the property and the certification is 
considered acceptable, as determined by the Deputy Administrator. Upon a 
false or inaccurate certification the Deputy Administrator may impose 
liability on the certifying party for additional cost that results--
however such a certification may be taken by the Deputy Administrator as 
a bar to other claims where there has been a failure of other persons 
claiming an interest in the property to act promptly to protect or 
declare their interest or where the current public records do not 
accurately set out the current ownership of the farm.
    Partial reconstitution means a reconstitution that is made effective 
in the current year for some crops, but is not made effective in the 
current year for other crops. This results in the same farm having two 
or more farm numbers in one crop year.
    Participant means one who participates in, or receives payments or 
benefits in accordance with any of the programs administered by FSA.
    Pasture means land that is used to, or has the potential to, produce 
food for grazing animals.
    Person means an individual, or an individual participating as a 
member of a joint operation or similar operation, a corporation, joint 
stock company, association, limited stock company, limited partnership, 
irrevocable trust, revocable trust together with the grantor of the 
trust, estate, or charitable organization including any entity 
participating in the farming operation as a partner in a general 
partnership, a participant in a joint venture, a grantor of a revocable 
trust, or a participant in a similar entity, or a State, political 
subdivision or agency thereof. To be considered a separate person for 
the purpose of this part, the individual or other legal entity must:
    (1) Have a separate and distinct interest in the land or the crop 
involved;
    (2) Exercise separate responsibility for such interest; and
    (3) Be responsible for the cost of farming related to such interest 
from a fund or account separate from that of any other individual or 
entity.
    Producer means an owner, operator, landlord, tenant, or 
sharecropper, who shares in the risk of producing a crop and who is 
entitled to share in the crop available for marketing from the farm, or 
would have shared had the crop been produced. A producer includes a 
grower of hybrid seed.

[[Page 27]]

    Quota means the pounds allocated to a farm for a commodity in 
accordance with the Agricultural Adjustment Act of 1938, as amended.
    Random inspection means an examination of a farm by an authorized 
representative of FSA selected as a part of an impartial sample to 
determine the adherence to program requirements.
    Reconstitution means a change in the land constituting a farm as a 
result of combination or division.
    Reported acreage means the acreage reported by the farm operator, 
farm owner, farm producer, or their agent on a Form prescribed by the 
FSA.
    Required inspection means an examination by an authorized 
representative of FSA of a farm specifically selected by application of 
prescribed rules to determine adherence to program requirements or to 
verify the farm operator's, farm owner's, farm producer, or agent's 
report.
    Rice means rice that follows the standard planting and harvesting 
practices of the area excluding sweet, glutinous, or candy rice such as 
Mochi Gomi.
    Secretary means the Secretary of Agriculture of the United States, 
or a designee.
    Sharecropper means one who performs work in connection with the 
production of a crop under the supervision of the operator and who 
receives a share of such crop for its labor.
    Skip-row or strip-crop planting means a cultural practice in which 
strips or rows of the crop are alternated with strips of idle land or 
another crop.
    Staking and referencing means determining an acreage before planting 
by:
    (1) Measuring or computing a delineated area from ground 
measurements and documenting the area measured; and, (2) Staking and 
referencing the area on the ground.
    Standard deduction means an acreage that is excluded from the gross 
acreage in a field because such acreage is considered as being used for 
farm equipment turn-areas. Such acreage is established by application of 
a prescribed percentage of the area planted to the crop in lieu of 
measuring the turn area.
    State means each of the 50 States, the District of Columbia, the 
Commonwealth of Puerto Rico, Guam, the Virgin Islands of the United 
States, American Samoa, the Commonwealth of the Northern Mariana 
Islands, or the Trust Territory of the Pacific Islands.
    Subdivision means a part of a field that is separated from the 
balance of the field by temporary boundary, such as a cropline which 
could be easily moved or will likely disappear.
    Tenant means:
    (1) One who rents land from another in consideration of the payment 
of a specified amount of cash or amount of a commodity; or
    (2) One (other than a sharecropper) who rents land from another 
person in consideration of the payment of a share of the crops or 
proceeds therefrom.
    Tolerance means a prescribed amount within which the reported 
acreage and/or production may differ from the determined acreage and/or 
production and still be considered as correctly reported.
    Tract means a unit of contiguous land under one ownership, which is 
operated as a farm, or part of a farm.
    Tract combination means the combining of two or more tracts if the 
tracts have common ownership and are contiguous.
    Tract division means the dividing of a tract into two or more tracts 
because of a change in ownership or operation.
    Turn-area means the area across the ends of crop rows which is used 
for operating equipment necessary to the production of a row crop (also 
called turn row, headland, or end row).
    Upland cotton means planted and stub cotton that is not considered 
extra long staple cotton, and that follows the standard planting and 
harvesting practices of the area and is produced from other than pure 
strain varieties of the Barbadense species, any hybrid thereof, or any 
other variety of cotton in which one or more of these varieties 
predominate. For program purposes, brown lint cotton is considered 
upland cotton.
    Wheat means wheat for feed or dual purpose variety that follows the 
standard planting and harvesting practice of wheat for the area in which 
the wheat is grown.

[68 FR 16172, Apr. 3, 2003; 69 FR 250, Jan. 5, 2004]

[[Page 28]]



Sec. 718.3  State committee responsibilities.

    (a) The State committee shall, with respect to county committees:
    (1) Take any action required of the county committee, which the 
county committee fails to take in accordance with this part;
    (2) Correct or require the county committee to correct any action 
taken by such committee, which is not in accordance with this part;
    (3) Require the county committee to withhold taking any action which 
is not in accordance with this part;
    (4) Review county office rates for producer services to determine 
equity between counties;
    (5) Determine, based on cost effectiveness, which counties will use 
aerial compliance methods and which counties will use ground measurement 
compliance methods; or
    (6) Adjust the per acre rate for acreage in excess of 25 acres to 
reflect the actual cost involved when performing measurement service 
from aerial slides or digital images.
    (b) The State committee shall submit to the Deputy Administrator 
requests to deviate from deductions prescribed in Sec. 718.108, or the 
error amount or percentage for refunds of redetermination costs as 
prescribed in Sec. 718.111.



Sec. 718.4  Authority for farm entry and providing information.

    (a) This section applies to all farms that have a tobacco allotment 
or quota under part 723 of this chapter and all farms that are currently 
participating in programs administered by FSA.
    (b) A representative of FSA may enter any farm that participates in 
an FSA or CCC program in order to conduct a farm inspection as defined 
in this part. A program participant may request that the FSA 
representative present written authorization for the farm inspection 
before granting access to the farm. If a farm inspection is not allowed 
within 30 days of written authorization:
    (1) All FSA and CCC program benefits for that farm shall be denied;
    (2) The person preventing the farm inspection shall pay all costs 
associated with the farm inspection;
    (3) The entire crop production on the farm will be considered to be 
in excess of the quota established for the farm; and
    (4) For tobacco, the farm operator must furnish proof of disposition 
of:
    (i) All tobacco which is in addition to the production shown on the 
marketing card issued with respect to such farm; and
    (ii) No credit will be given for disposing of excess tobacco other 
than that identified by a marketing card unless disposed of in the 
presence of FSA in accordance with Sec. 718.109 of this part.
    (c) If a program participant refuses to furnish reports or data 
necessary to determine benefits in accordance with paragraph (a) of this 
section, or FSA determines that the report or data was erroneously 
provided through the lack of good faith, all program benefits relating 
to the report or data requested will be denied.



Sec. 718.5  Rule of fractions.

    (a) Fractions shall be rounded after completion of the entire 
associated computation. All mathematical calculations shall be carried 
to two decimal places beyond the number of decimal places required by 
the regulations governing each program. In rounding, fractional digits 
of 49 or less beyond the required number of decimal places shall be 
dropped; if the fractional digits beyond the required number of decimal 
places are 50 or more, the figure at the last required decimal place 
shall be increased by ``1'' as follows:

------------------------------------------------------------------------
          Required decimal                 Computation          Result
------------------------------------------------------------------------
Whole numbers......................  6.49 (or less)........            6
                                     6.50 (or more)........            7
Tenths.............................  7.649 (or less).......          7.6
                                     7.650 (or more).......          7.7
Hundredths.........................  8.8449 (or less)......         8.84
                                     8.8450 (or more)......         8.85
Thousandths........................  9.63449 (or less).....        9.634
                                     9.63450 (or more).....        9.635
0 thousandths......................  10.993149 (or less)...      10.9931
                                     10.993150 (or more)...      10.9932
------------------------------------------------------------------------

    (b) The acreage of each field or subdivision computed for tobacco 
and CCC disaster assistance programs shall be recorded in acres and 
hundredths of an acre, dropping all thousandths of an acre. The acreage 
of each field or subdivision computed for crops, except tobacco, shall 
be recorded in acres and

[[Page 29]]

tenths of an acre, rounding all hundredths of an acre to the nearest 
tenth.



Sec. 718.6  Controlled substance.

    (a) The following terms apply to this section:
    (1) USDA benefit means the issuance of any grant, contract, loan, or 
payment by appropriated funds of the United States.
    (2) Person means an individual.
    (b) Notwithstanding any other provision of law, any person convicted 
under Federal or State law of:
    (1) Planting, cultivating, growing, producing, harvesting, or 
storing a controlled substance in any crop year shall be ineligible for 
any payment made under any Act, with respect to any commodity produced 
during the crop year of conviction and the four succeeding crop years, 
by such person.
    (2) Possession of a controlled substance, or trafficking in a 
controlled substance, shall, in addition to any ineligibility under 
paragraph (b)(1) of this section, be ineligible for any or all USDA 
benefits, to the extent that a court shall determine to impose such 
ineligibility pursuant to applicable Federal law, in which case the 
ineligibility shall be for such period of time as is imposed by the 
court, pursuant to such law, at the discretion of the court.
    (c) USDA benefits subject to paragraph (b) of this section include:
    (1) Any payments or benefits under the Direct and Counter Cyclical 
Program (DCP) in accordance with part 1413 of this title;
    (2) Any payments or benefits for losses to trees, crops, or 
livestock covered under disaster programs administered by FSA;
    (3) Any price support loan available in accordance with part 1464 of 
this title;
    (4) Any price support or payment made under the Commodity Credit 
Corporation Charter Act;
    (5) A farm storage facility loan made under section 4(h) of the 
Commodity Credit Corporation Charter Act or any other Act;
    (6) Crop Insurance under the Federal Crop Insurance Act;
    (7) A loan made or guaranteed under the Consolidated Farm and Rural 
Development Act or any other law formerly administered by the Farmers 
Home Administration; or
    (d) If a person denied benefits under this section is a shareholder, 
beneficiary, or member of an entity or joint operation, benefits for 
which the entity or joint operation is eligible shall be reduced, for 
the appropriate period, by a percentage equal to the total interest of 
the shareholder, beneficiary, or member.

[68 FR 16172, Apr. 3, 2003; 69 FR 250, Jan. 5, 2004]



Sec. 718.7  Furnishing maps.

    A reasonable number, as determined by FSA, of reproductions of 
photographs, mosaics and maps shall be available to the owner of a farm 
insurance companies reinsured by the Federal Crop Insurance Corporation 
(FCIC), private party contractors performing their official duties on 
behalf of FSA, CCC, and other USDA agencies. To all others, 
reproductions shall be made available at the rate FSA determines will 
cover the cost of making such items available.



Sec. 718.8  Administrative county.

    (a) If all land on the farm is physically located in one county, the 
farm shall be administratively located in such county. If there is no 
FSA office in the county or the county offices have been consolidated, 
the farm shall be administratively located in the contiguous county most 
convenient for the farm operator.
    (b) If the land on the farm is located in more than one county, the 
farm shall be administratively located in either of such counties as the 
county committees and the farm operator agree. If no agreement can be 
reached, the farm shall be administratively located in the county where 
the principal dwelling is situated, or where the major portion of the 
farm is located if there is no dwelling.
    (c) The State committee shall submit all requests to deviate from 
regulations specified in this section to the Deputy Administrator.



Sec. 718.9  Signature requirements.

    (a) When a program authorized by this chapter or Chapter XIV of this

[[Page 30]]

title requires the signature of a producer; landowner; landlord; or 
tenant, a husband or wife may sign all such FSA or CCC documents on 
behalf of the other spouse, unless such other spouse has provided 
written notification to FSA and CCC that such action is not authorized. 
The notification must be provided to FSA with respect to each farm.
    (b) Except a husband or wife may not sign a document on behalf of a 
spouse with respect to:
    (1) Program document required to be executed in accordance with part 
3 of this title;
    (2) Easements entered into under part 1410 of this title;
    (3) Power of attorney;
    (4) Such other program documents as determined by FSA or CCC.
    (c) An individual; duly authorized officer of a corporation; duly 
authorized partner of a partnership; executor or administrator of an 
estate; trustee of a trust; guardian; or conservator may delegate to 
another the authority to act on their behalf with respect to FSA and CCC 
programs administered by USDA service center agencies by execution of a 
Power of Attorney, or such other form as approved by the Deputy 
Administrator. FSA and CCC may, at their discretion, allow the 
delegations of authority by other individuals through use of the Power 
of Attorney or such other form as approved by the Deputy Administrator.
    (d) Notwithstanding another provision of this regulation or any 
other FSA or CCC regulation in this title, a parent may execute 
documents on behalf of a minor child unless prohibited by a statute or 
court order.
    (e) Notwithstanding any other provision in this title, an authorized 
agent of the Bureau of Indian Affairs (BIA) of the United States 
Department of Interior may sign as agent for landowners with properties 
affiliated with or under the management or trust of the BIA. For 
collection purposes, such payments will be considered as being made to 
the persons who are the beneficiaries of the payment or may, 
alternatively, be considered as an obligation of all persons on the farm 
in general. In the event of a need for a refund or other claim may be 
collected, among other means, by other monies due such persons or the 
farm.

[68 FR 16172, Apr. 3, 2003; 69 FR 250, Jan. 5, 2004]



Sec. 718.10  Time limitations.

    Whenever the final date prescribed in any of the regulations in this 
title for the performance of any act falls on a Saturday, Sunday, 
national holiday, State holiday on which the office of the county or 
State Farm Service Agency committee having primary cognizance of the 
action required to be taken is closed, or any other day on which the 
cognizant office is not open for the transaction of business during 
normal working hours, the time for taking required action shall be 
extended to the close of business on the next working day. Or in case 
the action required to be taken may be performed by mailing, the action 
shall be considered to be taken within the prescribed period if the 
mailing is postmarked by midnight of such next working day. Where the 
action required to be taken is with a prescribed number of days after 
the mailing of notice, the day of mailing shall be excluded in computing 
such period of time.



Sec. 718.11  Disqualification due to federal crop insurance fraud.

    (a) Section 515(h) of the Federal Crop Insurance Act (FCIA) provides 
that a person who willfully and intentionally provides any false or 
inaccurate information to the Federal Crop Insurance Corporation (FCIC) 
or to an approved insurance provider with respect to a policy or plan of 
FCIC insurance after notice and an opportunity for a hearing on the 
record, will be subject to one or more of the sanctions described in 
section 515(h)(3). In section 515(h)(3), the FCIA specifies that in the 
case of a violation committed by a producer, the producer may be 
disqualified for a period of up to 5 years from receiving any monetary 
or non-monetary benefit under a number of programs. The list includes, 
but is not limited to, benefits under:
    (1) Title V of the FCIA.

[[Page 31]]

    (2) The Agricultural Market Transition Act (7 U.S.C. 7201 et seq.), 
including the Noninsured Crop Disaster Assistance Program under section 
196 of that Act (7 U.S.C. 7333).
    (3) The Agricultural Act of 1949 (7 U.S.C. 1421 et seq.).
    (4) The Commodity Credit Corporation Charter Act (15 U.S.C. 714 et 
seq).
    (5) The Agricultural Adjustment Act of 1938 (7 U.S.C. 1281 et seq.).
    (6) Title XII of the Food Security Act of 1985 (16 U.S.C. 3801 et 
seq.).
    (7) Any law that provides assistance to a producer of an 
agricultural commodity affected by a crop loss or a decline in prices of 
agricultural commodities.
    (b) Violation determinations are made by FCIC. However, upon notice 
from FCIC to FSA that a producer has been found to have committed a 
violation to which paragraph (a) of this section applies, that person 
shall be considered ineligible for payments under the programs specified 
in paragraph (a) of this section that are funded by FSA for the same 
period of time for which, as determined by FCIC, the producer will be 
ineligible for crop insurance benefits of the kind referred to in 
paragraph (a)(1) of this section. Appeals of the determination of 
ineligibility will be administered under the rules set by FCIC.
    (c) Other sanctions may also apply.

[68 FR 39448, July 2, 2003]



            Subpart B_Determination of Acreage and Compliance

    Source: 68 FR 16176, Apr. 3, 2003, unless otherwise noted.



Sec. 718.101  Measurements.

    (a) Measurement services include, but are not limited to, measuring 
land and crop areas, quantities of farm-stored commodities, and 
appraising the yields of crops in the field when required for program 
administration purposes. The county committee shall provide measurement 
service if the producer requests such service and pays the cost, except 
that service shall not be provided to determine total acreage or 
production of a crop when the request is made:
    (1) After the established final reporting date for the applicable 
crop, unless a late filed report is accepted as provided in Sec. 
718.103;
    (2) After the farm operator has furnished production evidence when 
required for program administration purposes except as provided in this 
subpart; or
    (3) In connection with a late-filed report of acreage, unless there 
is evidence of the crop's existence in the field and use made of the 
crop, or the lack of the crop due to a disaster condition affecting the 
crop.
    (b) The acreage requested to be measured by staking and referencing 
shall not exceed the effective farm allotment for marketing quota crops 
or acreage of a crop that is limited to a specific number of acres to 
meet any program requirement.
    (c) When a producer requests, pays for, and receives written notice 
that measurement services have been furnished, the measured acreage 
shall be guaranteed to be correct and used for all program purposes for 
the current year even though an error is later discovered in the 
measurement thereof, if the producer has taken action with an economic 
significance based on the measurement service, and the entire crop 
required for the farm was measured. If the producer has not taken action 
with an economic significance based on the measurement service, the 
producer shall be notified in writing that an error was discovered and 
the nature and extent of such error. In such cases, the corrected 
acreage will be used for determining program compliance for the current 
year.
    (d) When a measurement service reveals acreage in excess of the 
permitted acreage and the allowable tolerance as defined in this part, 
the producer must destroy the excess acreage and pay for FSA to verify 
destruction, in order to keep the measurement service guarantee.



Sec. 718.102  Acreage reports.

    (a) In order to be eligible for benefits, participants in the 
programs specified in paragraphs (b)(1) through (b)(6) of this section 
must annually submit accurate information as required by these 
provisions.

[[Page 32]]

    (b)(1) Participants in the programs governed by part 1412 of this 
title must report the acreage of fruits and vegetables planted for 
harvest on a farm enrolled in such program;
    (2) Participants in the programs governed by parts 1421 and 1427 of 
this title must report the acreage planted to a commodity for harvest 
for which a marketing assistance loan or loan deficiency payment is 
requested;
    (3) Participants in the programs governed by part 1410 of this title 
must report the use of land enrolled in such programs;
    (4) All participants in the programs governed by part 1437 of this 
title must report all acreage in the county of the eligible crop in 
which the producer has a share;
    (5) Participants in the programs governed by part 723 of this 
chapter and part 1464 of this title must report the acreage planted to 
tobacco by kind on all farms that have an effective allotment or quota 
greater than zero;
    (6) All participants in the programs governed by parts 1412, 1421, 
and 1427 of this title must report the use of all cropland on the farm.
    (7) All producers requesting to report acreage as prevented planted 
or failed must provide documentation to FSA where the farm is 
administered that meets the provisions of Sec. 718.103.
    (c) The reports required under paragraph (a) of this section shall 
be timely filed by the farm operator, farm owner, producer of the crop 
on the farm, or a duly authorized representative with the county 
committee by the final reporting date applicable to the crop as 
established by the county committee and State committee.

[68 FR 16176, Apr. 3, 2003, as amended at 71 FR 13741, Mar. 17, 2006]



Sec. 718.103  Prevented planted and failed acreage.

    (a) Prevented planting is the inability to plant an eligible crop 
with proper equipment during the planting period as a result of an 
eligible cause of loss, as determined by CCC. The eligible cause of loss 
that prevented the planting must have:
    (1) Occurred after a previous planting period for the crop;
    (2) Occurred before the final planting date for the crop in the 
applicable crop year or, in the case of multiple plantings, the harvest 
date of the first planting in the applicable planting period, and
    (3) Similarly affected other producers in the area, as determined by 
CCC.
    (b) To be approved by FSA as prevented planted acreage:
    (1) The acreage must have been reported within 15 calendar days 
after the latter of
    (i) The occurrence of prevented planting, or
    (ii) The end of the planting period;
    (2) The acreage must have been prevented from being planted as the 
result of a natural disaster and not a management decision; and
    (3) The prevented planted acreage report must be acted on by the 
COC. The COC will deny the acreage report if it is not satisfied with 
the documentation provided.
    (c) To receive prevented planted credit for acreage:
    (1) The producer must show there was the intent to plant the acreage 
by providing documentation of field preparation, seed purchase and any 
other information that shows the acreage could have been planted and 
harvested under normal weather conditions, and
    (2) The producer must show that the amount of the prevented planted 
acreage credit is consistent with prior years' planting history for the 
farm.
    (d) Eligible prevented planting acreage will be determined on the 
basis of the producer's intent to plant the crop acreage and possession 
of, or access to, resources to plant, grow, and harvest the crop, as 
applicable.
    (e) Prevented planting acreage credit is not provided on acreage 
that had either a previous or subsequent crop planted on the acreage, 
unless the COC determines that all of the following conditions are met:
    (1) There is an established practice of planting two or more crops 
for harvest on the same acreage in the same crop year;
    (2) Both crops could have reached maturity if each planting was 
harvested or would have been harvested;

[[Page 33]]

    (3) Both the initial and subsequent planted crops were planted or 
prevented-planted within the normal planting period for that crop; and
    (4) Both the initial and subsequent planted crops meet all other 
eligibility provisions of this part including good farming practices.
    (f) Prevented planted acreage credit will not be given to crops 
where the prevented-planted acreage was affected by drought, unless:
    (1) On the final planting date for non-irrigated acreage, the area 
that is prevented from being planted has insufficient soil moisture for 
germination of seed and progress toward crop maturity because of a 
prolonged period of dry weather, as determined by CCC; and
    (2) Prolonged precipitation deficiencies exceeded the D2 level as 
determined using the U.S. Drought Monitor; and
    (3) Verifiable information is collected from sources whose business 
or purpose it is to record weather conditions, as determined by CCC, and 
including but not limited to the local weather reporting stations of the 
U.S. National Weather Service.
    (g) Prevented planted acreage credit under this part shall apply to 
irrigated crops where the acreage was prevented from being planted due 
to a lack of water resulting from drought conditions or contamination by 
saltwater intrusion of an irrigation supply resulting from drought 
conditions if there was not a reasonable probability of having adequate 
water to carry out an irrigation practice.
    (h) Acreage ineligible for prevented planting coverage includes, but 
is not limited to acreage:
    (1) Which planting history or conservation plans indicate would 
remain fallow for crop rotation purposes;
    (2) 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 and Wetland Reserve Programs; and
    (3) Not planted because of a management decision.
    (i) Failed acreage is acreage that was planted with the proper 
equipment during the planting period but failed as a result of an 
eligible cause of loss, as determined by CCC.
    (j) To be approved by CCC as failed acreage the acreage must have 
been reported as failed acreage before disposition of the crop, and the 
acreage must have been planted under normal conditions but failed as the 
result of a natural disaster and not a management decision. Producers 
who file a failed acreage report must have the request acted on by the 
COC. The COC will deny the acreage report if it is not satisfied with 
the documentation provided.
    (k) To receive failed acreage credit the producer must show all of 
the following:
    (1) That the acreage was planted under normal conditions using the 
proper equipment with the intent to harvest the acreage.
    (2) Provide documentation that the crop was planted using farming 
practices consistent for the crop and area, but could not be brought to 
harvest because of disaster-related conditions.
    (l) The eligible cause for failed acreage must have:
    (1) Occurred after the crop was planted, and
    (2) Before the normal harvest date for the crop in the applicable 
crop year or in the case of multiple plantings, the harvest date of the 
first planting in the applicable planting period, and
    (3) Other producers in the area were similarly affected as 
determined by CCC.
    (m) Eligible failed acreage will be determined on the basis of the 
producer planting the crop under normal conditions with the expectation 
to take the crop to harvest.
    (n) Acreage ineligible for failed acreage credit includes, but is 
not limited to acreage:
    (1) Which was planted using methods that could not be considered 
normal for the area and without the expectation of harvest;
    (2) Used for conservation purposes or intended to be or considered 
to have been un-harvested under any program administered by USDA, 
including the Conservation Reserve and Wetland Reserve Programs; and

[[Page 34]]

    (3) That failed because of a management decision.

[71 FR 13741, Mar. 17, 2006]



Sec. 718.104  Late-filed and revised acreage reports.

    (a) Late-filed acreage reports may be accepted after the final 
reporting date, and be considered timely filed, if both of the following 
apply:
    (1) The crop or identifiable crop residue is in the field, and
    (2) The acreage has not already been determined by FSA.
    (b) The farm operator filing a report late shall pay the cost of a 
farm inspection unless FSA determines that failure to report in a timely 
manner was beyond the producer's control.
    (c) Revised acreage reports may be filed with respect to 2005 and 
subsequent years to change the acreage reported if:
    (1) The acreage has not already been determined by FSA; and
    (2) Actual crop or residue is present in the field.
    (d) Revised reports shall be filed and accepted:
    (1) At any time for all crops if the crop or residue still exists in 
the field for inspection to verify the existence and use made of the 
crop, the lack of the crop, or a disaster condition affecting the crop; 
and
    (2) If the producer was in compliance with all other program 
requirements at the reporting date.

[71 FR 13742, Mar. 17, 2006]



Sec. 718.105  Tolerances, variances, and adjustments.

    (a) Tolerance is the amount by which the determined acreage for a 
crop may differ from the reported acreage or allotment for the crop and 
still be considered in compliance with program requirements under 
Sec. Sec. 718.102(b)(1), (b)(3) and (b)(5).
    (b) Tolerance rules apply to those fields for which a staking and 
referencing was performed but such acreage was not planted according to 
those measurements or when a measurement service is not requested for 
acreage destroyed to meet program requirements.
    (c) Tolerance rules do not apply to:
    (1) Program requirements of Sec. Sec. 718.102(b)(2), (b)(4) and 
(b)(6);
    (2) Official fields when the entire field is devoted to one crop;
    (3) Those fields for which staking and referencing was performed and 
such acreage was planted according to those measurements; or
    (4) The adjusted acreage for farms using measurement after planting 
which have a determined acreage greater than the marketing quota crop 
allotment.
    (d) An administrative variance is applicable to all allotment crop 
acreages. Allotment crop acreages as determined in accordance with this 
part shall be deemed in compliance with the effective farm allotment or 
program requirement when the determined acreage does not exceed the 
effective farm allotment by more than an administrative variance 
determined as follows:
    (1) For all kinds of tobacco subject to marketing quotas, except 
dark air-cured and fire-cured the larger of 0.1 acre or 2 percent of the 
allotment; and
    (2) For dark air-cured and fire-cured tobacco, an acreage based on 
the effective acreage allotment as provided in the table as follows:

------------------------------------------------------------------------
                                                         Administrative
   Effective acreage allotment is within this range         variance
------------------------------------------------------------------------
0.01 to 0.99.........................................               0.01
1.00 to 1.49.........................................               0.02
1.50 to 1.99.........................................               0.03
2.00 to 2.49.........................................               0.04
2.50 to 2.99.........................................               0.05
3.00 to 3.49.........................................               0.06
3.50 to 3.99.........................................               0.07
4.00 to 4.49.........................................               0.08
4.50 and up..........................................               0.09
------------------------------------------------------------------------

    (e) A tolerance applies to tobacco, other than flue-cured or burley, 
if the measured acreage exceeds the allotment by more than the 
administrative variance but by not more than the tolerance. Such excess 
acreage of tobacco may be adjusted to the effective farm acreage 
allotment to avoid marketing quota penalties or receive price support.
    (f) If the acreage report for a crop is outside the tolerance for 
that crop:
    (1) FSA may consider the requirements of Sec. Sec. 718.102 (b)(1), 
(b)(3) and (b)(5) not to have been met, and;
    (2) Participants may be ineligible for all or a portion of payments 
or benefits

[[Page 35]]

subject to the requirements of Sec. Sec. 718.102 (b)(1), (b)(3) and 
(b)(5).



Sec. 718.106  Non-compliance and fraudulent acreage reports.

    Participants that knowingly and willfully provide false or 
inaccurate acreage reports may be ineligible for some or all payments or 
benefits subject to the requirements of Sec. Sec. 718.102 (b)(1), 
(b)(3) and (b)(5):
    (a) The county committee determines that the acreage report filed 
according to Sec. Sec. 718.102 (b)(1), (b)(3) and (b)(5) is inaccurate, 
and;
    (b) A good-faith effort to accurately report the acreage was not 
made because the report was knowingly and willfully falsified.



Sec. 718.107  Acreages.

    (a) If an acreage has been established by FSA for an area delineated 
on an aerial photograph or within a GIS, such acreage will be recognized 
by the county committee as the acreage for the area until such time as 
the boundaries of such area are changed. When boundaries not visible on 
the aerial photograph are established from data furnished by the 
producer, such acreage shall not be recognized as official acreage until 
an authorized representative of FSA verifies the boundaries.
    (b) Measurements of any row crop shall extend beyond the planted 
area by the larger of 15 inches or one-half the distance between the 
rows.
    (c) The entire acreage of a field or subdivision of a field devoted 
to a crop shall be considered as devoted to the crop subject to a 
deduction or adjustment except as otherwise provided in this part.



Sec. 718.108  Measuring acreage including skip row acreage.

    (a) When one crop is alternating with another crop, whether or not 
both crops have the same growing season, only the acreage that is 
actually planted to the crop being measured will be considered to be 
acreage devoted to the measured crop.
    (b) Subject to the provisions of this paragraph and section, whether 
planted in a skip row pattern or without a pattern of skipped rows, the 
entire acreage of the field or subdivision may be considered as devoted 
to the crop only where the distance between the rows, for all rows, is 
40 inches or less. If there is a skip that creates idle land wider than 
40 inches, or if the distance between any rows is more than 40 inches, 
then the area planted to the crop shall be considered to be that area 
which would represent the smaller of; a 40 inch width between rows, or 
the normal row spacing in the field for all other rows in the field--
those that are not more than 40 inches apart. The allowance for 
individual rows would be made based on the smaller of actual spacing 
between those rows or the normal spacing in the field. For example, if 
the crop is planted in single, wide rows that are 48 inches apart, only 
20 inches to either side of each row (for a total of 40 inches between 
the two rows) could, at a maximum, be considered as devoted as the crop 
and normal spacing in the field would control. Half the normal distance 
between rows will also be allowed beyond the outside planted rows not to 
exceed 20 inches and will reflect normal spacing in the field.
    (c) In making calculations under this section, further reductions 
may be made in the acreage considered planted if it is determined that 
the acreage is more sparsely planted than normal using reasonable and 
customary full production planting techniques.
    (d) The Deputy Administrator has the discretionary authority to 
allow row allowances other than those specified in this section in those 
instances in which crops are normally planted with spacings greater or 
less than 40 inches, such as in case of tobacco, or where other 
circumstances are present which the Deputy Administrator finds justifies 
that allowance.
    (e) Paragraphs (a) through (d) of this section shall apply with 
respect to the 2003 and subsequent crops. For preceding crops, the rules 
in effect on January 1, 2002, shall apply.



Sec. 718.109  Deductions.

    (a) Any contiguous area which is not devoted to the crop being 
measured and which is not part of a skip-row pattern under Sec. 718.108 
shall be deducted from the acreage of the crop if such area

[[Page 36]]

meets the following minimum national standards or requirements:
    (1) A minimum width of 30 inches;
    (2) For tobacco--three-hundredths (.03) acre. Turn areas, terraces, 
permanent irrigation and drainage ditches, sod waterways, non-cropland, 
and subdivision boundaries each of which is at least 30 inches in width 
may be combined to meet the 0.03-acre minimum requirement; or
    (3) For all other crops and land uses--one-tenth (.10) acre. Turn 
areas, terraces, permanent irrigation and drainage ditches, sod 
waterways, non-cropland, and subdivision boundaries each of which is at 
least 30 inches in width and each of which contain 0.1 acre or more may 
be combined to meet any larger minimum prescribed for a State in 
accordance with this subpart.
    (b) If the area not devoted to the crop is located within the 
planted area, the part of any perimeter area that is more than 217.8 
feet (33 links) in width will be considered to be an internal deduction 
if the standard deduction is used.
    (c) A standard deduction of 3 percent of the area devoted to a row 
crop and zero percent of the area devoted to a close-sown crop may be 
used in lieu of measuring the acreage of turn areas.



Sec. 718.110  Adjustments.

    (a) The farm operator or other interested producer having excess 
tobacco acreage (other than flue-cured or burley) may adjust an acreage 
of the crop in order to avoid a marketing quota penalty if such person:
    (1) Notifies the county committee of such election within 15 
calendar days after the date of mailing of notice of excess acreage by 
the county committee; and
    (2) Pays the cost of a farm inspection to determine the adjusted 
acreage prior to the date the farm visit is made.
    (b) The farm operator may adjust an acreage of tobacco (except flue-
cured and burley) by disposing of such excess tobacco prior to the 
marketing of any of the same kind of tobacco from the farm. The 
disposition shall be witnessed by a representative of FSA and may take 
place before, during, or after the harvesting of the same kind of 
tobacco grown on the farm. However, no credit will be allowed toward the 
disposition of excess acreage after the tobacco is harvested but prior 
to marketing, unless the county committee determines that such tobacco 
is representative of the entire crop from the farm of the kind of 
tobacco involved.



Sec. 718.111  Notice of measured acreage.

    Notice of measured acreage shall be provided by FSA and mailed to 
the farm operator. This notice shall constitute notice to all parties 
who have ownership, leasehold interest, or other, in such farm.



Sec. 718.112  Redetermination.

    (a) A redetermination of crop acreage, appraised yield, or farm-
stored production for a farm may be initiated by the county committee, 
State committee, or Deputy Administrator at any time. Redetermination 
may be requested by a producer with an interest in the farm if they pay 
the cost of the redetermination. The request must be submitted to FSA 
within 15 calendar days after the date of the notice described in 
Sec. Sec. 718.110 or 718.111, or within 5 calendar days after the 
initial appraisal of the yield of a crop, or before the farm-stored 
production is removed from storage. A redetermination shall be 
undertaken in the manner prescribed by the Deputy Administrator. A 
redetermination shall be used in lieu of any prior determination.
    (b) The county committee shall refund the payment of the cost for a 
redetermination when, because of an error in the initial determination:
    (1) The appraised yield is changed by at least the larger of:
    (i) Five percent or 5 pounds for cotton;
    (ii) Five percent or 1 bushel for wheat, barley, oats, and rye; or
    (iii) Five percent or 2 bushels for corn and grain sorghum; or
    (2) The farm stored production is changed by at least the smaller of 
3 percent or 600 bushels; or
    (3) The acreage of the crop is:
    (i) Changed by at least the larger of 3 percent or 0.5 acre; or
    (ii) Considered to be within program requirements.

[[Page 37]]



    Subpart C_Reconstitution of Farms, Allotments, Quotas, and Bases

    Source: 68 FR 16178, Apr. 3, 2003, unless otherwise noted.



Sec. 718.201  Farm constitution.

    (a) In order to implement agency programs and monitor farmer 
compliance with regulations, the agency must have records on what land 
is being farmed by a particular producer. This is accomplished by a 
determination of what land or groups of land `constitute' an individual 
unit or farm. Land, which has been properly constituted under prior 
regulations, shall remain so constituted until a reconstitution is 
required under paragraph (c) of this section. The constitution and 
identification of land as a farm for the first time and the subsequent 
reconstitution of a farm made hereafter, shall include all land operated 
by an individual entity or joint operation as a single farming unit 
except that it shall not include:
    (1) Land under separate ownership unless the owners agree in writing 
and the labor, equipment, accounting system, and management are operated 
in common by the operator but separate from other tracts;
    (2) Land under a lease agreement of less than 1 year duration;
    (3) Land in different counties when the tobacco allotments or quotas 
established for the land involved cannot be transferred from one county 
to another county by lease, sale, or owner. However, this paragraph 
shall not apply if:
    (i) All of the land is contiguous;
    (ii) The land is located in counties that are contiguous in the same 
State if:
    (A) A burley or flue-cured tobacco quota is established for one or 
more of the tracts; and
    (B) The county committee determines that the tracts will be operated 
as a single farming unit as set forth in Sec. 718.202; or
    (iii) Because of a change in operation, tracts or parts of tracts 
will be divided from the parent farm that currently has land in more 
than one county, and there is no change in operation and ownership of 
the remainder of the farm, or if there is a change in ownership, the new 
owner agrees in writing to the constitution of the farm.
    (4) Federally-owned land;
    (5) State-owned wildlife lands unless the former owner has 
possession of the land under a leasing agreement; and
    (6) Land constituting a farm which is declared ineligible to be 
enrolled in a program under the regulations governing the program; and
    (7) For acreage base crops, land located in counties that are not 
contiguous. However, this paragraph shall not apply if:
    (i) Counties are divided by a river;
    (ii) Counties do not touch because of a correction line adjustment; 
or
    (iii) The land is within 20 miles, by road, of other land that will 
be a part of the farming unit.
    (b)(1) If all land on the farm is physically located in one county, 
the farm shall be administratively located in such county. If there is 
no FSA office in the county or the county offices have been 
consolidated, the farm shall be administratively located in the 
contiguous county most convenient for the farm operator.
    (2) If the land on the farm is located in more than one county, the 
farm shall be administratively located in either of such counties as the 
county committees and the farm operator agree. If no agreement can be 
reached, the farm shall be administratively located in the county where 
the principal dwelling is situated, or where the major portion of the 
farm is located if there is no dwelling.
    (c) A reconstitution of a farm either by division or by combination 
shall be required whenever:
    (1) A change has occurred in the operation of the land after the 
last constitution or reconstitution and as a result of such change the 
farm does not meet the conditions for constitution of a farm as set 
forth in paragraph (a) of this section except that no reconstitution 
shall be made if the county committee determines that the primary 
purpose of the change in operation is to establish eligibility to 
transfer allotments subject to sale or lease, or increase amount of 
program benefits received;

[[Page 38]]

    (2) The farm was not properly constituted the previous time;
    (3) An owner requests in writing that the land no longer be included 
in a farm composed of tracts under separate ownership;
    (4) The county committee determines that the farm was reconstituted 
on the basis of false information;
    (5) The county committee determines that tracts included in a farm 
are not being operated as a single farming unit.
    (d) Reconstitution shall not be approved if the county committee 
determines that the primary purpose of the reconstitution is to:
    (1) Circumvent the provisions of part 12 of this title; or
    (2) Circumvent any other chapter of this title.



Sec. 718.202  Determining the land constituting a farm.

    (a) In determining the constitution of a farm, consideration shall 
be given to provisions such as ownership and operation. For purposes of 
this part, the following rules shall be applicable to determining what 
land is to be included in a farm.
    (b) A minor shall be considered to be the same owner or operator as 
the parent, court-appointed guardian, or other person responsible for 
the minor child, unless the parent or guardian has no interest in the 
minor's farm or production from the farm, and the minor:
    (1) Is a producer on a farm;
    (2) Maintains a separate household from the parent or guardian;
    (3) Personally carries out the farming activities; and
    (4) Maintains a separate accounting for the farming operation.
    (c) A minor shall not be considered to be the same owner or operator 
as the parent or court-appointed guardian if the minor's interest in the 
farming operation results from being the beneficiary of an irrevocable 
trust and ownership of the property is vested in the trust or the minor.
    (d) A life estate tenant shall be considered to be the owner of the 
property for their life.
    (e) A trust shall be considered to be an owner with the beneficiary 
of the trust; except a trust can be considered a separate owner or 
operator from the beneficiary, if the trust:
    (1) Has a separate and distinct interest in the land or crop 
involved;
    (2) Exercises separate responsibility for the separate and distinct 
interest; and
    (3) Maintains funds and accounts separate from that of any other 
individual or entity for the interest.
    (f) The county committee shall require specific proof of ownership.
    (g) Land owned by different persons of an immediate family living in 
the same household and operated as a single farming unit shall be 
considered as being under the same ownership in determining a farm.
    (h) All land operated as a single unit and owned and operated by a 
parent corporation and subsidiary corporations of which the parent 
corporation owns more than 50 percent of the value of the outstanding 
stock, or where the parent is owned and operated by subsidiary 
corporations, shall be constituted as one farm.



Sec. 718.203  County committee action to reconstitute a farm.

    Action to reconstitute a farm may be initiated by the county 
committee, the farm owner, or the operator with the concurrence of the 
owner of the farm. Any request for a farm reconstitution shall be filed 
with the county committee.



Sec. 718.204  Reconstitution of allotments, quotas, and bases.

    (a) Farms shall be reconstituted in accordance with this subpart 
when it is determined that the land areas are not properly constituted 
and, to the extent practicable, shall be based on the facts and 
conditions existing at the time the change requiring the reconstitution 
occurred.
    (b) Reconstitutions of farms subject to a direct and counter-
cyclical program contract in accordance with part 1413 of this title 
will be effective for the current year if initiated on or before August 
1 or prior to the issuance of DCP payments for the farm or farms being 
reconstituted.
    (c) For tobacco farms, a reconstitution will be effective for the 
current

[[Page 39]]

year for each crop for which the reconstitution is initiated before the 
planting of such crop begins or would have begun.
    (d) Notwithstanding the provisions of paragraph (c) of this section, 
a reconstitution may be effective for the current year if the county 
committee determines, and the State committee concurs, that the purpose 
of the request for reconstitution is not to perpetrate a scheme or 
device designed to evade the requirements governing programs found in 
this title.



Sec. 718.205  Substantive change in farming operation, and changes in 
related legal entities.

    (a) Land that is properly constituted as a farm shall not be 
reconstituted if:
    (1) The reconstitution request is based upon the formation of a 
newly established legal entity which owns or operates the farm or any 
part of the farm and the county committee determines there is not a 
substantive change in the farming operation;
    (2) The county committee determines that the primary purpose of the 
request for reconstitution is to:
    (i) Obtain additional benefits under one or more commodity programs;
    (ii) Avoid damages or penalties under a contract or statute;
    (iii) Correct an erroneous acreage report; or
    (iv) Circumvent any other program provisions. In addition, no farm 
shall remain as constituted when the county committee determines that a 
substantive change in the farming operation has occurred which would 
require a reconstitution, except as otherwise approved by the State 
committee with the concurrence of the Deputy Administrator.
    (b) In determining whether a substantive change has occurred with 
respect to a farming operation, the county committee shall consider 
factors such as the composition of the legal entities having an interest 
in the farming operation with respect to management, financing, and 
accounting. The county committee shall also consider the use of land, 
labor, and equipment available to the farming operations and any other 
relevant factors that bear on the determination.
    (c) Unless otherwise approved by the State committee with the 
concurrence of the Deputy Administrator, when the county committee 
determines that a corporation, trust, or other legal entity is formed 
primarily for the purpose of obtaining additional benefits under the 
commodity programs of this title, the farm shall remain as constituted, 
or shall be reconstituted, as applicable, when the farm is owned or 
operated by:
    (1) A corporation having more than 50 percent of the stock owned by 
members of the same family living in the same household;
    (2) Corporations having more than 50 percent of the stock owned by 
stockholders common to more than one corporation; or
    (3) Trusts in which the beneficiaries and trustees are family 
members living in the same household.
    (d) Application of the provisions of paragraph (c) of this section 
shall not limit or affect the application of paragraphs (a) and (b) of 
this section.



Sec. 718.206  Determining farms, tracts, allotments, quotas, and bases 
when reconstitution is made by division.

    (a) The methods for dividing farms, tracts, allotments, quotas, and 
bases in order of precedence, when applicable, are estate, designation 
by landowner, contribution, cropland, DCP cropland, default, and 
history. The proper method shall be determined on a crop by crop basis.
    (b)(1) The estate method is the pro-rata distribution of allotments, 
quotas, and bases for a parent farm among the heirs in settling an 
estate. If the estate sells a tract of land before the farm is divided 
among the heirs, the allotments, quotas, and bases for that tract shall 
be determined according to paragraphs (c) through (h) of this section.
    (2) Allotments, quotas, and bases shall be divided in accordance 
with a will, but only if the county committee determines that the terms 
of the will are such that a division can reasonably be made by the 
estate method.
    (3) If there is no will or the county committee determines that the 
terms of a will are not clear as to the division of allotments, quotas, 
and bases, such allotments, quotas, and bases shall be apportioned in 
the manner agreed to in

[[Page 40]]

writing by all interested heirs or devisees who acquire an interest in 
the property for which such allotments, quotas, and bases have been 
established. An agreement by the administrator or executor shall not be 
accepted in lieu of an agreement by the heirs or devisees.
    (4) If allotments, quotas, and bases are not apportioned in 
accordance with the provisions of paragraphs (b)(2) or (b)(3) of this 
section, the allotments, quotas, and bases shall be divided pursuant to 
paragraphs (d) through (h) of this section, as applicable.
    (c)(1) If the ownership of a tract of land is transferred from a 
parent farm, the transferring owner may request that the county 
committee divide the allotments, quotas, and bases, including historical 
acreage that has been double cropped, between the parent farm and the 
transferred tract, or between the various tracts if the entire farm is 
sold to two or more purchasers, in a manner designated by the owner of 
the parent farm subject to the conditions set forth in paragraph (c)(3) 
of this section.
    (2) If the county committee determines that allotments, quotas, and 
bases cannot be divided in the manner designated by the owner because of 
the conditions set forth in paragraph (c)(3) of this section, the owner 
shall be notified and permitted to revise the designation so as to meet 
the conditions in paragraph (c)(3) of this section. If the owner does 
not furnish a revised designation of allotments, quotas, and bases 
within a reasonable time after such notification, or if the revised 
designation does not meet the conditions of paragraph (c)(3) of this 
section, the county committee will divide the allotments, quotas, and 
bases in a pro-rata manner in accordance with paragraphs (d) through (h) 
of this section.
    (3) A landowner may designate a manner in which allotments, quotas, 
and bases are divided according to this paragraph.
    (i) The transferring owner and transferee shall file a signed 
written memorandum of understanding of the designation with the county 
committee before any CCC or FSA prescribed form, letter or contract 
providing an allotment, base or quota is issued and before a subsequent 
transfer of ownership of the land. The landowner shall designate the 
allotments, quotas, and bases that shall be permanently reduced when the 
sum of the allotments, quotas, and bases exceeds the cropland for the 
farm.
    (ii) Where the part of the farm from which the ownership is being 
transferred was owned for a period of less than 3 years, the designation 
by landowner method shall not be available with respect to the transfer 
unless the county committee determines that the primary purpose of the 
ownership transfer was other than to retain or to sell allotments, 
quotas, or bases. In the absence of such a determination, and if the 
farm contains land which has been owned for less than 3 years, that part 
of the farm which has been owned for less than 3 years shall be 
considered as a separate farm and the allotments, quotas, or bases, 
shall be assigned to that part in accordance with paragraphs (d) through 
(h) of this section. Such apportionment shall be made prior to any 
designation of allotments, quotas, and bases with respect to the part 
that has been owned for 3 years or more.
    (4) The designation by landowner method is not applicable to crop 
allotments or quotas which are restricted to transfer within the county 
by lease, sale, or by owner, when the land on which the farm is located 
is in two or more counties.
    (5) The designation by landowner method may be applied at the 
owner's request to land owned by any Indian Tribal Council which is 
leased to two or more producers for the production of any crop of a 
commodity for which an allotment, quota, or base has been established. 
If the land is leased to two or more producers, an Indian Tribal Council 
may request that the county committee divide the allotments, quotas, and 
bases between the applicable tracts in the manner designated by the 
Council. The use of this method shall not be subject to the conditions 
of paragraph (c)(3) of this section.
    (d)(1) The contribution method is the pro-rata distribution of a 
parent farm's allotments and quotas to each tract as the tract 
contributed to the allotments and quotas at the time of combination

[[Page 41]]

and may be used when the provisions of paragraphs (b) and (c) of this 
section do not apply.
    (2) The county committee determines and the State committee or a 
representative thereof concurs, that the use of the contribution method 
would not result in an equitable distribution of allotments and quotas, 
considering available land, cultural operations, and changes in type of 
farming.
    (e) The cropland method is the pro-rata distribution of allotments 
and quotas to separate tracts proportionately to the tract's 
contribution to the cropland for the parent tract. This method shall be 
used if paragraphs (b) through (d) of this section do not apply unless 
the county committee determines that division by the history method 
would result in more representative allotments and quotas than the 
cropland method, taking into consideration the operation normally 
carried out on each tract for the commodities produced on the farm.
    (f)(1) The history method is the pro-rata distribution of allotments 
and quotas to separate tracts on the basis of the operation normally 
carried out on each tract of the parent farm. The county committee may 
use the history method of dividing allotments and quotas when it:
    (i) Determines that this method would result in a more accurate pro-
rata distribution of allotments and quotas based on actual contribution 
of the tract to the totals of the parent farm than the cropland method 
would; and
    (ii) Obtains written consent of all owners to use the history 
method.
    (2) The county committee may waive the requirement for written 
consent of the owners for dividing allotments and quotas if the county 
committee determines that the use of the cropland method would result in 
an inequitable division of the parent farm's allotments and quotas and 
the use of the history method would provide more favorable results for 
all owners.
    (g) The DCP cropland method is the pro-rata distribution of bases to 
the resulting tracts in the same proportion to the DCP cropland that 
each resulting tract bears to the DCP cropland for the parent tract. 
This method of division shall be used if paragraphs (b) and (c) of this 
section do not apply.
    (h) The default method is the separation of tracts from a farm with 
each tract maintaining the bases attributed to the tract when the 
reconstitution is initiated.
    (i)(1) Allotments, quotas, and bases apportioned among the resulting 
farms pursuant to paragraphs (d) through (h) of this section may be 
increased or decreased with respect to a farm by as much as 10 percent 
of the parent farm's allotment, quota, or base determined under such 
subsections for the parent farm if:
    (i) The owners agree in writing; and
    (ii) The county committee determines the method used did not provide 
an equitable distribution considering available land, cultural 
operations, and changes in the type of farming conducted on the farm. 
Any increase in an allotment, quota, or base with respect to a tract 
pursuant to this paragraph shall be offset by a corresponding decrease 
for such allotments, quotas or bases established with respect to the 
other tracts which constitute the farm.
    (2) Farm program payment yields calculated for the resulting farms 
of a division may be increased or decreased if the county committee 
determines the method used did not provide an equitable distribution 
considering available land, cultural operations, and changes in the type 
of farming conducted on the farm. Any increase in a farm program payment 
yield on a resulting farm shall be offset by a corresponding decrease on 
another resulting farm of the division.
    (j) If a farm with burley tobacco quota is divided through 
reconstitution and one or more of the farms resulting from the division 
are apportioned less than 1,000 pounds of burley tobacco quota, the 
owners of such farms shall take action as provided in part 723 of this 
chapter to comply with the 1,000 pound minimum by July 1 of the current 
year or the quota shall be dropped. Exceptions to this are farms 
divided:
    (1) Among family members;
    (2) By the estate method; and
    (3) When no sale or change in ownership of land occurs; or
    (4) With one resulting farm receiving all of the quota.

[[Page 42]]



Sec. 718.207  Determining allotments, quotas, and bases when 
reconstitution is made by combination.

    When two or more farms or tracts are combined for a year, that 
year's allotments, quotas, and bases, with respect to the combined farm 
or tract, as required by applicable commodity regulations, shall not be 
greater than the sum of the allotments, quotas, and bases for each of 
the farms or tracts comprising the combination, subject to the 
provisions of Sec. 718.204.



              Subpart D_Equitable Relief From Ineligibility

    Source: 67 FR 66307, Oct. 31, 2002, unless otherwise noted.



Sec. 718.301  Applicability.

    (a) This subpart is applicable to programs administered by the Farm 
Service Agency under chapters VII and XIV of this title, except for an 
agricultural credit program carried out under the Consolidated Farm and 
Rural Development Act (7 U.S.C. 1921 et seq.). Administration of this 
subpart shall be under the supervision of the Deputy Administrator, 
except that such authority shall not limit the exercise of authority 
allowed State Executive Directors of the Farm Service agency as provided 
for in Sec. 718.307.
    (b) Sections 718.303, 718.304, and 718.307 do not apply where the 
action for which relief is requested occurred before May 13, 2002. In 
such cases, authority that was effective prior to May 13, 2002, may be 
applied.
    (c) Section 718.306 does not apply to a function performed under 
either section 376 of the Consolidated Farm and Rural Development Act (7 
U.S.C. 1921 et seq.), or a conservation program administered by the 
Natural Resources Conservation Service of the United States Department 
of Agriculture.



Sec. 718.302  Definitions and abbreviations.

    In addition to the definitions provided in Sec. 718.2 of this part, 
the following terms apply to this subpart:
    Agricultural commodity means any agricultural commodity, food, feed, 
fiber, or livestock that is subject to a covered program.
    Covered program means a program specified in Sec. 718.301 of this 
subpart.
    FSA means the Farm Service Agency of the United States Department of 
Agriculture.
    OGC means the Office of the General Counsel of the United States 
Department of Agriculture.
    SED means, for activities within a particular state, the State 
Executive Director of the United States Department of Agriculture, FSA, 
for that state.



Sec. 718.303  Reliance on incorrect actions or information.

    (a) Notwithstanding any other law, action or inaction by a 
participant in a covered program that is to the detriment of the 
participant, and that is based upon good faith reliance on the action or 
advice of an authorized representative of a County or State FSA 
Committee, may be approved by the Administrator, FSA or the Executive 
Vice President, CCC, as applicable, or their designee, as meeting the 
requirements of the program, and benefits may be extended or payments 
made in accordance with Sec. 718.305.
    (b) This section applies only to a participant who relied upon the 
action of, or information provided by, a county or State FSA committee 
or an authorized representative of such committee and the participant 
acted, or failed to act, as a result of the Agency action or 
information. This part does not apply to cases where the participant had 
sufficient reason to know that the action or information upon which they 
relied was improper or erroneous or where the participant acted in 
reliance on their own misunderstanding or misinterpretation of program 
provisions, notices or information.



Sec. 718.304  Failure to fully comply.

    (a) Under a covered program, when the failure of a participant to 
fully comply with the terms and conditions of a program authorized by 
this chapter precludes the providing of payments or benefits, relief may 
be authorized in accordance with Sec. 718.305 if

[[Page 43]]

the participant made a good faith effort to comply fully with the 
requirements of the covered program.
    (b) This section only applies to participants who are determined by 
the FSA approval official to have made a good faith effort to comply 
fully with the terms and conditions of the program and rendered 
substantial performance.



Sec. 718.305  Forms of relief.

    (a) The Administrator of FSA, Executive Vice President of CCC, or 
their designee, may authorize a participant in a covered program to:
    (1) Retain loans, payments, or other benefits received under the 
covered program;
    (2) Continue to receive loans, payments, and other benefits under 
the covered program;
    (3) Continue to participate, in whole or in part, under any contract 
executed under the covered program;
    (4) In the case of a conservation program, re-enroll all or part of 
the land covered by the program; and
    (5) Receive such other equitable relief as determined to be 
appropriate.
    (b) As a condition of receiving relief under this subpart, the 
participant may be required to remedy their failure to meet the program 
requirement, or mitigate its affects.



Sec. 718.306  Finality.

    (a) A determination by a State or county FSA committee made on or 
after October 13, 1994, becomes final and binding 90 days from the date 
the application for benefits has been filed, and supporting 
documentation required to be supplied by the producer as a condition for 
eligibility for the particular program has been filed, unless one of the 
following conditions exist:
    (1) The participant has requested an administrative review of the 
determination in accordance with part 780 of this chapter;
    (2) The determination was based on misrepresentation, false 
statement, fraud, or willful misconduct by or on behalf of the 
participant;
    (3) The determination was modified by the Administrator, FSA, or in 
the case of CCC programs conducted under Chapter XIV of this title, the 
Executive Vice President, CCC; or
    (4) The participant had reason to know that the determination was 
erroneous.
    (b) Should an erroneous determination become final under the 
provisions of this section, it shall only be effective through the year 
in which the error was found and communicated to the participant.



Sec. 718.307  Special relief approval authority for State Executive 
Directors.

    (a) General nature of the special authority. Notwithstanding 
provisions in this subpart providing supervision and relief authority to 
other officials, an SED without further review by other officials (other 
than the Secretary) may grant relief to a participant under the 
provisions of Sec. Sec. 718.303 and 718.304 as if the SED were the 
final arbiter within the agency of such matters so long as:
    (1) The program matter with respect to which the relief is sought is 
a program matter in a covered program which is operated within the State 
under the control of the SED;
    (2) The total amount of relief which will be provided to the person 
(that is, to the individual or entity that applies for the relief) by 
that SED under this special authority for errors during that year is 
less than $20,000 (including in that calculation, any loan amount or 
other benefit of any kind payable for that year and any other year);
    (3) The total amount of such relief which has been previously 
provided to the participant using this special authority for errors in 
that year, as calculated above, is not more than $5,000;
    (4) The total amount of loans, payments, and benefits of any kind 
for which relief is provided to similarly situated participants by the 
SED (or the SED's predecessor) for errors for any year under the 
authority provided in this section, as calculated above, is not more 
than $1,000,000.
    (b) Report of the exercise of the power. A grant of relief shall be 
considered to be under this section and subject to the special finality 
provided in this section only if the SED grants the relief in writing 
when granting the relief to the party who will receive the benefit of

[[Page 44]]

such relief and only if, in that document, the SED declares that they 
are exercising that power. The SED must report the exercise of that 
power to the Deputy Administrator so that a full accounting may be made 
in keeping with the limitations of this section. Absent such a report, 
relief will not be considered to have been made under this section.
    (c) Additional limits on the authority. The authority provided under 
this section does not extend to:
    (1) The administration of payment limitations under part 1400 of 
this chapter (Sec. Sec. 1001 to 1001F of 7 U.S.C. 1308 et seq.);
    (2) The administration of payment limitations under a conservation 
program administered by the Secretary; or
    (3) Highly erodible land and wetland conservation requirements under 
subtitles B or C of Title XII of the Food Security Act of 1985 (16 
U.S.C. 3811 et seq.) as administered under 7 CFR part 12.
    (d) Relief may not be provided by the SED under this section until a 
written opinion or written acknowledgment is obtained from OGC that 
grounds exist for determination that the program participant has, in 
good faith, detrimentally relied on the guidance or actions of an 
authorized FSA representative in accordance with the provisions of this 
subpart, or that the producer otherwise failed, in good faith, to fully 
comply with the requirements of the program and that the granting of the 
relief is within the lawful authority of the SED.
    (e) Relation to other authorities. The authority provided under this 
section is in addition to any other applicable authority that may allow 
relief. Generally, the SED may, without consultation other than with 
OGC, decide all matters under $20,000 but those decisions shall not be 
subject to modification within the Farm Service Agency to the extent 
provided for under the rules of this section.

[[Page 45]]



                 SUBCHAPTER C_REGULATIONS FOR WAREHOUSES





PART 735_REGULATIONS FOR THE UNITED STATES WAREHOUSE 
ACT--Table of Contents




                      Subpart A_General Provisions

Sec.
735.1 Applicability.
735.2 Administration.
735.3 Definitions.
735.4 Fees.
735.5 Penalties.
735.6 Suspension, revocation and liquidation.
735.7 Return of suspended or revoked certificates of licensing or 
          certificates of authorization.
735.8 Appeals.
735.9 Dispute resolution and arbitration of private parties.
735.10 Posting of certificates of licensing, certificates of 
          authorization or other USWA documents.
735.11 Lost or destroyed certificates of licensing, authorization or 
          agreements.
735.12 Safe keeping of records.
735.13 Information of violations.
735.14 Bonding and other financial assurance requirements.

                      Subpart B_Warehouse Licensing

735.100 Application.
735.101 Financial records and reporting requirements.
735.102 Financial assurance requirements.
735.103 Amendments to license.
735.104 Insurance requirements.
735.105 Care of agricultural products.
735.106 Excess storage and transferring of agricultural products.
735.107 Warehouse charges and tariffs.
735.108 Inspections and examinations of warehouses.
735.109 Disaster loss to be reported.
735.110 Conditions for delivery of agricultural products.
735.111 Fair treatment.
735.112 Terminal and futures contract markets

        Subpart C_Inspectors, Samplers, Classifiers, and Weighers

735.200 Service licenses.
735.201 Agricultural product certificates; format.
735.202 Standards of grades for other agricultural products.

                      Subpart D_Warehouse Receipts

735.300 Warehouse receipt requirements.
735.301 Notification requirements.
735.302 Paper warehouse receipts.
735.303 Electronic warehouse receipts.

                     Subpart E_Electronic Providers

735.400 Administration.
735.401 Electronic warehouse receipt and USWA electronic document 
          providers.
735.402 Providers of other electronic documents.
735.403 Audits.
735.404 Schedule of charges and rates.

    Authority: 7 U.S.C. 241 et seq.

    Source: 67 FR 50763, Aug. 5, 2002, unless otherwise noted.



                      Subpart A_General Provisions



Sec. 735.1  Applicability.

    (a) The regulations of this part set forth the terms and conditions 
under which the Secretary of Agriculture through the Farm Service Agency 
(FSA) will administer the United States Warehouse Act (USWA or the Act) 
and sets forth the standards and the terms and conditions a participant 
must meet for eligibility to act under the USWA. The extent the 
provisions of this part are more restrictive, or more lenient, with 
respect to the same activities governed by State law, the provisions of 
this part shall prevail.
    (b) Additional terms and conditions may be set forth in applicable 
licensing agreements, provider agreements and other documents.
    (c) Compliance with State laws relating to the warehousing, grading, 
weighing, storing, merchandising or other similar activities is not 
required with respect to activities engaged in by a warehouse operator 
in a warehouse subject to a license issued in accordance with this part.



Sec. 735.2  Administration.

    (a) FSA will administer all provisions and activities regulated 
under the Act under the general direction and supervision of the FSA's 
Deputy Administrator, Commodity Operations (DACO), or a designee.
    (b) DACO may waive or modify the licensing or authorization 
requirements or deadlines in cases where lateness or

[[Page 46]]

failure to meet such requirements does not adversely affect the 
licensing or authorizations operated under the Act.
    (c) DACO will provide affected licensees or authorized providers 
with changes to their licensing or provider agreements before the 
effective date.
    (d) Licensing and authorization agreement updates will be available 
at:
    (1) DACO's USWA website, and
    (2) The following address: Deputy Administrator, Commodity 
Operations, Farm Service Agency, United States Department of 
Agriculture, STOP 0550, 1400 Independence Avenue, SW, Washington, DC 
20250-0550.



Sec. 735.3  Definitions.

    Words used in this part will be applicable to the activities 
authorized by this part and will be used in all aspects of administering 
the Act.
    Access means the ability, when authorized, to read, change, and 
transfer warehouse receipts or other applicable document information 
retained in a central filing system.
    Agricultural product means an agriculturally-produced product stored 
or handled for the purposes of interstate or foreign commerce, including 
a processed product of such agricultural product, as determined by DACO.
    Central filing system (CFS) means an electronic system operated and 
maintained by a provider, as a disinterested third party, authorized by 
DACO where information relating to warehouse receipts, USWA documents 
and other electronic documents is recorded and maintained in a 
confidential and secure fashion independent of any outside influence or 
bias in action or appearance.
    Certificate means a USWA document that bears specific assurances 
under the Act or warrants a person to operate or perform in a certain 
manner and sets forth specific responsibilities, rights, and privileges 
granted to the person under the Act.
    Control of the facility means ultimate responsibility for the 
operation and integrity of a facility by ownership, lease, or operating 
agreement.
    Department means the Department of Agriculture.
    Electronic document means any document that is generated, sent, 
received, or stored by electronic, optical, or similar means, including, 
but not limited to, electronic data interchange, advanced communication 
methods, electronic mail, telegram, telex, or telecopy.
    Electronic warehouse receipt (EWR) means a warehouse receipt that is 
authorized by DACO to be issued or transmitted under the Act in the form 
of an electronic document.
    Examiner means an individual designated by DACO for the purpose of 
examining warehouses or for any other activities authorized under the 
Act.
    Financial assurance means the surety or other financial obligation 
authorized by DACO that is a condition of receiving a license or 
authorization under the Act.
    Force majeure means severe weather conditions, fire, explosion, 
flood, earthquake, insurrection, riot, strike, labor dispute, act of 
civil or military, non-availability of transportation facilities, or any 
other cause beyond the control of the warehouse operator or provider 
that renders performance impossible.
    Holder means a person that has possession in fact or by operation of 
law of a warehouse receipt, USWA electronic document, or any electronic 
document.
    License means a license issued under the Act by DACO.
    Licensing agreement means the document and any amendment or addenda 
to such agreement executed by the warehouse operator and FSA specifying 
licensing terms and conditions specific to the warehouse operator and 
the agricultural product licensed to be stored.
    Non-storage agricultural product means an agricultural product 
received temporarily into a warehouse for conditioning, transferring or 
assembling for shipment, or lots of an agricultural product moving 
through a warehouse for current merchandising or milling use, against 
which no warehouse receipts are issued and no storage charges assessed.
    Official Standards of the United States means the standards of the 
quality or condition for an agricultural product, fixed and established 
under (7 U.S.C. 51) the United States Cotton Standards Act, (7 U.S.C. 
71) the United States

[[Page 47]]

Grain Standards Act, (7 U.S.C. 1622) the Agricultural Marketing Act of 
1946, or other applicable official United States Standards.
    Other electronic documents (OED) means those electronic documents, 
other than an EWR or USWA electronic document, that may be issued or 
transferred, related to the shipment, payment or financing of 
agricultural products that DACO has authorized for inclusion in a 
provider's CFS.
    Person means a person as set forth in 1 U.S.C. 1, a State; or a 
political subdivision of a State.
    Provider means a person authorized by DACO, as a disinterested third 
party, which maintains one or more confidential and secure electronic 
systems independent of any outside influence or bias in action or 
appearance.
    Provider agreement means the document and any amendment or addenda 
to such agreement executed by the provider and FSA that sets forth the 
provider's responsibilities concerning the provider's operation or 
maintenance of a CFS.
    Receipt means a warehouse receipt issued in accordance with the Act, 
including an electronic warehouse receipt.
    Schedule of charges means the tariff or uniform rate or amount 
charged by an authorized person for specific services offered or 
rendered under the Act.
    Schedule of fees means the fees charged and assessed by FSA for 
licensing, provider agreements or services furnished under the Act to 
help defray the costs of administering the Act, and as such are shown in 
a schedule of fees attached to the licensing or provider agreement.
    Service license means the document and any amendment to such 
document, issued under the Act by DACO to individuals certified 
competent by the licensed warehouse operator to perform inspection, 
sampling, grading classifying, or weighing services according to 
established standards and procedures, set forth in Sec. 735.202, at the 
specific warehouse license.
    Stored agricultural products means all agricultural products 
received into, stored within, or delivered out of the warehouse that are 
not classified as a non-storage agricultural product under this part.
    User means a person that uses a provider's CFS.
    USWA electronic document means a USWA electronic document initiated 
by DACO to be issued, transferred or transmitted that is not identified 
as an EWR or OED in the appropriate licensing or provider agreement or 
as determined by DACO.
    Warehouse means a structure or other authorized storage facility, as 
determined by DACO, in which any agricultural product may be stored or 
handled for the purpose of interstate or foreign commerce.
    Warehouse capacity means the maximum quantity of an agricultural 
product that the warehouse will accommodate when stored in a manner 
customary to the warehouse as determined by DACO.
    Warehouse operator means a person lawfully engaged in the business 
of storing or handling agricultural products.
    Warehousing activities and practices means any legal, operational, 
managerial or financial duty that a warehouse operator has regarding an 
agricultural product.



Sec. 735.4  Fees.

    (a) FSA will assess persons covered by the Act fees to cover the 
costs of administering the Act.
    (b) Warehouse operators, licensees, applicants, or providers must 
pay:
    (1) An annual fee as provided in the applicable licensing or 
provider agreement; and
    (2) Fees that FSA assesses for specific services, examinations and 
audits, or as provided in the applicable licensing or provider 
agreement.
    (c) The schedule of fees showing the current fees or any annual fee 
changes will be provided as an addendum to the applicable licensing or 
provider agreement or/and:
    (1) Will be available at DACO's USWA Web site, or
    (2) May be requested at the following address: Deputy Administrator, 
Commodity Operations, Farm Service Agency, United States Department of

[[Page 48]]

Agriculture, STOP 0550, 1400 Independence Avenue, SW., Washington, DC 
20250-0550.
    (d) At the sole discretion of DACO, these fees may be waived.



Sec. 735.5  Penalties.

    If a person fails to comply with any requirement of the Act, the 
regulations set forth in this part or any applicable licensing or 
provider agreement, DACO may assess, after an opportunity for a hearing 
as provided in Sec. 735.8, a civil penalty:
    (a) Of not more than $25,000 per violation, if an agricultural 
product is not involved in the violation; or
    (b) Of not more than 100 percent of the value of the agricultural 
product, if an agricultural product is involved in the violation.



Sec. 735.6  Suspension, revocation and liquidation.

    (a) DACO may, after an opportunity for a hearing as provided in 
Sec. 735.8, suspend, revoke or liquidate any license or agreement 
issued under the Act, for any violation of or failure to comply with any 
provision of the Act, regulations or any applicable licensing or 
provider agreement.
    (b) The reasons for a suspension, revocation or liquidation under 
this part include, but are not limited to:
    (1) Failure to perform licensed or authorized services as provided 
in this part or in the applicable licensing or provider agreement;
    (2) Failure to maintain minimum financial requirements as provided 
in the applicable licensing or provider agreement;
    (3) Failure to submit a proper annual financial statement within the 
established time period as provided in the applicable licensing or 
provider agreement.
    (4) Failure to maintain control of the warehouse or provider system.
    (5) The warehouse operator or provider requests closure, 
cancellation or liquidation. and
    (6) Commission of fraud against FSA, any depositor, EWR or OED 
holder or user, or any other function or operation under this part.
    (c) FSA retains USWA's full authority over a warehouse operator or 
provider for one year after such license revocation or provider 
agreement termination or until satisfaction of any claims filed against 
such warehouse operator or provider are resolved, whichever is later.
    (d) Upon DACO's determination that continued operation of a 
warehouse by a warehouse operator or an electronic provider system by a 
provider is likely to result in probable loss of assets to storage 
depositors, or loss of data integrity to EWR or OED holders and users. 
DACO may immediately suspend, close, or take control and begin an 
orderly liquidation of such warehouse inventory or provider system data 
as provided in this part or in the applicable licensing or provider 
agreement.
    (e) Any disputes involving probable loss of assets to storage 
depositors, or loss of data integrity to EWR or OED holders and users 
will be determined by DACO for the benefit of the depositors, or EWR or 
OED holders and users and such determinations shall be final.



Sec. 735.7  Return of suspended or revoked certificates of licensing or 
certificates of authorization.

    (a) When a license issued to a warehouse operator or service license 
ends or is suspended or revoked by DACO, such certificates of licensing 
and applicable licensing agreement and certificates of authorization 
must be immediately surrendered and returned to DACO.
    (b) When an agreement with a provider ends or is suspended or 
revoked by DACO, such certificates of authorization and applicable 
provider agreement must be immediately surrendered to DACO



Sec. 735.8  Appeals.

    (a) Any person who is subject to an adverse determination made under 
the Act may appeal the determination by filing a written request with 
DACO at the following address: Deputy Administrator, Commodity 
Operations, Farm Service Agency, United States Department of 
Agriculture, STOP 0550, 1400 Independence Avenue, SW., Washington, DC 
20250-0550.
    (b) Any person who believes that they have been adversely affected 
by a

[[Page 49]]

determination under this part must seek review by DACO within twenty-
eight calendar days of such determination, unless provided with notice 
by DACO of a different deadline.
    (c) The appeal process set forth in this part is applicable to all 
licensees and providers under any provision of the Act, regulations or 
any applicable licensing agreement as follows:
    (1) DACO will notify the person in writing of the nature of the 
suspension, revocation or liquidation action;
    (2) The person must notify DACO of any appeal of its action within 
twenty-eight calendar days;
    (3) The appeal and request must state whether:
    (i) A hearing is requested,
    (ii) The person will appear in person at such hearing, or
    (iii) Such hearing will be held by telephone;
    (4) DACO will provide the person a written acknowledgment of their 
request to pursue an appeal;
    (5) When a person requests an appeal and does not request a hearing 
DACO will allow that person:
    (i) To submit in writing the reasons why they believe DACO's 
determination to be in error,
    (ii) Twenty-eight calendar days from the receipt of the 
acknowledgment to file any statements and documents in support of their 
appeal, unless provided with notice by DACO of a different deadline, and
    (iii) An additional fourteen calendar days to respond to any new 
issues raised by DACO in response to the person's initial submission, 
unless provided with notice by DACO of a different deadline;
    (6) If the person requests to pursue an appeal and requests a 
hearing, DACO will:
    (i) Notify the person of the date of the hearing,
    (ii) Determine the location of the hearing, when the person asks to 
appear in person,
    (iii) Notify the person of the location of the hearing,
    (iv) Afford the person twenty-eight calendar days from the receipt 
of the notification of the scheduling of the hearing to submit any 
statements and documents in support of the appeal, unless provided with 
notice by DACO of a different deadline, and
    (v) Allow the person an additional fourteen calendar days from the 
date of the hearing to submit any additional material, unless provided 
with notice by DACO of a different deadline;
    (7) Determinations of DACO will be final and no further appeal 
within USDA will be available except as may be specified in the final 
determination of DACO; and
    (8) A person may not initiate an action in any court of competent 
jurisdiction concerning a determination made under the Act prior to the 
exhaustion of the appeal process set forth in this section.



Sec. 735.9  Dispute resolution and arbitration of private parties.

    (a) A person may initiate legal action in any court of competent 
jurisdiction concerning a claim for noncompliance or an unresolved 
dispute with respect to activities authorized under the Act.
    (b) Any claim for noncompliance or an unresolved dispute between a 
warehouse operator or provider and another party with respect to 
activities authorized under the Act may be resolved by the parties 
through mutually agreed-upon arbitration procedures or as may be 
prescribed in the applicable licensing or provider agreement. No 
arbitration determination or award will affect DACO's authority under 
the Act.
    (c) In no case will USDA provide assistance or representation to 
parties involved in an arbitration proceeding arising with respect to 
activities authorized under the Act.



Sec. 735.10  Posting of certificates of licensing, certificates of 
authorization or other USWA documents.

    (a) The warehouse operator must post, in a conspicuous place in the 
principal place where warehouse receipts are issued, any applicable 
certificate furnished by DACO that the warehouse operator is an 
authorized licensee under the Act.
    (b) Immediately upon receipt of their certificate of service 
licensing or any modification or extension thereof under the Act, the 
licensee and warehouse operator must jointly post the

[[Page 50]]

same, and thereafter, except as otherwise provided in the regulations in 
this part or as prescribed in the applicable licensing agreement, keep 
such certificate of licensing conspicuously posted in the office where 
all or most of the services are done, or in such place as may be 
designated by DACO.
    (c) The provider must post, in a conspicuous place in the principal 
place of business, any applicable certificate of authorization furnished 
by DACO that the provider is authorized to offer and provide specific 
services under the Act.



Sec. 735.11  Lost or destroyed certificates of licensing, authorization
or agreements.

    FSA will replace lost or destroyed certificates of licensing, 
certificate of authorization or applicable agreement upon satisfactory 
proof of loss or destruction. FSA will mark such certificates or 
agreements as duplicates.



Sec. 735.12  Safe keeping of records.

    Each warehouse operator or provider must take necessary precautions 
to safeguard all records, either paper or electronic format, from 
destruction.



Sec. 735.13  Information of violations.

    Every person licensed or authorized under the Act must immediately 
furnish DACO any information they may have indicating that any provision 
of the Act or the regulations in this part has been violated.



Sec. 735.14  Bonding and other financial assurance requirements.

    (a) As a condition of receiving a license or authorization under the 
Act, the person applying for the license or authorization must execute 
and file with DACO a bond or provide such other financial assurance as 
DACO determines appropriate to secure the person's compliance with the 
Act.
    (b) Such bond or assurance must be for a period of not less than one 
year and in such amount as required by DACO.
    (c) Failure to provide for, or renew, a bond or a financial 
assurance instrument will result in the immediate and automatic 
revocation of the warehouse operator's license or provider's agreement.
    (d) If DACO determines that a previously accepted bond or other 
financial assurance is insufficient, DACO may immediately suspend or 
revoke the license or authorization covered by the bond or other 
financial assurance if the person that filed the bond or other financial 
assurance does not provide such additional bond or other financial 
assurance as DACO determines appropriate.
    (e) To qualify as a suitable bond or other financial assurance, the 
entity issuing the bond or other financial assurance must be subject to 
service of process in lawsuits or legal actions on the bond or other 
financial assurance in the State in which the warehouse is located.



                      Subpart B_Warehouse Licensing



Sec. 735.100  Application.

    (a) An applicant for a license must submit to DACO information and 
documents determined by DACO to be sufficient to conclude that the 
applicant can comply with the provisions of the Act. Such documents must 
include a current review or an audit-level financial statement prepared 
according to generally accepted accounting standards as defined by the 
American Institute of Certified Public Accountants. For any entity that 
is not an individual, a document that establishes proof of the existence 
of the entity, such as:
    (1) For a partnership, an executed partnership agreement; and
    (2) For a corporation:
    (i) Articles of incorporation certified by the Secretary of State of 
the applicable State of incorporation;
    (ii) Bylaws; and
    (iii) Permits to do business; and
    (3) For a limited partnership, an executed limited partnership 
agreement; and
    (4) For a limited liability company:
    (i) Articles of organization or similar documents; and
    (ii) Operating agreement or similar agreement.
    (b) The warehouse facilities of an operator licensed under the Act 
must, as determined by DACO, be:

[[Page 51]]

    (1) Physically and operationally suitable for proper storage of the 
applicable agricultural product or agricultural products specified in 
the license;
    (2) Operated according to generally accepted warehousing activities 
and practices in the industry for the applicable agricultural product or 
agricultural products stored in the facility; and
    (3) Subject to the warehouse operator's control of the facility 
including all contiguous storage space with respect to such facilities.
    (c) As specified in individual licensing agreements, a warehouse 
operator must:
    (1) Meet the basic financial requirements determined by DACO; and
    (2) Meet the net worth requirements determined by DACO;
    (d) In order to obtain a license, the warehouse operator must 
correct any exceptions made by the warehouse examiner at the time of the 
original warehouse examination.
    (e) DACO may issue a license for the storage of two or more 
agricultural products in a single warehouse as provided in the 
applicable licensing agreements. The amount of the bond or financial 
assurance, net worth, and inspection and license fees will be determined 
by DACO in accordance with the licensing agreements applicable to the 
specific agricultural product, based upon the warehouses' total capacity 
for storing such product, that would require:
    (1) The largest bond or financial assurance;
    (2) The greatest amount of net worth; and
    (3) The greatest amount of fees.



Sec. 735.101  Financial records and reporting requirements.

    (a) Warehouse operators must maintain complete, accurate, and 
current financial records that must be available to DACO for review or 
audit at DACO's request as may be prescribed in the applicable licensing 
agreement.
    (b) Warehouse operators must, annually, present a financial 
statement as may be prescribed in the applicable licensing agreement to 
DACO.



Sec. 735.102  Financial assurance requirements.

    (a) Warehouse operators must file with DACO financial assurances 
approved by DACO consisting of:
    (1) A warehouse operator's bond; or
    (2) Obligations that are unconditionally guaranteed as to both 
interest and principal by the United States, in a sum equal at their par 
value to the amount of the bond otherwise required to be furnished, 
together with an irrevocable power of attorney authorizing DACO to 
collect, sell, assign and transfer such obligations in case of any 
default in the performance of any of the conditions required in the 
licensing agreement; or
    (3) An irrevocable letter of credit issued in the favor of DACO with 
a term of not less than two years; or
    (4) A certificate of participation in, and coverage by, an indemnity 
or insurance fund as approved by DACO, established and maintained by a 
State, backed by the full faith and credit of the applicable State, 
which guarantees depositors of the licensed warehouse full 
indemnification for the breach of any obligation of the licensed 
warehouse operator under the terms of the Act. If a warehouse operator 
files a bond or financial assurance in the form of a certification of 
participation in an indemnity or insurance fund, the certification may 
only be used to satisfy any deficiencies in assets above the minimum net 
worth requirement as prescribed in the applicable licensing agreement. A 
certificate of participation and coverage in this fund must be furnished 
to DACO annually; or
    (5) Other alternative instruments and forms of financial assurance 
approved by DACO as may be prescribed in the applicable licensing 
agreement.
    (b) The warehouse operator may not withdraw obligations required 
under this section until one year after license termination or until 
satisfaction of any claims against the obligations, whichever is later.



Sec. 735.103  Amendments to license.

    FSA will issue an amended license upon:
    (a) Receipt of forms prescribed and furnished by DACO outlining the 
requested changes to the license;

[[Page 52]]

    (b) Payment of applicable licensing and examination fees;
    (c) Receipt of bonding or other financial assurance if required in 
the applicable licensing agreement; and
    (d) Receipt of a report on the examination of the proposed 
facilities pending inclusion or exclusion, if determined necessary by 
DACO.



Sec. 735.104  Insurance requirements.

    Each warehouse operator must comply fully with the terms of 
insurance policies or contracts covering their licensed warehouse and 
all products stored therein, and must not commit any acts, nor permit 
others to do anything, that might impair or invalidate such insurance.



Sec. 735.105  Care of agricultural products.

    Each warehouse operator must at all times, including during any 
period of suspension of their license, exercise such care in regard to 
stored and non-storage agricultural products in their custody as 
required in the applicable licensing agreement.



Sec. 735.106  Excess storage and transferring of agricultural products.

    (a) If at any time a warehouse operator stores an agricultural 
product in a warehouse subject to a license issued under the Act in 
excess of the warehouse capacity for which it is licensed, such 
warehouse operator must immediately notify DACO of such excess storage 
and the reason for the storage.
    (b) A warehouse operator who desires to transfer stored agricultural 
products to another warehouse may do so either by physical movement, by 
other methods as may be provided in the applicable licensing agreement, 
or as authorized by DACO.



Sec. 735.107  Warehouse charges and tariffs.

    (a) A warehouse operator must not make any unreasonable or 
exorbitant charge for services rendered.
    (b) A warehouse operator must follow the terms and conditions for 
each new or revised warehouse tariff or schedule of charges and rates as 
prescribed in the applicable licensing agreement.



Sec. 735.108  Inspections and examinations of warehouses.

    (a) Warehouse operators must permit any agent of the Department to 
enter and inspect or examine, on any business day during the usual hours 
of business, any licensed warehouse, the offices of the warehouse 
operator, the books, records, papers, and accounts.
    (b) Routine and special inspections and examinations will be 
unannounced.
    (c) Warehouse operators must provide safe access to all storage 
facilities.
    (d) Warehouse operators must inform any agent of the Department, 
upon arrival, of any hazard.
    (e) Agents of the Department must accomplish inspections and 
examinations of warehouses in a manner that is efficient and cost-
effective without jeopardizing any inspection and examination integrity.



Sec. 735.109  Disaster loss to be reported.

    If at any time a disaster or loss occurs at or within any licensed 
warehouse, the warehouse operator must report immediately the occurrence 
of the disaster or loss and the extent of damage, to DACO.



Sec. 735.110  Conditions for delivery of agricultural products.

    (a) In the absence of a lawful excuse, a warehouse operator will, 
without unnecessary delay, deliver the agricultural product stored or 
handled in the warehouse on a demand made by:
    (1) The holder of the warehouse receipt for the agricultural 
product; or
    (2) The person that deposited the agricultural product, if no 
warehouse receipt has been issued.
    (b) Prior to delivery of the agricultural product, payment of the 
accrued charges associated with the storage or handling of the 
agricultural product, including satisfaction of the warehouse operator's 
lien, must be made if requested by the warehouse operator.
    (c) When the holder of a warehouse receipt requests delivery of an 
agricultural product covered by the warehouse receipt, the holder must 
surrender the warehouse receipt to the warehouse operator before 
obtaining the agricultural product.
    (d) A warehouse operator must cancel each warehouse receipt 
surrendered to

[[Page 53]]

the warehouse operator upon the delivery of the agricultural product for 
which the warehouse receipt was issued and in accordance with the 
applicable licensing agreement.
    (e) For the purpose of this part, unless prevented from doing so by 
force majeure, a warehouse operator will deliver or ship such 
agricultural products stored or handled in their warehouse as prescribed 
in the applicable licensing agreement.



Sec. 735.111  Fair treatment.

    (a) Contingent upon the capacity of a warehouse, a warehouse 
operator will deal in a fair and reasonable manner with persons storing, 
or seeking to store, an agricultural product in the warehouse if the 
agricultural product is:
    (1) Of the kind, type, and quality customarily stored or handled in 
the area in which the warehouse is located;
    (2) Tendered to the warehouse operator in a suitable condition for 
warehousing; and
    (3) Tendered in a manner that is consistent with the ordinary and 
usual course of business.
    (b) Nothing in this section will prohibit a warehouse operator from 
entering into an agreement with a depositor of an agricultural product 
to allocate available storage space.



Sec. 735.112  Terminal and futures contract markets.

    (a) DACO may issue service licenses to weigh-masters or their 
deputies to perform services relating to warehouse receipts that are 
deliverable in satisfaction of futures contracts in such contract 
markets or as may be prescribed in any applicable licensing agreement.
    (b) DACO may authorize a registrar of warehouse receipts issued for 
an agricultural product in a warehouse licensed under the Act that 
operates in any terminal market or in any futures contract market the 
official designated by officials of the State in which such market is 
located if such individual is not:
    (1) An owner or employee of the licensed warehouse;
    (2) The owner of, or an employee of the owner of, such agricultural 
product deposited in any such licensed warehouse; or
    (3) As may be prescribed in any applicable licensing or provider 
agreement.



        Subpart C_Inspectors, Samplers, Classifiers, and Weighers



Sec. 735.200  Service licenses.

    (a) FSA may issue to a person a license for:
    (1) Inspection of any agricultural product stored or handled in a 
warehouse subject to the Act;
    (2) Sampling of such an agricultural product;
    (3) Classification of such an agricultural product according to 
condition, grade, or other class and certify the condition, grade, or 
other class of the agricultural product;
    (4) Weighing of such an agricultural product and certify the weight 
of the agricultural product; or
    (5) Performing two or more services specified in paragraphs (a)(1), 
(a)(2), (a)(3) or (a)(4) of this section.
    (b) Each person seeking a license to perform activities described in 
this section must submit an application on forms furnished by DACO that 
contain, at a minimum, the following information:
    (1) The name, location and license number of the warehouses where 
the applicant would perform such activities;
    (2) A statement from the warehouse operator that the applicant is 
competent and authorized to perform such activities at specific 
locations; and
    (3) Evidence that the applicant is competent to inspect, sample, 
classify, according to grade or weigh the agricultural product.
    (c) The warehouse operator will promptly notify DACO in writing of 
any changes with respect to persons authorized to perform such 
activities at the licensed warehouse.



Sec. 735.201  Agricultural product certificates; format.

    Each inspection, grade, class, weight or combination certificate 
issued under the Act by a licensee to perform such services must be:
    (a) In a format prescribed by DACO;

[[Page 54]]

    (b) Issued and maintained in a consecutive order; and
    (c) As prescribed in the applicable licensing or provider agreement 
and authorized by DACO.



Sec. 735.202  Standards of grades for other agricultural products.

    Official Standards of the United States for any kind, class or grade 
of an agricultural product to be inspected must be used if such 
standards exist. Until Official Standards of the United States are fixed 
and established for the kind of agricultural product to be inspected, 
the kind, class and grade of the agricultural product must be stated, 
subject to the approval of DACO. If such standards do not exist for such 
an agricultural product, the following will be used:
    (a) State standards established in the State in which the warehouse 
is located, (b) In the absence of any State standards, in accordance 
with the standards, if any, adopted by the local board of trade, chamber 
of commerce, or by the agricultural product trade generally in the 
locality in which the warehouse is located, or
    (c) In the absence of the standards set forth in paragraphs (a) and 
(b) of this section, in accordance with any standards approved for the 
purpose by DACO.



                      Subpart D_Warehouse Receipts



Sec. 735.300  Warehouse receipt requirements.

    (a) Warehouse receipts may be:
    (1) Negotiable or non-negotiable;
    (2) For a single unit, multiple units, identity preserved or 
commingled lot; and
    (3) In a paper or electronic format that, besides complying with the 
requirements of the Act, must be in a format as prescribed in the 
applicable licensing or provider agreement and authorized by DACO.
    (b) The warehouse operator must:
    (1) At the request of a depositor of an agricultural product stored 
or handled in a warehouse licensed under the Act, issue a warehouse 
receipt to the depositor;
    (2) Not issue a warehouse receipt for an agricultural product unless 
the agricultural product is actually stored in their warehouse at the 
time of issuance;
    (3) Not issue a warehouse receipt until the quality, condition and 
weight of such an agricultural product is ascertained by a licensed 
inspector and weigher;
    (4) Not directly or indirectly compel or attempt to compel the 
depositor to request the issuance of a warehouse receipt omitting the 
statement of quality or condition;
    (5) Not issue an additional warehouse receipt under the Act for a 
specific identity-preserved or commingled agricultural product lot (or 
any portion thereof) if another warehouse receipt representing the same 
specific identity-preserved or commingled lot of the agricultural 
product is outstanding. No two warehouse receipts issued by a warehouse 
operator may have the same warehouse receipt number or represent the 
same agricultural product lot;
    (6) When issuing a warehouse receipt and purposefully omitting any 
information, notate the blank to show such intent;
    (7) Not deliver any portion of an agricultural product for which 
they have issued a negotiable warehouse receipt until the warehouse 
receipt has been surrendered to them and canceled as prescribed in the 
applicable licensing agreement;
    (8) Not deliver more than 90% of the receipted quantity of an 
agricultural product for which they have issued a non-negotiable 
warehouse receipt until such warehouse receipt has been surrendered or 
the depositor or the depositor's agent has provided a written order for 
the agricultural product and the warehouse receipt surrendered upon 
final delivery; and
    (9) Deliver, upon proper presentation of a warehouse receipt for any 
agricultural product, and payment or tender of all advances and charges, 
to the depositor or lawful holder of such warehouse receipt the 
agricultural product of such identity, quantity, grade and condition as 
set forth in such warehouse receipt.
    (c) In the case of a lost or destroyed warehouse receipt, a new 
warehouse receipt upon the same terms, subject to the same conditions, 
and bearing on its

[[Page 55]]

face the number and the date of the original warehouse receipt may be 
issued.



Sec. 735.301  Notification requirements.

    Warehouse operators must file with DACO the name and genuine 
signature of each person authorized to sign warehouse receipts for the 
licensed warehouse operator, and will promptly notify DACO of any 
changes with respect to persons authorized to sign.



Sec. 735.302  Paper warehouse receipts.

    Paper warehouse receipts must be issued as follows:
    (a) On distinctive paper specified by DACO;
    (b) Printed by a printer authorized by DACO; and
    (c) Issued, identified and maintained in a consecutive order.



Sec. 735.303  Electronic warehouse receipts.

    (a) Warehouse operators issuing EWR under the Act may issue EWR's 
for the agricultural product stored in their warehouse. Warehouse 
operators issuing EWR's under the Act must:
    (1) Only issue EWR's through one FSA-authorized provider annually;
    (2) Inform DACO of the identity of their provider, when they are a 
first time user of EWR's, 60 calendar days in advance of issuing an EWR 
through that provider. DACO may waive or modify this 60-day requirement 
as set forth in Sec. 735.2(b);
    (3) Before issuing an EWR, request and receive from FSA a range of 
consecutive warehouse receipt numbers that the warehouse will use 
consecutively for issuing their EWR's;
    (4) When using an authorized provider, issue and cancel all 
warehouse receipts as EWR's;
    (5) Cancel an EWR only when they are the holder of the warehouse 
receipt;
    (6) Be the holder of an EWR to correct information contained within 
any required data field;
    (7) Receive written authorization from FSA at least 30 calendar days 
before changing providers. Upon authorization, they may request their 
current provider to transfer their EWR data from its Central Filing 
System (CFS) to the CFS of the authorized provider whom they select; and
    (8) Notify all holders of EWR's by inclusion in the CFS at least 30 
calendar days before changing providers, unless otherwise required or 
allowed by FSA.
    (b) An EWR establishes the same rights and obligations with respect 
to an agricultural product as a paper warehouse receipt and possesses 
the following attributes:
    (1) The holder of an EWR will be entitled to the same rights and 
privileges as the holder of a paper warehouse receipt.
    (2) Only the current holder of the EWR may transfer the EWR to a new 
holder.
    (3) The identity of the holder must be confidential and included as 
information for every EWR.
    (4) Only one person may be designated as the holder of an EWR at any 
one time.
    (5) A warehouse operator may not issue an EWR on a specific 
identity-preserved or commingled lot of agricultural product or any 
portion thereof while another valid warehouse receipt representing the 
same specific identity-preserved or commingled lot of agricultural 
product remains not canceled. No two warehouse receipts issued by a 
warehouse operator may have the same warehouse receipt number or 
represent the same agricultural product lot.
    (6) An EWR may only be issued to replace a paper warehouse receipt 
if requested by the current holder of the paper warehouse receipt.
    (7) Holders and warehouse operators may authorize any other user of 
their provider or the provider itself to act on their behalf with 
respect to their activities with this provider. This authorization must 
be in writing, and acknowledged and retained by the warehouse operator 
and provider.
    (c) A warehouse operator not licensed under the Act may, at the 
option of the warehouse operator, issue EWRs in accordance with this 
subpart, except this option does not apply to a warehouse operator that 
is licensed under State law to store agricultural products in a 
warehouse if the warehouse operator elects to issue an EWR under State 
law.

[[Page 56]]



                     Subpart E_Electronic Providers



Sec. 735.400  Administration.

    This subpart sets forth the regulations under which DACO may 
authorize one or more electronic systems under which:
    (a) Electronic documents relating to the shipment, payment, and 
financing of the sale of agricultural products may be issued or 
transferred; or
    (b) Electronic receipts may be issued and transferred.



Sec. 735.401  Electronic warehouse receipt and USWA electronic document providers.

    (a) To establish a USWA-authorized system to issue and transfer 
EWR's and USWA electronic documents, each applicant must submit to DACO 
information and documents determined by DACO to be sufficient to 
determine that the applicant can comply with the provisions of the Act. 
Each provider operating pursuant to this section must meet the following 
requirements:
    (1) Have and maintain a net worth as specified in the applicable 
provider agreement;
    (2) Maintain two insurance policies; one for ``errors and 
omissions'' and another for ``fraud and dishonesty.'' Each policy's 
minimum coverage and maximum deductible amounts and applicability of 
other forms of financial assurances as set forth in Sec. 735.14 will be 
prescribed in the applicable provider agreement. Each policy must 
contain a clause requiring written notification to FSA 30 days prior to 
cancellation or as prescribed by FSA;
    (3) Submit a current review or an audit level financial statement 
prepared according to generally accepted accounting standards as defined 
by the American Institute of Certified Public Accountants;
    (4) For any entity that is not an individual, a document that 
establishes proof of the existence, such as:
    (i) For a partnership, an executed partnership agreement; and
    (ii) For a corporation:
    (A) Articles of incorporation certified by the Secretary of State of 
the applicable State of incorporation;
    (B) Bylaws; and
    (C) Permits to do business; and
    (iii) For a limited partnership, an executed limited partnership 
agreement; and
    (iv) For a limited liability company:
    (A) Articles of organization or similar documents; and
    (B) Operating agreement or similar agreement.
    (5) Meet any additional financial requirements as set forth in the 
applicable provider agreement;
    (6) Pay user fees annually to FSA, as set and announced annually by 
FSA prior to April 1 of each calendar year; and
    (7) Operate a CFS as a neutral third party in a confidential and 
secure fashion independent of any outside influence or bias in action or 
appearance.
    (b) The provider agreement will contain, but not be limited to, 
these basic elements:
    (1) Scope of authority;
    (2) Minimum document and warehouse receipt requirements;
    (3) Liability;
    (4) Transfer of records protocol;
    (5) Records;
    (6) Conflict of interest requirements;
    (7) USDA common electronic information requirements;
    (8) Financial requirements
    (9) Terms of insurance policies or assurances;
    (10) Provider's integrity statement;
    (11) Security audits; and
    (12) Submission, authorization, approval, use and retention of 
documents.
    (c) DACO may suspend or terminate a provider's agreement for cause 
at any time.
    (1) Hearings and appeals will be conducted in accordance with 
procedures as set forth in Sec. Sec. 735.6 and 735.8.
    (2) Suspended or terminated providers may not execute any function 
pertaining to USDA, USWA documents, or USWA or State EWR's during the 
pendency of any appeal or subsequent to this appeal if the appeal is 
denied, except as authorized by DACO.
    (3) The provider or DACO may terminate the provider agreement 
without cause solely by giving the other party written notice 60 
calendar days prior to termination.
    (d) Each provider agreement will be automatically renewed annually 
on

[[Page 57]]

April 30th as long as the provider complies with the terms contained in 
the provider agreement, the regulations in this subpart, and the Act.



Sec. 735.402  Providers of other electronic documents.

    (a) To establish a USWA-authorized system to issue and transfer OED, 
each applicant must submit to DACO information and documents determined 
by DACO to be sufficient to determine that the applicant can comply with 
the provisions of the Act. Each provider operating pursuant to this 
section must meet the following requirements:
    (1) Have and maintain a net worth as specified in the applicable 
provider agreement;
    (2) Maintain two insurance policies; one for 'errors and omissions' 
and another for 'fraud and dishonesty'. Each policy's minimum coverage 
and maximum deductible amounts and applicability of other forms of 
financial assurances as set forth in Sec. 735.14 will be prescribed in 
the applicable provider agreement. Each policy must contain a clause 
requiring written notification to FSA 30 days prior to cancellation or 
as prescribed by FSA;
    (3) Submit a current review or an audit level financial statement 
prepared according to generally accepted accounting standards as defined 
by the American Institute of Certified Public Accountants;
    (4) For any entity that is not an individual, a document that 
establishes proof of the existence, such as:
    (i) For a partnership, an executed partnership agreement; and
    (ii) For a corporation:
    (A) Articles of incorporation certified by the Secretary of State of 
the applicable State of incorporation;
    (B) Bylaws; and
    (C) Permits to do business; and
    (iii) For a limited partnership, an executed limited partnership 
agreement; and
    (iv) For a limited liability company:
    (A) Articles of organization or similar documents; and
    (B) Operating agreement or similar agreement.
    (5) Meet any additional financial requirements as set forth in the 
applicable provider agreement;
    (6) Pay user fees annually to FSA, as set and announced annually by 
FSA prior to April 1 of each calendar year; and
    (7) Operate a CFS as a neutral third party in a confidential and 
secure fashion independent of any outside influence or bias in action or 
appearance.
    (b) The provider agreement will contain, but not be limited to, 
these basic elements:
    (1) Scope of authority;
    (2) Minimum document and warehouse receipt requirements;
    (3) Liability;
    (4) Transfer of records protocol;
    (5) Records;
    (6) Conflict of interest requirements;
    (7) USDA common electronic information requirements;
    (8) Financial requirements;
    (9) Terms of insurance policies or assurances;
    (10) Provider's integrity statement;
    (11) Security audits; and
    (12) Submission, authorization, approval, use and retention of 
documents.
    (c) DACO may suspend or terminate a provider's agreement for cause 
at any time.
    (1) Hearings and appeals will be conducted in accordance with 
procedures as set forth in Sec. Sec. 735.6 and 735.8.
    (2) Suspended or terminated providers may not execute any function 
pertaining to USDA, USWA documents, USWA or State EWR's or OED's during 
the pendency of any appeal or subsequent to this appeal if the appeal is 
denied, except as authorized by DACO.
    (d) Each provider agreement will be automatically renewed annually 
on April 30th as long as the provider complies with the terms contained 
in the provider agreement, the regulations in this subpart, and the Act.
    (e) In addition to audits prescribed in this section the provider 
must submit a copy of any audit, examination or investigative report 
prepared by any Federal regulatory agency with respect to the provider 
including agencies such as, but not limited to, the Comptroller of the 
Currency, Department of the Treasury, the Federal Trade Commission, and 
the Commodity Futures Trading Commission.

[[Page 58]]



Sec. 735.403  Audits.

    (a) No later than 120 calendar days following the end of the 
provider's fiscal year, the provider authorized under Sec. Sec. 735.401 
and 735.402 must submit to FSA an annual audit level financial statement 
and an electronic data processing audit that meets the minimum 
requirements as provided in the applicable provider agreement. The 
electronic data processing audit will be used by DACO to evaluate 
current computer operations, security, disaster recovery capabilities of 
the system, and compatibility with other systems authorized by DACO.
    (b) Each provider will grant the Department unlimited, free access 
at any time to all records under the provider's control relating to 
activities conducted under this part and as specified in the applicable 
provider agreement.



Sec. 735.404  Schedule of charges and rates.

    (a) A provider authorized under Sec. Sec. 735.401 or 735.402 must 
furnish FSA with copies of its current schedule of charges and rates for 
all services as they become effective.
    (b) Charges and rates assessed any user by the provider must be in 
effect for a minimum period of one year.
    (c) Providers must furnish FSA and all users a 60-calendar day 
advance notice of their intent to change any charges and rates.

                           PART 743 [RESERVED]

[[Page 59]]



                      SUBCHAPTER D_SPECIAL PROGRAMS





PART 750_SOIL BANK--Table of Contents




    Editorial Note: Part 750 (formerly part 485 of title 6), published 
at 21 FR 6289, Aug. 22, 1956, and redesignated at 26 FR 5788, June 29, 
1961, is no longer carried in the Code of Federal Regulations. This 
deletion does not relieve any person of any obligation or liability 
incurred under these regulations, nor deprive any person of any rights 
received or accrued under the provisions of this part. For Federal 
Register citations affecting this part, see the ``List of CFR Sections 
Affected, 1949-1963, 1964-1972, and 1973-1985,'' published in seven 
separate volumes.



PART 760_INDEMNITY PAYMENT PROGRAMS--Table of Contents




                Subpart A_Dairy Indemnity Payment Program

                           Program Operations

Sec.
760.1 Administration.
760.2 Definitions.

                   Payments to Dairy Farmers for Milk

760.3 Indemnity payments on milk.
760.4 Normal marketings of milk.
760.5 Fair market value of milk.
760.6 Information to be furnished.
760.7 Other requirements for affected farmers.
760.8 Application for payments for milk.
760.9 Other legal recourse.

            Payments to Manufacturers Affected by Pesticides

760.20 Payments to manufacturers of dairy products.
760.21 Application for payments by manufacturers.
760.22 Information to be furnished by manufacturer.
760.23 Other requirements for manufacturers.

                           General Provisions

760.24 Limitation of authority.
760.25 Estates and trusts; minors.
760.26 Appeals.
760.27 Setoffs.
760.28 Overdisbursement.
760.29 Death, incompetency, or disappearance.
760.30 Records and inspection thereof.
760.31 Assignment.
760.32 Instructions and forms.
760.33 Availability of funds.
760.34 Paperwork Reduction Act assigned numbers.

Subpart B_General Provisions for the 2005 Section 32 Hurricane Disaster 
                                Programs

760.101 Eligible counties, hurricanes and disaster periods.
760.102 Applicability.
760.103 Administration of HIP, FIP, LIP, and TIP.
760.104 Definitions.
760.105 Application for payment.
760.106 Limitations on payments and other benefits.
760.107 Appeals.
760.108 Offsets, assignments, and debt settlement.
760.109 Records and inspection thereof.
760.110 Refunds; joint and several liability.
760.111 Paperwork Reduction Act assigned number.

                  Subpart C_Hurricane Indemnity Program

760.201 Applicability.
760.202 Producer eligibility.
760.203 Payment calculation.

                    Subpart D_Feed Indemnity Program

760.301 Applicability.
760.302 Definitions.
760.303 Eligible livestock and producers.
760.304 Application process.
760.305 Payment calculation.

                  Subpart E_Livestock Indemnity Program

760.401 Applicability.
760.402 Definitions.
760.403 Eligible owners, contract growers and livestock.
760.404 Application process.
760.405 Payment calculation.

                    Subpart F_Tree Indemnity Program

760.501 Applicability.
760.502 Eligible producers and stands.
760.503 Application process.
760.504 Payment calculation.

                      Subpart G_Aquaculture Program

760.601 Funds availability.

    Authority: 7 U.S.C. 612c; Pub. L. 106-387, 114 Stat. 1549; Pub. L. 
107-76, 115 Stat. 704.

[[Page 60]]



                Subpart A_Dairy Indemnity Payment Program

    Authority: Pub. L. 106-387, 114 Stat. 1549, and Pub. L. 107-76, 115 
Stat. 704.

    Source: 43 FR 10535, Mar. 14, 1978, unless otherwise noted.

                           Program Operations



Sec. 760.1  Administration.

    This indemnity payment program will be carried out by FSA under the 
direction and supervision of the Deputy Administrator. In the field, the 
program will be administered by the State and county committees.



Sec. 760.2  Definitions.

    For purposes of this subject, the following terms shall have the 
meanings specified:
    (a) Secretary means the Secretary of Agriculture of the United 
States or any officer or employee of the U.S. Department of Agriculture 
to whom he has delegated, or to whom he may hereafter delegate, 
authority to act in his stead.
    (b) FSA means the Farm Service Agency, U.S. Department of 
Agriculture.
    (c) Deputy Administrator means the Deputy Administrator for Farm 
Programs, FSA.
    (d) State committee means the FSA State committee.
    (e) County committee means the FSA county committee.
    (f) Pesticide means an economic poison which was registered pursuant 
to the provisions of the Federal Insecticide, Fungicide, and Rodenticide 
Act, as amended (7 U.S.C. 135 through 135k), and approved for use by the 
Federal Government.
    (g) Chemicals or Toxic Substances means any chemical substance or 
mixture as defined in the Toxic Substances Control Act (15 U.S.C. 2602).
    (h) Nuclear Radiation or Fallout means contamination from nuclear 
radiation or fallout from any source.
    (i) Violating Substance means one or more of the items defined in 
paragraphs (f), (g), and (h) of this section.
    (j) Public agency means any Federal, State or local public 
regulatory agency.
    (k) Affected farmer means a person who produces whole milk which is 
removed from the commerical market any time from:
    (1) Pursuant to the direction of a public agency because of the 
detection of pesticide residues in such whole milk by tests made by a 
public agency or under a testing program deemed adequate for the purpose 
by a public agency, or
    (2) Pursuant to the direction of a public agency because of the 
detection of other residues of chemicals or toxic substances residues, 
or contamination from nuclear radiation or fallout in such whole milk by 
tests made by a public agency or under a testing program deemed adequate 
for the purpose by a public agency.
    (l) Affected manufacturer means a person who manufactures dairy 
products which are removed from the commercial market pursuant to the 
direction of a public agency because of the detection of pesticide 
residue in such dairy products by tests made by a public agency or under 
a testing program deemed adequate for the purpose by a public agency.
    (m) Milk handler means the marketing agency to or through which the 
affected dairy farmer marketed his whole milk at the time he was 
directed by the public agency to remove his whole milk from the 
commercial market.
    (n) Person means an individual, partnership, association, 
corporation, trust, estate, or other legal entity.
    (o) Application period means any period during which an affected 
farmer's whole milk is removed from the commercial market pursuant to 
direction of a public agency for a reason specified in paragraph (k) of 
this section and for which application for payment is made.
    (p) Pay period means (1) in the case of an affected farmer who 
markets his whole milk through a milk handler, the period used by the 
milk handler in settling with the affected farmer for his whole milk, 
usually biweekly or monthly, or (2) in the case of an affected farmer 
whose commercial market consists of direct retail sales to consumers, a 
calendar month.

[[Page 61]]

    (q) Whole milk means milk as it is produced by cows.
    (r) Commercial market means (1) the market to which the affected 
farmer normally delivers his whole milk and from which it was removed 
because of detection therein of a residue of a violating substance(s) or 
(2) the market to which the affected manufacturer normally delivers his 
dairy products and from which they were removed because of detection 
therein of pesticide residue.
    (s) Removed from the commercial market means (1) produced and 
destroyed or fed to livestock, (2) produced and delivered to a handler 
who destroyed it or disposed of it as salvage (such as separating whole 
milk, destroying the fat, and drying the skim milk), or (3) produced and 
otherwise diverted to other than the commercial market.
    (t) Payment subject to refund means a payment which is made by a 
milk handler to an affected farmer, and which such farmer is obligated 
to refund to the milk handler.
    (u) Base period means the calendar month or 4-week period 
immediately preceding removal of milk from the market.

[43 FR 10535, Mar. 14, 1978, as amended by Amdt. 1, 44 FR 36360, July 
22, 1979; 52 FR 17935, May 13, 1987; 53 FR 44001, Nov. 1, 1988; 56 FR 
1358, Jan. 14, 1991; 61 FR 18485, Apr. 26, 1996; 71 FR 27190, May 10, 
2006]

                   Payments to Dairy Farmers for Milk



Sec. 760.3  Indemnity payments on milk.

    An indemnity payment for milk may be made to an affected farmer who 
is determined by the county committee to be in compliance with all the 
terms and conditions of this subpart in the amount of the fair market 
value of his normal marketings for the application period, as determined 
in accordance with Sec. Sec. 760.4 and 760.5, less (a) any amount he 
received for whole milk marketed during the applications period, and (b) 
any payment not subject to refund which he received from a milk handler 
with respect to whole milk removed from the commercial market during the 
application period.

[43 FR 10535, Mar. 14, 1978, as amended at 47 FR 24689, June 8, 1982]



Sec. 760.4  Normal marketings of milk.

    (a) The county committee shall determine the affected farmer's 
normal marketings which, for the purposes of this subpart, shall be the 
sum of the quantities of whole milk which such farmer would have sold in 
the commercial market in each of the pay periods in the application 
period but for the removal of his whole milk from the commercial market 
because of the detection of a residue of a violating substance.
    (b) Normal marketings for each pay period are based on the average 
daily production during the base period.
    (c) Normal marketings determined in paragraph (b) of this section 
are adjusted for any change in the daily average number of cows milked 
during each pay period the milk is off the market compared with the 
average number of cows milked daily during the base period.
    (d) If only a portion of a pay period falls within the application 
period, normal marketings for such pay period shall be reduced so that 
they represent only that part of such pay period which is within the 
application period.

[43 FR 10535, Mar. 14, 1978, as amended by Amdt. 1, 44 FR 36360, July 
22, 1979]



Sec. 760.5  Fair market value of milk.

    (a) The county committee shall determine the fair market value of 
the affected farmer's normal marketings, which, for the purposes of this 
subpart, shall be the sum of the net proceeds such farmer would have 
received for his normal marketings in each of the pay periods in the 
application period.
    (b) The county committee shall determine the net proceeds the 
affected farmer would have received in each of the pay periods in the 
application period (1) in the case of an affected farmer who markets his 
whole milk through a milk handler, by multiplying the affected farmer's 
normal marketings for each such pay period by the average net price per 
hundred-weight of whole milk paid during the pay period by such farmer's 
milk handler in the same area for whole milk similar in quality and 
butterfat test to that marketed by the affected farmer in the base 
period

[[Page 62]]

used to determine his normal marketings, or (2) in the case of an 
affected farmer whose commercial market consists of direct retail sales 
to consumers, by multiplying the affected farmer's normal marketings for 
each such pay period by the average net price per hundredweight of whole 
milk, as determined by the county committee, which other producers in 
the same area who marketed their whole milk through milk handlers 
received for whole milk similar in quality and butterfat test to that 
marketed by the affected farmer during the base period used to determine 
his normal marketings.
    (c) In determining the net price for whole milk, the county 
committee shall deduct from the gross price therefor any transportation, 
administrative, and other costs of marketing which it determines are 
normally incurred by the affected farmer but which were not incurred 
because of the removal of his whole milk from the commercial market.



Sec. 760.6  Information to be furnished.

    The affected farmer shall furnish to the county committee complete 
and accurate information sufficient to enable the county committee or 
the Deputy Administrator to make the determinations required in this 
subpart. Such information shall include, but is not limited to:
    (a) A copy of the notice from, or other evidence of action by, the 
public agency which resulted in the removal of the affected farmer's 
whole milk from the commercial market.
    (b) The specific name of the violating substance causing the removal 
of his whole milk from the commercial market, if not included in the 
notice or other evidence of action furnished under paragraph (a) of this 
section.
    (c) The quantity and butterfat test of whole milk produced and 
marketed during the base period. This information must be a certified 
statement from the affected farmer's milk handler or any other evidence 
the county committee accepts as an accurate record of milk production 
and butterfat tests during the base period.
    (d) The average number of cows milked during the base period and 
during each pay period in the application.
    (e) If the affected farmer markets his whole milk through a milk 
handler, a statement from the milk handler showing, for each pay period 
in the application period, the average price per hundred-weight of whole 
milk similar in quality to that marketed by the affected farmer during 
the base period used to determine his normal marketings. If the milk 
handler has information as to the transportation, administrative, and 
other costs of marketing which are normally incurred by producers who 
market through the milk handler but which the affected farmer did not 
incur because of removal of his whole milk from the market, the average 
price stated by the milk handler shall be the average gross price paid 
producers less any such costs. If the milk handler does not have such 
information, the affected farmer shall furnish a statement setting forth 
such costs, if any.
    (f) The amount of proceeds, if any, received by the affected farmer 
from the marketing of whole milk produced during the application period.
    (g) The amount of any payments not subject to refund made to the 
affected farmer by the milk handler with respect to the whole milk 
produced during the application period and remove from the commercial 
market.
    (h) To the extent that such information is available to the affected 
farmer, the name of any pesticide, chemical, or toxic substance used on 
the farm within 24 months prior to the application period, the use made 
of the pesticide, chemical, or toxic substance, the approximate date of 
such use, and the name of the manufacturer and the registration number, 
if any, on the label on the container of the pesticide, chemical, or 
toxic substance.
    (i) To the extent possible, the source of the pesticide, chemical, 
or toxic substance that caused the contamination of the whole milk, and 
the results of any laboratory tests on the feed supply.

[[Page 63]]

    (j) Such other information as the county committee may request to 
enable the county committee or the Deputy Administrator to make the 
determinations required in this subpart.

[43 FR 10535, Mar. 14, 1978, as amended by Amdt. 1, 44 FR 36360, June 
22, 1979]



Sec. 760.7  Other requirements for affected farmers.

    An indemnity payment for milk may be made under this subpart to an 
affected farmer only under the following conditions:
    (a) If the pesticide, chemical, or toxic substance, contaminating 
the milk was used by the affected farmer, he established each of the 
following:
    (1) That the pesticide, chemical or toxic substance, when used, was 
registered (if applicable) and approved for use as provided in Sec. 
760.2(f);
    (2) That the contamination of his milk was not the result of his 
failure to use the pesticide, chemical, or toxic substance, according to 
the directions and limitations stated on the label;
    (3) That the contamination of his milk was not otherwise his fault.
    (b) If the pesticide, chemical, or toxic substance contaminating the 
milk was not used by the affected farmer, he establishes each of the 
following:
    (1) He did not know or have reason to believe that any feed which he 
purchased and which contaminated his milk contained a harmful residue of 
a pesticide, a chemical, or a toxic substance or was contaminated by 
nuclear radiation or fallout.
    (2) None of the milk was produced by dairy cattle which he knew, or 
had reason to know at the time he acquired them, were contaminated with 
residues of pesticides, chemicals or toxic substances, or by nuclear 
radiation or fallout.
    (3) The contamination of his milk was not otherwise his fault.
    (c) The affected farmer has adopted recommended practices for 
eliminating residues of pesticides, chemicals, or toxic substances or 
contamination from nuclear radiation or fallout from his milk as soon as 
practicable following the discovery of the initial contamination.

[43 FR 10535, Mar. 14, 1978, as amended at 47 FR 24689, June 8, 1982]



Sec. 760.8  Application for payments for milk.

    The affected farmer or his legal representative, as provided in 
Sec. Sec. 760.25 and 760.29, must sign and file an application for 
payment on a form which is approved for that purpose by the Deputy 
Administrator. The form must be filed with the county FSA office for the 
county where the farm headquarters are located no later than December 31 
following the end of the fiscal year in which the loss occurred, or such 
later date as the Deputy Administrator may specify. The application for 
payment shall cover application periods of at least 28 days, except 
that, if the entire application period, or the last application period, 
is shorter than 28 days, applications for payment may be filed for such 
shorter period. The application for payment shall be accompanied by the 
information required by Sec. 760.6 as well as any other information 
which will enable the county committee to determine whether the making 
of an indemnity payment is precluded for any of the reasons set forth in 
Sec. 760.7. Such information shall be submitted on forms approved for 
the purpose by the Deputy Administrator.

[43 FR 10535, Mar. 14, 1978, as amended at 51 FR 12986, Apr. 17, 1986; 
52 FR 17935, May 13, 1987]



Sec. 760.9  Other legal recourse.

    (a) No indemnity payment shall be made for contaminated milk 
resulting from residues of chemicals or toxic substances if, within 30 
days after receiving a complete application, the Deputy Administrator 
determines that other legal recouse is available to the farmer. An 
application shall not be deemed complete unless it contains all 
information necessary to make a determination as to whether other legal 
recourse is available to the farmer. However, notwithstanding such a 
determination, the Deputy Administrator may reopen the case at a later 
date and make a new determination on the merits of the case as may be 
just and equitable.
    (b) In the event that a farmer receives an indemnity payment under 
this subpart, and such farmer is later compensated for the same loss by 
the

[[Page 64]]

person (or the representative or successor in interest of such person) 
responsible for such loss, the indemnity payment shall be refunded by 
the farmer to the Department of Agriculture: Provided, That the amount 
of such refund shall not exceed the amount of other compensation 
received by the farmer.

[Amdt. 1, 44 FR 36361, June 22, 1979]

            Payments to Manufacturers Affected by Pesticides



Sec. 760.20  Payments to manufacturers of dairy products.

    An indemnity payment may be made to the affected manufacturer who is 
determined by the Deputy Administrator to be in compliance with all the 
terms and conditions of this subpart in the amount of the fair market 
value of the product removed from the commercial market because of 
pesticide residues, less any amount the manufacturer receives for the 
product in the form of salvage.
    Note: Manufacturers are not eligible for payment when dairy products 
are contaminated by chemicals, toxic substances (other than pesticides) 
or nuclear radiation or fallout.

[43 FR 10535, Mar. 14, 1978, as amended at 47 FR 24689, June 8, 1982]



Sec. 760.21  Application for payments by manufacturers.

    The affected manufacturer, or his legal representatives, shall file 
an application for payment with the Deputy Administrator, FSA, 
Washington, D.C., through the county office serving the county where the 
contaminated product is located. The application for payment may be in 
the form of a letter or memorandum. Such letter or memorandum, however, 
must be accompanied by acceptable documentation to support such 
application for payment.



Sec. 760.22  Information to be furnished by manufacturer.

    The affected manufacturer shall furnish the Deputy Administrator, 
through the county committee, complete and accurate information 
sufficient to enable him to make the determination as to the 
manufacturer's eligibility to receive an indemnity payment. Such 
information shall include, but is not limited to:
    (a) A copy of the notice or other evidence of action by the public 
agency which resulted in the product being removed from the commerical 
market.
    (b) The name of the pesticide causing the removal of the product 
from the commerical market and, to the extent possible, the source of 
the pesticide.
    (c) A record of the quantity of milk or butterfat used to produce 
the product for which an indemnity payment is requested.
    (d) The identity of any pesticide used by the affected manufacturer.
    (e) Such other information as the Deputy Administrator may request 
to enable him to make the determinations required in this subpart.



Sec. 760.23  Other requirements for manufacturers.

    An indemnity payment may be made under this subpart to an affected 
manufacturer only under the following conditions:
    (a) If the pesticide contaminating the product was used by the 
affected manufacturer, he establishes each of the following: (1) That 
the pesticide, when used, was registered and recommended for such use as 
provided in Sec. 760.2(f); (2) that the contamination of his product 
was not the result of his failure to use the pesticide in accordance 
with the directions and limitations stated on the label of the 
pesticide; and (3) that the contamination of his product was not 
otherwise his fault.
    (b) If the pesticide contaminating the product was not used by the 
affected manufacturer: (1) He did not know or have reason to believe 
that the milk from which the product was processed contained a harmful 
level of pesticide residue, and (2) the contamination of his product was 
not otherwise his fault.
    (c) In the event that a manufacturer receives an indemnity payment 
under this subpart, and such manufacturer is later compensated for the 
same loss by the person (or the representative or successor in interest 
of such person) responsible for such loss, the indemnity payment shall 
be refunded by the manufacturer to the Department of Agriculture: 
Provided, That the amount of such refund shall not exceed the

[[Page 65]]

amount of other compensation received by the manufacturer.

[43 FR 10535, Mar. 14, 1978, as amended at 47 FR 24689, June 8, 1982; 51 
FR 12987, Apr. 17, 1986; 52 FR 17935, May 13, 1987]

                           General Provisions



Sec. 760.24  Limitation of authority.

    (a) County executive directors and State and county committees do 
not have authority to modify or waive any of the provisions of the 
regulations in this subpart.
    (b) The State committee may take any action authorized or required 
by the regulations in this subpart to be taken by the county committee 
when such action has not been taken by the county committee. The State 
committee may also:
    (1) Correct, or require a county committee to correct, any action 
taken by such county committee which is not in accordance with the 
regulations in this subpart, or (2) require a county committee to 
withhold taking any action which is not in accordance with the 
regulations in this subpart.
    (c) No delegation herein to a State or county committee shall 
preclude the Deputy Administrator or his designee from determining any 
question arising under the regulations in this subpart or from reversing 
or modifying any determination made by a State or county committee.



Sec. 760.25  Estates and trusts; minors.

    (a) A receiver of an insolvent debtor's estate and the trustee of a 
trust estate shall, for the purpose of this subpart, be considered to 
represent an insolvent affected farmer or manufacturer and the 
beneficiaries of a trust, respectively, and the production of the 
receiver or trustee shall be considered to be the production of the 
person or manufacturer he represents. Program documents executed by any 
such person will be accepted only if they are legally valid and such 
person has the authority to sign the applicable documents.
    (b) An affected dairy farmer or manufacturer who is a minor shall be 
eligible for indemnity payments only if he meets one of the following 
requirements:
    (1) The right of majority has been conferred on him by court 
proceedings or by statute; (2) a guardian has been appointed to manage 
his property and the applicable program documents are signed 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 he been an 
adult.
    (2) [Reserved]



Sec. 760.26  Appeals.

    The appeal regulations issued by the Administrator, FSA, part 780 of 
this chapter, shall be applicable to appeals by dairy farmers or 
manufacturers from determinations made pursuant to the regulations in 
this subpart.



Sec. 760.27  Setoffs.

    (a) If the affected farmer or manufacturer is indebted to any agency 
of the United States and such indebtedness is listed on the county debt 
record, indemnity payments due the affected farmer or manufacturer under 
the regulations in this part shall be applied, as provided in the 
Secretary's setoff regulations, part 13 of this title, to such 
indebtedness.
    (b) Compliance with the provisions of this section shall not deprive 
the affected farmer or manufacturer of any right he would otherwise have 
to contest the justness of the indebtedness involved in the setoff 
action, either by administrative appeal or by legal action.



Sec. 760.28  Overdisbursement.

    If the indemnity payment disbursed to an affected farmer or to a 
manufacturer exceeds the amount authorized under the regulations in this 
subpart, the affected farmer or manufacturer shall be personally liable 
for repayment of the amount of such excess.



Sec. 760.29  Death, incompetency, or disappearance.

    In the case of the death, incompetency, or disappearance of any 
affected farmer or manufacturer who would otherwise receive an indemnity 
payment, such payment may be made to the person or persons specified in 
the regulations contained in part 707 of this chapter. The person 
requesting

[[Page 66]]

such payment shall file Form FSA-325, ``Application for Payment of 
Amounts Due Persons Who Have Died, Disappeared, or Have Been Declared 
Incompetent,'' as provided in that part.

[43 FR 10535, Mar. 14, 1978, as amended at 47 FR 24689, June 8, 1982]



Sec. 760.30  Records and inspection thereof.

    (a) The affected farmer, as well as his milk handler and any other 
person who furnished information to such farmer or to the county 
committee for the purpose of enabling such farmer to receive a milk 
indemnity payment under this subpart, shall maintain any existing books, 
records, and accounts supporting any information so furnished for 3 
years following the end of the year during which the application for 
payment was filed. The affected farmer, his milk handler, and any other 
person who furnishes such information to the affected farmer or to the 
county committee shall permit authorized representatives of the 
Department of Agriculture and the General Accounting Office, during 
regular business hours, to inspect, examine, and make copies of such 
books, records, and accounts.
    (b) The affected manufacturer or any other person who furnishes 
information to the Deputy Administrator for the purposes of enabling 
such manufacturer to receive an indemnity payment under this subpart 
shall maintain any books, records, and accounts supporting any 
information so furnished for 3 years following the end of the year 
during which the application for payment was filed. The affected 
manufacturer or any other person who furnishes such information to the 
Deputy Administrator shall permit authorized representatives of the 
Department of Agriculture and the General Accounting Office, during 
regular business hours, to inspect, examine, and make copies of such 
books, records, and accounts.



Sec. 760.31  Assignment.

    No assignment shall be made of any indemnity payment due or to come 
due under the regulations in this subpart. Any assignment or attempted 
assignment of any indemnity payment due or to come due under this 
subpart shall be null and void.



Sec. 760.32  Instructions and forms.

    The Deputy Administrator shall cause to be prepared such forms and 
instructions as are necessary for carrying out the regulations in this 
subpart. Affected farmers and manufacturers may obtain information 
necessary to make application for a dairy indemnity payment from the 
county FSA office. Form FSA-373--Application for Indemnity Payment, is 
available at the county ASC office.

[43 FR 10535, Mar. 14, 1978, as amended at 47 FR 24689, June 8, 1982]



Sec. 760.33  Availability of funds.

    Payment of indemnity claims will be contingent upon the availability 
of funds to the Department to pay such claims. With respect to claims 
filed after October 1, 1982, if the Department determines that the 
amount of claims to be filed under the program will exceed the funds 
available to the Department, to pay such claims payments will be made so 
that each eligible claimant will receive a pro rata share of the 
remaining funds available to the Department to pay dairy indemnity 
claims.

(Approved by the Office of Management and Budget under control number 
0560-0045)

[48 FR 40367, Sept. 7, 1983 and 49 FR 8906, Mar. 9, 1984]



Sec. 760.34  Paperwork Reduction Act assigned numbers.

    The information collection requirements contained in these 
regulations (7 CFR part 760) have been approved by the Office of 
Management and Budget (OMB) under the provisions of 44 U.S.C. Chapter 35 
and have been assigned OMB control number 0560-0045.

[49 FR 29564, July 23, 1984]



Subpart B_General Provisions for the 2005 Section 32 Hurricane Disaster 
                                Programs

    Source: 71 FR 27191, May 10, 2006, unless otherwise noted.

[[Page 67]]



Sec. 760.101  Eligible counties, hurricanes and disaster periods.

    Producers who have suffered certain losses due to 2005 Hurricanes 
Dennis, Katrina, Ophelia, Rita, and Wilma in the following counties 
(eligible counties) are eligible to enroll in the programs made 
available under subparts B through F of this part. The 'Disaster Period' 
is the time period in which losses occurred that would be considered 
eligible for the programs under subparts B through F of this part. Funds 
for the programs in subparts B through G are made available under 
section 32 of the Act of August 24, 1935, as amended (section 32).

[[Page 68]]



------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                   Disaster period
                     State                                     County              -------------------------------------------------------------------------------------------------------------
                                                                                           Dennis                Katrina               Ophelia                Rita                  Wilma
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama........................................  Autauga..........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Baldwin..........................        7/10/05-9/8/05      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Bibb.............................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Butler...........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Chambers.........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Choctaw..........................        7/10/05-9/8/05      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Clarke...........................        7/10/05-9/8/05      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Clay.............................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Cleburne.........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Coffee...........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Colbert..........................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Conecuh..........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Covington........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Crenshaw.........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Cullman..........................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Dallas...........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Escambia.........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Geneva...........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Greene...........................        7/10/05-9/8/05      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Hale.............................        7/10/05-9/8/05      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Henry............................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Houston..........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Jefferson........................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Lamar............................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Lauderdale.......................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Lowndes..........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Macon............................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Marengo..........................        7/10/05-9/8/05      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Marion...........................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Mobile...........................        7/10/05-9/8/05      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Monroe...........................        7/10/05-9/8/05      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Perry............................        7/10/05-9/8/05      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Pickens..........................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Pike.............................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Randolph.........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Alabama........................................  Sumter...........................        7/10/05-9/8/05      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Tuscaloosa.......................        7/10/05-9/8/05      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Washington.......................        7/10/05-9/8/05      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Wilcox...........................        7/10/05-9/8/05      8/29/05-10/28/05  ....................  ....................  ....................
Alabama........................................  Winston..........................  ....................      8/29/05-10/28/05  ....................  ....................  ....................

[[Page 69]]

 
Florida........................................  Bay..............................        7/10/05-9/8/05      8/24/05-10/23/05  ....................  ....................  ....................
Florida........................................  Brevard..........................  ....................  ....................  ....................  ....................     10/23/05-12/22/05
Florida........................................  Broward..........................  ....................      8/24/05-10/23/05  ....................  ....................     10/23/05-12/22/05
Florida........................................  Calhoun..........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Florida........................................  Charlotte........................  ....................  ....................  ....................  ....................     10/23/05-12/22/05
Florida........................................  Collier..........................  ....................      8/24/05-10/23/05  ....................  ....................     10/23/05-12/22/05
Florida........................................  Dixie............................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Florida........................................  Escambia.........................        7/10/05-9/8/05      8/24/05-10/23/05  ....................  ....................  ....................
Florida........................................  Franklin.........................        7/10/05-9/8/05      8/24/05-10/23/05  ....................  ....................  ....................
Florida........................................  Gadsden..........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Florida........................................  Glades...........................  ....................  ....................  ....................  ....................     10/23/05-12/22/05
Florida........................................  Gulf.............................        7/10/05-9/8/05      8/24/05-10/23/05  ....................  ....................  ....................
Florida........................................  Hardee...........................  ....................  ....................  ....................  ....................     10/23/05-12/22/05
Florida........................................  Hendry...........................  ....................  ....................  ....................  ....................     10/23/05-12/22/05
Florida........................................  Highlands........................  ....................  ....................  ....................  ....................     10/23/05-12/22/05
Florida........................................  Holmes...........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Florida........................................  Indian River.....................  ....................  ....................  ....................  ....................     10/23/05-12/22/05
Florida........................................  Jackson..........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Florida........................................  Jefferson........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Florida........................................  Lee..............................  ....................  ....................  ....................  ....................     10/23/05-12/22/05
Florida........................................  Leon.............................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Florida........................................  Levy.............................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Florida........................................  Liberty..........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Florida........................................  Martin...........................  ....................  ....................  ....................  ....................     10/23/05-12/22/05
Florida........................................  Miami-Dade.......................  ....................      8/24/05-10/23/05  ....................  ....................     10/23/05-12/22/05
Florida........................................  Monroe...........................        7/10/05-9/8/05      8/24/05-10/23/05  ....................  ....................     10/23/05-12/22/05
Florida........................................  Okaloosa.........................        7/10/05-9/8/05      8/24/05-10/23/05  ....................  ....................  ....................
Florida........................................  Okeechobee.......................  ....................  ....................  ....................  ....................     10/23/05-12/22/05
Florida........................................  Palm Beach.......................  ....................  ....................  ....................  ....................     10/23/05-12/22/05
Florida........................................  St. Lucie........................  ....................  ....................  ....................  ....................     10/23/05-12/22/05
Florida........................................  Santa Rosa.......................        7/10/05-9/8/05      8/24/05-10/23/05  ....................  ....................  ....................
Florida........................................  Sarasota.........................  ....................  ....................  ....................  ....................     10/23/05-12/22/05
Florida........................................  Taylor...........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Florida........................................  Wakulla..........................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Florida........................................  Walton...........................        7/10/05-9/8/05      8/24/05-10/23/05  ....................  ....................  ....................
Florida........................................  Washington.......................        7/10/05-9/8/05  ....................  ....................  ....................  ....................
Louisiana......................................  Acadia...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Allen............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Ascension........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Assumption.......................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Louisiana......................................  Avoyelles........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Beauregard.......................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Bienville........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Bossier..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................

[[Page 70]]

 
Louisiana......................................  Caddo............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Calcasieu........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Caldwell.........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Cameron..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Catahoula........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Claiborne........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Concordia........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  De Soto..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  East Baton Rouge.................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Louisiana......................................  East Carroll.....................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  East Feliciana...................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Louisiana......................................  Evangeline.......................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Franklin.........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Grant............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Iberia...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Iberville........................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Louisiana......................................  Jackson..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Jefferson........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Jefferson Davis..................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Lafayette........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Lafourche........................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Louisiana......................................  La Salle.........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Lincoln..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Livingston.......................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Madison..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Morehouse........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Natchitoches.....................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Orleans..........................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Louisiana......................................  Ouachita.........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Plaquemines......................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Pointe Coupee....................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Louisiana......................................  Rapides..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Red River........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Richland.........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Sabine...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  St. Bernard......................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Louisiana......................................  St. Charles......................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Louisiana......................................  St. Helena.......................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Louisiana......................................  St. James........................  ....................      8/29/05-10/28/05  ....................  ....................  ....................

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Louisiana......................................  St. John the Baptist.............  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Louisiana......................................  St. Landry.......................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  St. Martin.......................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  St. Mary.........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  St. Tammany......................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Tangipahoa.......................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Louisiana......................................  Tensas...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Terrebonne.......................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Union............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Vermilion........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Vernon...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  Washington.......................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Louisiana......................................  Webster..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  West Baton Rouge.................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  West Carroll.....................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Louisiana......................................  West Feliciana...................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Louisiana......................................  Winn.............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Adams............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Alcorn...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Amite............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Attala...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Benton...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Bolivar..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Calhoun..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Carroll..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Chickasaw........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Choctaw..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Claiborne........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Clarke...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Clay.............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Coahoma..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Copiah...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Covington........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  De Soto..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Forrest..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Franklin.........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  George...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Greene...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Grenada..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Hancock..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Harrison.........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Hinds............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................

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Mississippi....................................  Holmes...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Humphreys........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Issaquena........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Itawamba.........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Jackson..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Jasper...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Jefferson........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Jefferson Davis..................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Jones............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Kemper...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Lafayette........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Lamar............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Lauderdale.......................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Lawrence.........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Leake............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Lee..............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Leflore..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Lincoln..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Lowndes..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Madison..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Marion...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Marshall.........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Monroe...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Montgomery.......................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Neshoba..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Newton...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Noxubee..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Oktibbeha........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Panola...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Pearl River......................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Perry............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Pike.............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Pontotoc.........................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Mississippi....................................  Prentiss.........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Quitman..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Rankin...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Scott............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Sharkey..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Simpson..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Smith............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................

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Mississippi....................................  Stone............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Sunflower........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Tallahatchie.....................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Tate.............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Tippah...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Tishomingo.......................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Tunica...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Union............................  ....................      8/29/05-10/28/05  ....................  ....................  ....................
Mississippi....................................  Walthall.........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Warren...........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Washington.......................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Wayne............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Webster..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Wilkinson........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Winston..........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Yalobusha........................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
Mississippi....................................  Yazoo............................  ....................      8/29/05-10/28/05  ....................      9/23/05-11/22/05  ....................
North Carolina.................................  Brunswick........................  ....................  ....................      9/11/05-11/10/05  ....................  ....................
North Carolina.................................  Carteret.........................  ....................  ....................      9/11/05-11/10/05  ....................  ....................
North Carolina.................................  Craven...........................  ....................  ....................      9/11/05-11/10/05  ....................  ....................
North Carolina.................................  Dare.............................  ....................  ....................      9/11/05-11/10/05  ....................  ....................
North Carolina.................................  Hyde.............................  ....................  ....................      9/11/05-11/10/05  ....................  ....................
North Carolina.................................  Jones............................  ....................  ....................      9/11/05-11/10/05  ....................  ....................
North Carolina.................................  New Hanover......................  ....................  ....................      9/11/05-11/10/05  ....................  ....................
North Carolina.................................  Onslow...........................  ....................  ....................      9/11/05-11/10/05  ....................  ....................
North Carolina.................................  Pamlico..........................  ....................  ....................      9/11/05-11/10/05  ....................  ....................
North Carolina.................................  Pender...........................  ....................  ....................      9/11/05-11/10/05  ....................  ....................
Texas..........................................  Angelina.........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Brazoria.........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Chambers.........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Cherokee.........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Fort Bend........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Galveston........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Gregg............................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Hardin...........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Harris...........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Harrison.........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Houston..........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Jasper...........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Jefferson........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Liberty..........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Marion...........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Montgomery.......................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Nacogdoches......................  ....................  ....................  ....................      9/23/05-11/22/05  ....................

[[Page 74]]

 
Texas..........................................  Newton...........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Orange...........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Panola...........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Polk.............................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Rusk.............................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Sabine...........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  San Augustine....................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  San Jacinto......................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Shelby...........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Trinity..........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Tyler............................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
Texas..........................................  Walker...........................  ....................  ....................  ....................      9/23/05-11/22/05  ....................
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[[Page 75]]



Sec. 760.102  Applicability.

    (a) This part establishes the terms and conditions under which the 
following programs will be administered for 2005 hurricanes in eligible 
counties:
    (1) Hurricane Indemnity Program (HIP);
    (2) Feed Indemnity Program (FIP);
    (3) Livestock Indemnity Program (LIP);
    (4) Tree Indemnity Program (TIP); and
    (5) Aquaculture grants to States.
    (b) The amount that may be expended for payments under subparts B 
through G of this part shall not exceed the amount of Section 32 funds 
made available by the Secretary for the administration of these 
programs.
    (c) To be eligible for payments under these programs, producers must 
comply with all applicable provisions under subparts B through G of this 
part and with any other conditions imposed by FSA or, in the case of 
State grants, by the State.



Sec. 760.103  Administration of HIP, FIP, LIP, and TIP.

    (a) These programs are administered under the general supervision of 
the Administrator, FSA.
    (b) FSA representatives do not have authority to modify or waive any 
of the provisions of the regulations of subparts B through F of this 
part.
    (c) The State FSA committee shall take any action required by the 
regulations of subparts B through F of this part that the county FSA 
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 subparts B through F of this part; or
    (2) Require a county committee to withhold taking any action that is 
not in accordance with subparts B through F of this part.
    (d) No provision or delegation to a State or county FSA committee 
shall preclude the Administrator, FSA, Deputy Administrator for Farm 
Programs, FSA or a designee or other such person, from determining any 
question arising under the program or from reversing or modifying any 
determination made by a State or county FSA committee.



Sec. 760.104  Definitions.

    The following definitions in this section apply to the programs in 
subparts B through G of this part. The terms defined in part 718 of this 
chapter and parts 1400 and 1437 of this title shall also be applicable, 
except where they conflict with the definitions set forth in this 
section.
    Application means the `2005 Hurricane Disaster Programs Application' 
form.
    Application period means the date established by the Deputy 
Administrator for producers to apply for program benefits.
    Bush means a thick densely branched woody shrub grown for the 
production of an annual crop for commercial market for human 
consumption.
    Commercial use means used in the operation of a business activity 
engaged in as a means of livelihood for profit by the eligible producer.
    Crop insurance means an insurance policy reinsured by the Federal 
Crop Insurance Corporation under the provisions of the Federal Crop 
Insurance Act, as amended.
    Farming operation means a business enterprise engaged in the 
production of agricultural products.
    Fruit tree means a woody perennial plant having a single main trunk, 
commonly exceeding 10 feet in height and usually devoid of branches 
below, but bearing a head of branches and foliage or crown of leaves at 
the summit that is grown for the production of an annual crop, including 
nuts, for commercial market for human consumption.
    Owner means one who had legal ownership of the trees, bushes, vines, 
or livestock for which benefits are being requested under subparts B 
through F, on the day such plant or livestock perished or suffered 
losses due to an eligible hurricane as set forth Sec. 760.101.
    Stand means a contiguous acreage of the same crop of trees, bushes, 
or vines, and excludes container-grown crops.
    Tier means the geographic bands of damage generally correlating to 
the severity of damage caused by the maximum sustained winds of the 
applicable hurricanes.

[[Page 76]]

    Vine means a plant from which an annual fruit crop is produced for 
commercial market for human consumption, such as grape, kiwi, or passion 
fruit, that has a flexible stem supported by climbing, twining, or 
creeping along a surface.



Sec. 760.105  Application for payment.

    (a) A producer who applies for any program under subparts B through 
F shall file an application and any required supporting documentation in 
the county FSA office serving the county where the eligible loss 
occurred; or in the case of FIP, where the eligible livestock were 
physically located on the applicable date.
    (b) The application must be filed during the application period 
announced by FSA.
    (c) Payments may be made for eligible losses suffered by an eligible 
producer who is now deceased or is a dissolved entity if a 
representative who currently has authority to enter into a contract for 
the producer signs the application for payment. Proof of authority to 
sign for the deceased producer or dissolved entity must be provided. If 
a producer is now a dissolved general partnership or joint venture, all 
members of the general partnership or joint venture at the time of 
dissolution or their duly authorized representatives must sign the 
application for payment.
    (d) Data furnished by the applicant will be used to determine 
eligibility for program benefits. Furnishing the data is voluntary; 
however, without all required data program benefits will not be approved 
or provided.
    (e) A minor child shall be eligible to apply for program benefits so 
long as all eligibility requirements are met and one of the following 
conditions exist:
    (1) The right of majority has been conferred upon the minor by court 
proceedings or 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 a surety guarantees any loss 
incurred for which the minor would be liable had the minor been an 
adult.



Sec. 760.106  Limitations on payments and other benefits.

    (a) Separate payment limitations apply to HIP, FIP, LIP, and TIP. No 
`person' as determined under part 1400 of this title shall receive more 
than $80,000 under each of these programs.
    (b) An individual or entity whose adjusted gross income is in excess 
of $2.5 million, as determined under part 1400 of this title, shall not 
be eligible to receive benefits under this part for HIP, FIP, LIP, and 
TIP.
    (c) As a condition to receive benefits under subparts B through F, a 
producer must have been in compliance with the provisions of parts 12 
and 718 of this title for the 2005 crop year and must not otherwise be 
barred from receiving benefits under any law.
    (d) An individual or entity determined to be a foreign person under 
part 1400 of this title shall not be eligible to receive benefits under 
subparts B through F of this part.



Sec. 760.107  Appeals.

    The appeal regulations set forth at parts 11 and 780 of this title 
apply to determinations made pursuant to subparts B through F of this 
part.



Sec. 760.108  Offsets, assignments, and debt settlement.

    (a) Except as provided in paragraph (b) of this section, any payment 
or portion thereof to any producer shall be made without regard to 
questions of title under State law and without regard to any claim or 
lien against the commodity, and 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 792 of this 
chapter apply to payments made under subparts B through F of this part.
    (b) Any producer entitled to any payment may assign any payments in 
accordance with regulations governing the assignment of payments found 
at part 1404 of this title.



Sec. 760.109  Records and inspection thereof.

    Producers receiving payments under the programs in subparts B 
through F

[[Page 77]]

or any other person who furnishes information for the purposes of 
enabling such producer to receive a payment under subparts B through F 
of this part shall maintain any books, records, and accounts supporting 
any information so furnished for 3 years following the end of the year 
during which the application for payment was filed. Producers receiving 
payments or any other person who furnishes such information to FSA shall 
permit authorized representatives of USDA and the General Accounting 
Office during regular business hours to inspect, examine, and to allow 
such persons to make copies of such books, records, and to enter upon, 
inspect and verify all applicable livestock and acreage in which the 
applicant has an interest for the purpose of confirming the accuracy of 
the information provided by the applicant.



Sec. 760.110  Refunds; joint and several liability.

    In the event there is a failure to comply with any term, 
requirement, or condition for payment or assistance arising under 
subparts B through F of this part, and if any refund of a payment to FSA 
shall otherwise become due in connection with this part, all payments 
made in regard to such matter shall be refunded to FSA together with 
interest and late-payment charges as provided for in part 792 of this 
chapter.



Sec. 760.111  Paperwork Reduction Act assigned number.

    The information collection required to support the regulations of 
subparts B through F of this part has been approved by OMB and assigned 
OMB control number 0560-0257.



                  Subpart C_Hurricane Indemnity Program

    Source: 71 FR 27191, May 10, 2006, unless otherwise noted.



Sec. 760.201  Applicability.

    This subpart sets forth the terms and conditions applicable to the 
Hurricane Indemnity Program (HIP). Benefits will be provided under this 
subpart to producers who have received a crop insurance indemnity from 
the Risk Management Agency (RMA) based on the associated loss criteria 
set forth in Sec. 760.202(a)(1) as provided to FSA by RMA; and to 
producers who have received Noninsured Crop Disaster Assistance Program 
(NAP) payments under part 1437 of this title based on the provisions of 
Sec. 760.202(a)(1). HIP benefits will be provided under this subpart to 
eligible producers who suffered losses due to hurricanes as set forth in 
Sec. 760.101.



Sec. 760.202  Producer eligibility.

    A producer who applies for benefits under this subpart will be 
eligible to receive a payment if both of the following apply:
    (a) The producer received a crop insurance indemnity from RMA or a 
NAP payment under part 1437 of this title for crop losses:
    (1) In an eligible county;
    (2) Recorded by RMA or FSA as being due to an eligible hurricane and 
the loss occurred during a disaster period as set forth in Sec. 
760.101; and
    (3) Were due to any of the following causes of loss:
    (i) Excessive moisture, precipitation, and/or rain;
    (ii) Flood;
    (iii) Excessive wind;
    (iv) Cyclone;
    (v) Tornado;
    (vi) Hurricane or tropical depression;
    (vii) Storm surge; and/or
    (viii) Salinity due to salt water intrusion.
    (b) An application is filed in accordance with Sec. 760.105.



Sec. 760.203  Payment calculation.

    The disaster benefits under this subpart will be equal to the 
smaller of:
    (a) 30 percent of the RMA crop insurance indemnity or 30 percent of 
the NAP payment for eligible crop losses according to Sec. 
760.202(a)(1), and adding the crop insurance premium for the indemnity 
as outlined in Sec. 760.202(a)(1); or
    (b) 95 percent of the expected value of the crop in the absence of a 
disaster, as determined by RMA for insured crops, using information from 
the crop policy; and by FSA for NAP crops, using the producer's price 
and yield, minus the following:

[[Page 78]]

    (1) The value of the production as counted by RMA for insured crops 
to establish the indemnity and by FSA for NAP crops to establish the NAP 
payment,
    (2) The crop's eligible indemnity or NAP payment for eligible crop 
losses determined in accordance with Sec. 760.202(a)(1),
    (3) And adding the crop insurance premium for the indemnity as 
outlined in Sec. 760.202(a)(1).



                    Subpart D_Feed Indemnity Program

    Source: 71 FR 27191, May 10, 2006, unless otherwise noted.



Sec. 760.301  Applicability.

    This subpart sets forth the terms and conditions applicable to the 
Feed Indemnity Program (FIP). FIP benefits will be provided under this 
subpart to eligible owners and cash lessees, but not both, for the same 
livestock, for feed losses or increased feed costs that occurred in 
eligible counties during the disaster period as set forth in Sec. 
760.101.



Sec. 760.302  Definitions.

    The following definitions are applicable for all purposes of 
administering FIP.
    Adult beef bulls means male bovine animals that were at least 2 
years old and used for breeding purposes on the beginning date of the 
applicable disaster period as set forth in Sec. 760.101.
    Adult beef cows means female bovine animals that had delivered one 
or more offspring before the beginning date of the applicable disaster 
period as set forth in Sec. 760.101. A first-time bred beef heifer 
shall also be considered an adult beef cow if it was pregnant on the 
beginning date of the applicable disaster period as set forth in Sec. 
760.101.
    Adult buffalo and beefalo bulls means male animals of those breeds 
that were at least 2 years old and used for breeding purposes on the 
beginning date of the applicable disaster period as set forth in Sec. 
760.101.
    Adult buffalo and beefalo cows means female animals of those breeds 
that had delivered one or more offspring before the beginning date of 
the applicable disaster period as set forth in Sec. 760.101. A first-
time bred buffalo or beefalo heifer shall also be considered to be an 
adult buffalo or beefalo cow if it was pregnant on the beginning date of 
the applicable disaster period as set forth in Sec. 760.101.
    Adult dairy bulls means male bovine animals of a breed used for 
producing milk for human consumption that were at least 2 years old and 
used for breeding dairy cows on the beginning date of the applicable 
disaster period as set forth in Sec. 760.101.
    Adult dairy cows means female bovine animals used for the purpose of 
providing milk for human consumption, that had delivered one or more 
offspring before the beginning date of the applicable disaster period as 
set forth in Sec. 760.101. A first-time bred dairy heifer shall also be 
considered an adult dairy cow if it was pregnant on the beginning date 
of the applicable disaster period as set forth in Sec. 760.101.
    Deer means domesticated ruminant mammals of the genus Cervus having 
two large and two small hooves on each foot.
    Goats means domesticated, ruminant mammals of the genus Capra, 
including Angora goats.
    Horses means domesticated horses, and does not include donkeys, 
mules or other large solid-hoofed herbivorous mammals.
    Non-adult beef cattle means male, female or neutered male bovine 
animals that weighed 500 pounds or more on the beginning date of the 
applicable disaster period as set forth in Sec. 760.101, but do not 
meet the definition of adult beef cows or bulls.
    Non-adult buffalo/beefalo means male, female or neutered male 
animals of those breeds that weighed 500 pounds or more on the beginning 
date of the applicable disaster period as set forth in Sec. 760.101, 
but do not meet the definition of an adult buffalo or beefalo cow or 
bull.
    Non-adult dairy cattle means male, female or neutered male bovine 
livestock, of a breed used for the purpose of providing milk for human 
consumption, that weighed 500 pounds or more on the beginning date of 
the applicable disaster period as set forth in Sec. 760.101, but do not 
meet the definition adult dairy cows or bulls.

[[Page 79]]

    Sheep means domesticated, ruminant mammals of the genus Ovis.



Sec. 760.303  Eligible livestock and producers.

    (a) To be considered eligible, livestock must meet all the following 
conditions:
    (1) Be adult or non-adult dairy cattle, beef cattle, buffalo, 
beefalo, horses, sheep, goats or deer as defined in Sec. 760.302;
    (2) Been physically located in an eligible county on the beginning 
date of the applicable disaster period as set forth in Sec. 760.101;
    (3) Been maintained for commercial use as part of a farming 
operation on the beginning date of the applicable disaster period as set 
forth in Sec. 760.101;
    (4) Not have been produced and maintained for reasons other than 
commercial use as part of a farming operation. Such excluded uses 
include, but are not limited to wild free roaming animals or animals 
used for recreational purposes, such as pleasure, hunting, pets, or for 
show.
    (b) To be considered an eligible livestock producer, both of the 
following conditions must be met:
    (1) Owned or cash-leased, but not both for the same livestock, 
eligible livestock on the beginning date of the applicable disaster 
period as provided in Sec. 760.101; and
    (2) Suffered a feed loss or an increased feed cost during the 
applicable disaster period as set forth in Sec. 760.101. The feed must 
have been for the eligible livestock.



Sec. 760.304  Application process.

    (a) Applicants must submit a completed application certifying to the 
feed loss or increased feed cost, current physical location of livestock 
in inventory, physical location of claimed livestock on the beginning 
date of the applicable disaster period as set forth in Sec. 760.101, 
and any other supporting documentation for FSA to determine the 
eligibility of the applicant.
    (b) Supporting evidence may include quantity and kind of livestock 
for which benefits are being requested, including but not limited to, 
purchase records, veterinarian records, bank or other loan papers, 
rendering truck receipts, Federal Emergency Management Agency and 
National Guard records, written contracts, production records, Internal 
Revenue Service (IRS) records, property tax records, private insurance 
documents, and any other verifiable documents available to confirm the 
existence of the claimed livestock.



Sec. 760.305  Payment calculation.

    (a) FIP payments are calculated by multiplying the national payment 
rate for each of the following livestock categories by the number of 
eligible livestock in each category. The payment rate represents the 
cost of the amount of corn needed to maintain 1 animal unit for a 
specified period of time.
    (b) The eligible livestock categories are:
    (1) Adult beef cows or bulls;
    (2) Non-adult beef cattle;
    (3) Adult buffalo or beefalo cows or bulls;
    (4) Non-adult buffalo or beefalo;
    (5) Adult dairy cows or bulls;
    (6) Non-adult dairy cattle;
    (7) Goats;
    (8) Sheep;
    (9) Horses; and
    (10) Deer.



                  Subpart E_Livestock Indemnity Program

    Source: 71 FR 27191, May 10, 2006, unless otherwise noted.



Sec. 760.401  Applicability.

    (a) This subpart sets forth the terms and conditions applicable to 
the Livestock Indemnity Program (LIP). Benefits will be provided under 
this subpart to eligible livestock owners and contract growers, but not 
both for the same livestock loss, for certain livestock deaths that 
occurred in eligible counties during the disaster period as set forth in 
Sec. 760.101.
    (b) Eligible livestock owners and contract growers will be 
compensated in accordance with Sec. 760.405 for eligible livestock 
deaths that occurred in eligible counties during the disaster period as 
set forth in Sec. 760.101.

[[Page 80]]



Sec. 760.402  Definitions.

    The following definitions are applicable for all purposes of 
administering LIP.
    Adult beef bull means a male bovine animal that was at least 2 years 
old and used for breeding purposes before it died.
    Adult beef cow means a female bovine animal that had delivered one 
or more offspring before dying. A first-time bred beef heifer shall also 
be considered an adult beef cow if it was pregnant at the time it died.
    Adult buffalo and beefalo bull means a male animal of those breeds 
that were at least 2 years old and used for breeding purposes before it 
died.
    Adult buffalo and beefalo cow means a female animal of those breeds 
that had delivered one or more offspring before dying. A first-time bred 
buffalo or beefalo heifer shall also be considered an adult buffalo or 
beefalo cow if it was pregnant at the time it died.
    Adult dairy bull means a male bovine animal of a breed used for 
producing milk for human consumption that was at least 2 years old and 
used for breeding dairy cows before it died.
    Adult dairy cow means a female bovine animal used for the purpose of 
providing milk for human consumption that had delivered one or more 
offspring before dying. A first-time bred dairy heifer shall also be 
considered an adult dairy cow if it was pregnant at the time it died.
    Buck means a male goat.
    Contract means, with respect to contracts for the handling of 
livestock, a written agreement between a livestock owner and another 
individual or entity setting the specific terms, conditions and 
obligations of the parties involved regarding the production of 
livestock or livestock products.
    Deer means a domesticated ruminant mammal of the genus Cervus having 
two large and two small hooves on each foot.
    Doe means a female goat.
    Equine animal means a domesticated horse, mule or donkey.
    Ewe means a female sheep.
    Goat means a domesticated, ruminant mammal of the genus Capra, 
including Angora goats. Goats will be further delineated by sex (bucks 
and does) and age (kids).
    Kid means a goat less than 1 year old.
    Lamb means a sheep less than 1 year old.
    Non-adult beef cattle means male, female or neutered male bovines 
that do not meet the definition of adult beef cows or bulls. Non-adult 
beef cattle is further delineated by weight categories of less than 400 
pounds, and 400 pounds or more at the time they died.
    Non-adult buffalo or beefalo means a male, female or neutered male 
animal of those breeds that do not meet the definition of adult buffalo/
beefalo cow or bull. Non-adult buffalo or beefalo is further delineated 
by weight categories of less than 400 pounds, and 400 pounds or more at 
the time of death.
    Non-adult dairy cattle means male, female or neutered male bovine 
livestock, of a breed used for the purpose of providing milk for human 
consumption, that do not meet the definition of adult dairy cows or 
bulls. Non-adult dairy cattle is further delineated by weight categories 
of less than 400 pounds, and 400 pounds or more at the time they died.
    Poultry means domesticated chickens, turkeys, ducks and geese. 
Poultry will be further delineated by sex, age and purpose of 
production, as determined by FSA.
    Ram means a male sheep.
    Sheep means domesticated, ruminant mammals of the genus Ovis. Sheep 
will be further delineated by sex (rams and ewes) and age (lambs).
    Swine means domesticated omnivorous pigs, hogs, and boars. Swine 
will be further delineated by sex and weight as determined by FSA.



Sec. 760.403  Eligible owners, contract growers and livestock.

    (a) To be considered eligible, a livestock owner must have had legal 
ownership of the eligible livestock on the day the livestock died.
    (b) To be considered eligible, a contract grower on the day the 
livestock died must have had:
    (1) A written agreement with the owner of eligible livestock setting 
the specific terms, conditions and obligations of the parties involved 
regarding the production of livestock; and

[[Page 81]]

    (2) Control of the livestock that died.
    (c) To be considered eligible, livestock must meet all the 
following:
    (1) Be adult or non-adult dairy cattle, beef cattle, buffalo, 
beefalo, equine, sheep, goats, swine, poultry or deer.
    (2) Perished as a direct result of an applicable disaster, in an 
eligible county and during the applicable disaster period as set forth 
in Sec. 760.101;
    (3) Been maintained for commercial use as part of a farming 
operation on the day they died; and before dying;
    (4) Not have been produced or maintained for reasons other than 
commercial use as part of a farming operation, including but not limited 
to wild free roaming animals or animals used for recreational purposes, 
such as pleasure, hunting, pets, or for show.



Sec. 760.404  Application process.

    (a) Applicants must submit a completed application, documentary 
evidence of loss, current physical location of livestock in inventory, 
physical location of claimed livestock at the time of death, and any 
other supporting documentation necessary for FSA to determine 
eligibility.
    (b) Applicants must provide adequate proof that the death of the 
eligible livestock occurred during the applicable disaster period, and 
the death was a direct result of the applicable disaster, as set forth 
in Sec. 760.101.
    (c) The quantity and kind of livestock that died as a direct result 
of the applicable disaster may be documented by purchase records, 
veterinarian records, bank or other loan papers, rendering truck 
receipts, Federal Emergency Management Agency and National Guard 
records, written contracts, production records, IRS records, property 
tax records, private insurance documents, and any other verifiable 
documents available to confirm the presence and subsequent death of the 
livestock.
    (d) Certifications of livestock deaths by third parties may be 
accepted only if both the following conditions are met:
    (1) The livestock owner or livestock contract grower, as applicable, 
certifies in writing:
    (i) That there is no other documentation of death available; and
    (ii) The number of livestock, by category as determined by the 
Deputy Administrator, in inventory at the time the applicable disaster 
occurred; and
    (2) The third party certifying to the claimed deaths by the 
livestock owner or contract grower must provide their telephone number 
and address, and certify in writing to all the following:
    (i) Specific details about their knowledge of the livestock deaths;
    (ii) Their affiliation to the livestock owner or contract grower;
    (iii) The accuracy of the deaths claimed by the livestock owner or 
contract grower; and
    (iv) Other details necessary for FSA to determine the certification 
acceptable.



Sec. 760.405  Payment calculation.

    (a) Under LIP, separate payment rates are established for eligible 
livestock owners and eligible contract growers in accordance with 
paragraphs (b) and (c) of this section. LIP payments are calculated by 
multiplying the national payment rate, as determined in paragraphs (b) 
and (c) of this section, by the number of eligible livestock in each 
category, as provided in paragraph (d) of this section. The payment 
calculated for an eligible contract grower for an eligible livestock 
category shall be reduced by the amount of any compensation received 
from the contractor for the loss of income from the dead livestock.
    (b) The LIP payment rate for eligible livestock owners is based on 
75 percent of the average fair market value of the livestock.
    (c) The LIP payment rates for eligible contract growers is based on 
75 percent of the average income loss sustained by the contract grower 
with respect to the dead livestock.
    (d) The categories of eligible livestock are as follows:
    (1) Adult beef cows;
    (2) Adult beef bulls;
    (3) Non-adult beef cattle;
    (4) Adult buffalo or beefalo cows;
    (5) Adult buffalo or beefalo bulls;
    (6) Non-adult buffalo/beefalo;
    (7) Adult dairy cows;
    (8) Adult dairy bulls;
    (9) Non-adult dairy cattle;

[[Page 82]]

    (10) Swine, sows, boars, barrows, gilts over 150 pounds;
    (11) Swine, sows, boars, barrows, gilts 50 to 150 pounds;
    (12) Swine, feeder pigs under 50 pounds;
    (13) Goats, bucks;
    (14) Goats, does;
    (15) Goats, kids;
    (16) Sheep, rams;
    (17) Sheep, ewes;
    (18) Sheep, lambs;
    (19) Deer;
    (20) Chickens, layers, roasters;
    (21) Chickens, broilers, pullets;
    (22) Chickens, chicks;
    (23) Turkeys, toms, fryers, roasters;
    (24) Turkeys, poults;
    (25) Ducks;
    (26) Ducks, ducklings;
    (27) Geese, goose;
    (28) Geese, gosling; and
    (29) Equine.



                    Subpart F_Tree Indemnity Program

    Source: 71 FR 27191, May 10, 2006, unless otherwise noted.



Sec. 760.501  Applicability.

    (a) This subpart sets forth the terms and conditions applicable to 
the Tree Indemnity Program (TIP). Benefits will be provided under this 
subpart for eligible fruit trees, bushes, and vines that were lost or 
damaged during the disaster period as set forth in Sec. 760.101.
    (b) Compensation will be based on expenses incurred for replanting, 
rehabilitation, cleanup, and debris removal.
    (c) No benefits shall be provided when the loss:
    (1) Occurred in any county other than an eligible county, or
    (2) Was not the result of an eligible disaster as set forth in Sec. 
760.101.



Sec. 760.502  Eligible producers and stands.

    (a) An eligible fruit tree, bush, and/or vine producer is one who 
bears financial responsibility and who has incurred costs of at least 
$90 per acre for replanting, rehabilitation, cleanup, or debris removal, 
excluding crop production.
    (b) An eligible stand must:
    (1) Be physically located in an eligible county;
    (2) Have been impacted during an eligible disaster as set forth in 
Sec. 760.101; and
    (3) Be grown for commercial use.



Sec. 760.503  Application process.

    (a) Applicants must submit a completed application and report of 
acreage identifying the geographic location and number of acres in the 
disaster-affected stand of claimed fruit trees, bushes, and vines 
according to part 718 of this chapter, and any other supporting 
documentation for FSA to determine the eligibility of the applicant.
    (b) Applicants must certify and provide adequate proof that the 
expenses incurred to eligible fruit trees, bushes, or vines occurred 
during the applicable disaster period and that the loss or damage was a 
direct result of the applicable disaster, as set forth in Sec. 760.101.
    (c) The quantity and kind of fruit trees, bushes, or vines that died 
or were damaged as a result of the applicable disaster may be documented 
by purchase records, bank or other loan papers, Federal Emergency 
Management Agency and National Guard records, IRS records, property tax 
records, private insurance documents, and any other verifiable documents 
available to confirm the presence and subsequent loss or expenses 
incurred of said fruit trees, bushes, or vines.



Sec. 760.504  Payment calculation.

    (a) TIP payments shall be calculated by multiplying the following 
national payment rate for the applicable tier by the number of eligible 
acres, excluding but not limited to such things as drainage ditches and 
canals, in a stand of fruit trees, bushes, or vines by the producer's 
share in such crop:
    (1) Tier I--$750;
    (2) Tier II--$300;
    (3) Tier III--$200; and
    (4) Tier IV--$90.
    (b) If the actual expenses incurred for damage are greater than the 
value associated with the tier based on the location of the stand, the 
applicant may submit documentation to FSA to request the stand be placed 
in the next lower-numbered tier which represents a

[[Page 83]]

greater level of loss and a higher payment rate. Regardless of the 
expenses incurred the stand can only be placed in the next lower-
numbered tier.



                      Subpart G_Aquaculture Program



Sec. 760.601  Funds availability.

    FSA will provide block grants to the states of Alabama, Florida, 
Louisiana, Mississippi, North Carolina and Texas where aquaculture was 
adversely affected by the hurricanes as set forth in Sec. 760.201 for 
those States. Producers in eligible counties in those states who raise 
aquaculture species in a controlled environment as part of a farming 
operation and who have not received assistance under other disaster 
programs for the same aquaculture losses may be eligible for these 
funds. Funds provided by a State to a farming operation under such a 
grant shall not exceed $80,000.

[71 FR 27191, May 10, 2006]



PART 761_GENERAL AND ADMINISTRATIVE--Table of Contents




                      Subpart A_General Provisions

Sec.
761.1-761.6 [Reserved]
761.7 Appraisals.
761.8 Loan limitations.

    Authority: 5 U.S.C. 301, 7 U.S.C. 1989.

    Source: 64 FR 62567, Nov. 17, 1999, unless otherwise noted.



Sec. Sec. 761.1-761.6  [Reserved]



Sec. 761.7  Appraisals.

    (a) General. This section describes requirements for:
    (1) Real estate and chattel appraisals made in connection with the 
making and servicing of direct Farm Loan Program and nonprogram loans; 
and,
    (2) Appraisal reviews conducted on appraisals made in connection 
with the making and servicing of direct and guaranteed Farm Loan Program 
and nonprogram loans.
    (b) Definitions.
    Administrative appraisal review means a review of an appraisal to 
determine if the appraisal:
    (1) Meets applicable Agency requirements; and
    (2) Is accurate outside the requirements of standard 3 of USPAP.
    Agency means the Farm Service Agency, including its employees and 
state and area committee members, and any successor agency.
    Farm Loan Programs (FLP) loans refers to Farm Ownership (FO), Soil 
and Water (SW), Recreation (RL), Economic Opportunity (EO), Operating 
(OL), Emergency (EM), Economic Emergency (EE), Softwood Timber (ST), and 
Rural Housing loans for farm service buildings (RHF).
    Technical appraisal review means a review of an appraisal to 
determine if such appraisal meets the requirements of USPAP pursuant to 
standard 3 of USPAP.
    USPAP (Uniform Standards of Professional Appraisal Practice) means 
standards governing the preparation, reporting, and reviewing of 
appraisals established by the Appraisal Foundation pursuant to the 
Financial Institutions Reform, Recovery, and Enforcement Act of 1989.
    (c) Appraisal standards--(1) Real estate. Real estate appraisals, 
technical appraisal reviews of real estate appraisals, and their 
respective forms must comply with the standards contained in USPAP, as 
well as applicable Agency regulations and procedures for the specific 
Farm Loan Program activity involved. A current copy of USPAP along with 
other applicable appraisal procedures and regulations is available for 
review in each Agency State Office.
    (2) Chattel. An appraisal of chattel property may be completed on an 
applicable Agency form (available in each Agency State Office) or other 
format containing the same information.
    (d) Use of an existing real estate appraisal. The Agency may use an 
existing real estate appraisal to reach a loan making or servicing 
decision under either of the following conditions:
    (1) The appraisal was completed within the previous 12 months and 
the Agency determines that:
    (i) The appraisal meets the provisions of this section and the 
applicable Agency loan making or servicing requirements, and

[[Page 84]]

    (ii) Current market values have remained stable since the appraisal 
was completed; or
    (2) The appraisal was not completed in the previous 12 months, but 
has been updated by the appraiser or appraisal firm that completed the 
appraisal, and both the update and original appraisal were completed in 
accordance with USPAP.
    (e) Appraisal reviews--(1) Real estate appraisals. With respect to a 
real estate appraisal, the Agency may conduct a technical appraisal 
review or an administrative appraisal review, or both.
    (2) Chattel appraisals. With respect to a chattel appraisal, the 
Agency may conduct an administrative appraisal review.

[64 FR 62567, Nov. 17, 1999; 64 FR 69322, Dec 10, 1999; 65 FR 14433, 
Mar. 17, 2000]



Sec. 761.8  Loan limitations.

    (a) Dollar limits. The outstanding principal balances for a farm 
loan applicant or anyone who will sign the promissory note cannot exceed 
any of the following:
    (1) Farm Ownership loans, Beginning Farmer Down payment loans and 
Soil and Water loans:
    (i) Direct--$200,000;
    (ii) Guaranteed--$700,000 (for fiscal year 2000 and increased at the 
beginning of each fiscal year in accordance with paragraph (b) of this 
section);
    (iii) Any combination of a direct Soil and Water loan, direct Farm 
Ownership loan, guaranteed Soil and Water loan, and guaranteed Farm 
Ownership loan--$700,000 (for fiscal year 2000 and increased each fiscal 
year in accordance with paragraph (b) of this section);
    (2) Operating loans:
    (i) Direct--$200,000;
    (ii) Guaranteed--$700,000 (for fiscal year 2000 and increased each 
fiscal year in accordance with paragraph (b) of this section);
    (iii) Any combination of a direct Operating loan and guaranteed 
Operating loan--$700,000 (for fiscal year 2000 and increased each fiscal 
year in accordance with paragraph (b) of this section);
    (3) Any combination of guaranteed Farm Ownership loan, guaranteed 
Soil and Water loan, and guaranteed Operating loan--$700,000 (for fiscal 
year 2000 and increased each fiscal year in accordance with paragraph 
(b) of this section);
    (4) Any combination of direct Farm Ownership loan, direct Soil and 
Water loan, direct Operating loan, guaranteed Farm Ownership loan, 
guaranteed Soil and Water loan, and guaranteed Operating loan--the 
amount in paragraph (a)(1)(ii) of this section plus $200,000;
    (5) Emergency loans--$500,000;
    (6) Any combination of direct Farm Ownership loan, direct Soil and 
Water loan, direct Operating loan, guaranteed Farm Ownership loan, 
guaranteed Soil and Water loan, guaranteed Operating loan, and Emergency 
loan--the amount in paragraph (a)(1)(ii) of this section plus $700,000.
    (b) The dollar limits of guaranteed loans will be increased each 
fiscal year based on the percentage change in the Prices Paid by Farmers 
Index as compiled by the National Agricultural Statistics Service, USDA. 
The maximum loan limits for the current fiscal year are available in any 
FSA office and on the FSA website at http://www.fsa.usda.gov.
    (c) Line of credit advances. The total dollar amount of guaranteed 
line of credit advances and income releases cannot exceed the total 
estimated expenses, less interest expense, as indicated on the 
borrower's cash flow budget, unless the cash flow budget is revised and 
continues to reflect a feasible plan.

[66 FR 7566, Jan. 24, 2001, as amended at 67 FR 41312, June 18, 2002]



PART 762_GUARANTEED FARM LOANS--Table of Contents




Sec.
762.1-762.100 [Reserved]
762.101 Introduction.
762.102 Abbreviations and definitions.
762.103 Full faith and credit.
762.104 Appeals.
762.105 Eligibility and substitution of lenders.
762.106 Preferred and certified lender programs.
762.107-762.109 [Reserved]
762.110 Loan application.
762.111-762.119 [Reserved]
762.120 Loan applicant eligibility.
762.121 Loan purposes.
762.122 Loan limitations.

[[Page 85]]

762.123 Insurance and farm inspection requirements.
762.124 Interest rates, terms, charges, and fees.
762.125 Financial feasibility.
762.126 Security requirements.
762.127 Appraisal requirements.
762.128 Environmental and special laws.
762.129 Percent of guarantee and maximum loss.
762.130 Loan approval and issuing the guarantee.
762.131-762.139 [Reserved]
762.140 General servicing responsibilities.
762.141 Reporting requirements.
762.142 Servicing related to collateral.
762.143 Servicing distressed accounts.
762.144 Repurchase of guaranteed portion from a secondary market holder.
762.145 Restructuring guaranteed loans.
762.146 Other servicing procedures.
762.147 Servicing shared appreciation agreements.
762.148 Bankruptcy.
762.149 Liquidation.
762.150 Interest assistance program.
762.151-762.158 [Reserved]
762.159 Pledging of guarantee.
762.160 Assignment of guarantee.

    Authority: 5 U.S.C. 301, 7 U.S.C. 1989.

    Source: 64 FR 7378, Feb. 12, 1999, unless otherwise noted.



Sec. Sec. 762.1-762.100  [Reserved]



Sec. 762.101  Introduction.

    (a) Scope. This subpart contains regulations governing Operating 
Loans and Farm Ownership loans guaranteed by the Farm Service Agency. 
This subpart applies to lenders, holders, borrowers, Agency personnel, 
and other parties involved in making, guaranteeing, holding, servicing, 
or liquidating such loans.
    (b) Policy. The Agency issues guarantees on loans made to qualified 
loan applicants without regard to race, color, religion, sex, national 
origin, marital status, or age, provided the loan applicant can enter 
into a legal and binding contract, or whether all or part of the 
applicant's income derives from any public assistance program or whether 
the applicant, in good faith, exercises any rights under the Consumer 
Protection Act.
    (c) Lender list and classification. (1) The Agency maintains a 
current list of lenders who express a desire to participate in the 
guaranteed loan program. This list is made available to farmers upon 
request.
    (2) Lenders who participate in the Agency guaranteed loan program 
will be classified into one of the following categories:
    (i) Standard Eligible Lender under Sec. 762.105,
    (ii) Certified Lender, or
    (iii) Preferred Lender under Sec. 762.106.
    (3) Lenders may continue to make loans under Approved Lender Program 
(ALP) agreements until they expire; however, these agreements will not 
be renewed when they expire. All ALP agreements with farm credit 
institutions will expire on February 12, 2001.
    (d) Type of guarantee. Guarantees are available for both a loan note 
or a line of credit. A loan note is used for a loan of fixed amount and 
term. A line of credit has a fixed term, but no fixed amount. The 
principal amount outstanding at any time, however, may not exceed the 
line of credit ceiling contained in the contract. Both guarantees are 
evidenced by the same loan guarantee form.
    (e) Termination of loan guarantee. The loan guarantee will 
automatically terminate as follows:
    (1) Upon full payment of the guaranteed loan. A zero balance within 
the period authorized for advances on a line of credit will not 
terminate the guarantee;
    (2) Upon payment of a final loss claim; or
    (3) Upon written notice from the lender to the Agency that a 
guarantee is no longer desired provided the lender holds all of the 
guaranteed portion of the loan. The loan guarantee will be returned to 
the Agency office for cancellation within 30 days of the date of the 
notice by the lender.



Sec. 762.102  Abbreviations and definitions.

    (a) Abbreviations.
    ALP--Approved lender program
    CLP--Certified lender program
    CONACT--Consolidated Farm and Rural Development Act (7 U.S.C. 1921 
et seq.)
    EPA--Environmental Protection Agency
    EIS--Environmental impact statement

[[Page 86]]

    EM--Emergency loans
    FO--Farm ownership loans
    FSA--Farm Service Agency
    OL--Operating loans
    PLP--Preferred lender program
    SW--Soil and water
    USDA--United States Department of Agriculture
    (b) Definitions.
    Additional security. Collateral in excess of that needed to fully 
secure the loan.
    Agency. The Farm Service Agency, including its employees and state 
and area committee members, and any successor agency.
    Allonge. An attachment or an addendum to a note.
    Applicant. For guaranteed loans, the lender requesting a guarantee 
is the applicant. The party applying to the lender for a loan will be 
considered the loan applicant.
    Aquaculture. The husbandry of aquatic organisms in a controlled or 
selected environment. An aquatic organism is any fish, amphibian, 
reptile, or aquatic plant. An aquaculture operation is considered to be 
a farm only if it is conducted on the grounds which the loan applicant 
owns, leases, or has an exclusive right to use. An exclusive right to 
use must be evidenced by a permit issued to the loan applicant and the 
permit must specifically identify the waters available to be used by the 
loan applicant only.
    Assignment of guaranteed portion. A process by which the lender 
transfers the right to receive payments or income on the guaranteed loan 
to another party, usually in return for payment in the amount of the 
loan's guaranteed principal. The lender retains the unguaranteed portion 
in its portfolio and receives a fee from the purchaser or assignee to 
service the loan, and receive and remit payments according to a written 
assignment agreement. This assignment can be reassigned or sold multiple 
times.
    Average farm customers. Those conventional farm borrowers who are 
required to pledge their crops, livestock, and other chattel and real 
estate security for the loan. This does not include those high-risk 
farmers with limited security and management ability who are generally 
charged a higher interest rate by conventional agricultural lenders. 
Also, this does not include those low-risk farm customers who obtain 
financing on a secured or unsecured basis, who have as collateral such 
items as savings accounts, time deposits, certificates of deposit, 
stocks and bonds, and life insurance, which they are able to pledge for 
the loan.
    Basic Security. All farm machinery, equipment, vehicles, foundation 
and breeding livestock herds and flocks, including replacements, and 
real estate which serves as security for a loan guaranteed by the 
Agency.
    Beginning farmer or rancher. A beginning farmer or rancher is an 
individual or entity who:
    (1) Meets the loan eligibility requirements for OL or FO assistance, 
as applicable, in accordance with this subpart;
    (2) Has not operated a farm or ranch, or who has operated a farm or 
ranch for not more than 10 years. This requirement applies to all 
members of an entity;
    (3) Will materially and substantially participate in the operation 
of the farm or ranch:
    (i) In the case of a loan made to an individual, individually or 
with the immediate family, material and substantial participation 
requires that the individual provide substantial day-to-day labor and 
management of the farm or ranch, consistent with the practices in the 
county or State where the farm is located.
    (ii) In the case of a loan made to an entity, all members must 
materially and substantially participate in the operation of the farm or 
ranch. Material and substantial participation requires that the 
individual provide some amount of the management, or labor and 
management necessary for day-to-day activities, such that if the 
individual did not provide these inputs, operation of the farm or ranch 
would be seriously impaired;
    (4) Agrees to participate in any loan assessment and financial 
management programs required by Agency regulations;
    (5) Does not own real farm or ranch property or who, directly or 
through interests in family farm entities, owns

[[Page 87]]

real farm or ranch property, the aggregate acreage of which does not 
exceed 30 percent of the average farm or ranch acreage of the farms or 
ranches in the county where the property is located. If the farm is 
located in more than one county, the average farm acreage of the county 
where the loan applicant's residence is located will be used in the 
calculation. If the applicant's residence is not located on the farm or 
if the loan applicant is an entity, the average farm acreage of the 
county where the major portion of the farm is located will be used. The 
average county farm or ranch acreage will be determined from the most 
recent Census of Agriculture developed by the U.S. Department of 
Commerce, Bureau of the Census or USDA;
    (6) Demonstrates that the available resources of the loan applicant 
and spouse (if any) are not sufficient to enable the loan applicant to 
enter or continue farming or ranching on a viable scale; and
    (7) In the case of an entity:
    (i) All the members are related by blood or marriage; and
    (ii) All the stockholders in a corporation are beginning farmers or 
ranchers.
    Borrower. An individual or entity which has outstanding obligations 
to the lender under any Agency loan or loan guarantee program. A 
borrower includes all parties liable for Agency debt, including 
collection-only borrowers, except those whose total loan and accounts 
have been voluntarily or involuntarily foreclosed or liquidated, or who 
have been discharged of all Agency debt.
    Capital leases. Agreements under which the lessee effectively 
acquires ownership of the asset being leased. A lease is a capital lease 
if it meets any one of the following criteria:
    (1) The lease transfers ownership of the property to the lessee at 
the end of the lease term.
    (2) The lessee has the right to purchase the property for 
significantly less than its market value at the end of the lease.
    (3) The term of the lease is at least 75 percent of the estimated 
economic life of the leased property.
    (4) The present value of the minimum lease payments equals or 
exceeds 90 percent of the fair market value of the leased property.
    Cash flow budget. A projection listing all anticipated cash inflows 
(including all farm income, nonfarm income and all loan advances) and 
all cash outflows (including all farm and nonfarm debt service and other 
expenses) to be incurred by the borrower during the period of the 
budget. Cash flow budgets for loans under $50,000 do not require income 
and expenses itemized by categories. Cash flow budgets for loans under 
$125,000 do not require income and expenses itemized by categories. It 
may also be prepared with a breakdown of cash inflows and outflows for 
each month of the review period and includes the expected outstanding 
operating credit balance for the end of each month. The latter type is 
referred to as a ``monthly cash flow budget''.
    Collateral. Property pledged as security for a loan to ensure 
repayment of an obligation.
    Conditional commitment. The Agency's commitment to the lender that 
the material it has submitted is approved subject to the completion of 
all conditions and requirements contained therein.
    Consolidation. The combination of outstanding principal and interest 
balance of two or more OL loans.
    Controlled. When a director or employee has more than a 50 percent 
ownership in the entity or, the director or employee, together with 
relatives of the director or employee, have more than a 50 percent 
ownership.
    Cooperative. An entity which has farming as its purpose and whose 
members have agreed to share the profits of the farming enterprise. The 
entity must be recognized as a farm cooperative by the laws of the State 
in which the entity will operate a farm.
    Cosigner. A party who joins in the execution of a promissory note to 
assure its repayment. The cosigner becomes jointly and severally liable 
to comply with the terms of the note. In the case of an entity 
applicant, the cosigner cannot be a member, partner, joint operator, or 
stockholder of the entity.

[[Page 88]]

    County average yield. The historical average yield for a commodity 
in a particular political subdivision, as determined or published by a 
government entity or other recognized source.
    Debt writedown. To reduce the amount of the borrower's debt to that 
amount that is determined to be collectible based on an analysis of the 
security value and the borrower's ability to pay.
    Deferral. A postponement of the payment of interest or principal or 
both. Principal may be deferred in whole or in part, interest may only 
be partially deferred.
    Depreciation and amortization expenses. An annual allocation of the 
cost or other basic value of tangible capital assets, less salvage 
value, over the estimated life of the unit (which may be a group of 
assets), in a systematic and rational manner.
    Direct loan. A loan serviced by the Agency as lender.
    Entity. Cooperatives, corporations, partnerships, joint operations, 
trusts, or limited liability companies.
    Family farm. A farm which:
    (1) Produces agricultural commodities for sale in sufficient 
quantities so that it is recognized in the community as a farm rather 
than a rural residence;
    (2) Provides enough agricultural income by itself, including rented 
land, or together with any other dependable income to enable the 
borrower to:
    (i) Pay necessary family living and operating expenses;
    (ii) Maintain essential chattel and real property; and
    (iii) Pay debts;
    (3) Is managed by:
    (i) The borrower when a loan is made to an individual; or,
    (ii) The members, stockholders, partners, or joint operators 
responsible for operating the farm when a loan is made to an entity;
    (4) Has a substantial amount of the labor requirement for the farm 
and nonfarm enterprise provided by:
    (i) The borrower and the borrower's immediate family for a loan made 
to an individual; or
    (ii) The members, stockholders, partners, or joint operators 
responsible for operating the farm, along with the families of these 
individuals, for a loan made to an entity; and
    (5) May use a reasonable amount of full-time hired labor and 
seasonal labor during peak load periods.
    Family living expenses. Any withdrawals from income to provide for 
needs of family members.
    Family members. The immediate members of the family residing in the 
same household with the individual borrower, or, in the case of an 
entity, with the operator.
    Farm. A tract or tracts of land, improvements, and other 
appurtenances which are used or will be used in the production of crops, 
livestock, or aquaculture products for sale in sufficient quantities so 
that the property is recognized as a farm rather than a rural residence. 
The term ``farm'' also includes any such land and improvements and 
facilities used in a nonfarm enterprise. It may also include the 
residence which, although physically separate from the farm acreage, is 
ordinarily treated as part of the farm in the local community.
    Feasible plan. A plan is feasible when a borrower or applicant's 
cash flow budget indicates that there is sufficient cash inflow to pay 
all cash outflow each year during the term of the loan. If a loan 
approval or restructuring action exceeds one production cycle and the 
planned cash flow budget is atypical due to cash or inventory on hand, 
new enterprises, carryover debt, atypical planned purchases, important 
operating changes, or other reasons, a cash flow budget must be prepared 
that reflects a typical cycle. If the request is for only one cycle, a 
feasible plan for only one cycle is required for approval.
    Fish. Any aquatic, gilled animal commonly known as ``fish'' as well 
as mollusks, or crustaceans (or other invertebrates) produced under 
controlled conditions (that is, feeding, tending, harvesting, and such 
other activities as are necessary to properly raise and market the 
products) in ponds, lakes, streams, artificial enclosures, or similar 
holding areas.
    Fixture. An item of personal property attached to real estate in 
such a way that it cannot be removed without defacing or dismantling the 
structure, or

[[Page 89]]

substantially damaging the structure itself.
    Graduation. The Agency's determination that a borrower of a direct 
loan, is financially stable enough to refinance that loan with a 
commercial lender with or without a guarantee.
    Guaranteed loan. A loan made and serviced by a lender for which the 
Agency has entered into a lenders agreement and for which the Agency has 
issued a loan note guarantee. This term also includes lines of credit 
except where otherwise indicated.
    Hazard insurance. Includes fire, windstorm, lightning, hail, 
explosion, riot, civil commotion, aircraft, vehicles, smoke, builder's 
risk, public liability, property damage, flood or mudslide, workers 
compensation, or any similar insurance that is available and needed to 
protect the security, or that is required by law.
    Holder. The person or organization other than the lender who holds 
all or a part of the guaranteed portion of an Agency guaranteed loan but 
who has no servicing responsibilities. When the lender assigns a part of 
the guaranteed loan to an assignee by way of execution of an assignment 
form, the assignee becomes a holder.
    In-house expenses. Expenses associated with credit management and 
loan servicing by the lender and the lender's contractor. In-house 
expenses include, but are not limited to: employee salaries, staff 
lawyers, travel, supplies, and overhead.
    Interest assistance agreement. The signed agreement between the 
Agency and the lender setting forth the terms and conditions of the 
interest assistance.
    Interest assistance anniversary date. Date on which interest 
assistance reviews and claims will be effective. This date is 
established by the lender. Once established, it will not change unless 
the loan is restructured.
    Interest assistance review. The yearly review process which includes 
an analysis of the borrower or applicant's farming operation and need 
for continued interest assistance, completion of the needs test and 
request for continuation of interest assistance.
    Joint operation. Individuals that have agreed to operate a farm or 
farms together as a business unit. The real and personal property may be 
owned separately or jointly by the individuals.
    Land development. Items such as terracing, clearing, leveling, 
fencing, drainage and irrigation systems, ponds, forestation, permanent 
pastures, perennial hay crops, basic soil amendments, and other items of 
land improvements which conserve or permanently enhance productivity.
    Lender. The organization making and servicing the loan or advancing 
and servicing the line of credit which is guaranteed under the 
provisions of Agency regulations. The lender is also the party 
requesting a guarantee.
    Lender's agreement. The appropriate Agency form executed by the 
Agency and the lender setting forth the loan responsibilities of the 
lender and agency when the loan guarantee is issued.
    Lien.A legally enforceable hold or claim on the property of another 
obtained as security for the repayment of indebtedness or an encumbrance 
on property to enforce payment of an obligation.
    Liquidation expenses. The cost of an appraisal, due diligence 
evaluation, environmental assessment, outside attorney fees and other 
costs incurred as a direct result of liquidating the security for the 
guaranteed loan. Liquidation fees do not include in-house expenses.
    Loan or line of credit agreement. A document which contains certain 
lender and borrower agreements, conditions, limitations, and 
responsibilities for credit extension and acceptance in a loan format 
where loan principal balance may fluctuate throughout the term of the 
document.
    Loan applicant. The party applying to a lender for a guaranteed loan 
or line of credit.
    Loan transaction. Any loan approval or servicing action.
    Loss claim. A request made to the Agency by a lender to receive a 
reimbursement based on a percentage of the lender's loss on a loan 
covered by an Agency guarantee.
    Loss rate. The net amount of guaranteed OL, FO, and SW loss claims 
paid on loans made in the past 7 years divided by the total loan amount 
of OL, FO, and SW made in the past 7 years.

[[Page 90]]

    Major deficiency. A deficiency that directly affects the soundness 
of the loan.
    Majority interest. Any individual or a combination of individuals 
owning more than a 50 percent interest in a cooperative, corporation, 
joint operation, or partnership.
    Market value. The amount which an informed and willing buyer would 
pay an informed and willing, but not forced, seller in a completely 
voluntary sale.
    Minor deficiency. A deficiency that violates Agency regulations, but 
does not affect the soundness of a loan.
    Mortgage. A legal instrument giving the lender a security interest 
or lien on real or personal property of any kind.
    Negligent servicing. The failure to perform those services which 
would be considered normal industry standards of loan management or 
failure to comply with any servicing requirement of this subpart or the 
lenders agreement or the guarantee. The term includes the concept of a 
failure to act or failure to act timely consistent with actions of a 
reasonable lender in loan making, servicing, and collection.
    Net farm operating income. The gross income generated by a farming 
operation annually, minus all yearly operating expenses (including 
withdrawals from entities for living expenses), operating loan interest, 
interest on term debt and capital lease payments, and depreciation and 
amortization expenses. Net farm operating income does not include off-
farm income and social security taxes, carryover debt and delinquent 
interest.
    Net recovery value. The market value of the security property 
assuming that it will be acquired by the lender, and sold for its 
highest and best use, less the lender's costs of property acquisition, 
retention, maintenance, and liquidation.
    Nonessential asset. Assets in which the borrower has an ownership 
interest that do not contribute an income to pay essential family living 
expenses or maintain a sound farming operation, and are not exempt from 
judgment creditors.
    Normal income security. All security not considered basic security.
    Partnership. Any entity consisting of two or more individuals who 
have agreed to operate a farm as one business unit. The entity must be 
recognized as a partnership by the laws of the State in which the entity 
will operate and must be authorized to own both real estate and personal 
property and to incur debts in its own name.
    Potential liquidation value. The amount of the lender's protective 
bid at the foreclosure sale. Potential liquidation value is determined 
by an independent appraiser using comparables from other forced 
liquidation sales.
    Present value. The present worth of a future stream of payments 
discounted to the current date.
    Presidentially-designated emergency. A major disaster or emergency 
designated by the President under the Robert T. Stafford Disaster Relief 
and Emergency Assistance Act (42 U.S.C. 5121 et seq.)
    Primary security. The minimum amount of collateral needed to fully 
secure a proposed loan.
    Principals of borrowers. Includes owners, officers, directors, 
entities and others directly involved in the operation and management of 
a business.
    Protective advances. Advances made by a lender to protect or 
preserve the collateral itself from loss or deterioration. Protective 
advances include but are not limited to:
    (1) Payment of delinquent taxes,
    (2) Annual assessments,
    (3) Ground rents,
    (4) Hazard or flood insurance premiums against or affecting the 
collateral,
    (5) Harvesting costs,
    (6) Other expenses needed for emergency measures to protect the 
collateral.
    Recapture. The amount that a guaranteed lender is entitled to 
recover from a guaranteed loan borrower in consideration for the lender 
writing down a portion of their guaranteed loan debt when that loan was 
secured by real estate and that real estate increases in value. Also, 
the act of collecting shared appreciation.
    Related by blood or marriage. Individuals who are connected to one 
another

[[Page 91]]

as husband, wife, parent, child, brother, or sister.
    Relative. An individual or spouse and anyone having the following 
relationship to either: parent, son, daughter, sibling, stepparent, 
stepson, stepdaughter, stepbrother, stepsister, half brother, half 
sister, uncle, aunt, nephew, niece, grandparent, granddaughter, 
grandson, and the spouses of the foregoing.
    Rescheduling. To rewrite the rates and terms of a single note or 
line of credit agreement.
    Restructuring. Changing terms of a debt through either a 
rescheduling, deferral, or writedown or a combination thereof.
    Security. Property of any kind subject to a real or personal 
property lien. Any reference to ``collateral'' or ``security property'' 
shall be considered a reference to the term ``security.''
    Shared appreciation agreement. An agreement between a guaranteed 
lender and borrower that requires a borrower that has received a write 
down on a guaranteed loan secured by real estate to repay the lender 
some or all of the writedown received, based on a percentage of any 
increase in the value of that real estate at some future date, if 
certain conditions exist.
    State. The major political subdivision of the United States and the 
organization of program delivery for the Agency.
    Subordination. A document executed by a lender to relinquish their 
priority of lien in favor of another lender that provides the other 
lender with a priority right to collect a debt of a specific dollar 
amount from the sale of the same collateral.
    Subsequent loans. Any loans processed by the Agency after an initial 
loan has been made to the same borrower.
    Transfer and assumption. The conveyance by a debtor to an assuming 
party of the assets, collateral, and liabilities of the loan in return 
for the assuming party's binding promise to pay the debt outstanding.
    Typical plan. A projected income and expense statement listing all 
anticipated cash flows for a typical 12-month production cycle; 
including all farm and nonfarm income and all expenses (including debt 
service) to be incurred by the borrower during such period.
    Unaccounted for security. Items, as indicated on the lender's loan 
application, request for guarantee, or any interim agreements provided 
to the Agency, that are security for the guaranteed loan that were 
misplaced, stolen, sold, or otherwise missing, where replacement 
security was not obtained or the proceeds from their sale have not been 
applied to the loan.
    United States. The United States itself, each of the several States, 
the Commonwealth of Puerto Rico, the Virgin Islands of the United 
States, Guam, American Samoa, and the Commonwealth of the Northern 
Mariana Islands.
    Veteran. Any person who served in the military, naval, or air 
service during any war as defined in section 101(12) of title 38, United 
States Code.

[64 FR 7378, Feb. 12, 1999, as amended at 66 FR 7567, Jan. 24, 2001; 68 
FR 7695, Feb. 18, 2003; 69 FR 5262, Feb. 4, 2004; 70 FR 56107, Sept. 26, 
2005]



Sec. 762.103  Full faith and credit.

    (a) Fraud and misrepresentation. The loan guarantee constitutes an 
obligation supported by the full faith and credit of the United States. 
The Agency may contest the guarantee only in cases of fraud or 
misrepresentation by a lender or holder, in which:
    (1) The lender or holder had actual knowledge of the fraud or 
misrepresentation at the time it became the lender or holder, or
    (2) The lender or holder participated in or condoned the fraud or 
misrepresentation.
    (b) Lender violations. The loan guarantee cannot be enforced by the 
lender, regardless of when the Agency discovers the violation, to the 
extent that the loss is a result of:
    (1) Violation of usury laws;
    (2) Negligent servicing;
    (3) Failure to obtain the required security; or,
    (4) Failure to use loan funds for purposes specifically approved by 
the Agency.
    (c) Enforcement by holder. The guarantee and right to require 
purchase will be directly enforceable by the holder even if:

[[Page 92]]

    (1) The loan guarantee is contestable based on the lender's fraud or 
misrepresentation; or
    (2) The loan note guarantee is unenforceable by the lender based on 
a lender violation.



Sec. 762.104  Appeals.

    (a) The loan applicant or borrower and lender must jointly execute 
the written request for review of an alleged adverse decision made by 
the Agency. However, in cases where the Agency has denied or reduced the 
amount of the final loss payment, the decision may be appealed by the 
lender only.
    (b) A decision made by the lender adverse to the borrower is not a 
decision by the Agency, whether or not concurred in by the Agency, and 
may not be appealed.
    (c) The lender or Agency may request updated information from the 
borrower to implement an appeal decision.
    (d) Appeals will be handled in accordance with parts 11 and 780 of 
this title.



Sec. 762.105  Eligibility and substitution of lenders.

    (a) General. To participate in FSA guaranteed farm loan programs, a 
lender must meet the eligibility criteria in this part. The standard 
eligible lender must demonstrate eligibility and provide such evidence 
as the Agency may request.
    (b) Standard eligible lender eligibility criteria. (1) A lender must 
have experience in making and servicing agricultural loans and have the 
capability to make and service the loan for which a guarantee is 
requested;
    (2) The lenders must not have losses or deficiencies in processing 
and servicing guaranteed loans above a level which would indicate an 
inability to properly process and service a guaranteed agricultural 
loan.
    (3) A lender must be subject to credit examination and supervision 
by an acceptable State or Federal regulatory agency;
    (4) The lender must maintain an office near enough to the 
collateral's location so it can properly and efficiently discharge its 
loan making and loan servicing responsibilities or use Agency approved 
agents, correspondents, branches, or other institutions or persons to 
provide expertise to assist in carrying out its responsibilities. The 
lender must be a local lender unless it:
    (i) Normally makes loans in the region or geographic location in 
which the loan applicant's operation being financed is located, or
    (ii) Demonstrates specific expertise in making and servicing loans 
for the proposed operation.
    (5) The lender, its officers, or agents must not be debarred or 
suspended from participation in Government contracts or programs or be 
delinquent on a Government debt.
    (c) Substitution of lenders. A new eligible lender may be 
substituted for the original lender, upon the original lender's 
concurrence, under the following conditions:
    (1) The Agency approves of the substitution in writing by executing 
a modification of the guarantee to identify the new lender, the amount 
of debt at the time of the substitution and any new loan terms if 
applicable.
    (2) The new lender agrees in writing to:
    (i) Assume all servicing and other responsibilities of the original 
lender and to acquire the unguaranteed portion of the loan;
    (ii) Execute a lender's agreement if one is not in effect;
    (iii) [Reserved]
    (iv) Give any holder written notice of the substitution. If the rate 
and terms are changed, written concurrence from the holder is required.
    (3) The original lender will:
    (i) Assign their promissory note, lien instruments, loan agreements, 
and other documents to the new lender.
    (ii) If the loan is subject to an existing interest assistance 
agreement, submit a request for subsidy for the partial year that it has 
owned the loan.
    (d) Lender name or ownership changes. (1) When a lender begins doing 
business under a new name or undergoes an ownership change the lender 
will notify the Agency.
    (2) The lender's CLP or PLP status is subject to reconsideration 
when ownership changes.

[[Page 93]]

    (3) The lender will execute a new lender's agreement when ownership 
changes.

[64 FR 7378, Feb. 12, 1999, as amended at 66 FR 7567, Jan. 24, 2001]



Sec. 762.106  Preferred and certified lender programs.

    (a) General. (1) Lenders who desire PLP or CLP status must prepare a 
written request addressing:
    (i) The States in which they desire to receive PLP or CLP status and 
their branch offices which they desire to be considered by the Agency 
for approval; and
    (ii) Each item of the eligibility criteria for PLP or CLP approval 
in this section, as appropriate.
    (2) The lender may include any additional supporting evidence or 
other information the lender believes would be helpful to the Agency in 
making its determination.
    (3) The lender must send its request to the Agency State office for 
the State in which the lender's headquarters is located.
    (4) The lender must provide any additional information requested by 
the Agency to process a PLP or CLP request if the lender continues with 
the approval process.
    (b) CLP criteria. The lender must meet the following requirements to 
obtain CLP status:
    (1) Qualify as a standard eligible lender under Sec. 762.105;
    (2) Have a lender loss rate not in excess of the maximum CLP loss 
rate established by the Agency and published periodically in a Federal 
Register Notice. The Agency may waive the loss rate criteria for those 
lenders whose loss rate was substantially affected by a disaster as 
defined in part 1945, subpart A, of this title.
    (3) Have proven an ability to process and service Agency guaranteed 
loans by showing that the lender:
    (i) Submitted substantially complete and correct guaranteed loan 
applications; and
    (ii) Serviced all guaranteed loans according to Agency regulations;
    (4) Have made the minimum number of guaranteed OL, FO, or Soil and 
Water (SW) loans established by the Agency and published periodically in 
a Federal Register Notice.
    (5) Not be under any regulatory enforcement action such as a cease 
and desist order, written agreement, or an appointment of conservator or 
receiver, based upon financial condition;
    (6) Designate a qualified person or persons to process and service 
Agency guaranteed loans for each of the lender offices which will 
process CLP loans. To be qualified, the person must meet the following 
conditions:
    (i) Have attended Agency sponsored training in the past 12 months or 
will attend training in the next 12 months; and
    (ii) Agree to attend Agency sponsored training each year;
    (7) Use forms acceptable to the Agency for processing, analyzing, 
securing, and servicing Agency guaranteed loans and lines of credit;
    (c) PLP criteria. The lender must meet the following requirements to 
obtain PLP status:
    (1) Meet the CLP eligibility criteria under this section.
    (2) Have a credit management system, satisfactory to the Agency, 
based on the following:
    (i) The lender's written credit policies and underwriting standards;
    (ii) Loan documentation requirements;
    (iii) Exceptions to policies;
    (iv) Analysis of new loan requests;
    (v) Credit file management;
    (vi) Loan funds and collateral management system;
    (vii) Portfolio management;
    (viii) Loan reviews;
    (ix) Internal credit review process;
    (x) Loan monitoring system; and
    (xi) The board of director's responsibilities.
    (3) Have made the minimum number of guaranteed OL, FO, or SW loans 
established by the Agency and published periodically in a Federal 
Register Notice.
    (4) Have a lender loss rate not in excess of the rate of the maximum 
PLP loss rate established by the Agency and published periodically in a 
Federal Register Notice. The Agency may waive the loss rate criteria for 
those

[[Page 94]]

lenders whose loss rate was substantially affected by a disaster as 
defined in part 1945, subpart A, of this title.
    (5) Show a consistent practice of submitting applications for 
guaranteed loans containing accurate information supporting a sound loan 
proposal.
    (6) Show a consistent practice of processing Agency guaranteed loans 
without recurring major or minor deficiencies.
    (7) Demonstrate a consistent, above average ability to service 
guaranteed loans based on the following:
    (i) Borrower supervision and assistance;
    (ii) Timely and effective servicing; and
    (iii) Communication with the Agency.
    (8) Designate a person or persons, either by name, title, or 
position within the organization, to process and service PLP loans for 
the Agency.
    (d) CLP and PLP approval. (1) If a lender applying for CLP or PLP 
status is or has recently been involved in a merger or acquisition, all 
loans and losses attributed to both lenders will be considered in the 
eligibility calculations.
    (2) The Agency will determine which branches of the lender have the 
necessary experience and ability to participate in the CLP or PLP 
program based on the information submitted in the lender application and 
on Agency experience.
    (3) Lenders who meet the criteria will be granted CLP or PLP status 
for a period not to exceed 5 years.
    (4) PLP status will be conditioned on the lender carrying out its 
credit management system as proposed in its request for PLP status and 
any additional loan making or servicing requirements agreed to and 
documented the PLP lender's agreement. If the PLP lender's agreement 
does not specify any agreed upon process for a particular action, the 
PLP lender will act according to regulations governing CLP lenders.
    (e) Monitoring CLP and PLP lenders. CLP and PLP lenders will provide 
information and access to records upon Agency request to permit the 
Agency to audit the lender for compliance with these regulations.
    (f) Renewal of CLP or PLP status. (1) PLP or CLP status will expire 
within a period not to exceed 5 years from the date the lender's 
agreement is executed, unless a new lender's Agreement is executed.
    (2) Renewal of PLP or CLP status is not automatic. A lender must 
submit a written request for renewal of a lender's agreement with PLP or 
CLP status which includes information:
    (i) Updating the material submitted in the initial application; and,
    (ii) Addressing any new criteria established by the Agency since the 
initial application.
    (3) PLP or CLP status will be renewed if the applicable eligibility 
criteria under this section are met, and no cause exists for denying 
renewal under paragraph (g) of this section.
    (g) Revocation of PLP or CLP status. (1) The Agency may revoke the 
lender's PLP or CLP status at any time during the 5 year term for cause.
    (2) Any of the following instances constitute cause for revoking or 
not renewing PLP or CLP status:
    (i) Violation of the terms of the lender's agreement;
    (ii) Failure to maintain PLP or CLP eligibility criteria. The Agency 
may allow a PLP lender with a loss rate which exceeds the maximum PLP 
loss rate, to retain its PLP status for a two-year period, if:
    (A) The lender documents in writing why the excessive loss rate is 
beyond their control;
    (B) The lender provides a written plan that will reduce the loss 
rate to the PLP maximum rate within two years from the date of the plan, 
and
    (C) The Agency determines that exceeding the maximum PLP loss rate 
standard was beyond the control of the lender. Examples include, but are 
not limited to, a freeze with only local impact, economic downturn in a 
local area, drop in local land values, industries moving into or out of 
an area, loss of access to a market, and biological or chemical damage.
    (D) The Agency will revoke PLP status if the maximum PLP loss rate 
is not met at the end of the two-year period, unless a second two year 
extension is granted under this subsection.

[[Page 95]]

    (iii) Knowingly submitting false or misleading information to the 
Agency;
    (iv) Basing a request on information known to be false;
    (v) Deficiencies that indicate an inability to process or service 
Agency guaranteed farm loan programs loans in accordance with this 
subpart;
    (vi) Failure to correct cited deficiencies in loan documents upon 
notification by the Agency;
    (vii) Failure to submit status reports in a timely manner;
    (viii) Failure to use forms, or follow credit management systems 
(for PLP lenders) accepted by the Agency; or
    (ix) Failure to comply with the reimbursement requirements of Sec. 
762.144(c)(7).
    (3) A lender which has lost PLP or CLP status must be reconsidered 
for eligibility to continue as a Standard Eligible Lender (for former 
PLP and CLP lenders), or as a CLP lender (for former PLP lenders) in 
submitting loan guarantee requests. They may reapply for CLP or PLP 
status when the problem causing them to lose their status has been 
resolved.

[64 FR 7378, Feb. 12, 1999; 64 FR 38298, July 16, 1999, as amended at 70 
FR 56107, Sept. 26, 2005; 71 FR 43957, Aug. 3, 2006]



Sec. Sec. 762.107-762.109  [Reserved]



Sec. 762.110  Loan application.

    (a) Loans for $125,000 or less. All lenders except PLP lenders will 
submit the following items:
    (1) A complete application for loans of $125,000 or less must, at 
least, consist of:
    (i) The application form;
    (ii) Loan narrative;
    (iii) Balance sheet;
    (iv) Cash flow budget;
    (v) Credit report;
    (vi) A plan for servicing the loan.
    (2) In addition to the minimum requirements, the lender will perform 
at least the same level of evaluation and documentation for a guaranteed 
loan that the lender typically performs for non-guaranteed loans of a 
similar type and amount.
    (3) The $125,000 threshold includes any single loan, or package of 
loans submitted for consideration at any one time. A lender must not 
split a loan into two or more parts to meet the threshold thereby 
avoiding additional documentation.
    (4) The Agency may require lenders with a lender loss rate in excess 
of the rate for CLP lenders to assemble additional documentation from 
paragraph (b) of this section.
    (b) Loans over $125,000. A complete application for loans over 
$50,000 will consist of the items required in paragraph (a) of this 
section plus the following:
    (1) Verification of income;
    (2) Verification of debts over $1,000;
    (3) Three years financial history;
    (4) Three years of production history (for standard eligible lenders 
only);
    (5) Proposed loan agreements; and,
    (6) If construction or development is planned, a copy of the plans, 
specifications, and development schedule.
    (c) Applications from PLP lenders. Notwithstanding paragraphs (a) 
and (b) of this section, a complete application for PLP lenders will 
consist of at least:
    (1) An application form;
    (2) A loan narrative; and
    (3) Any other items agreed to during the approval of the PLP 
lender's status and contained in the PLP lender agreement.
    (d) Submitting applications. (1) All lenders must compile and 
maintain in their files a complete application for each guaranteed loan. 
See paragraphs (a), (b), and (c) of this section.
    (2) The Agency will notify CLP lenders which items to submit to the 
Agency.
    (3) PLP lenders will submit applications in accordance with their 
agreement with the Agency for PLP status.
    (4) CLP and PLP lenders must certify that the required items, not 
submitted, are in their files.
    (5) The Agency may request additional information from any lender or 
review the lender's loan file as needed to make eligibility and approval 
decisions.
    (e) Incomplete applications. If the lender does not provide the 
information needed to complete its application by the deadline 
established in an Agency request for the information, the application 
will be considered withdrawn by the lender.

[[Page 96]]

    (f) Conflict of interest. (1) When a lender submits the application 
for a guaranteed loan, the lender will inform the Agency in writing of 
any relationship which may cause an actual or potential conflict of 
interest.
    (2) Relationships include:
    (i) The lender or its officers, directors, principal stockholders 
(except stockholders in a Farm Credit System institution that have stock 
requirements to obtain a loan), or other principal owners having a 
financial interest (other than lending relationships in the normal 
course of business) in the loan applicant or borrower.
    (ii) The loan applicant or borrower, a relative of the loan 
applicant or borrower, anyone residing in the household of the loan 
applicant or borrower, any officer, director, stockholder or other owner 
of the loan applicant or borrower holds any stock or other evidence of 
ownership in the lender.
    (iii) The loan applicant or borrower, a relative of the loan 
applicant or borrower, or anyone residing in the household of the loan 
applicant or borrower is an Agency employee.
    (iv) The officers, directors, principal stockholders (except 
stockholders in a Farm Credit System institution that have stock 
requirements to obtain a loan), or other principal owners of the lender 
have substantial business dealings (other than in the normal course of 
business) with the loan applicant or borrower.
    (v) The lender or its officers, directors, principal stockholders, 
or other principal owners have substantial business dealings with an 
Agency employee.
    (3) The lender must furnish additional information to the Agency 
upon request.
    (4) The Agency will not approve the application until the lender 
develops acceptable safeguards to control any actual or potential 
conflicts of interest.

[64 FR 7378, Feb. 12, 1999, as amended at 68 FR 7695, Feb. 18, 2003]



Sec. Sec. 762.111-762.119  [Reserved]



Sec. 762.120  Loan applicant eligibility.

    Loan applicants must meet all of the following requirements to be 
eligible for a guaranteed OL or a guaranteed FO:
    (a) Agency loss. (1) Except as provided in paragraph (a)(2) of this 
section, the applicant, and anyone who will execute the promissory note, 
has not caused the Agency a loss by receiving debt forgiveness on all or 
a portion of any direct or guaranteed loan made under the authority of 
the CONACT by debt write-down or write-off; compromise, adjustment, 
reduction, or charge-off under the provisions of section 331 of the 
CONACT; discharge in bankruptcy; or through payment of a guaranteed loss 
claim on:
    (i) More than three occasions on or prior to April 4, 1996; or
    (ii) Any occasion after April 4, 1996.
    (2) The applicant may receive a guaranteed OL to pay annual farm and 
ranch operating and family living expenses, provided the applicant meets 
all other requirements for the loan, if the applicant and anyone who 
will execute the promissory note:
    (i) Received a write-down under section 353 of the CONACT;
    (ii) Is current on payments under a confirmed reorganization plan 
under chapter 11, 12, or 13 of title 11 of the United States Code; or
    (iii) Received debt forgiveness on not more than one occasion after 
April 4, 1996, resulting directly and primarily from a Presidentially-
designated emergency for a county or contiguous county in which the 
applicant operates. Only applicants who were current on all existing 
direct and guaranteed FSA loans prior to the beginning date of the 
incidence period for a Presidentially-designated emergency and received 
debt forgiveness on that debt within three years after the designation 
of such emergency meet this exception.
    (b) Delinquent Federal debt. The loan applicant, and anyone who will 
execute the promissory note, is not delinquent on any Federal debt, 
other than a debt under the Internal Revenue Code of 1986. (Any debt 
under the Internal Revenue Code of 1986 may be considered by the lender 
in determining cash flow and creditworthiness.)
    (c) Outstanding judgments. The loan applicant, and anyone who will 
execute the promissory note, have no outstanding unpaid judgment 
obtained by

[[Page 97]]

the United States in any court. Such judgments do not include those 
filed as a result of action in the United States Tax Courts.
    (d) Citizenship. (1) The applicant must be a citizen of the United 
States, a United States non-citizen national, or a qualified alien 
under applicable Federal immigration laws. For an entity applicant, the 
majority interest of the entity must be held by members who are United 
States citizens, United States non-citizen nationals, or qualified 
aliens under applicable Federal immigration laws.
    (2) United States non-citizen nationals and qualified aliens must 
provide the appropriate documentation as to their immigration status as 
required by the United States Department of Homeland Security, Bureau of 
Citizenship and Immigration Services.
    (e) Legal capacity. The loan applicant and all borrowers on the loan 
must possess the legal capacity to incur the obligations of the loan.
    (f) False or misleading information. The loan applicant, in past 
dealings with the Agency, must not have provided the Agency with false 
or misleading documents or statements.
    (g) Credit history. (1) The individual or entity loan applicant and 
all entity members must have acceptable credit history demonstrated by 
debt repayment.
    (2) A history of failures to repay past debts as they came due when 
the ability to repay was within their control will demonstrate 
unacceptable credit history.
    (3) Unacceptable credit history will not include:
    (i) Isolated instances of late payments which do not represent a 
pattern and were clearly beyond their control; or,
    (ii) Lack of credit history.
    (h) Test for credit. (1) The loan applicant is unable to obtain 
sufficient credit elsewhere without a guarantee to finance actual needs 
at reasonable rates and terms.
    (2) The potential for sale of any significant nonessential assets 
will be considered when evaluating the availability of other credit.
    (3) Ownership interests in property and income received by an 
individual or entity loan applicant, and any entity members as 
individuals will be considered when evaluating the availability of other 
credit to the loan applicant.
    (i) For OLs:
    (1) The individual or entity loan applicant must be an operator of 
not larger than a family farm after the loan is closed.
    (2) In the case of an entity borrower:
    (i) The entity must be authorized to operate, and own if the entity 
is also an owner, a farm in the State or States in which the farm is 
located; and
    (ii) If the entity members holding a majority interest are related 
by marriage or blood, at least one member of the entity must operate the 
family farm; or,
    (iii) If the entity members holding a majority interest are not 
related by marriage or blood, the entity members holding a majority 
interest must also operate the family farm.
    (j) For FOs:
    (1) The individual must be the operator and owner of not larger than 
a family farm after the loan is closed.
    (2) In the case of an entity borrower:
    (i) The entity must be authorized to own and operate a farm in the 
state or states in which the farm is located; and
    (ii) If the entity members holding a majority interest are related 
by marriage or blood, at least one member of the entity also must 
operate the family farm and at least one member of the entity or the 
entity must own the family farm; or,
    (iii) If the entity members holding a majority interest are not 
related by marriage or blood, the entity members holding a majority 
interest must operate the family farm and the entity members holding a 
majority interest or the entity must own the family farm.
    (k) For entity loan applicants. Entity loan applicants must meet the 
following additional eligibility criteria:
    (1) Each entity member's ownership interest may not exceed the 
family farm definition limits;
    (2) The collective ownership interest of all entity members may 
exceed the family farm definition limits only if the following 
conditions are met:
    (i) All of the entity members are related by blood or marriage;

[[Page 98]]

    (ii) All of the members are or will be operators of the entity; and,
    (iii) The majority interest holders of the entity must meet the 
requirements of paragraphs (d), (f), (g), and (i) through (j) of this 
section;
    (3) The entity must be controlled by farmers or ranchers engaged 
primarily and directly in farming or ranching in the United States after 
the loan is made; and
    (4) The entity members are not themselves entities.
    (l) Neither the applicant nor any entity member has been convicted 
of planting, cultivating, growing, producing, harvesting, or storing a 
controlled substance under Federal or state law within the last five 
crop years. ``Controlled substance'' is defined at 21 CFR 1308. 
Applicants must certify on the application that it and its members, if 
an entity, have not been convicted of such a crime within the relevant 
period. If the lender uses the lender's Agency approved forms, the 
certification may be an attachment to the form.

[64 FR 7378, Feb. 12, 1999, as amended at 68 FR 62223, Nov. 3, 2003; 69 
FR 5262, Feb. 4, 2004]



Sec. 762.121  Loan purposes.

    (a) Operating Loan purposes. (1) Loan funds disbursed under an OL 
guarantee may only be used for the following purposes:
    (i) Payment of costs associated with reorganizing a farm or ranch to 
improve its profitability;
    (ii) Purchase of livestock, including poultry, and farm or ranch 
equipment or fixtures, quotas and bases, and cooperative stock for 
credit, production, processing or marketing purposes;
    (iii) Payment of annual farm or ranch operating expenses, examples 
of which include feed, seed, fertilizer, pesticides, farm or ranch 
supplies, repairs and improvements which are to be expensed, cash rent 
and family subsistence;
    (iv) Payment of scheduled principal and interest payments on term 
debt provided the debt is for authorized FO or OL purposes;
    (v) Other farm and ranch needs;
    (vi) Payment of costs associated with land and water development for 
conservation or use purposes;
    (vii) Refinancing indebtedness incurred for any authorized OL 
purpose, when the lender and loan applicant can demonstrate the need to 
refinance;
    (viii) Payment of loan closing costs;
    (ix) Payment of costs associated with complying with Federal or 
State-approved standards under the Occupational Safety and Health Act of 
1970 (29 U.S.C. 655, 667). This purpose is limited to applicants who 
demonstrate that compliance with the standards will cause them 
substantial economic injury; and
    (x) Payment of training costs required or recommended by the Agency.
    (2) Loan funds under a line of credit may be advanced only for the 
following purposes:
    (i) Payment of annual operating expenses, family subsistence, and 
purchase of feeder animals;
    (ii) Payment of current annual operating debts advanced for the 
current operating cycle; (Under no circumstances can carry-over 
operating debts from a previous operating cycle be refinanced);
    (iii) Purchase of routine capital assets, such as replacement of 
livestock, that will be repaid within the operating cycle;
    (iv) Payment of scheduled, non-delinquent, term debt payments 
provided the debt is for authorized FO or OL purposes.
    (v) Purchase of cooperative stock for credit, production, processing 
or marketing purposes; and
    (vi) Payment of loan closing costs.
    (b) Farm ownership loan purposes. Guaranteed FO are authorized only 
to:
    (1) Acquire or enlarge a farm or ranch; examples include, but are 
not limited to, providing down payments, purchasing easements for the 
loan applicant's portion of land being subdivided, and participating in 
the beginning farmer downpayment FO program under part 1943, subpart A, 
of this title;
    (2) Make capital improvements; examples include, but are not limited 
to, the construction, purchase, and improvement of a farm dwelling, 
service buildings and facilities that can be made fixtures to the real 
estate, (Capital improvements to leased land may be financed subject to 
the limitations in Sec. 762.122);

[[Page 99]]

    (3) Promote soil and water conservation and protection; examples 
include the correction of hazardous environmental conditions, and the 
construction or installation of tiles, terraces and waterways;
    (4) Pay closing costs, including but not limited to, purchasing 
stock in a cooperative and appraisal and survey fees; and
    (5) Refinancing indebtedness incurred for authorized FO and OL 
purposes, provided the lender and loan applicant demonstrate the need to 
refinance the debt.
    (c) Highly erodible land or wetlands conservation. Loans may not be 
made for any purpose which contributes to excessive erosion of highly 
erodible land or to the conversion of wetlands to produce an 
agricultural commodity. A decision by the Agency to reject an 
application for this reason may be appealable. An appeal questioning 
whether the presence of a wetland, converted wetland, or highly erodible 
land on a particular property must be filed directly with the USDA 
agency making the determination in accordance with the agency's appeal 
procedures.
    (d) Judgment debts. Loans may not be used to satisfy judgments 
obtained in the United States District courts. However, Internal Revenue 
Service judgment liens may be paid with loan funds.



Sec. 762.122  Loan limitations.

    (a) OL term limitations. (1) No guaranteed OL shall be made to any 
loan applicant after the 15th year that a loan applicant, or any 
individual signing the promissory note, received a direct or guaranteed 
OL.
    (2) Notwithstanding paragraph (c)(1) of this section, if a borrower 
had any combination of direct or guaranteed OL closed in 10 or more 
prior calendar years prior to October 28, 1992, eligibility to receive 
new guaranteed OL is extended for 5 additional years from October 28, 
1992, and the years need not run consecutively. However, in the case of 
a line of credit, each year in which an advance is made after October 
28, 1992, counts toward the 5 additional years. Once determined 
eligible, a loan or line of credit may be approved for any authorized 
term.
    (b) Leased land. When FO funds are used for improvements to leased 
land the terms of the lease must provide reasonable assurance that the 
loan applicant will have use of the improvement over its useful life, or 
provide compensation for any unexhausted value of the improvement if the 
lease is terminated.
    (c) Tax-exempt transactions. The Agency will not guarantee any loan 
made with the proceeds of any obligation the interest on which is 
excluded from income under section 103 of the Internal Revenue Code of 
1986. Funds generated through the issuance of tax-exempt obligations may 
not be used to purchase the guaranteed portion of any Agency guaranteed 
loan. An Agency guaranteed loan may not serve as collateral for a tax-
exempt bond issue.
    (d) Floodplain restrictions. The Agency will not guarantee any loan 
to purchase, build, or expand buildings located in a special 100 year 
floodplain as defined by FEMA flood hazard area maps unless flood 
insurance is available and purchased.

[64 FR 7378, Feb. 12, 1999; 64 FR 38298, July 16, 1999, as amended at 66 
FR 7567, Jan. 24, 2001]



Sec. 762.123  Insurance and farm inspection requirements.

    (a) Insurance. (1) Lenders must require borrowers to maintain 
adequate property, public liability, and crop insurance to protect the 
lender and Government's interests.
    (2) By loan closing, loan applicants must either:
    (i) Obtain at least the catastrophic risk protection (CAT) level of 
crop insurance coverage, if available, for each crop of economic 
significance, as defined by part 402 of this title, or
    (ii) Waive eligibility for emergency crop loss assistance in 
connection with the uninsured crop. EM loan assistance under part 1945, 
subpart D, of this title is not considered emergency crop loss 
assistance for purposes of this waiver and execution of the waiver does 
not render the borrower ineligible for EM loans.
    (3) Loan applicants must purchase flood insurance if buildings are 
or will be located in a special flood hazard area as defined by FEMA 
flood hazard

[[Page 100]]

area maps and if flood insurance is available.
    (4) Insurance, including crop insurance, must be obtained as 
required by the lender or the Agency based on the strengths and 
weaknesses of the loan.
    (b) Farm inspections. Before submitting an application the lender 
must make an inspection of the farm to assess the suitability of the 
farm and to determine any development that is needed to make it a 
suitable farm.

[64 FR 7378, Feb. 12, 1999, as amended at 70 FR 56107, Sept. 26, 2005]



Sec. 762.124  Interest rates, terms, charges, and fees.

    (a) Interest rates. (1) The interest rate on a guaranteed loan or 
line of credit may be fixed or variable as agreed upon between the 
borrower and the lender. The lender may charge different rates on the 
guaranteed and the non-guaranteed portions of the note. The guaranteed 
portion may be fixed while the unguaranteed portion may be variable, or 
vice versa. If both portions are variable, different bases may be used.
    (2) If a variable rate is used, it must be tied to a rate 
specifically agreed to between the lender and borrower in the loan 
instruments. Variable rates may change according to the normal practices 
of the lender for its average farm customers, but the frequency of 
change must be specified in the loan or line of credit instrument.
    (3) Neither the interest rate on the guaranteed portion nor the 
unguaranteed portion may exceed the rate the lender charges its average 
agricultural loan customer. At the request of the Agency, the lender 
must provide evidence of the rate charged the average agricultural loan 
customer. This evidence may consist of average yield data, or documented 
administrative differential rate schedule formulas used by the lender.
    (4) Interest must be charged only on the actual amount of funds 
advanced and for the actual time the funds are outstanding. Interest on 
protective advances made by the lender to protect the security will be 
charged at the note rate but limited to paragraph (a)(3) of this 
section.
    (5) The lender and borrower may collectively obtain a temporary 
reduction in the interest rate through the interest assistance program 
in accordance with Sec. 762.150.
    (b) OL terms. (1) Loan funds or advances on a line of credit used to 
pay annual operating expenses will be repaid when the income from the 
year's operation is received, except when the borrower is establishing a 
new enterprise, developing a farm, purchasing feed while feed crops are 
being established, or recovering from disaster or economic reverses.
    (2) The final maturity date for each loan cannot exceed 7 years from 
the date of the promissory note or line of credit agreement. Advances 
for purposes other than for annual operating expenses will be scheduled 
for repayment over the minimum period necessary considering the loan 
applicant's ability to repay and the useful life of the security, but 
not in excess of 7 years.
    (3) All advances on a line of credit must be made within 5 years 
from the date of the Loan Guarantee.
    (c) FO terms. Each loan must be scheduled for repayment over a 
period not to exceed 40 years from the date of the note or such shorter 
period as may be necessary to assure that the loan will be adequately 
secured, taking into account the probable depreciation of the security.
    (d) Balloon installments under loan note guarantee. Balloon payment 
terms are permitted on FO or OL subject to the following:
    (1) Extended repayment schedules may include equal, unequal, or 
balloon installments if needed on any guaranteed loan to establish a new 
enterprise, develop a farm, or recover from a disaster or an economical 
reversal.
    (2) Loans with balloon installments must have adequate collateral at 
the time the balloon installment comes due. Crops, livestock other than 
breeding livestock, or livestock products produced are not sufficient 
collateral for securing such a loan.
    (3) The borrower must be projected to be able to refinance the 
remaining debt at the time the balloon payment comes due based on the 
expected financial condition of the operation, the depreciated value of 
the collateral, and the principal balance on the loan.

[[Page 101]]

    (e) Charges and Fees. (1) The lender may charge the loan applicant 
and borrower fees for the loan provided they are no greater than those 
charged to unguaranteed customers for similar transactions. Similar 
transactions are those involving the same type of loan requested (for 
example, operating loans or farm real estate loans).
    (2) Late payment charges (including default interest charges) are 
not covered by the guarantee. These charges may not be added to the 
principal and interest due under any guaranteed note or line of credit. 
However, late payment charges may be made outside of the guarantee if 
they are routinely made by the lender in similar types of loan 
transactions.
    (3) Lenders may not charge a loan origination and servicing fee 
greater than 1 percent of the loan amount for the life of the loan when 
a guaranteed loan is made in conjunction with a down payment FO for 
beginning farmers under part 1943, subpart A, of this title.



Sec. 762.125  Financial feasibility.

    (a) General. (1) Notwithstanding any other provision of this 
section, PLP lenders will follow their internal procedures on financial 
feasibility as agreed to by the Agency during PLP certification.
    (2) The loan applicant's proposed operation must project a feasible 
plan as defined in Sec. 762.102(b).
    (3) For standard eligible lenders, the projected income and expenses 
of the borrower and operation used to determine a feasible plan must be 
based on the loan applicant's proven record of production and financial 
management.
    (4) For CLP lenders, the projected income and expenses of the 
borrower and the operation must be based on the loan applicant's 
financial history and proven record of financial management.
    (5) For those farmers without a proven history, a combination of any 
actual history and any other reliable source of information that are 
agreeable with the lender, the loan applicant, and the Agency will be 
used.
    (6) The cash flow budget analyzed to determine a feasible plan must 
represent the predicted cash flow of the operating cycle.
    (7) Lenders must use price forecasts that are reasonable and 
defensible. Sources must be documented by the lender and acceptable to 
the Agency.
    (8) When a feasible plan depends on income from other sources in 
addition to income from owned land, the income must be dependable and 
likely to continue.
    (9) The lender will analyze business ventures other than the farm 
operation to determine their soundness and contribution to the 
operation. Guaranteed loan funds will not be used to finance a nonfarm 
enterprise. Nonfarm enterprises include, but are not limited to: raising 
earthworms, exotic birds, tropical fish, dogs, or horses for nonfarm 
purposes; welding shops; boarding horses; and riding stables.
    (10) When the loan applicant has or will have a cash flow budget 
developed in conjunction with a proposed or existing Agency direct loan, 
the two cash flow budgets must be consistent.
    (b) Estimating production. (1) Standard eligible lenders must use 
the best sources of information available for estimating production in 
accordance with this subsection when developing cash flow budgets.
    (2) Deviations from historical performance may be acceptable, if 
specific to changes in operation and adequately justified and acceptable 
to the Agency.
    (3) For existing farmers, actual production for the past 3 years 
will be utilized.
    (4) For those farmers without a proven history, a combination of any 
actual history and any other reliable source of information that are 
agreeable with the lender, the loan applicant, and the Agency will be 
used.
    (5) When the production of a growing commodity can be estimated, it 
must be considered when projecting yields.
    (6) When the loan applicant's production history has been so 
severely affected by a declared disaster that an accurate projection 
cannot be made, the following applies:
    (i) County average yields are used for the disaster year if the loan 
applicant's disaster year yields are less than the

[[Page 102]]

county average yields. If county average yields are not available, State 
average yields are used. Adjustments can be made, provided there is 
factual evidence to demonstrate that the yield used in the farm plan is 
the most probable to be realized.
    (ii) To calculate a historical yield, the crop year with the lowest 
actual or county average yield may be excluded, provided the loan 
applicant's yields were affected by disasters at least 2 of the previous 
5 consecutive years.
    (c) Refinancing. Loan guarantee requests for refinancing must ensure 
that a reasonable chance for success still exists. The lender must 
demonstrate that problems with the loan applicant's operation that have 
been identified, can be corrected, and the operation returned to a sound 
financial basis.

[64 FR 7378, Feb. 12, 1999, as amended at 66 FR 7567, Jan. 24, 2001]



Sec. 762.126  Security requirements.

    (a) General. (1) The lender is responsible for ensuring that proper 
and adequate security is obtained and maintained to fully secure the 
loan, protect the interest of the lender and the Agency, and assure 
repayment of the loan or line of credit.
    (2) The lender will obtain a lien on additional security when 
necessary to protect the Agency's interest.
    (b) Guaranteed and unguaranteed portions. (1) All security must 
secure the entire loan or line of credit. The lender may not take 
separate security to secure only that portion of the loan or line of 
credit not covered by the guarantee.
    (2) The lender may not require compensating balances or certificates 
of deposit as means of eliminating the lender's exposure on the 
unguaranteed portion of the loan or line of credit. However, 
compensating balances or certificates of deposit as otherwise used in 
the ordinary course of business are allowed for both the guaranteed and 
unguaranteed portions.
    (c) Identifiable security. The guaranteed loan must be secured by 
identifiable collateral. To be identifiable, the lender must be able to 
distinguish the collateral item and adequately describe it in the 
security instrument.
    (d) Type of security. (1) Guaranteed loans may be secured by any 
property if the term of the loan and expected life of the property will 
not cause the loan to be undersecured.
    (2) For loans with terms greater than 7 years, a lien must be taken 
on real estate.
    (3) Loans can be secured by a mortgage on leasehold properties if 
the lease has a negotiable value and is subject to being mortgaged.
    (4) The lender or Agency may require additional personal and 
corporate guarantees to adequately secure the loan. These guarantees are 
separate from, and in addition to, the personal obligations arising from 
members of an entity signing the note as individuals.
    (e) Lien position. All guaranteed loans will be secured by the best 
lien obtainable. Provided that:
    (1) Any chattel-secured guaranteed loan must have a higher lien 
priority (including purchase money interest) than an unguaranteed loan 
secured by the same chattels and held by the same lender.
    (2) Junior lien positions are acceptable only if the total amount of 
debt with liens on the security, including the debt in junior lien 
position, is less than or equal to 85 percent of the value of the 
security. Junior liens on crops or livestock products will not be relied 
upon for security unless the lender is involved in multiple guaranteed 
loans to the same borrower and also has the first lien on the 
collateral.
    (3) When taking a junior lien, prior lien instruments will not 
contain future advance clauses (except for taxes, insurance, or other 
reasonable costs to protect security), or cancellation, summary 
forfeiture, or other clauses that jeopardize the Government's or the 
lender's interest or the borrower's ability to pay the guaranteed loan, 
unless any such undesirable provisions are limited, modified, waived or 
subordinated by the lienholder for the benefit of the Agency and the 
lender.
    (f) Additional security, or any loan of $10,000 or less may be 
secured by the best lien obtainable on real estate without title 
clearance or legal services normally required, provided the lender 
believes from a search of the county records that the loan applicant

[[Page 103]]

can give a mortgage on the farm and provided that the lender would, in 
the normal course of business, waive the title search. This exception to 
title clearance will not apply when land is to be purchased.
    (g) Multiple owners. If security has multiple owners, all owners 
must execute the security documents for the loan.
    (h) Exceptions. The Deputy Administrator for Farm Loan Programs has 
the authority to grant an exception to any of the requirements involving 
security, if the proposed change is in the best interest of the 
Government and the collection of the loan will not be impaired.

[64 FR 7378, Feb. 12, 1999, as amended at 70 FR 56107, Sept. 26, 2005]



Sec. 762.127  Appraisal requirements.

    (a) General. The Agency may require a lender to obtain an appraisal 
based on the type of security, loan size, and whether it is primary or 
additional security. Except for authorized liquidation expenses, the 
lender is responsible for all appraisal costs, which may be passed on to 
the borrower, or a transferee in the case of a transfer and assumption.
    (b) Exception. Notwithstanding other provisions of this section, an 
appraisal is not required for any additional security, or for loans of 
$50,000 or less if a strong equity position exists.
    (c) Chattel appraisals. A current appraisal (not more than 12 months 
old) of primary chattel security is generally required on all loans. An 
appraisal for loans or lines of credit for annual production purposes 
that are secured by crops is only required when a guarantee is requested 
late in the current production year and actual yields can be reasonably 
estimated. The appraised value of chattel property will be based on 
public sales of the same, or similar, property in the market area. In 
the absence of such public sales, reputable publications reflecting 
market values may be used. Appraisal reports may be on the Agency's 
appraisal of chattel property form or on any other appraisal form 
containing at least the same information. Chattel appraisals will be 
performed by appraisers who possess sufficient experience or training to 
establish market (not retail) values as determined by the Agency.
    (d) Real estate appraisals. A current real estate appraisal is 
required when real estate will be primary security. Agency officials may 
accept an appraisal that is not current if there have been no 
significant changes in the market or on the subject real estate and the 
appraisal was either completed within the past 12 months or updated by a 
qualified appraisal if not completed within the past 12 months.
    (1) Appraiser qualifications. On loan transactions of $250,000 or 
less, the lender must demonstrate to the Agency's satisfaction that the 
appraiser possesses sufficient experience or training to estimate the 
market value of agricultural property. On loan transactions greater than 
$250,000, which includes principal plus accrued interest through the 
closing date, the appraisal must be completed by a State certified 
general appraiser.
    (2) Appraisals. Real estate appraisals must be completed in 
accordance with the Uniform Standards of Professional Appraisal 
Practice. Appraisals may be either a complete or limited appraisal 
provided in a self-contained or summary format. Restricted reports, as 
defined in the Uniform Standards of Professional Appraisal Practice, are 
not acceptable.

[64 FR 7378, Feb. 12, 1999, as amended at 64 FR 62568, Nov. 17, 1999; 65 
FR 14433, Mar. 17, 2000]



Sec. 762.128  Environmental and special laws.

    (a) Environmental requirements. The requirements found in part 1940, 
subpart G, of this title must be met for guaranteed OL and FO. CLP and 
PLP lenders may certify that they have documentation in their file to 
demonstrate compliance with paragraph (c) of this section. Standard 
eligible lenders must submit evidence supporting compliance with this 
section.
    (b) Determination. The Agency determination of whether an 
environmental problem exists will be based on:
    (1) The information supplied with the application;
    (2) The Agency Official's personal knowledge of the operation;

[[Page 104]]

    (3) Environmental resources available to the Agency including, but 
not limited to, documents, third parties, and governmental agencies;
    (4) A visit to the farm operation when the available information is 
insufficient to make a determination;
    (5) Other information supplied by the lender or loan applicant upon 
Agency request. If necessary, information not supplied with the 
application will be requested by the Agency.
    (c) Special requirements. Lenders will assist in the environmental 
review process by providing environmental information. In all cases, the 
lender must retain documentation of their investigation in the loan 
applicant's case file.
    (1) A determination must be made as to whether there are any 
potential impacts to a 100 year floodplain as defined by Federal 
Emergency Management Agency floodplain maps, Natural Resources 
Conservation Service data, or other appropriate documentation.
    (2) The lender will assist the borrower in securing any applicable 
permits or waste management plans. The lender may consult with the 
Agency for guidance on activities which require consultation with State 
regulatory agencies, special permitting or waste management plans.
    (3) The lender will examine the security property to determine if 
there are any structures or archeological sites which are listed or may 
be eligible for listing in the National Register of Historic Places. The 
lender may consult with the Agency for guidance on which situations will 
need further review in accordance with the National Historical 
Preservation Act and part 1940, subpart G, and part 1901, subpart F, of 
this title.
    (4) The loan applicant must certify they will not violate the 
provisions of Sec. 363 of the CONACT, the Food Security Act of 1985, 
and Executive Order 11990 relating to Highly Erodible Land and Wetlands.
    (5) All lenders are required to ensure that due diligence is 
performed in conjunction with a request for guarantee of a loan 
involving real estate. Due diligence is the process of evaluating real 
estate in the context of a real estate transaction to determine the 
presence of contamination from release of hazardous substances, 
petroleum products, or other environmental hazards and determining what 
effect, if any, the contamination has on the security value of the 
property. The Agency will accept as evidence of due diligence the most 
current version of the American Society of Testing Materials (ASTM) 
transaction screen questionnaire available from 100 Barr Harbor Drive, 
West Conshohocken, Pennsylvania 19428-2959, or similar documentation, 
approved for use by the Agency, supplemented as necessary by the ASTM 
phase I environmental site assessments form.
    (d) Equal opportunity and nondiscrimination. (1) With respect to any 
aspect of a credit transaction, the lender will not discriminate against 
any applicant on the basis of race, color, religion, national origin, 
sex, marital status, or age, provided the applicant can execute a legal 
contract. Nor will the lender discriminate on the basis of whether all 
or a part of the applicant's income derives from any public assistance 
program, or whether the applicant in good faith, exercises any rights 
under the Consumer Protection Act.
    (2) Where the guaranteed loan involves construction, the contractor 
or subcontractor must file all compliance reports, equal opportunity and 
nondiscrimination forms, and otherwise comply with all regulations 
prescribed by the Secretary of Labor pursuant to Executive Orders 11246 
and 11375.
    (e) Other Federal, State and local requirements. Lenders are 
required to coordinate with all appropriate Federal, State, and local 
agencies and comply with special laws and regulations applicable to the 
loan proposal.



Sec. 762.129  Percent of guarantee and maximum loss.

    (a) General. The percent of guarantee will not exceed 90 percent 
based on the credit risk to the lender and the Agency both before and 
after the transaction. The Agency will determine the percentage of 
guarantee.
    (b) Exceptions. The guarantee will be issued at 95 percent in any of 
the following circumstances:

[[Page 105]]

    (1) The sole purpose of a guaranteed FO or OL is to refinance an 
Agency direct farm loan. When only a portion of the loan is used to 
refinance a direct Agency farm credit program loan, a weighted 
percentage of a guarantee will be provided;
    (2) When the purpose of an FO guarantee is to participate in the 
downpayment loan program;
    (3) When a guaranteed OL is made to a farmer or rancher who is 
participating in the Agency's down payment loan program. The guaranteed 
OL must be made during the period that a borrower has the down payment 
loan outstanding; or
    (4) When a guaranteed OL is made to a farmer or rancher whose farm 
or ranch land is subject to the jurisdiction of an Indian tribe and 
whose loan is secured by one or more security instruments that are 
subject to the jurisdiction of an Indian tribe.
    (c) CLP and PLP guarantees. All guarantees issued to CLP or PLP 
lenders will not be less than 80 percent.
    (d) Maximum loss. The maximum amount the Agency will pay the lender 
under the loan guarantee will be any loss sustained by such lender on 
the guaranteed portion including:
    (1) The pro rata share of principal and interest indebtedness as 
evidenced by the note or by assumption agreement;
    (2) Any loan subsidy due and owing;
    (3) The pro rata share of principal and interest indebtedness on 
secured protective and emergency advances made in accordance with this 
subpart; and
    (4) Principal and interest indebtedness on recapture debt pursuant 
to a shared appreciation agreement. Provided that the lender has paid 
the Agency its pro rata share of the recapture amount due.

[64 FR 7378, Feb. 12, 1999, as amended at 68 FR 7695, Feb. 18, 2003]



Sec. 762.130  Loan approval and issuing the guarantee.

    (a) Processing timeframes. (1) Standard Eligible Lenders. Complete 
applications from Standard Eligible Lenders will be approved or 
rejected, and the lender notified in writing, no later than 30 calendar 
days after receipt.
    (2) CLP and PLP lenders.
    (i) Complete applications from CLP or PLP lenders will be approved 
or rejected not later than 14 calendar days after receipt.
    (ii) For PLP lenders, if this time frame is not met, the proposed 
guaranteed loan will automatically be approved, subject to funding, and 
receive an 80 or 95 percent guarantee, as appropriate.
    (3) Complete applications. For purposes of determining the 
application processing timeframes, an application will be not be 
considered complete until all information required to make an approval 
decision, including the information for an environmental review, is 
received by the Agency.
    (4) The Agency will confirm the date an application is received with 
a written notification to the lender.
    (b) Funding preference. Loans are approved subject to the 
availability of funding. When it appears that there are not adequate 
funds to meet the needs of all approved loan applicants, applications 
that have been approved will be placed on a preference list according to 
the date of receipt of a complete application. If approved applications 
have been received on the same day, the following will be given 
priority:
    (1) An application from a veteran
    (2) An application from an Agency direct loan borrower
    (3) An application from a loan applicant who:
    (i) Has a dependent family,
    (ii) Is an owner of livestock and farm implements necessary to 
successfully carry out farming operations, or
    (iii) Is able to make down payments.
    (4) Any other approved application.
    (c) Conditional commitment. (1) The lender must meet all of the 
conditions specified in the conditional commitment to secure final 
Agency approval of the guarantee.
    (2) The lender, after reviewing the conditions listed on the 
conditional commitment, will complete, execute, and return the form to 
the Agency. If the conditions are not acceptable to the lender, the 
Agency may agree to alternatives or inform the lender and the loan 
applicant of their appeal rights.
    (d) Lender requirements prior to issuing the guarantee. (1) Lender 
certification.

[[Page 106]]

The lender will certify as to the following on the appropriate Agency 
form:
    (i) No major changes have been made in the lender's loan or line of 
credit conditions and requirements since submission of the application 
(except those approved in the interim by the Agency in writing);
    (ii) Required hazard, flood, crop, worker's compensation, and 
personal life insurance (when required) are in effect;
    (iii) Truth in lending requirements have been met;
    (iv) All equal employment and equal credit opportunity and 
nondiscrimination requirements have been or will be met at the 
appropriate time;
    (v) The loan or line of credit has been properly closed, and the 
required security instruments have been obtained, or will be obtained, 
on any acquired property that cannot be covered initially under State 
law;
    (vi) The borrower has marketable title to the collateral owned by 
the borrower, subject to the instrument securing the loan or line of 
credit to be guaranteed and subject to any other exceptions approved in 
writing by the Agency. When required, an assignment on all USDA crop and 
livestock program payments has been obtained;
    (vii) When required, personal, joint operation, partnership, or 
corporate guarantees have been obtained;
    (viii) Liens have been perfected and priorities are consistent with 
requirements of the conditional commitment;
    (ix) Loan proceeds have been, or will be disbursed for purposes and 
in amounts consistent with the conditional commitment and as specified 
on the loan application. In line of credit cases, if any advances have 
occurred, advances have been disbursed for purposes and in amounts 
consistent with the conditional commitment and line of credit 
agreements;
    (x) There has been no material adverse change in the borrower's 
condition, financial or otherwise, since submission of the application; 
and
    (xi) All other requirements specified in the conditional commitment 
have been met.
    (2) Inspections. The lender must notify the Agency of any scheduled 
inspections during construction and after the guarantee has been issued. 
The Agency may attend these field inspections. Any inspections or review 
performed by the Agency, including those with the lender, are solely for 
the benefit of the Agency. Agency inspections do not relieve any other 
parties of their inspection responsibilities, nor can these parties rely 
on Agency inspections for any purpose.
    (3) Execution of lender's agreement. The lender must execute the 
Agency's lender's agreement and deliver it to the Agency.
    (4) Closing report and guarantee fees.
    (i) The lender must complete an Agency closing report form and 
return it to the Agency along with any guarantee fees.
    (ii) Guarantee fees are 1 percent and are calculated as follows: 
Fee=Loan Amountx% Guaranteedx.01. The nonrefundable fee is paid to the 
Agency by the lender. The fee may be passed on to the borrower and 
included in loan funds.
    (iii) The following guaranteed loan transactions are not charged a 
fee:
    (A) Loans involving interest assistance;
    (B) Loans where a majority of the funds are used to refinance an 
Agency direct loan; and
    (C) Loans to beginning farmers or ranchers involved in the direct 
beginning farmer downpayment program.
    (e) Promissory notes, line of credit agreements, mortgages, and 
security agreements. The lender will use its own promissory notes, line 
of credit agreements, real estate mortgages (including deeds of trust 
and similar instruments), and security agreements (including chattel 
mortgages in Louisiana and Puerto Rico), provided:
    (1) The forms meet Agency requirements;
    (2) Documents comply with State law and regulation;
    (3) The principal and interest repayment schedules are stated 
clearly in the notes and are consistent with the conditional commitment;
    (4) The note is executed by the individual liable for the loan. For 
entities, the note is executed by the member who is authorized to sign 
for the entity, and by all members of the entity as

[[Page 107]]

individuals. Individual liability can be waived by the Agency for 
members holding less than 10 percent ownership in the entity if the 
collectability of the loan will not be impaired; and
    (5) When the loan purpose is to refinance or restructure the 
lender's own debt, the lender may continue to use the existing debt 
instrument and attach an allonge that modifies the terms of the original 
note.
    (f) Replacement of loan guarantee, or assignment guarantee 
agreement. If the guarantee or assignment guarantee agreements are lost, 
stolen, destroyed, mutilated, or defaced, except where the evidence of 
debt was or is a bearer instrument, the Agency will issue a replacement 
to the lender or holder upon receipt of acceptable documentation 
including a certificate of loss and an indemnity bond.



Sec. Sec. 762.131-762.139  [Reserved]



Sec. 762.140  General servicing responsibilities.

    (a) General. (1) Lenders are responsible for servicing the entire 
loan in a reasonable and prudent manner, protecting and accounting for 
the collateral, and remaining the mortgagee or secured party of record.
    (2) The lender cannot enforce the guarantee to the extent that a 
loss results from a violation of usury laws or negligent servicing.
    (b) Borrower supervision. The lender's responsibilities regarding 
borrower supervision include, but are not limited to the following:
    (1) Ensuring loan funds are not used for unauthorized purposes.
    (2) Ensuring borrower compliance with the covenants and provisions 
contained in the promissory note, loan agreement, mortgage, security 
instruments, any other agreements, and this part. Any violations which 
indicate non-compliance on the part of the borrower must be reported, in 
writing, to both the Agency and the borrower.
    (3) Ensuring the borrower is in compliance with all laws and 
regulations applicable to the loan, the collateral, and the operations 
of the farm.
    (4) Receiving all payments of principal and interest on the loan as 
they fall due and promptly disbursing to any holder its pro-rata share 
according to the amount of interest the holder has in the loan, less 
only the lender's servicing fee.
    (5) Performing an annual analysis of the borrower's financial 
condition to determine the borrower's progress. The annual analysis will 
include:
    (i) For loans secured by real estate only, the analysis for standard 
eligible lenders must include an analysis of the borrower's balance 
sheet. CLP lenders will determine the need for the annual analysis based 
on the financial strength of the borrower and document the file 
accordingly. PLP lenders will perform an annual analysis in accordance 
with the requirements established in the lender's agreement.
    (ii) For loans secured by chattels, all lenders will review the 
borrower's progress regarding business goals, trends and changes in 
financial performance, and compare actual to planned income and expenses 
for the past year.
    (iii) An account of the whereabouts or disposition of all 
collateral.
    (iv) A discussion of any observations about the farm business with 
the borrower.
    (c) Monitoring of development. The lender's responsibilities 
regarding the construction, repairs, or other development include, but 
are not limited to:
    (1) Determining that all construction is completed as proposed in 
the loan application;
    (2) Making periodic inspections during construction to ensure that 
any development is properly completed within a reasonable period of 
time; and
    (3) Verification that the security is free of any mechanic's, 
materialmen's, or other liens which would affect the lender's lien or 
result in a different lien priority from that proposed in the request 
for guarantee.
    (d) Loan installments. When a lender receives a payment from the 
sale of encumbered property, loan installments will be paid in the order 
of lien priority. When a payment is received from the sale of 
unencumbered property or other sources of income, loan installments will 
be paid in order of their due

[[Page 108]]

date. Agency approval is required for any other proposed payment plans.

[64 FR 7378, Feb. 12, 1999, as amended at 69 FR 44579, July 27, 2004]



Sec. 762.141  Reporting requirements.

    Lenders are responsible for providing the local Agency credit 
officer with all of the following information on the loan and the 
borrower:
    (a) When the guaranteed loan becomes 30 days past due, and following 
the lender's meeting or attempts to meet with the borrower, all lenders 
will submit the appropriate Agency form showing guaranteed loan borrower 
default status. The form will be resubmitted every 60 days until the 
default is cured either through restructuring or liquidation.
    (b) All lenders will submit the appropriate guaranteed loan status 
reports as of March 31 and September 30 of each year;
    (c) CLP lenders also must provide the following:
    (1) A written summary of the lender's annual analysis of the 
borrower's operation. This summary should describe the borrower's 
progress and prospects for the upcoming operating cycle. This annual 
analysis may be waived or postponed if the borrower is financially 
strong. The summary will include a description of the reasons an 
analysis was not necessary.
    (2) For lines of credit, an annual certification stating that a cash 
flow projecting at least a feasible plan has been developed, that the 
borrower is in compliance with the provisions of the line of credit 
agreement, and that the previous year income and loan funds and security 
proceeds have been accounted for.
    (d) In addition to the requirements of paragraphs (a), (b), and (c) 
of this section, the standard eligible lender also will provide:
    (1) Borrower's balance sheet, and income and expense statement for 
the previous year.
    (2) For lines of credit, the cash flow for the borrower's operation 
that projects a feasible plan or better for the upcoming operating 
cycle. The standard eligible lender must receive approval from the 
Agency before advancing future years' funds.
    (3) An annual farm visit report or collateral inspection.
    (e) PLP lenders will submit additional reports as required in their 
lender's agreement.
    (f) A lender receiving a final loss payment must complete and return 
an annual report on its collection activities for each unsatisfied 
account for 3 years following payment of the final loss claim.



Sec. 762.142  Servicing related to collateral.

    (a) General. The lender's responsibilities regarding servicing 
collateral include, but are not limited to, the following:
    (1) Obtain income and insurance assignments when required.
    (2) Ensure the borrower has or obtains marketable title to the 
collateral.
    (3) Inspect the collateral as often as deemed necessary to properly 
service the loan.
    (4) Ensure the borrower does not convert loan security.
    (5) Ensure the proceeds from the sale or other disposition of 
collateral are accounted for and applied in accordance with the lien 
priorities on which the guarantee is based or used for the purchase of 
replacement collateral.
    (6) Ensure the loan and the collateral are protected in the event of 
foreclosure, bankruptcy, receivership, insolvency, condemnation, or 
other litigation.
    (7) Ensure taxes, assessments, or ground rents against or affecting 
the collateral are paid.
    (8) Ensure adequate insurance is maintained.
    (9) Ensure that insurance loss payments, condemnation awards, or 
similar proceeds are applied on debts in accordance with lien priorities 
on which the guarantee was based, or used to rebuild or acquire needed 
replacement collateral.
    (b) Partial releases. (1) A lender may release guaranteed loan 
security without FSA concurrence as follows:
    (i) When the security item is being sold for market value and the 
proceeds will be applied to the loan in accordance with lien priorities. 
In the case of term loans, proceeds will be applied as

[[Page 109]]

extra payments and not as a regular installment on the loan.
    (ii) The security item will be used as a trade-in or source of down 
payment funds for a like item that will be taken as security.
    (iii) The security item has no present or prospective value.
    (2) A partial release of security may be approved in writing by the 
Agency upon the lender's request when:
    (i) Proceeds will be used to make improvements to real estate that 
increase the value of the security by an amount equal to or greater than 
the value of the security being released.
    (ii) Security will be released outright with no consideration, but 
the total unpaid balance of the guaranteed loan is less than or equal to 
75 percent of the value of the security for the loan after the release, 
excluding the value of growing crops or planned production, based on a 
current appraisal of the security.
    (iii) Significant income generating property will not be released 
unless it is being replaced and business assets will not be released for 
use as a gift or any similar purpose.
    (iv) Agency concurrence is provided in writing to the lender's 
written request. Standard eligible lenders and CLP lenders will submit 
the following to the Agency:
    (A) A current balance sheet on the borrower; and
    (B) A current appraisal of the security. Based on the level of risk 
and estimated equity involved, the Agency will determine what security 
needs to be appraised. Any required security appraisals must meet the 
requirements of Sec. 762.127; and
    (C) A description of the purpose of the release; and
    (D) Any other information requested by the Agency to evaluate the 
proposed servicing action.
    (3) The lender will provide the Agency copies of any agreements 
executed to carry out the servicing action.
    (4) PLP lenders will request servicing approval in accordance with 
their agreement with the Agency at the time of PLP status certification.
    (c) Subordinations. (1) The Agency may subordinate its security 
interest on a direct loan when a guaranteed loan is being made if the 
requirements of the regulations governing Agency direct loan 
subordinations are met and only in the following circumstances:
    (i) To permit a guaranteed lender to advance funds and perfect a 
security interest in crops, feeder livestock, livestock offspring, or 
livestock products;
    (ii) When the lender requesting the guarantee needs the 
subordination of the Agency's lien position to maintain its lien 
position when servicing or restructuring;
    (iii) When the lender requesting the guarantee is refinancing the 
debt of another lender and the Agency's position on real estate security 
will not be adversely affected; or
    (iv) To permit a line of credit to be advanced for annual operating 
expenses.
    (2) The Agency may subordinate its basic security in a direct loan 
to permit guaranteed line of credit only when both of the following 
additional conditions are met:
    (i) The total unpaid balance of the direct loans is less than or 
equal to 75 percent of the value of all of the security for the direct 
loans, excluding the value of growing crops or planned production, at 
the time of the subordination. The direct loan security value will be 
determined by an appraisal. The lender requesting the subordination and 
guarantee is responsible for providing the appraisal and may charge the 
applicant a reasonable appraisal fee.
    (ii) The applicant cannot obtain sufficient credit through a 
conventional guaranteed loan without a subordination.
    (3) The lender may not subordinate its interest in property which 
secures a guaranteed loan except as follows:
    (i) The lender may subordinate its security interest in crops, 
feeder livestock, livestock offspring, or livestock products when no 
funds have been advanced from the guaranteed loan for their production, 
so a lender can make a loan for annual production expenses; or
    (ii) The lender may, with written Agency approval, subordinate its 
interest in basic security in cases where the subordination is required 
to allow another lender to refinance an existing

[[Page 110]]

prior lien, no additional debt is being incurred, and the lender's 
security position will not be adversely affected by the subordination.
    (iii) The Agency's national office may provide an exception to the 
subordination prohibition if such action is in the Agency's best 
interest. However, in no case can the loan made under the subordination 
include tax exempt financing.
    (d) Transfer and assumption. Transfers and assumptions are subject 
to the following conditions:
    (1) For standard eligible and CLP lenders, the servicing action must 
be approved by the Agency in writing.
    (2) For standard eligible and CLP lenders, the transferee must apply 
for a loan in accordance with Sec. 762.110, including a current 
appraisal, unless the lien position of the guaranteed loan will not 
change, and any other information requested by the Agency to evaluate 
the transfer and assumption.
    (3) PLP lenders may process transfers and assumptions in accordance 
with their agreement with the Agency.
    (4) Any required security appraisals must meet the requirements of 
Sec. 762.127.
    (5) The Agency will review, approve or reject the request in 
accordance with the time frames in Sec. 762.130.
    (6) The transferee must meet the eligibility requirements and loan 
limitations for the loan being transferred, all requirements relating to 
loan rates and terms, loan security, feasibility, and environmental and 
other laws applicable to a loan applicant under this part.
    (7) The lender will use its own assumption agreements or conveyance 
instruments, providing they are legally sufficient to obligate the 
transferee for the total outstanding debt. The lender will provide the 
Agency copies of any agreements executed to carry out the servicing 
action.
    (8) The Agency approves the transfer and assumption by executing a 
modification of the guarantee to designate the party that assumed the 
guaranteed debt, the amount of debt at the time of the assumption, 
including interest that is being capitalized, and any new loan terms, if 
applicable.
    (9) The lender must give any holder notice of the transfer. If the 
rate and terms are changed, written concurrence from the holder is 
required.
    (10) The Agency will agree to releasing the transferor or any 
guarantor from liability only if the requirements of Sec. 762.146(c) 
are met.

[64 FR 7378, Feb. 12, 1999, as amended at 66 FR 7567, Jan. 24, 2001; 69 
FR 44579, July 27, 2004]



Sec. 762.143  Servicing distressed accounts.

    (a) A borrower is in default when 30 days past due on a payment or 
in violation of provisions of the loan documents.
    (b) In the event of a borrower default, SEL and CLP lenders will:
    (1) Report to the Agency in accordance with Sec. 762.141.
    (2) Determine whether it will repurchase the guaranteed portion from 
the holder in accordance with Sec. 762.144, if the guaranteed portion 
of the loan was sold on the secondary market.
    (3) Arrange a meeting with the borrower within 15 days of default 
(45 days after payment due date for monetary defaults) to identify the 
nature of the delinquency and develop a course of action that will 
eliminate the delinquency and correct the underlying problems. Non-
monetary defaults will be handled in accordance with the lender's note, 
loan agreements and any other applicable loan documents.
    (i) The lender and borrower will prepare a current balance sheet and 
cash flow projection in preparation for the meeting. If the borrower 
refuses to cooperate, the lender will compile the best financial 
information available.
    (ii) The lender or the borrower may request the attendance of an 
Agency credit officer. If requested, the Agency credit officer will 
assist in developing solutions to the borrower's financial problems.
    (iii) The lender will summarize the meeting and proposed solutions 
on the Agency form for guaranteed loan borrower default status completed 
after the meeting. The lender will indicate the results on this form for 
the lender's consideration of the borrower for interest assistance in 
conjunction with rescheduling under Sec. 762.145(b).
    (iv) The lender must decide whether to restructure or liquidate the 
account

[[Page 111]]

within 90 days of default, unless the lender can document circumstances 
that justify an extension by the Agency.
    (v) The lender may not initiate foreclosure action on the loan until 
60 days after eligibility of the borrower to participate in the interest 
assistance programs has been determined by the Agency. If the lender or 
the borrower does not wish to consider servicing options under this 
section, this should be documented, and liquidation under Sec. 762.149 
should begin.
    (vi) If a borrower is current on a loan, but will be unable to make 
a payment, a restructuring proposal may be submitted in accordance with 
Sec. 762.145 prior to the payment coming due.
    (c) PLP lenders will service defaulted loans according to their 
lender's agreement.



Sec. 762.144  Repurchase of guaranteed portion from a secondary market
holder.

    (a) Request for repurchase. The holder may request the lender to 
repurchase the unpaid guaranteed portion of the loan when:
    (1) The borrower has not made a payment of principal and interest 
due on the loan for at least 60 days; or
    (2) The lender has failed to remit to the holder its pro-rata share 
of any payment made by the borrower within 30 days of receipt of a 
payment.
    (b) Repurchase by the lender. (1) When a lender is requested to 
repurchase a loan from the holder, the lender must consider the request 
according to the servicing actions that are necessary on the loan. In 
order to facilitate servicing and simplified accounting of loan 
transactions, lenders are encouraged to repurchase the loan upon the 
holder's request.
    (2) The repurchase by the lender will be for an amount equal to the 
portion of the loan held by the holder plus accrued interest.
    (3) The guarantee will not cover separate servicing fees that the 
lender accrues after the repurchase.
    (c) Repurchase by the Agency. (1) If the lender does not repurchase 
the loan, the holder must inform the Agency in writing that demand was 
made on the lender and the lender refused. Following the lender's 
refusal, the holder may continue as holder of the guaranteed portion of 
the loan or request that the Agency purchase the guaranteed portion. 
Within 30 days after written demand to the Agency from the holder with 
required attachments, the Agency will forward to the holder payment of 
the unpaid principal balance, with accrued interest to the date of 
repurchase. If the holder does not desire repurchase or purchase of a 
defaulted loan, the lender must forward the holder its pro-rata share of 
payments, liquidation proceeds and Agency loss payments.
    (2) With its demand on the Agency, the holder must include:
    (i) A copy of the written demand made upon the lender.
    (ii) Originals of the guarantee and note properly endorsed to the 
Agency, or the original of the assignment of guarantee.
    (iii) A copy of any written response to the demand of the holder by 
the lender.
    (iv) An account to which the Agency can forward the purchase amount 
via electronic funds transfer.
    (3) The amount due the holder from the Agency includes unpaid 
principal, unpaid interest to the date of demand, and interest which has 
accrued from the date of demand to the proposed payment date.
    (i) Upon request by the Agency, the lender must furnish upon Agency 
request a current statement, certified by a bank officer, of the unpaid 
principal and interest owed by the borrower and the amount due the 
holder.
    (ii) Any discrepancy between the amount claimed by the holder and 
the information submitted by the lender must be resolved by the lender 
and the holder before payment will be approved by the Agency. The Agency 
will not participate in resolution of any such discrepancy. When there 
is a discrepancy, the 30 day Agency payment requirement to the holder 
will be suspended until the discrepancy is resolved.
    (iii) In the case of a request for Agency purchase, the Agency will 
only pay interest that accrues for up to 90 days from the date of the 
demand letter to the lender requesting the repurchase.

[[Page 112]]

However, if the holder requested repurchase from the Agency within 60 
days of the request to the lender and for any reason not attributable to 
the holder and the lender, the Agency cannot make payment within 30 days 
of the holder's demand to the Agency, the holder will be entitled to 
interest to the date of payment.
    (4) At the time of purchase by the Agency, the original assignment 
of guarantee will be assigned by the holder to the Agency without 
recourse, including all rights, title, and interest in the loan.
    (5) Purchase by the Agency does not change, alter, or modify any of 
the lender's obligations to the Agency specified in the lender's 
agreement or guarantee; nor does the purchase waive any of the Agency's 
rights against the lender.
    (6) The Agency succeeds to all rights of the holder under the 
Guarantee including the right of set-off against the lender.
    (7) Within 180 days of the Agency's purchase, the lender will 
reimburse the Agency the amount of repurchase, with accrued interest, 
through one of the following ways:
    (i) By liquidating the loan security and paying the Agency its pro-
rata share of liquidation proceeds; or
    (ii) Paying the Agency the full amount the Agency paid to the holder 
plus any accrued interest.
    (8) The lender will be liable for the purchase amount and any 
expenses incurred by the Agency to maintain the loan in its portfolio or 
liquidate the security. While the Agency holds the guaranteed portion of 
the loan, the lender will transmit to the Agency any payment received 
from the borrower, including the pro-rata share of liquidation or other 
proceeds.
    (9) If the borrower files for reorganization under the provisions of 
the bankruptcy code or pays the account current while the purchase by 
the Government is being processed, the Agency may hold the loan as long 
it determines this action to be in the Agency's interest. If the lender 
is not proceeding expeditiously to collect the loan or reimbursement is 
not waived under this paragraph, the Agency will demand payment by the 
lender and collect the purchase amount through administrative offset of 
any claims due the lender.
    (10) The Agency may sell a purchased guaranteed loan on a non-
recourse basis if it determines that selling the portion of the loan 
that it holds is in the Government's best interest. A non-recourse 
purchase from the Agency requires a written request to the Agency from 
the party that wishes to purchase it, and written concurrence from the 
lender;
    (d) Repurchase for servicing. (1) If, due to loan default or 
imminent loan restructuring, the lender determines that repurchase is 
necessary to adequately service the loan, the lender may repurchase the 
guaranteed portion of the loan from the holder, with the written 
approval of the Agency.
    (2) The lender will not repurchase from the holder for arbitrage 
purposes. With its request for Agency concurrence, the lender will 
notify the Agency of its plans to resell the guaranteed portion 
following servicing.
    (3) The holder will sell the guaranteed portion of the loan to the 
lender for an amount agreed to between the lender and holder.

[64 FR 7378, Feb. 12, 1999, as amended at 69 FR 44579, July 27, 2004]



Sec. 762.145  Restructuring guaranteed loans.

    (a) General. (1) To restructure guaranteed loans standard eligible 
lenders must:
    (i) Obtain prior written approval of the Agency for all 
restructuring actions; and,
    (ii) Provide the items in paragraph (b) and (e) of this section to 
the Agency for approval.
    (2) If the standard eligible lender's proposal for servicing is not 
agreed to by the Agency, the Agency approval official will notify the 
lender in writing within 14 days of the lender's request.
    (3) To restructure guaranteed loans CLP lenders must:
    (i) Obtain prior written approval of the Agency only for debt write 
down under this section.
    (ii) Submit all calculations required in paragraph (e) of this 
section for debt writedown.

[[Page 113]]

    (iii) For restructuring other than write down, provide FSA with a 
certification that each requirement of this section has been met, a 
narrative outlining the circumstances surrounding the need for 
restructuring, and copies of any applicable calculations.
    (4) PLP lenders will restructure loans in accordance with their 
lender's agreement.
    (5) All lenders will submit copies of any restructured notes or 
lines of credit to the Agency.
    (b) Requirements. For any restructuring action, the following 
conditions apply:
    (1) The borrower meets the eligibility criteria of Sec. 762.120, 
except the provisions regarding prior debt forgiveness and delinquency 
on a federal debt do not apply.
    (2) The borrower's ability to make the amended payment is documented 
by the following:
    (i) A feasible plan (see Sec. 762.102(b)). If interest assistance 
is required to achieve a feasible plan, the items required by Sec. 
762.150(d) must be submitted with a restructuring request. Feasible plan 
is defined in Sec. 762.102(b).
    (ii) Current financial statements from all liable parties.
    (iii) Verification of nonfarm income.
    (iv) Verification of all debts of $1,000 or more.
    (v) Applicable credit reports.
    (vi) Financial history (and production history for standard eligible 
lenders) for the past 3 years to support the cash flow projections.
    (3) A final loss claim may be reduced, adjusted, or rejected as a 
result of negligent servicing after the concurrence with a restructuring 
action under this section.
    (4) Loans secured by real estate and/or equipment can be 
restructured using a balloon payment, equal installments, or unequal 
installments. Under no circumstances may livestock or crops alone be 
used as security for a loan to be rescheduled using a balloon payment. 
If a balloon payment is used, the projected value of the real estate 
and/or equipment security must indicate that the loan will be fully 
secured when the balloon payment becomes due. The projected value will 
be derived from a current appraisal adjusted for depreciation of 
depreciable property, such as buildings and other improvements, that 
occurs until the balloon payment is due. For equipment security, a 
current appraisal is required. The lender is required to project the 
security value of the equipment at the time the balloon payment is due 
based on the remaining life of the equipment, or the depreciation 
schedule on the borrower's Federal income tax return. Loans restructured 
with a balloon payment that are secured by real estate will have a 
minimum term of 5 years, and other loans will have a minimum term of 3 
years before the scheduled balloon payment. If statutory limits on terms 
of loans prevent the minimum terms, balloon payments may not be used. If 
the loan is rescheduled with unequal installments, a feasible plan, as 
defined in Sec. 762.102(b), must be projected for when installments are 
scheduled to increase.
    (5) If a borrower is current on a loan, but will be unable to make a 
payment, a restructuring proposal may be submitted prior to the payment 
coming due.
    (6) The lender may capitalize the outstanding interest when 
restructuring the loan as follows:
    (i) As a result of the capitalization of interest, a rescheduled 
promissory note may increase the amount of principal the borrower is 
required to pay. However, in no case will such principal amount exceed 
the statutory loan limits contained in Sec. 761.8 of this chapter.
    (ii) When accrued interest causes the loan amount to exceed the 
statutory loan limits, rescheduling may be approved without 
capitalization of the amount that exceeds the limit. Noncapitalized 
interest may be scheduled for repayment over the term of the rescheduled 
note.
    (iii) Only interest that has accrued at the rate indicated on the 
borrower's original promissory notes may be capitalized. Late payment 
fees or default interest penalties that have accrued due to the 
borrower's failure to make payments as agreed are not covered under the 
guarantee and may not be capitalized.
    (iv) The Agency will execute a modification of guarantee form to 
identify

[[Page 114]]

the new loan principal and the guaranteed portion if greater than the 
original loan amounts, and to waive the restriction on capitalization of 
interest, if applicable, to the existing guarantee documents. The 
modification form will be attached to the original guarantee as an 
addendum.
    (v) Approved capitalized interest will be treated as part of the 
principal and interest that accrues thereon, in the event that a loss 
should occur.
    (7) The lender's security position will not be adversely affected 
because of the restructuring. New security instruments may be taken if 
needed, but a loan does not have to be fully secured in order to be 
restructured, unless it is restructured with a balloon payment. When a 
loan is restructured using a balloon payment the lender must take a lien 
on all assets and project the loan to be fully secured at the time the 
balloon payment becomes due, in accordance with paragraph (b)(4) of this 
section.
    (8) Any holder agrees in writing to any changes in the original loan 
terms, including the approval of interest assistance. If the holder does 
not agree, the lender must repurchase the loan from the holder for any 
loan restructuring to occur.
    (9) After a guaranteed loan is restructured, the lender must provide 
the Agency with a copy of the restructured promissory note.
    (c) Rescheduling. The following conditions apply when a guaranteed 
loan is rescheduled or reamortized:
    (1) Payments will be rescheduled within the following terms:
    (i) FO and existing SW may be amortized over the remaining term of 
the note or rescheduled with an uneven payment schedule. The maturity 
date cannot exceed 40 years from the date of the original note.
    (ii) OL notes must be rescheduled over a period not to exceed 15 
years from the date of the rescheduling. An OL line of credit may be 
rescheduled over a period not to exceed 7 years from the date of the 
rescheduling or 10 years from the date of the original note, whichever 
is less. Advances cannot be made against a line of credit loan that has 
had any portion of the loan rescheduled.
    (2) The interest rate for a rescheduled loan is the negotiated rate 
agreed upon by the lender and the borrower at the time of the action, 
subject to the loan limitations for each type of loan.
    (3) A new note is not necessary when rescheduling occurs. However, 
if a new note is not taken, the existing note or line of credit 
agreement must be modified by attaching an allonge or other legally 
effective amendment, evidencing the revised repayment schedule and any 
interest rate change. If a new note is taken, the new note must 
reference the old note and state that the indebtedness evidenced by the 
old note or line of credit agreement is not satisfied. The original note 
or line of credit agreement must be retained.
    (d) Deferrals. The following conditions apply to deferrals:
    (1) Payments may be deferred up to 5 years, but the loan may not be 
extended beyond the final due date of the note.
    (2) The principal portion of the payment may be deferred either in 
whole or in part.
    (3) Interest may be deferred only in part. Payment of a reasonable 
portion of accruing interest as indicated by the borrower's cash flow 
projections is required for multi-year deferrals.
    (4) There must be a reasonable prospect that the borrower will be 
able to resume full payments at the end of the deferral period.
    (e) Debt writedown. The following conditions apply to debt 
writedown:
    (1) A lender may only write down a delinquent guaranteed loan or 
line of credit in an amount sufficient to permit the borrower to develop 
a feasible plan as defined in Sec. 762.102(b).
    (2) The lender will request other creditors to negotiate their debts 
before a writedown is considered.
    (3) The borrower cannot develop a feasible plan after consideration 
is given to rescheduling and deferral under this section.
    (4) The present value of the loan to be written down, based on the 
interest rate of the rescheduled loan, will be equal to or exceed the 
net recovery value of the loan collateral.
    (5) The loan will be restructured with regular payments at terms no 
shorter than 5 years for a line of credit and OL

[[Page 115]]

note and no shorter than 20 years for FO, unless required to be shorter 
by Sec. 762.145(c)(1)(i) and (ii).
    (6) No further advances may be made on a line of credit that is 
written down.
    (7) Loans may not be written down with interest assistance. If a 
borrower's loan presently on interest assistance requires a writedown, 
the writedown will be considered without interest assistance.
    (8) The writedown is based on writing down the shorter-term loans 
first.
    (9) When a lender requests approval of a writedown for a borrower 
with multiple loans, the security for all of the loans will be cross-
collateralized and continue to serve as security for the loan that is 
written down. If a borrower has multiple loans and one loan is written 
off entirely through debt writedown, the security for that loan will not 
be released and will remain as security for the other written down debt. 
Additional security instruments will be taken if required to cross-
collateralize security and maintain lien priority.
    (10) The writedown will be evidenced by an allonge or amendment to 
the existing note or line of credit reflecting the writedown.
    (11) The borrower executes an Agency shared appreciation agreement 
for loans which are written down and secured by real estate.
    (i) The lender will attach the original agreement to the 
restructured loan document.
    (ii) The lender will provide the Agency a copy of the executed 
agreement, and
    (iii) Security instruments must ensure future collection of any 
appreciation under the agreement.
    (12) The lender will prepare and submit the following to the Agency:
    (i) A current appraisal of all security in accordance with Sec. 
762.127.
    (ii) A completed report of loss on the appropriate Agency form for 
the proposed writedown loss claim.
    (iii) Detailed writedown calculations as follows:
    (A) Calculate the present value.
    (B) Determine the net recovery value.
    (C) If the net recovery value exceeds the present value, writedown 
is unavailable; liquidation becomes the next servicing consideration. If 
the present value equals or exceeds the net recovery value, the debt may 
be written down to the present value.
    (iv) The lender will make any adjustment in the calculations as 
requested by the Agency.

[64 FR 7378, Feb. 12, 1999; 64 FR 38298, July 16, 1999, as amended at 66 
FR 7567, Jan. 24, 2001; 69 FR 44579, July 27, 2004; 70 FR 56107, Sept. 
26, 2005]



Sec. 762.146  Other servicing procedures.

    (a) Additional loans and advances. (1) Notwithstanding any provision 
of this section, the PLP lender may make additional loans or advances in 
accordance with the lender's agreement with the Agency.
    (2) SEL and CLP lenders must not make additional loans or advances 
without prior written approval of the Agency, except as provided in the 
borrower's loan or line of credit agreement.
    (3) In cases of a guaranteed line of credit, lenders may make an 
emergency advance when a line of credit has reached its ceiling. The 
emergency advance will be made as an advance under the line and not as a 
separate note. The lender's loan documents must contain sufficient 
language to provide that any emergency advance will constitute a debt of 
the borrower to the lender and be secured by the security instrument. 
The following conditions apply:
    (i) The loan funds to be advanced are for authorized operating loan 
purposes;
    (ii) The financial benefit to the lender and the Government from the 
advance will exceed the amount of the advance; and
    (iii) The loss of crops or livestock is imminent unless the advance 
is made.
    (4) Protective advance requirements are found in Sec. 762.149.
    (b) Release of liability upon withdrawal. An individual who is 
obligated on a guaranteed loan may be released from liability by a 
lender, with the written consent of the Agency, provided the following 
conditions have been met:
    (1) The individual to be released has withdrawn from the farming or 
ranching operation;

[[Page 116]]

    (2) A divorce decree or final property settlement does not hold the 
withdrawing party responsible for the loan payments;
    (3) The withdrawing party's interest in the security is conveyed to 
the individual or entity with whom the loan will be continued;
    (4) The ratio of the amount of debt to the value of the remaining 
security is less than or equal to .75, or the withdrawing party has no 
income or assets from which collection can be made; and
    (5) Withdrawal of the individual does not result in legal 
dissolution of the entity to which the loans are made. Individually 
liable members of a general or limited partnership may not be released 
from liability.
    (6) The remaining liable party projects a feasible plan (see Sec. 
762.102(b)).
    (c) Release of liability after liquidation. After a final loss claim 
has been paid on the borrower's account, the lender may release the 
borrower or guarantor from liability if;
    (1) The Agency agrees to the release in writing;
    (2) The lender documents its consideration of the following factors 
concerning the borrower or guarantors:
    (i) The likelihood that the borrower or guarantor will have a 
sufficient level of income in the reasonably near future to contribute 
to a meaningful reduction of the debt;
    (ii) The prospect that the borrower or guarantor will inherit assets 
in the near term that may be attached by the Agency for payment of a 
significant portion of the debt;
    (iii) Whether collateral has been properly accounted for, and 
whether liability should be retained in order to take action against the 
borrower or a third party for conversion of security;
    (iv) The availability of other income or assets which are not 
security;
    (v) The possibility that assets have been concealed or improperly 
transferred;
    (vi) The effect of other guarantors on the loan; and
    (vii) Cash consideration or other collateral in exchange for the 
release of liability.
    (3) The lender will use its own release of liability documents.
    (d) Interest rate changes. (1) The lender may change the interest 
rate on a performing (nondelinquent) loan only with the borrower's 
consent.
    (2) If the loan has been sold on the secondary market, the lender 
must repurchase the loan or obtain the holder's written consent.
    (3) To change a fixed rate of interest to a variable rate of 
interest or vice versa, the lender and the borrower must execute a 
legally effective allonge or amendment to the existing note.
    (4) If a new note is taken, it will be attached to and refer to the 
original note.
    (5) The lender will inform the Agency of the rate change.
    (e) Consolidation. Two or more Agency guaranteed loans may be 
consolidated, subject to the following conditions:
    (1) The borrower must project a feasible plan after the 
consolidation. See Sec. 762.102(b) for definition of feasible plan.
    (2) Only OL may be consolidated.
    (3) Existing lines of credit may only be consolidated with a new 
line of credit if the final maturity date and conditions for advances of 
the new line of credit are made the same as the existing line of credit.
    (4) Guaranteed OL may not be consolidated with a line of credit, 
even if the line of credit has been rescheduled.
    (5) Guaranteed loans made prior to October 1, 1991, cannot be 
consolidated with those loans made on or after October 1, 1991.
    (6) OL secured by real estate or with an outstanding interest 
assistance agreement or shared appreciation agreement cannot be 
consolidated.
    (7) A new note or line of credit agreement will be taken. The new 
note or line of credit agreement must describe the note or line of 
credit agreement being consolidated and must state that the indebtedness 
evidenced by the note or line of credit agreement is not satisfied. The 
original note or line of credit agreement must be retained.
    (8) The interest rate for a consolidated OL loan is the negotiated 
rate agreed upon by the lender and the borrower at the time of the 
action, subject

[[Page 117]]

to the loan limitations for each type of loan.
    (9) The Agency approves the consolidation by executing a 
modification of guarantee. The modification will indicate the 
consolidated loan amount, new terms, and percentage of guarantee, and 
will be attached to the originals of the guarantees being consolidated. 
If loans with a different guarantee percentage are consolidated, the new 
guarantee will be at the lowest percentage of guarantee being 
consolidated
    (10) Any holders must consent to the consolidation, or the 
guaranteed portion must be repurchased by the lender.

[64 FR 7378, Feb. 12, 1999, as amended at 66 FR 7567, Jan. 24, 2001]



Sec. 762.147  Servicing shared appreciation agreements.

    (a) Lender responsibilities. The lender is responsible for:
    (1) Monitoring the borrower's compliance with the shared 
appreciation agreement;
    (2) Notifying the borrower of the amount of recapture due; and,
    (3) Beginning October 1, 1999, a notice of the agreement's 
provisions not later than 12 months before the end of the agreement; and
    (4) Reimbursing the Agency for its pro-rata share of recapture due.
    (b) Recapture. (1) Recapture of any appreciation of real estate 
security will take place at the end of the term of the agreement, or 
sooner if the following occurs:
    (i) On the conveyance of the real estate security (or a portion 
thereof) by the borrower.
    (A) If only a portion of the real estate is conveyed, recapture will 
only be triggered against the portion conveyed. Partial releases will be 
handled in accordance with Sec. 762.141(b).
    (B) Transfer of title to the spouse of the borrower on the death of 
such borrower will not be treated as a conveyance under the agreement.
    (ii) On repayment of the loan; or
    (iii) If the borrower ceases farming.
    (2) Calculating recapture.
    (i) The amount of recapture will be based on the difference between 
the value of the security at the time recapture is triggered and the 
value of the security at the time of writedown, as shown on the shared 
appreciation agreement.
    (ii) Security values will be determined through appraisals obtained 
by the lender and meeting the requirements of Sec. 762.127.
    (iii) All appraisal fees will be paid by the lender.
    (iv) The amount of recapture will not exceed the amount of writedown 
shown on the shared appreciation agreement.
    (v) If recapture is triggered within 4 years of the date of the 
shared appreciation agreement, the lender shall recapture 75 percent of 
any positive appreciation in the market value of the property securing 
the loan or line of credit agreement.
    (vi) If recapture is triggered after 4 years from the date of the 
shared appreciation agreement, the lender shall recapture 50 percent of 
any positive appreciation in the market value of the property securing 
the loan or line of credit agreement.
    (3) Servicing recapture debt.
    (i) If recapture is triggered under the shared appreciation 
agreement and the borrower is unable to pay the recapture in a lump sum, 
the lender may:
    (A) Reschedule the recapture debt with the consent of the Agency, 
provided the lender can document the borrower's ability to make 
amortized payments on the recapture debt, plus pay all other 
obligations. In such case, the recapture debt will not be covered by the 
guarantee;
    (B) Pay the Agency its pro rata share of the recapture due. In such 
case, the recapture debt of the borrower will be covered by the 
guarantee; or
    (C) Service the account in accordance with Sec. 762.149.
    (ii) If recapture is triggered, and the borrower is able but 
unwilling to pay the recapture in a lump sum, the lender will service 
the account in accordance with Sec. 762.149.
    (4) Paying the Agency. Any shared appreciation recaptured by the 
lender will be shared on a pro-rata basis between the lender and the 
Agency.



Sec. 762.148  Bankruptcy.

    (a) Lender responsibilities. The lender must protect the guaranteed 
loan debt

[[Page 118]]

and all collateral securing the loan in bankruptcy proceedings. The 
lender's responsibilities include, but are not limited to:
    (1) Filing a proof of claim where required and all the necessary 
papers and pleadings;
    (2) Attending, and where necessary, participating in meetings of the 
creditors and court proceedings;
    (3) Protecting the collateral securing the guaranteed loan and 
resisting any adverse changes that may be made to the collateral;
    (4) Seeking a dismissal of the bankruptcy proceeding when the 
operation as proposed by the borrower to the bankruptcy court is not 
feasible;
    (5) When permitted by the bankruptcy code, requesting a modification 
of any plan of reorganization if it appears additional recoveries are 
likely.
    (6) Monitor confirmed plans under chapters 11, 12 and 13 of the 
bankruptcy code to determine borrower compliance. If the borrower fails 
to comply, the lender will seek a dismissal of the reorganization plan; 
and
    (7) Keeping the Agency regularly informed in writing on all aspects 
of the proceedings.
    (i) The lender will submit a default status report when the borrower 
defaults and every 60 days until the default is resolved or a final loss 
claim is paid.
    (ii) The default status report will be used to inform the Agency of 
the bankruptcy filing, the reorganization plan confirmation date and 
effective date, when the reorganization plan is complete, and when the 
borrower is not in compliance with the reorganization plan.
    (b) Bankruptcy expenses. (1) Reorganization.
    (i) Expenses, such as legal fees and the cost of appraisals incurred 
by the lender as a direct result of the borrower's chapter 11, 12, or 13 
reorganization, are covered under the guarantee, provided they are 
reasonable, customary, and provide a demonstrated economic benefit to 
the lender and the Agency.
    (ii) Lender's in-house expenses, which are those expenses which 
would normally be incurred for administration of the loan, including in-
house lawyers, are not covered by the guarantee.
    (2) Liquidation expenses in bankruptcy.
    (i) Reasonable and customary liquidation expenses may be deducted 
from the proceeds of the collateral in liquidation bankruptcy cases.
    (ii) In-house expenses are not considered customary liquidation 
expenses, may not be deducted from collateral proceeds, and are not 
covered by the guarantee.
    (c) Estimated loss claims in reorganization--(1) At confirmation. 
The lender may submit an estimated loss claim upon confirmation of the 
reorganization plan in accordance with the following:
    (i) The estimated loss payment will cover the guaranteed percentage 
of the principal and accrued interest written off, plus any allowable 
costs incurred as of the effective date of the plan.
    (ii) The lender will submit supporting documentation for the loss 
claim, and any additional information requested by the Agency, including 
justification for the legal fees included on the claim.
    (iii) The estimated loss payment may be revised as consistent with a 
court-approved reorganization plan.
    (iv) Protective advances made and approved in accordance with Sec. 
762.149 may be included in an estimated loss claim associated with a 
reorganization, if:
    (A) They were incurred in connection with the initiation of 
liquidation action prior to bankruptcy filing; or
    (B) The advance is required to provide repairs, insurance, etc. to 
protect the collateral as a result of delays in the case, or failure of 
the borrower to maintain the security.
    (2) Interest only losses. The lender may submit an estimated loss 
claim for interest only after confirmation of the reorganization plan in 
accordance with the following:
    (i) The loss claims may cover interest losses sustained as a result 
of a court-ordered, permanent interest rate reduction.
    (ii) The loss claims will be processed annually on the anniversary 
date of the effective date of the reorganization plan.

[[Page 119]]

    (iii) If the borrower performs under the terms of the reorganization 
plan, annual interest reduction loss claims will be submitted on or near 
the same date, beyond the period of the reorganization plan.
    (3) Actual loss.
    (i) Once the reorganization plan is complete, the lender will 
provide the Agency with documentation of the actual loss sustained.
    (ii) If the actual loss sustained is greater than the prior 
estimated loss payment, the lender may submit a revised estimated loss 
claim to obtain payment of the additional amount owed by the Agency 
under the guarantee.
    (iii) If the actual loss is less than the prior estimated loss, the 
lender will reimburse the Agency for the overpayment plus interest at 
the note rate from the date of the payment of the estimated loss.
    (4) Payment to holder. In reorganization bankruptcy, if a holder 
makes demand upon the Agency, the Agency will pay the holder interest to 
the plan's effective date. Accruing interest thereafter will be based 
upon the provisions of the reorganization plan.
    (d) Liquidation under the bankruptcy code. (1) Upon receipt of 
notification that a borrower has filed for protection under Chapter 7 of 
the bankruptcy code, or a liquidation plan under chapter 11, the lender 
must proceed according to the liquidation procedures of this part. For 
purposes of calculating the time frames required under Sec. 762.149 of 
this part, for a borrower who is or will be liquidated, the date the 
borrower files for bankruptcy protection under Chapter 7 shall be the 
date of the decision to liquidate.
    (2) If the property is abandoned by the trustee, the lender will 
conduct the liquidation according to Sec. 762.149.
    (3) Proceeds received from partial sale of collateral during 
bankruptcy may be used by the lender to pay reasonable costs, such as 
freight, labor and sales commissions, associated with the partial sale. 
Reasonable use of proceeds for this purpose must be documented with the 
final loss claim in accordance with Sec. 762.149(a)(vi).

[64 FR 7378, Feb. 12, 1999, as amended at 71 FR 43957, Aug. 3, 2006]



Sec. 762.149  Liquidation.

    (a) Mediation. When it has been determined that default cannot be 
cured through any of the servicing options available, or if the lender 
does not wish to utilize any of the authorities provided in this part, 
the lender must:
    (1) Participate in mediation according to the rules and regulations 
of any State which has a mandatory farmer-creditor mediation program;
    (2) Consider private mediation services in those States which do not 
have a mandatory farmer-creditor mediation program; and
    (3) Not agree to any proposals to rewrite the terms of a guaranteed 
loan which do not comply with this part. Any agreements reached as a 
result of mediation involving defaults and or loan restructuring must 
have written concurrence from the Agency before they are implemented.
    (b) Liquidation plan. If a default cannot be cured after considering 
servicing options and mediation, the lender will proceed with 
liquidation of the collateral in accordance with the following:
    (1) Within 30 days of the decision to liquidate, standard eligible 
and CLP lenders will submit a written liquidation plan to the Agency 
which includes:
    (i) Current balance sheets from all liable parties or, if the 
parties are not cooperative, the best information available, or in 
liquidation bankruptcies, a copy of the bankruptcy schedules or 
discharge notice;
    (ii) A proposed method of maximizing the collection of debt which 
includes specific plans to collect any remaining loan balances on the 
guaranteed loan after loan collateral has been liquidated, including 
possibilities for judgment;
    (A) If the borrower has converted loan security, the lender will 
determine whether litigation is cost effective. The lender must address, 
in the liquidation plan, whether civil or criminal action will be 
pursued. If the lender does not pursue the recovery, the reason must be 
documented when an estimated loss claim is submitted.
    (B) Any proposal to release the borrower from liability will be 
addressed in the liquidation plan in accordance with Sec. 
762.146(c)(2);

[[Page 120]]

    (iii) An independent appraisal report on all collateral securing the 
loan that meets the requirements of Sec. 762.127 and a calculation of 
the net recovery value of the security as defined in Sec. 762.102. The 
appraisal requirement may be waived by the Agency in the following 
cases:
    (A) The bankruptcy trustee is handling the liquidation and the 
lender has submitted the trustee's determination of value;
    (B) The lender's proposed method of liquidation rarely results in 
receipt of less than market value for livestock and used equipment; or
    (C) A purchase offer has already been received for more than the 
debt;
    (iv) An estimate of time necessary to complete the liquidation;
    (v) An estimated loss claim if the liquidation period is expected to 
exceed 90 days.
    (vi) An estimate of reasonable liquidation expenses; and
    (vii) An estimate of any protective advances.
    (2) PLP lenders will submit a liquidation plan as required by their 
lender's agreement.
    (c) Agency approval of the liquidation plan. (1) CLP lender's or 
standard eligible lender's liquidation plan, and any revisions of the 
plan, must be approved by the Agency.
    (2) If, within 20 calendar days of the Agency's receipt of the 
liquidation plan, the Agency fails to approve it or fails to request 
that the lender make revisions, the lender may assume the plan is 
approved. The lender may then proceed to begin liquidation actions at 
its discretion as long as it has been at least 60 days since the 
borrower's eligibility for interest assistance was considered.
    (3) At its option, the Agency may liquidate the guaranteed loan as 
follows:
    (i) Upon Agency request, the lender will transfer to the Agency all 
rights and interests necessary to allow the Agency to liquidate the 
loan. The Agency will not pay the lender for any loss until after the 
collateral is liquidated and the final loss is determined; and
    (ii) If the Agency conducts the liquidation, interest accrual will 
cease on the date the Agency notifies the lender in writing that it 
assumes responsibility for the liquidation.
    (d) Estimated loss claims. An estimated loss claim will be submitted 
by the lender with the liquidation plan if the liquidation is expected 
to exceed 90 days. The estimated loss will be based on the following:
    (1) The Agency will pay the lender the guaranteed percentage of the 
total outstanding debt, less the net recovery value of the remaining 
security, less any unaccounted for security; and
    (2) The lender generally will discontinue interest accrual on the 
defaulted loan at the time the estimated loss claim is paid by the 
Agency. The following exceptions apply:
    (i) If the lender estimates that there will be no loss after 
considering the costs of liquidation, interest accrual will cease 90 
days after the decision to liquidate,
    (ii) In the case of a Chapter 7 bankruptcy, in cases where the 
lender filed an estimated loss claim, the Agency will pay the lender 
interest which accrues during and up to 45 days after the date of 
discharge on the portion of the chattel only secured debt that was 
estimated to be secured but upon final liquidation was found to be 
unsecured, and up to 90 days after the date of discharge on the portion 
of real estate secured debt that was estimated to be secured but was 
found to be unsecured upon final disposition,
    (iii) The Agency will pay the lender interest which accrues during 
and up to 90 days after the time period the lender is unable to dispose 
of acquired property due to state imposed redemption rights on any 
unsecured portion of the loan during the redemption period, if an 
estimated loss claim was paid by the Agency during the liquidation 
action.
    (3) Packager fees and outside consultant fees for servicing of 
guaranteed loans are not covered by the guarantee, and will not be paid 
in an estimated loss claim.
    (e) Protective advances. (1) Prior written authorization from the 
Agency is required for all protective advances in excess of $5,000 for 
CLP lenders and $3,000 for standard eligible lenders. The dollar amount 
of protective advances

[[Page 121]]

allowed for PLP lenders will be specified when PLP status is awarded by 
the Agency or as contained in the lender's agreement.
    (2) The lender may claim recovery for the guaranteed portion of any 
loss of monies advanced as protective advances as allowed in this part, 
plus interest that accrues on the protective advances.
    (3) Payment for protective advances is made by the Agency when the 
final loss claim is approved, except in bankruptcy actions.
    (4) Protective advances are used only when the borrower is in 
liquidation, liquidation is imminent, or when the lender has taken title 
to real property in a liquidation action.
    (5) Legal fees are not a protective advance.
    (6) Protective advances may only be made when the lender can 
demonstrate the advance is in the best interest of the lender and the 
Agency.
    (7) Protective advances must constitute a debt of the borrower to 
the lender and be secured by the security instrument.
    (8) Protective advances must not be made in lieu of additional 
loans.
    (f) Unapproved loans or advances. The amount of any payments made by 
the borrower on unapproved loans or advances outside of the guarantee 
will be deducted from any loss claim submitted by the lender on the 
guaranteed loan, if that loan or advance was paid prior to, and to the 
detriment of, the guaranteed loan.
    (g) Acceleration. (1) If the borrower is not in bankruptcy, the 
lender shall send the borrower notice that the loan is in default and 
the entire debt has been determined due and payable immediately after 
other servicing options have been exhausted.
    (2) The loan cannot be accelerated until after the borrower has been 
considered for interest assistance and the conclusion of mandatory 
mediation in accordance with Sec. 762.149.
    (3) The lender will submit a copy of the acceleration notice or 
other document to the Agency.
    (h) Foreclosure. (1) The lender is responsible for determining the 
necessary parties to any foreclosure action, or who should be named on a 
deed of conveyance taken in lieu of foreclosure.
    (2) When the property is liquidated, the lender will apply the net 
proceeds to the guaranteed loan debt.
    (3) When it is necessary to enter a bid at a foreclosure sale, the 
lender may bid the amount that it determines is reasonable to protect 
its and the Agency's interest. At a minimum, the lender will bid the 
lesser of the net recovery value or the unpaid guaranteed loan balance.
    (i) Final loss claims. (1) Lenders may submit a final loss claim 
when the security has been liquidated and all proceeds have been 
received and applied to the account.
    (2) If a lender acquires title to property either through voluntary 
conveyance or foreclosure proceeding, the lender will submit a final 
loss claim after disposing of the property. The lender may pay 
reasonable maintenance expenses to protect the value of the property 
while it is owned by the lender. These may be paid as protective 
advances or deducted as liquidation expenses from the sales proceeds 
when the lender disposes of the property. The lender must obtain Agency 
written concurrence before incurring maintenance expenses which exceed 
the amounts allowed in Sec. 762.149(e)(1). Packager fees and outside 
consultant fees for servicing of guaranteed loans are not covered by the 
guarantee, and will not be paid in a final loss claim.
    (3) The lender will make its records available to the Agency for the 
Agency's audit of the propriety of any loss payment.
    (4) All lenders will submit the following documents with a final 
loss claim:
    (i) An accounting of the use of loan funds;
    (ii) An accounting of the disposition of loan security and its 
proceeds;
    (iii) A copy of the loan ledger indicating loan advances, interest 
rate changes, protective advances, and application of payments, rental 
proceeds, and security proceeds, including a running outstanding balance 
total; and
    (iv) Documentation, as requested by the Agency, concerning the 
lender's compliance with the requirements of this part.

[[Page 122]]

    (5) The Agency will notify the lender of any discrepancies in the 
final loss claim or, approve or reject the claim within 40 days.
    (6) The Agency will reduce a final loss claim based on its 
calculation of the dollar amount of loss caused by the lender's 
negligent servicing of the account. Loss claims may be reduced or 
rejected as a result of the following:
    (i) A loss claim may be reduced by the amount caused by the lender's 
failure to secure property after a default, and will be reduced by the 
amount of interest that accrues when the lender fails to contact the 
borrower or takes no action to cure the default, once it occurs. Losses 
incurred as a result of interest accrual during excessive delays in 
collection, as determined by the Agency, will not be paid.
    (ii) Unauthorized release of security proceeds, failure to verify 
ownership or possession of security to be purchased, or failure to 
inspect collateral as often required so as to ensure its maintenance.
    (7) Losses will not be reduced for the following:
    (i) Servicing deficiencies that did not contribute materially to the 
dollar amount of the loss.
    (ii) Unaccounted security, as long as the lender's efforts to locate 
and recover the missing collateral was equal to that which would have 
been expended in the case of an unguaranteed loan in the lender's 
portfolio.
    (8) Default interest, late charges, and loan servicing fees are not 
payable under the loss claim.
    (9) The final loss will be the remaining outstanding balance after 
application of the estimated loss payment and the application of 
proceeds from the liquidation of the security.
    (10) If the final loss is less than the estimated loss, the lender 
will reimburse the Agency for the overpayment, plus interest at the note 
rate from the date of the estimated loss payment.
    (11) The lender will return the original guarantee marked paid after 
receipt of a final loss claim.
    (j) Future Recovery. The lender will remit any recoveries made on 
the account after the Agency's payment of a final loss claim to the 
Agency in proportion to the percentage of guarantee, in accordance with 
the lender's agreement, until the account is paid in full or otherwise 
satisfied.
    (k) Overpayments. The lender will repay any final loss overpayment 
determined by the Agency upon request.
    (l) Electronic funds transfer. The lender will designate one or more 
financial institutions to which any Agency payments will be made via 
electronic funds transfer.
    (m) Establishment of Federal debt. Any amounts paid by the Agency on 
account of liabilities of the guaranteed loan borrower will constitute a 
Federal debt owing to the Agency by the guaranteed loan borrower. In 
such case, the Agency may use all remedies available to it, including 
offset under the Debt Collection Improvement Act of 1996, to collect the 
debt from the borrower. Interest charges will be established at the note 
rate of the guaranteed loan on the date the final loss claim is paid.

[64 FR 7378, Feb. 12, 1999, as amended at 67 FR 44016, July 1, 2002; 69 
FR 44580, July 27, 2004; 71 FR 43957, Aug. 3, 2006]



Sec. 762.150  Interest assistance program.

    (a) Requests for interest assistance. (1) To apply for interest 
assistance in conjunction with a new request for guarantee, the lender 
will submit the following:
    (i) A completed cash flow budget and interest assistance needs 
analysis portion of the application form. Interest assistance can be 
applied to each loan, only to one loan or any distribution the lender 
selects; however, interest assistance is only available on as many loans 
as necessary to achieve a feasible plan.
    (ii) For loans with unequal payments, a proposed debt repayment 
schedule which shows principal and interest payments for the subject 
loan, in each year of the loan.
    (2) To request interest assistance on an existing guaranteed loan, 
the lender must submit to the Agency the following:
    (i) A completed cash flow projection and interest assistance needs 
analysis portion of the application form. Interest assistance can be 
applied to each loan, only to one loan or any distribution the lender 
selects as required to achieve a feasible plan.

[[Page 123]]

    (ii) For loans with unequal payments, a proposed debt repayment 
schedule which shows scheduled payments for the subject loan in each of 
the remaining years of the loan.
    (iii) Cash flow budgets and supporting justification to document 
that the request meets the requirements outlined in paragraph (b) of 
this section. This will include a typical cash flow if the projected 
cash flow budget is atypical.
    (3) Requests for interest assistance on lines of credit or loans 
made for annual operating purposes must be accompanied by a projected 
monthly cash flow budget.
    (b) Requirements. (1) The typical term of scheduled loan repayment 
will not be reduced solely for the purpose of maximizing eligibility for 
interest assistance. To be eligible for interest assistance, a loan must 
be scheduled over the maximum terms typically used by lenders for 
similar type loans within the limits set by Sec. 762.124 of this part. 
At a minimum, loans will be scheduled for repayment over the terms 
listed below, but for OL not to exceed the life of the security:
    (i) An OL for the purpose of providing annual operating and living 
expenses will be scheduled for repayment when the income is scheduled to 
be received from the sale of the crops, livestock, and livestock 
products which will serve as security for the loan.
    (ii) OL for purposes other than annual operating and living expenses 
(i.e. equipment, livestock, refinancing of existing debt) will be 
scheduled over 7 years from the effective date of the proposed interest 
assistance agreement.
    (iii) FO and SW secured by real estate will be scheduled for 20 
years from the closing date of the original note covered by the 
guarantee.
    (2) The lender must document that a feasible plan, as defined in 
Sec. 762.102(b), is not possible without reducing the interest rate on 
the borrower's loan and with the debt restructured over the term of 
repayment.
    (3) The lender must determine whether the borrower, including 
members of an entity, owns any significant assets that do not contribute 
directly to essential family living or farm operations. The lender must 
determine the market value of these assets and prepare a cash flow 
budget based on the assumption that the value of these assets will be 
used for debt reduction. If a feasible plan can then be achieved, the 
borrower is not eligible for interest assistance. All interest 
assistance calculations will be based on the cash flow budget which 
assumes that the assets will be sold.
    (4) A borrower's new guaranteed loan is eligible for interest 
assistance if all the following conditions are met:
    (i) The applicant needs interest assistance in order to achieve a 
feasible plan.
    (ii) If significant changes in the borrower's cash flow budget are 
anticipated after the initial 12 months, then the typical cash flow 
budget must demonstrate that the borrower will still have a feasible 
plan, following the anticipated changes, with or without interest 
assistance.
    (iii) If a feasible plan cannot be achieved, even with other 
creditors voluntarily adjusting their debts and with the interest 
assistance, the interest assistance request will not be approved.
    (5) An existing guaranteed loan is eligible for interest assistance 
if the borrower needs interest assistance to achieve a feasible plan as 
defined in Sec. 762.102(b), and the borrower meets the eligibility 
criteria of Sec. 762.120, except the provision regarding prior debt 
forgiveness. If a feasible plan cannot be achieved, even with other 
creditors voluntarily adjusting their debts and with the interest 
assistance, the interest assistance request will not be approved. If a 
borrower has multiple loans, interest assistance may be provided on one 
or each loan, as available, to the extent necessary to achieve a 
feasible plan.
    (6) The term of the interest assistance agreement under this section 
shall not exceed 10 years from the date of the first interest assistance 
agreement signed by the loan applicant, including entity members, or the 
outstanding term of the loan, as limited by this section, whichever is 
less.
    (7) The lender may charge a fixed or variable interest rate. The 
type of rate must be the same as the type of rate in the underlying note 
or line of credit agreement. The lender will reduce the

[[Page 124]]

interest rate charged the borrower's account by at least the amount of 
interest assistance.
    (8) The borrower must be an operator of not larger than a family 
size farm.
    (c) Interest assistance closing. (1) Initial guaranteed loans will 
be closed in accordance with Sec. 762.130.
    (2) The lender will then prepare and deliver to the Agency a closing 
report for each initial and existing guaranteed loan which has been 
granted interest assistance.
    (3) When all requirements have been met, the lender and the Agency 
will execute an interest assistance agreement.
    (d) Interest assistance claims and payments. (1) The interest 
assistance claim will be prepared by the lender. The following 
conditions apply to the claims process:
    (i) No claim period can exceed 12 months. The initial and final 
claim periods may be less than 12 months. In such claims, the 4 percent 
payment will be prorated over the number of months in the claim period. 
The period for all other claims must be 12 months.
    (ii) To permit the borrower to prepare for the upcoming year, a 
claim should be filed within 60 days of each anniversary date. Claims 
not filed within 1 year of the anniversary date will not be paid and the 
amount due the lender is permanently forfeited.
    (iii) If a claim is submitted without an interest assistance review 
in accordance with Sec. 762.102, when it is required, the claim will 
not be processed until the review is submitted by the lender.
    (iv) Upon full payment of the note or line of credit, the lender 
will immediately prepare the request for interest assistance payment and 
submit it to the Agency.
    (v) Interest assistance payments shall cease upon the assumption and 
transfer of the loan if the transferee was not liable for the debt on 
the effective date of the interest assistance agreement. The lender 
shall request payment through the date of the transfer or assumption. 
The claim must be submitted within 1 year or it will be denied and the 
payment permanently forfeited.
    (vi) All claims will be supported by detailed calculations of 
average daily principal balances during the claim period.
    (vii) The Agency will review the claim and the supporting 
documentation. If the information and the supporting documentation is 
not complete and correct, the reviewing official will notify the lender 
in writing, of the actions needed to correct the request.
    (viii) If there is a substitution of lender, a claim for the first 
lender's interest assistance, through the effective date of the 
substitution, will be submitted by the first lender and processed at the 
time of the substitution.
    (ix) Interest assistance claims shall be submitted concurrently with 
the submission of estimated loss claims where interest accrual ceases, 
or final loss claims that are not preceded by an estimated loss claim.
    (2) [Reserved]
    (e) Request for continuation of interest assistance. (1) For all 
interest assistance agreements exceeding 12 months, the lender will 
perform an analysis of the applicant's farming operation and need for 
continued interest assistance. The following information will be 
submitted to the Agency:
    (i) A summary of the operation's actual financial performance in the 
previous year, including a detailed income and expense statement.
    (ii) A narrative description of the causes of any major differences 
between the previous year's projections and actual performance.
    (iii) A current balance sheet.
    (iv) A cash flow budget for the period being planned. A monthly cash 
flow budget is required for all lines of credit and operating loans made 
for annual operating purposes. All other loans may include either an 
annual or monthly cash flow budget.
    (v) A copy of the interest assistance needs analysis portion of the 
application form which has been completed based on the planned period's 
cash flow budget.
    (2) The loan will be eligible for continuation of interest 
assistance if the cash flow budget projects a feasible plan with 
interest assistance applied. However, interest assistance can be applied 
only to as many loans as necessary to achieve a positive cash flow for 
the plan period. If the cash flow

[[Page 125]]

budget indicates that the borrower requires a level of interest 
assistance greater than 4 percent to project a feasible plan, then the 
Agency will deny the continuation of interest assistance. Interest 
assistance will be reduced to zero during that period. See Sec. 
762.102(b) for the definition of feasible plan.
    (3) The documentation listed above will be provided to the Agency 
concurrently with the lender's submission of its request for interest 
assistance payment. This information will be provided to the Agency 
within 60 days after the review date specified on the interest 
assistance agreement.
    (4) A request for continuation of interest assistance will be 
completed for 12 month periods, effective on the anniversary date.
    (5) The initial review may be submitted in conjunction with any 
claim within the initial 12 month period. The anniversary date and 
length of the review period will be stated on the interest assistance 
agreement. Any request for interest assistance adjustment submitted 
effective any time other than the review date will be denied, except for 
those cases where it is necessary to service the loan with rescheduling, 
reamortization, deferral or writedown.
    (6) If the review is not completed and submitted to the Agency 
within 1 year of the review date, no claim will be paid for that period.
    (f) Notification of Adverse Action. The lender will be notified in 
writing of all Agency decisions in which a request for interest 
assistance, a request for continuation of interest assistance or 
lender's claim for interest assistance are denied. The notification 
letter will provide specific reasons for the decision and appeals will 
be handled in accordance with parts 11 and 780 of this title.
    (g) Servicing of loans covered by an interest assistance agreement. 
(1) Loans covered by interest assistance agreements cannot be 
consolidated.
    (2) The loan will be transferred with the interest assistance 
agreement only in cases where the transferee was liable for the debt at 
the time interest assistance was granted. Under no other circumstances 
will the interest assistance be transferred. If interest assistance is 
necessary for the transferee to achieve a feasible plan, the lender may 
request such assistance, which may be approved if interest assistance 
funds are available and the applicant is eligible. The maximum length of 
the agreement will be 10 years from the date of the first agreement 
covering a loan for which the transferee was liable. If interest 
assistance is necessary for a feasible plan and funds are not available, 
the request for assumption of the Agency guaranteed debt will be denied.
    (3) When consideration is given to using a debt writedown to service 
a delinquent account, the subsidy level will be recalculated prior to 
any writedown. If a feasible plan can be obtained using interest 
assistance and funds are available, then the interest assistance will be 
authorized and no writedown will be approved. If a feasible plan cannot 
be achieved using 4 percent interest assistance, all further 
calculations for determining debt writedown eligibility and amounts to 
be written down will be based on the borrower receiving no interest 
assistance. If debt writedown is approved, the interest assistance claim 
for the previous review period will be processed in conjunction with the 
writedown loss claim. The interest assistance agreement will not be 
canceled and the anniversary date can remain the same or be re-
established under the same guidelines that it was originally 
established. If the lender determines through its annual analysis that 
interest assistance is necessary for a feasible plan, a request to 
reinstate the subsidy in a subsequent review period may be submitted in 
accordance with paragraph (e) of this section.
    (4) In the event of rescheduling or deferral of loans with interest 
assistance, interest assistance will remain available for that loan 
under the terms of the existing interest assistance agreement. 
Additional years of interest assistance and/or increases in the 
restructured loan amount will require additional funding. If the 
additional interest assistance is needed in order to produce a feasible 
plan throughout the life of the rescheduled loan and funds

[[Page 126]]

are not available for the additional interest assistance, then the 
rescheduling will not be approved by the Agency. In no case will the 
subsidy be extended more than 10 years from the effective date of the 
first interest assistance agreement signed by the loan applicant or by 
anyone who signed the note or line of credit agreement.
    (5) In cases where the interest on a loan covered by an interest 
assistance agreement is reduced by court order in a reorganization plan 
under the bankruptcy code, interest assistance agreement will be 
terminated effective on the date of the court ordered interest 
reduction. The lender will file a claim due through the effective date 
of the court ordered interest reduction. Guaranteed loans which have had 
their interest reduced by bankruptcy court order are not eligible to 
receive interest assistance.
    (6) For Loan Guarantees held by holders, Agency purchase of the 
guaranteed portion of a loan will stop interest assistance payments on 
that portion. Interest assistance payments will cease upon termination 
of the Loan Guarantee, upon reaching the expiration date contained in 
the agreement or upon cancellation by the Agency.
    (7) When a borrower defaults on a loan, interest assistance may be 
considered in conjunction with a rescheduling action in accordance with 
Sec. 762.145(b). After the meeting required by Sec. 762.143(b)(3) and 
consideration of actions to correct the delinquency, the lender will 
notify the Agency of the results of the meeting. If the restructuring 
proposal includes interest assistance, the lender will provide the items 
required by paragraph (d) of this section in addition to those items 
required by Sec. 762.145. Liquidation must not be initiated, except in 
accordance with Sec. 762.143(b)(3)(v).
    (h) Cancellation of interest assistance agreement. The interest 
assistance agreement is incontestable except for fraud or 
misrepresentation, of which the lender and borrower have actual 
knowledge at the time that the interest assistance agreement is 
executed, or which the lender or borrower participates in or condones.
    (i) Adjustment of assistance level between review dates. After the 
initial or renewal request for interest assistance is processed, no 
adjustments can be made until the next review or adjustment date except 
when necessary to service the loan with a rescheduling or deferral.
    (j) Excessive interest assistance. Upon written notice to the 
lender, borrower and any holder, the Agency may amend or cancel the 
interest assistance agreement and collect from the lender any amount of 
interest Assistance granted which resulted from incomplete or inaccurate 
information, an error in computation, or any other reason which resulted 
in payment that the lender was not entitled to receive.
    (k) The Deputy Administrator for Farm Loan Programs has the 
authority to grant an exception to any requirement involving interest 
Assistance if it is in the best interest of the Government.

[64 FR 7378, Feb. 12, 1999; 64 FR 38298, July 16, 1999, as amended at 66 
FR 7567, Jan. 24, 2001]



Sec. Sec. 762.151-762.158  [Reserved]



Sec. 762.159  Pledging of guarantee.

    A lender may pledge all or part of the guaranteed or unguaranteed 
portion of the loan as security to a Federal Home Loan Bank, a Federal 
Reserve Bank, a Farm Credit System Bank, or any other funding source 
determined acceptable by the Agency.

[70 FR 56107, Sept. 26, 2005]



Sec. 762.160  Assignment of guarantee.

    (a) The following general requirements apply to assigning guaranteed 
loans:
    (1) Subject to Agency concurrence, the lender may assign all or part 
of the guaranteed portion of the loan to one or more holders at or after 
loan closing, if the loan is not in default. However, a line of credit 
cannot be assigned. The lender must always retain the unguaranteed 
portion in their portfolio, regardless of how the loan is funded.
    (2) The Agency may refuse to execute the Assignment of Guarantee and 
prohibit the assignment in case of the following:
    (i) The Agency purchased and is holder of a loan that was assigned 
by the

[[Page 127]]

lender that is requesting the assignment.
    (ii) The lender has not complied with the reimbursement requirements 
of Sec. 762.144(c)(7), except when the 180 day reimbursement or 
liquidation requirement has been waived by the Agency.
    (3) The lender will provide the Agency with copies of all 
appropriate forms used in the assignment.
    (4) The guaranteed portion of the loan may not be assigned by the 
lender until the loan has been fully disbursed to the borrower.
    (5) The lender is not permitted to assign any amount of the 
guaranteed or unguaranteed portion of the loan to the loan applicant or 
borrower, or members of their immediate families, their officers, 
directors, stockholders, other owners, or any parent, subsidiary, or 
affiliate.
    (6) Upon the lender's assignment of the guaranteed portion of the 
loan, the lender will remain bound to all obligations indicated in the 
Guarantee, Lender's Agreement, the Agency program regulations, and to 
future program regulations not inconsistent with the provisions of the 
Lenders Agreement. The lender retains all rights under the security 
instruments for the protection of the lender and the United States.
    (b) The following will occur upon the lender's assignment of the 
guaranteed portion of the loan:
    (1) The holder will succeed to all rights of the Guarantee 
pertaining to the portion of the loan assigned.
    (2) The lender will send the holder the borrower's executed note 
attached to the Guarantee.
    (3) The holder, upon written notice to the lender and the Agency, 
may assign the unpaid guaranteed portion of the loan. The holder must 
assign the guaranteed portion back to the original lender if requested 
for servicing or liquidation of the account.
    (4) The Guarantee or Assignment of Guarantee in the holder's 
possession does not cover:
    (i) Interest accruing 90 days after the holder has demanded 
repurchase by the lender, except as provided in the Assignment of 
Guarantee and Sec. 762.144(c)(3)(iii).
    (ii) Interest accruing 90 days after the lender or the Agency has 
requested the holder to surrender evidence of debt repurchase, if the 
holder has not previously demanded repurchase.
    (c) Negotiations concerning premiums, fees, and additional payments 
for loans are to take place between the holder and the lender. The 
Agency will participate in such negotiations only as a provider of 
information.

[70 FR 56107, Sept. 26, 2005]



PART 764_EMERGENCY FARM LOANS--Table of Contents




Sec.
764.1 Purpose.
764.2 Definitions.
764.3 Emergency loan funds uses.
764.4 Eligibility requirements.
764.5 Limitations.
764.6 Interest rate.
764.7 Loan terms.
764.8 Repayment and security requirements.
764.9 Appraisal and valuation requirements.
764.10 Insurance for loan security.
764.11 Charges and fees.

    Authority: 5 U.S.C. 301 and 7 U.S.C. 1989.

    Source: 67 FR 795, Jan. 8, 2002, unless otherwise noted.



Sec. 764.1  Purpose.

    The purpose of the Emergency Loan Program is to provide financial 
assistance to family farmers who have suffered losses as the result of a 
disaster so that they can return to normal farming operations as soon as 
possible after the disaster. Specifically, this part describes the 
policies and procedures of the Agency for making Emergency loans to 
operators of such farms.



Sec. 764.2  Definitions.

    Act means the Consolidated Farm and Rural Development Act (7 U.S.C. 
1921 et seq.).
    Additional security means property that provides security in excess 
of the amount of security value equal to the loan amount, excluding 
security described in Sec. 764.8(g).
    Adequate security means property that provides a security value at 
least equal to the loan amount.
    Agency means the Farm Service Agency, including its employees, any 
predecessor agency, and any successor agency.

[[Page 128]]

    Agricultural commodity means livestock, grains, cotton, oilseeds, 
dry beans, tobacco, peanuts, sugar beets, sugar cane, fruit, vegetable, 
forage, tree farming, nursery crops, nuts, aquacultural species, and 
other plant or animal production as determined by the Agency.
    Allowable costs means those costs for replacement or repair that are 
supported by acceptable documentation, including but not limited to 
written estimates, invoices, and bills.
    Applicant means an individual or entity (including each owner of the 
entity unless specified otherwise) operating a farming operation at the 
time of the disaster, who is requesting assistance from the Agency under 
this part. All requirements of applicants apply to owners of the entity 
individually and collectively unless specified otherwise.
    Aquacultural species means aquatic organisms (including fish, 
mollusks, crustaceans or other invertebrates, amphibians, reptiles, or 
aquatic plants) raised in a controlled or selected environment which the 
applicant has exclusive rights to use.
    Basic part of an applicant's total farming operation means any 
single agricultural commodity or livestock production enterprise of an 
applicant's farming operation which normally generates sufficient income 
to be considered essential to the success of such farming operation.
    Borrower means an individual or entity which has an outstanding 
obligation to the Agency under any Farm Loan Program loan, without 
regard to whether the loan has been accelerated. A borrower includes all 
parties liable for such obligation owed to the Agency, including 
collection-only borrowers, except for debtors whose total loans and 
accounts have been voluntarily or involuntarily foreclosed, sold, or 
conveyed; or who have been discharged of all such obligations owed to 
the Agency.
    Chattel means any property that is not real estate.
    Chattel or real estate essential to the farming operation means 
chattel or real estate that would be necessary for the applicant to 
continue operating the farm on and after the disaster in a manner 
similar to the manner in which the farm was operated immediately prior 
to the disaster, as determined by the Agency.
    Corporation means a private domestic entity recognized as a 
corporation and authorized as a corporation under the laws of the State 
or States in which the entity does business.
    County means a local administrative subdivision of a State or 
similar political subdivision of the United States.
    Debt forgiveness means reducing or terminating a debt under the Act 
in a manner that results in a loss to the Agency (excluding a 
consolidation, rescheduling, reamortization, or deferral), through:
    (1) Writing down or writing off a debt pursuant to 7 U.S.C. 2001;
    (2) Compromising, adjusting, reducing, or charging off a debt or 
claim pursuant to 7 U.S.C. 1981; or
    (3) Paying a loss pursuant to 7 U.S.C. 2005 on a Farm Loan Program 
loan guaranteed by the Agency.
    Disaster means an event of unusual and adverse weather conditions, 
other natural phenomena, or quarantine, that has substantially affected 
producers of agricultural commodities by causing physical property or 
production losses in a county, or similar political subdivision, that 
triggered the inclusion of such county or political subdivision in the 
disaster area designated by the Agency.
    Disaster area means the county, declared or designated as a disaster 
area for Emergency loan assistance as a result of disaster related 
losses and counties contiguous to those counties declared or designated 
as disaster areas.
    Disaster yield means the per-acre yield of an agricultural commodity 
for the farming operation during the production period when the disaster 
occurred.
    Entity means a partnership, corporation, cooperative, joint 
operation, trust or limited liability company that is an operator of an 
operation engaged in farming, ranching, or aquaculture activities at the 
time the disaster occurs.
    Essential family household expenses means the expenses associated 
with providing food, clothing, and shelter necessary to maintain the 
borrower and the immediate family of the borrower.

[[Page 129]]

    Established farmer means a farmer who is an operator of the farming 
operation (in the case of a farming operation operated by an entity, its 
owners as a group) who:
    (1) Actively participated in the operation and the management, 
including but not limited to, exercising control over, making decisions 
regarding, and establishing the direction of the farming operation at 
the time of the disaster;
    (2) Spends a substantial portion of time in carrying out the farming 
operation;
    (3) Planted the crop, or purchased or produced the livestock on the 
farming operation;
    (4) In the case of an entity, is primarily engaged in farming and 
has over 50 percent of its gross income from all sources from its 
farming operation based on the farming operation's projected cash flow 
for the next crop year or the next 12 month period, as mutually 
determined; and
    (5) Is not:
    (i) A corporation with an ownership interest of 50 percent or more 
held by one or more estates, trusts, other corporations, partnerships, 
or joint operations;
    (ii) A partnership or joint operation with an ownership interest of 
50 percent or more held by one of more estates, trusts, corporations, 
other partnerships or other joint operations;
    (iii) An integrated livestock, poultry, or fish processor who 
operates primarily and directly as a commercial business through 
contracts or business arrangements with farmers, except a grower under 
contract with an integrator or processor may be considered an 
established farmer, provided the operation is not managed by an outside 
full-time manager or management service and such loans shall be based on 
the applicant's share of the agricultural production as contained in the 
contract; or
    (iv) An operation that employs a full-time farm manager.
    Family farm means a farm that:
    (1) Produces agricultural commodities for sale in sufficient 
quantities so that it is recognized in the community as a farm rather 
than a rural residence.
    (2) Provides enough agricultural income by itself, including rented 
land, or together with any other dependable income, to enable the 
borrower to:
    (i) Pay necessary family and operating expenses;
    (ii) Maintain essential chattel and real property; and
    (iii) Pay debts.
    (3) Is managed by:
    (i) The borrower, when a loan is made to an individual.
    (ii) The members, stockholders, partners, or joint operators 
responsible for operating the farm when a loan is made to an entity.
    (4) Has a substantial amount of the labor requirements for the farm 
enterprise provided by:
    (i) The borrower and family members for a loan made to an 
individual.
    (ii) The members, stockholders, partners, or joint operators 
responsible for operating the farm, along with the families of these 
individuals, for a loan made to an entity.
    (5) May use a reasonable amount of full-time hired labor and 
seasonal labor during peak load periods.
    Farm Loan Program loan means a Farm Ownership loan, Operating loan, 
Emergency loan, Soil and Water loan, or Economic Emergency loan made or 
guaranteed by the Agency pursuant to the Act.
    Farmer means individuals, cooperatives, corporations, partnerships 
or joint operations who are farmers, ranchers, or aquaculture operators 
actively engaged in their operation at the time a disaster occurs.
    Feasible plan means a plan based upon the applicant's records that 
show the farming operation's actual production and expenses. These 
records will be used along with realistic anticipated prices, including 
farm program payments when available, to determine that the income from 
the farming operation, along with any other reliable off-farm income, 
will provide the income necessary for an applicant to at least be able 
to:
    (1) Pay all operating expenses and all taxes that are due during the 
projected farm budget period;
    (2) Meet necessary payments on all debts; and

[[Page 130]]

    (3) Provide living expenses for family members of an individual 
borrower or a wage of the farm operator in the case of an entity 
borrower which is in accordance with the essential family needs. Family 
members include the individual borrower, or farm operator in the case of 
an entity, and the immediate members of the family who reside in the 
same household.
    Hazard insurance means coverage against losses due to fire, 
windstorm, lightning, hail, explosion, business interruption, riot, 
civil commotion, aircraft, land vehicles, marine vehicles, smoke, 
builders risk, public liability, property damage, flood or mudslide, 
workman's compensation, or any similar insurance that is available and 
needed to protect the security, or that is required by law.
    Household contents means the essential household items necessary to 
maintain viable living quarters such as: stove, refrigerator, furnace, 
couch, chairs, tables, beds, lamps, clothes, etc. The term excludes all 
luxury items including jewelry, furs, antiques, paintings, etc.
    Livestock means a member of the animal kingdom, or product thereof, 
as determined by the Agency.
    Majority interest means an ownership interest of more than 50 
percent of the entity.
    Non-essential asset means those assets in which the applicant has an 
ownership interest that do not contribute a net income to pay essential 
family living expenses or to maintain a sound farming operation and are 
not exempt from judgment creditors or in a bankruptcy action.
    Nonfarm enterprise means any nonfarm business enterprise, including 
recreation, that is closely associated with the farm operation and 
located on or adjacent to the farm and provides income to supplement 
farm income. This may include, but is not limited to, such enterprises 
as raising earthworms, exotic birds, tropical fish, dogs, and horses for 
nonfarm purposes, welding shops, roadside stands, boarding horses and 
riding stables.
    Normal production yield means:
    (1) The per-acre actual production history of the crops produced by 
the farming operation used to determine Federal crop insurance payments 
or payment under the Non-Insured Assistance Program for the production 
year during which the disaster occurred;
    (2) When the actual production history is not available, the 
applicant's own production records for the previous three years will be 
used. If the applicant's production records are not available, the 
records of production on which FSA farm program payments are made that 
are contained in the applicant's farm program file, for the previous 
three years will be used;
    (3) When the production records outlined in paragraphs (a) and (b) 
of this definition are not available, the county average production 
yield will be used.
    Owner means those persons with an interest in the entity as a 
stockholder, partner, member, or joint operator.
    Physical loss means verifiable damage or destruction with respect to 
real estate or chattel, excluding annual growing crops.
    Production loss means verifiable damage or destruction with respect 
to annual growing crops.
    Quarantine means a quarantine imposed by the Secretary under the 
Plant Protection Act or animal quarantine laws (as defined in section 
2509 of the Food, Agriculture, Conservation and Trade Act of 1990).
    Security value means the Agency-established market value of property 
(less the value of any prior liens) used as security for a loan under 
this part as of the date of the closing of the loan.
    United States means each of the several States, the Commonwealth of 
Puerto Rico, the Virgin Islands of the United States, Guam, American 
Samoa, and the Commonwealth of the Northern Mariana Islands.
    Working capital means cash available to conduct normal daily farming 
or ranching operations including, but not limited to, feed, seed, 
fertilizer, pesticides, farm or ranch supplies, cooperative stock, and 
cash rent.

[67 FR 795, Jan. 8, 2002; 67 FR 7941, Feb. 21, 2002, as amended at 68 FR 
7695, Feb. 18, 2003]



Sec. 764.3  Emergency loan funds uses.

    (a) Physical losses--(1) Real estate losses. Emergency loans may be 
used to address the needs of the farming operation associated with 
physical losses of

[[Page 131]]

essential real estate that were the result of a disaster to:
    (i) Acquire or enlarge the farm, as specified in Sec. 1943.16(a) of 
this title, as long such acquisition or enlargement does not cause the 
farm to exceed the requirements for a family farm;
    (ii) Replace or repair buildings or other structures which are 
essential to the ongoing viability of the operation. The Agency will 
finance such replacement or repair only to the extent that the 
structures conform to industry standards and meet the needs of the 
operation and intended purposes of the structure.
    (iii) Pay for activities to promote soil and water conservation and 
protection on the family farm as specified in Sec. 1943.16(c) of this 
title;
    (iv) Pay loan closing costs related to acquiring, enlarging, or 
improving the family farm as specified in Sec. 1943.16(d) of this 
title, that an applicant cannot pay from other sources;
    (v) Replace land or water resources on the family farm which 
resources cannot be restored;
    (vi) Pay costs associated with land and water development for 
conservation or use purposes;
    (vii) Establish a new site for farm dwelling and service buildings 
outside of a flood or mudslide area; and
    (viii) Replace land from the family farm that was sold or conveyed 
as a direct result of the disaster, if such land is necessary for the 
farming operation to be effective.
    (2) Chattel losses. Emergency loans may be used to address the needs 
of the farming operation associated with the physical losses of 
essential chattel that were the result of a disaster to:
    (i) Purchase livestock and farm equipment, including but not limited 
to quotas, and cooperative stock for credit, production, processing, or 
marketing purposes;
    (ii) Pay customary costs associated with obtaining, planning, and 
closing a loan that an applicant cannot pay from other sources (e.g. 
fees for legal, architectural, and other technical services, but not 
fees for agricultural management consultation and preparation of Agency 
forms);
    (iii) Repair or replace essential household contents damaged in the 
disaster;
    (iv) Pay the costs to restore perennials that produce an 
agricultural commodity, to the stage of development the damaged 
perennials had obtained prior to the disaster;
    (v) In the case of a farming operation that has suffered livestock 
losses not from breeding stock, pay essential farm operating and family 
household expenses; and
    (vi) Refinance debt (in the case of Farm Loan Program loan debt, as 
long as the applicant has not refinanced the loan more than 4 times).
    (b) Production losses. Emergency loans may be used to address the 
losses of the farming operation associated with production of 
agricultural commodities (except the losses associated with the loss of 
livestock) of the farming operation that were the result of a disaster 
to:
    (1) Pay costs associated with reorganizing the family farm to 
improve its profitability except that such costs shall not include the 
payment of bankruptcy expenses;
    (2) Pay annual operating expenses, which include, but are not 
limited to, feed, seed, fertilizer, pesticides, farm or ranch supplies, 
cooperative stock, and cash rent;
    (3) Pay costs associated with Federal or State-approved standards 
under the Occupational Safety and Health Act of 1970 (29 U.S.C. 655 and 
667) if the applicant can show that compliance or non-compliance with 
the standards will cause substantial economic injury;
    (4) Pay training costs required or recommended by the Agency;
    (5) Pay essential family household expenses;
    (6) Refinance debt (in the case of Farm Loan Program loan debt, as 
long as the applicant has not refinanced the loan more than 4 times); 
and
    (7) Replace lost working capital.



Sec. 764.4  Eligibility requirements.

    (a) General borrower eligibility requirements. An applicant for an 
Emergency loan must meet the following requirements:
    (1) Legal capacity. The applicant must have the legal capacity to 
incur the obligation of the loan.
    (2) Citizenship. (i) The applicant must be a citizen of the United 
States, a

[[Page 132]]

United States non-citizen national, or a qualified alien under 
applicable Federal immigration laws. For an entity applicant, the 
majority interest of the entity must be held by members who are United 
States citizens, United States non-citizen nationals, or qualified 
aliens under applicable Federal immigration laws.
    (ii) United States non-citizen nationals and qualified aliens must 
provide the appropriate documentation as to their immigration status as 
required by the United States Department of Homeland Security, Bureau of 
Citizenship and Immigration Services.
    (3) Family farm and nonfarm enterprise. The applicant's farming 
operation must qualify as a family farm and must not be a nonfarm 
enterprise.
    (4) Established farmer. An applicant must be an established farmer.
    (5) Owner and operator requirements--(i) Loans for physical losses 
to real estate. In the case of a loan for a purpose specified in Sec. 
764.3(a)(1), an applicant must be:
    (A) The owner and operator of the farming operation; or
    (B) An operator of the farming operation whose lease on the affected 
real estate would exceed the term of the loan and give the Agency prior 
notification of the termination of the lease during the term of the 
loan, and whose lessor would provide the Agency a mortgage on the real 
estate as security for the loan.
    (ii) Loans for physical losses to chattel. In the case of a loan for 
a purpose specified in Sec. 764.3(a)(2), an applicant must be the 
operator of the farming operation.
    (iii) Loans for production losses. In the case of a loan for a 
purpose specified in Sec. 764.3(b), an applicant must be the operator 
of the farming operation.
    (6) Entity applicants. For entity applicants:
    (i) If the owners holding a majority interest in the entity 
applicant are related by blood or marriage, at least one of such related 
owners must operate the family farm.
    (ii) If the owners holding a majority interest in the entity 
applicant are not related by blood or marriage, the majority interest 
holders must all operate the family farm.
    (iii) If the entity applicant has an operator interest in any other 
farming operation, that farming operation must not exceed the 
requirements of a family farm.
    (7) Intent to continue farming. The applicant must demonstrate the 
intent to continue the farm operation after the disaster.
    (8) Credit history. The applicant must demonstrate a credit history 
satisfactory to the Agency. As part of the credit history the Agency 
will determine whether the applicant has dealt with the Agency in good 
faith. This includes the applicant providing current, complete, and 
truthful information when applying for assistance and in all past 
dealings with the Agency. The Agency will also examine whether the 
applicant has properly fulfilled its obligations to other parties, 
including other Federal agencies. The Agency may use credit reports or 
any other available information to evaluate credit history.
    (9) Availability of credit elsewhere. The applicant must be unable 
to obtain sufficient credit elsewhere at reasonable rates and terms. To 
establish this, the applicant must obtain written declinations of credit 
from legally organized commercial lending institutions within reasonable 
proximity of the applicant that specify the reasons for the declination 
as follows:
    (i) In the case of a loan for $300,000 or more, two written 
declinations of credit are required;
    (ii) In the case of a loan of less than $300,000, one written 
declination of credit is required; and
    (iii) In the case of a loan of $100,000 or less, the Agency may 
waive the requirement for obtaining a written declination of credit if 
the Agency determines that it would pose an undue burden on the 
applicant, the applicant certifies that they cannot get credit 
elsewhere, and based on the applicant's circumstances credit is not 
likely to be available;
    (iv) Notwithstanding the applicant's submission of the required 
written declinations of credit, the Agency may contact other commercial 
lending institutions within reasonable proximity

[[Page 133]]

of the applicant and make an independent determination of the 
applicant's ability to obtain credit elsewhere.
    (10) Prior debt forgiveness. The applicant must not have received 
debt forgiveness from the Agency on more than one occasion on or before 
April 4, 1996, or any time after April 4, 1996.
    (11) Federal judgment lien. The applicant's property must not be 
subject to a Federal judgment lien (other than a United States Tax Court 
lien).
    (12) Managerial ability. The applicant must have sufficient 
managerial ability to assure reasonable prospects of loan repayment, as 
determined by the Agency. The applicant must demonstrate this managerial 
ability by education, on-the-job training, or farming experience within 
the last 5 years that covers an entire production cycle.
    (13) Borrower training. The applicant must agree to meet the 
borrower training requirements in accordance with Sec. 1924.74 of this 
title.
    (14) Prior drug convictions. The applicant cannot have been 
convicted under Federal or State law of planting, cultivating, growing, 
producing, harvesting, or storing a controlled substance, as defined in 
21 CFR part 1308, during the current crop year or the previous 4 crop 
years.
    (15) Recovery of duplicative benefits. The applicant must agree to 
repay any duplicative Federal assistance to the agency providing such 
assistance. A person receiving Federal assistance for a major disaster 
or emergency is liable to the United States to the extent that the 
assistance duplicates benefits available to the person for the same 
purpose from another source.
    (b) Additional Emergency loan eligibility requirements--(1) Timely 
loan application. A loan application must be received by the Agency not 
later than 8 months after the date the disaster is declared or 
designated in the county of the applicant's farming operation.
    (2) Qualifying losses--(i) Loss must occur in a disaster area. The 
applicant may seek an Emergency loan only with respect to a family farm 
that had production or physical losses as a result of a disaster in a 
disaster area.
    (ii) Eligible production loss. For production loss loans, the 
applicant must have a disaster yield that is at least 30 percent below 
the normal production yield of any single crop, as determined by the 
Agency, that comprises a basic part of an applicant's total farming 
operation.
    (iii) Eligible physical loss. For physical loss loans, the applicant 
must have suffered disaster-related damage to chattel or real estate 
essential to the farming operation, to household items that must be 
repaired or replaced, to harvested or stored crops, or to perennial 
crops.
    (3) Changes in ownership structure. The ownership structure of a 
family farm may change between the time of a qualifying loss and the 
time an Emergency loan is closed. In such case, all of the following 
requirements must be met:
    (i) The applicant, in its new form, including all owners must meet 
all applicable eligibility requirements contained in this section;
    (ii) The new individual applicant, or all owners of a new entity 
applicant must have had an ownership interest in the farming operation 
at the time of the disaster; and
    (iii) The amount of the loan will be based on the percentage of the 
former farming operation transferred to the new applicant and in no 
event will the individual portions, aggregated, equal more than would 
have been authorized for the former farming operation.
    (4) Insurance requirement. Emergency loan funds may not be used for 
physical loss purposes (excluding losses to livestock) unless that 
physical property was covered by general hazard insurance at the time 
that the damage caused by the natural disaster occurred. The level of 
the coverage in effect at the time of the disaster must have been the 
tax or cost depreciated value, whichever is less. Chattel property must 
have been covered at the tax or cost depreciated value, whichever is 
less, when such insurance was readily available and the benefits of the 
coverage (i.e. the amount of coverage equaling the lesser of the 
property's tax or cost depreciated value) justify the cost of the 
insurance.

[67 FR 795, Jan. 8, 2002, as amended at 68 FR 62223, Nov. 3, 2003]

[[Page 134]]



Sec. 764.5  Limitations.

    (a) General limitations--(1) Highly erodible soil and wetlands 
conservation. The Agency will not make a loan under this part for any 
purpose that contributes to erosion of highly-erodible land or the 
conversion of wetlands to produce an agricultural commodity.
    (2) Construction. Any construction financed by the Agency must 
comply with applicable Federal, State, local, and industry building 
standards and subpart A of part 1924 of this title.
    (3) Refinancing. Emergency loan funds may not be used to refinance 
consumer debt, such as automobile loans, or credit card debt unless such 
credit card debt is directly attributable to the farming operation.
    (b) Restriction on loan amount. An Emergency loan may not exceed the 
lesser of:
    (1) The amount of credit necessary to restore the family farming 
operation to its pre-disaster condition;
    (2) In the case of a physical loss loan, the total eligible physical 
losses caused by the disaster; or
    (3) In the case of a production loss loan, 100 percent of the total 
actual production loss sustained by the applicant calculated pursuant to 
paragraph (d) of this section.
    (c) Maximum cumulative loan principal. The maximum cumulative 
Emergency loan principal that any individual or entity may have 
outstanding is $500,000.
    (d) Production losses. The applicant's actual production loss with 
respect to a crop is calculated as follows:
    (1) Subtract the applicant's disaster yield from the applicant's 
normal production yield to determine the applicant's per acre production 
loss;
    (2) Multiply the applicant's per acre production loss by the number 
of acres of the farming operation devoted to the crop to determine the 
volume of the production loss;
    (3) Multiply the volume of the applicant's production loss by the 
market price for such crop as determined by the Agency to determine the 
dollar value for the production loss; and
    (4) Subtract any other disaster related compensation or insurance 
indemnities received or to be received by the applicant for the 
production loss.
    (e) Physical loss--(1) Amount of loss. The applicant's total 
eligible physical loss is calculated as follows:
    (i) Add the allowable costs associated with replacing or repairing 
chattel covered by hazard insurance (excluding labor, machinery, 
equipment, or materials contributed by the applicant to repair or 
replace chattel);
    (ii) Add the allowable costs associated with repairing or replacing 
real estate, covered by hazard insurance;
    (iii) Add the value of livestock and livestock products (such 
valuation will be based on a national or regional valuation of species 
or product classification, whichever the Agency determines is more 
accurate);
    (iv) Add the allowable costs to restore perennials, which produce an 
agricultural commodity, to the stage of development the damaged 
perennials had obtained prior to the disaster;
    (v) Add, in the case of an applicant that is an individual, the 
allowable costs associated with repairing or replacing essential 
household contents, not to exceed $20,000; and
    (vi) Subtract any other disaster-related compensation or insurance 
indemnities received or to be received by the applicant for the loss or 
damage to the chattel or real estate.
    (2) Documentation. In the case of physical losses associated with 
livestock, the applicant must have written documentation of the 
inventory of livestock and records of livestock product sales sufficient 
to allow the Agency to value such livestock or livestock products just 
prior to the loss.



Sec. 764.6  Interest rate.

    The interest rate applicable for an Emergency loan will be the lower 
of the interest rate at the time of either loan approval or loan closing 
and in no event shall exceed 8 percent annually.



Sec. 764.7  Loan terms.

    (a) Basis for repayment. The Agency schedules repayment of Emergency 
loans based on the useful life of the loan security, the applicant's 
repayment ability, and the type of loss.
    (b) Minimum payment requirement. The repayment schedule must include 
at least one payment every year.

[[Page 135]]

    (c) Repayment of loans for annual operating expenses. Emergency 
loans for annual operating expenses, except those expenses associated 
with establishing a perennial crop, must be repaid within 12 months. The 
Agency, however, may extend this term to not more than 18 months to 
accommodate the production cycle of the agricultural commodities of the 
farming operation.
    (d) Repayment of loans for production or physical losses to chattel. 
The repayment schedule for loans for production losses or physical 
losses to chattel (including but not limited to assets with an expected 
life between 1 and 7 years) may not exceed 7 years. If necessary to 
improve the repayment ability of the loan and real estate security is 
available, the term of the loan may be extended up to a total length not 
to exceed 20 years.
    (e) Repayment of loans for physical losses to real estate. The 
repayment schedule for loans for physical losses to real estate is based 
on repayment ability of the applicant and the useful life of the 
security, but in no case will the term of repayment exceed 40 years.



Sec. 764.8  Repayment and security requirements.

    (a) General requirements--(1) Ability to repay. The applicant must 
submit a feasible plan that demonstrates the applicant's ability to 
repay the loan. The plan also must demonstrate that the applicant will 
meet all other credit needs and obligations, including judgments, for 
which the applicant is legally responsible.
    (2) Sufficient equity. The applicant must have sufficient equity in 
the security pledged for an Emergency loan to provide adequate security 
for the loan except as permitted in paragraph (f) of this section. The 
applicant must provide additional security, if available, not to exceed 
150 percent of the loan amount.
    (3) Interests in property not owned by the applicant. Interests in 
property not owned by the applicant (such as leases that provide a 
mortgageable value, water rights, easements, mineral rights, and 
royalties) can be offered as security for the loan and will be 
considered in determining whether adequate security is available.
    (b) Real estate loans. In the case of an Emergency loan for real 
estate losses, the loan shall be secured at a minimum by the real estate 
that is being purchased, repaired, replaced, or improved with the loan 
funds.
    (c) Chattel and production loans. In the case of an Emergency loan 
for chattel and production losses, the loan shall be secured, at a 
minimum, by the chattel that is being purchased, repaired, replaced, 
refinanced, or produced with the loan funds.
    (d) Agency lien position--(1) Real estate security. If real estate 
is pledged as security for a loan, the Agency must obtain a first lien, 
if available, on the real estate. When a first lien is not available, 
the Agency may take a junior lien under the following conditions:
    (i) The prior lien does not contain any provision that may 
jeopardize the Agency's interest or the applicant's ability to repay the 
loan to the Agency;
    (ii) Prior lienholders agree to notify the Agency of acceleration 
and foreclosure whenever State law or other arrangements do not require 
such notice; and
    (iii) The applicant must agree to obtain permission from the Agency 
prior to granting any additional security interests in the real estate.
    (2) Real estate held under a purchase contract. If the real estate 
offered as security is held under a recorded purchase contract:
    (i) The applicant must provide a security interest in the real 
estate;
    (ii) The applicant and the purchase contract holder must agree in 
writing that any insurance proceeds received to compensate for real 
estate losses will be used only to replace or repair the damaged real 
estate;
    (iii) The applicant must refinance the existing purchase contract, 
or demonstrate that financing is not available, if an acceptable 
contract of sale cannot be negotiated or the purchase contract holder 
refuses to agree to apply all the insurance proceeds to repair or 
replace the damaged real estate and wants to retain some of the proceeds 
as an extra payment on the balance owed;
    (iv) The purchase contract must not be subject to summary 
cancellation on

[[Page 136]]

default and must not contain any provisions that are contrary to the 
Agency's best interests; and
    (v) The contract holder must agree in writing to notify the Agency 
of any breach by the purchaser, and give the Agency the option to 
rectify the conditions that amount to a breach within 30 days after the 
date the Agency receives written notice of the breach.
    (3) Chattel security. If chattel property is pledged as security for 
a loan the Agency must obtain a first lien on the chattel that is being 
purchased, repaired, replaced, refinanced, or produced with the loan 
funds.
    (e) Same security for multiple loans. The same property may be 
pledged as security for more than one Farm Loan Program loan.
    (f) Lack of adequate security. When adequate security is not 
available because of the disaster, the loan application may be approved 
if the Agency determines, based on the plan required in paragraph (a)(1) 
of this section, that there is a reasonable assurance that the applicant 
has the ability to repay the loan (based on an on-going operational 
basis, excluding special one-time sources of income or expenses) 
provided:
    (1) The applicant has pledged as collateral for the loan, all 
available personal and business collateral, except those items listed in 
paragraphs (h)(1) and (h)(2) of this section;
    (2) The feasible plan, approved by the Agency, indicates the loan 
will be repaid based upon the applicant's production and income history 
and addresses applicable pricing risks through the use of marketing 
contracts, hedging, options, revenue insurance or similar risk 
management practices;
    (3) The applicant has had positive net cash farm income in at least 
3 of the past 5 years; and
    (4) The applicant has given the Agency an assignment on any USDA 
program payments to be received.
    (g) Conditions for taking other assets as security--(1) Conditions. 
In addition to the requirements for adequate and additional security, 
the Agency will take a security interest in other assets (other than 
assets listed under the exceptions in paragraph (h) of this section), if 
available, when:
    (i) An applicant has non-essential assets that are not being 
converted to cash to reduce the loan amount; or
    (ii) The real estate security and chattel security do not provide 
adequate security for the loan.
    (2) List of other assets. Other assets may include:
    (i) A pledge of real estate or chattel by a third party;
    (ii) Patents, copyrights, life insurance, stocks, other securities, 
and membership in cooperatives, owned by the applicant;
    (iii) Assets owned by an applicant that cannot be converted to cash 
without jeopardizing the farm operation; and
    (iv) Non-essential assets owned by the applicant with an aggregate 
value in excess of $5,000.
    (h) Exceptions to security requirements. The Agency will not take a 
security interest in certain property in the following situations:
    (1) The property proposed as security has environmental 
contamination, restrictions, or historical impact that could impair the 
value or expose the Agency to potential liability;
    (2) The Agency cannot obtain a valid lien on the security;
    (3) The applicant's personal residence and appurtenances are on a 
parcel of land separate and apart from that real estate being used as 
adequate security for the loan; or
    (4) The applicant's other assets are used for farming or for 
essential living expenses and are not needed for security purposes, 
including but not limited to, subsistence livestock, cash or special 
cash collateral accounts, retirement accounts, personal vehicles, 
household goods, and small tools and equipment such as hand tools, power 
lawn mowers.
    (i) Requirements for security. (1) For loans over $25,000, title 
clearance is required when real estate is taken as security.
    (2) For loans of $25,000 or less, when real estate is taken as 
security, a certification of ownership in real estate is required. 
Certification of ownership may be in the form of an affidavit which is 
signed by the applicant, naming the record owner of the real estate in 
question and listing the balances

[[Page 137]]

due on all known debts against the real estate. Whenever the loan 
approving official is uncertain of the record owner or debts against the 
real estate security, a title search is required.
    (j) Taking Indian Trust lands as security. The Agency may take a 
lien on Indian Trust lands as security provided that the requirements of 
Sec. 1943.19(a)(7) of this title are satisfied.



Sec. 764.9  Appraisal and valuation requirements.

    (a) Establishing value for real estate. Real estate appraisals 
conducted pursuant to this part may be completed by designated 
appraisers or contract appraisers and shall conform to the Uniform 
Standards of Professional Appraisal Practice guidelines and standards in 
accordance with Sec. 761.7 of this chapter.
    (b) Establishing value for agricultural commodities and equipment. 
Valuations of agricultural commodities and equipment shall be 
established as follows:
    (1) The security value of the annual agricultural commodities 
production (excluding livestock) will be 100 percent of the amount 
loaned for annual operating and essential family household expenses, or 
the amount of expected crop revenue, excluding farm program and 
insurance payments, whichever is lower.
    (2) The value of livestock and equipment will be the market value as 
determined by the Agency in accordance with Sec. 761.7 of this chapter.
    (c) Assets damaged by the disaster. In the case of farm assets 
damaged by the disaster, the value of such security shall be established 
as of the day before the disaster occurred.

[67 FR 795, Jan. 8, 2002; 67 FR 7942, Feb. 21, 2002]



Sec. 764.10  Insurance for loan security.

    (a) Adequacy of insurance. An applicant must obtain insurance, 
consistent with this section, equal to the lesser of the value of the 
security at the time of loan closing, or the principal of the loan.
    (b) Hazard insurance. All security (except growing crops) must be 
covered by hazard insurance if it is readily available (i.e. sold by 
insurance agents in the applicants normal trade area) and economically 
feasible.
    (c) Flood or mudslide insurance. Real estate security located in 
flood or mudslide prone areas, as determined by the Agency, must be 
covered by flood or mudslide insurance.
    (d) Crop insurance--(1) Requirement to obtain crop insurance. Except 
as provided in paragraph (d)(2) of this section, prior to closing the 
loan, the applicant must have obtained at least the catastrophic risk 
protection level of crop insurance coverage for the crop during the crop 
year for which the loan is sought for each crop which is a basic part of 
an applicant's total farming operation, if such insurance is available, 
unless the applicant executes a written waiver of any emergency crop 
loss assistance with respect to such crop.
    (2) Exception. Growing crops used to provide adequate security must 
be covered by crop insurance if such insurance is available.
    (e) Indemnities. A borrower must:
    (1) List the Agency as loss payee for the insurance indemnity 
payment or as a beneficiary of a mortgagee loss payable clause; and
    (2) In the case of crop insurance, execute an assignment of 
indemnity in favor of the Agency.



Sec. 764.11  Charges and fees.

    The applicant must pay all filing, recording, notary, and lien 
search fees necessary to process and close a loan. The applicant may pay 
or be reimbursed for these fees from Emergency loan funds.



PART 770_INDIAN TRIBAL LAND ACQUISITION LOANS--Table of Contents




Sec.
770.1 Purpose.
770.2 Abbreviations and definitions.
770.3 Eligibility requirements.
770.4 Authorized loan uses.
770.5 Loan limitations.
770.6 Rates and terms.
770.7 Security requirements.
770.8 Use of acquired land.
770.9 Appraisals.
770.10 Servicing.

    Authority: 5 U.S.C. 301, 25 U.S.C. 490.

    Source: 66 FR 1567, Jan. 9, 2001, unless otherwise noted.

[[Page 138]]



Sec. 770.1  Purpose.

    This part contains the Agency's policies and procedures for making 
and servicing loans to assist a Native American tribe or tribal 
corporation with the acquisition of land interests within the tribal 
reservation or Alaskan community.



Sec. 770.2  Abbreviations and definitions.

    (a) Abbreviations.
    FSA Farm Service Agency, an Agency of the United States Department 
of Agriculture, including its personnel and any successor Agency.
    ITLAP Indian Tribal Land Acquisition Program.
    USPAP Uniform Standards of Professional Appraisal Practice.
    (b) Definitions.
    Administrator is the head of the Farm Service Agency.
    Agency is Farm Service Agency (FSA).
    Appraisal is an appraisal for the purposes of determining the market 
value of land (less value of any existing improvements that pass with 
the land) that meets the requirements of part 761 of this chapter.
    Applicant is a Native American tribe or tribal corporation 
established pursuant to the Indian Reorganization Act seeking a loan 
under this part.
    Loan funds refers to money loaned under this part.
    Native American tribe is:
    (1) An Indian tribe recognized by the Department of the Interior; or
    (2) A community in Alaska incorporated by the Department of the 
Interior pursuant to the Indian Reorganization Act.
    Rental value is the potential annual rental income of a parcel of 
real estate as determined by a market analysis of annual rental incomes 
of like real estate in the subject property area.
    Reservation is lands or interests in land within:
    (1) The Native American tribe's reservation as determined by the 
Department of the Interior; or
    (2) A community in Alaska incorporated by the Department of the 
Interior pursuant to the Indian Reorganization Act.
    Reserve is an account established for loans approved in accordance 
with regulations in effect prior to February 8, 2001 which required that 
an amount equal to 10 percent of the annual payment be set aside each 
year until at least one full payment is available.
    Tribal corporation is a corporation established pursuant to the 
Indian Reorganization Act.

[66 FR 1567, Jan. 9, 2001, as amended at 70 FR 7167, Feb. 11, 2005]



Sec. 770.3  Eligibility requirements.

    An applicant must:
    (a) Submit a completed Agency application form;
    (b) Except for refinancing activities authorized in Sec. 770.4(c), 
obtain an option or other acceptable purchase agreement for land to be 
purchased with loan funds;
    (c) Be a Native American tribe or a tribal corporation of a Native 
American tribe without adequate uncommitted funds, based on Generally 
Accepted Accounting Principles, or another financial accounting method 
acceptable to Secretary of Interior to acquire lands or interests 
therein within the Native American tribe's reservation for the use of 
the Native American tribe or tribal corporation or the members of 
either;
    (d) Be unable to obtain sufficient credit elsewhere at reasonable 
rates and terms for purposes established in Sec. 770.4;
    (e) Demonstrate reasonable prospects of success in the proposed 
operation of the land to be purchased with funds provided under this 
part by providing:
    (1) A feasibility plan for the use of the Native American tribe's 
land and other enterprises and funds from any other source from which 
payment will be made;
    (2) A satisfactory management and repayment plan; and
    (3) A satisfactory record for paying obligations.
    (f) Unless waived by the FSA Administrator, not have any outstanding 
debt with any Federal Agency (other than debt under the Internal Revenue 
Code of 1986) which is in a delinquent status.
    (g) Not be subject to a judgment lien against the tribe's property 
arising out of a debt to the United States.

[[Page 139]]

    (h) Have not received a write-down as provided in Sec. 770.10(e) 
within the preceding 5 years.

[66 FR 1567, Jan. 9, 2001, as amended at 70 FR 7167, Feb. 11, 2005]



Sec. 770.4  Authorized loan uses.

    Loan funds may only be used to:
    (a) Acquire land and interests therein (including fractional 
interests, rights-of-way, water rights, easements, and other 
appurtenances (excluding improvements) that would normally pass with the 
land or are necessary for the proposed operation of the land) located 
within the Native American tribe's reservation which will be used for 
the benefit of the tribe or its members.
    (b) Pay costs incidental to land acquisition, including but not 
limited to, title clearance, legal services, land surveys, and loan 
closing.
    (c) Refinance non-United States Department of Agriculture 
preexisting debts the applicant incurred to purchase the land provided 
the following conditions exist:
    (1) Prior to the acquisition of such land, the applicant filed a 
loan application regarding the purchase of such land and received the 
Agency's approval for the land purchase;
    (2) The applicant could not acquire an option on such land;
    (3) The debt for such land is a short term debt with a balloon 
payment that cannot be paid by the applicant and that cannot be extended 
or modified to enable the applicant to satisfy the obligation; and
    (4) The purchase of such land is consistent with all other 
applicable requirements of this part.
    (d) Pay for the costs of any appraisal conducted pursuant to this 
part.



Sec. 770.5  Loan limitations.

    (a) Loan funds may not be used for any land improvement or 
development purposes, acquisition or repair of buildings or personal 
property, payment of operating costs, payment of finder's fees, or 
similar costs, or for any purpose that will contribute to excessive 
erosion of highly erodible land or to the conversion of wetlands to 
produce an agriculture commodity as further established in exhibit M to 
subpart G of part 1940 of this title.
    (b) The amount of loan funds used to acquire land may not exceed the 
market value of the land (excluding the value of any improvements) as 
determined by a current appraisal.
    (c) Loan funds for a land purchase must be disbursed over a period 
not to exceed 24 months from the date of loan approval.
    (d) The sale of assets that are not renewable within the life of the 
loan will require a reduction in loan principal equal to the value of 
the assets sold.



Sec. 770.6  Rates and terms.

    (a) Term. Each loan will be scheduled for repayment over a period 
not to exceed 40 years from the date of the note.
    (b) Interest rate. The interest rate charged by the Agency will be 
the lower of the interest rate in effect at the time of the loan 
approval or loan closing, which is the current rate available in any FSA 
office. Except as provided in Sec. 770.10(b) the interest rate will be 
fixed for the life of the loan.



Sec. 770.7  Security requirements.

    (a) The applicant will take appropriate action to obtain and provide 
security for the loan.
    (b) A mortgage or deed of trust on the land to be purchased by the 
applicant will be taken as security for a loan, except as provided in 
paragraph (c) of this section.
    (1) If a mortgage or deed of trust is to be obtained on trust or 
restricted land and the applicant's constitution or charter does not 
specifically authorize mortgage of such land, the mortgage must be 
authorized by tribal referendum.
    (2) All mortgages or deeds of trust on trust or restricted land must 
be approved by the Department of the Interior.
    (c) The Agency may take an assignment of income in lieu of a 
mortgage or deed of trust provided:
    (1) The Agency determines that an assignment of income provides as 
good or better security; and
    (2) Prior approval of the Administrator has been obtained.



Sec. 770.8  Use of acquired land.

    (a) General. Subject to Sec. 770.5(d) land acquired with loan 
funds, or other

[[Page 140]]

property serving as the security for a loan under this part, may be 
leased, sold, exchanged, or subject to a subordination of the Agency's 
interests, provided:
    (1) The Agency provides prior written approval of the action;
    (2) The Agency determines that the borrower's loan obligations to 
the Agency are adequately secured; and
    (3) The borrower's ability to repay the loan is not impaired.
    (b) Title. Title to land acquired with a loan made under this part 
may, with the approval of the Secretary of the Interior, be taken by the 
United States in trust for the tribe or tribal corporation.



Sec. 770.9  Appraisals.

    (a) The applicant or the borrower, as appropriate, will pay the cost 
of any appraisal required under this part.
    (b) Appraisals must be completed in accordance with Sec. 761.7 of 
this chapter.



Sec. 770.10  Servicing.

    (a) Reamortization--(1) Eligibility. The Agency may consider 
reamortization of a loan provided:
    (i) The borrower submits a completed Agency application form; and
    (ii) The account is delinquent due to circumstances beyond the 
borrower's control and cannot be brought current within 1 year; or
    (iii) The account is current, but due to circumstances beyond the 
borrower's control, the borrower will be unable to meet the annual loan 
payments.
    (2) Terms. The term of a loan may not be extended beyond 40 years 
from the date of the original note.
    (i) Reamortization within the remaining term of the loan will be 
predicated on a projection of the tribe's operating expenses indicating 
the ability to meet the new payment schedule; and
    (ii) No intervening lien exists on the security for the loan which 
would jeopardize the Government's security priority.
    (3) Consolidation of notes. If one or more notes are to be 
reamortized, consolidation of the notes is authorized.
    (b) Interest rate reduction. The Agency may consider a reduction of 
the interest rate for an existing loan to the current interest rate as 
available from any Agency office provided:
    (1) The borrower submits a completed Agency application form;
    (2) The loan was made more than 5 years prior to the application for 
the interest reduction; and
    (3) The Department of the Interior and the borrower certify that the 
borrower meets at least one of the criteria contained in paragraph 
(e)(2) of this section.
    (c) Deferral. The Agency may consider a full or partial deferral for 
a period not to exceed 5 years provided:
    (1) The borrower submits a completed Agency application form;
    (2) The borrower presents a plan which demonstrates that due to 
circumstances beyond their control, they will be unable to meet all 
financial commitments unless the Agency payment is deferred; and
    (3) The borrower will be able to meet all financial commitments, 
including the Agency payments, after the deferral period has ended.
    (d) Land exchanges. In the cases where a borrower proposes to 
exchange any portion of land securing a loan for other land, title 
clearance and a new mortgage on the land received by the borrower in 
exchange, which adequately secures the unpaid principal balance of the 
loan, will be required unless the Agency determines any remaining land 
or other loan security is adequate security for the loan.
    (e) Debt write-down--(1) Application. The Agency will consider debt 
write-down under either the land value option or rental value option, as 
requested by the borrower.
    (i) The borrower must submit a completed Agency application form;
    (ii) If the borrower applies and is determined eligible for a land 
value and a rental value write-down, the borrower will receive a write-
down based on the write-down option that provides the greatest debt 
reduction.
    (2) Eligibility. To be eligible for debt write-down, the borrower 
(in the case of a tribal corporation, the Native American tribe of the 
borrower) must:
    (i) Be located in a county which is identified as a persistent 
poverty county by the United States Department of

[[Page 141]]

Agriculture, Economic Research Service pursuant to the most recent data 
from the Bureau of the Census; and
    (ii) Have a socio-economic condition over the immediately preceding 
5 year period that meets the following two factors as certified by the 
Native American tribe and the Department of the Interior:
    (A) The Native American tribe has a per capita income for individual 
enrolled tribal members which is less than 50 percent of the Federally 
established poverty income rate established by the Department of Health 
and Human Services;
    (B) The tribal unemployment rate exceeds 50 percent;
    (3) Land value write-down. The Agency may reduce the unpaid 
principal and interest balance on any loan made to the current market 
value of the land that was purchased with loan funds provided:
    (i) The market value of such land has declined by at least 25 
percent since the land was purchased as established by a current 
appraisal;
    (ii) Land value decrease is not attributed to the depletion of 
resources contained on or under the land;
    (iii) The loan was made more than 5 years prior to the application 
for land value write-down;
    (iv) The loan has not previously been written down under paragraph 
(e)(4) of this section and has not been written down within the last 5 
years under this paragraph, and
    (v) The borrower must meet the eligibility requirements of 
paragraphs (a)(1)(ii) or (iii) of this section.
    (4) Rental value write-down. The Agency may reduce the unpaid 
principal and interest on any loan, so the annual loan payment for the 
remaining term of each loan equals the average of annual rental value of 
the land purchased by each such loan for the immediately preceding 5-
year period provided:
    (i) The loan was made more than 5 years prior to the rental value 
writedown;
    (ii) The description of the land purchased with the loan funds and 
the rental values used to calculate the 5 year average annual rental 
value of the land have been certified by the Department of the Interior;
    (iii) The borrower provides a current market value rent study report 
for the land for the preceding 5 years, which identifies the average 
rental value. The report must be prepared by a certified general 
appraiser and meet the requirements of USPAP;
    (iv) The borrower has not previously received a write-down under 
this paragraph and has not had a loan written down within the last 5 
years under paragraph (e)(3) of this section, and
    (v) The borrower must meet the eligibility requirements of paragraph 
(a)(1)(ii) or (iii) of this section.
    (f) Release of reserve. Existing reserve accounts may be released 
for the purpose of making ITLAP loan payments or to purchase additional 
lands, subject to the following:
    (1) A written request is received providing details of the use of 
the funds;
    (2) The loan is not delinquent;
    (3) The loan adequately secured by a general assignment of tribal 
income.

[66 FR 1567, Jan. 9, 2001; 66 FR 47877, Sept. 14, 2001, as amended at 70 
FR 7167, Feb. 11, 2005]



PART 771_BOLL WEEVIL ERADICATION LOAN PROGRAM--Table of Contents




Sec.
771.1 Introduction.
771.2 Abbreviations and definitions.
771.3 [Reserved]
771.4 Eligibility requirements.
771.5 Loan purposes.
771.6 Environmental requirements.
771.7 Equal opportunity and non-discrimination requirements.
771.8 Other Federal, State, and local requirements.
771.9 Interest rates, terms, security requirements, and repayment.
771.10 [Reserved]
771.11 Application.
771.12 Funding applications.
771.13 Loan closing.
771.14 Loan monitoring.
771.15 Loan servicing.

    Authority: 5 U.S.C. 301; 7 U.S.C. 1989; and Pub. L. 104-180, 110 
Stat. 1569.

    Source: 67 FR 59771, Sept. 24, 2002, unless otherwise noted.



Sec. 771.1  Introduction.

    The regulations in this part set forth the terms and conditions 
under which loans are made through the Boll Weevil

[[Page 142]]

Eradication Loan Program. The regulations in this part are applicable to 
applicants, borrowers, and other parties involved in the making, 
servicing, and liquidation of these loans. The program's objective is to 
assist producers and state government agencies in the eradication of 
boll weevils from cotton producing areas.



Sec. 771.2  Abbreviations and definitions.

    The following abbreviations and definitions apply to this part:
    (a) Abbreviations:
    APHIS means the Animal and Plant Health Inspection Service of the 
United States Department of Agriculture, or any successor Agency.
    FSA means the Farm Service Agency, its employees, and any successor 
agency.
    (b) Definitions:
    Extra payment means a payment derived from the sale of property 
serving as security for a loan, such as real estate or vehicles. 
Proceeds from program assessments and other normal operating income, 
when remitted for payment on a loan, will not be considered as an extra 
payment.
    Non-profit corporation means a private domestic corporation created 
and organized under the laws of the State(s) in which the entity will 
operate whose net earnings are not distributable to any private 
shareholder or individual, and which qualifies under the Internal 
Revenue Service code.
    Restructure means to modify the terms of a loan. This may include a 
modification of the interest rate and/or repayment terms of the loan.
    Security means assets pledged as collateral to assure repayment of a 
loan in the event of default on the loan.
    State organization means a quasi-state run public operation 
exclusively established and managed by state and/or non-state employees, 
with all employees currently dedicated to the specific task of 
eliminating the boll weevil from the cotton growing area of the state.



Sec. 771.3  [Reserved]



Sec. 771.4  Eligibility requirements.

    (a) An eligible applicant must:
    (1) Meet all requirements prescribed by APHIS to qualify for cost-
share grant funds as determined by APHIS, (FSA will accept the 
determination by APHIS as to an organization's qualification);
    (2) Have the appropriate charter and/or legal authority as a non-
profit corporation or as a State organization specifically organized to 
operate the boll weevil eradication program in any State, biological, or 
geographic region of any State in which it operates;
    (3) Possess the legal authority to enter into contracts, including 
debt instruments;
    (4) Operate in an area in which producers have approved a referendum 
authorizing producer assessments and in which an active eradication or 
post-eradication program is underway or scheduled to begin no later than 
the fiscal year following the fiscal year in which the application is 
submitted;
    (5) Have the legal authority to pledge producer assessments as 
security for loans from FSA.
    (b) Individual producers are not eligible for loans.



Sec. 771.5  Loan purposes.

    (a) Loan funds may be used for any purpose directly related to boll 
weevil eradication activities, including, but not limited to:
    (1) Purchase or lease of supplies and equipment;
    (2) Operating expenses, including but not limited to, travel and 
office operations;
    (3) Salaries and benefits.
    (b) Loan funds may not be used to pay expenses incurred for 
lobbying, public relations, or related activities, or to pay interest on 
loans from the Agency.



Sec. 771.6  Environmental requirements.

    No loan will be made until all Federal and state statutory and 
regulatory environmental requirements have been complied with.



Sec. 771.7  Equal opportunity and non-discrimination requirements.

    No recipient of a boll weevil eradication loan shall directly, or 
through contractual or other arrangement, subject any person or cause 
any person to

[[Page 143]]

be subjected to discrimination on the basis of race, religion, color, 
national origin, gender, or other prohibited basis. Borrowers must 
comply with all applicable Federal laws and regulations regarding equal 
opportunity in hiring, procurement, and related matters.



Sec. 771.8  Other Federal, State, and local requirements.

    (a) In addition to the specific requirements in this subpart, loan 
applications will be coordinated with all appropriate Federal, State, 
and local agencies.
    (b) Borrowers are required to comply with all applicable:
    (1) Federal, State, or local laws;
    (2) Regulatory commission rules; and
    (3) Regulations which are presently in existence, or which may be 
later adopted including, but not limited to, those governing the 
following:
    (i) Borrowing money, pledging security, and raising revenues for 
repayment of debt;
    (ii) Accounting and financial reporting; and
    (iii) Protection of the environment.



Sec. 771.9  Interest rates, terms, security requirements, and repayment.

    (a) Interest rate. The interest rate will be fixed for the term of 
the loan. The rate will be established by FSA, based upon the cost of 
Government borrowing for instruments on terms similar to that of the 
loan requested.
    (b) Term. The loan term will be based upon the needs of the 
applicant to accomplish the objectives of the loan program as determined 
by FSA, but may not exceed 10 years.
    (c) Security requirements. (1) Loans must be adequately secured as 
determined by FSA. FSA may require certain security, including but not 
limited to the following:
    (i) Assignments of assessments, taxes, levies, or other sources of 
revenue as authorized by State law;
    (ii) Investments and deposits of the applicant; and
    (iii) Capital assets or other property of the applicant or its 
members.
    (2) In those cases in which FSA and another lender will hold 
assignments of the same revenue as collateral, the other lender must 
agree to a prorated distribution of the assigned revenue. The 
distribution will be based upon the proportionate share of the 
applicant's debt the lender holds for the eradication zone from which 
the revenue is derived at the time of loan closing.
    (d) Repayment. The applicant must demonstrate that income sources 
will be sufficient to meet the repayment requirements of the loan and 
pay operating expenses.



Sec. 771.10  [Reserved]



Sec. 771.11  Application.

    A complete application will consist of the following:
    (a) An application for Federal assistance (available in any FSA 
office);
    (b) Applicant's financial projections including a cash flow 
statement showing the plan for loan repayment;
    (c) Copies of the applicant's authorizing State legislation and 
organizational documents;
    (d) List of all directors and officers of the applicant;
    (e) Copy of the most recent audited financial statements along with 
updates through the most recent quarter;
    (f) Copy of the referendum used to establish the assessments and a 
certification from the Board of Directors that the referendum passed;
    (g) Evidence that the officers and employees authorized to disburse 
funds are covered by an acceptable fidelity bond;
    (h) Evidence of acceptable liability insurance policies;
    (i) Statement from the applicant addressing any current or pending 
litigation against the applicant as well as any existing judgments;
    (j) A copy of a resolution passed by the Board of Directors 
authorizing the officers to incur debt on behalf of the borrower;
    (k) Any other information deemed to be necessary by FSA to render a 
decision.



Sec. 771.12  Funding applications.

    Loan requests will be processed based on the date FSA receives the 
application. Loan approval is subject to the availability of funds. 
However, when multiple applications are received on

[[Page 144]]

the same date and available funds will not cover all applications 
received, applications from active eradication areas, which FSA 
determines to be most critical for the accomplishment of program 
objectives, will be funded first.



Sec. 771.13  Loan closing.

    (a) Conditions. The applicant must meet all conditions specified by 
the loan approval official in the notification of loan approval prior to 
closing.
    (b) Loan instruments and legal documents. The borrower, through its 
authorized representatives will execute all loan instruments and legal 
documents required by FSA to evidence the debt, perfect the required 
security interest in property and assets securing the loan, and protect 
the Government's interest, in accordance with applicable State and 
Federal laws.
    (c) Loan agreement. A loan agreement between the borrower and FSA 
will be required. The agreement will set forth performance criteria and 
other loan requirements necessary to protect the Government's financial 
and programmatic interest and accomplish the objectives of the loan. 
Specific provisions of the agreement will be developed on a case-by-case 
basis to address the particular situation associated with the loan being 
made. However, all loan agreements will include at least the following 
provisions:
    (1) The borrower must submit audited financial statements to FSA at 
least annually;
    (2) The borrower will immediately notify FSA of any adverse actions 
such as:
    (i) Anticipated default on FSA debt;
    (ii) Potential recall vote of an assessment referendum; or
    (iii) Being named as a defendant in litigation;
    (3) Submission of other specific financial reports for the borrower;
    (4) The right of deferral under 7 U.S.C. 1981a; and
    (5) Applicable liquidation procedures upon default.
    (d) Fees. The borrower will pay all fees for recording any legal 
instruments determined to be necessary and all notary, lien search, and 
similar fees incident to loan transactions. No fees will be assessed for 
work performed by FSA employees.



Sec. 771.14  Loan monitoring.

    (a) Annual and periodic reviews. At least annually, the borrower 
will meet with FSA representatives to review the financial status of the 
borrower, assess the progress of the eradication program utilizing loan 
funds, and identify any potential problems or concerns.
    (b) Performance monitoring. At any time FSA determines it necessary, 
the borrower must allow FSA or its representative to review the 
operations and financial condition of the borrower. This may include, 
but is not limited to, field visits, and attendance at Foundation Board 
meetings. Upon FSA request, a borrower must submit any financial or 
other information within 14 days unless the data requested is not 
available within that time frame.



Sec. 771.15  Loan servicing.

    (a) Advances. FSA may make advances to protect its financial 
interests and charge the borrower's account for the amount of any such 
advances.
    (b) Payments. Payments will be made to FSA as set forth in loan 
agreements and debt instruments. The funds from extra payments will be 
applied entirely to loan principal.
    (c) Restructuring. The provisions of 7 CFR part 1951, subpart S, are 
not applicable to loans made under this section. However, FSA may 
restructure loan debts; provided:
    (1) The Government's interest will be protected;
    (2) The restructuring will be performed within FSA budgetary 
restrictions; and
    (3) The loan objectives cannot be met unless the loan is 
restructured.
    (d) Default. In the event of default, FSA will take all appropriate 
actions to protect its interest.



PART 772_SERVICING MINOR PROGRAM LOANS--Table of Contents




Sec.
772.1 Policy.
772.2 Abbreviations and definitions.
772.3 Compliance.
772.4 Environmental requirements.

[[Page 145]]

772.5 Security maintenance.
772.6 Subordination of security.
772.7 Leasing minor program loan security.
772.8 Sale or exchange of security property.
772.9 Releases.
772.10 Transfer and assumption--AMP loans.
772.11 Transfer and assumption--IMP loans.
772.12 Graduation.
772.13 Delinquent account servicing.
772.14 Reamortization of AMP loans.
772.15 Protective advances.
772.16 Liquidation.
772.17 Equal Opportunity and non-discrimination requirements.
772.18 Exception authority.

    Authority: 5 U.S.C. 301, 7 U.S.C. 1989, 25 U.S.C. 490.

    Source: 68 FR 69949, Dec. 16, 2003, unless otherwise noted.



Sec. 772.1  Policy.

    (a) Purpose. This part contains the Agency's policies and procedures 
for servicing Minor Program loans which include: Grazing Association 
loans, Irrigation and Drainage Association loans, and Non-Farm 
Enterprise and Recreation loans to individuals.
    (b) Appeals. The regulations at 7 CFR parts 11 and 780 apply to 
decisions made under this part.



Sec. 772.2  Abbreviations and Definitions.

    (a) Abbreviations.

AMP Association-Type Minor Program loan;
CFR Code of Federal Regulations;
FO Farm Ownership Loan;
FSA Farm Service Agency;
IMP Individual-Type Minor Program loan;
OL Operating Loan;
USDA United States Department of Agriculture.
    (b) Definitions.
    Association-Type Minor Program loans (AMP): Loans to Grazing 
Associations and Irrigation and Drainage Associations.
    Entity: Cooperative, corporation, partnership, joint operation, 
trust, or limited liability company.
    Graduation: The requirement contained in loan documents that 
borrowers pay their FSA loan in full with funds received from a 
commercial lending source as a result of improvement in their financial 
condition.
    Individual-type Minor Program loans (IMP): Non-Farm Enterprise or 
Recreation loans to individuals.
    Member: Any individual who has an ownership interest in the entity 
which has received the Minor Program loan.
    Minor Program: Non-Farm Enterprise, Individual Recreation, Grazing 
Association, or Irrigation and Drainage loan programs administered or to 
be administered by FSA
    Review official: An agency employee, contractor or designee who is 
authorized to conduct a compliance review of a Minor Program borrower 
under this part.



Sec. 772.3  Compliance.

    (a) Requirements. No Minor Program borrower shall directly, or 
through contractual or other arrangement, subject any person or cause 
any person to be subjected to discrimination on the basis of race, 
color, national origin, or disability. Borrowers must comply with all 
applicable Federal laws and regulations regarding equal opportunity in 
hiring, procurement, and related matters. AMP borrowers are subject to 
the nondiscrimination provisions applicable to Federally assisted 
programs contained in 7 CFR part 15, subparts A and C, and part 15b. IMP 
loans are subject to the nondiscrimination provisions applicable to 
federally conducted programs contained in 7 CFR parts 15d and 15e.
    (b) Reviews. In accordance with Title VI of the Civil Rights Act of 
1964, the Agency will conduct a compliance review of all Minor Program 
borrowers, to determine if a borrower has directly, or through 
contractual or other arrangement, subjected any person or caused any 
person to be subjected to discrimination on the basis of race, color, or 
national origin. The borrower must allow the review official access to 
their premises and all records necessary to carry out the compliance 
review as determined by the review official.
    (c) Frequency and timing. Compliance reviews will be conducted no 
later than October 31 of every third year until the Minor Program loan 
is paid in full or otherwise satisfied.
    (d) Violations. If a borrower refuses to provide information or 
access to their

[[Page 146]]

premises as requested by a review official during a compliance review, 
or is determined by the Agency to be not in compliance in accordance 
with this section or Departmental regulations and procedures, the Agency 
will service the loan in accordance with the provisions of Sec. 772.16 
of this part.



Sec. 772.4  Environmental requirements.

    Servicing activities such as transfers, assumptions, subordinations, 
sale or exchange of security property, and leasing of security will be 
reviewed for compliance with 7 CFR part 1940, subpart G and the exhibits 
to that subpart and 7 CFR part 799.



Sec. 772.5  Security maintenance.

    (a) General. Borrowers are responsible for maintaining the 
collateral that is serving as security for their Minor Program loan in 
accordance with their lien instruments, security agreement and 
promissory note.
    (b) Security inspection. The Agency will inspect real estate that is 
security for a Minor Program loan at least once every 3 years, and 
chattel security at least annually. More frequent security inspections 
may be made as determined necessary by the Agency. Borrowers will allow 
representatives of the Agency, or any agency of the U.S. Government, in 
accordance with statutes and regulations, such access to the security 
property as the agency determines is necessary to document compliance 
with the requirements of this section.
    (c) Violations. If the Agency determines that the borrower has 
failed to adequately maintain security, made unapproved dispositions of 
security, or otherwise has placed the repayment of the Minor Program 
loan in jeopardy, the Agency will:
    (1) For chattel security, service the account according to 7 part 
1962, subpart A. If any normal income security as defined in that 
subpart secures a Minor Program loan, the reporting, approval and 
release provisions in that subpart shall apply.
    (2) For real estate security for AMP loans, contact the Regional 
Office of General Counsel for advice on the appropriate servicing 
including liquidation if warranted.
    (3) For real estate security for IMP loans, service the account 
according to 7 CFR part 1965, subpart A.



Sec. 772.6  Subordination of security.

    (a) Eligibility. The Agency shall grant a subordination of Minor 
Program loan security when the transaction will further the purposes for 
which the loan was made, and all of the following are met:
    (1) The loan will still be adequately secured after the 
subordination, or the value of the loan security will be increased by 
the amount of advances to be made under the terms of the subordination.
    (2) The borrower can document the ability to pay all debts including 
the new loan.
    (3) The action does not change the nature of the borrower's 
activities to the extent that they would no longer be eligible for a 
Minor Program loan.
    (4) The subordination is for a specific amount.
    (5) The borrower is unable, as determined by the Agency, to 
refinance its loan and graduate in accordance with this subpart.
    (6) The loan funds will not be used in such a way that will 
contribute to erosion of highly erodible land or conversion of wetlands 
for the production of an agricultural commodity according to 7 CFR part 
1940, subpart G.
    (7) The borrower has not been convicted of planting, cultivating, 
growing, producing, harvesting or storing a controlled substance under 
Federal or state law. ``Borrower,'' for purposes of this subparagraph, 
specifically includes an individual or entity borrower and any member of 
an entity borrower. ``Controlled substance,'' for the purpose of this 
subparagraph, is defined at 21 CFR part 1308. The borrower will be 
ineligible for a subordination for the crop year in which the conviction 
occurred and the four succeeding crop years. An applicant must attest on 
the Agency application form that it, and its members if an entity, have 
not been convicted of such a crime.
    (b) Application. To request a subordination, a Minor Program 
borrower must make the request in writing and provide the following:

[[Page 147]]

    (1) The specific amount of debt for which a subordination is needed;
    (2) An appraisal prepared in accordance with Sec. 761.7 of this 
chapter, if the request is for a subordination of more than $10,000, 
unless a sufficient appraisal report, as determined by the Agency, that 
is less than one year old, is on file with the Agency; and
    (3) Consent and subordination, as necessary, of all other creditors' 
security interests.



Sec. 772.7  Leasing minor program loan security.

    (a) Eligibility. The Agency may consent to the borrower leasing all 
or a portion of security property for Minor Program loans to a third 
party when:
    (1) Leasing is the only feasible way to continue to operate the 
enterprise and is a customary practice;
    (2) The lease will not interfere with the purpose for which the loan 
was made;
    (3) The borrower retains ultimate responsibility for the operation, 
maintenance and management of the facility or service for its continued 
availability and use at reasonable rates and terms;
    (4) The lease prohibits amendments to the lease or subleasing 
arrangements without prior written approval from the Agency;
    (5) The lease terms provide that the Agency is a lienholder on the 
subject property and, as such, the lease is subordinate to the rights 
and claims of the Agency as lienholder; and
    (6) The lease is for less than 3 years and does not constitute a 
lease/purchase arrangement, unless the transfer and assumption 
provisions of this subpart are met.
    (b) Application. The borrower must submit a written request for 
Agency consent to lease the property.



Sec. 772.8  Sale or exchange of security property.

    (a) For AMP loans.
    (1) Sale of all or a portion of the security property may be 
approved when all of the following conditions are met:
    (i) The property is sold for market value based on a current 
appraisal prepared in accordance with Sec. 761.7 of this chapter.
    (ii) The sale will not prevent carrying out the original purpose of 
the loan. The borrower must execute an Assurance Agreement as prescribed 
by the Agency. The covenant involved will remain in effect as long as 
the property continues to be used for the same or similar purposes for 
which the loan was made. The instrument of conveyance will contain the 
following nondiscrimination covenant:

The property described herein was obtained or improved with Federal 
financial assistance and is subject to the non-discrimination provisions 
of title VI of the Civil Rights Act of 1964, title IX of the Education 
Amendments of 1972, section 504 of the Rehabilitation Act of 1973, and 
other similarly worded Federal statutes, and the regulations issued 
pursuant thereto that prohibit discrimination on the basis of race, 
color, national origin, handicap, religion, age, or sex in programs or 
activities receiving Federal financial assistance. Such provisions apply 
for as long as the property continues to be used for the same or similar 
purposes for which the Federal assistance was extended, or for so long 
as the purchaser owns it, whichever is later.
    (iii) The remaining security for the loan is adequate or will not 
change after the transaction.
    (iv) Sale proceeds remaining after paying any reasonable and 
necessary selling expenses are applied to the Minor Program loan 
according to lien priority.
    (2) Exchange of all or a portion of security property for an AMP 
loan may be approved when:
    (i) The Agency will obtain a lien on the property acquired in the 
exchange;
    (ii) Property more suited to the borrower's needs related to the 
purposes of the loan is to be acquired in the exchange;
    (iii) The AMP loan will be as adequately secured after the 
transaction as before; and
    (iv) It is necessary to develop or enlarge the facility, improve the 
borrower's debt-paying ability, place the operation on a more sound 
financial basis or otherwise further the loan objectives and purposes, 
as determined by the Agency.
    (b) For IMP loans.
    (1) A sale or exchange of chattel that is serving as security is 
governed by 7 CFR part 1962, subpart A.

[[Page 148]]

    (2) A sale or exchange of real estate that is serving as security 
for an IMP loan is governed by 7 CFR part 1965, subpart A.

[68 FR 69949, Dec. 16, 2003, as amended at 69 FR 18741, Apr. 8, 2004]



Sec. 772.9  Releases.

    (a) Security. Minor Program liens may be released when:
    (1) The debt is paid in full;
    (2) Security property is sold for market value and sale proceeds are 
received and applied to the borrower's creditors according to lien 
priority; or
    (3) An exchange in accordance with Sec. 772.8 has been concluded.
    (b) Borrower liability. The Agency may release a borrower from 
liability when the Minor Program loan, plus all administrative 
collection costs and charges are paid in full. IMP borrowers who have 
had previous debt forgiveness on a farm loan program loan as defined in 
7 CFR 1951.906, however, cannot be released from liability by FSA until 
the previous loss to the Agency has been repaid with interest from the 
date of debt forgiveness. An AMP borrower may also be released in 
accordance with Sec. 772.10 in conjunction with a transfer and 
assumption.
    (c) Servicing of debt not satisfied through liquidation. Balances 
remaining after sale or liquidation of the security will be subject to 
administrative offset in accordance with 7 CFR part 3, Department of 
Treasury Offset Program (TOP) and Treasury Cross-Servicing regulations 
at 31 CFR part 285 and Federal Claims Collections Standards at 31 CFR 
parts 900-904. Thereafter the debt settlement provisions in 7 CFR part 
1956, subpart B of chapter XVIII of the Code of Federal Regulations or 
successor regulation apply.

[68 FR 69949, Dec. 16, 2003, as amended at 69 FR 7679, Feb. 19, 2004]



Sec. 772.10  Transfer and assumption--AMP loans.

    (a) Eligibility. The Agency may approve transfers and assumptions of 
AMP loans when:
    (1) The present borrower is unable or unwilling to accomplish the 
objectives of the loan;
    (2) The transfer will not harm the Government or adversely affect 
the Agency's security position;
    (3) The transferee will continue with the original purpose of the 
loan;
    (4) The transferee will assume an amount at least equal to the 
present market value of the loan security;
    (5) The transferee documents the ability to pay the AMP loan debt as 
provided in the assumption agreement and has the legal capacity to enter 
into the contract;
    (6) If there is a lien or judgment against the Agency security being 
transferred, the transferee is subject to such claims. The transferee 
must document the ability to repay the claims against the land; and
    (7) If the transfer is to one or more members of the borrower's 
organization and there is no new member, there must not be a loss to the 
Government.
    (b) Withdrawal. Withdrawal of a member and transfer of the 
withdrawing member's interest in the Association to a new eligible 
member may be approved by the Agency if all of the following conditions 
are met:
    (1) The entire unpaid balance of the withdrawing member's share of 
the AMP loan must be assumed by the new member;
    (2) In accordance with the Association's governing articles, the 
required number of remaining members must agree to accept any new 
member; and
    (3) The transfer will not adversely affect collection of the AMP 
loan.
    (c) Requesting a transfer and assumption. The transferor/borrower 
and transferee/applicant must submit:
    (1) The written consent of any other lienholder, if applicable.
    (2) A current balance sheet and cash flow statement.
    (d) Terms. The interest rate and term of the assumed AMP loan will 
not be changed. Any delinquent principal and interest of the AMP loan 
must be paid current before the transfer and assumption will be approved 
by the Agency.
    (e) Release of liability. Transferors may be released from liability 
with respect to an AMP loan by the Agency when:
    (1) The full amount of the loan is assumed; or

[[Page 149]]

    (2) Less than the full amount of the debt is assumed, and the 
balance remaining will be serviced in accordance with Sec. 772.9(c).



Sec. 772.11  Transfer and assumption--IMP loans.

    Transfers and assumptions for IMP loans are processed in accordance 
with 7 CFR part 1962, subpart A, for chattel secured loans and 7 CFR 
part 1965, subpart A, for real estate secured loans. Any remaining 
transferor liability will be serviced in accordance with Sec. 772.9(c) 
of this subpart.



Sec. 772.12  Graduation.

    (a) General. This section only applies to Minor Program borrowers 
with promissory notes which contain provisions requiring graduation.
    (b) Graduation reviews. Borrowers shall provide current financial 
information when requested by the Agency or its representatives to 
conduct graduation reviews.
    (1) AMP loans shall be reviewed at least every two years. In the 
year to be reviewed, each borrower must submit, at a minimum, a year-end 
balance sheet and cash flow projection for the current year.
    (2) All IMP borrowers classified as ``commercial'' or ``standard'' 
in accordance with 7 CFR part 1951, subpart F, shall be reviewed at 
least every 2 years. In the year to be reviewed, each borrower must 
submit a year-end balance sheet, actual financial performance for the 
most recent year, and a projected budget for the current year.
    (c) Criteria. Borrowers must graduate from the Minor Programs as 
follows:
    (1) Borrowers with IMP loans that are classified as ``commercial'' 
or ``standard'' must apply for private financing within 30 days from the 
date the borrower is notified of lender interest, if an application is 
required by the lender. For good cause, the Agency may grant the 
borrower a reasonable amount of additional time to apply for 
refinancing.
    (2) Borrowers with AMP loans will be considered for graduation at 
least every two years or more frequently if the Agency determines that 
the borrower's financial condition has significantly improved.



Sec. 772.13  Delinquent account servicing.

    (a) AMP loans. If the borrower does not make arrangements to cure 
the default after notice by the Agency and is not eligible for 
reamortization in accordance with Sec. 772.14, the Agency will 
liquidate the account according to Sec. 772.16.
    (b) IMP loans. Delinquent IMP borrowers will be serviced according 
to 7 CFR part 1951, subpart S, and parts 3 and 1951, subpart C, 
concerning internal agency offset and referral to the Department of 
Treasury Offset Program and Treasury Cross-Servicing (or successor 
regulations).



Sec. 772.14  Reamortization of AMP loans.

    The Agency may approve reamortization of AMP loans provided:
    (a) There is no extension of the final maturity date of the loan;
    (b) No intervening lien exists on the security for the loan which 
would jeopardize the Government's security position;
    (c) If the account is delinquent, it cannot be brought current 
within one year and the borrower has presented a cash flow budget which 
demonstrates the ability to meet the proposed new payment schedule; and
    (d) If the account is current, the borrower will be unable to meet 
the annual loan payments due to circumstances beyond the borrower's 
control.



Sec. 772.15  Protective advances.

    (a) The Agency may approve, without regard to any loan or total 
indebtedness limitation, vouchers to pay costs, including insurance and 
real estate taxes, to preserve and protect the security, the lien, or 
the priority of the lien securing the debt owed to the Agency if the 
debt instrument provides that the Agency may voucher the account to 
protect its lien or security.
    (b) The Agency may pay protective advances only when it determines 
it to be in the Government's best financial interest.
    (c) Protective advances are immediately due and payable.

[[Page 150]]



Sec. 772.16  Liquidation.

    When the Agency determines that continued servicing will not 
accomplish the objectives of the loan and the delinquency or financial 
distress cannot be cured by the options in Sec. 772.13, or the loan is 
in non-monetary default, the borrower will be encouraged to dispose of 
the Agency security voluntarily through sale or transfer and assumption 
in accordance with this part. If such a transfer or voluntary sale is 
not carried out, the loan will be liquidated according to 7 CFR part 
1955, subpart A. For AMP loans, appeal rights under 7 CFR part 11 are 
provided in the notice of acceleration. For IMP loans, appeal rights 
must be exhausted before acceleration, and the notice of acceleration is 
not appealable.



Sec. 772.17  Equal opportunity and non-discrimination requirements.

    With respect to any aspect of a credit transaction, the Agency will 
comply with the requirements of the Equal Credit Opportunity Act as 
implemented in 7 CFR 1910.2, and the Department's civil rights policy in 
7 CFR part 15d.



Sec. 772.18  Exception authority.

    Exceptions to any requirement in this subpart can be approved in 
individual cases by the Administrator if application of any requirement 
or failure to take action would adversely affect the Government's 
financial interest. Any exception must be consistent with the 
authorizing statute and other applicable laws.



PART 773_SPECIAL APPLE LOAN PROGRAM--Table of Contents




Sec.
773.1 Introduction.
773.2 Definitions.
773.3 Appeals.
773.4-773.5 [Reserved]
773.6 Eligibility requirements.
773.7 Loan uses.
773.8 Limitations.
773.9 Environmental compliance.
773.10 Other Federal, State, and local requirements.
773.11-773.17 [Reserved]
773.18 Loan application.
773.19 Interest rate, terms, security requirements, and repayment.
773.20 Funding applications.
773.21 Loan decision, closing and fees.
773.22 Loan servicing.
773.23 Exception.

    Authority: Pub. L. 106-224.

    Source: 65 FR 76117, Dec. 6, 2000, unless otherwise noted.



Sec. 773.1  Introduction.

    This part contains the terms and conditions for loans made under the 
Special Apple Loan Program. These regulations are applicable to 
applicants, borrowers, and other parties involved in making, servicing, 
and liquidating these loans. The program objective is to assist 
producers of apples suffering from economic loss as a result of low 
apple prices.



Sec. 773.2  Definitions.

    As used in this part, the following definitions apply:
    Agency is the Farm Service Agency, its employees, and any successor 
agency.
    Apple producer is a farmer in the United States or its territories 
that produced apples, on not less than 10 acres, for sale in 1999 or 
2000.
    Applicant is the individual or business entity applying for the 
loan.
    Business entity is a corporation, partnership, joint operation, 
trust, limited liability company, or cooperative.
    Cash flow budget is a projection listing all anticipated cash 
inflows (including all farm income, nonfarm income and all loan 
advances) and all cash outflows (including all farm and nonfarm debt 
service and other expenses) to be incurred by the borrower during the 
period of the budget. A cash flow budget may be completed either for a 
12 month period, a typical production cycle or the life of the loan, as 
appropriate.
    Domestically owned enterprise is an entity organized in the United 
States under the law of the state or states in which the entity operates 
and a majority of the entity is owned by members meeting the citizenship 
test.
    False information is information provided by an applicant, borrower, 
or other source to the Agency which information is known by the provider 
to be incorrect, and was given to the Agency in order to obtain benefits 
for

[[Page 151]]

which the applicant or borrower would not otherwise have been eligible.
    Feasible plan is a plan that demonstrates that the loan will be 
repaid as agreed, as determined by the Agency.
    Security is real or personal property pledged as collateral to 
assure repayment of a loan in the event there is a default on the loan.
    USPAP is Uniform Standards of Professional Appraisal Practice.



Sec. 773.3  Appeals.

    A loan applicant or borrower may request an appeal or review of an 
adverse decision made by the Agency in accordance with 7 CFR part 11.



Sec. Sec. 773.4-773.5  [Reserved]



Sec. 773.6  Eligibility requirements.

    Loan applicants must meet all of the following requirements to be 
eligible for a Special Apple Program Loan:
    (a) The loan applicant must be an apple producer;
    (b) The loan applicant must be a citizen of the United States or an 
alien lawfully admitted to the United States for permanent residence 
under the Immigration and Nationalization Act. For a business entity 
applicant, the majority of the business entity must be owned by members 
meeting the citizenship test or, other entities that are domestically 
owned. Aliens must provide the appropriate Immigration and 
Naturalization Service forms to document their permanent residency;
    (c) The loan applicant and anyone who will execute the promissory 
note must possess the legal capacity to enter into contracts, including 
debt instruments;
    (d) At loan closing the loan applicant and anyone who will execute 
the promissory note must not be delinquent on any Federal debt, other 
than a debt under the Internal Revenue Code of 1986;
    (e) At loan closing the loan applicant and anyone who will execute 
the promissory note must not have any outstanding unpaid judgments 
obtained by the United States in any court. Such judgments do not 
include those filed as a result of action in the United States Tax 
Courts;
    (f) The loan applicant, in past or present dealings with the Agency, 
must not have provided the Agency with false information; and
    (g) The individual or business entity loan applicant and all entity 
members must have acceptable credit history demonstrated by debt 
repayment. A history of failure to repay past debts as they came due 
(including debts to the Internal Revenue Service) when the ability to 
repay was within their control will demonstrate unacceptable credit 
history. Unacceptable credit history will not include isolated instances 
of late payments which do not represent a pattern and were clearly 
beyond the applicant's control or lack of credit history.



Sec. 773.7  Loan uses.

    Loan funds may be used for any of the following purposes related to 
the production or marketing of apples:
    (a) Payment of costs associated with reorganizing a farm to improve 
its profitability;
    (b) Payment of annual farm operating expenses;
    (c) Purchase of farm equipment or fixtures;
    (d) Acquiring, enlarging, or leasing a farm;
    (e) Making capital improvements to a farm;
    (f) Refinancing indebtedness;
    (g) Purchase of cooperative stock for credit, production, processing 
or marketing purposes; or
    (h) Payment of loan closing costs.



Sec. 773.8  Limitations.

    (a) The maximum loan amount any individual or business entity may 
receive under the Special Apple Loan Program is limited to $500,000.
    (b) The maximum loan is further limited to $300 per acre of apple 
trees in production in 1999 or 2000, whichever is greater.
    (c) Loan funds may not be used to pay expenses incurred for lobbying 
or related activities.
    (d) Loans may not be made for any purpose which contributes to 
excessive erosion of highly erodible land or to the conversion of 
wetlands to produce an agricultural commodity.

[[Page 152]]



Sec. 773.9  Environmental compliance.

    (a) Except as otherwise specified in this section, prior to approval 
of any loan, an environmental evaluation will be completed by the Agency 
to determine if the proposed action will have any adverse impacts on the 
human environment and cultural resources. Loan applicants will provide 
all information necessary for the Agency to make its evaluation.
    (b) The following loan actions were reviewed for the purpose of 
compliance with the National Environmental Policy Act (NEPA), 40 CFR 
parts 1500 through 1508, and determined not to have a significant impact 
on the quality of the human environment, either individually or 
cumulatively. Therefore the following loan actions are categorically 
excluded from the requirements of an environmental evaluation:
    (1) Payment of legal costs associated with reorganizing a farm to 
improve its profitability as long as there will be no changes in the 
land's use or character;
    (2) Purchase of farm equipment which will not be affixed to a 
permanent mount or position;
    (3) Acquiring or leasing a farm;
    (4) Refinancing an indebtedness not greater than $30,000;
    (5) Purchase of stock in a credit association or in a cooperative 
which deals with the production, processing or marketing of apples; and
    (6) Payment of loan closing costs.
    (c) The loan actions listed in paragraph (b) of this section were 
also reviewed in accordance with section 106 of the National Historic 
Preservation Act (NHPA). It was determined that these loan actions are 
non-undertakings with no potential to affect or alter historic 
properties and therefore, will not require consultation with the State 
Historic Preservation Officer, Tribal Historic Preservation Officer, or 
other interested parties.
    (d) If adverse environmental impacts, either direct or indirect, are 
identified, the Agency will complete an environmental assessment in 
accordance with the Council on Environmental Quality's Regulations for 
Implementing the Procedural Provisions of NEPA to the extent required by 
law.
    (e) In order to minimize the financial risk associated with 
contamination of real property from hazardous waste and other 
environmental concerns, the Agency will complete an environmental risk 
evaluation of the environmental risks to the real estate collateral 
posed by the presence of hazardous substances and other environmental 
concerns.
    (1) The Agency will not accept real estate as collateral which has 
significant environmental risks.
    (2) If the real estate offered as collateral contains significant 
environmental risks, the Agency will provide the applicant with the 
option of properly correcting or removing the risk, or offering other 
non-contaminated property as collateral.



Sec. 773.10  Other Federal, State, and local requirements.

    Borrowers are required to comply with all applicable:
    (a) Federal, State, or local laws;
    (b) Regulatory commission rules; and
    (c) Regulations which are presently in existence, or which may be 
later adopted including, but not limited to, those governing the 
following:
    (1) Borrowing money, pledging security, and raising revenues for 
repayment of debt;
    (2) Accounting and financial reporting; and
    (3) Protection of the environment.



Sec. Sec. 773.11-773.17  [Reserved]



Sec. 773.18  Loan application.

    (a) A complete application will consist of the following:
    (1) A completed Agency application form;
    (2) If the applicant is a business entity, any legal documents 
evidencing the organization and any State recognition of the entity;
    (3) Documentation of compliance with the Agency's environmental 
regulations contained in 7 CFR part 1940, subpart G;
    (4) A balance sheet on the applicant;
    (5) The farm's operating plan, including the projected cash flow 
budget reflecting production, income, expenses, and loan repayment plan;
    (6) The last 3 years of production and income and expense 
information;

[[Page 153]]

    (7) Payment to the Agency for ordering a credit report; and
    (8) Any additional information required by the Agency to determine 
the eligibility of the applicant, the feasibility of the operation, or 
the adequacy and availability of security.
    (b) Except as required in Sec. 773.19(e), the Agency will waive 
requirements for a complete application, listed in paragraphs (a)(5) and 
(a)(6) of this section, for requests of $30,000 or less.



Sec. 773.19  Interest rate, terms, security requirements, and repayment.

    (a) Interest rate. The interest rate will be fixed for the term of 
the loan. The rate will be established by the Agency and available in 
each Agency Office, based upon the cost of Government borrowing for 
loans of similar maturities.
    (b) Terms. The loan term will be for up to 3 years, based upon the 
useful life of the security offered.
    (c) Security requirements. The Agency will take a lien on the 
following security, if available, as necessary to adequately secure the 
loan:
    (1) Real estate;
    (2) Chattels;
    (3) Crops;
    (4) Other assets owned by the applicant; and
    (5) Assets owned and pledged by a third party.
    (d) Documentation of security value. (1) For loans that are for 
$30,000 or less, collateral value will be based on the best available, 
verifiable information.
    (2) For loans of greater than $30,000 where the applicant's balance 
sheet shows a net worth of three times the loan amount or greater, 
collateral value will be based on tax assessment of real estate and 
depreciation schedules of chattels, as applicable, less any existing 
liens.
    (3) For loans of greater than $30,000 where the applicant's balance 
sheet shows a net worth of less than three times the loan amount, 
collateral value will be based on an appraisal. Such appraisals must be 
obtained by the applicant, at the applicant's expense and acceptable to 
the Agency. Appraisals of real estate must be completed in accordance 
with USPAP.
    (e) Repayment. (1) All loan applicants must demonstrate that the 
loan can be repaid.
    (2) For loans that are for $30,000 or less where the applicant's 
balance sheet shows a net worth of three times the loan amount or 
greater, repayment ability will be considered adequate without further 
documentation.
    (3) For loans that are for $30,000 or less where the applicant's 
balance sheet shows a net worth of less than three times the loan 
amount, repayment ability must be demonstrated using the farm's 
operating plan, including a projected cash flow budget based on 
historical performance. Such operating plan is required notwithstanding 
Sec. 773.18 of this part.
    (4) For loans that are for more than $30,000, repayment ability must 
be demonstrated using the farm's operating plan, including a projected 
cash flow budget based on historical performance.
    (f) Creditworthiness. All loan applicants must have an acceptable 
credit history demonstrated by debt repayment. A history of failure to 
repay past debts as they came due (including debts to the Internal 
Revenue Service) when the ability to repay was within their control will 
demonstrate unacceptable credit history. Unacceptable credit history 
will not include isolated instances of late payments which do not 
represent a pattern and were clearly beyond the applicant's control or 
lack of credit history.



Sec. 773.20  Funding applications.

    Loan requests will be funded based on the date the Agency approves 
the application. Loan approval is subject to the availability of funds.



Sec. 773.21  Loan decision, closing, and fees.

    (a) Loan decision. (1) The Agency will approve a loan if it 
determines that:
    (i) The loan can be repaid;
    (ii) The proposed use of loan funds is authorized;
    (iii) The applicant has been determined eligible;
    (iv) All security requirements have been, or will be met at closing;
    (vi) All other pertinent requirements have been, or will be met at 
closing.

[[Page 154]]

    (2) The Agency will place conditions upon loan approval as necessary 
to protect its interest.
    (b) Loan closing. (1) The applicant must meet all conditions 
specified by the loan approval official in the notification of loan 
approval prior to loan closing;
    (2) There must have been no significant changes in the plan of 
operation or the applicant's financial condition since the loan was 
approved; and
    (2) The applicant will execute all loan instruments and legal 
documents required by the Agency to evidence the debt, perfect the 
required security interest in property securing the loan, and protect 
the Government's interests, in accordance with applicable State and 
Federal laws. In the case of an entity applicant, all officers or 
partners and any board members also will be required to execute the 
promissory notes as individuals.
    (c) Fees. The applicant will pay all loan closing fees including 
credit report fees, fees for appraisals, fees for recording any legal 
instruments determined to be necessary, and all notary, lien search, and 
similar fees incident to loan transactions. No fees will be assessed for 
work performed by Agency employees.



Sec. 773.22  Loan servicing.

    Loans will be serviced in accordance with subpart J of part 1951, or 
its successor regulation, during the term of the loan. If the loan is 
not paid in full during this term, servicing will proceed in accordance 
with Sec. 1951.468 of that part.



Sec. 773.23  Exception.

    The Agency may grant an exception to the security requirements of 
this section, if the proposed change is in the best financial interest 
of the Government and not inconsistent with the authorizing statute or 
other applicable law.



PART 774_Emergency Loan for Seed Producers Program--Table of Contents




Sec.
774.1 Introduction.
774.2 Definitions.
774.3 Appeals.
774.4-774.5 [Reserved]
774.6 Eligibility requirements.
774.7 [Reserved]
774.8 Limitations.
774.9 Environmental requirements.
774.10 Other Federal, State, and local requirements.
774.11-774.16 [Reserved]
774.17 Loan application.
774.18 Interest rate, terms, and security requirements.
774.19 Processing applications.
774.20 Funding applications.
774.21 [Reserved]
774.22 Loan closing.
774.23 Loan servicing.
774.24 Exception.

    Authority: Pub. L. 106-224

    Source: 65 FR 76119, Dec. 6, 2000, unless otherwise noted.



Sec. 774.1  Introduction.

    The regulations of this part contain the terms and conditions under 
which loans are made under the Emergency Loan for Seed Producers 
Program. These regulations are applicable to applicants, borrowers, and 
other parties involved in making, servicing, and liquidating these 
loans. The program objective is to assist certain seed producers 
adversely affected by the bankruptcy filing of AgriBiotech.



Sec. 774.2  Definitions.

    As used in this part, the following definitions apply:
    Agency is the Farm Service Agency, its employees, and any successor 
agency.
    Applicant is the individual or business entity applying for the 
loan.
    Business entity is a corporation, partnership, joint operation, 
trust, limited liability company, or cooperative.
    Domestically owned enterprise is an entity organized in the United 
States under the law of the state or states in which the entity operates 
and a majority of the entity is owned by members meeting the citizenship 
test.
    False information is information provided by an applicant, borrower 
or other source to the Agency that the borrower knows to be incorrect, 
and that the borrower or other source provided in order to obtain 
benefits for which the borrower would not otherwise have been eligible.

[[Page 155]]

    Seed producer is a farmer that produced a 1999 crop of grass, 
forage, vegetable, or sorghum seed for sale to AgriBiotech under 
contract.



Sec. 774.3  Appeals.

    A loan applicant or borrower may request an appeal or review of an 
adverse decision made by the Agency in accordance with 7 CFR part 11.



Sec. Sec. 774.4-774.5  [Reserved]



Sec. 774.6  Eligibility requirements.

    Loan applicants must meet all of the following requirements to be 
eligible under the Emergency Loan for Seed Producers Program;
    (a) The loan applicant must be a seed producer;
    (b) The individual or entity loan applicant must have a timely filed 
proof of claim in the Chapter XI bankruptcy proceedings involving 
AgriBiotech and the claim must have arisen from acontract to grow seeds 
in the United States;
    (c) The loan applicant must be a citizen of the United States or an 
alien lawfully admitted to the United States for permanent residence 
under the Immigration and Nationalization Act. For a business entity 
applicant, the majority of the business entity must be owned by members 
meeting the citizenship test or, other entities that are domestically 
owned. Aliens must provide the appropriate Immigration and 
Naturalization Service forms to document their permanent residency;
    (d) The loan applicant and anyone who will execute the promissory 
note must possess the legal capacity to enter into contracts, including 
debt instruments;
    (e) At loan closing, the applicant and anyone who will execute the 
promissory note must not be delinquent on any Federal debt, other than a 
debt under the Internal Revenue Code of 1986;
    (f) At loan closing, the applicant and anyone who will execute the 
promissory note must not have any outstanding unpaid judgments obtained 
by the United States in any court. Such judgments do not include those 
filed as a result of action in the United States Tax Courts;
    (g) The loan applicant, in past and current dealings with the 
Agency, must not have provided the Agency with false information.



Sec. 774.7  [Reserved]



Sec. 774.8  Limitations.

    (a) The maximum loan amount any individual or business entity may 
receive will be 65% of the value of the timely filed proof of claim 
against AgriBiotech in the bankruptcy proceeding as determined by the 
Agency.
    (b) Loan funds may not be used to pay expenses incurred for lobbying 
or related activities.
    (c) Loans may not be made for any purpose which contributes to 
excessive erosion of highly erodible land or to the conversion of 
wetlands to produce an agricultural commodity.



Sec. 774.9  Environmental requirements.

    The loan actions in this part were reviewed for the purpose of 
compliance with the National Environmental Policy Act (NEPA), 40 CFR 
parts 1500 through 1508, and determined not to have a significant impact 
on the quality of the human environment, either individually or 
cumulatively. These loan actions are categorically excluded from the 
requirements of an environmental evaluation due to the fact that the 
loan funds would be utilized to replace operating capital the applicant 
would have had if AgriBiotech had not filed bankruptcy.



Sec. 774.10  Other Federal, State, and local requirements.

    Borrowers are required to comply with all applicable:
    (a) Federal, State, or local laws;
    (b) Regulatory commission rules; and
    (c) Regulations which are presently in existence, or which may be 
later adopted including, but not limited to, those governing the 
following:
    (1) Borrowing money, pledging security, and raising revenues for 
repayment of debt;
    (2) Accounting and financial reporting; and
    (3) Protection of the environment.

[[Page 156]]



Sec. 774.11-774.16  [Reserved]



Sec. 774.17  Loan application.

    A complete application will consist of the following:
    (a) A completed Agency application form;
    (b) Proof of a bankruptcy claim in the AgriBiotech bankruptcy 
proceedings;
    (c) If the applicant is a business entity, any legal documents 
evidencing the organization and any State recognition of the entity;
    (d) Documentation of compliance with the Agency's environmental 
regulations contained in 7 CFR part 1940, subpart G;
    (e) A balance sheet on the applicant; and
    (f) Any other additional information the Agency needs to determine 
the eligibility of the applicant and the application of any Federal, 
State or local laws.



Sec. 774.18  Interest rate, terms and security requirements.

    (a) Interest rate. (1) The interest rate on the loan will be zero 
percent for 36 months or until the date of settlement of, completion of, 
or final distribution of assets in the bankruptcy proceeding involving 
AgriBiotech, whichever comes first.
    (2) Thereafter interest will begin to accrue at the regular rate for 
an Agency Farm operating-direct loan (available in any Agency office).
    (b) Terms. (1) Loans shall be due and payable upon the earlier of 
the settlement of the bankruptcy claim or 36 months from the date of the 
note.
    (2) However, any principal remaining thereafter will be amortized 
over a term of 7 years at the Farm operating-direct loan interest rate 
(available in any Agency office). If the loan is not paid in full during 
this term and default occurs, servicing will proceed in accordance with 
Sec. 1951.468 of this title.
    (c) Security requirements. (1) The Agency will require a first 
position pledge and assignment of the applicant's monetary claim in the 
AgriBiotech bankruptcy estate to secure the loan.
    (2) If the applicant has seed remaining in their possession that was 
produced under contract to AgriBiotech, the applicant also will provide 
the Agency with a first lien position on this seed. It is the 
responsibility of the applicant to negotiate with any existing 
lienholders to secure the Agency's first lien position.

[65 FR 76119, Dec. 6, 2000, as amended at 68 FR 7696, Feb. 18, 2003]



Sec. 774.19  Processing applications.

    Applications will be processed until such time that funds are 
exhausted, or all claims have been paid and the bankruptcy involving 
AgriBiotech has been discharged. When all loan funds have been exhausted 
or the bankruptcy is discharged, no further applications will be 
accepted and any pending applications will be considered withdrawn.



Sec. 774.20  Funding applications.

    Loan requests will be funded based on the date the Agency approves 
an application. Loan approval is subject to the availability of funds.



Sec. 774.21  [Reserved]



Sec. 774.22  Loan closing.

    (a) Conditions. The applicant must meet all conditions specified by 
the loan approval official in the notification of loan approval prior to 
closing.
    (b) Loan instruments and legal documents. The applicant will execute 
all loan instruments and legal documents required by the Agency to 
evidence the debt, perfect the required security interest in the 
bankruptcy claim, and protect the Government's interest, in accordance 
with applicable State and Federal laws. In the case of an entity 
applicant, all officers or partners and any board members also will be 
required to execute the promissory notes as individuals.
    (c) Fees. The applicant will pay all loan closing fees for recording 
any legal instruments determined to be necessary and all notary, lien 
search, and similar fees incident to loan transactions. No fees will be 
assessed for work performed by Agency employees.



Sec. 774.23  Loan servicing.

    Loans will be serviced in accordance with subpart J of part 1951 of 
this title, or its successor regulation. If the loan

[[Page 157]]

is not repaid as agreed and default occurs, servicing will proceed in 
accordance with section 1951.468 of that part.



Sec. 774.24  Exception.

    The Agency may grant an exception to any of the requirements of this 
section, if the proposed change is in the best financial interest of the 
Government and not inconsistent with the authorizing statute or other 
applicable law.



PART 780_APPEAL REGULATIONS--Table of Contents




Sec.
780.1 General.
780.2 Definitions.
780.3 Reservations of authority.
780.4 Applicability.
780.5 Decisions that are not appealable.
780.6 Appeal procedures available when a decision is appealable.
780.7 Reconsideration.
780.8 County committee appeals.
780.9 Mediation.
780.10 State committee appeals.
780.11 Appeals of NRCS determinations.
780.12 Appeals of penalties assessed under the Agricultural Foreign 
          Investment Disclosure Act of 1978.
780.13 Verbatim transcripts.
780.14 [Reserved]
780.15 Time limitations.
780.16 Implementation of final agency decisions.
780.17 Judicial review.

    Authority: 5 U.S.C. 301 and 574; 7 U.S.C. 6995; 15 U.S.C. 714b and 
714c; 16 U.S.C. 590h.

    Source: 70 FR 43266, July 27, 2005, unless otherwise noted.



Sec. 780.1  General.

    This part sets forth rules applicable to appealability reviews, 
reconsiderations, appeals and alternative dispute resolution procedures 
comprising in aggregate the informal appeals process of FSA. FSA will 
apply these rules to facilitate and expedite participants' submissions 
and FSA reviews of documentary and other evidence material to resolution 
of disputes arising under agency program regulations.



Sec. 780.2  Definitions.

    For purposes of this part:
    1994 Act means the Federal Crop Insurance Reform and Department of 
Agriculture Reorganization Act of 1994 (Pub. L. 103-354).
    Adverse decision means a program decision by an employee, officer, 
or committee of FSA that is adverse to the participant. The term 
includes any denial of program participation, benefits, written 
agreements, eligibility, etc., that results in a participant receiving 
less funds than the participant believes should have been paid or not 
receiving a program benefit to which the participant believes the 
participant was entitled.
    Agency means FSA and its county and State committees and their 
personnel, CCC, NRCS, and any other agency or office of the Department 
which the Secretary may designate, or any successor agency.
    Agency record means all documents and materials maintained by FSA 
that are related to the adverse decision under review that are compiled 
and reviewed by the decision-maker or that are compiled in the record 
provided to the next level reviewing authority.
    Appeal means a written request by a participant asking the next 
level reviewing authority within FSA to review a decision. However, 
depending on the context, the term may also refer to a request for 
review by NAD.
    Appealability review means review of a decision-maker's 
determination that a decision is not appealable under this part. That 
decision is, however, subject to review according to Sec. 780.5 or 7 
CFR part 11 to determine whether the decision involves a factual dispute 
that is appealable or is, instead, an attempt to challenge generally 
applicable program policies, provisions, regulations, or statutes that 
were not appealable.
    Appellant means any participant who appeals or requests 
reconsideration or mediation of an adverse decision in accordance with 
this part or 7 CFR part 11.
    Authorized representative means a person who has obtained a Privacy 
Act waiver and is authorized in writing by a participant to act for the 
participant in a reconsideration, mediation, or appeal.
    CCC means the Commodity Credit Corporation, a wholly owned 
Government corporation within USDA.

[[Page 158]]

    Certified State means, in connection with mediation, a State with a 
mediation program, approved by the Secretary, that meets the 
requirements of 7 CFR part 785.
    Confidential mediation means a mediation process in which neither 
the mediator nor parties participating in mediation will disclose to any 
person oral or written communications provided to the mediator in 
confidence, except as allowed by 5 U.S.C. 574 or 7 CFR part 785.
    County committee means an FSA county or area committee established 
in accordance with section 8(b) of the Soil Conservation and Domestic 
Allotment Act (16 U.S.C. 590h(b)).
    Determination of NRCS means a decision by NRCS made pursuant to 
Title XII of the Food Security Act of 1985 (16 U.S.C. 3801 et seq.), as 
amended.
    FSA means the Farm Service Agency, an agency within USDA.
    Final decision means a program decision rendered by an employee or 
officer of FSA pursuant to delegated authority, or by the county or 
State committee upon written request of a participant. A decision that 
is otherwise final shall remain final unless the decision is timely 
appealed to the State committee or NAD. A decision of FSA made by 
personnel subordinate to the county committee is considered ``final'' 
for the purpose of appeal to NAD only after that decision has been 
appealed to the county committee under the provisions of this part.
    Hearing means an informal proceeding on an appeal to afford a 
participant opportunity to present testimony, documentary evidence, or 
both to show why an adverse decision is in error and why the adverse 
decision should be reversed or modified.
    Implement means the taking of action by FSA, NRCS, or CCC that is 
necessary to effectuate fully and promptly a final decision.
    Mediation means a technique for resolution of disputes in which a 
mediator assists disputing parties in voluntarily reaching mutually 
agreeable settlement of issues within the laws, regulations, and the 
agency's generally applicable program policies and procedures, but in 
which the mediator has no authoritative decision making power.
    Mediator means a neutral individual who functions specifically to 
aid the parties in a dispute during a mediation process.
    NAD means the USDA National Appeals Division established pursuant to 
the 1994 Act.
    NAD rules means the NAD rules of procedure published at 7 CFR part 
11, implementing title II, subtitle H of the 1994 Act.
    Non-certified State means a State that is not approved to 
participate in the certified mediation program under 7 CFR part 785, or 
any successor regulation.
    NRCS means the Natural Resources Conservation Service of USDA.
    Participant means any individual or entity who has applied for, or 
whose right to participate in or receive, a payment, loan, loan 
guarantee, or other benefit in accordance with any program of FSA to 
which the regulations in this part apply is affected by a decision of 
FSA. The term includes anyone meeting this definition regardless of 
whether, in the particular proceeding, the participant is an appellant 
or a third party respondent. The term does not include individuals or 
entities whose claim(s) arise under the programs excluded in the 
definition of ``participant'' published at 7 CFR 11.1.
    Qualified mediator means a mediator who meets the training 
requirements established by State law in the State in which mediation 
services will be provided or, where a State has no law prescribing 
mediator qualifications, an individual who has attended a minimum of 40 
hours of core mediator knowledge and skills training and, to remain in a 
qualified mediator status, completes a minimum of 20 hours of additional 
training or education during each 2-year period. Such training or 
education must be approved by USDA, by an accredited college or 
university, or by one of the following organizations: State Bar of a 
qualifying State, a State mediation association, a State approved 
mediation program, or a society of dispute resolution professionals.
    Reconsideration means a subsequent consideration of a program 
decision by the same level of decision-maker or reviewing authority.

[[Page 159]]

    Reviewing authority means a person or committee assigned the 
responsibility of making a decision on reconsideration or an appeal 
filed by a participant in accordance with this part.
    State committee means an FSA State committee established in 
accordance with Section 8(b) of the Soil Conservation and Domestic 
Allotment Act (16 U.S.C. 590h(b)) including, where appropriate, the 
Director of the Caribbean Area FSA office for Puerto Rico and the Virgin 
Islands.
    State Conservationist means the NRCS official in charge of NRCS 
operations within a State, as set forth in part 600 of this title.
    State Executive Director means the executive director of an FSA 
State office with administrative responsibility for a FSA State office 
as established under the Reorganization Act.
    USDA means the U.S. Department of Agriculture.
    Verbatim transcript means an official, written record of proceedings 
in an appeal hearing or reconsideration of an adverse decision 
appealable under this part.



Sec. 780.3  Reservations of authority.

    (a) Representatives of FSA and CCC may correct all errors in data 
entered on program contracts, loan agreements, and other program 
documents and the results of the computations or calculations made 
pursuant to the contract or agreement. FSA and CCC will furnish 
appropriate notice of such corrections when corrections are deemed 
necessary.
    (b) Nothing contained in this part shall preclude the Secretary, or 
the Administrator of FSA, Executive Vice President of CCC, the Chief of 
NRCS, if applicable, or a designee, from determining at any time any 
question arising under the programs within their respective authority or 
from reversing or modifying any decision made by a subordinate employee 
of FSA or its county and State committees, or CCC.



Sec. 780.4  Applicability.

    (a)(1) Except as provided in other regulations, this part applies to 
decisions made under programs and by agencies, as set forth herein:
    (i) Decisions in programs administered by FSA to make, guarantee or 
service farm loans set forth in chapters VII and XVIII of this title 
relating to farm loan programs;
    (ii) Decisions in those domestic programs administered by FSA on 
behalf of CCC through State and county committees, or itself, which are 
generally set forth in chapters VII and XIV of this title, or in part 
VII relating to conservation or commodities;
    (iii) Appeals from adverse decisions, including technical 
determinations, made by NRCS under title XII of the Food Security Act of 
1985, as amended;
    (iv) Penalties assessed by FSA under the Agricultural Foreign 
Investment Disclosure Act of 1978, 5 U.S.C. 501 et seq.;
    (v) Decisions on equitable relief made by a State Executive Director 
or State Conservationist pursuant to section 1613 of the Farm Security 
and Rural Investment Act of 2002, Pub. L. 107-171; and
    (vi) Other programs to which this part is made applicable by 
specific program regulations or notices in the Federal Register.
    (2) The procedures contained in this part may not be used to seek 
review of statutes or regulations issued under Federal law or review of 
FSA's generally applicable interpretations of such laws and regulations.
    (3) For covered programs, this part is applicable to any decision 
made by an employee of FSA or of its State and county committees, CCC, 
the personnel of FSA, or CCC, and by the officials of NRCS to the extent 
otherwise provided in this part, and as otherwise may be provided in 
individual program requirements or by the Secretary.
    (b) With respect to matters identified in paragraph (a) of this 
section, participants may request appealability review, reconsideration, 
mediation, or appeal under the provisions of this part, of decisions 
made with respect to:
    (1) Denial of participation in a program;
    (2) Compliance with program requirements;
    (3) Issuance of payments or other program benefits to a participant 
in a program; and

[[Page 160]]

    (4) Determinations under Title XII of the Food Security Act of 1985, 
as amended, made by NRCS.
    (c) Only a participant directly affected by a decision may seek 
administrative review under Sec. 780.5(c).



Sec. 780.5  Decisions that are not appealable.

    (a) Decisions that are not appealable under this part shall include 
the following:
    (1) Any general program provision or program policy or any statutory 
or regulatory requirement that is applicable to similarly situated 
participants;
    (2) Mathematical formulas established under a statute or program 
regulation and decisions based solely on the application of those 
formulas;
    (3) Decisions made pursuant to statutory provisions that expressly 
make agency decisions final or their implementing regulations;
    (4) Decisions on equitable relief made by a State Executive Director 
or State Conservationist pursuant to Section 1613 of the Farm Security 
and Rural Investment Act of 2002, Pub. L. 107-171;
    (5) Decisions of other Federal or State agencies;
    (6) Requirements and conditions designated by law to be developed by 
agencies other than FSA.
    (7) Disapprovals or denials because of a lack of funding.
    (8) Decisions made by the Administrator or a Deputy Administrator.
    (b) A participant directly affected by an adverse decision that is 
determined not to be subject to appeal under this part may request an 
appealability review of the determination by the State Executive 
Director of the State from which the underlying decision arose in 
accordance with Sec. 780.15.
    (c) Decisions that FSA renders under this part may be reviewed by 
NAD under part 11 of this title to the extent otherwise allowed by NAD 
under its rules and procedures. An appealability determination of the 
State Executive Director in an administrative review is considered by 
FSA to be a new decision.



Sec. 780.6  Appeal procedures available when a decision is appealable.

    (a) For covered programs administered by FSA for CCC, the following 
procedures are available:
    (1) Appeal to the county committee of decisions of county committee 
subordinates;
    (2) Reconsideration by the county committee;
    (3) Appeal to the State committee;
    (4) Reconsideration by the State committee;
    (5) Appeal to NAD;
    (6) Mediation under guidelines specified in Sec. 780.9.
    (b) For decisions in agricultural credit programs administered by 
FSA, the following procedures are available:
    (1) Reconsideration under Sec. 780.7;
    (2) Mediation under Sec. 780.9;
    (3) Appeal to NAD.
    (c) For programs and regulatory requirements under Title XII of the 
Food Security Act of 1985, as amended, to the extent not covered by 
paragraph (a) of this section, the following procedures are available:
    (1) Appeal to the county committee;
    (2) Appeal to the State committee;
    (3) Mediation under Sec. 780.9;
    (4) Appeal to NAD.



Sec. 780.7  Reconsideration.

    (a) A request for reconsideration must be submitted in writing by a 
participant or by a participant's authorized representative and 
addressed to the FSA decision maker as will be instructed in the adverse 
decision notification.
    (b) A participant's right to request reconsideration is waived if, 
before requesting reconsideration, a participant:
    (1) Has requested and begun mediation of the adverse decision;
    (2) Has appealed the adverse decision to a higher reviewing 
authority in FSA; or
    (3) Has appealed to NAD.
    (c) Provided a participant has not waived the right to request 
reconsideration, FSA will consider a request for reconsideration of an 
adverse decision under these rules except when a request concerns a 
determination of NRCS appealable under the procedures

[[Page 161]]

in Sec. 780.11, the decision has been mediated, the decision has 
previously been reconsidered, or the decision-maker is the 
Administrator, Deputy Administrator, or other FSA official outside FSA's 
informal appeals process.
    (d) A request for reconsideration will be deemed withdrawn if a 
participant requests mediation or appeals to a higher reviewing 
authority within FSA or requests an appeal by NAD before a request for 
reconsideration has been acted upon.
    (e) The Federal Rules of Evidence do not apply to reconsiderations. 
Proceedings may be confined to presentations of evidence to material 
facts, and evidence or questions that are irrelevant, unduly 
repetitious, or otherwise inappropriate may be excluded.
    (f) The official decision on reconsideration will be the decision 
letter that is issued following disposition of the reconsideration 
request.
    (g) A decision on reconsideration is a new decision that restarts 
applicable time limitations periods under Sec. 780.15 and part 11 of 
this title.

[70 FR 43266, July 27, 2005, as amended at 71 FR 30573, May 30, 2006]



Sec. 780.8  County committee appeals.

    (a) A request for appeal to a county committee concerning a decision 
of a subordinate of the county committee must be submitted by a 
participant or by a participant's authorized representative in writing 
and must be addressed to the office in which the subordinate is 
employed.
    (b) The Federal Rules of Evidence do not apply to appeals to a 
county committee. However, a county committee may confine presentations 
of evidence to material facts and may exclude evidence or questions that 
are irrelevant, unduly repetitious, or otherwise inappropriate.
    (c) The official county committee decision on an appeal will be the 
decision letter that is issued following disposition of the appeal.
    (d) Deliberations shall be in confidence except to the extent that a 
county committee may request the assistance of county committee or FSA 
employees during deliberations.



Sec. 780.9  Mediation.

    (a) Any request for mediation must be submitted after issuance of an 
adverse decision but before any hearing in an appeal of the adverse 
decision to NAD.
    (b) An adverse decision and any particular issues of fact material 
to an adverse decision may be mediated only once:
    (1) If resolution of an adverse decision is not achieved in 
mediation, a participant may exercise any remaining appeal rights under 
this part or appeal to NAD in accordance with part 11 of this title and 
NAD procedures.
    (2) If an adverse decision is modified as a result of mediation, a 
participant may exercise any remaining appeal rights as to the modified 
decision under this part or appeal to NAD, unless such appeal rights 
have been waived pursuant to agreement in the mediation.
    (c) Any agreement reached during, or as a result of, the mediation 
process shall conform to the statutory and regulatory provisions 
governing the program and FSA's generally applicable interpretation of 
those statutes and regulatory provisions.
    (d) FSA will participate in mediation in good faith and to do so 
will take steps that include the following:
    (1) Designating a representative in the mediation;
    (2) Instructing the representative that any agreement reached 
during, or as a result of, the mediation process must conform to the 
statutes, regulations, and FSA's generally applicable interpretations of 
statutes and regulations governing the program;
    (3) Assisting as necessary in making pertinent records available for 
review and discussion during the mediation; and
    (4) Directing the representative to forward any written agreement 
proposed in mediation to the appropriate FSA official for approval.
    (e) Mediations will be treated in a confidential manner consistent 
with the purposes of the mediation.
    (f) For requests for mediation in a Certified State, if the factual 
issues implicated in an adverse decision have not previously been 
mediated, notice to a participant of an adverse decision

[[Page 162]]

will include notice of the opportunity for mediation, including a 
mailing address and facsimile number, if available, that the participant 
may use to submit a written request for mediation.
    (1) If the participant desires mediation, the participant must 
request mediation in writing by contacting the certified mediation 
program or such other contact as may be designated by FSA in an adverse 
decision letter. The request for mediation must include a copy of the 
adverse decision to be mediated.
    (2) Participants in mediation may be required to pay fees 
established by the mediation program.
    (3) A listing of certified State mediation programs and means for 
contact may be found on the FSA Web site at http://www.usda.gov/fsa/
disputemediation.htm.
    (g) For requests for mediation in a Non-certified State, if the 
factual issues implicated in an adverse decision have not previously 
been mediated, notice to a participant of an adverse decision will, as 
appropriate, include notice of the opportunity for mediation, including 
the mailing address of the State Executive Director and a facsimile 
number, if available, that the participant may use to submit a written 
request for mediation.
    (1) It is the duty of the participant to contact the State Executive 
Director in writing to request mediation. The request for mediation must 
include a copy of the adverse decision to be mediated.
    (2) If resources are available for mediation, the State Executive 
Director will select a qualified mediator and provide written notice to 
the participant that mediation is available and the fees that the 
participant will incur for mediation.
    (3) If the participant accepts such mediation, FSA may give notice 
of the mediation to interested parties and third parties whose interests 
are known to FSA.
    (h) Mediation will be considered to be at an end on that date set 
out in writing by the mediator or mediation program, as applicable, or 
when the participant receives written notice from the State Executive 
Director that the State Executive Director believes the mediation is at 
an impasse, whichever is earlier.
    (i) To provide for mediator impartiality:
    (1) No person shall be designated as mediator in an adverse program 
dispute who has previously served as an advocate or representative for 
any party in the mediation.
    (2) As a condition of retention to mediate in an adverse program 
dispute under this part, the mediator shall agree not to serve 
thereafter as an advocate or representative for a participant or party 
in any other proceeding arising from or related to the mediated dispute, 
including, without limitation, representation of a mediation participant 
before an administrative appeals entity of USDA, or any other Federal 
Government department.

[70 FR 43266, July 27, 2005, as amended at 71 FR 30573, May 30, 2006]



Sec. 780.10  State committee appeals.

    (a) A request for appeal to the State committee from a decision of a 
county committee must be submitted by a participant or by a 
participant's authorized representative in writing and addressed to the 
State Executive Director.
    (b) A participant's right to appeal a decision to a State committee 
is waived if a participant has appealed the adverse decision to NAD 
before requesting an appeal to the State Committee.
    (c) If a participant requests mediation or requests an appeal to NAD 
before a request for an appeal to the State Committee has been acted 
upon, the appeal to the State Committee will be deemed withdrawn. The 
deemed withdrawal of a participant's appeal to the State Committee will 
not preclude a subsequent request for a State Committee hearing on 
appealable matters not resolved in mediation.
    (d) The Federal Rules of Evidence do not apply in appeals to a State 
committee. Notwithstanding, a State committee may confine presentations 
of evidence to material facts and exclude evidence or questions as 
irrelevant, unduly repetitious, or otherwise inappropriate.

[[Page 163]]

    (e) The official record of a State committee decision on an appeal 
will be the decision letter that is issued following disposition of the 
appeal.
    (f) Deliberations shall be in confidence except to the extent that a 
State committee may request the assistance of FSA employees during 
deliberations.

[70 FR 43266, July 27, 2005, as amended at 71 FR 30573, May 30, 2006]



Sec. 780.11  Appeals of NRCS determinations.

    (a) Notwithstanding any other provision of this part, a 
determination of NRCS issued to a participant pursuant to Title XII of 
the Food Security Act of 1985, as amended, including a wetland 
determination, may be appealed to the county committee in accordance 
with the procedures in this part.
    (b) If the county committee hears the appeal and believes that the 
challenge to the NRCS determination is not frivolous, the county 
committee shall refer the case with its findings on other issues to the 
NRCS State Conservationist to review the determination, or may make such 
a referral in advance of resolving other issues.
    (c) A decision of the county committee not to refer the case with 
its findings to the NRCS State Conservationist may be appealed to the 
State Committee.
    (d) The county or State committee decision must incorporate, and be 
based upon, the results of the NRCS State Conservationist's review and 
subsequent determination.



Sec. 780.12  Appeals of penalties assessed under the Agricultural 
Foreign Investment Disclosure Act of 1978.

    (a) Requests for appeals of penalties assessed under the 
Agricultural Foreign Investment Disclosure Act of 1978 must be addressed 
to: Administrator, Farm Service Agency, Stop 0572, 1400 Independence 
Avenue, SW., Washington, DC 20250-0572.
    (b) Decisions in appeals under this section are not subject to 
reconsideration and are administratively final.



Sec. 780.13  Verbatim transcripts.

    (a) Appellants and their representatives are precluded from making 
any electronic recording of any portion of a hearing or other proceeding 
conducted in accordance with this part. Appellants interested in 
obtaining an official recording of a hearing or other proceeding may 
request a verbatim transcript in accordance with paragraph (b) of this 
section.
    (b) Any party to an appeal or request for reconsideration under this 
part may request that a verbatim transcript be made of the hearing 
proceedings and that such transcript be made the official record of the 
hearing. The party requesting a verbatim transcript shall pay for the 
transcription service, provide a copy of the transcript to FSA free of 
charge, and allow any other party in the proceeding desiring to purchase 
a copy of the transcript to order it from the transcription service.



Sec. 780.14  [Reserved]



Sec. 780.15  Time limitations.

    (a) To the extent practicable, no later than 10 business days after 
an agency decision maker renders an adverse decision that affects a 
participant, FSA will provide the participant written notice of the 
adverse decision and available appeal rights.
    (b) A participant requesting an appealability review by the State 
Executive Director of an agency decision made at the county, area, 
district or State level that is otherwise determined by FSA not to be 
appealable must submit a written request for an appealability review to 
the State Executive Director that is received no later than 30 calendar 
days from the date a participant receives written notice of the 
decision.
    (c) A participant requesting reconsideration, mediation or appeal 
must submit a written request as instructed in the notice of decision 
that is received no later than 30 calendar days from the date a 
participant receives written notice of the decision. A participant that 
receives a determination made under part 1400 of this title will be 
deemed to have consented to an extension of the time limitation for a 
final determination as provided in part 1400 of this title if the 
participant requests mediation.

[[Page 164]]

    (d) Notwithstanding the time limits in paragraphs (b) and (c) of 
this section, a request for an appealability review, reconsideration, or 
appeal may be accepted if, in the judgment of the reviewing authority 
with whom such request is filed, exceptional circumstances warrant such 
action. A participant does not have the right to seek an exception under 
this paragraph. FSA's refusal to accept an untimely request is not 
appealable.
    (e) Decisions appealable under this part are final unless review 
options available under this part or part 11 are timely exercised.
    (1) Whenever the final date for any requirement of this part falls 
on a Saturday, Sunday, Federal holiday, or other day on which the 
pertinent FSA office is not open for the transaction of business during 
normal working hours, the time for submission of a request will be 
extended to the close of business on the next working day.
    (2) The date when an adverse decision or other notice pursuant to 
these rules is deemed received is the earlier of physical delivery by 
hand, by facsimile with electronic confirmation of receipt, actual 
stamped record of receipt on a transmitted document, or 7 calendar days 
following deposit for delivery by regular mail.

[70 FR 43266, July 27, 2005, as amended at 71 FR 30574, May 30, 2006]



Sec. 780.16  Implementation of final agency decisions.

    To the extent practicable, no later than 30 calendar days after an 
agency decision becomes a final administrative decision of USDA, FSA 
will implement the decision.



Sec. 780.17  Judicial review.

    (a) Decisions of the Administrator in appeals under this part from 
Agriculture Foreign Investment Disclosure Act penalties are 
administratively final decisions of USDA.
    (b) The decision of a State Executive Director or State 
Conservationist on equitable relief made under Sec. 718.307 of this 
title is administratively final and also not subject to judicial review.



PART 781_DISCLOSURE OF FOREIGN INVESTMENT IN AGRICULTURAL 
LAND--Table of Contents




Sec.
781.1 General.
781.2 Definitions.
781.3 Reporting requirements.
781.4 Assessment of penalties.
781.5 Penalty review procedure.
781.6 Paperwork Reduction Act assigned number.

    Authority: Sec. 1-10, 92 Stat. 1266 (7 U.S.C. 3501 et seq.).

    Source: 49 FR 35074, Sept. 6, 1984, unless otherwise noted.



Sec. 781.1  General.

    The purpose of these regulations is to set forth the requirements 
designed to implement the Agricultural Foreign Investment Disclosure Act 
of 1978. The regulations require that a foreign person who acquires, 
disposes of, or holds an interest in United States agricultural land 
shall disclose such transactions and holdings to the Secretary of 
Agriculture. In particular, the regulations establish a system for the 
collection of information by the Agricultural Stablization and 
Conservation Service (FSA) pertaining to foreign investment in United 
States agricultural land. The information collected will be utilized in 
the preparation of periodic reports to Congress and the President by the 
Economic Research Service (ERS) concerning the effect of such holdings 
upon family farms and rural communities.



Sec. 781.2  Definitions.

    In determining the meaning of the provisions of this part, unless 
the context indicates otherwise, words importing the singular include 
and apply to several persons or things, words importing the plural 
include the singular, and words used in the present tense include the 
future as well as the present. The following terms shall have the 
following meanings:
    (a) AFIDA. AFIDA means the Agricultural Foreign Investment 
Disclosure Act of 1978.
    (b) Agricultural land. Agricultural land means land in the United 
States used for forestry production and land in the United States 
currently used for,

[[Page 165]]

or, if currently idle, land last used within the past five years, for 
farming, ranching, or timber production, except land not exceeding ten 
acres in the aggregate, if the annual gross receipts from the sale of 
the farm, ranch, or timber products produced thereon do not exceed 
$1,000. Farming, ranching, or timber production includes, but is not 
limited to, activities set forth in the Standard Industrial 
Classification Manual (1987), Division A, exclusive of industry numbers 
0711-0783, 0851, and 0912-0919 which cover animal trapping, game 
management, hunting carried on as a business enterprise, trapping 
carried on as a business enterprise, and wildlife management. Land used 
for forestry production means, land exceeding 10 acres in which 10 
percent is stocked by trees of any size, including land that formerly 
had such tree cover and that will be naturally or artificially 
regenerated.
    (c) Any interest. Any interest means all interest acquired, 
transferred or held in agricultural lands by a foreign person, except:
    (1) Security interests;
    (2) Leaseholds of less than 10 years;
    (3) Contingent future interests;
    (4) Noncontingent future interests which do not become possessory 
upon the termination of the present possessory estate;
    (5) Surface or subsurface easements and rights of way used for a 
purpose unrelated to agricultural production; and
    (6) An interest solely in mineral rights.
    (d) County. County means a political subdivision of a State 
identified as a County or parish. In Alaska, the term means an area so 
designated by the State Agricultural Stabilization and Conservation 
committee.
    (e) Foreign government. Foreign government means any government 
other than the United States government, the government of a State, or a 
political subdivision of a State.
    (f) Foreign individual. Foreign individual means foreign person as 
defined in paragraph (g)(1) of this section.
    (g) Foreign person. Foreign person means:
    (1) Any individual:
    (i) Who is not a citizen or national of the United States; or
    (ii) Who is not a citizen of the Northern Mariana Islands or the 
Trust Territory of the Pacific Islands; or
    (iii) Who is not lawfully admitted to the United States for 
permanent residence or paroled into the United States under the 
Immigration and Nationality Act;
    (2) Any person, other than an individual or a government, which is 
created or organized under the laws of a foreign government or which has 
its principal place of business located outside of all the States;
    (3) Any foreign government;
    (4) Any person, other than an individual or a government:
    (i) Which is created or organized under the laws of any State; and
    (ii) In which a significant interest or substantial control is 
directly or indirectly held:
    (A) By any individual referred to in paragraph (g)(1) of this 
section; or
    (B) By any person referred to in paragraph (g)(2) of this section; 
or
    (C) By any foreign government referred to in paragraph (g)(3) of 
this section; or
    (D) By any numerical combination of such individuals, persons, or 
governments, which combination need not have a common objective.
    (h) Person. Person means any individual, corporation, company, 
association, partnership, society, joint stock company, trust, estate, 
or any other legal entity.
    (i) Secretary. Secretary means the Secretary of Agriculture.
    (j) Security interest. Security interest means a mortgage or other 
debt securing instrument.
    (k) Significant interest of substantial control. Significant 
interest or substantial control means:
    (1) An interest of 10 percent or more held by a person referred to 
in paragraph (g)(4) of this section, by a single individual referred to 
in paragraph (g)(1) of this section, by a single person referred to in 
paragraph (g)(2) of this section, by a single government referred to in 
paragraph (g)(3) of this section; or

[[Page 166]]

    (2) An interest of 10 percent or more held by persons referred to in 
paragraph (g)(4) of this section, by individuals referred to in 
paragraph (g)(1) of this section, by persons referred to in paragraph 
(g)(2) of this section, or by governments referred to in paragraph 
(g)(3) of this section, whenever such persons, individuals, or 
governments are acting in concert with respect to such interest even 
though no single individual, person, or government holds an interest of 
10 percent or more; or
    (3) An interest of 50 percent or more, in the aggregate, held by 
persons referred to in paragraph (g)(4) of this section, by individuals 
referred to in paragraph (g)(1) of this section, by persons referred to 
in paragraph (g)(2) of this section, or by governments referred to in 
paragraph (g)(3) of this section, even though such individuals, persons, 
or governments may not be acting in concert.
    (l) State. State means any of the several States, the District of 
Columbia, the Commonwealth of Puerto Rico, the Northern Mariana Islands, 
Guam, the Virgin Islands, American Samoa, the Trust Territory of the 
Pacific Islands or any other territory or possession of the United 
States.

[49 FR 35074, Sept. 6, 1984, as amended at 58 FR 48274, Sept. 15, 1993]



Sec. 781.3  Reporting requirements.

    (a) All reports required to be filed pursuant to this part shall be 
filed with the FSA County office in the county where the land with 
respect to which such report must be filed is located or where the FSA 
County office administering programs carried out on such land is 
located; Provided, that the FSA office in Washington, DC, may grant 
permission to foreign persons to file reports directly with its 
Washington office when complex filings are involved, such as where the 
land being reported is located in more than one county.
    (b) Any foreign person who held, holds, acquires, or transfers any 
interest in United States agricultural land is subject to the 
requirement of filing a report on form FSA-153 by the following dates:
    (1) August 1, 1979, if the interest in the agricultural land was 
held on the day before February 2, 1979, or
    (2) Ninety days after the date of acquisition or transfer of the 
interest in the agricultural land, if the interest was acquired or 
transferred on or after February 2, 1979.
    (c) Any person who holds or acquires any interest in United States 
agricultural land at a time when such person is not a foreign person and 
who subsequently becomes a foreign person must submit, not later than 90 
days after the date on which such person becomes a foreign person, a 
report containing the information required to be submitted under 
paragraph (e) of this section.
    (d) Any foreign person who holds or acquires any interest in United 
States land at a time when such land is not agricultural land and such 
land subsequently becomes agricultural land must submit, not later than 
90 days after the date on which such land becomes agricultural, a report 
containing the information required to be submitted under paragraph (e) 
of this section.
    (e) Any foreign person required to submit a report under this 
regulation, except under paragraph (g) of this section, shall file an 
FSA-153 report containing the following information:
    (1) The legal name and the address of such foreign person;
    (2) In any case in which such foreign person is an individual, the 
citizenship of such foreign person;
    (3) In any case in which such foreign person is not an individual or 
a government, the nature and name of the person holding the interest, 
the country in which such foreign person is created or organized, and 
the principal place of business of such foreign person;
    (4) The type of interest held by a foreign person who acquired or 
transferred an interest in agricultural land;
    (5) The legal description and acreage of such agricultural land;
    (6) The purchase price paid for, or any other consideration given 
for, such interest; the amount of the purchase price or the value of the 
consideration yet to be given; the current estimated value of the land 
reported;
    (7) In any case in which such foreign person transfers such 
interest, the legal name and the address of the person to whom such 
interest is transferred; and

[[Page 167]]

    (i) In any case in which such transferee is an individual, the 
citizenship of such transferee; and
    (ii) In any case in which such transferee is not an individual, or a 
government, the nature of the person holding the interest, the country 
in which such transferee is created or organized, and the principal 
place of business;
    (8) The agricultural purposes for which such foreign person intends, 
on the date on which such report is submitted, to use such agricultural 
land;
    (9) When applicable, the name, address and relationship of the 
representative of the foreign person who is completing the FSA-153 form 
for the foreign person;
    (10) How the tract of land was acquired or transferred, the 
relationship of the foreign person to the previous owner, producer, 
manager, tenant or sharecropper, and the rental agreement; and
    (11) The date the interest in the land was acquired or transferred.
    (f)(1) Any foreign person, other than an individual or government, 
required to submit a report under paragraphs (b), (c), and (d) of this 
section, must submit, in addition to the report required under paragraph 
(e) of this section, a report containing the following information:
    (i) The legal name and the address of each foreign individual or 
government holding significant interest or substantial control in such 
foreign person;
    (ii) In any case in which the holder of such interest is an 
individual, the citizenship of such holder; and
    (iii) In any case in which the holder of significant interest or 
substantial control in such foreign person is not an individual or a 
government, the nature and name of the foreign person holding such 
interest, the country in which such holder is created or organized, and 
the principal place of business of such holder.
    (2) In addition, any such foreign person required to submit a report 
under paragraph (f)(1) of this section may also be required, upon 
request, to submit a report containing:
    (i) The legal name and the address of each individual or government 
whose legal name and address did not appear on the report required to be 
submitted under paragraph (f)(1) of this section, if such individual or 
government holds any interest in such foreign person:
    (ii) In any case in which the holder of such interest is an 
individual, the citizenship of such holder; and
    (iii) In any case in which the holder of such interest is not an 
individual or a government, the nature and name of the person holding 
the interest, the country in which such holder is created or organized, 
and the principal place of business of such holder.
    (g) Any foreign person, other than an individual or a government, 
whose legal name is contained on any report submitted in satisfaction of 
paragraph (f) of this section may also be required, upon request, to:
    (1) Submit a report containing:
    (i) The legal name and the address of each foreign individual or 
government holding significant interest or substantial control in such 
foreign person;
    (ii) In any case in which the holder of such interest is an 
individual, the citizenship of such holder; and
    (iii) In any case in which the holder of such interest in such 
foreign person is not an individual or a government, the nature and name 
of the foreign person holding such interest, the country in which each 
holder is created or organized, and the principal place of business of 
such holder.
    (2) Submit a report containing:
    (i) The legal name and address of each individual or government 
whose legal name and address did not appear on the report required to be 
submitted under paragraph (g)(1) of this section if such individual or 
government holds any interest in such foreign person and, except in the 
case of a request which involves a foreign person, a report was required 
to be submitted pursuant to paragraph (f)(2) of this section, disclosing 
information relating to nonforeign interest holders;
    (ii) In any case in which the holder of such interest is an 
individual, the citizenship of such holder; and
    (iii) In any case in which the holder of such interest is not an 
individual or government and, except in a situation where the 
information is requested from a foreign person, a report was required to 
be submitted pursuant to

[[Page 168]]

paragraph (f)(2) of this section disclosing information relating to 
nonforeign interest holders, the nature and name of the person holding 
the interest, the country in which such holder is created or organized, 
and the principal place of business of such holder.
    (h)(1) Any person which has issued fewer than 100,000 shares of 
common and preferred stock and instruments convertible into equivalents 
thereof shall be considered to have satisfactorily determined that it 
has no obligation to file a report pursuant to Sec. 781.3 if, in 
addition to information within its knowledge, a quarterly examination of 
its business records fails to reveal that persons with foreign mailing 
addresses hold significant interest or substantial control in such 
person.
    (2) Any person which has issued 100,000 or more shares of common and 
preferred stock and instruments convertible into equivalents thereof 
shall be considerd to have satisfactorily determined that it has no 
obligation to file a report pursuant to Sec. 781.3 if, in addition to 
information within its knowledge, a quarterly examination of its 
business records fails to reveal that the percentage of shares held in 
such person both by persons with foreign mailing addresses and 
investment institutions which manage shares does not equal or exceed 
significant interest or substantial control in such person.
    (3) If the person in paragraph (h)(2) of this section determines 
that the percentage of shares, which is held in it both by persons with 
foreign mailing addresses and investment institutions which manage 
shares, equals or exceeds significant interest or substantial control in 
such persons, then such person shall be considered to have 
satisfactorily attempted to determine whether it has an obligation to 
file a report pursuant to Sec. 781.3 if it sends questionnaires to each 
such investment institution holding an interest in it inquiring as to 
whether the persons for which they are investing are foreign persons and 
the percentage of shares reflected by the affirmative responses from 
each such investment institution plus the percentage of shares held by 
persons listed on the business records with foreign mailing addresses 
does not reveal that foreign persons hold significant interest or 
substantial control in such person.
    (i) Any foreign person, who submitted a report under paragraph (b), 
(c), or (d) of this section at a time when such land was agricultural, 
and such agricultural land later ceases to be agricultural, must submit, 
not later than 90 days after the date on which such land ceases being 
agricultural, a revised report from FSA-153 or a written notification of 
the change of status of the land to the FSA office where the report form 
was originally filed. The report form and notification must contain the 
following information:
    (1) The legal name and the address of such foreign person;
    (2) The legal description, which includes the State and county where 
the land is located, and the acreage of such land;
    (3) The date the land ceases to be agricultural;
    (4) The use of the land while agricultural.
    (j) If any foreign person who submitted a report under paragraph 
(b), (c), or (d) of this section ceases to be a foreign person, such 
person must submit, not later than 90 days after the date such person 
ceases being a foreign person, a written notification of the change of 
status of the person to the FSA office where the report form FSA-153 was 
originally filed. The notification must contain the following 
information:
    (1) The legal name of such person;
    (2) The legal description and acreage of such land;
    (3) The date such person ceases to be foreign.
    (k) Any foreign person who submitted a report under paragraph (b), 
(c), or (d) of this section must submit, not later than 90 days after 
the change of information contained on the report, a written 
notification of the change to the FSA office where the report form FSA-
153 was originally filed. The following information must be kept current 
on the report:
    (1) The legal address of such foreign person;
    (2) The legal name and the address required to be submitted under 
(f)(1) of this section;

[[Page 169]]

    (3) The legal name and the address required to be submitted under 
(g)(1) of this section.

[49 FR 35074, Sept. 6, 1984, as amended at 51 FR 25993, July 18, 1986]



Sec. 781.4  Assessment of penalties.

    (a) Violation of the reporting obligations will consist of:
    (1) Failure to submit any report in accordance with Sec. 781.3;
    (2) Failure to maintain any submitted report with accurate 
information; or
    (3) Submission of a report which the foreign person knows:
    (i) Does not contain, initially or within thirty days from the date 
of a letter returning for completion such incomplete report, all the 
information required to be in such report; or
    (ii) Contains misleading or false information.
    (b) Any foreign person who violates the reporting obligation as 
described in paragraph (a) of this section shall be subject to the 
following penalties:
    (1) Late-filed reports: One-tenth of one percent of the fair market 
value, as determined by the Farm Service Agency, of the foreign person's 
interest in the agricultural land, with respect to which such violation 
occurred, for each week or portion thereof that such violation 
continues, but the total penalty imposed shall not exceed 25 percent of 
the fair market value of the foreign person's interest in such land.
    (2) Submission of an incomplete report or a report containing 
misleading or false information, failure to submit a report or failure 
to maintain a submitted report with accurate information: 25 percent of 
the fair market value, as determined by the Farm Service Agency, of the 
foreign person's interest in the agricultural land with respect to which 
such violation occurred.
    (3) Penalties prescribed above are subject to downward adjustments 
based on factors including:
    (i) Total time the violation existed.
    (ii) Method of discovery of the violation.
    (iii) Extenuating circumstances concerning the violation.
    (iv) Nature of the information misstated or not reported.
    (c) The fair market value for the land, with respect to which such 
violation occurred, shall be such value on the date the penalty is 
assessed, or if the land is no longer agricultural, on the date it was 
last used as agricultural land. The price or current estimated value 
reported by the foreign person, as verified and/or adjusted by the 
County Agricultural Stabilization and Conservation Committee for the 
County where the land is located, will be considered to be the fair 
market value.



Sec. 781.5  Penalty review procedure.

    (a) Whenever it appears that a foreign person has violated the 
reporting obligation as described in paragraph (a) of Sec. 781.4, a 
written notice of apparent liability will be sent to the foreign 
person's last known address by the Farm Service Agency. This notice will 
set forth the facts which indicate apparent liability, identify the type 
of violation listed in paragraph (a) of Sec. 781.4 which is involved, 
state the amount of the penalty to be imposed, include a statement of 
fair market value of the foreign person's interest in the subject land, 
and summarize the courses of action available to the foreign person.
    (b) The foreign person involved shall respond to a notice of 
apparent liability within 60 days after the notice is mailed. If a 
foreign person fails to respond to the notice of apparent liability, the 
proposed penalty shall become final. Any of the following actions by the 
foreign person shall constitute a response meeting the requirements of 
this paragraph.
    (1) Payment of the proposed penalty in the amount specified in the 
notice of apparent liability and filing of a report, if required, in 
compliance with Sec. 781.3. The amount shall be paid by check or money 
order drawn to the Treasurer of the United States and shall be mailed to 
the U.S. Department of Agriculture, P.O. Box 2415, Washington, DC 20013. 
The Department is not responsible for the loss of currency sent through 
the mails.
    (2) Submission of a written statement denying liability for the 
penalty in whole or in part. Allegations made in any such statement must 
be supported by detailed factual data. The

[[Page 170]]

statement should be mailed to the Administrator, Farm Service Agency, 
U.S. Department of Agriculture, P.O. Box 2415, Washington, DC 20013.
    (3) A request for a hearing on the proposed penalty may be filed in 
accordance with part 780 of this title.
    (c) After a final decision is issued pursuant to an appeal under 
part 780 of this title, the Administrator or Administrator's designee 
shall mail the foreign person a notice of the determination on appeal, 
stating whether a report must be filed or amended in compliance with 
Sec. 781.3, the amount of the penalty (if any), and the date by which 
it must be paid. The foreign person shall file or amend the report as 
required by the Administrator. The penalty in the amount stated shall be 
paid by check or money order drawn to the Treasurer of the United States 
and shall be mailed to the United States Department of Agriculture, P.O. 
Box 2415, Washington, DC 20013. The Department is not responsible for 
the loss of currency sent through the mails.
    (d) If the foreign person contests the notice of apparent liability 
by submitting a written statement or a request for a hearing thereon, 
the foreign person may elect either to pay the penalty or decline to pay 
the penalty pending resolution of the matter by the Administrator. If 
the Administrator determines that the foreign person is not liable for 
the penalty or is liable for less than the amount paid, the payment will 
be wholly or proportionally refunded. If the Administrator ultimately 
determines that the foreign person is liable, the penalty finally 
imposed shall not exceed the amount imposed in the notice of apparent 
liability.
    (e) If a foreign person fails to respond to the notice of apparent 
liability as required by paragraph (b) of this section, or fails to pay 
the penalty imposed by the Administrator under paragraph (d) of this 
section, the case will, without further notice, be referred by the 
Department to the Department of Justice for prosecution in the 
appropriate District Court to recover the amount of the penalty.
    (f) Any amounts approved by the U.S. Department of Agriculture for 
disbursement to a foreign person under the programs administered by the 
Department may be setoff against penalties assessed hereunder against 
such person, in accordance with the provisions of 7 CFR part 13.

[49 FR 35074, Sept. 6, 1984, as amended at 60 FR 67318, Dec. 29, 1995]



Sec. 781.6  Paperwork Reduction Act assigned number.

    The information collection requirements contained in these 
regulations (7 CFR part 781) have been approved by the Office of 
Management and Budget (OMB) under the provisions of 44 U.S.C. Chapter 35 
and have been assigned OMB control number 0560-0097.



PART 782_END-USE CERTIFICATE PROGRAM--Table of Contents




                            Subpart A_General

Sec.
782.1 Basis and purpose.
782.2 Definitions.
782.3 Administration.
782.4 OMB control numbers assigned pursuant to the Paperwork Reduction 
          Act.

       Subpart B_Implementation of the End-Use Certificate Program

782.10 Identification of commodities subject to end-use certificate 
          regulations.
782.11 Extent to which commodities are subject to end-use certificate 
          regulations.
782.12 Filing FSA-750, End-Use Certificate for Wheat.
782.13 Importer responsibilities.
782.14 Identity preservation.
782.15 Filing FSA-751, Wheat Consumption and Resale Report.
782.16 Designating end use on form FSA-751.
782.17 Wheat purchased for resale.
782.18 Wheat purchased for export.
782.19 Penalty for noncompliance.

                      Subpart C_Records and Reports

782.20 Importer records and reports.
782.21 End-user and exporter records and reports.
782.22 Subsequent buyer records and reports.
782.23 Failure to file end-use certificates or consumption and resale 
          reports.
782.24 Recordkeeping and examination of records.
782.25 Length of time records are to be kept.

    Authority: 19 U.S.C. 3391(f).

    Source: 60 FR 5089, Jan. 26, 1995, unless otherwise noted.

[[Page 171]]


    Editorial Note: Nomenclature changes to part 782 appear at 61 FR 
32643, June 25, 1996.



                            Subpart A_General



Sec. 782.1  Basis and purpose.

    The regulations contained in this part are issued pursuant to and in 
accordance with Section 321(f) of the North American Free Trade 
Agreement Implementation Act. These regulations govern the establishment 
of the end-use certificate program, the completion of end-use 
certificates, the identification of commodities requiring end-use 
certificates, the submission of reports, and the keeping of records and 
making of reports incident thereto.



Sec. 782.2  Definitions.

    As used in this part and in all instructions, forms, and documents 
in connection therewith, the words and phrases defined in this section 
shall have the meanings herein assigned to them unless the context or 
subject matter requires otherwise. References contained herein to other 
parts of this chapter or title shall be construed as references to such 
parts and amendments now in effect or later issued.
    Date of entry means the effective time of entry of the merchandise, 
as defined in 19 CFR part 101.
    End Use means the actual manner in which Canadian-produced wheat was 
used, including, among other uses, milling, brewing, malting, 
distilling, manufacturing, or export.
    End user means the entity that uses Canadian-produced wheat for, 
among other uses, milling, brewing, malting, distilling, manufacturing, 
or other use, except resale.
    Entity means a legal entity including, but not limited to, an 
individual, joint stock company, corporation, association, partnership, 
cooperative, trust, and estate.
    Entry means that documentation required by 19 CFR part 142 to be 
filed with the appropriate U.S. Customs officer to secure the release of 
imported merchandise from U.S. Customs custody, or the act of filing 
that documentation.
    Grain handler means an entity other than the importer, exporter, 
subsequent buyer, or end user that handles wheat on behalf of an 
importer, exporter, subsequent buyer, or end user.
    Importer means a party qualifying as an Importer of Record pursuant 
to 19 U.S.C. 1484(a).
    Metric ton means a unit of measure that equals 2,204.6 pounds.
    Subsequent buyer means an entity other than the end user or importer 
which owns wheat originating in Canada.
    Workdays means days that the Federal government normally conducts 
business, which excludes Saturdays, Sundays, and Federal holidays.

[60 FR 5089, Jan. 26, 1995, as amended at 61 FR 32643, June 25, 1996; 64 
FR 12885, Mar. 16, 1999]



Sec. 782.3  Administration.

    The end-use certificate program will be administered under the 
general supervision and direction of the Administrator, Farm Service 
Agency (FSA), U.S. Department of Agriculture (USDA), through the Office 
of the Deputy Administrator for Commodity Operations (DACO), FSA, 
Washington, D.C., and the Kansas City Commodity Office (KCCO), FSA, 
Kansas City, MO, in coordination with the Commissioner of Customs 
pursuant to a Memorandum of Understanding.



Sec. 782.4  OMB control numbers assigned pursuant to the Paperwork 
Reduction Act.

    The information collection requirements in this part have been 
approved by the Office of Management and Budget and assigned OMB control 
number 0560-0151.

[61 FR 32643, June 25, 1996]



       Subpart B_Implementation of the End-Use Certificate Program



Sec. 782.10  Identification of commodities subject to end-use certificate
regulations.

    (a) The regulations in this part are applicable to wheat and barley, 
respectively, imported into the U.S. from any foreign country, as 
defined in 19 CFR 134.1, or instrumentality of such foreign country 
that, as of April 8, 1994, required end-use certificates for imports of 
U.S.-produced wheat or barley.

[[Page 172]]

    (b) Because Canada is the only country with such requirements on 
wheat, and no country has an end-use certificate requirement for barley, 
only wheat originating in Canada is affected by the regulations in this 
part.



Sec. 782.11  Extent to which commodities are subject to end-use 
certificate regulations.

    (a) In the event that Canada eliminates the requirement for end-use 
certificates on imports from the U.S., the provisions of the regulations 
in this part shall be suspended 30 calendar days following the date 
Canada eliminates its end-use certificate requirement, as determined by 
the Secretary.
    (b) The provisions of the regulations in this part may be suspended 
if the Secretary, after consulting with domestic producers, determines 
that the program has directly resulted in the:
    (1) Reduction of income to U.S. producers of agricultural 
commodities, or
    (2) Reduction of the competitiveness of U.S. agricultural 
commodities in world export markets.



Sec. 782.12  Filing FSA-750, End-Use Certificate for Wheat.

    (a) Each entity that imports wheat originating in Canada shall, for 
each entry into the U.S., obtain form FSA-750, End-Use Certificate for 
Wheat, from Kansas City Commodity Office, Warehouse Contract Division, 
P.O. Box 419205, Kansas City, MO 64141-6205, and submit the completed 
original form FSA-750 to KCCO within 10 workdays following the date of 
entry or release. Each form FSA-750 shall set forth, among other things, 
the:
    (1) Name, address, and telephone number of the importer,
    (2) Customs entry number,
    (3) Date of entry,
    (4) Importer number,
    (5) Class of wheat being imported,
    (6) Grade, protein content, moisture content, and dockage level of 
wheat being imported,
    (7) If imported as a result of a contract for sale, the date of such 
contract.
    (8) Quantity imported, in net metric tons, rounded to the nearest 
hundredth of a metric ton, per conveyance,
    (9) Storage location of the wheat,
    (10) Mode of transportation and the name of the transportation 
company used to import the wheat, and
    (11) A certification that the identity of the Canadian-produced 
wheat will be preserved until such time as the wheat is either delivered 
to a subsequent buyer or end-user, or loaded onto a conveyance for 
direct delivery to an end user.
    (b) Importers may provide computer generated form FSA-750, provided 
such computer generated forms:
    (1) Are approved in advance by KCCO,
    (2) Contain a KCCO-assigned serial number, and
    (3) Contain all of the information required in paragraphs (a)(1) 
through (a)(9).
    (c) KCCO will accept form FSA-750 submitted through the following 
methods:
    (1) Mail service, including express mail,
    (2) Facsimile machine, and
    (3) Other electronic transmissions, provided such transmissions are 
approved in advance by KCCO. The importer remains responsible for 
ensuring that electronically transmitted forms are received in 
accordance with paragraph (a).
    (d) The original form FSA-750 and one copy of form FSA-750 shall be 
signed and dated by the importer.
    (e) Distribution of form FSA-750 will be as follows:
    (1) If form FSA-750 is submitted to KCCO in accordance with 
paragraph (c)(1);
    (i) The original shall be forwarded to Kansas City Commodity Office, 
Warehouse License and Contract Division, P.O. Box 419205, Kansas City, 
MO 64141-6205, by the importer,
    (ii) One copy shall be retained by the importer.
    (2) If form FSA-750 is submitted to KCCO in accordance with 
paragraphs (c)(2) or (c)(3), the original form FSA-750 that is signed 
and dated by the importer in accordance with paragraph (d) shall be 
maintained by the importer,
    (3) The importer shall provide a photocopy to the end user or, if 
the wheat is purchased for purposes of resale, the subsequent buyer(s).

[[Page 173]]

    (f) The completion and filing of an end-use certificate does not 
relieve the importer of other legal requirements, such as those imposed 
by other U.S. agencies, pertaining to the importation.

[60 FR 5089, Jan. 26, 1995, as amended at 61 FR 32643, June 25, 1996; 64 
FR 12885, Mar. 16, 1999]



Sec. 782.13  Importer responsibilities.

    The importer shall:
    (a) File form FSA-750 in accordance with Sec. 782.12.
    (b) Immediately notify each subsequent buyer, grain handler, or end 
user that the wheat being purchased or handled originated in Canada and 
may only be commingled with U.S.-produced wheat by the end user or when 
loaded onto a conveyance for direct delivery to the end user or a 
foreign country.
    (c) Provide each subsequent buyer or end user with a copy of form 
FSA-750 that was filed when the Canadian wheat entered the U.S.
    (d) Submit to KCCO, within 15 workdays following the date of sale, 
form FSA-751, Wheat Consumption and Resale Report, in accordance with 
Sec. 782.15.

[60 FR 5089, Jan. 26, 1995, as amended at 61 FR 32643, June 25, 1996]



Sec. 782.14  Identity preservation.

    (a) The importer and all subsequent buyers of the imported wheat 
shall preserve the identity of the Canadian-produced wheat.
    (b) Canadian-produced wheat may only be commingled with U.S.-
produced wheat by the end user, or when loaded onto a conveyance for 
direct delivery to the end user or foreign country.
    (c) Failure to meet the requirements in paragraphs (a) and (b) of 
this section shall constitute noncompliance by the importer or 
subsequent buyer for the purposes of this part.



Sec. 782.15  Filing FSA-751, Wheat Consumption and Resale Report.

    (a) For purposes of providing information relating to the 
consumption and resale of Canadian-produced wheat, form FSA-751, Wheat 
Consumption and Resale Report, shall be filed with KCCO by each:
    (1) Importer and subsequent buyer, for each sale to a subsequent 
buyer or end user, within 15 workdays following the date of sale.
    (2) End user and exporter, for full and partial consumption or 
export, within 15 workdays following:
    (i) March 31,
    (ii) June 30,
    (iii) September 30, and
    (iv) December 31.
    (b) Each form FSA-751 shall set forth, among other things, the:
    (1) Name, address, and telephone number of the filer,
    (2) Storage location of the wheat,
    (3) Name and address of the importer,
    (4) Form FSA-750, End-Use Certificate for Wheat, serial number,
    (5) Class of wheat,
    (6) Date the wheat was received at the filer's facility,
    (7) Quantity of wheat received, in net metric tons, rounded to the 
nearest hundredth of a metric ton,
    (8) Certification to be completed by end users and exporters that 
requires the end user or exporter to provide, among other things:
    (i) A certification of compliance with these regulations,
    (ii) The quantity consumed or exported,
    (iii) The quantity remaining,
    (iv) The manner in which the commodity was used.
    (v) The signature of an authorized representative of the end user or 
exporter.
    (9) Certification to be completed by subsequent buyers and importers 
that requires the subsequent buyer or importer to provide, among other 
things:
    (i) A certification of compliance with the regulations in this part,
    (ii) The quantity resold,
    (iii) The name, address, and telephone number of the buyer, and
    (iv) The signature of an authorized representative of the subsequent 
buyer or importer.
    (c) End user and exporter shall submit form FSA-751 to KCCO 
quarterly until the wheat has been fully utilized or exported in 
accordance with the regulations in this part.

[[Page 174]]

    (d) Importers and subsequent buyers shall, for each individual sale, 
submit form FSA-751 to KCCO until the imported wheat has been fully 
resold.
    (e) Filers may provide computer generated form FSA-751, provided 
such computer generated forms:
    (1) Are approved in advance by KCCO, and
    (2) Contain the information required in paragraphs (b)(1) through 
(b)(9) of this section.
    (f) KCCO will accept form FSA-751 submitted through the following 
methods:
    (1) Mail service, including express mail,
    (2) Facsimile machine, and
    (3) Other electronic transmissions, provided such transmissions are 
approved in advance by KCCO. The importer, end user, exporter, or 
subsequent buyer remains responsible for ensuring that electronically 
transmitted forms are received in accordance with this section.
    (g) Distribution of form FSA-751 will be as follows:
    (1) If form FSA-751 is submitted to KCCO in accordance with 
paragraph (f)(1) of this section:
    (i) The original shall be forwarded to Kansas City Commodity Office, 
Warehouse License and Contract Division, P.O. Box 419205, Kansas City, 
MO 64141-6205, by the importer, end user, exporter, or subsequent buyer.
    (ii) One copy shall be retained by the importer, end user, exporter, 
or subsequent buyer.
    (2) If form FSA-751 is submitted to KCCO in accordance with 
paragraphs (f)(2) or (f)(3) of this section, the original form FSA-751 
shall be maintained by the importer, end user, exporter, or subsequent 
buyer.

[60 FR 5089, Jan. 26, 1995, as amended at 61 FR 32643, June 25, 1996]



Sec. 782.16  Designating end use on form FSA-751.

    (a) If the end use specified on the applicable form FSA-751, Wheat 
Consumption and Resale Report, is ``export,'' the exporter must specify 
the final destination, by country, on form FSA-751.
    (b) If the end user utilizes the wheat for purposes other than 
milling, brewing, malting, distilling, export, or manufacturing, such 
use must be specifically designated on form FSA-751.



Sec. 782.17  Wheat purchased for resale.

    (a) This section applies to an importer or subsequent buyer who 
imports or purchases Canadian-produced wheat for the purpose of 
reselling the wheat.
    (b) The importer or subsequent buyer shall immediately notify each 
subsequent buyer, grain handler, exporter, or end user that the wheat 
being purchased or handled originated in Canada and may only be 
commingled with U.S.-produced wheat by the end user or when loaded onto 
a conveyance for direct delivery to the end user or a foreign country.
    (c) The importer or subsequent buyer shall provide all purchasers of 
Canadian-produced wheat with a photocopy of the form FSA-750 submitted 
to KCCO by the importer in accordance with Sec. 782.12(a).

[60 FR 5089, Jan. 26, 1995, as amended at 61 FR 32643, June 25, 1996]



Sec. 782.18  Wheat purchased for export.

    (a) This section applies to an importer or subsequent buyer who 
imports or purchases Canadian-produced wheat for the purpose of export 
to a foreign country or instrumentality.
    (b) Wheat that is purchased for the purpose of export must be stored 
identity preserved while the importer or subsequent buyer maintains 
control of the wheat, except that such wheat may be commingled when 
loaded onto a conveyance for delivery to the foreign country or 
instrumentality.
    (c) Importers or subsequent buyers that purchase wheat for export to 
a foreign country or instrumentality must complete form FSA-751 
quarterly, in accordance with Sec. 782.15.



Sec. 782.19  Penalty for noncompliance.

    It shall be a violation of 18 U.S.C. 1001 for any entity to engage 
in fraud with respect to, or to knowingly violate, the provisions set 
forth in this part.

[[Page 175]]



                      Subpart C_Records and Reports



Sec. 782.20  Importer records and reports.

    (a) The importer shall retain a copy of each form:
    (1) FSA-750, End-Use Certificate for Wheat, that is submitted to 
KCCO in accordance with Sec. 782.12(a); and
    (2) FSA-751, Wheat Consumption and Resale Report, that is submitted 
to KCCO in accordance with Sec. 782.15(a)(1).
    (b) The importer shall maintain records to verify that the wheat was 
identity preserved until such time as the wheat was:
    (1) Loaded onto the conveyance for direct delivery to an end user, 
or
    (2) Delivered to an end user, or
    (3) Delivered to a subsequent buyer.
    (c) Copies of the documents, information, and records required in 
paragraphs (a) and (b) of this section shall be kept on file at the 
importer's headquarters office or other location designated by the 
importer for the period specified in Sec. 782.25.



Sec. 782.21  End-user and exporter records and reports.

    (a) The end user or exporter shall retain a copy of each form FSA-
751, Wheat Consumption and Resale Report, that is filed with KCCO in 
accordance with Sec. 782.15(a)(2).
    (b) The end user or exporter shall retain a copy of each form FSA-
750, End-Use Certificate for Wheat, provided to the end-user or exporter 
in accordance with Sec. 782.17(b).
    (c) The exporter shall maintain records to verify that wheat 
purchased for the purpose of export was stored identity preserved until 
such time as the wheat was loaded onto a conveyance for delivery to the 
foreign country or instrumentality.
    (d) Copies of the documents required in paragraphs (a), (b), and (c) 
of this section shall be kept on file at the end-user's or exporter's 
headquarters office or other location designated by the end user or 
exporter for the period specified in Sec. 782.25.



Sec. 782.22  Subsequent buyer records and reports.

    (a) The subsequent buyer shall retain a copy of each form FSA-751, 
Wheat Consumption and Resale Report, that is filed with KCCO in 
accordance with Sec. 782.15(a)(1).
    (b) The subsequent buyer shall retain a copy of each form FSA-750, 
End-Use Certificate for Wheat, provided to the subsequent buyer in 
accordance with Sec. 782.17(b).
    (c) The subsequent buyer shall maintain records to verify that the 
wheat specified on the end-use certificate was identity preserved during 
the time that the subsequent buyer maintained control of the wheat, or 
until the wheat was loaded onto a conveyance for direct delivery to an 
end user.
    (d) Copies of the documents and records required in paragraphs (a) 
through (c) of this section shall be kept on file at the subsequent 
buyer's headquarters office or other location designated by the 
subsequent buyer for the period specified in Sec. 782.25.



Sec. 782.23  Failure to file end-use certificates or consumption 
and resale reports.

    Failure by importers, end users, exporters, and subsequent buyers to 
file form FSA-750, End-Use Certificate for Wheat, and form FSA-751, 
Wheat Consumption and Resale Report, as applicable, and retain or 
maintain related copies and records shall constitute noncompliance for 
the purposes of Sec. 782.19.



Sec. 782.24  Recordkeeping and examination of records.

    (a) Examination. For the purpose of verifying compliance with the 
requirements of this part, each importer, end-user, exporter, and 
subsequent buyer shall make available at one place at all reasonable 
times for examination by representatives of USDA, all books, papers, 
records, contracts, scale tickets, settlement sheets, invoices, written 
price quotations, or other documents related to the importation of the 
Canadian-produced wheat that is within the control of such entity.
    (b) Orderly retention of records. To facilitate examination and 
verification of the records and reports required by this part, copies of 
form FSA-750, End-Use Certificate for Wheat, and form FSA-751, Wheat 
Consumption and Resale Report, shall be filed in an orderly manner, and 
must be made available

[[Page 176]]

for inspection by representatives of USDA.



Sec. 782.25  Length of time records are to be kept.

    The records required to be kept under this part shall be retained 
for 3 years following the filing date of the applicable record. Records 
shall be kept for such longer period of time as may be requested in 
writing by USDA representatives.



PART 783_TREE ASSISTANCE PROGRAM--Table of Contents




Sec.
783.1 Applicability.
783.2 Administration.
783.3 Definitions.
783.4 Eligibility.
783.5 Application.
783.6 Benefits.
783.7 Obligations of a participant.
783.8 Multiple benefits.
783.9 Miscellaneous.

    Authority: 7 U.S.C. 8201 et seq.

    Source: 69 FR 9745, Mar. 2, 2004, unless otherwise noted.



Sec. 783.1  Applicability.

    This part governs and provides the requirements and authorities for 
administration of the Tree Assistance Program (TAP) of the Farm Service 
Agency. This program shall operate only to the extent funds are 
appropriated for this program. Payments will be limited to lost eligible 
trees, bushes or vines, and all claims are subject to the availability 
of funds.



Sec. 783.2  Administration.

    (a) The program will be administered under the general supervision 
and direction of the Administrator, Farm Service Agency (FSA), and the 
Deputy Administrator for Farm Programs, FSA. In the field, the 
regulations in this part will be administered by the FSA 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 the 
regulations of this part 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 Deputy Administrator, FSA, 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 non-statutory requirements in cases where lateness or failure to 
meet such other requirements does not adversely affect operation of the 
program.
    (f) Data furnished by the applicants will be used to determine 
eligibility for program benefits. Although participation in TAP is 
voluntary, program benefits will not be provided unless the participant 
furnishes all requested data.



Sec. 783.3  Definitions.

    (a) The definitions in part 718 of this chapter apply to TAP except 
when they conflict with paragraph (b) of this section.
    (b) The following definitions apply to TAP:
    Cutting means a vine, which was planted in the ground for commercial 
production of grapes, kiwi fruit, or passion fruit or similar fruit as 
approved by the Deputy Administrator.
    County office means the FSA or USDA Service Center that is 
responsible for servicing the farm on which the trees, bushes or vines 
are located.
    Deputy Administrator means the Deputy Administrator for Farm 
Programs, FSA, or a designee.
    Eligible bush means, a low, branching, woody plant from which an 
annual fruit or vegetable crop is produced for commercial purposes, such 
as a blueberry bush.

[[Page 177]]

    Eligible orchardist means an individual, or legal entity, including 
an Indian tribe as defined under the Indian Self-Determination and 
Education Assistance Act; an Indian organization or entity chartered 
under the Indian Reorganization Act; a tribal organization as defined 
under the Indian Self-Determination Education and Assistance Act; or, an 
economic enterprise as defined under the Indian Financing Act of 1974, 
which owns a tree, bush or vine as defined in this part.
    Eligible tree means, a tall, woody plant having comparatively great 
height, as determined by the Deputy Administrator, and a single trunk 
from which an annual crop is produced for commercial purposes, such as 
maple tree for syrup, papaya tree, or orchard tree. Plantain and banana 
plants are also included. Trees used for pulp or timber are not 
considered eligible trees under this part.
    Eligible vine means a plant with a flexible stem supported by 
climbing, twining, or creeping along a surface and from which an annual 
fruit or vegetable crop is produced for commercial purposes, such as 
grape, kiwi fruit, or passion fruit.
    Individual stand means an area of trees, bushes or vines that are 
tended by an owner as a single operation, whether or not such trees, 
bushes or vines are planted in the same field or similar location. 
Trees, bushes or vines in the same field or similar area may be 
considered separate individual stands if the county committee determines 
that the trees, bushes or vines are susceptible to losses at 
significantly differing levels.
    Lost means with respect to the extent of damage to a tree or other 
plant that the damage is such that it would, as determined by FSA, be 
more economically beneficial to replace the plant rather than to leave 
it in its deteriorated, low producing state.
    Natural disaster means plant disease, insect infestation, drought, 
fire, freeze, flood, earthquake, lightning, or other natural occurrence 
of such magnitude or severity so as to be considered disastrous, as 
determined by FSA.
    Normal mortality means the percentage, as established by the State 
Committee, of lost trees, bushes or vines in the individual stand that 
normally occurs in a 12-month period.
    Program year means a calendar year for which funding is available.
    Seedling means a tree, bush or vine which was planted in the ground 
for commercial purposes.



Sec. 783.4  Eligibility.

    (a) To be considered an eligible loss:
    (1) Eligible trees, bushes or vines must have been located and lost 
as a result of natural disasters determined and announced by FSA as set 
forth in the TAP application.
    (2) The individual stand must have sustained a loss in excess of 15 
percent after adjustment for normal mortality;
    (3) The loss could not have been prevented through reasonable and 
available measures; and
    (4) The tree, bush or vine, in the absence of a qualifying disaster, 
would not normally have been rehabilitated or replanted within the 12-
month period following the loss.
    (b)(1) The damage must be visible and obvious to the county 
committee except that if the damage is no longer visible, the county 
committee may accept other evidence of the loss as it determines is 
reasonable.
    (2) The county committee may require information from an expert in 
the case of plant disease or insect infestation.
    (c)(1) To be eligible for TAP benefits the eligible orchardist must:
    (i) Own the stand on which the claim for benefits is based;
    (ii) Have owned the stand at the time the natural disaster occurred;
    (iii) Have continuously owned the stand until the TAP application is 
submitted; and
    (iv) Not exceed or be in violation of any other limitations on 
payments.
    (2) Federal, State, and local governments and agencies and political 
subdivisions thereof are not eligible for benefits under this part.
    (d)(1) A new owner of an orchard is allowed to receive TAP benefits 
in an amount not to exceed those approved for the predecessor owner of 
the orchard and not paid to the predecessor owner, if the predecessor 
owner of the orchard agrees to the succession in writing and if the new 
owner:

[[Page 178]]

    (i) Acquires ownership of trees, bushes or vines for which benefits 
have been approved;
    (ii) Agrees to complete all approved practices which the original 
owner has not completed; and
    (iii) Otherwise meets and assumes full responsibility for all 
provisions of this part, including refund of payments made to the 
previous owner, if applicable.
    (2) In the case of death, incompetence or disappearance of an 
eligible orchardist, successors may be eligible to receive TAP payments 
as specified in part 707 of this chapter.



Sec. 783.5  Application.

    (a) A complete application for TAP benefits and related supporting 
documentation must be submitted to the county office prior to the 
deadline FSA announces.
    (b) A complete application includes all of the following:
    (1) A form provided by FSA;
    (2) A written estimate of the number of trees, bushes or vines lost 
or damaged which is prepared by the owner or someone who is a qualified 
expert, as determined by the county committee;
    (3) The number of acres on which the loss was suffered; and
    (4) Sufficient evidence of the loss to allow the county committee to 
calculate whether an eligible loss occurred.
    (c) Before requests will be approved, the county committee:
    (1) Must make recommendations and an eligibility determination based 
on a complete application on those requests that it wants to refer to a 
higher approval official.
    (2) Must verify actual qualifying losses and the number of acres 
involved by on-site visual inspection of the land and trees, bushes or 
vines.
    (3) May request additional information and may consider all relevant 
information in making its determination, including its members own 
knowledge about the applicant's normal operations.



Sec. 783.6  Benefits.

    (a) Subject to the availability of TAP funds, an approved eligible 
orchardist shall be reimbursed in an amount not to exceed 75 percent of 
the eligible costs for the qualifying loss (that loss over and above the 
calculated 15% mortality). The payment shall be the lesser of the 75% of 
actual costs for the replanting or the amount calculated using rates 
established by the State committee (not to exceed the maximum amount the 
Deputy Administrator establishes). The costs permitted shall only be 
approved for:
    (1) Seedlings or cuttings, for tree, bush or vine replanting;
    (2) Site preparation and debris handling within normal cultural 
practices for the type of individual stand being re-established and 
necessary to ensure successful plant survival;
    (3) Chemicals and nutrients necessary for successful establishment;
    (4) Labor to plant seedlings or cuttings as determined reasonable by 
the county committee; and
    (5) Labor used to transplant existing seedlings established through 
natural regeneration into a productive tree stand.
    (b) Costs for fencing, irrigation, irrigation equipment, protection 
of seedlings from wildlife, general improvements, re-establishing 
structures, windscreens and other costs as determined by the Deputy 
Administrator are not eligible for reimbursement benefits.
    (c) When lost stands are replanted, the types planted may be 
different than those originally planted if the new types have the same 
general end use, as the county committee determines and approves. 
Payments will be based on the lesser of rates established to plant the 
types actually lost or the cost to establish the alternative used. If 
the species of plantings, seedlings or cuttings differs significantly 
from the species lost then, except as the county committee determines, 
the costs may not be reimbursed.
    (d) Eligible orchardists may elect not to replant the entire 
eligible stand. If so, the county committee shall calculate payment 
based on the number of qualifying trees, bushes or vines actually 
replanted.
    (e) The cumulative total quantity of acres planted to trees, bushes 
or vines

[[Page 179]]

for which a person may receive assistance at any time under this part 
shall not exceed 500 acres.
    (f) The cumulative amount of TAP benefits which any person, as 
defined in accordance with part 1400 of this title, may receive under 
this part shall not exceed $75,000.
    (g) In the event the total amount of claims submitted under this 
part during a sign-up period exceeds the applicable funds available for 
such period, such payments shall be reduced by a uniform national 
percentage or by such other method deemed appropriate by the Deputy 
Administrator. Such payment reductions shall be applied after the 
imposition of applicable payment limitation provisions.



Sec. 783.7  Obligations of a participant.

    (a) Eligible orchardists must execute all required documents and 
complete the TAP funded practice within 12 months of application 
approval.
    (b) If a person was erroneously determined to be eligible or becomes 
ineligible for all or part of a TAP benefit, the person and successor 
shall refund any payment paid under this part together with interest 
from the date of disbursement at a rate in accordance with part 1403 of 
this title.
    (c) Participants must allow representatives of FSA to visit the site 
for the purposes of certifying compliance with TAP requirements.



Sec. 783.8  Multiple benefits.

    Persons may not receive or retain payments for production losses 
from trees, vines and bushes under this part if they have been 
compensated under another program for the same loss. However, this 
restriction does not apply to emergency Federal loans or payments 
resulting from purchase of the additional coverage insurance, as defined 
in 7 CFR 400.651. However, in no case shall the total amount received 
from all sources exceed the amount of the owner's actual loss, unless 
the Deputy Administrator shall approve an exemption in writing.



Sec. 783.9  Miscellaneous.

    (a) Any payment or portion thereof due any person under this part 
shall be allowed without regard to questions of title under State law, 
and without regard to any claim or lien in favor of any person except 
agencies of the U.S. Government.
    (b) Persons shall be ineligible to receive or retain assistance 
under this program if they have:
    (1) Adopted any scheme or device intended to defeat the purpose of 
this program;
    (2) Made any fraudulent representation; or
    (3) Misrepresented any fact affecting a program determination.
    (c) TAP benefits paid to a person as a result of misrepresentation 
shall be refunded to FSA with interest and costs of collection. The 
party engaged in acts prohibited by this part and the party receiving 
payment and their successors shall be jointly and severally liable for 
any amount due. The remedies provided to FSA in this part shall be in 
addition to other civil, criminal, or administrative remedies which may 
apply.
    (d) 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.
    (e) A minor who is an owner that has met all other eligibility 
criteria shall be eligible for TAP assistance if:
    (1) The minor establishes that the right of majority has been 
conferred on the minor by court proceedings or by statute; or
    (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.
    (f) The regulations regarding reconsideration's and appeals at part 
11 of this title and part 780 of this chapter apply to this part.



PART 784_2004 EWE LAMB REPLACEMENT AND RETENTION PAYMENT 
PROGRAM--Table of Contents




Sec.
784.1 Applicability.
784.2 Administration.
784.3 Definitions.

[[Page 180]]

784.4 Time and method of application.
784.5 Payment eligibility.
784.6 Rate of payment and limitations on funding.
784.7 Availability of funds.
784.8 Appeals.
784.9 Misrepresentation and scheme or device.
784.10 Estates, trusts, and minors.
784.11 Death, incompetence, or disappearance.
784.12 Maintaining records.
784.13 Refunds; joint and several liability.
784.14 Offsets and withholdings.
784.15 Assignments.
784.16 Termination of program.

    Authority: Clause (3) of section 32 of the Act of August 24, 1935, 
as amended; 7 U.S.C. 612c.

    Source: 69 FR 76837, Dec. 23, 2004, unless otherwise noted.



Sec. 784.1  Applicability.

    (a) Subject to the availability of funds, this part establishes 
terms and conditions under which the 2004 Ewe Lamb Replacement and 
Retention Payment Program will be administered.
    (b) Unless otherwise determined by the Farm Service Agency (FSA) in 
accordance with the provisions of this part, the amount that may be 
expended under this part for program payments shall not exceed $18 
million. Claims that exceed that amount will be prorated in accordance 
with Sec. 784.7.
    (c) To be eligible for payments, producers must comply with all 
provisions of this part and with any other conditions imposed by FSA.



Sec. 784.2  Administration.

    (a) This part shall be administered by FSA under the general 
direction and supervision of the Deputy Administrator for Farm Programs, 
FSA. The program shall be carried out in the field by FSA State and 
county committees (State and county committees) in accordance with their 
assigned duties and the regulations of this part.
    (b) The Deputy Administrator for Farm Programs, FSA, or a designee, 
may reverse or modify a determination made by a State or county 
committee.
    (c) The Deputy Administrator for Farm Programs, FSA, may waive or 
modify deadlines and other program requirements in cases where 
timeliness or failure to meet such other requirements does not adversely 
affect the operation of the program.
    (d) The program described under this part is a one-time program to 
be administered with respect to eligibility and qualifying factors 
occurring during or related to the base period of August 1, 2003 through 
July 31, 2004, as specified in this part.



Sec. 784.3  Definitions.

    The definitions in this section shall apply to the 2004 Ewe Lamb 
Replacement and Retention Payment Program and this part.
    Agricultural Marketing Service or AMS means the Agricultural 
Marketing Service of the Department.
    Application means the Ewe Lamb Replacement and Retention Payment 
Program Application.
    Application period means the date established by the Deputy 
Administrator for producers to apply for program benefits. Unless 
otherwise announced, that period will end January 13, 2005.
    Base period means the period from August 1, 2003, through July 31, 
2004, during and after which ewe lambs must meet all qualifying 
eligibility criteria.
    Ewe lamb means a female lamb no more than 18 months of age that has 
not produced an offspring.
    Farm Service Agency or FSA means the Farm Service Agency of the 
Department.
    Foot rot means an infectious, contagious disease of sheep that 
causes severe lameness and economic loss from decreased flock 
production.
    Lambing cycle means the period of time from birth to weaning.
    Parrot mouth means a genetic defect resulting in the failure of the 
incisor teeth to meet the dental pad correctly.
    Person means any individual, group of individuals, partnership, 
corporation, estate, trust, association, cooperative, or other business 
enterprise or other legal entity who is, or whose members are, a citizen 
or citizens of, or legal resident alien or aliens in the United States.
    Sheep and lamb operation means any self-contained, separate 
enterprise operated as an independent unit exclusively within the United 
States in which a person or group of persons raise sheep and/or lambs.

[[Page 181]]

    United States means the 50 States of the United States of America, 
the District of Columbia, and the Commonwealth of Puerto Rico.



Sec. 784.4  Time and method of application.

    (a) A request for benefits under this part must be submitted on the 
Ewe Lamb Replacement and Retention Program Application. The application 
form may be obtained in person, by mail, by telephone, or by facsimile 
from any county FSA office. In addition, applicants may download a copy 
of the form at http://www.usda.gov/dafp/psd/.
    (b) The form may be obtained from and must be submitted to the FSA 
county office serving the county where the sheep and lamb operation is 
located. The completed form must be received by the FSA county office by 
the date established by FSA. Applications not received by that date will 
be disapproved and returned as not having been timely filed and the 
sheep and lamb operation filing the application will not be eligible for 
benefits under this program.
    (c) The sheep and lamb operation requesting benefits under this part 
must certify to the accuracy of the information provided in their 
application for benefits. All information provided is subject to 
verification and spot checks by FSA. Refusal to allow FSA or any other 
agency of the Department of Agriculture to verify any information 
provided will result in a determination of ineligibility. Data furnished 
by the applicant will be used to determine eligibility for program 
benefits. Providing a false certification will lead to ineligibility for 
payments and may be subject to additional civil and criminal sanctions.
    (d) The sheep and lamb operation requesting benefits under this part 
must maintain accurate records that document that they meet all 
eligibility requirements specified herein, as may be requested by FSA. 
Acceptable forms of supporting documentation include, but are not 
limited to: Sales receipts, farm management records, veterinarian 
certifications, scrapie program forms and identification numbers, as 
well as, other types of documents that prove the eligibility of the 
qualifying ewe lambs and the sheep and lamb operation. The supporting 
documentation provided must, at a minimum, include: date of lamb 
purchase or date of birth, date of lamb death (if applicable), lamb 
identification and control information, number of ewe lambs purchased or 
retained, and scrapie program identification numbers.



Sec. 784.5  Payment eligibility.

    (a) Payments can be made, as agreed to by FSA and subject to the 
availability of funds, for eligible ewe lambs considered by FSA, as 
determined by FSA only, to have been acquired or held during the base 
period by eligible sheep and lamb operations for breeding purposes. 
Payments may be made for eligible ewe lambs held continuously by the 
operation, through the end of the compliance period, from the time of 
the first possession of the ewe lamb in the base period. The payment 
rate cannot exceed the rate provided for in Sec. 784.6 and may be 
prorated pursuant to Sec. 784.7. For purposes of this section, the 
``base period'' is the period from August 1, 2003, through July 31, 
2004. A purchase in the base period without possession in the base 
period will not be considered an acquisition in the base period for 
purposes of this section unless otherwise allowed by FSA.
    (b) For the ewe lamb to be eligible, a sheep and lamb operation must 
certify that the ewe lamb:
    (1) During at least part of the base period was a ewe lamb which was 
both, at the same time, not older than 18 months of age and had not 
produced an offspring; and
    (2) At the time of certification, does not possess any of the 
following characteristics:
    (i) Parrot mouth; or
    (ii) Foot rot.
    (c) The sheep and lamb operation must certify and agree to:
    (1) Maintain the qualifying ewe lambs in the herd for at least one 
complete, normal offspring lambing cycle, the end of which shall 
constitute the end of the compliance period for the purposes of 
paragraph (a) of this section, and actually maintain the lambs for that 
period in accord with that certification. The ``offspring'' lambing

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cycle refers to the time in which the qualifying ewe lamb's own 
offspring would be weaned, in a normal course, from that qualifying ewe 
if the ewe were to have offspring, irrespective of whether the ewe 
actually produces offspring.
    (2) Upon request by an AMS agent or FSA representative, allow the 
AMS agent or FSA Representative to verify that the ewe lambs meet 
qualifying characteristics. Spot checks will be conducted by FSA within 
30 days of the end of the sign-up period. Any animal showing evidence of 
parrot mouth, foot rot, or scrapie in such spot checks will be 
considered to have had those conditions at the time of certification. 
Other spot checks may be conducted as needed.
    (3) Maintain documentation of any death loss of qualifying ewe 
lambs.
    (4) Agree to refund any payments made with respect to any ewe lamb 
or offspring that has died before completing the full program 
requirements where said deaths for the operation exceed 10 percent.
    (5) Be in compliance with all requirements relating to scrapie, as 
described in 9 CFR parts 54 and 79.
    (d) To be eligible for any payments addressed under this section, a 
sheep and lamb operation must be engaged in the business of producing 
and marketing agricultural products at the time of filing the 
application.
    (e) In addition, to be eligible for payment, a sheep and lamb 
operation must submit a timely application during the application period 
for benefits and comply with all other terms and conditions of this part 
or that are contained in the application for such benefits, and such 
other conditions as may be imposed by FSA.
    (f) Proof that each lamb was held during and through the end of the 
base period as required by paragraph (a) of this section, as must be 
determined individually for each lamb, shall be provided in such manner, 
and with such access to the operation and the documents and information 
related to the operation, as FSA may request.



Sec. 784.6  Rate of payment and limitations on funding.

    (a) Subject to the availability of funds and to the proration 
provisions of Sec. 784.7, payments for qualifying operations shall be 
$18 for each qualifying ewe lamb retained or purchased for breeding 
purposes.



Sec. 784.7  Availability of funds.

    Total payments under this part, unless otherwise determined by the 
FSA, cannot exceed $18 million. In the event that approval of all 
eligible applications would result in expenditures in excess of the 
amount available, FSA shall prorate the available funds by a national 
factor to reduce the expected payments to be made to the amount 
available. The payment shall be made based on the national factored rate 
as determined by FSA. FSA shall prorate the payments in such manner as 
it, in its sole discretion, finds appropriate and reasonable.



Sec. 784.8  Appeals.

    The appeal regulations set forth at parts 11 and 780 of this title 
apply to determinations made pursuant to this part.



Sec. 784.9  Misrepresentation and scheme or device.

    (a) A sheep and lamb operation shall be ineligible to receive 
assistance under this program if it is determined by the State committee 
or the county committee to have:
    (1) Adopted any scheme or device that tends to defeat the purpose of 
this program;
    (2) Made any fraudulent representation; or
    (3) Misrepresented any fact affecting a program determination.
    (b) Any funds disbursed pursuant to this part to any person or 
operation engaged in a misrepresentation, scheme, or device, shall be 
refunded with interest together with such other sums as may become due. 
Any sheep and lamb operation or person engaged in acts prohibited by 
this section and any sheep and lamb operation or person receiving 
payment under this part shall be jointly and severally liable with other 
persons or operations involved in such claim for benefits for any refund

[[Page 183]]

due under this section and for related charges. The remedies provided in 
this part shall be in addition to other civil, criminal, or 
administrative remedies that may apply.



Sec. 784.10  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 for assistance under this part 
must, also:
    (1) Establish that the right of majority has been conferred on the 
minor by court proceedings or by statute;
    (2) Show a guardian has been appointed to manage the minor's 
property and the applicable program documents are executed by the 
guardian; or
    (3) Furnish a bond under which the surety guarantees any loss 
incurred for which the minor would be liable had the minor been an 
adult.



Sec. 784.11  Death, incompetence, or disappearance.

    In the case of death, incompetence, disappearance or dissolution of 
a person that is eligible to receive benefits in accordance with this 
part, such person or persons specified in 7 CFR part 707 may receive 
such benefits, as determined appropriate by FSA.



Sec. 784.12  Maintaining records.

    Persons making application for benefits under this program must 
maintain accurate records and accounts that will document that they meet 
all eligibility requirements specified herein. Such records and accounts 
must be retained for 3 years after the date of payment to the sheep and 
lamb operations under this program. Destruction of the records after 
such date shall be at the risk of the party undertaking the destruction.



Sec. 784.13  Refunds; joint and several liability.

    (a) In the event there is an inaccurate certification or a failure 
to comply with any term, requirement, or condition for payment arising 
under the application, or this part, and if any refund of a payment to 
FSA shall otherwise become due in connection with the application, or 
this part, all related payments made under this part to any sheep and 
lamb operation shall be refunded to FSA together with interest as 
determined in accordance with paragraph (c) of this section and late 
payment charges as provided in part 1403 of this title.
    (b) All persons signing a sheep and lamb operation's application for 
payment as having an interest in the operation shall be jointly and 
severally liable for any refund, including related charges, that is 
determined to be due for any reason under the terms and conditions of 
the application or this part with respect to such operation.
    (c) Interest shall be charged on refunds required of any person 
under this part if FSA determines that payments or other assistance was 
provided to a person who was not eligible for such assistance. Such 
interest shall be charged at the rate of interest that the United States 
Treasury charges the Commodity Credit Corporation for funds, from the 
date FSA made such benefits available to the date of repayment or the 
date interest increases as determined in accordance with applicable 
regulations. FSA may waive the accrual of interest if FSA determines 
that the cause of the erroneous determination was not due to any action 
of the person.
    (d) Interest determined in accordance with paragraph (c) of this 
section may be waived at the discretion of FSA alone for refunds 
resulting from those violations determined by FSA to have been beyond 
the control of the person committing the violation.
    (e) Late payment interest shall be assessed on all refunds in 
accordance with the provisions of, and subject to the rates prescribed 
in 7 CFR part 792.
    (f) Any excess payments made by FSA with respect to any application 
under this part must be refunded.
    (g) In the event that a benefit under this subpart was provided as 
the result of erroneous information provided by any person, the benefit 
must be repaid with any applicable interest.



Sec. 784.14  Offsets and withholdings.

    FSA may offset or withhold any amounts due FSA under this subpart in

[[Page 184]]

accordance with the provisions of 7 CFR part 792, or successor 
regulations, as designated by the Department.



Sec. 784.15  Assignments.

    Any person who may be entitled to a payment may assign his rights to 
such payment in accordance with 7 CFR part 1404, or successor 
regulations, as designated by the Department.



Sec. 784.16  Termination of program.

    This program will be terminated after payment has been made to those 
applications certified as eligible pursuant to the application period 
established in Sec. 784.4.



PART 785_CERTIFIED STATE MEDIATION PROGRAM--Table of Contents




Sec.
785.1 General.
785.2 Definitions.
785.3 Annual certification of State mediation programs.
785.4 Grants to certified State mediation programs.
785.5 Fees for mediation services.
785.6 Deadlines and address.
785.7 Distribution of Federal grant funds.
785.8 Reports by qualifying States receiving mediation grant funds.
785.9 Access to program records.
785.10 Penalties for non-compliance.
785.11 Reconsideration by the Administrator.
785.12 Nondiscrimination.
785.13 OMB control number.

    Authority: 5 U.S.C. 301; 7 U.S.C. 1989; and 7 U.S.C. 5101-5104.

    Source: 67 FR 57315, Sept. 10, 2002, unless otherwise noted.



Sec. 785.1  General.

    (a) States meeting conditions specified in this part may have their 
mediation programs certified by the Farm Service Agency (FSA) and 
receive Federal grant funds for the operation and administration of 
agricultural mediation programs.
    (b) USDA agencies participate in mediations pursuant to agency rules 
governing their informal appeals processes. Where mediation of an agency 
decision by a certified State mediation program is available to 
participants in an agency program as part of the agency's informal 
appeal process, the agency will offer a participant receiving notice of 
an agency decision the opportunity to mediate the decision under the 
State's certified mediation program, in accordance with the agency's 
informal appeals regulations.
    (c) USDA agencies making mediation available as part of the agency 
informal appeals process may execute memoranda of understanding with a 
certified mediation program concerning procedures and policies for 
mediations during agency informal appeals that are not inconsistent with 
this part or other applicable regulations. Each such memorandum of 
understanding will be deemed part of the grant agreement governing the 
operation and administration of a State certified mediation program 
receiving Federal grant funds under this part.
    (d) A mediator in a program certified under this part has no 
authority to make decisions that are binding on parties to a dispute.
    (e) No person may be compelled to participate in mediation provided 
through a mediation program certified under this part. This provision 
shall not affect a State law requiring mediation before foreclosure on 
agricultural land or property.



Sec. 785.2  Definitions.

    Administrator means the Administrator, FSA, or authorized designee.
    Certified State mediation program means a program providing 
mediation services that has been certified in accordance with section 
785.3.
    Confidential mediation means a mediation process in which the 
mediator will not disclose to any person oral or written communications 
provided to the mediator in confidence, except as allowed by 5 U.S.C. 
574 or section 785.9.
    Covered persons means producers, their creditors (as applicable), 
and other persons directly affected by actions of the USDA involving one 
or more of the following issues:
    (1) Wetlands determinations;
    (2) Compliance with farm programs, including conservation programs;
    (3) Agricultural loans (regardless of whether the loans are made or 
guaranteed by the USDA or are made by a third party);
    (4) Rural water loan programs;

[[Page 185]]

    (5) Grazing on National Forest System lands;
    (6) Pesticides; or
    (7) Such other issues as the Secretary may consider appropriate.
    Fiscal year means the period of time beginning October 1 of one year 
and ending September 30 of the next year and designated by the year in 
which it ends.
    FSA means the Farm Service Agency of the U.S. Department of 
Agriculture, or a successor agency.
    Mediation services means all activities relating to the intake and 
scheduling of mediations; the provision of background and selected 
information regarding the mediation process; financial advisory and 
counseling services (as reasonable and necessary to prepare parties for 
mediation) performed by a person other than a State mediation program 
mediator; and mediation sessions in which a mediator assists disputing 
parties in voluntarily reaching mutually agreeable settlement of issues 
within the laws, regulations, and the agency's generally applicable 
program policies and procedures, but has no authoritative decision 
making power.
    Mediator means a neutral individual who functions specifically to 
aid the parties in a dispute during a mediation process.
    Qualified mediator means a mediator who meets the training 
requirements established by State law in the State in which mediation 
services will be provided or, where a State has no law prescribing 
mediator qualifications, an individual who has attended a minimum of 40 
hours of core mediator knowledge and skills training and, to remain in a 
qualified mediator status, completes a minimum of 20 hours of additional 
training or education during each 2-year period. Such training or 
education must be approved by the USDA, by an accredited college or 
university, or by one of the following organizations: State Bar of a 
qualifying State, a State mediation association, a State approved 
mediation program, or a society of professionals in dispute resolution.
    Qualifying State means a State with a State mediation program 
currently certified by FSA.



Sec. 785.3  Annual certification of State mediation programs.

    To obtain FSA certification of the State's mediation program, the 
State must meet the requirements of this section.
    (a) New request for certification. A new request for certification 
of a State mediation program must include descriptive and supporting 
information regarding the mediation program and a certification that the 
mediation program meets certain requirements as prescribed in this 
subsection. If a State is also qualifying its mediation program to 
request a grant of Federal funds under the certified State mediation 
program, the State must submit with its request for certification 
additional information in accordance with Sec. 785.4.
    (1) Description of mediation program. The State must submit a 
narrative describing the following with supporting documentation:
    (i) A summary of the program;
    (ii) An identification of issues available for mediation under the 
program;
    (iii) Management of the program;
    (iv) Mediation services offered by the program;
    (v) Program staffing and staffing levels;
    (vi) Uses of contract mediation services in the program describing 
both services provided by contractors and costs of such services;
    (vii) State statutes and regulations in effect that are applicable 
to the State's mediation program; and
    (viii) A description of the State program's education and training 
requirements for mediators including:
    (A) Training in mediation skills and in USDA programs;
    (B) Identification and compliance with any State law requirements; 
and
    (C) Other steps by the State's program to recruit and deploy 
qualified mediators.
    (ix) Any other information requested by FSA;
    (2) Certification. The Governor, or head of a State agency 
designated by the Governor, must certify in writing to the Administrator 
that the State's mediation program meets the following program 
requirements:

[[Page 186]]

    (i) That the State's mediation program provides mediation services 
to covered persons with the aim of reaching mutually agreeable decisions 
between the parties under the program;
    (ii) That the State's mediation program is authorized or 
administered by an agency of the State government or by the Governor of 
the State;
    (iii) That the State's mediation program provides for training of 
mediators in mediation skills and in all issues covered by the State's 
mediation program;
    (iv) That the State's mediation program shall provide confidential 
mediation as defined in Sec. 785.2;
    (v) That the State's mediation program ensures, in the case of 
agricultural loans, that all lenders and borrowers of agricultural loans 
receive adequate notification of the mediation program;
    (vi) That the State's mediation program ensures, in the case of 
other issues covered by the mediation program, that persons directly 
affected by actions of the USDA receive adequate notification of the 
mediation program; and
    (vii) That the State's mediation program prohibits discrimination in 
its programs on the basis of race, color, national origin, sex, 
religion, age, disability, political beliefs, and marital or familial 
status.
    (b) Request for re-certification by qualifying State. If a State is 
a qualifying State at the time its request is made, the written request 
need only describe the changes made in the program since the previous 
year's request, together with such documents and information as are 
necessary concerning such changes, and a written certification that the 
remaining elements of the program will continue as described in the 
previous request.



Sec. 785.4  Grants to certified State mediation programs.

    (a) Eligibility. To be eligible to receive a grant, a State 
mediation program must:
    (1) Be certified as described in Sec. 785.3; and
    (2) Submit an application for a grant with its certification or re-
certification request as set forth in this section.
    (b) Application for grant. A State requesting a grant will submit 
the following to the Administrator:
    (1) Application for Federal Assistance, Standard Form 424 (available 
in any FSA office and on the Internet, http://www.whitehouse.gov/omb/
grants/);
    (2) A budget with supporting details providing estimates of the cost 
of operation and administration of the program. Proposed direct 
expenditures will be grouped in the categories of allowable direct costs 
under the program as set forth in paragraph (c)(1) of this section;
    (3) Other information pertinent to the funding criteria specified in 
Sec. 785.7(b); and
    (4) Any additional supporting information requested by FSA in 
connection with its review of the grant request.
    (c) Grant purposes. Grants made under this part will be used only to 
pay the allowable costs of operation and administration of the 
components of a qualifying State's mediation program that have been 
certified as set forth in Sec. 785.3(b)(2). Costs of services other 
than mediation services to covered persons within the State are not 
considered part of the cost of operation and administration of the 
mediation program for the purpose of determining the amount of a grant 
award.
    (1) Allowable costs. Subject to applicable cost principles as set 
forth or referenced in Sec. 3016.22 of this title, allowable costs for 
operations and administration are limited to those that are reasonable 
and necessary to carry out the State's certified mediation program in 
providing mediation services for covered persons within the State. 
Specific categories of costs allowable under the certified State 
mediation program include, and are limited to:
    (i) Staff salaries and fringe benefits;
    (ii) Reasonable fees and costs of mediators;
    (iii) Office rent and expenses, such as utilities and equipment 
rental;
    (iv) Office supplies;

[[Page 187]]

    (v) Administrative costs, such as workers' compensation, liability 
insurance, employer's share of Social Security, and travel that is 
necessary to provide mediation services;
    (vi) Education and training of participants and mediators involved 
in mediation;
    (vii) Security systems necessary to assure confidentiality of 
mediation sessions and records of mediation sessions;
    (viii) Costs associated with publicity and promotion of the program; 
and
    (ix) Financial advisory and counseling services for parties 
requesting mediation (as reasonable and necessary to prepare parties for 
mediation) that are performed by a person other than a state mediation 
program mediator and as approved under guidelines established by the 
state mediation program and reported to FSA.
    (2) Prohibited expenditures. Expenditures of grant funds are not 
allowed for:
    (i) Purchase of capital assets, real estate, or vehicles and repair, 
or maintenance of privately-owned property;
    (ii) Political activities;
    (iii) Routine administrative activities not allowable under OMB Cost 
Principles found in part 3015, subpart T, of this title and OMB Circular 
No. A-87; and
    (iv) Services provided by a State mediation program that are not 
consistent with the features of the mediation program certified by the 
State, including advocacy services on behalf of a mediation participant, 
such as representation of a mediation client before an administrative 
appeals entity of the USDA or other Federal Government department or 
Federal or State Court proceeding.



Sec. 785.5  Fees for mediation services.

    A requirement that non-USDA parties who elect to participate in 
mediation pay a fee for mediation services will not preclude 
certification of a certified State mediation program or its eligibility 
for a grant; however, if participation in mediation is mandatory for a 
USDA agency, a certified State mediation program may not require the 
USDA agency to pay a fee to participate in a mediation.



Sec. 785.6  Deadlines and address.

    (a) Deadlines. (1) To be a qualifying State as of the beginning of a 
fiscal year and to be eligible for grant funding as of the beginning of 
the fiscal year, the Governor of a State or head of a State agency 
designated by the Governor of a State must submit a request for 
certification and application for grant on or before August 1 of the 
calendar year in which the fiscal year begins.
    (2) Requests received after August 1. FSA will accept requests for 
re-certifications and for new certifications of State mediation programs 
after August 1 in each calendar year; however, such requests will not be 
considered for grant funding under Sec. 785.7(c) until after March 1.
    (3) Requests for additional grant funds during a fiscal year. Any 
request by a State mediation program that is eligible for grant funding 
as of the beginning of the fiscal year for additional grant funds during 
that fiscal year for additional, unbudgeted demands for mediation 
services must be submitted on or before March 1 of the fiscal year.
    (b) Address. The request for certification or re-certification and 
any grant request must be mailed or delivered to: Administrator, Farm 
Service Agency, U.S. Department of Agriculture, Stop 0501, 1400 
Independence Avenue, SW., Washington, DC 20250-0501.



Sec. 785.7  Distribution of Federal grant funds.

    (a) Maximum grant award. A grant award shall not exceed 70 percent 
of the budgeted allowable costs of operation and administration of the 
certified State mediation program. In no case will the sum granted to a 
State exceed $500,000 per fiscal year.
    (b) Funding criteria. FSA will consider the following in determining 
the grant award to a qualifying State:
    (1) Demand for and use of mediation services (historical and 
projected);
    (2) Scope of mediation services;
    (3) Service record of the State program, as evidenced by:
    (i) Number of inquiries;
    (ii) Number of requests for and use of mediation services, 
historical and projected, as applicable;

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    (iii) Number of mediations resulting in signed mediation agreements;
    (iv) Timeliness of mediation services; and
    (v) Activities promoting awareness and use of mediation;
    (4) Historic use of program funds (budgeted versus actual); and
    (5) Material changes in the State program.
    (c) Disbursements of grant funds. (1) Grant funds will be paid in 
advance, in installments throughout the Federal fiscal year as requested 
by a certified State mediation program and approved by FSA. The initial 
payment to a program in a qualifying State eligible for grant funding as 
of the beginning of a fiscal year shall represent at least one-fourth of 
the State's annual grant award. The initial payment will be made as soon 
as practicable after certification, or re-certification, after grant 
funds are appropriated and available.
    (2) Payment of grant funds will be by electronic funds transfer to 
the designated account of each certified State mediation program, as 
approved by FSA.
    (d) Administrative reserve fund. After funds are appropriated, FSA 
will set aside 5 percent of the annual appropriation for use as an 
administrative reserve.
    (1) Subject to paragraph (a) of this section and the availability of 
funds, the Administrator will allocate and disburse sums from the 
administrative reserve in the following priority order:
    (i) Disbursements to cover additional, unbudgeted demands for 
mediation services in qualifying States eligible for grant funding as of 
the beginning of the fiscal year;
    (ii) Grants to qualifying States whose requests for new 
certification or re-certification were received between August 2 and 
March 1. A previously qualifying State that submits a request for re-
certification received after August 1 may receive a grant award 
effective as of the beginning of the fiscal year. A newly qualifying 
State that submits a request for certification received after August 1 
may receive a grant award effective March 31 of the fiscal year.
    (iii) Any balance remaining in the administrative reserve will be 
allocated pro rata to certified State mediation programs based on their 
initial fiscal year grant awards.
    (2) All funds from the administrative reserve will be made available 
on or before March 31 of the fiscal year.
    (e) Period of availability of funds. (1) Certified State mediation 
programs receiving grant funds are encouraged to obligate award funds 
within the Federal fiscal year of the award. A State may, however, carry 
forward any funds disbursed to its certified State mediation program 
that remain unobligated at the end of the fiscal year of award for use 
in the next fiscal year for costs resulting from obligations in the 
subsequent funding period. Any carryover balances plus any additional 
obligated fiscal year grant will not exceed the lesser of 70 percent of 
the State's budgeted allowable costs of operation and administration of 
the certified State mediation program for the subsequent fiscal year, or 
$500,000.
    (2) Grant funds not spent in accordance with this part will be 
subject to de-obligation and must be returned to the USDA.



Sec. 785.8  Reports by qualifying States receiving mediation grant funds.

    (a) Annual report by certified State mediation program. No later 
than 30 days following the end of a fiscal year during which a 
qualifying State received a grant award under this part, the State must 
submit to the Administrator an annual report on its certified State 
mediation program. The annual report must include the following:
    (1) A review of mediation services provided by the certified State 
mediation program during the preceding Federal fiscal year providing 
information concerning the following matters:
    (i) A narrative review of the goals and accomplishments of the 
certified State mediation program in providing intake and scheduling of 
cases; the provision of background and selected information regarding 
the mediation process; financial advisory and counseling services, 
training, notification, public education, increasing resolution rates, 
and obtaining program funding from sources other than the grant under 
this part.

[[Page 189]]

    (ii) A quantitative summary for the preceding fiscal year, and for 
prior fiscal years, as appropriate, for comparisons of program 
activities and outcomes of the cases opened and closed during the 
reporting period; mediation services provided to clients grouped by 
program and subdivided by issue, USDA agency, types of covered persons 
and other participants; and the resolution rate for each category of 
issue reported for cases closed during the year;
    (2) An assessment of the performance and effectiveness of the 
State's certified mediation program considering:
    (i) Estimated average costs of mediation services per client with 
estimates furnished in terms of the allowable costs set forth in Sec. 
785.4(b)(1).
    (ii) Estimated savings to the State as a result of having the State 
mediation program certified including:
    (A) Projected costs of avoided USDA administrative appeals based on 
projections of the average costs of such appeals furnished to the State 
by FSA, with the assistance of the USDA National Appeals Division and 
other agencies as appropriate;
    (B) In agricultural credit mediations that do not result from a USDA 
adverse program decision, projected cost savings to the various parties 
as a result of resolution of their dispute in mediation. Projected cost 
savings will be based on such reliable statistical data as may be 
obtained from State statistical sources including the certified State's 
bar association, State Department of Agriculture, State court system or 
Better Business Bureau, or other reliable State or Federal sources;
    (iii) Recommendations for improving the delivery of mediation 
services to covered persons, including:
    (A) Increasing responsiveness to needs for mediation services.
    (B) Promoting increases in dispute resolution rates.
    (C) Improving assessments of training needs.
    (D) Improving delivery of training.
    (E) Reducing costs per mediation.
    (3) Such other matters relating to the program as the State may 
elect to include, or as the Administrator may require.
    (b) Audit report. In addition to the auditing requirements of part 
3015, subpart I and Sec. 3016.26 of this title, any qualifying State 
receiving a grant under this part must submit an audit report to the 
Administrator in compliance with OMB Circular A-133.



Sec. 785.9  Access to program records.

    Notwithstanding Sec. 3015.24 of this title, the State must maintain 
and provide the Government access to pertinent records regarding 
services delivered by the certified State mediation program for purposes 
of evaluation, audit and monitoring of the certified State mediation 
program as follows:
    (a) For purposes of this section, pertinent records consist of: the 
names and addresses of applicants for mediation services; dates 
mediations opened and closed; issues mediated; dates of sessions with 
mediators; names of mediators; mediation services furnished to 
participants by the program; the sums charged to parties for each 
mediation service; records of delivery of services to prepare parties 
for mediation (including financial advisory and counseling services); 
and the outcome of the mediation services including formal settlement 
results and supporting documentation.
    (b) State mediators will notify all participants in writing at the 
beginning of the mediation session that the USDA, including the USDA 
Inspector General, the Comptroller General of the United States, the 
Administrator, and any of their representatives will have access to 
pertinent records as necessary to monitor and to conduct audits, 
investigations, or evaluations of mediation services funded in whole or 
in part by the USDA.
    (c) All participants in a mediation must sign and date an 
acknowledgment of receipt of such notice from the mediator. The 
certified State mediation program shall maintain originals of such 
acknowledgments in its mediation files for at least 5 years.



Sec. 785.10  Penalty for non-compliance.

    (a) The Administrator is authorized to withdraw certification of a 
State mediation program, terminate or suspend the grant to such program, 
require a return of unspent grant funds, a

[[Page 190]]

reimbursement of grant funds on account of expenditures that are not 
allowed, and may impose any other penalties or sanctions authorized by 
law if the Administrator determines that:
    (1) The State's mediation program, at any time, does not meet the 
requirements for certification;
    (2) The mediation program is not being operated in a manner 
consistent with the features of the program certified by the State, with 
applicable regulations, or the grant agreement;
    (3) Costs that are not allowed under Sec. 785.4(b) are being paid 
out of grant funds;
    (4) The mediation program fails to grant access to mediation records 
for purposes specified in Sec. 785.8; or
    (5) Reports submitted by the State pursuant to Sec. 785.7 are 
false, contain misrepresentations or material omissions, or are 
otherwise misleading.
    (b) In the event that FSA gives notice to the State of its intent to 
enforce any withdrawal of certification or other penalty for non-
compliance, USDA agencies will cease to participate in any mediation 
conducted by the State's mediation program immediately upon delivery of 
such notice to the State.



Sec. 785.11  Reconsideration by the Administrator.

    (a) A State mediation program may request that the Administrator 
reconsider any determination that a State is not a qualifying State 
under Sec. 785.3 and any penalty decision made under Sec. 785.10. The 
decision of the Administrator upon reconsideration shall be the final 
administrative decision of FSA.
    (b) Nothing in this part shall preclude action to suspend or debar a 
State mediation program or administering entity under part 3017 of this 
title following a withdrawal of certification of the State mediation 
program.



Sec. 785.12  Nondiscrimination.

    The provisions of parts 15, 15b and 1901, subpart E, of this title 
and part 90 of title 45 apply to activities financed by grants made 
under this part.



Sec. 785.13  OMB Control Number.

    The information collection requirements in this regulation have been 
approved by the Office of Management and Budget and assigned OMB control 
number 0560-0165.

[[Page 191]]



         SUBCHAPTER E_PROVISIONS COMMON TO MORE THAN ONE PROGRAM





PART 792_DEBT SETTLEMENT POLICIES AND PROCEDURES--Table of Contents




Sec.
792.1 Applicability.
792.2 Administration.
792.3 Definitions.
792.4 Demand for payment of debts.
792.5 Collection by payment in full.
792.6 Collection by installment payments.
792.7 Collection by administrative offset.
792.8 Priorities of offsets versus assignments.
792.9 Withholding.
792.10 Late payment interest, penalty and administrative charges.
792.11 Waiver of late payment interest, penalty charge and 
          administrative charges.
792.12 Administrative appeal.
792.13 Additional administrative collection action.
792.14 Contact with debtor's employing agency.
792.15 Prior provision of rights with respect to debt.
792.16 Discharge of debts.
792.17 Referral of delinquent debts to credit reporting agencies.
792.18 Referral of debts to Department of Justice.
792.19 Referral of delinquent debts to IRS for tax refund offset.
792.20 Reporting discharged debts to IRS.
792.21 Referral of debts to private collection agencies.
792.22 Collection and compromise.

    Authority: 31 U.S.C. 3701, 3711, 3716-3719, 3728; 4 CFR parts 101-
105; 7 CFR 3.21(b).

    Source: 59 FR 15829, Apr. 5, 1994, unless otherwise noted.



Sec. 792.1  Applicability.

    Except as may otherwise be provided by statute, this part sets forth 
the manner in which the Farm Service Agency (FSA) will settle and 
collect debts by FSA. The provisions of part 1403 of this title are 
applicable to actions of FSA regarding the settlement and collection of 
debts on the behalf of the Commodity Credit Corporation (CCC).



Sec. 792.2  Administration.

    The regulations in this part will be administered under the general 
supervision and direction of the Administrator, FSA.



Sec. 792.3  Definitions.

    The following definitions shall be applicable to this part:
    Administrative charges means the additional costs of processing 
delinquent debts against the debtor, to the extent such costs are 
attributable to the delinquency. Such costs include, but are not limited 
to, costs incurred in obtaining a credit report, costs of employing 
commercial firms to locate debtor, costs of employing contractors for 
collection services, costs of selling collateral or property to satisfy 
the debt.
    Administrative offset means deducting money payable or held by the 
United States Government, or any agency thereof, to satisfy in whole or 
in part a debt owed the Government, or any agency thereof.
    FSA means the Farm Service Agency of the United States Department of 
Agriculture (USDA).
    CCC means the Commodity Credit Corporation.
    Certified financial statement means an account of the assets, 
liabilities, income and expenses of a debtor, executed in accordance 
with generally accepted accounting principles and attested to as 
accurate by the debtor and preparer, under penalty of perjury.
    Claim means an amount of money or property which has been determined 
by FSA, after a notice of delinquency and a demand for the payment of 
the debt has been made by FSA, to be owed to FSA by any person other 
than a Federal agency.
    Credit reporting agency means: (1) A reporting agency as defined at 
4 CFR 102.5(a), or
    (2) Any entity which has entered into an agreement with USDA 
concerning the referral of credit information.
    Debt means any amount owed to FSA which has not been satisfied 
through payment or otherwise.
    Debt record refers to the account, register, balance sheet, file, 
ledger, data

[[Page 192]]

file, or similar record of debts owed to FSA, CCC, or any other 
Government Agency with respect to which collection action is being 
pursued, and which is maintained in an FSA office.
    Delinquent debt means: (1) Any debt owed to FSA that has not been 
paid by the date specified in the applicable statute, regulation, 
contract, or agreement; or
    (2) Any debt that has not been paid by the date of an initial 
notification of indebtedness mailed or hand-delivered pursuant to Sec. 
792.4.
    Discharged debt means any debt, or part thereof, which FSA has 
determined is uncollectible and has closed out, and if the amount in 
controversy exceeds $100,000.00, excluding interest and administrative 
charges, or such higher amount as may be prescribed, in which the 
Department of Justice has concurred in such determination.
    IRS means the Internal Revenue Service.
    Late payment interest rate means the amount of interest charged on 
delinquent debts and claims. The late payment interest rate shall be 
determined as of the date a debt becomes delinquent and shall be equal 
to the higher of the Prompt Payment Act interest rate or the standard 
late payment rate prescribed by 31 U.S.C. 3717, which is based on the 
Treasury Department's current value of funds rate.
    Person means an individual, partnership, association, corporation, 
estate or trust, or other business enterprise or other legal entity and, 
whenever applicable, the Federal Government or a State government, or 
any agency thereof.
    Salary offset means the deduction of money from the current pay 
account of a present or former Government employee payable by the United 
States Government to, or held by the Government for, such person to 
satisfy a debt that person owes the Government.
    Settlement means any final disposition of a debt or claim.
    System of records means a group of any records under the control of 
FSA or CCC from which information is retrieved by the name of the 
individual, organization or other entity or by some identifying number, 
symbol, or other identification assigned to the individual, organization 
or other entity.
    Withholding means the taking of action to temporarily prevent the 
payment of some or all amounts to a debtor under one or more contracts 
or programs.



Sec. 792.4  Demand for payment of debts.

    (a) When a debt is due FSA, an initial written demand for payment of 
such amount shall be mailed or hand-delivered to the debtor. If the debt 
is not paid in full by the date specified in the initial demand letter, 
or if a repayment schedule acceptable to FSA has not been arranged with 
the debtor, the initial demand may be followed by two subsequent written 
demands at approximately 30-day intervals, unless it is determined by 
FSA that further demands would be futile and the debtor's response does 
not require rebuttal. The initial or subsequent demand letters shall 
specify the following:
    (1) The basis for and the amount of the debt determined to be due 
FSA, including the principal, applicable interest, costs, and other 
charges;
    (2) FSA' intent to establish an account on a debt record 30 days 
after the date of the letter, or other applicable period of time, if the 
debt is not paid within that time;
    (3) The applicable late payment interest rate.
    (i) If a late payment interest rate is specified in the contract, 
agreement or program regulation, the debtor shall be informed of that 
rate and the date from which the late payment interest has been 
accruing;
    (ii) If a late payment interest rate is not specified in the 
contract, agreement or program regulation, the debtor shall be informed 
of the applicable late payment interest rate set out in Sec. 792.10.
    (4) FSA' intent, if applicable, to collect the debt 30 days from the 
date of the initial demand letter, or other applicable period of time, 
by administrative offset from any CCC or FSA payments due or to become 
due to the debtor, and that the claim may be reported to other agencies 
of the Federal government for offset from any amounts due or to become 
due to the debtor;

[[Page 193]]

    (5) FSA' intent, if applicable, under Sec. 792.17, to report any 
delinquent debt to a credit reporting agency no sooner than 60 days from 
the date of the letter;
    (6) FSA' intent, if applicable, under Sec. 792.19, to refer any 
delinquent debt to the IRS, no sooner than 60 days from the date of the 
letter, to be considered for offset against any tax refund due or to 
become due the debtor.
    (7) If not previously provided, the debtor's right to request 
administrative review by an authorized FSA official, and the proper 
procedure for making such request. If the request relates to the:
    (i) Existence or amount of the debt, it must be made within 15 days 
from the date of the letter, unless a different time period is specified 
in the contract, agreement or program regulation;
    (ii) Appropriateness of reporting to a credit reporting agency, it 
must be made within 30 days from the date of the letter; or
    (iii) Appropriateness of referral to IRS for tax refund offset, it 
must be made within 60 days from the date of the letter, if applicable.
    (8) The debtor's right to a full explanation of the debt and to 
dispute any information in the records of FSA concerning the debt;
    (9) The opportunity afforded the debtor to enter into a written 
agreement which is acceptable to FSA for the repayment of the debt;
    (10) That FSA maintains the right to initiate legal action to 
collect the amount of the debt;
    (11) That if any portion of the debt remains unpaid or if a 
repayment schedule satisfactory to FSA has not been arranged 90 days 
after the due date, a penalty charge shall be assessed on the unpaid 
balance of the debt as prescribed in Sec. 792.10(e);
    (b) When FSA deems it necessary to protect the Government's 
interest, written demand may be preceded by other appropriate actions.



Sec. 792.5  Collection by payment in full.

    Except as FSA may provide, FSA shall collect debts owed to the 
Government, including applicable interest, penalties, and administrative 
costs, in full, whenever feasible whether the debt is being collected by 
administrative offset or by another method, including voluntary payment. 
If a debt is paid in one lump sum after the due date, FSA will impose 
late payment interest, as provided in Sec. 792.10, unless such interest 
is waived as provided in Sec. 792.11.



Sec. 792.6  Collection by installment payments.

    (a) Payments in installments may be arranged, at FSA' discretion, if 
a debtor furnishes satisfactory evidence of inability to pay a claim in 
full by the specified date. The size and frequency of installment 
payments shall:
    (1) Bear a reasonable relation to the size of the debt and the 
debtor's ability to pay; and
    (2) Normally be of sufficient size and frequency to liquidate the 
debt in not more than three years.
    (b) Except as otherwise determined by FSA, no installment 
arrangement will be considered unless the debtor submits a certified 
financial statement which reflects the debtor's assets, liabilities, 
income, and expenses. The financial statement shall not be required to 
be submitted sooner than 15 workdays following its request by FSA.
    (c) All installment payment agreements shall be in writing and 
require the payment of interest at the late payment interest rate in 
effect on the date such agreement is executed, unless such interest is 
waived or reduced by FSA. The installment agreement shall specify all 
the terms of the arrangement and include provision for accelerating the 
debt in the event the debtor defaults.
    (d) FSA may deem a repayment plan to be abrogated if the debtor 
fails to comply with its terms.
    (e) If the debtor's financial statement or other information 
discloses the ownership of assets which are not encumbered, the debtor 
may be required to secure the payment of an installment note by 
executing a security agreement and financing agreement which provides 
FSA a security interest in the assets until the debt is paid in full.
    (f) If the debtor owes more than one debt to FSA, FSA may allow the 
debtor to designate the manner in which a voluntary installment payment 
is to be

[[Page 194]]

applied. If the debtor does not designate the application of a voluntary 
installment or partial payment, the payment will be applied to such 
debts as determined by FSA.



Sec. 792.7  Collection by administrative offset.

    (a) The provisions of this section shall apply to all debts due FSA 
except as otherwise provided in this part and part 1404 of this title. 
This section is not applicable to:
    (1) FSA requests for administrative offset against money payable to 
a debtor from the Civil Service Retirement and Disability Fund and FSA 
requests for salary offset against a present, former or retired employee 
of the Federal Government which shall be made in accordance with 
regulations at part 3 of this title;
    (2) FSA requests for administrative offset against a Federal income 
tax refund payable to a debtor which shall be made in accordance with 
Sec. 792.19;
    (3) Cases in which FSA must adjust, by increasing or decreasing, a 
payment which is to be paid under a contract in order to properly make 
other payments due by FSA; and
    (4) Any case in which a statute explicitly provides for or prohibits 
using administrative offset to collect the debt for the type of debt 
involved.
    (b) Debts due FSA or CCC may be collected by administrative offset 
from amounts payable by FSA when:
    (1) The debtor has been provided written notification of the basis 
and amount of the debt and has been given an opportunity to make 
payment. Such written notification and opportunity includes notice of 
the right to pursue an administrative appeal in accordance with part 780 
of this chapter or any other applicable appeal procedures, if not 
previously provided;
    (2) The debtor has been provided an opportunity to request to 
inspect and copy the records of FSA related to the debt;
    (3) The debtor has been given the opportunity to enter into a 
written agreement which is acceptable to FSA for repayment of the debt;
    (4) The debtor has been notified in writing that the debt will be 
collected by administrative offset if not paid; and
    (5) The debt has not been delinquent for more than ten years or 
legal action to enforce the debt has not been barred by an applicable 
period of limitation, whichever is later.
    (c) Administrative offset shall also be effected against amounts 
payable by FSA:
    (1) When requested or approved by the Department of Justice; or
    (2) When a person is indebted under a judgment in favor of FSA or 
the United States.
    (d) A payment due any person may be offset when there is a breach of 
a contract or a violation of FSA program requirements, and offset is 
considered necessary by FSA to protect the financial interests of the 
Government.
    (e) FSA may effect administrative offset against a payment to be 
made to a debtor prior to completion of the procedures required by 
paragraphs (b)(1) through (b)(4) of this section if:
    (1) Failure to take the offset would substantially prejudice FSA' 
ability to collect the debt; and
    (2) The time before the payment is to be made does not reasonably 
permit the completion of those procedures.
    (f)(1) Judgments in favor of the United States may be offset against 
any amounts payable by FSA based on information provided by or obtained 
from the Department of Justice. Debts due any agency other than FSA 
which have not been reduced to judgment shall be offset against amounts 
payable by FSA to a debtor when an agency of the U.S. Government has 
submitted a written request for offset which is mailed or hand-delivered 
to the appropriate FSA State office, Kansas City Financial Management 
Office, Kansas City Management Office, or Kansas City Commodity Office. 
Such written request must:
    (i) Bear the signature of an authorized representative of the 
requesting agency;
    (ii) Include a certification that all requirements of the law and 
the regulations for collection of the debt and for requesting offset 
have been complied with;

[[Page 195]]

    (iii) State the name, address (including county), and, where legally 
available, the Social Security number or employer ID number of the 
debtor, and a brief description of the basis of the debt, including 
identification of the judgment, if any;
    (iv) State the amount of the debt separately as to principal, 
interest, penalties, and administrative costs. Interest, if any, shall 
be computed on a daily basis to a date shown in the request. The amount 
to be offset shall not exceed the principal sum owed by the debtor, plus 
interest computed in accordance with the request, and any late payment 
interest, penalties and administrative costs that have been assessed;
    (v) Certify that the debtor has not filed for bankruptcy. If the 
debtor has filed for bankruptcy, a copy of the order of the bankruptcy 
court relieving the agency from the automatic stay must be included; and
    (vi) State the name, address, and telephone number of a contact 
person within the agency and the address to which payment should be 
sent.
    (2) Unless prohibited by law, the head of an agency, or a designee, 
may defer or subordinate in whole or in part the right of the agency to 
recover through offset all or part of any indebtedness to such agency, 
or may withdraw a request for offset. Notice of such action must be sent 
to the appropriate FSA office.
    (g)(1) After FSA has complied with the provisions of this part, FSA 
may request other agencies of the Government to offset amounts payable 
by them to persons indebted to FSA.
    (2) In the case of a request to IRS for a tax refund offset, the 
provisions at Sec. 792.19 shall apply.
    (h)(1) Debts shall be collected by offset in the following order of 
priority without regard to the date of the request for such collection:
    (i) Debts to FSA.
    (ii) Debts to other agencies of USDA as determined by FSA.
    (iii) Debts to other government agencies as determined by FSA.
    (2) In the case of multiple debts involving the same debtor, FSA 
may, at its discretion, deviate from the usual order of priority in 
applying recovered amounts to debts owed other agencies when considered 
to be in the Government's best interest. Such decision shall be made by 
FSA based on the facts and circumstances of the particular case.
    (i) Amounts recovered by offset for FSA and CCC debts but later 
found not to be owed to the Government shall be promptly refunded.
    (j) The debtor shall be notified whenever any offset action has been 
taken.
    (k) Offsets made pursuant to this section shall not deprive a debtor 
of any right he or she might otherwise have to contest the debt involved 
in the offset action either by administrative appeal or by legal action.
    (l) Any action authorized by the provisions of this section may be 
taken:
    (1) Against a debtor's pro rata share of payments due any entity 
which the debtor participates in, either directly or indirectly, as 
determined by FSA.
    (2) When FSA determines that the debtor has established an entity, 
or reorganized, transferred ownership of, or changed in some other 
manner, their operation, for the purpose of avoiding the payment of the 
claim or debt.
    (m) The amount to be offset shall not exceed the actual or estimated 
amount of the debt, including interest, administrative charges, and 
penalties, unless the Department of Justice requests that a larger 
specified amount be offset.
    (n) Offset action will not be taken against payments when:
    (1) A debt has been discharged as provided in Sec. 792.16.
    (2) FSA determines such action will unduly interfere with the 
administration of an FSA or CCC program.
    (3) The debt has been delinquent for more than ten years or legal 
action to enforce the debt due FSA is barred by an applicable period of 
limitation, whichever is later.

[59 FR 15829, Apr. 5, 1994, as amended at 60 FR 43706, Aug. 23, 1995]



Sec. 792.8  Priorities of offsets versus assignments.

    (a) No amounts payable to a debtor by FSA shall be paid to an 
assignee until there have been collected any amounts owed by the debtor 
except as provided in this section.

[[Page 196]]

    (b) A payment which is assigned in accordance with part 1404 of this 
title by execution of Form CCC-36 shall be subject to offset for any 
debt owed to FSA or CCC or any judgment in favor of the United States 
without regard to the date notice of assignment was accepted by FSA or 
CCC.
    (c) A payment which is assigned in accordance with part 1404 of this 
title by execution of Form CCC-252 shall be offset:
    (1) Against any debt of the assignor entered on the debt record of 
the applicable FSA office prior to the filing of such form with FSA or 
CCC, or
    (2) At anytime, regardless of the date of filing of such form with 
FSA or CCC, if the debt which is the basis for the offset arises from a 
judgment in favor of the United States, or under the same contract under 
which the payment is earned by the assignor.
    (d) With respect to all other Federal agencies, offset shall be made 
of any amounts due any other Federal agency which have not been reduced 
to judgment, and which are entered on the debt record of the appropriate 
FSA office prior to the date the notice of assignment was accepted by 
FSA or CCC.
    (e) Any amount due and payable to the assignor which remains after 
deduction of amounts paid to the assignee shall be available for offset.



Sec. 792.9  Withholding.

    (a) Withholding of a payment prior to the completion of an 
applicable offset procedure may be made from amounts payable to a debtor 
by FSA to ensure that the interests of FSA and the United States will be 
protected as provided in this section.
    (b) A payment may be withheld to protect the interests of FSA or the 
United States only if FSA determines that:
    (1) There has been a serious breach of contract or violation of 
program requirements and the withholding action is considered necessary 
to protect the financial interests of FSA;
    (2) There is substantial evidence of violations of criminal or civil 
frauds statutes and criminal prosecution or civil frauds action is of 
primary importance to program operations of FSA;
    (3) Prior experience with the debtor indicates that collection will 
be difficult if amounts payable to the debtor are not withheld;
    (4) There is doubt that the debtor will be financially able to pay a 
judgment on the claim of FSA;
    (5) The facts available to FSA are insufficient to determine the 
amount to be offset or the proper payee;
    (6) A judgment on a claim of FSA has been obtained; or
    (7) Such action has been requested by the Department of Justice.
    (c) Except for debts due FSA or CCC, withholding action by FSA on 
amounts payable to debtors of other Government agencies may not be made 
unless requested by the Department of Justice.



Sec. 792.10  Late payment interest, penalty and administrative charges.

    (a) Late payment interest provisions of this section shall not 
apply:
    (1) To debts owed by Federal agencies and State and local 
governments. Interest on debts owed by such entities shall be charged to 
the extent authorized under the common law or applicable statutory 
authority.
    (2) If an applicable statute, regulation, agreement, or contract 
either prohibits the charging of such interest or specifies the interest 
or charges applicable to the debt involved;
    (3) If the late payment interest is waived by FSA in accordance with 
Sec. 792.11.
    (4) To administrative charges as set forth in paragraph (f) of this 
section.
    (b) FSA will assess late payment interest on the full amount of 
delinquent debts. For purposes of this section, the term ``full amount 
of the delinquent debt'' means the sum of the principal, accrued program 
interest, and any other charges which are otherwise due and owing to FSA 
on the delinquent debt at the time the late payment interest is 
assessed, except as provided in paragraphs (a)(2) and (d)(3) of this 
section.
    (c) The late payment interest shall be expressed as an annual rate 
of interest which FSA charges on delinquent debts. The late payment 
interest rate shall be equal to the higher of the Treasury Department's 
current value

[[Page 197]]

of funds rate or the rate of interest assessed under the Prompt Payment 
Act, determined as of the date specified in paragraphs (d)(1) and (d)(2) 
of this section. The rate of interest assessed under the Prompt Payment 
Act was chosen as an alternative rate to ensure that the Government 
would recoup interest at a rate which was at least as high as that which 
it pays for late payments.
    (d)(1) When a debt results from a statute, regulation, contract, or 
other agreement with specific provisions for late payment interest and 
payment due date, late payment interest shall accrue on the amount of 
the debt from the first day the debt became delinquent, unless otherwise 
provided by statute.
    (2) With respect to debts not resulting from a statute, regulation, 
contract, or agreement containing specific provisions for late payment 
interest and payment due date, late payment interest shall begin to 
accrue from the date on which notice of the debt, including notice of 
late payment interest, is first mailed or hand-delivered to the debtor.
    (3) The rate of late payment interest initially assessed will be 
fixed for the duration of the indebtedness, except when a debtor has 
defaulted on a repayment agreement and seeks to enter into a new 
agreement. FSA may then set a new rate of interest which reflects the 
late payment interest rate in effect at the time the new agreement is 
executed. All charges which accrued, but which were not collected under 
the defaulted agreement, shall be added to the principal to be paid 
under a new repayment agreement.
    (4) The late payment interest on delinquent debts will accrue on a 
daily basis.
    (e) Except as specified in paragraph (a)(2) of this section, a 
penalty charge of three (3) percent per annum will be assessed on any 
portion of a debt which remains unpaid ninety (90) days after the date 
described in paragraph (d)(1) or (d)(2) of this section, if no repayment 
schedule satisfactory to FSA has been agreed upon. Such penalty charge 
will be assessed retroactively from the date late payment interest began 
to accrue and applied on a daily basis. Such rate shall continue to 
accrue until the delinquent debt has been paid.
    (f) FSA shall assess as administrative charges the additional costs 
of processing delinquent debts against the debtor, to the extent such 
costs are attributable to the delinquency. Such costs include, but are 
not limited to, costs incurred in obtaining a credit report, costs of 
employing commercial firms to locate debtor, costs of employing 
contractors for collection services, costs of selling collateral or 
property to satisfy the debt.
    (g) When a debt is paid in partial or installment payments, payments 
will be applied first to administrative charges, second to the penalty 
charge assessed in accordance with paragraph (e) of this section and 
late payment interest, and third to outstanding principal.



Sec. 792.11  Waiver of late payment interest, penalty charge and 
administrative charges.

    (a) FSA shall waive the collection of late payment interest and 
administrative charges on a debt or any portion of a debt which is paid 
within 30 days after the date on which late payment interest began to 
accrue.
    (b) FSA may waive the assessment and collection of all or a portion 
of the penalty charge on debts which are appealed in accordance with 7 
CFR part 780 or other applicable appeal procedures from either the date 
of the appeal or the date such interest began to accrue, whichever is 
later, until the date a final administrative determination is issued. 
Such waiver shall not apply for any delay due to:
    (1) The appellant's request for a postponement of the scheduled 
hearing;
    (2) The appellant's request for an additional time following the 
hearing to present additional information or a written closing 
statement; or
    (3) The appellant's failure to timely present information to the 
reviewing authority.
    (c) Assessment and collection of late payment interest, the penalty 
charge and administrative charges under this part may be waived by FSA 
in full, or in part, if it is determined by the Controller, FSA, or his 
or her designee,

[[Page 198]]

that such action is in the best interest of FSA.



Sec. 792.12  Administrative appeal.

    If the opportunity to appeal the determination has not previously 
been provided under part 24 of this title or part 780 of this chapter or 
any other appeal procedure, a debtor may obtain an administrative review 
under part 780 of this chapter, or other applicable appeal procedures, 
of FSA' determination concerning the existence or amount of a debt, if a 
request is filed with the authority who made the determination within 15 
days of the date of FSA' initial demand letter, unless a longer period 
is specified in the initial demand letter.



Sec. 792.13  Additional administrative collection action.

    Nothing contained in this part shall preclude the use of any other 
administrative or contractual remedy which may be available to FSA to 
collect debts owed to the Government.



Sec. 792.14  Contact with debtor's employing agency.

    When a debtor is employed by the Federal Government or is a member 
of the military establishment or the Coast Guard, and collection by 
offset cannot be accomplished in accordance with 5 U.S.C. 5514, FSA may 
contact the employing agency to arrange for payment of the debt by 
allotment or otherwise, in accordance with section 206 of Executive 
Order No. 11222, May 8, 1965, 30 FR 6469, 3 CFR, 1964-1965 Comp., p 306.



Sec. 792.15  Prior provision of rights with respect to debt.

    FSA will not provide an administrative appeal with respect to issues 
which were raised or should have been raised at any administrative 
review requested by the debtor as provided under another statute or 
regulation before:
    (a) Effecting administrative offset;
    (b) Referring the debt to private collection or credit reporting 
agencies;
    (c) Referring the debt for salary offset against the current pay of 
a present or former Government employee; or
    (d) Referring the debt to IRS for tax refund offset.



Sec. 792.16  Discharge of debts.

    (a) Except as required by other applicable regulation or statute, a 
debt or part thereof owed FSA shall be discharged with the concurrence 
of the Department of Justice, if applicable, and the records and 
accounts on that debt closed in the following situations:
    (1) When an obligation or part thereof is discharged in bankruptcy;
    (2) When an obligation or part thereof is the subject of a final 
judgment entered by a court of competent jurisdiction which is adverse 
to FSA and no appeal will be taken by FSA;
    (3) When a debt or part thereof is compromised and paid, the amount 
of such compromise;
    (4) When collection of a debt by administrative offset is barred in 
accordance with Sec. 792.7(b)(5).
    (b) Debts discharged in accordance with this section may be reported 
to the Internal Revenue Service pursuant to Sec. 792.20.



Sec. 792.17  Referral of delinquent debts to credit reporting agencies.

    (a) This section specifies the procedures that will be followed by 
FSA and the rights that will be afforded to debtors when FSA reports 
delinquent debts to credit reporting agencies.
    (b) Before disclosing information to a credit reporting agency in 
accordance with this part, FSA shall review the claim and determine that 
it is valid and delinquent.
    (c) Before a debt may be referred to a credit reporting agency, the 
debtor must be notified, pursuant to Sec. 792.4, of FSA' intent to make 
such a report. Such notification shall include:
    (1) FSA' intent to disclose to a credit reporting agency that the 
debtor is responsible for the debt, and that such disclosure will be 
made not less than 60 days after notification to such debtor.
    (2) The information intended to be disclosed to the credit reporting 
agency under paragraph (g)(1) of this section.
    (3) The debtor's right to enter a repayment agreement on the debt, 
including, at the discretion of FSA, installment payments, and that if 
such

[[Page 199]]

an agreement is reached, the debt will not be referred to a credit 
reporting agency.
    (4) The debtor's right to review of this action in accordance with 
paragraph (i) of this section.
    (d) The debtor shall be notified, in writing at the debtor's last 
known address, when FSA has reported any delinquent debt to a credit 
reporting agency.
    (e)(1) FSA shall notify each credit reporting agency to which an 
original disclosure of delinquent debt information was made of any 
substantial change in the condition or amount of the claim.
    (2) FSA shall promptly verify or correct, as appropriate, 
information about the debt on request of a credit reporting agency. The 
records of the debtor shall reflect any correction resulting from such 
request.
    (f) Information reported to a credit reporting agency on delinquent 
debts shall be derived from the system of records maintained by FSA.
    (g) FSA shall limit delinquent debt information disclosed to credit 
reporting agencies to:
    (1) The name, address, taxpayer identification number, and other 
information necessary to establish the identity of the debtor;
    (2) The amount, status, and history of the claim; and
    (3) The program under which the claim arose.
    (h) Reasonable action shall be taken to locate a debtor for whom FSA 
does not have a current address before reporting delinquent debt 
information to a credit reporting agency.
    (i)(1) Before disclosing delinquent debt information to a credit 
reporting agency, FSA shall, upon request of the debtor, provide for a 
review of the debt in accordance with Sec. 792.12. This review shall 
only consider defenses or arguments which were not available or could 
not have been available at any previous appeal proceeding permitted 
under Sec. 792.12.
    (2) Upon receipt of a request for review within 30 days from the 
date of notice to the debtor of intent to refer delinquent debt 
information to a credit reporting agency, FSA shall suspend its schedule 
for disclosure to a credit reporting agency until a final decision 
regarding the appropriateness of disclosure to a credit reporting agency 
is made.
    (3) Upon completion of the review, the reviewing official shall 
transmit to the debtor a written notification of the decision. If 
appropriate, the debtor shall be notified of the scheduled date on or 
after which the debt will be referred to the credit reporting agency. 
The debtor will also be notified of any changes from the initial 
notification in the information to be disclosed.
    (j)(1) In accordance with guidelines established by the 
Administrator, FSA, the responsible claims official shall report to 
credit reporting agencies delinquent debt information specified in 
paragraph (g) of this section.
    (2) The agreements entered into by USDA and credit reporting 
agencies shall provide the necessary assurances to FSA that the credit 
reporting agencies to which information will be provided are in 
compliance with the provisions of all the laws and regulations of the 
United States relating to providing credit information.
    (3) FSA shall not report delinquent debt information to credit 
reporting agencies when: (i) The debtor has entered a repayment 
agreement covering the debt with FSA, and such agreement is still valid; 
or
    (ii) FSA has suspended its schedule for disclosure of delinquent 
debt information pursuant to paragraph (i)(2) of this section.
    (k) Disclosures made under this section shall be in accordance with 
the requirements of the Privacy Act, as amended (5 U.S.C. 552a).
    (l) The provisions of paragraphs (a) through (k) of this section 
apply to commercial debts owed by farm producers and all personal debts. 
All commercial debts owed by debtors other than farm producers may be 
reported to credit reporting agencies without following the provisions 
of paragraphs (a) through (k) of this section.



Sec. 792.18  Referral of debts to Department of Justice.

    (a) Debts that exceed $100,000.00 exclusive of interest, penalties, 
and administrative charges, or such higher amount as may be prescribed, 
shall be

[[Page 200]]

referred to the Department of Justice before they can be discharged.
    (b) Debts which cannot be compromised or on which collection action 
cannot be suspended or terminated, may be referred to the Department of 
Justice for collection action. Claims of less than $600.00 exclusive of 
interest, penalties, and administrative costs will not be referred to 
the Department of Justice unless:
    (1) Referral is important to a significant enforcement policy, or
    (2) The debtor not only has the clear ability to pay the claim, but 
the Government can effectively enforce payment, having due regard for 
the exemptions available to the debtor under State and Federal law and 
the judicial remedies available to the Government.



Sec. 792.19  Referral of delinquent debts to IRS for tax refund offset.

    FSA may refer legally enforceable delinquent debts to IRS to be 
offset against tax refunds due to debtors under 26 U.S.C. 6402, in 
accordance with the provisions of 31 U.S.C. 3720A and Treasury 
Department regulations.



Sec. 792.20  Reporting discharged debts to IRS.

    (a) In accordance with IRS regulations, FSA may report to IRS as 
discharged debts on IRS Form 1099-G the amounts specified in paragraph 
(b) of this section.
    (b) The following discharged debts may be reported to IRS: (1) The 
amount of a debt discharged under a compromise agreement between FSA and 
the debtor, except for compromises made due to doubt about the 
Government's ability to prove its case in court for the full amount of 
the debt.
    (2) The amount of a debt discharged by the running of the statutory 
period of limitation for collecting the debt by administrative offset 
specified in 31 U.S.C. 3716.



Sec. 792.21  Referral of debts to private collection agencies.

    If FSA' collection efforts have been unsuccessful after 90 days from 
the date of delinquency, the head of the agency or his designee may 
enter into a contract with any person or organization, under such terms 
and conditions as the head of the agency or his designee considers 
appropriate for collection services to recover debts owed to FSA.



Sec. 792.22  Collection and compromise.

    The Administrator, FSA, or his designee may compromise any claim of 
the Government of not more than $100,000.00 exclusive of interest, 
penalties, and administrative charges, or such higher amount as may be 
prescribed, that has not been referred to another executive or 
legislative agency for further collection action.



PART 795_PAYMENT LIMITATION--Table of Contents




                                 General

Sec.
795.1 [Reserved]
795.2 Applicability.
795.3 Definitions.
795.4 Family members.
795.5 Timing for determining status of persons.
795.6 Multiple individuals or other entities.
795.7 Entities or joint operations not considered as a person.
795.8 Corporations and stockholders.
795.9 Estate or trust.
795.10 Club, society, fraternal or religious organization.
795.11 Husband and wife.
795.12 Minor children.
795.13 Other cases.
795.14 Changes in farming operations.
795.15 Determination whether agreement is a share lease or a cash lease.
795.16 Custom farming.
795.17 Scheme or device.
795.20 Joint and several liability.
795.21 Appeals.
795.22 Interpretations.
795.23 Paperwork Reduction Act assigned number.
795.24 Relief.

    Authority: Sec. 1001 of the Food Security Act of 1985, as amended, 
99 Stat, 1444, as amended, 7 U.S.C 1308; Pub. L. 99-500 and Pub. L. 99-
591.

    Source: 43 FR 9784, Mar. 10, 1978, unless otherwise noted.

                                 General



Sec. 795.1  [Reserved]



Sec. 795.2  Applicability.

    (a) The provisions of this part are applicable to payments when so 
provided by the individual program regulations

[[Page 201]]

under which the payments are made. The amount of the limitation shall be 
as specified in the individual program regulations.
    (b) The limitation shall be applied to the payments for a commodity 
for a crop year.
    (c) The limitation shall not be applicable to payments made to 
States, political subdivisions, or agencies thereof for participation in 
the programs on lands owned by such States, political subdivisions, or 
agencies thereof so long as such lands are farmed primarily in the 
direct furtherance of a public function. However, the limitation is 
applicable to persons who rent or lease land owned by States, political 
subdivisions, or agencies thereof.
    (d) The limitation shall not be applicable to payments made to 
Indian tribal ventures participating in the programs where a responsible 
official of the Bureau of Indian Affairs or the Indian Tribal Council 
certifies that no more than the program payment limitation shall accrue 
directly or indirectly to any individual Indian and the State committee 
reviews and approves the exemption.
    (e) Except as provided in part 1497 of this title, this part shall 
not be applicabie to contracts entered into on or after August 1, 1988 
in accordance with part 704 of this chapter.

[49 FR 14719, Apr. 13, 1984, as amended at 51 FR 8453, Mar. 11, 1986; 51 
FR 36905, Oct. 16, 1986; 53 FR 29570, Aug. 5, 1988]



Sec. 795.3  Definitions.

    (a) The terms defined in part 719 of this chapter, governing 
reconstitutions of farms, shall be applicable to this part and all 
documents issued in accordance with this part, except as otherwise 
provided in this section.
    (b)(1) Subject to the provisions of this part, the term ``person'' 
shall mean an individual, joint stock company, corporation, association, 
trust, estate, or other legal entity. In order to be considered to be a 
separate person for the purposes of this part with respect to any crop, 
in addition to any other provision of this part, an individual or other 
legal; entity must:
    (i) Have a separate and distinct interest in the crop or the land on 
which the crop is produced;
    (ii) Exercise separate responsibility for such interest; and
    (iii) Be responsible for payment of the cost of farming related to 
such interest from a fund or account separate from that of any other 
individual or entity.
    (2) The term ``person'' shall not include any cooperative 
association of producers that markets commodities for producers with 
respect to the commodities so marketed for producers.
    (c) The term ``family member'' shall mean the individual, the great-
grandparent, grand-parent, child, grandchild, and great-grandchild of 
such individual and the spouses of all such individuals.
    (d) The term ``separate unit'' shall mean an individual who, prior 
to December 31, 1985: (1) Had been engaged in a separate farming 
operation and (2) in accordance with the provisions of this part, had 
been determined to be a separate person or could have so determined 
under the circumstances existing at such time.

[52 FR 26295, July 14, 1987]



Sec. 795.4  Family members.

    Effective for the 1987 through 1990 crops, an individual shall not 
be denied a determination that such individual was a ``person'' solely 
on the basis that:
    (a) A family member cosigns for, or makes a loan to, such individual 
and leases, loans or gives equipment, land or labor to such an 
individual; and
    (b) Such family members were organized as separate units prior to 
December 31, 1985.

[52 FR 26295, July 14, 1987]



Sec. 795.5  Timing for determining status of persons.

    Except as otherwise set forth in this part, the status of 
individuals or entities as of March 1, or such other date as may be 
determined and announced by the Administrator shall be the basis on 
which determinations are made in accordance with this part for the year 
for which the determination is made.

[51 FR 21836, June 16, 1986; 51 FR 36905, Oct. 16, 1986]

[[Page 202]]



Sec. 795.6  Multiple individuals or other entities.

    The rules in Sec. Sec. 795.5 through 795.16 shall be used to 
determine whether certain multiple individuals or legal entities are to 
be treated as one person or as separate persons for the purpose of 
applying the limitation. In cases in which more than one rule would 
appear to be applicable, the rule which is most restrictive on the 
number of persons shall apply.



Sec. 795.7  Entities or joint operations not considered as a person.

    A partnership, joint venture, tenants-in-common, or joint tenants 
shall not be considered as a person but, notwithstanding the provisions 
of Sec. 795.3, each individual or other legal entity who shares in the 
proceeds derived from farming by such joint operations shall be 
considered a separate person, except as otherwise provided in this part, 
and shall be listed as a producer for payment purposes on program 
documents. The payment shares listed on the program documents for each 
individual or other legal entity shall be the same as each individual or 
other legal entity shares in the proceeds derived from farming by such 
joint operation. Notwithstanding the foregoing, each individual or other 
legal entity who shares in the proceeds derived from farming by such 
joint operation shall not be considered as a separate person unless the 
individual or other legal entity is actively engaged in the farming 
operations of the partnership or other joint operation. An individual or 
other legal entity shall be considered as actively engaged in the 
farming operation only if its contribution to the joint operation is 
commensurate with its share in the proceeds derived from farming by such 
joint operation. Members of the partnership or joint venture must 
furnish satisfactory evidence that their contributions of land, labor, 
management, equipment, or capital to the joint operation are 
commensurate with their claimed shares of the proceeds. A capital 
contribution may be a direct out-of-pocket input of a specified sum or 
an amount borrowed by the individual. If the contribution consists 
substantially of capital, such capital must have been contributed 
directly to the joint operation by the individual or other legal entity 
and not acquired as a result of (a) a loan made to the joint operation, 
(b) a loan which was made to such individual or other legal entity by 
the joint operation or any of its members or related entities, or (c) a 
loan made to such individual or other legal entity which was guaranteed 
by the joint operation or any of its members or related entities.



Sec. 795.8  Corporations and stockholders.

    (a) A corporation (including a limited partnership) shall be 
considered as one person, and an individual stockholder of the 
corporation may be considered as a separate person to the extent that 
such stockholder is engaged in the production of the crop as a separate 
producer and otherwise meets the requirements of Sec. 795.3, except 
that a corporation in which more than 50 percent of the stock is owned 
by an individual (including the stock owned by the individual's spouse, 
minor children, and trusts for the benefit of such minor children), or 
by a legal entity, shall not be considered as a separate person from 
such individual or legal entity.
    (b) Where the same two or more individuals or other legal entities 
own more than 50 percent of the stock in each of two or more 
corporations, all such corporations shall be considered as one person.
    (c) The percentage share of the value of the stock owned by an 
individual or other legal entity shall be determined as of March 1 of 
the crop year, except that where a stockholder voluntarily acquires 
stock after March 1 and before the harvest of the crop, the amount of 
any stock so acquired shall be included in determining the percentage 
share of the value of the stock owned by the stockholder. Where there is 
only one class of stock, a stockholder's percentage share of the value 
of the outstanding stock shall be equal to the percentage of the 
outstanding stock owned by the stockholder. If the corporation has more 
than one class of stock the percentage share of the value of the stock 
owned by a stockholder shall be determined by the Deputy Administrator 
on the basis of market quotations, and if market quotations

[[Page 203]]

are lacking or too scarce to be recognized the percentage share of the 
value of the stock shall be determined by the Deputy Administrator on 
the basis of all relevant factors affecting the fair market value, 
including the rights and privileges of the various stock issues.

(Title I, Agricultural Act of 1970, as amended by the Agriculture and 
Consumer Protection Act of 1973, Pub. L. 93-86, 87 Stat. 221 (7 U.S.C. 
1307) and under Title I, Rice Production Act of 1975, Pub. L. 94-214, 90 
Stat. 181 (7 U.S.C. 428c note), and Pub. L. 95-156, 91 Stat. 1264 (7 
U.S.C. 1307 note, 7 U.S.C. 1307, 7 U.S.C. 1441))

[43 FR 9784, Mar. 10, 1978, as amended at 45 FR 10311, Feb. 15, 1980; 45 
FR 11795, Feb. 22, 1980]



Sec. 795.9  Estate or trust.

    (a) An estate or irrevocable trust shall be considered as one person 
except that, where two or more estates or irrevocable trusts have common 
beneficiaries or heirs (including spouses and minor children) with more 
than a 50-percent interest, all such estates or irrevocable trusts shall 
be considered as one person.
    (b) An individual heir of an estate or beneficiary of a trust may be 
considered as a separate person to the extent that such heir or 
beneficiary is engaged in the production of crops as a separate producer 
and otherwise meets the requirements of Sec. 795.3, except that an 
estate or irrevocable trust which has a sole heir or beneficiary shall 
not be considered as a separate person from such heir or beneficiary.
    (c) Where an irrevocable trust or an estate is a producer on a farm 
and one or more of the beneficiaries or heirs of such trust or estate 
are minor children, the minor children's pro rata share of the program 
payments to the trust or estate shall be attributed to the parent of the 
minor children except as otherwise provided in Sec. 795.12.
    (d) A revocable trust shall not be considered as a separate person 
from the grantor.



Sec. 795.10  Club, society, fraternal or religious organization.

    Each individual club, society, fraternal or religious organization 
may be considered as a separate person to the extent that each such 
club, society, fraternal or religious organization is engaged in the 
production of crops as a separate producer and otherwise meets the 
requirements of Sec. 795.3.



Sec. 795.11  Husband and wife.

    With respect to the 1988 crop year, a husband and wife shall be 
considered to be one person except that such individuals who, prior to 
their marriage, were separately engaged in unrelated farming operations 
will be determined to be separate persons with respect to such farming 
operations so long as the operations remain separate and distinct from 
any farming operation conducted by the other spouse if such individuals 
have executed a Contract to Participate in the 1988 Price Support and 
Production Adjustment Programs by April 15, 1988. Such individuals must 
file a form FSA-561 with the county committee for each such farming 
operation by July 8, 1988, if they desire to be considered as separate 
persons under this section.

[53 FR 21410, June 8, 1988]



Sec. 795.12  Minor children.

    (a) A minor child and his parents or guardian (or other person 
responsible for him) shall be considered as one person, except that the 
minor child may be considered as a separate person if such minor child 
is a producer on a farm in which the parents or guardian or other person 
responsible for him (including any entity in which the parents or 
guardian or other person responsible for him has a substantial interest, 
i.e., more than a 20-percent interest) takes no part in the operation of 
the farm (including any activities as a custom farmer) and owns no 
interest in the farm or allotment or in any portion of the production on 
the farm, and if such minor child:
    (1) Is represented by a court-appointed guardian who is required by 
law to make a separate accounting for the minor and ownership of the 
farm is vested in the minor, or
    (2) Has established and maintains a different household from his 
parents or guardian and personally carries out the actual farming 
operations on the farm for which there is a separate accounting, or

[[Page 204]]

    (3) Has a farming operation resulting from his being the beneficiary 
of an irrevocable trust and ownership of the property is vested in the 
trust or the minor.
    (b) A person shall be considered a minor until he reaches 18 years 
of age. Court proceedings conferring majority on a person under 18 years 
of age will not change such person's status as a minor for purposes of 
applying the regulations.



Sec. 795.13  Other cases.

    Where the county committee is unable to determine whether certain 
individuals or legal entities involved in the production of a commodity 
are to be treated as one person or separate persons, all the facts 
regarding the arrangement under which the commodity is produced shall be 
submitted to the State committee for decision. Where the State committee 
is unable to determine whether such individuals or legal entities are to 
be treated as one person or separate persons, all the facts regarding 
the arrangement under which the farming operation is conducted shall be 
submitted to the Deputy Administrator for decision.



Sec. 795.14  Changes in farming operations.

    (a) Subject to the provisions of this part, a person may exercise 
his or her right heretofore existing under law, to divide, sell, 
transfer, rent, or lease his or her property if such division, sale, 
transfer, rental arrangement, or lease is legally binding as between the 
parties thereto. However, any document representing a division, sale, 
transfer, rental arrangement, or lease which is fictitious or not 
legally binding as between the parties thereto shall be considered to be 
for the purpose of evading the payment limitation and shall be 
disregarded for the purpose of applying the payment limitation. Any 
change in farming operations that would otherwise serve to increase the 
number of persons for application of the payment limitation must be bona 
fide and substantive.
    (b) A substantive change includes, for example, a substantial 
increase or decrease in the size of the farm by purchase, sale, or 
lease; a substantial increase or decrease in the size of allotment by 
purchase, sale, or lease; a change from a cash lease to a share lease or 
vice versa; and dissolution of an entity such as a corporation or 
partnership.
    (c) Examples of the types of changes that would not be considered as 
substantive are the following:

    Example 1. A corporation is owned equally by four shareholders. The 
corporation owns land, buildings, and equipment and in the prior year 
carried out substantial farming operations. Three of the shareholders 
propose forming a partnership which they would own equally. The 
partnership would cash lease land and equipment from the corporation 
with the objective of having the three partners considered as separate 
persons for purposes of applying the payment limitation under the 
provisions of Sec. 795.7 of the regulations.
    The formation of such a partnership and the leasing of land from a 
corporation in which they hold a major interest would not constitute a 
substantive and bona fide change in operations. Therefore, the 
corporation and the partners would be limited to a single payment 
limitation.
    Example 2. Three individuals each have individual farming operations 
which, if continued unchanged, would permit them to have a total of 
three payment limitations.
    The three individuals propose forming a corporation which they would 
own equally. The corporation would then cash lease a portion of the 
farmland owned and previously operated by the individuals with the 
objective of having the corporation considered as a separate person for 
purposes of applying the payment limitation under the provisions of 
Sec. 795.8 of the regulations. The formation of such a corporation and 
the leasing of land from the stockholders would not constitute a 
substantive and bona fide change in operations. Therefore, the 
corporation and the three individuals would be limited to three payment 
limitations.



Sec. 795.15  Determining whether agreement is a share lease or a cash 
lease.

    (a) Cash lease. If a rental agreement contains provisions for a 
guaranteed minimum rental with respect to the amount of rent to be paid 
to the landlord by a tenant, such agreement shall be considered to be a 
cash rental agreement. In addition, the rental agreement must be 
customary and reasonable for the area.
    (b) Share lease. If a rental agreement contains provisions that 
require the

[[Page 205]]

payment of rent on the basis of the amount of the crop produced or the 
proceeds derived from the crop, such agreement shall be considered to be 
a share rental agreement. In addition, the rental agreement must be 
customary and reasonable for the area.

[51 FR 8454, Mar. 11, 1986 and 51 FR 36905, Oct. 16, 1986]



Sec. 795.16  Custom farming.

    (a) Custom farming is the performance of services on a farm such as 
land preparation, seeding, cultivating, applying pesticides, and 
harvesting for hire with remuneration on a unit of work basis, except 
that, for the purpose of applying the provisions of this section, the 
harvesting of crops and the application of agricultural chemicals by 
firms regularly engaged in such businesses shall not be regarded as 
custom farming. A person performing custom farming shall be considered 
as being separate from the person for whom the custom farming is 
performed only if:
    (1) The compensation for the custom farming is paid at a unit of 
work rate customary in the area and is in no way dependent upon the 
amount of the crop produced, and (2) the person performing the custom 
farming (and any other entity in which such person has more than a 20-
percent interest) has no interest, directly or indirectly, (i) in the 
crop on the farm by taking any risk in the production of the crop, 
sharing in the proceeds of the crop, granting or guaranteeing the 
financing of the crop, (ii) in the allotment on the farm, or (iii) in 
the farm as landowner, landlord, mortgage holder, trustee, lienholder, 
guarantor, agent, manager, tenant, sharecropper, or any other similar 
capacity.
    (b) A person having more than a 20-percent interest in any legal 
entity performing custom farming shall be considered as being separate 
from the person for whom the custom farming is performed only if:
    (1) The compensation for the custom farming service is paid at a 
unit of work rate customary in the area and is in no way dependent upon 
the amount of the crop produced, and (2) the person having such interest 
in the legal entity performing the custom farming has no interest, 
directly or indirectly, (i) in the crop on the farm by taking any risk 
in the production of the crop, sharing in the proceeds of the corp, 
granting or guaranteeing the financing of the crop, (ii) in the 
allotment on the farm, or (iii) in the farm as landowner, landlord, 
mortgage holder, trustee, lienholder, guarantor, agent, manager, tenant, 
sharecropper, or in any other similar capacity.



Sec. 795.17  Scheme or device.

    All or any part of the payments otherwise due a person under the 
upland cotton, wheat, feed grain and rice programs on all farms in which 
the person has an interest may be withheld or required to be refunded if 
the person adopts or participates in adopting any scheme or device 
designed to evade or which has the effect of evading the rules of this 
part. Such acts shall include, but are not limited to, concealing from 
the county committee any information having a bearing on the application 
of the rules of this part or submitting false information to the county 
committee (for example, a set-aside agreement which is entered into that 
differs from information furnished to the county committee concerning 
the manner in which program payments are actually shared, concerning the 
actual facts of a sale, or concerning the transfer of property) or 
creating fictitious entities for the purpose of concealing the interest 
of a person in a farming operation.



Sec. 795.20  Joint and several liability.

    Where two or more individuals or legal entities, who are treated as 
one person hereunder, receive payments which in the aggregate exceed the 
limitation, such individuals or legal entities shall be liable, jointly 
and severally, for any liability arising therefrom. The provisions of 
this part requiring the refund of payments shall be applicable in 
addition to any liability under criminal and civil fraud statutes.



Sec. 795.21  Appeals.

    Any person may obtain reconsideration and review of determinations 
made under this part in accordance with the appeal regulations, part 780 
of this chapter, as amended.

[[Page 206]]



Sec. 795.22  Interpretations.

    In interpretations previously issued pursuant to the payment 
limitation regulations and published at 36 FR 16569, 37 FR 3049, 39 FR 
15021 and 41 FR 17527 shall be applicable in construing the provisions 
of this part.



Sec. 795.23  Paperwork Reduction Act assigned number.

    The information collection requirements contained in these 
regulations (7 CFR part 795) have been approved by the Office of 
Management and Budget under the provisions of 44 U.S.C. Chapter 35 and 
have been assigned OMB control number 0560-0096.

[49 FR 14719, Apr. 13, 1984]



Sec. 795.24  Relief.

    If a producer relied on a county committee and/or State committee 
``person'' determination for a crop year and higher reviewing authority 
makes a more restrictive determination, the Deputy Administrator may 
grant relief only for such crop year if the producer was not afforded an 
opportunity to exercise other alternatives with respect to the 
producer's farming operation and the program provisions and the county 
committee has determined that the producers acted in good faith based 
upon the original ``person'' determination.

[51 FR 8454, Mar. 11, 1986; 51 FR 36905, Oct. 16, 1986]

[[Page 207]]



                       SUBCHAPTER F_PUBLIC RECORDS





PART 798_AVAILABILITY OF INFORMATION TO THE PUBLIC--Table of Contents




Sec.
798.1 General statement.
798.2 Public inspection and copying.
798.3 Index.
798.4 Requests for records.
798.5 Appeals.
798.6 Fees.

    Authority: 5 U.S.C. 301, 552; 7 CFR 1.1 through 1.16.

    Source: 44 FR 10353, Feb. 20, 1979, unless otherwise noted.



Sec. 798.1  General statement.

    This part is issued in accordance with the regulations of the 
Secretary of Agriculture at 7 CFR 1.1 through 1.16, and appendix A, 
implementing the Freedom of Information Act (5 U.S.C. 552). The 
Secretary's regulations as implemented by the regulations in this part, 
govern the availability of records of the FSA and Commodity Credit 
Corporation (CCC) to the public.



Sec. 798.2  Public inspection and copying.

    5 U.S.C. 552(a)(2) requires that certain materials be made available 
for public inspection and copying. Members of the public may request 
access to such materials maintained by FSA and/or CCC at the Office of 
the Director, Information Division, Farm Service Agency, Room 3608 South 
Building, P.O. Box 2415, Washington, D.C. 20013, between the hours of 
8:15 and 4:45 p.m., Monday through Friday.

[50 FR 53259, Dec. 31, 1985]



Sec. 798.3  Index.

    5 U.S.C. 552(a)(2) requires that each agency publish or otherwise 
make available a current index of all materials required to be made 
available for public inspection and copying. FSA maintains an index of 
FSA National Handbooks, CCC Board Dockets, decisions of the Board of 
Contract Appeals of the Department of Agriculture affecting FSA or CCC, 
and Marketing Quota Review Committee determinations. In view of the 
small number of public requests for such index, publication of the index 
is unnecessary and impractical. The index is maintained and available to 
the public at the office shown in Sec. 798.2 and copies of the index 
are available upon request in person or by mail to that office.



Sec. 798.4  Request for records.

    Request for records under 5 U.S.C. 552(a)(3) shall be made in 
accordance with 7 CFR 1.3. Reasonable requests for material not in 
existence may also be honored where their compilation will not unduly 
interfere with FSA operations and programs. Each FSA office in the field 
and each FSA office and division in Washington (see statement of 
Organization and Functions of FSA, 40 FR 18815, and of CCC, 35 FR 14951, 
and any amendments thereto) is designated as an ``information center'' 
and shall make space available to inspect and copy records in their 
custody not exempted from disclosure. Copies of records shall also be 
made available upon request. The head of each office or division is 
authorized to receive requests for records and to make determinations 
regarding requests for records in the office's custody in accordance 
with 7 CFR 1.4(c). Requests to Washington divisions and offices shall be 
addressed to USDA, FSA, P.O. Box 2415, Washington, D.C. 20013. The heads 
of FSA field offices shall be addressed as listed in the local telephone 
directory under ``U.S. Government, Department of Agriculture, FSA''. 
Names and addresses of heads of field offices may also be obtained from 
the office indicated in Sec. 798.2.



Sec. 798.5  Appeals.

    Any person whose request under Sec. 798.4 of this part is denied 
shall have the right to appeal such denial. This appeal shall be 
submitted in accordance with 7 CFR 1.3(e) and addressed to the 
Administrator, FSA (Executive Vice-President, CCC), USDA, FSA, P.O. Box 
2415, Washington, D.C. 20013.



Sec. 798.6  Fees.

    This schedule supplements the fee schedule in 7 CFR, part 1, subpart 
A,

[[Page 208]]

appendix A and sets forth the fees to be charged by FSA for providing 
copies of records, materials, and services not covered in appendix A:
    (a) Records, materials and services furnished without cost.
    (1) One copy each of related directives, or blank forms required by 
FSA for program participation, if requester is a program participant.
    (2) List of names and addresses of county and/or community committee 
members, and names of county employees in the county.
    (3) One copy of an investigation report furnished to an appellant 
for a program appeal.
    (b) Records, materials and services for which fees are charged.
    (1) National handbooks. Three dollars for the first copy. One dollar 
for each additional copy. (The term ``copy'' includes all national 
amendments to date. They will be furnished separately for the requester 
to assemble).
    (2) Field supplementation to national handbooks. Five cents per 
page, not to exceed $3, for each supplement.
    (3) Computerized records. The requester shall furnish the necessary 
reels when computerized records are furnished on magnetic tape.

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                  SUBCHAPTER G_ENVIRONMENTAL PROTECTION





PART 799_ENVIRONMENTAL QUALITY AND RELATED ENVIRONMENTAL 
CONCERNS_COMPLIANCE WITH THE NATIONAL ENVIRONMENTAL 

POLICY ACT--Table of Contents




Sec.
799.1 Background.
799.2 Purpose.
799.3 Applicability.
799.4 Definitions.
799.5 FSA officials and offices responsible for carrying out NEPA.
799.6 Adoption of regulations issued by others in implementing the 
          procedural provisions of NEPA.
799.7 Early involvement in private and state and local activities 
          requiring Federal approval.
799.8 Making supplements to EISs part of the final administrative 
          record.
799.9 Ensuring that environmental factors are considered in agency 
          decisionmaking.
799.10 Criteria and identification of FSA actions as to degree of 
          involvement under the NEPA process.
799.11 Expedited procedures.
799.12 Program termination.
799.13 Environmental information.

Appendix 1 to Part 799--Organization Chart--FSA-USDA
Appendix 2 to Part 799--Form FSA-929

    Authority: Pub. L. 91-190, 83 Stat. 852, as amended (42 U.S.C. 
4321); E.O. 11514; E.O. 11991; 40 CFR 1507.3, 7 CFR 3100.

    Source: 45 FR 32313, May 16, 1980, unless otherwise noted.



Sec. 799.1  Background.

    The National Environmental Policy Act (NEPA) of 1969 (42 U.S.C. 4321 
et seq.) establishes national policies and goals for the protection of 
the environment. Section 102(2) of NEPA contains certain procedural 
requirements directed toward the attainment of such goals. Section 
(102)(2) also requires all Federal agencies to give appropriate 
consideration to the environmental effects of their proposed actions in 
their decisionmaking and to prepare detailed environmental statements on 
recommendations or reports on proposals for legislation and other major 
Federal actions significantly affecting the quality of the human 
environment. Executive Order 11991 of May 24, 1977 (42 FR 26967), 
directed the Council on Environmental Quality (CEQ) to issue regulations 
to implement the procedural provisions of NEPA. Accordingly, CEQ issued 
final NEPA regulations (40 CFR parts 1500 through 1508) on November 29, 
1978, which are binding on all Federal agencies as of July 30, 1979. 
These regulations provide that each Federal agency shall as necessary 
adopt implementing procedures to supplement the regulations. The U.S. 
Department of Agriculture adopted such procedures in a final rule (7 CFR 
part 3100) published on July 30, 1979. The CEQ regulations at 40 CFR 
1507.3 (b) identify those items which must be addressed in agency 
procedures.



Sec. 799.2  Purpose.

    The purpose of this part is to establish agency procedures which 
supplement NEPA regulations issued by CEQ and USDA. This regulation, 
together with such NEPA regulations issued by CEQ and USDA, will 
supersede regulations issued by the Farm Service Agency (FSA) on 
December 20, 1974 (39 FR 43996).



Sec. 799.3  Applicability.

    This part, together with NEPA regulations issued by CEQ and USDA, 
applies to all programs administered by FSA which might have significant 
impacts on the environment.



Sec. 799.4  Definitions.

    (a) The term environmental evaluation means agency appraisal of the 
potential or likely environmental impacts of proposed legislation, a new 
program, a major change in a program, an action related to a program or 
an action related to part of a program which will be used by the 
responsible agency official to determine whether or not an environmental 
assessment and/or an environmental impact statement is needed. Such 
appraisal shall relate to the same environmental concerns as an 
environmental impact statement. The environmental evaluation shall 
particularly

[[Page 210]]

focus on the adverse affects of FSA actions on the environmental factors 
listed on Form FSA-929 (see Appendix 2) and on the significance of the 
action as discussed in the CEQ regulations concerning NEPA at 40 CFR 
1508.27. As required, the environmental evaluation shall be made by an 
interdisciplinary team.
    (b) In the regulations in this part and in all instructions, forms, 
and documents in connection therewith, all other words and phrases 
shall, unless the context or subject matter otherwise requires, have the 
meanings assigned to them in the regulations governing reconstitution of 
farms, allotments and bases, part 719 of this chapter, as amended.



Sec. 799.5  FSA officials and offices responsible for carrying out NEPA.

    (a) Responsible officials. The Administrator of FSA, or his or her 
designee, is the responsible Federal official for carrying out the 
purpose of NEPA for all FSA programs. County committees, State 
committees, and Directors of Washington Divisions, within their 
respective areas of responsibility with the assistance of the FSA 
representative on the USDA Environmental Quality Committee, shall assist 
the Administrator in complying with the policies and purposes of NEPA 
generally, and, in particular, in determining whether the quality of the 
human environment will be significantly affected in implementing agency 
programs and preparing the necessary environmental documents.
    (b) Offices responsible for carrying out NEPA--(1) Washington 
divisions. Washington divisions are responsible for carrying out NEPA 
with regard to legislative proposals and multi-State and national 
programs or major revisions of national programs.
    (2) State committees. State committees are responsible for carrying 
out NEPA with regard to major actions in a State or area within a State.
    (3) County committees. County committees are responsible for 
carrying out NEPA with regard to major actions within a county.
    (c) All environmental assessments, environmental impact statements 
(EISs) and similar documents will be forwarded through the appropriate 
agency channels to the FSA representative on the USDA Environmental 
Quality Committee for review and submission to the Administrator.



Sec. 799.6  Adoption of regulations issued by others in implementing 
the procedural provisions of NEPA.

    In addition to provisions provided for in this part 799, FSA adopts 
the NEPA regulations issued by CEQ (40 CFR parts 1500 through 1508) and 
NEPA regulations issued by USDA (7 CFR part 3100).



Sec. 799.7  Early involvement in private and state and local activities 
requiring Federal approval.

    (a) The NEPA regulations at 40 CFR 1501.2(d) require agencies to 
provide for early involvement in actions which, while planned by private 
applicants or other non-Federal entities, require some form of Federal 
involvement.
    (b) To implement the requirements of 40 CFR 1501.2(d) with respect 
to these actions FSA shall:
    (1) Prepare, where practicable, generic guidelines describing the 
scope and level of environmental information required from applicants 
seeking assistance from FSA as a basis for evaluating their proposed 
actions, and make these guidelines available upon request.
    (2) Provide such guidance on a project-by-project basis to 
applicants seeking assistance from FSA.
    (3) Upon receipt of an application for agency approval, or 
notification that an application will be filed, consult as required with 
other appropriate parties to initiate and coordinate the necessary 
environmental analyses.
    (c) The responsibilities under this section shall be coordinated by 
the Conservation and Environmental Protection Division of the Farm 
Service Agency, Washington, D.C.
    (d) To facilitate compliance with paragraph (a) of this section, 
private applicants seeking assistance from FSA and other non-Federal 
entities are expected to:
    (1) Contact FSA as early as possible in the planning process for 
guidance on the scope and level of environmental

[[Page 211]]

information required to be submitted in support of their application;
    (2) Conduct any studies which are deemed necessary and appropriate 
by FSA to determine the impact of the proposed action on the human 
environment;
    (3) Consult with appropriate Federal, regional, State and local 
agencies and other potentially interested parties during preliminary 
planning stages to ensure that all environmental factors are identified;
    (4) Submit applications for all Federal, regional, State and local 
approvals as early as possible in the planning process;
    (5) Notify FSA as early as possible of all other Federal, regional, 
State, local and Indian tribe actions required for project completion so 
that FSA may coordinate all Federal environmental reviews; and
    (6) Notify FSA of all known parties potentially affected by or 
interested in the proposed action.



Sec. 799.8  Making supplements to EISs part of the final administrative 
record.

    Where FSA evaluates a proposal on the basis of a formal 
administrative record and an EIS on the proposal has been prepared, any 
supplement to the EIS shall be made a part of the formal record before a 
final decision on the proposal is made.



Sec. 799.9  Ensuring that environmental factors are considered in agency 
decisionmaking.

    (a) The NEPA regulations at 40 CFR 1501.1 contain requirements to 
ensure adequate consideration of environmental factors in 
decisionmaking. To fulfill these requirements, FSA officials shall:
    (1) Consider all relevant environmental factors in evaluating 
proposals for agency action;
    (2) Make all relevant environmental documents, comments and 
responses part of the record in formal rulemaking or adjudicatory 
proceedings.
    (3) Ensure that all relevant environmental documents, comments and 
responses accompany the proposal through existing review processes;
    (4) Consider only those alternatives encompassed by the range of 
alternatives discussed in the relevant environmental documents when 
evaluating proposals for agency action.
    (5) Where an EIS has been prepared, consider the specific 
alternatives analyzed in the EIS when evaluating the proposal which is 
the subject of the EIS.
    (b) The four categories of FSA activities that have or are likely to 
have significant environment impacts on the human environment are:
    (1) Legislative proposals.
    (2) Initial program implementation.
    (3) Major changes in ongoing programs.
    (4) Major environmental concerns with ongoing programs.
    (c) Initial NEPA involvement in program categories in paragraph (b) 
of this section shall begin at the time FSA begins developing proposed 
legislation, begins the planning stage for implementing a new or changed 
program or receives notice that an ongoing program may have a 
significant adverse impact on the quality of the human environment. 
Where a legislative EIS or environmental assessment is part of the 
formal transmittal of a legislative program proposal to Congress, such 
legislative EIS or assessment may negate the need for the subsequent 
preparation of a program impact statement when FSA implements the 
resulting program. The decision whether such additional statement is 
needed will be made by an interdisciplinary team. The NEPA process on 
legislative proposals and FSA programs is carried out at the national 
level.
    (d) Individual farm participation in FSA programs will normally not 
require any major involvement with the NEPA process. The practices 
carried out under FSA programs that might have impacts on the quality of 
the human environment will normally have been discussed in environmental 
assessments or impact statements on the applicable programs. However, 
for those practices that might significantly affect the quality of the 
human environment, the county committee

[[Page 212]]

shall make an environmental evaluation before approval. If the 
environmental evaluation shows that the implementation of a proposed FSA 
practice on an individual farm will have significant adverse affects on 
the quality of the human environment, the county committee will not 
approve the practice implementation until after the completion of the 
NEPA-EIS process in accordance with this part. For those actions for 
which technical assistance is provided by an agency other than FSA, and 
such technical agency is required by its regulations to implement NEPA 
requirements when providing such assistance, the county committee shall 
use the environmental determination and considerations of such agency 
instead of duplicating the NEPA-EIS process. Individual farm 
participation in acreage set-aside, acreage allotments, price support 
and loans and other similar or related programs will not significantly 
affect the quality of the human environment.
    (e) Pooling agreements and special projects carried out under 
several FSA programs involving two or more farmers in a local geographic 
area will not normally require any major involvement with the NEPA 
process. However, the county committee shall, with the assistance of a 
local interdisciplinary team, as necessary, make an environmental 
evaluation of proposed pooling agreements or special projects that have 
a potential for significantly affecting the quality of the human 
environment. The NEPA process shall begin with the initial involvement 
of FSA personnel in the planning or development of pooling agreements or 
special projects. If it is determined from an environmental evaluation 
that the implementation of a proposed pooling agreement or a proposed 
special project will have a significant adverse impact on the quality of 
the human environment, the completion of the NEPA-EIS process in 
accordance with these regulations will be necessary before approval. For 
those actions for which technical assistance is provided by an agency 
other than FSA and such technical agency is required by its regulations 
to implement NEPA when providing such assistance the county committee 
shall use the environmental determinations and considerations of such 
agency instead of duplicating the NEPA-EIS process.



Sec. 799.10  Criteria and identification of FSA actions as to degree of 
involvement under the NEPA process.

    (a) FSA will for each of its legislative proposals, initial program 
implementations, program changes or any actions under its ongoing 
programs make a determination by the use of an environmental evaluation 
as to whether or not an environmental assessment or EIS is required.
    (b) The NEPA regulations issued by CEQ at 40 CFR 1507.3(b)(2) in 
conjunction with the regulations at 40 CFR 1508.4 require agencies to 
determine those typical classes of actions for treatment under NEPA. The 
typical classes of FSA actions for treatment under NEPA are set forth as 
follows:
    (1) Actions normally requiring an EIS are:
    (i) Production adjustment programs to balance supply and demand of 
specified commodities, through cropland set-aside or other acreage 
diversion.
    (ii) Agricultural Conservation Program.
    (iii) Rural Clean Water Program.
    (iv) Other major actions that are determined after an environmental 
evaluation and/or an environmental assessment to significantly affect 
the quality of the human environment.
    (2) Actions normally not requiring an assessment or an EIS are:
    (i) Individual farm participation in FSA programs.
    (ii) Pooling agreements and special projects under FSA programs.
    (iii) Production adjustment programs for tobacco, peanuts and extra 
long staple cotton.
    (iv) Emergency Conservation Program.
    (v) Water Bank Program.
    (vi) Forestry Incentives Program.
    (vii) Sugar Program.
    (viii) Wool and Mohair Incentives Program.
    (ix) Bee and Dairy Indemnity Programs.
    (x) Commodity Income and Support and Disaster Protection Programs.
    (xi) Facility Loan Program.
    (xii) Grain Reserve Program.
    (xiii) Livestock Feed Program.

[[Page 213]]

    (xiv) Naval Stores Program.
    (xv) Indian Acute Distress Donation Program.
    (xvi) Other major actions that are determined after an environmental 
evaluation not to significantly affect the quality of the human 
environment.
    (c) FSA will independently determine by an environmental evaluation 
whether an environmental assessment or an EIS is required on actions 
included in paragraph (b) of this section where the presence of 
extraordinary circumstances or other unforseeable factors indicate that 
some other level of environmental review may be appropriate.
    (d) If an environmental evaluation indicates that an action will 
significantly affect the quality of the human environment, the 
preparation of an environmental assessment and/or an EIS will be 
necessary before the action is carried out.



Sec. 799.11  Expedited procedures.

    Where emergency circumstances make it necessary to take action with 
significant environmental impact without following the provisions of the 
NEPA regulations issued by CEQ, USDA, and FSA, FSA will, by working 
through the USDA Office of Environmental Quality, consult with CEQ and/
or EPA about alternative arrangements (7 CFR 3100.35).



Sec. 799.12  Program termination.

    An environmental assessment or an EIS will not be needed when a 
program or part of a program is discontinued because of a mandatory 
legislative requirement where the enabling legislation for such program 
does not provide authority to ameliorate or mitigate any resulting 
environmental effects on the quality of the human environment.



Sec. 799.13  Environmental information.

    Interested persons may contact the Conservation and Environmental 
Protection Division, FSA, for information regarding FSA compliance with 
NEPA.

[[Page 214]]

           Appendix 1 to Part 799--Organization Chart FSA-USDA
[GRAPHIC] [TIFF OMITTED] TC19SE91.000


[[Page 215]]



                  Appendix 2 to Part 799--Form FSA-929
[GRAPHIC] [TIFF OMITTED] TC19SE91.001


[[Page 217]]



  CHAPTER VIII--GRAIN INSPECTION, PACKERS AND STOCKYARD ADMINISTRATION 
      (FEDERAL GRAIN INSPECTION SERVICE), DEPARTMENT OF AGRICULTURE




  --------------------------------------------------------------------
Part                                                                Page
800             General regulations.........................         219
801             Official performance requirements for grain 
                    inspection equipment....................         299
802             Official performance and procedural 
                    requirements for grain weighing 
                    equipment and related grain handling 
                    systems.................................         304
810             Official United States standards for grain..         306
868             General regulations and standards for 
                    certain agricultural commodities........         332

[[Page 219]]



PART 800_GENERAL REGULATIONS--Table of Contents




                               Definitions

Sec.
800.0 Meaning of terms.

                             Administration

800.1 Mission.
800.2 Administrator.
800.3 Nondiscrimination--policy and provisions.
800.4 Procedures for establishing regulations, official standards, and 
          official criteria.
800.5 Complaints and reports of alleged violations.
800.6 Provisions for hearings.
800.7 Information about the Service, Act, and regulations.
800.8 Public information.

    Official Inspection and Class X or Class Y Weighing Requirements

800.15 Services.
800.16 Certification requirements for export grain.
800.17 Special inspection and weighing requirements for sacked export 
          grain.
800.18 Waivers of the official inspection and Class X weighing 
          requirements.

                 Recordkeeping and Access to Facilities

800.25 Required elevator and merchandising records.
800.26 Access to records and facilities.

                              Registration

800.30 Foreign commerce grain business.
800.31 Who must register.
800.32 When to register.
800.33 How to register.
800.34 Registration fee.
800.35 Review of applications.
800.36 Certificates of registration.
800.37 Notice of change in information.
800.38 Termination and renewal of registration.
800.39 Suspension or revocation of registration for cause.

        Conditions for Obtaining or Withholding Official Services

800.45 Availability of official services.
800.46 Requirements for obtaining official services.
800.47 Withdrawal of request for official services.
800.48 Dismissal of request for official services.
800.49 Conditional withholding of official services.
800.50 Refusal of official services and civil penalties.
800.51 Expenses of agency, field office, or Board of Appeals and Review.
800.52 Official services not to be denied.

                              Descriptions

800.55 Descriptions by grade.
800.56 Requirements on descriptions.

                        Grain Handling Practices

800.60 Deceptive actions and practices.
800.61 Prohibited grain handling practices.

                                  Fees

800.70 Fees for official services performed by agencies.
800.71 Fees assessed by the Service.
800.72 Explanation of additional service fees for services performed in 
          the United States only.
800.73 Computation and payment of service fees; general fee information.

                       Kinds of Official Services

800.75 Kinds of official inspection and weighing services.
800.76 Prohibited services; restricted services.

                    Inspection Methods and Procedures

800.80 Methods and order of performing official inspection services.
800.81 Sample requirements; general.
800.82 Sampling provisions by level of service.
800.83 Sampling provisions by kind of movement.
800.84 Inspection of grain in land carriers, containers, and barges in 
          single lots.
800.85 Inspection of grain in combined lots.
800.86 Inspection of shiplot, unit train, and lash barge grain in single 
          lots.
800.87 New inspections.
800.88 Loss of identity.

                   Weighing Provisions and Procedures

800.95 Methods and order of performing weighing services.
800.96 Weighing procedures.
800.97 Weighing grain in containers, land carriers, barges, and 
          shiplots.
800.98 Weighing grain in combined lots.
800.99 Checkweighing sacked grain.

                            Original Services

800.115 Who may request original services.
800.116 How to request original services.
800.117 Who shall perform original services.
800.118 Certification.

     Official Reinspection Services and Review of Weighing Services

800.125 Who may request reinspection services or review of weighing 
          services.
800.126 How to request reinspection or review of weighing services.
800.127 Who shall perform reinspection or review of weighing services.

[[Page 220]]

800.128 Conflicts of interest.
800.129 Certificating reinspection and review of weighing results.

                       Appeal Inspection Services

800.135 Who may request appeal inspection services.
800.136 How to request appeal inspection services.
800.137 Who shall perform appeal inspection services.
800.138 Conflict of interest.
800.139 Certificating appeal inspections.

                  Official Records and Forms (General)

800.145 Maintenance and retention of records--general requirements.
800.146 Maintenance and retention of records issued by the Service under 
          the Act.
800.147 Maintenance and retention of records on delegations, 
          designations, contracts, and approval of scale testing 
          organizations.
800.148 Maintenance and retention of records on organization, staffing, 
          and budget.
800.149 Maintenance and retention of records on licenses and approvals.
800.150 Maintenance and retention of records on fee schedules.
800.151 Maintenance and retention of records on space and equipment.
800.152 Maintenance and retention of file samples.
800.153 Maintenance and retention of records on official inspection, 
          Class X or Class Y weighing, and equipment testing service.
800.154 Availability of official records.
800.155 Detailed work records--general requirements.
800.156 Official inspection records.
800.157 Official weighing records.
800.158 Equipment testing work records.
800.159 Related official records.

                          Official Certificates

800.160 Official certificates; issuance and distribution.
800.161 Official certificate requirements.
800.162 Certification of grade; special requirements.
800.163 Divided-lot certificates.
800.164 Duplicate certificates.
800.165 Corrected certificates.
800.166 Reproducing certificates.

           Licenses and Authorizations (For Individuals Only)

800.170 When a license or authorization or approval is required.
800.171 Who may be licensed or authorized.
800.172 Applications for licenses.
800.173 Examinations and reexaminations.
800.174 Issuance and possession of licenses and authorizations.
800.175 Termination of licenses.
800.176 Voluntary cancellation or suspension of licenses.
800.177 Automatic suspension of license by change in employment.
800.178 Summary revocation of licenses.
800.179 Refusal of renewal, suspension, or revocation of licenses for 
          cause.
800.180 Summary cancellation of licenses.

         Duties and Conduct of Licensed and Authorized Personnel

800.185 Duties of official personnel and warehouse samplers.
800.186 Standards of conduct.
800.187 Conflicts of interest.
800.188 Crop year, variety, and origin statements.
800.189 Corrective actions for violations.

   Delegations, Designations, Approvals, Contracts, and Conflicts of 
                                Interest

800.195 Delegations.
800.196 Designations.
800.197 Approval as a scale testing and certification organization.
800.198 Contracts.
800.199 Conflict-of-interest provisions.

             Supervision, Monitoring, and Equipment Testing

800.215 Activities that shall be supervised.
800.216 Activities that shall be monitored.
800.217 Equipment that shall be tested.
800.218 Review of rejection or disapproval of equipment.
800.219 Conditional approval on use of equipment.

    Authority: 7 U.S.C. 71-87k.

    Effective Date Note: At 71 FR 52405, Sept. 6, 2006, part 800 was 
amended by revising the authority citation, effective Sept. 1, 2007. For 
the convenience of the user, the revised text is set forth as follows:
    Authority: 7 U.S.C. 71-87k.

    Source: 45 FR 15810, Mar. 11, 1980, unless otherwise noted.

                               Definitions



Sec. 800.0  Meaning of terms.

    (a) Construction. Words used in the singular form shall be 
considered to imply the plural and vice versa, as appropriate. When a 
section; e.g., Sec. 800.2, is cited, it refers to the indicated section 
in these regulations.
    (b) Definitions. For the purpose of these regulations, unless the 
context requires otherwise, the following terms shall have the meanings 
given for them

[[Page 221]]

below. The terms defined in the Act have been incorporated herein for 
easy reference.
    (1) Act. The United States Grain Standards Act, as amended (39 Stat. 
482-485, as amended 7 U.S.C. 71 et seq.).
    (2) Additives. Materials approved by the Food and Drug 
Administration or the Environmental Protection Agency and added to grain 
for purposes of insect and fungi control, dust suppression, or 
identification.
    (3) Administrator. The Administrator of the Grain Inspection, 
Packers and Stockyards Administration or any person to whom authority 
has been delegated.
    (4) Agency. A delegated State or an official agency designated by 
the Administrator, as appropriate.
    (5) Appeal inspection service. An official review by a field office 
of the results of an original inspection service or a reinspection 
service.
    (6) Applicant. An interested person who requests an official 
inspection or a Class X or Class Y weighing service.
    (7) Approved scale testing organization. A State or local 
governmental agency, or person, approved by the Service to perform 
official equipment testing services with respect to weighing equipment.
    (8) Approved weigher. A person employed by or at an approved 
weighing facility and approved by the Service to physically perform 
Class X or Class Y weighing services, and certify the results of Class Y 
weighing.
    (9) Approved weighing equipment. Any weighing device or related 
equipment approved by the Service for the performance of Class X or 
Class Y weighing services.
    (10) Approved weighing facility. An elevator that is approved by the 
Service to receive Class X or Class Y weighing services.
    (11) Assigned area of responsibility. A geographical area assigned 
to an agency or to a field office for the performance of official 
inspection or Class X or Class Y weighing services.
    (12) Board appeal inspection service. An official review by the 
Board of Appeals and Review of the results on an appeal inspection 
service.
    (13) Board of Appeals and Review. The Board of Appeals and Review of 
the Service.
    (14) Business day. The established field office working hours, any 
Monday through Friday that is not a holiday, or the working hours and 
days established by an agency.
    (15) Cargo shipment. Bulk or sacked grain that is loaded directly 
aboard waterborne carrier for shipment. Grain loaded aboard a land 
carrier for shipment aboard a waterborne carrier shall not be considered 
to be a cargo shipment.
    (16) Carrier. A truck, trailer, truck/trailer(s) combination, 
railroad car, barge, ship, or other container used to transport bulk or 
sacked grain.
    (17) Chapter. Chapter VIII of the Code of Federal Regulations (7 CFR 
chapter VIII).
    (18) Circuit. A geographical area assigned to a field office.
    (19) Class X or Class Y weighing equipment testing. Any operation or 
procedure performed by official personnel to determine the accuracy of 
the equipment used, or to be used, in the performance of Class X or 
Class Y weighing services.
    (20) Combined lot. Grain loaded aboard, or being loaded aboard, or 
discharged from two or more carriers as one lot.
    (21) Compliance. Conformance with all requirements and procedures 
established by statute, regulation, instruction, or directive so that 
managerial, administrative, and technical functions are accomplished 
effectively. Compliance functions include: evaluating alleged 
violations, initiating preliminary investigations; initiating 
implementation of all necessary corrective actions; conducting 
management and technical reviews; administering the designation of 
agencies and the delegation of State agencies to perform official 
functions; identifying and, where appropriate, waiving and monitoring 
conflicts of interest; licensing agency personnel; responding to audits 
of FGIS programs; and reviewing and, when appropriate, approving agency 
fee schedules.
    (22) Container. A carrier, or a bin, other storage space, bag, box, 
or other receptacle for grain.

[[Page 222]]

    (23) Contract grade. The official grade, official factors, or 
official criteria specified in a contract for sale or confirmation of 
sale; or in the absence of a contract the official grade, official 
factors, or official criteria specified by the applicant for official 
service.
    (24) Contract service. An inspection or weighing service performed 
under a contract between an applicant and the Service.
    (25) Contractor. A person who enters into a contract with the 
Service for the performance of specified official inspection or official 
monitoring services.
    (26) Date of official inspection service or Class X or Class Y 
weighing services. The day on which an official inspection, or a Class X 
or Class Y weighing service is completed. For certification purposes, a 
day shall be considered to end at midnight, local time.
    (27) Deceptive loading, handling, weighing, or sampling. Any manner 
of loading, handling, weighing, or sampling that knowingly deceives or 
attempts to deceive official personnel.
    (28) Delegated State. A State agency delegated authority under the 
Act to provide official inspection service, or Class X or Class Y 
weighing services, or both, at one or more export port locations in the 
State.
    (29) Department of Agriculture and Department. The United States 
Department of Agriculture (USDA).
    (30) Designated agency. A State or local governmental agency, or 
person, designated under the Act to provide either official inspection 
service, or Class X or Class Y weighing services, or both, at locations 
other than export port locations.
    (31) Door-probe sample. A sample taken with a probe from a lot of 
bulk grain that is loaded so close to the top of the carrier that it is 
possible to insert the probe in the grain only in the vicinity of the 
tailgate of the truck or trailer, the door of the railroad boxcar, or in 
a similarly restricted opening or area in the carrier in which the grain 
is located or is loaded in hopper cars or barges in such a manner that a 
representative sample cannot be obtained.
    (32) Elevator. Any warehouse, storage, or handling facility used 
primarily for receiving, storing, or shipping grain. In a facility that 
is used primarily for receiving, storing, and shipping grain, all parts 
of the main facility, as well as annexes, shall be considered to be part 
of the elevator. A warehouse, storage, and handling facility that is 
located adjacent to and is operated primarily as an adjunct of a grain 
processing facility shall not be considered to be an elevator.
    (33) Elevator areas and facilities. All operational areas, including 
the automated data processing facilities that are an integral part of 
the inspection or weighing operations of an elevator; the loading and 
unloading docks; the headhouse and control rooms; all storage areas, 
including the bins, the interstices, the bin floor, and the basement; 
and all handling facilities, including the belts, other conveyors, 
distributor scales, spouting, mechanical samplers, and electronic 
controls.
    (34) Employed. An individual is employed if the individual is 
actually employed or the employment is being withheld pending issuance 
of a license under the Act.
    (35) Exporter. Any person who ships or causes to be shipped any bulk 
or sacked grain in a final carrier or container in which the grain is 
transported from the United States to any place outside the United 
States.
    (36) Export elevator. Any grain elevator, warehouse, or other 
storage or handling facility in the United States (i) from which bulk or 
sacked export grain is loaded (A) aboard a carrier in which the grain is 
shipped from the United States to any place outside thereof, or (B) into 
a container for shipment to an export port location where the grain and 
the container will be loaded aboard a carrier in which it will be 
shipped from the United States to any place outside thereof; and (ii) 
which has been approved by the Service as a facility where Class X or 
Class Y weighing of grain may be obtained.
    (37) Export grain. Grain for shipment from the United States to any 
place outside thereof.
    (38) Export port location. A commonly recognized port of export in 
the United States or Canada, as determined by the Administrator, from 
which grain produced in the United States is shipped to any place 
outside the United States.

[[Page 223]]

Such locations include any coastal or border location or site in the 
United States which contains one or more export elevators, and is 
identified by the Service as an export port location.
    (39) False, incorrect, and misleading. Respectively false, 
incorrect, and misleading in any particular. \2\
---------------------------------------------------------------------------

    \1\ [Reserved]
    \2\ A definition taken from the U.S. Grain Standards Act, as 
amended, with certain modifications which do not change the meanings.
---------------------------------------------------------------------------

    (40) Federal Register. An official U.S. Government publication 
issued under the Federal Register Act of July 26, 1935, as amended (44 
U.S.C. 301 et seq.).
    (41) Field Office. An office of the Service designated to perform or 
supervise official inspection services and Class X and Class Y weighing 
services.
    (42) Grain. Corn, wheat, rye, oats, barley, flaxseed, sorghum, 
soybeans, triticale, mixed grain, sunflower seed, canola, and any other 
food grains, feed grains, and oilseeds for which standards are 
established under section 4 of the Act.
    (43) Handling. Loading, unloading, elevating, storing, binning, 
mixing, blending, drying, aerating, screening, cleaning, washing, 
treating, or fumigating grain.
    (44) High Quality Specialty Grain. Grain sold under contract terms 
that specify all factors exceed the grade limits for U.S. No. 1 grain, 
except for the factor test weight, or specify ``organic'' as defined by 
7 CFR part 205. This definition expires July 31, 2010.
    (45) Holiday. The legal public holidays specified in paragraph (a) 
of section 6103, Title 5, of the United States Code (5 U.S.C. 6103(a)) 
and any other day declared to be a holiday by Federal statute or 
Executive Order. Under section 610 and Executive Order No. 10357, as 
amended, if the specified legal public holiday falls on a Saturday, the 
preceding Friday shall be considered to be the holiday, or if the 
specified legal public holiday falls on a Sunday, the following Monday 
shall be considered to be the holiday.
    (46) ``IN'' movement. A movement of grain into an elevator, or into 
or through a city, town, port, or other location without a loss of 
identity.
    (47) Instructions. The Notices, Instructions, Handbooks, and other 
directives issued by the Service.
    (48) Interested person. Any person having a contract or other 
financial interest in grain as the owner, seller, purchaser, 
warehouseman, or carrier, or otherwise.
    (49) Interstate or foreign commerce. Commerce from any State to or 
through any other State, or to or through any foreign country.
    (50) Licensee. Any person licensed by the Service.
    (51) Loading. Placing grain in or aboard any carrier or container.
    (52) ``LOCAL'' movement. A bin run or other inhouse movement, or 
grain in bins, tanks, or similar containers which are not in transit or 
designed to transport grain
    (53) [Reserved]
    (54) Lot. A specific quantity of grain identified as such.
    (55) Material error. An error in the results of an official 
inspection service that exceeds the official tolerance, or any error in 
the results of a Class X or Class Y weighing service
    (56) Material portion. A subsample, component, or sublot which is 
determined to be inferior to the contract or declared grade. A subsample 
is a material portion when it has sour, musty, or commercially 
objectionable foreign odors, when it is heating; or when it is of 
distinctly low quality. A component is a material portion when it is 
infested or when it is determined to be inferior in quality by more than 
one numerical grade to the contract or declared grade. A sublot is a 
material portion when a factor result causes a breakpoint to be exceeded 
or when a factor result exceeds specific sublot contract requirements. A 
sublot designated a material portion shall include only one sublot.
    (57) Merchandiser. Any person, other than a producer, who buys and 
sells grain and takes title to the grain. A person who operates as a 
broker or commission agent and does not take title to the grain shall 
not be considered to be a merchandiser.
    (58) Monitoring. Observing or reviewing activities performed under 
or subject to the Act for adherence to the

[[Page 224]]

Act, the regulations, standards, and instructions and preparing reports 
thereon.
    (59) Nonregular workday. Any Sunday or holiday.
    (60) Official agency. Any State or local government agency, or any 
person, designated by the Administrator pursuant to subsection (f) of 
section 7 of the Act for the conduct of official inspection (other than 
appeal inspection), or subsection (c) of section 7A of the Act for the 
conduct of Class X or Class Y weighing (other than review of weighing).
    (61) Official certificate. Those certificates which show the results 
of official services performed under the Act as provided in the 
instructions, and any other official certificates which may be approved 
by the Service in accordance with the instructions.
    (62) Official criteria. A quantified physical or chemical property 
of grain that is approved by the Service to determine the quality or 
condition of grain or other facts relating to grain.
    (63) Official factor. A quantified physical or chemical property of 
grain as identified in the Official U.S. Standards for Grain.
    (64) Official forms. License, authorizations, and approvals; 
official certificates; official pan tickets; official inspection or 
weighing logs; weight sheets; shipping bin weight loading logs; official 
equipment testing reports; official certificates of registration; and 
any other forms which may be issued or approved by the Service that show 
the name of the Service or an agency and a form number.
    (65) Official grade designation. A numerical or sample grade 
designation, specified in the standards relating to kind, class, 
quality, and condition of grain provided for in the Act.
    (66) Official inspection. The determination (by original inspection, 
and when requested, reinspection and appeal inspection) and the 
certification, by official personnel, of the kind, class, quality, or 
condition of grain, under standards provided for in the Act; or the 
condition of vessels and other carriers or receptacles for the 
transportation of grain insofar as it may affect the quality of such 
grain; or other facts relating to grain under other criteria approved by 
the Administrator (the term ``officially inspected'' shall be construed 
accordingly).
    (67) Official inspection equipment testing. Any operation or 
procedure by official personnel to determine the accuracy of equipment 
used, or to be used, in the performance of official inspection services.
    (68) Official inspection technician. Any official personnel who 
perform or supervise the performance of specified official inspection 
services and certify the results thereof, other than certifying the 
grade of the grain.
    (69) Official inspector. Any official personnel who perform or 
supervise the performance of official inspection services and certify 
the results thereof including the grade of the grain.
    (70) Official marks. The symbols or terms ``official certificate,'' 
``official grade,'' ``officially sampled,'' ``officially inspected,'' 
``official inspection,'' ``U.S. inspected,'' ``loaded under continuous 
official inspection,'' ``official weighing,'' ``officially weighed,'' 
``official weight,'' ``official supervision of weighing,'' ``supervision 
of weighing,'' ``officially supervised weight,'' ``loaded under 
continiuous official weighing,'' ``loaded under continuous official 
inspection and weighing,'' ``officially tested,'' ``Class X weight,'' 
``official Class X weighing,'' ``Class X weighing,'' ``official Class Y 
weighing,'' ``Class Y weighing,'' and ``Class Y weight.''
    (71) Official personnel. Persons licensed or otherwise authorized by 
the Administrator pursuant to Section 8 of the Act to perform all or 
specified functions involved in official inspection, Class X or Class Y 
weighing, or in the supervision of official inspection, or Class X or 
Class Y weighing.
    (72) Official sample. A sample obtained from a lot of grain by, and 
submitted for official inspection by, official personnel (the term 
``official sampling'' shall be construed accordingly).
    (73) Official sampler. Any official personnel who perform or 
supervise the performance of official sampling services and certify the 
results thereof.
    (74) Official stowage examination. Any examining operation or 
procedure performed by official personnel to determine the suitability 
of a carrier or container to receive or store grain.

[[Page 225]]

    (75) Official tolerance. A statistical allowance prescribed by the 
Service, on the basis of expected variation, for use in performing or 
supervising the performance of official inspection services, official 
equipment testing services, and, when determined under an established 
loading plan, reinspection services and appeal inspection services.
    (76) Official U.S. Standards for Grain. The Official U.S. Standards 
for Grain established under the Act describe the physical and biological 
condition of grain at the time of inspection.
    (77) Official weigher. Any official personnel who perform or 
supervise the performance of Class X or Class Y weighing services and 
certify the results thereof, including the weight of the grain.
    (78) Official weighing. (Referred to as Class X weighing.) The 
determination and certification by official personnel of the quantity of 
a lot of grain under standards provided for in the Act, based on the 
actual performance of weighing or the physical supervision thereof, 
including the physical inspection and testing for accuracy of the 
weights and scales and the physical inspection of the premises at which 
weighing is performed and the monitoring of the discharge of grain into 
the elevator or conveyance. (The terms ``officially weigh'' and 
``officially weighed'' shall be construed accordingly.)
    (79) Official weighing technician. Any personnel who perform or 
supervise specified weighing services and certify the results thereof 
other than certifying the weight of grain.
    (80) Official weight sample. Sacks of grain obtained at random by, 
or under the complete supervision of, official personnel from a lot of 
sacked grain for the purpose of computing the weight of the grain in the 
lot.
    (81) Original inspection. An initial official inspection of grain.
    (82) ``Out'' movement. A movement of grain out of an elevator or out 
of a city, town, port, or other location.
    (83) Person. Any individual, partnership, corporation, association, 
or other business entity.
    (84) Quantity. Pounds or kilograms, tons or metric tons, or bushels.
    (85) Reasonably continuous operation. A loading or unloading 
operation in one specific location which does not include inactive 
intervals in excess of 88 consecutive hours.
    (86) Regular workday. Any Monday, Tuesday, Wednesday, Thursday, 
Friday, or Saturday that is not a holiday.
    (87) Regulations. The regulations in parts 800, 801, and 802 of this 
chapter.
    (88) Reinspection service. An official review of the results of an 
original inspection service by the agency or field office that performed 
the original inspection service.
    (89) Respondent. The party proceeded against.
    (90) Review of weighing service. An official review of the results 
of a Class X or Class Y weighing service.
    (91) Secretary. The Secretary of Agriculture of the United States or 
any person to whom authority has been delegated.
    (92) Service. The Federal Grain Inspection Service of the Grain 
Inspection, Packers and Stockyards Administration of the United States 
Department of Agriculture.
    (93) Service representative. An authorized salaried employee of the 
Service; or a person licensed by the Administrator under a contract with 
the Service.
    (94) Shallow-probe sample. A sample taken with a probe from a lot of 
bulk grain that is loaded so close to the top of the carrier that it is 
possible to insert the probe in the grain at the prescribed locations, 
but only at an angle greater or more obtuse from the vertical than the 
angle prescribed in the instructions.
    (95) Ship. The verb ``ship'' with respect to grain means transfer 
physical possession of the grain to another person for the purpose of 
transportation by any means of conveyance, or transport one's own grain 
by any means of conveyance.
    (96) Shiplot grain. Grain loaded aboard, or being loaded aboard, or 
discharged from an ocean-going vessel including a barge, lake vessel, or 
other vessel of similar capacity.
    (97) Shipper's Export Declaration. The Shipper's Export Declaration 
certificate filed with the U.S. Department of Commerce, Bureau of 
Census.

[[Page 226]]

    (98) Specified service point. A city, town, or other location 
specified by an agency for the performance of official inspection or 
Class X or Class Y weighing services and within which the agency or one 
or more of its inspectors or weighers is located.
    (99) Standardization. The act, process, or result of standardizing 
methodology and measurement of quality and quantity. Standardization 
functions include: compiling and evaluating data to develop and to 
update grading and weighing standards, developing or evaluating new 
methodology for determining grain quality and quantity, providing 
reference standards for official grading methods, and reviewing official 
results through the use of a quality control and weight monitoring 
program.
    (100) State. Any one of the States (including Puerto Rico) or 
territories or possessions of the United States (including the District 
of Columbia).
    (101) Submitted sample. A sample submitted by or for an interested 
person for official inspection, other than an official sample.
    (102) Supervision. The effective guidance of agencies, official 
personnel and others who perform activities under the Act, so as to 
reasonably assure the integrity and accuracy of the program activities. 
Supervision includes overseeing, directing, and coordinating the 
performance of activities under the Act, reviewing the performance of 
these activities; and effecting appropriate action. FGIS supervisory 
personnel supervise agencies, official personnel and others who perform 
activities under the Act. Agency supervisors are responsible for the 
direct supervision of their own official personnel and employees. FGIS 
provides oversight, guidance, and assistance to agencies as they carry 
out their responsibilities.
    (103) Supervision of weighing (Referred to as Class Y weighing.) 
Such supervision by official personnel of the grain-weighing process as 
is determined by the Administrator to be adequate to reasonably assure 
the integrity and accuracy of the weighing and of certificates which set 
forth the weight of the grain and such physical inspection by such 
personnel of the premises at which the grain weighing is performed as 
will reasonably assure that all the grain intended to be weighed has 
been weighed and discharged into the elevator or conveyance.
    (104) United States. The States (including Puerto Rico) and the 
territories and possessions of the United States (including the District 
of Columbia).
    (105) Use of official inspection service. The use of the services 
provided under a delegation or designation or provided by the Service.
    (106) Uniform in quality. A lot of grain in which there are no 
material portions.
    (107) Warehouseman's sampler. An elevator employee licensed by the 
Service to obtain samples of grain for a warehouseman's sample-lot 
inspection service. Warehouseman's samplers are not considered official 
personnel, but they are licensed under authority of section 11 of the 
Act.

[45 FR 15810, Mar. 11, 1980, as amended at 49 FR 36068, Sept. 14, 1984; 
49 FR 37055, Sept. 21, 1984; 49 FR 49586, Dec. 21, 1984; 52 FR 6495, 
Mar. 4, 1987; 55 FR 24041, June 13, 1990; 57 FR 3273, Jan. 29, 1992; 60 
FR 5835, Jan. 31, 1995; 70 FR 21923, Apr. 28, 2005; 70 FR 73558, Dec. 
13, 2005]

                             Administration



Sec. 800.1  Mission.

    The mission of the Federal Grain Inspection Service is to facilitate 
the marketing of grain, oilseeds, pulses, rice, and related commodities 
by:
    (a) Establishing descriptive standards and terms,
    (b) Accurately and consistently certifying quality,
    (c) Providing for uniform official inspection and weighing,
    (d) Carrying out assigned regulatory and service responsibilities, 
and
    (e) Providing the framework for commodity quality improvement 
incentives to both domestic and foreign buyers.

[54 FR 9197, Mar. 6, 1989]



Sec. 800.2  Administrator.

    The Administrator is delegated, from the Secretary, responsibility 
for administration of the United States

[[Page 227]]

Grain Standards Act and responsibilities under the Agricultural 
Marketing Act of 1946 (7 U.S.C. 1621 et seq.). The Administrator is 
responsible for the establishment of policies, guidelines, and 
regulations by which the Service is to carry out the provisions of the 
Act and the Agricultural Marketing Act of 1946. The regulations 
promulgated under the Agricultural Marketing Act of 1946 appear at part 
68 of this title (7 CFR part 68). The Administrator is authorized by the 
Secretary to take any action required by law or considered to be 
necessary and proper to the discharge of the functions and services 
under the Act. The Administrator may delegate authority to the Deputy 
Administrator and other appropriate officers and employees. The 
Administrator may, in emergencies or other circumstances which would not 
impair the objectives of the Act, suspend for period determined by the 
Administrator any provision of the regulations or official grain 
standards. The Administrator may authorize research; experimentation; 
and testing of new procedures, equipment, and handling techniques to 
improve the inspection and weighing of grain. The Administrator may 
waive the official inspection and official weighing requirements 
pursuant to Section 5 of the Act.

[60 FR 5835, Jan. 31, 1995]



Sec. 800.3  Nondiscrimination--policy and provisions.

    In implementing, administering, and enforcing the Act and the 
regulations, standards, and instructions, it is the policy of the 
Service to promote adherence to the provisions of the Civil Rights Act 
of 1964 (42 U.S.C. 2000a et seq.), (Pub. L. 88-352).



Sec. 800.4  Procedures for establishing regulations, official standards,
and official criteria.

    Notice of proposals to prescribe, amend, or revoke regulations, 
official standards, and official criteria under the Act shall be 
published in accordance with applicable provisions of the Administrative 
Procedure Act (5 U.S.C. 551, et seq.). Proposals to establish, amend, or 
revoke grain standards will be made effective not less than 1 calendar 
year after promulgation unless, for good cause, the Service determines 
that the public health, interest, or safety require that they become 
effective sooner. Any interested person desiring to file a petition for 
the issuance, amendment, or revocation of regulations, Official U.S. 
Standards for Grain, or official criteria may do so in accordance with 
Sec. 1.28 of the regulations of the Office of the Secretary of 
Agriculture (7 CFR 1.28).



Sec. 800.5  Complaints and reports of alleged violations.

    (a) General. Except as provided in paragraphs (b) and (c) of this 
section, complaints and reports of violations involving the Act or the 
regulations, standards, and instructions issued under the Act should be 
filed with the Service in accordance with Sec. 1.133 of the regulations 
of the Office of the Secretary of Agriculture (7 CFR 1.133) and with the 
regulations and the instructions.
    (b) Reinspection, review of weighing, and appeal services. 
Complaints involving the results of official inspection or Class X or 
Class Y weighing services shall, to the extent practicable, be submitted 
as requests for a reinspection service, a review of weighing service, an 
appeal inspection service, or a Board appeal inspection service as set 
forth in these regulations.
    (c) Foreign buyer complaints. Inquiries or complaints from importers 
or other purchasers in foreign countries involving alleged discrepancies 
in the quality or weight of officially inspected or Class X weighed 
export grain shall, to the extent possible, be submitted by the 
importers or purchasers to the appropriate U.S. Agricultural Attache in 
accordance with Sec. 2.68(a)(14) of the regulations of the Office of 
the Secretary of Agriculture (7 CFR 2.68(a)(14)) and the instructions 
issued by the Foreign Agricultural Service of the Department.

[45 FR 15810, Mar. 11, 1980, as amended at 54 FR 5924, Feb. 7, 1989]



Sec. 800.6  Provisions for hearings.

    Opportunities will be provided for hearings prescribed or authorized 
by sections 7(g)(3), 7A(c)(2), 9, 10(d), and 17A(d) of the Act, and the 
hearings shall be conducted in accordance with

[[Page 228]]

the Rules of Practice Governing Formal Adjudicatory Administrative 
Proceedings Instituted by the Secretary under Various Statutes (7 CFR, 
part 1, subpart H).



Sec. 800.7  Information about the Service, Act, and regulations.

    Information about the Grain Inspection, Packers and Stockyards 
Administration, Service, Act, regulations, official standards, official 
criteria, rules of practice, instructions, and other matters related to 
the official inspection or Class X or Class Y weighing of grain may be 
obtained by telephoning or writing the U.S. Department of Agriculture, 
Grain Inspection, Packers and Stockyards Administration, P.O. Box 96454, 
Washington, D.C. 20090-6454, or any field office or agency of the 
Service.

[60 FR 5836, Jan. 31, 1995]



Sec. 800.8  Public information.

    (a) General. This section is issued in accordance with Sec. Sec. 
1.1 through 1.23 of the regulations of the Secretary of Agriculture in 
part 1, subpart A, of subtitle A of title 7 (7 CFR 1.1 through 1.23), 
and appendix A thereto, implementing the Freedom of Information Act (5 
U.S.C. 552). The Secretary's regulations, as implemented by this 
section, govern the availability of records of the Service to the 
public.
    (b) Public inspection and copying. Materials maintained by the 
Service, including those described in 7 CFR 1.5, will be made available, 
upon a request which has not been denied, for public inspection and 
copying at the U.S. Department of Agriculture, Grain Inspection, Packers 
and Stockyards Administration, at 14th Street and Independence Avenue, 
SW., Washington, D.C. 20250. The public may request access to these 
materials during regular working hours, 8:00 a.m. to 4:30 p.m., est, 
Monday through Friday except for holidays.
    (c) Indexes. FGIS shall maintain an index of all material required 
to be made available in 7 CFR 1.5. Copies of these indexes will be 
maintained at the location given in paragraph (b) of this section. 
Notice is hereby given that quarterly publication of these indexes is 
unnecessary and impracticable, because the material is voluminous and 
does not change often enough to justify the expense of quarterly 
publication. However, upon specific request, copies of any index will be 
provided at a cost not to exceed the direct cost of duplication.
    (d) Requests for records. Requests for records under 5 U.S.C. 
552(a)(3) shall be made in accordance with 7 CFR 1.6 and shall be 
addressed as follows: Office of the Administrator, Grain Inspection, 
Packers and Stockyards Administration; FOIA Request, U.S. Department of 
Agriculture, P.O. Box 96454, Washington, D.C. 20090-6454.
    (e) Appeals. Any person whose request under paragraph (d) of this 
section, is denied shall have the right to appeal such denial in 
accordance with 7 CFR 1.13. Appeals shall be addressed to the 
Administrator, Grain Inspection, Packers and Stockyards Administration, 
FOIA Appeal, P.O. Box 96454, Washington, D.C. 20090-6454.

(Secs. 5, 18, Pub. L. 94-582, 90 Stat. 2869, 2884; (7 U.S.C. 76, 87e))

[48 FR 57467, Dec. 30, 1983, as amended at 54 FR 5924, Feb. 7, 1989; 60 
FR 5836, Jan. 31, 1995]

    Official Inspection and Class X or Class Y Weighing Requirements



Sec. 800.15  Services.

    (a) General. These regulations implement requirements for a national 
inspection and weighing system. This system promotes the uniform and 
accurate application of the official grain standards and provides 
inspection and weighing services required by the Act and as requested by 
applicants for official services. The types and kinds of services 
available under the Act and regulations can be obtained at all specified 
service points in the United States and on U.S. grain in Canadian ports.
    (b) Responsibilities for complying with the official inspection, 
aflatoxin testing, and weighing requirements.--(1) Export grain. 
Exporters are responsible for (i) complying with all inspection, Class X 
weighing, and other certification provisions and requirements of section 
5(a)(1) of the Act and the regulations applicable to export grain and 
(ii) having all corn, as defined in Sec. 810.401, exported from the 
United States tested

[[Page 229]]

for aflatoxin contamination unless the buyer and seller agree not to 
have the corn tested. The Service shall perform the aflatoxin testing 
service unless the buyer and seller agree to have the corn tested by an 
entity other than the Service.
    (2) Intercompany barges. Operators of export elevators at export 
port locations are responsible for complying with Class X weighing 
requirements and regulations covering intercompany grain shipments 
received by barge.
    (3) Grain in marked containers. When grain is in a container that 
bears an official grade designation or mark, the person who places the 
designation or mark on the container or the person who places the grain 
in a container that bears the designation or mark shall be responsible 
for determining that the grain has been inspected or weighed by official 
personnel and qualifies for the official grade designation or mark.
    (4) Grain for which representations have been made. Any person who 
makes a representation that (i) grain has been officially inspected or 
weighed; or (ii) grain has been officially inspected or weighed and 
found to be of a particular kind, class, quality, condition, or weight; 
or (iii) particular facts have been established with respect to the 
grain by official inspection or weighing, shall be responsible for 
determining that the representation is true and is not in violation of 
the Act and regulations.

[50 FR 49668, Dec. 4, 1985, as amended at 57 FR 2439, Jan. 22, 1992]



Sec. 800.16  Certification requirements for export grain.

    (a) General. Official Export Grain Inspection and Weight 
Certificates, Official Export Grain Inspection Certificates, and 
Official Export Grain Weight Certificates for bulk or sacked grain shall 
be issued according to Sec. 800.162 for export grain loaded by an 
export elevator. Only these types of export certificates showing the 
official grade, official aflatoxin test results if required under the 
Act and the regulations, and/or the Class X weight of the grain shall be 
considered to be in compliance with inspection and weighing requirements 
under the Act for export grain.
    (b) Promptly furnished. Export certificates shall be considered 
promptly furnished if they are forwarded by the shipper or the shipper's 
agent to the consignee not later than 10 business days after issuance.

[50 FR 49668, Dec. 4, 1985, as amended at 57 FR 2439, Jan. 22, 1992]



Sec. 800.17  Special inspection and weighing requirements for sacked 
export grain.

    (a) General. Subject to the provisions of Sec. 800.18, sacked 
export grain shall be (1) officially inspected on the basis of official 
samples obtained with an approved sampling device and operated in 
accordance with instructions, (2) Class X weighed or checkweighed, and 
(3) officially checkloaded by official personnel at the time the grain 
is loaded aboard the export carrier, in accordance with the provisions 
of paragraphs (b) and (c) of this section.
    (b) Services at time of loading. When official sampling, official 
inspection, Class X weighing or checkweighing, and checkloading of 
sacked export grain loaded aboard an export carrier is performed at one 
location and time, official export inspection and weight certificate(s) 
which identify the export carrier shall be issued.
    (c) Services prior to loading. When official sampling, official 
inspection, and Class X weighing or checkweighing of sacked export grain 
is performed prior to the date of loading aboard an export carrier, 
official ``OUT'' certificates shall be issued. An examination by 
official personnel for condition and checkloading of the grain shall be 
made as the grain is loaded aboard the export carrier. If the 
examination for condition and the checkloading shows that the identity 
or quantity of the grain has not changed or the condition of the grain 
has not changed beyond expected variations prescribed in the 
instruction, official export inspection and weight certificates shall be 
issued on the basis of the official ``OUT'' certificates and the 
checkloading. If the identity, quantity, or the condition has changed, 
official export inspection and weight certificates shall be issued on 
the basis of the most representative

[[Page 230]]

samples, including weight samples, obtained at the time the grain is 
loaded aboard the export carrier.

[50 FR 49668, Dec. 4, 1985]



Sec. 800.18  Waivers of the official inspection and Class X weighing
requirements.

    (a) General. Waivers from the official inspection and Class X 
weighing requirements for export grain under section 5 of the Act shall 
be provided in accordance with this section and the Act.
    (b) Waivers--(1) 15,000 metric-ton waiver. Official inspection and 
Class X weighing requirements apply only to exporters and individual 
elevator operators who (i) exported 15,000 metric tons or more of grain 
during the preceding calendar year, or (ii) have exported 15,000 metric 
tons or more of grain during the current calendar year. Exporters and 
elevator operators who are granted a waiver by reason of this paragraph 
shall, as a condition of the waiver, keep such accounts, records, and 
memorandum to fully and correctly disclose all transactions concerning 
lots of all export grain shipments. In addition, the exporters or 
elevator operators shall notify the Service in writing of the intention 
to export grain under this waiver. In the case of lots waived under this 
provision, if such lots are required by contract to be inspected or 
weighed, or if the lots are represented by official inspection or weight 
certificates, then such certificates shall meet the requirements of 
section 5 of the Act.
    (2) Grain exported for seeding purposes. Official inspection and 
Class X weighing requirements do not apply to grain exported for seeding 
purposes, provided that (i) the grain is (A) sold or consigned for sale 
and invoiced as seed; and (B) identified as seed for seeding purposes on 
the Shipper's Export Declaration; and (ii) records pertaining to these 
shipments are made available, upon request by the Service, for review or 
copying purposes.
    (3) Grain shipped in bond. Official inspection and weighing 
requirements do not apply to grain that is shipped from a foreign 
country to a foreign country through the United States in bond in 
accordance with applicable regulations of the United States Customs 
Service (19 CFR part 18).
    (4) Grain exported by rail or truck to Canada or Mexico. Inspection 
and weighing requirements do not apply to grain exported by rail or 
truck from the United States to Canada or Mexico.
    (5) Grain not sold by grade. Official inspection requirements may be 
waived by the Service on a shipment-by-shipment basis for export grain 
not sold, offered for sale, or consigned for sale by official grade if 
(i) the contract and any amendments clearly show that the buyer and 
seller mutually agree to ship the grain without official inspection and 
(ii) a copy of the contract and any amendments is furnished in advance 
of loading, along with a completed application on a form prescribed by 
the Service.
    (6) Service not available. Upon request, any required official 
inspection or Class X weighing of grain may be waived on a shipment-by-
shipment basis if (i) official personnel are not and will not be 
available within a 24-hour period to perform needed inspection or 
weighing services and (ii) both the buyer and seller of the grain are 
made aware that the grain has not been officially inspected or Class X 
weighed.
    (7) Emergency waiver. Upon request, the requirements for official 
inspection or Class X weighing may be waived whenever the Service 
determines (i) that an emergency exists that precludes official 
inspection or Class X weighing and (ii) that granting an emergency 
waiver will not impair the objectives of the Act. To qualify for an 
emergency waiver, the exporter or elevator operator shall make timely 
application and comply with all conditions which may be required by the 
Service.
    (8) High Quality Specialty Grain Shipped in Containers. Official 
inspection and weighing requirements do not apply to high quality 
specialty grain exported in containers. Records generated during the 
normal course of business that pertain to these shipments shall be made 
available to the Service upon request, for review or

[[Page 231]]

copying. These records shall be maintained for a period of 3 years. This 
waiver expires July 31, 2010.

(Approved by the Office of Management and Budget under control number 
0580-0011)

[50 FR 49669, Dec. 4, 1985, as amended at 70 FR 21923, Apr. 28, 2005; 70 
FR 73559, Dec. 13, 2005]

                 Recordkeeping and Access to Facilities



Sec. 800.25  Required elevator and merchandising records.

    (a) Elevator and merchandiser recordkeeping. Every person and every 
State or political subdivision of a State that owns or operates an 
elevator and every merchandiser that has obtained or obtains official 
inspection or official weighing services other than (1) submitted sample 
inspection service, or (2) official sampling service, or (3) official 
stowage examination service shall keep such accounts, records, and 
memoranda that fully and correctly disclose all transactions concerning 
the lots of grain for which the elevator or merchandiser received 
official services, except as provided under Sec. 800.18.
    (b) Retention period. Records specified in this section may be 
disposed of after a period of 3 years from the date of the official 
service; provided, the 3-year period may be extended if the elevator 
owner or operator, or merchandiser is notified in writing by the 
Administrator that specific records should be retained for a longer 
period for effective administration and enforcement of the Act. This 
requirement does not restrict or modify the requirements of any other 
Federal, State, or local statute concerning recordkeeping.

(Approved by the Office of Management and Budget under control number 
0580-0011)

[51 FR 1768, Jan. 15, 1986]



Sec. 800.26  Access to records and facilities.

    (a) Inspection of records and facilities. Prior to the examination 
of records or inspection of facilities by an authorized representative 
of the Secretary or the Administrator, the authorized representative 
shall contact or otherwise notify the elevator manager or manager's 
representative of their presence and furnish proof of identity and 
authority. While in the elevator, the authorized representative shall 
abide by the safety regulations in effect at the elevator. Every 
elevator owner and operator and every merchandiser shall permit 
authorized representatives of the Secretary or Administrator to enter 
its place of business during normal business hours and have access to 
the facilities and to inspect any books, documents, papers, and records 
that are maintained by such persons. Such access and inspection will be 
to effectuate the purpose, provisions, and objectives of the Act and to 
assure the integrity of official services under the Act or of any 
official transaction with which the Act is concerned. All copies of such 
records will be made at the Service's expense. Reasonable accommodations 
shall be made available to the duly authorized representative by 
elevator owners and operators, and merchandisers for such examination of 
records.
    (b) Disclosure of business information. FGIS employees or persons 
acting for FGIS under the Act shall not, without the consent of the 
elevator operator or merchandiser concerned, divulge or make known in 
any manner, any facts or information acquired pursuant to the Act and 
regulations except as authorized by the Administrator, by a court of 
competent jurisdiction, or otherwise by law.

[51 FR 1768, Jan. 15, 1986]

                              Registration



Sec. 800.30  Foreign commerce grain business.

    ``Foreign commerce grain business'' is defined as the business of 
buying grain for sale in foreign commerce or the business of handling, 
weighing, or transporting grain for sale in foreign commerce. This 
provision shall not include:
    (a) Any person who only incidentally or occasionally buys for sale, 
or handles, weighs, or transports grain for sale and is not engaged in 
the regular business of buying grain for sale, or handling, weighing, or 
transporting grain for sale;
    (b) Any producer of grain who only incidentally or occasionally 
sells or

[[Page 232]]

transports grain which the producer has purchased;
    (c) Any person who transports grain for hire and does not own a 
financial interest in such grain; or
    (d) Any person who buys grain for feeding or processing and not for 
the purpose of reselling and only incidentally or occasionally sells 
such grain as grain.

[48 FR 44455, Sept. 29, 1983]



Sec. 800.31  Who must register.

    Each person who has engaged in foreign commerce grain business 
totaling 15,000 or more metric tons during the preceding or current 
calendar year must register with the Service and shall be deemed to be 
regularly engaged in foreign commerce grain business. This includes 
foreign-based firms operating in the United States but does not include 
foreign governments or their agents. The Service will, upon request, 
register persons not required to register under this section if they 
comply with the requirements of Sec. Sec. 800.33 and 800.34.

(Approved by the Office of Management and Budget under control number 
0580-0012)

[48 FR 44453 and 44455, Sept. 29, 1983, as amended at 54 FR 5924, Feb. 
7, 1989]



Sec. 800.32  When to register.

    A person shall submit an application for registration to the Service 
at least 30 calendar days before regularly engaging in foreign commerce 
grain business according to Sec. 800.31. For good cause shown, the 
Service may waive this 30-day requirement.

(Approved by the Office of Management and Budget under control number 
0580-0012)

[48 FR 44453 and 44455, Sept. 29, 1983, as amended at 54 FR 5924, Feb. 
7, 1989]



Sec. 800.33  How to register.

    Any person who is required or desires to register must submit an 
application for registration to the Service. Application forms can be 
obtained from the Service. Each application shall: (a) Be typewritten or 
legibly written in English; (b) include all information required by the 
application form; and (c) be signed by the applicant. The information 
required by this paragraph may be submitted to the Service via 
telephone, subject to written confirmation. An applicant shall furnish 
any additional information requested by the Service for consideration of 
the application.

(Approved by the Office of Management and Budget under control number 
0580-0012)

[48 FR 44453 and 44456, Sept. 29, 1983, as amended at 54 FR 5924, Feb. 
7, 1989]



Sec. 800.34  Registration fee.

    An applicant shall submit the registration fee prescribed in Sec. 
800.71 with the completed application. If an application is dismissed, 
the fee shall be refunded by the Service. No fee or portion of a fee 
shall be refunded if a person is registered and the registration is 
subsequently suspended or revoked under Sec. 800.39.

[48 FR 44456, Sept. 29, 1983]



Sec. 800.35  Review of applications.

    (a) The Service shall review each application to determine if it 
complies with Sec. Sec. 800.32, 800.33, and 800.34. If the application 
complies and the fee has been paid, the applicant shall be registered.
    (b) If the application does not comply with Sec. Sec. 800.32, 
800.33, and 800.34 and the omitted information prevents a satisfactory 
review by the Service, the applicant shall be provided an opportunity to 
submit the needed information. If the needed information is not 
submitted within a reasonable time, the application may be dismissed. 
The Service shall promptly notify the applicant, in writing, of the 
reasons for the dismissal.

[48 FR 44456, Sept. 29, 1983]



Sec. 800.36  Certificates of registration.

    The Service shall furnish the applicant with an original and three 
copies of the registration certificate. The registration shall be 
effective on the issue date shown on the certificate. Each certificate 
of registration is issued on the condition that the registrant will 
comply with all provisions of the Act, regulations, and instructions. 
The Service shall charge a fee, in accordance with Sec. 800.71, for 
each additional

[[Page 233]]

copy of a certificate of registration requested by a registrant.

[48 FR 44456, Sept. 29, 1983]



Sec. 800.37  Notice of change in information.

    Each registrant shall notify the Service within 30 days of any 
change in the information contained in the application for registration. 
If the notice is submitted orally, it shall be promptly confirmed in 
writing.

(Approved by the Office of Management and Budget under control number 
0580-0012)

[48 FR 44453 and 44456, Sept. 29, 1983, as amended at 54 FR 5924, Feb. 
7, 1989]



Sec. 800.38  Termination and renewal of registration.

    Each certificate of registration shall terminate on December 31 of 
the calendar year for which it is issued. The Service shall send a 
letter to each registrant notifying the registrant of the impending 
termination of the registration and providing instructions for 
requesting renewal. The registration may be renewed in accordance with 
Sec. Sec. 800.33 and 800.34. Failure to receive the letter shall not 
exempt registrants from the responsibility of renewing their 
registration if required by Sec. 800.31.

[48 FR 44456, Sept. 29, 1983]



Sec. 800.39  Suspension or revocation of registration for cause.

    (a) General. Registration is subject to suspension or revocation 
whenever the Administrator determines that the registrant has violated 
any provision of the Act or regulations, or has been convicted of any 
violation involving the handling, weighing, or inspection of grain under 
Title 18 of the United States Code.
    (b) Procedure. Before the Service suspends or revokes a 
registration, the registrant (hereinafter the ``respondent''): (1) Shall 
be notified of the proposed action and the reasons therefor and (2) 
shall be afforded opportunity for a hearing in accordance with the Rules 
of Practice Governing Formal Adjudicatory Proceedings Instituted by the 
Secretary under Various Statutes (7 CFR, 1.130 through 1.151). Prior to 
formal adjudicatory proceedings, the Service may allow the respondent to 
express views on the action proposed by the Service in an informal 
conference before the Administrator. If the Service and the respondent 
enter into a consent agreement, no formal adjudicatory proceedings shall 
be initiated.

[48 FR 44456, Sept. 29, 1983]

        Conditions For Obtaining Or Withholding Official Services



Sec. 800.45  Availability of official services.

    (a) Original inspection and weighing services. Original inspection 
and weighing services on grain are available according to this section 
and Sec. Sec. 800.115 through 800.118 when requested by an interested 
person.
    (b) Reinspection, review of weighing, and appeal inspection 
services. Reinspection, review of weighing, appeal inspection, and Board 
appeal inspection services are available when requested by an interested 
person, according to Sec. Sec. 800.125 through 800.129 and Sec. Sec. 
800.135 through 800.139.
    (c) Proof of authorization. If an application for official services 
is filed by a person representing the applicant, the agency or the field 
office receiving the application may require written proof of the 
authority to file the application.

(Approved by the Office of Management and Budget under control number 
0580-0012)

(Secs. 8, 9, 10, 13 and 18, Pub. L. 94-582, 90 Stat. 2870, 2875, 2877, 
2880, and 2884, 7 U.S.C. 79, 79a, 79b, 84, 87, and 87e)

[49 FR 30913, Aug. 2, 1984, as amended at 50 FR 45392, Oct. 31, 1985; 54 
FR 5924, Feb. 7, 1989]



Sec. 800.46  Requirements for obtaining official services.

    (a) Consent and agreement by applicant. In submitting a request for 
official services, the applicant and the owner of the grain consent to 
the special and general requirements specified in paragraphs (b) and (c) 
of this section. These requirements are essential to carry out the 
purposes or provisions of the Act.
    (b) General requirements--(1) Access to grain. Grain on which 
official services are to be performed shall, except as provided in 
Sec. Sec. 800.85, 800.86, 800.98, and

[[Page 234]]

800.99, be made accessible by the applicant for the performance of the 
requested official service and related monitoring and supervision 
activities. For the purposes of this section, grain is not 
``accessible'' if it is offered for official services (i) in containers 
or carriers that are closed and cannot, with reasonable effort, be 
opened by or for official personnel; (ii) when any portion is located so 
as to prohibit the securing or a representative sample; or (iii) under 
conditions prescribed in the instructions as being hazardous to the 
health or safety of official personnel.
    (2) Working space. When official services are performed at an 
elevator, adequate and separate space must be provided by the applicant 
for the performance of the requested service and related monitoring and 
supervision activities. Space will be ``adequate'' if it meets the 
space, location, and safety requirements specified in the instructions.
    (3) Notice of changes. The operator of each facility at which 
official services are performed must notify the appropriate agency or 
field office promptly, in full detail, of changes in the grain handling 
and weighing facilities, equipment, or procedures at the elevator that 
could or would affect the proper performance of official services.
    (4) Loading and unloading conditions. As applicable, each applicant 
for official services must provide or arrange for suitable conditions in 
the (i) loading and unloading areas and the truck and railroad holding 
areas; (ii) gallery and other grain-conveying areas; (iii) elevator 
legs, distributor, and spout areas; (iv) pier or dock areas; (v) deck 
and stowage areas in the carrier; and (vi) equipment used in loading or 
unloading and handling the grain. Suitable conditions are those which 
will facilitate accurate inspection and weighing, maintain the quantity 
and the quality of the grain that is to be officially inspected or 
weighed, and not be hazardous to the health and safety of official 
personnel, as prescribed in the instructions.
    (5) Timely arrangements. Requests for official service shall be made 
in a timely manner; otherwise, official personnel may not be available 
to provide the requested service. For the purpose of this paragraph, 
``timely manner'' shall mean not later than 2 p.m., local time, of the 
preceding business day.
    (6) Observation of activities. Each applicant for official services 
must provide any interested person, or their agent, an opportunity to 
observe sampling, inspection, weighing, and loading or unloading of 
grain. Appropriate observation areas shall be mutually defined by the 
Service and facility operator. The areas shall be safe and shall afford 
a clear and unobstructed view of the performance of the activity, but 
shall not permit a close over-the-shoulder type of observation by the 
interested person.
    (7) Payment of bills. Each applicant, for services under the Act, 
must pay bills for the services according to Sec. Sec. 800.70 through 
800.73.
    (8) Written confirmations. When requested by the agency or field 
office, verbal requests for official services shall be confirmed in 
writing. Each written request shall be signed by the applicant, or the 
applicant's agent, and shall show or be accompanied by the following 
information: (i) The identification, quantity, and specific location of 
the grain; (ii) the name and mailing address of the applicant; (iii) the 
kind and scope of services desired; and (iv) any other information 
requested by the agency or field office.
    (9) Names and addresses of interested persons. When requested, each 
applicant for official services shall show on the application form the 
name and address of each known interested person.
    (10) Surrender of superseded certificates. When a request for 
official service results in a certificate being superseded, the 
superseded certificate must be promptly surrendered.
    (11) Recordkeeping and access. Each applicant for official services 
must comply with applicable recordkeeping and access-to-facility 
provisions in Sec. Sec. 800.25 and 800.26.
    (12) Monitoring equipment. Owners and operators of elevators shall, 
upon a finding of need by the Administrator, provide equipment necesary 
for the monitoring by official personnel of grain loading, unloading, 
handling, sampling, weighing, inspection, and related activities. The 
finding of need

[[Page 235]]

will be based primarily on a consideration of manpower and efficiency.
    (c) Special requirements for official Class X and Class Y weighing 
services--(1) General. Weighing services shall be provided only at 
weighing facilities which have met the conditions, duties, and 
responsibilities specified in section 7A(f) of the Act and this section 
of the regulations. Weighing services will be available only in 
accordance with the requirements of Sec. 800.115. Facilities desiring 
weighing services should contact the Service in advance to allow the 
Service time to determine if the facility complies with the provisions 
of the Act and regulations.
    (2) Conditions. The facility shall provide the following information 
annually to the Service: (i) The facility owner's name and address; (ii) 
the facility operator's name and address; (iii) the name of each 
individual employed by the facility as a weigher and a statement that 
each individual: (A) Has a technical ability to operate grain weighing 
equipment and (B) has a reputation for honesty and integrity; (iv) a 
blueprint or similar drawing of the facility showing the location of: 
(A) The loading, unloading, and grain handling systems; (B) the scale 
systems used or to be used in weighing grain; and (C) the bins and other 
storage areas; (v) the identification of each scale in the facility that 
is to be used for weighing grain under the Act; (vi) the following 
information regarding automated data processing systems: (A) Overall 
system intent, design, and layout; (B) make, model, and technical 
specifications of all hardware; (C) description of software, language 
used, and flow charts of all programs, subprograms, routines, and 
subroutines; and (D) complete operating instructions; and (vii) any 
other information deemed necessary to carry out the provisions of the 
Act.

If a facility has, or plans to have, an automated data processing system 
which is used in conjunction with any portion of the scale system, grain 
handling system, or the preparing or printing of official weight 
certificates, the facility shall make available to the Service 
sufficient documentation to ensure that the system cannot be used 
deceptively or otherwise provide inaccurate information. The Service or 
approved scale testing and certification organization shall conduct an 
onsite review to evaluate the performance and accuracy of each scale 
that will be used for weighing grain under the Act, and the performance 
of the grain loading, unloading, and related grain handling equipment 
and systems.
    (3) Duties and responsibilities of weighing facilities requesting 
official services. (i) Providing official services. Upon request, each 
weighing facility shall permit official weighing services to be 
performed promptly.
    (ii) Supervision. Each weighing facility shall supervise its 
employees and shall take action necessary to assure that employees are 
performing their duties according to the Act, regulations, and 
instructions and are not performing prohibited functions or are not 
involved in any action prohibited by the Act, regulations, and 
instructions.
    (iii) Facilities and equipment. (A) General. Each weighing facility 
shall obtain and maintain facilities and equipment which the Service 
determines are needed for weighing services performed at the facility. 
Each facility shall operate and shall maintain each scale system and 
related grain handling system used in weighing according to instructions 
issued by the manufacturer and by the Service. A scale log book for each 
approved scale used for official weighing services shall be maintained 
according to instructions at each weighing facility.
    (B) Malfunction of scales. Scales or scale systems that are 
operating in other than a correct and approved manner shall not be used 
for weighing grain under the Act. Before the malfunctioning scale or 
scale system can be used again for weighing grain under the Act, it 
shall be repaired and determined to be operating properly by the Service 
or approved scale testing and certification organization.
    (iv) Oral directives. FGIS oral directives issued to elevator 
personnel shall be confirmed in writing upon request by elevator 
management. Whenever practicable, the Service shall issue oral

[[Page 236]]

directives through elevator management officials.

(Approved by the Office of Management and Budget under control number 
0580-0012)

(Secs. 8, 9, 10, 13 and 18, Pub. L. 94-582, 90 Stat. 2870, 2875, 2877, 
2880, and 2884, 7 U.S.C. 79, 79a, 79b, 84, 87, and 87e)

[49 FR 30915, Aug. 2, 1984, as amended at 49 FR 49587, Dec. 21, 1984; 50 
FR 45392, Oct. 31, 1985; 54 FR 5924, Feb. 7, 1989]



Sec. 800.47  Withdrawal of request for official services.

    An applicant may withdraw a request for official services any time 
before official personnel release results, either verbally or in 
writing. See Sec. 800.51 for reimbursement of expenses, if any.

(Secs. 8, 9, 10, 13 and 18, Pub. L. 94-582, 90 Stat. 2870, 2875, 2877, 
2880, and 2884, 7 U.S.C. 79, 79a, 79b, 84, 87, and 87e)

[49 FR 30915, Aug. 2, 1984]



Sec. 800.48  Dismissal of request for official services.

    (a) Conditions for dismissal--(1) General. An agency or the Service 
shall dismiss requests for official services when (i) Sec. 800.76 
prohibits the requested service; (ii) performing the requested service 
is not practicable; (iii) the agency or the Service lacks authority 
under the Act or regulations; or (iv) sufficient information is not 
available to make an accurate determination.
    (2) Original services. A request for original services shall be 
dismissed if a reinspection, review of weighing, appeal inspection, or 
Board appeal inspection has been performed on the same lot at the same 
specified service point within 5 business days.
    (3) Reinspection, appeal inspection, or Board appeal inspection 
services. A request for a reinspection, appeal inspection, or Board 
appeal inspection service shall be dismissed when: (i) The kind and 
scope are different from the kind and scope of the last inspection 
service; (ii) the condition of the grain has undergone a material 
change; (iii) the request specifies a representative file sample and a 
representative file sample is not available, (iv) the applicant requests 
that a new sample be obtained and a new sample cannot be obtained; or 
(v) the service cannot be performed within 5 business days of the date 
of the last inspection date.
    (4) Review of weighing services. A request for review of weighing 
services shall be dismissed when the request (i) is filed before the 
weighing results have been released, or (ii) is filed more than 90 
calendar days after the date of the original service.
    (b) Procedure for dismissal. When an agency or the Service proposes 
to dismiss a request for official services, the applicant shall be 
notified of the proposed action. The applicant will then be afforded 
reasonable time to take corrective action or to demonstrate there is no 
basis for the dismissal. If the agency or the Service determines that 
corrective action has not been adequate, the applicant will be notified 
again of the decision to dismiss the request for service, and any 
results of official services shall not be released.

(Secs. 8, 9, 10, 13 and 18, Pub. L. 94-582, 90 Stat. 2870, 2875, 2877, 
2880, and 2884, 7 U.S.C. 79, 79a, 79b, 84, 87, and 87e)

[49 FR 30915, Aug. 2, 1984, as amended at 50 FR 45392, Oct. 31, 1985]



Sec. 800.49  Conditional withholding of official services.

    (a) Conditional withholding. An agency or the Service shall 
conditionally withhold requests for official services when an applicant 
fails to meet any requirement prescribed in Sec. 800.46.
    (b) Procedure and withholding. When an agency or the Service 
proposes to conditionally withhold official services, the applicant 
shall be notified of the reason for the proposed action. The applicant 
will then be afforded reasonable time to take corrective action or to 
show that there is no basis for withholding services. If the agency or 
the Service determines that corrective action has not been adequate, the 
applicant will be notified. Any results of official services shall not 
be released when a request for service is withheld.

(Secs. 8, 9, 10, 13 and 18, Pub. L. 94-582, 90 Stat. 2870, 2875, 2877, 
2880, and 2884, 7 U.S.C. 79, 79a, 79b, 84, 87, and 87e)

[49 FR 30915, Aug. 2, 1984]

[[Page 237]]



Sec. 800.50  Refusal of official services and civil penalties.

    (a) Grounds for refusal. Any or all services available to an 
applicant under the Act may be refused, either temporarily or 
indefinitely, by the Service for causes prescribed in section 10(a) of 
the Act. Such refusal by the Service may be restricted to the particular 
facility or applicant (if not a facility) found in violation or to a 
particular type of service, as the facts may warrant. Such action may be 
in addition to, or in lieu of, criminal penalties or other remedial 
action authorized by the Act.
    (b) Provision and procedure for summary refusal. The Service may, 
without first affording the applicant (hereafter in this section 
``respondent'') a hearing, refuse to provide official inspection and 
Class X or Y weighing services pending final determination of the 
proceeding whenever the Service has reason to believe there is cause, as 
prescribed in section 10 of the Act, for refusing such official services 
and considers such action to be in the best interest of the official 
services system under the Act: Provided that within 7 days after refusal 
of such service, the Service shall afford the respondent an opportunity 
for a hearing as provided under paragraph (c)(2) of this section. 
Pending final determination, the Service may terminate the temporary 
refusal if alternative managerial, staffing, financial, or operational 
arrangements satisfactory to the Service can be and are made by the 
respondent.
    (c) Procedure for other than summary refusal. Except as provided in 
paragraph (b) of this section, before the Service refuses to provide 
official services the respondent shall be (1) notified of the services 
that are to be refused, the locations at which and the time period for 
which service will be refused, and the reasons for the refusal; and (2) 
afforded an opportunity for a hearing in accordance with the provisions 
of the Rules of Practice Governing Formal Adjudicatory Proceedings 
Instituted by the Secretary Under Various Statutes (7 CFR 1.130 et 
seq.). At the discretion of the Service, prior to initiation of formal 
adjudicatory proceedings, the respondent may be given an opportunity to 
express his or her views on the action proposed by the Service in an 
informal conference before the Administrator of the Service. If, as a 
result of such an informal conference, the Service and the respondent 
enter into a consent agreement, no formal adjudicatory proceedings shall 
be initiated.
    (d) Assessment of civil penalties. Any person who has knowingly 
committed any violation of section 13 of the Act or has been convicted 
of any violation of other Federal law with respect to the handling, 
weighing, or official inspection of grain may be assessed a civil 
penalty not to exceed $75,000 for each such violation as the 
Administrator determines is appropriate to effect compliance with the 
Act. Such action may be in addition to, or in lieu of, criminal 
penalties under section 14 of the Act, or in addition to, or in lieu of, 
the refusal of official services authorized by the Act.
    (e) Provisions for civil penalty hearings. Before a civil penalty is 
assessed against any person, such person shall be afforded an 
opportunity for a hearing as provided under paragraph (c)(2) of this 
section.
    (f) Collection of civil penalties. Upon failure to pay the civil 
penalty, the Service may request the Attorney General to file civil 
action to collect the penalty in a court of appropriate jurisdiction.

[45 FR 15810, Mar. 11, 1980, as amended at 51 FR 12830, Apr. 16, 1986]



Sec. 800.51  Expenses of agency, field office, or Board of Appeals and 
Review.

    For any request that has been dismissed or withdrawn under Sec. 
800.47, Sec. 800.48, or Sec. 800.49, respectively, each applicant 
shall pay expenses incurred by the agency or the Service.

(Secs. 8, 9, 10, 13 and 18, Pub. L. 94-582, 90 Stat. 2870, 2875, 2877, 
2880, and 2884, 7 U.S.C. 79, 79a, 79b, 84, 87, and 87e)

[49 FR 30915, Aug. 2, 1984]



Sec. 800.52  Official services not to be denied.

    Subject to the provisions of Sec. Sec. 800.48, 800.49, and 800.50, 
no person entitled to official services under the Act shall be denied or 
deprived of the right thereto

[[Page 238]]

by reason of any rule, regulation, bylaw, or custom of any market, board 
of trade, chamber of commerce, exchange, inspection department, or 
similar organization; or by any contract, agreement, or other 
understanding.

                              Descriptions



Sec. 800.55  Descriptions by grade.

    (a) General. In any sale, offer for sale, or consignment for sale, 
which involves the shipment of grain in interstate or foreign commerce, 
the description of grain, as being of a grade in any advertising, price 
quotation, other negotiation of sale, contract of sale, invoice, bill of 
lading, other document, or description on bags or other containers of 
the grain, is prohibited if such description is other than by an 
official grade designation, with or without additional information as to 
specified factors. An official grade designation contains any of the 
following: The term ``U.S.,'' the numerals 1 through 5, the term 
``Sample grade,'' or the name of a subclass or a special grade of grain 
specified in the Official United States Standards for Grain.
    (b) Proprietary brand names or trademarks. A description of grain by 
a proprietary brand name or a trademark that does not resemble an 
official grade designation will not be considered to be a description by 
grade; but a description by a proprietary brand name or trademark that 
contains singly or in combination any of the terms referenced in 
paragraph (a) of this section shall be considered to resemble an 
official grade designation.
    (c) Use of one or more factor designations. In interstate commerce, 
a description of grain by the use of one or more grade factor 
designations which appear in the Official United States Standards for 
Grain or by other criteria will not be considered to be a description by 
grade.
    (d) False or misleading descriptions. In any sale, offer for sale, 
or consignment for sale of any grain which involves the shipment of 
grain from the United States to any place outside thereof, knowingly 
using a false or misleading description of grain by official grade 
designation, or other description is prohibited.

[50 FR 9982, Mar. 13, 1985]



Sec. 800.56  Requirements on descriptions.

    Section 13 of the Act contains certain prohibitions with respect to 
the use of official grade designations, official marks, and other 
representations with respect to grain.
    (a) The use of an official grade designation, with or without factor 
information, or of official criteria information, or of the term 
``official grain standards,'' shall not, without additional information, 
be considered to be a representation that the grain was officially 
inspected.
    (b) The use of any symbol or term listed as an official mark, at 
Sec. 800.0(b)(68), with respect to grain shall be considered to be a 
representation of official service under the Act: Provided however, that 
the use of the official marks ``official certificate;'' ``officially 
inspected;'' ``official inspection;'' ``officially weighed;'' ``official 
weight;'' and ``official weighing'' shall not be considered to be a 
representation of official service under the Act if it is clearly shown 
that the activity occurred under the U.S. Warehouse Act (7 U.S.C. 241 et 
seq.): Provided further, that the use of the official mark ``officially 
tested'' with respect to grain inspection and weighing equipment shall 
not be considered to be a representation of testing under the Act if it 
is clearly shown that the equipment was tested under a State statute.

[50 FR 9982, Mar. 13, 1985]

                        Grain Handling Practices



Sec. 800.60  Deceptive actions and practices.

    In the absence of prior adequate notice to appropriate official 
personnel, any action or practice, including the loading, weighing, 
handling, or sampling of grain that knowingly causes or is an attempt to 
cause the issuance by official personnel of a false or incorrect 
official certificate or other official form, is deemed to be deceptive 
and, as such, is a violation of section 13(a)(3) of the Act. For the 
purposes of this paragraph, adequate notice is written or

[[Page 239]]

oral notice given to an agency or the Service, as applicable, before 
official personnel begin to perform official inspection or weighing 
services. If oral notice is given, it must be confirmed in writing 
within 2 business days. To be adequate, the notice must explain the 
nature and extent of the action or practice in question and must 
identify the grain, stowage container, equipment, facility, and the 
official personnel actually or potentially involved.

(Approved by the Office of Management and Budget under control number 
0580-0011)

[48 FR 17330, Apr. 22, 1983, as amended at 48 FR 44453, Sept. 29, 1983; 
54 FR 5924, Feb. 7, 1989]



Sec. 800.61  Prohibited grain handling practices.

    (a) Definitions. For the purpose of this section, dockage and 
foreign material in grain shall be:
    (1) Defined for export elevators at export port locations as set 
forth in 7 CFR part 810 and as dust removed from grain and collected in 
a bin/container and as dust settling on floors, equipment, and other 
areas, commonly referred to as dust sweepings; and
    (2) Defined for other than export elevators as set forth in 7 CFR 
part 810.
    (b) Prohibited practices. Except as permitted in paragraphs (c) and 
(d) of this section, no person shall:
    (1) Recombine or add dockage or foreign material to any grain, or
    (2) Blend different kinds of grain except when such blending will 
result in grain being designated as Mixed grain in accordance with 
subpart E of the Official United States Standards for Grain.
    (3) Add water to grain for purposes other than milling, malting, or 
similar processing operations.
    (c) Exemption. (1) The Administrator may grant exemptions from 
paragraph (b) of this section for grain shipments sent directly to a 
domestic end-user or processor. Requests for exemptions shall be 
submitted by grain handlers to the Service through the domestic end-
users or processors or their representatives.
    (2) Grain sold under an exemption shall be consumed or processed 
into a product(s) by the purchaser and not resold into the grain market.
    (3) Products or byproducts from grain sold under an exemption shall 
not be blended with or added to grain in commercial channels, except for 
vegetable oil which may be used as a dust suppressant in accordance with 
(d)(4) of this section.
    (d) Exceptions. Paragraph (b) shall not be construed as prohibiting 
the following grain handling practices. Compliance with paragraphs 
(d)(1) through (d)(6) of this section does not excuse compliance with 
applicable Federal, State, and local laws.
    (1) Blending. Grain of the same kind, as defined by the Official 
United States Standards for Grain, may be blended to adjust quality. 
Broken corn or broken kernels may be recombined or added to whole grain 
of the same kind provided that no foreign material or dockage has been 
added to the broken corn or broken kernels.
    (2) Insect and fungi control. Grain may be treated to control 
insects and fungi. Elevators, other grain handlers, and their agents are 
responsible for the proper use and applications of insecticides and 
fungicides. Sections 800.88 and 800.96 include additional requirements 
for grain that is officially inspected and weighed.
    (3) Marketing dockage and foreign material. Dockage and foreign 
material may be marketed separately.
    (4) Dust suppressants. Grain may be treated with an additive, other 
than water, to suppress dust during handling. Elevators, other grain 
handlers, and their agents are responsible for the proper use and 
application of dust suppressants. Sections 800.88 and 800.96 include 
additional requirements for grain that is officially inspected and 
weighed.
    (5) Identification. Confetti or similar material may be added to 
grain for identification purposes. Elevators, other grain handlers, and 
their agents are responsible for the proper use and application of such 
materials. Sections 800.88 and 800.96 include additional requirements 
for grain that is officially inspected or weighed.
    (6) Export loading facilities. Between May 1, 1987, and December 31, 
1987, export elevators at export port locations

[[Page 240]]

may recombine dockage and foreign material, but not dust, with grain 
provided such recombination occurs during the loading of a vessel with 
the intended purpose of ensuring uniformity of dockage and foreign 
material in the cargo.

(Approved by the Office of Management and Budget under control number 
0580-0011)

[52 FR 24437, June 30, 1987, as amended at 59 FR 52077, Oct. 14, 1994]

                                  Fees



Sec. 800.70  Fees for official services performed by agencies.

    (a) Assessment and use of fees. (1) Fees assessed by an agency for 
official inspection and Class X or Class Y weighing services or testing 
of inspection equipment shall be reasonable and nondiscriminatory.
    (2) In the case of a State or local governmental agency, fees shall 
not be used for any purpose other than to finance the cost of the 
official inspection and Class X or Class Y weighing service and 
inspection equipment testing service performed by the agency or the cost 
of other closely related programs administered by the agency.
    (b) Approval required--(1) Restriction. Only fees that meet the 
requirements stated in this section and are approved by the Service as 
reasonable and nondiscriminatory may be charged by an agency.
    (2) Exceptions. For good cause shown by an agency, the Administrator 
may grant case-by-case exceptions to the requirements in this section, 
provided that a determination is made that the agency fees would be 
reasonable and nondiscriminatory.
    (c) Reasonable fees. In determining if an agency's fees are 
reasonable, the Service will consider whether the fees: (1) Cover the 
estimated total cost to the agency of (i) official inspection services, 
(ii) Class X or Class Y weighing services, (iii) inspection equipment 
testing services, and (iv) related supervision and monitoring activities 
performed by the agency; (2) Are reasonably consistent with fees 
assessed by adjacent agencies for similar services; (3) Are assessed on 
the basis of the average cost of performing the same or similar services 
at all locations served by the agency; and (4) Are supported by 
sufficient information which shows how the fees were developed.
    (d) Nondiscriminatory fees. In determining if fees are 
nondiscriminatory, the Service will consider whether the fees are 
collected from all applicants for official service in accordance with 
the approved fee schedule. Charges for time and travel incurred in 
providing service at a location away from a specified service point 
shall be assessed in accordance with the approved fee schedule.
    (e) Schedule of fees to be established. (1) Each agency shall 
establish a schedule of fees for official services which the agency is 
delegated or designated the authority to perform. The schedule shall be 
in a standard format in accordance with the instructions. Such schedules 
may include fees for nonofficial services provided by the agency, but 
they shall be clearly identified and will not be subject to approval by 
the Service.
    (2) The schedule shall be published and made available by the agency 
to all users of its services.
    (f) Request for approval of fees--(1) Time requirement. A request 
for approval of a new or revised fee shall be submitted to the Service 
not less than 60 days in advance of the proposed effective date for the 
fee. Failure to submit a request within the prescribed time period may 
be considered grounds for postponment or denial of the request.
    (2) Contents of request. Each request shall show (i) the present 
fee, if any, and the proposed fee, together with data showing in detail 
how the fee was developed, and (ii) the proposed effective date.
    (g) Review of request--(1) Approval action. If upon review the 
Service finds that the request and supporting data justify the new or 
revised fee, the request will be marked ``approved'' and returned to the 
agency.
    (2) Denial action. If the Service finds that the request and 
supporting data do not justify the new or revised fee, approval of the 
request will be withheld pending receipt of any additional supporting 
data which the agency has to offer. If the data are not submitted within 
a reasonable period, the request

[[Page 241]]

shall be denied. In the case of a denial of a request, the agency shall 
be notified of the reason for denial.

(Approved by the Office of Management and Budget under control numbers 
0580-0003 and 0580-0012)

[45 FR 15810, Mar. 11, 1980; 45 FR 55119, Aug. 18, 1980, as amended at 
48 FR 44453, Sept. 29, 1983; 50 FR 30131, July 24, 1985]



Sec. 800.71  Fees assessed by the Service.

    (a) Official inspection and weighing services. The fees shown in 
schedules A and B apply to official inspection and weighing services 
performed by FGIS in the United States and Canada. The fees shown in 
schedule C apply to official inspection and weighing services performed 
by delegated States and designated agencies in the United States, except 
for those State agencies that have been delegated additional 
responsibilities by FGIS. These States shall be assessed fees as set 
forth in the State's Delegation of Authority document. Failure of a 
delegated State or designated agency to pay prescribed fees within 30 
days after being due, shall result in automatic termination of the 
delegation or designation. The delegation or designation shall be 
reinstated if fees currently due, plus interest and any further expenses 
incurred by the Service because of the termination are paid within 60 
days of the termination.

Schedule A--Fees for Official Inspection and Weighing Services Performed 
                          in the United States

    Table 1--Fees for Official Services Performed at an Applicant's Facility in an Onsite FGIS Laboratory \1\
----------------------------------------------------------------------------------------------------------------
                                                               Monday to    Monday to    Saturday,
                                                               Friday  (6   Friday  (6  Sunday, and
                                                               a.m. to 6    p.m. to 6     overtime     Holidays
                                                                 p.m.)        a.m.)         \2\
----------------------------------------------------------------------------------------------------------------
(1) Inspection and Weighing Services Hourly Rates (per
 service representative):
    1-year contract ($ per hour)............................        36.00        37.60        43.00        64.00
    Noncontract ($ per hour)................................        64.00        64.00        64.00        64.00
----------------------------------------------------------------------------------------------------------------
(2) Additional Tests (cost per test, assessed in addition to
 the hourly rate): \3\
    (i) Aflatoxin (rapid test kit method)...................       $10.00
    (ii) NIR or NMR Analysis (protein, oil, starch, etc.)...         2.25
    (iii) Vomitoxin (qualitative)...........................        12.50
    (iv) Vomitoxin (quantitative)...........................        18.50
    (v) Waxy corn (per test)................................         2.25
    (vi) Fees for other tests not listed above will be based  ...........
     on the lowest noncontract hourly rate..................
    (vii) Other services....................................  ...........
         (a) Class Y Weighing (per carrier)                   ...........
            (1) Truck/container.............................         0.30
            (2) Railcar.....................................         1.25
            (3) Barge.......................................         2.50
(3) Administrative Fee (assessed in addition to all other
 applicable fees, only one administrative fee will be
 assessed when inspection and weighing services are
 performed on the same carrier):
    (i) All outbound carriers serviced by the specific field
     office (per-metric ton):
        (a) League City.....................................        0.167
        (b) New Orleans.....................................        0.067
        (c) Portland........................................        0.136
        (d) Toledo..........................................       0.184
\1\ Fees apply to original inspection and weighing, reinspection, and appeal inspection service and include, but
  are not limited to, sampling, grading, weighing, prior to loading stowage examinations, and certifying results
  performed within 25 miles of an employee's assigned duty station. Travel and related expenses will be charged
  for service outside 25 miles as found in Sec.  800.72 (a).
\2\ Overtime rates will be assessed for all hours in excess of 8 consecutive hours that result from an applicant
  scheduling or requesting service beyond 8 hours, or if requests for additional shifts exceed existing
  staffing.
\3\ Appeal and reinspection services will be assessed the same fee as the original inspection service.


[[Page 242]]


 Table 2--Services Performed at Other Than an Applicant's Facility in an
                          FGIS Laboratory \1,2\
------------------------------------------------------------------------
 
------------------------------------------------------------------------
(1) Original Inspection and Weighing (Class X) Services
    (i) Sampling only (use hourly rates from Table 1)
    (ii) Stationary lots (sampling, grade/factor, &
     checkloading):
        (a) Truck/trailer/container (per carrier)..........       $20.00
        (b) Railcar (per carrier)..........................        29.70
        (c) Barge (per carrier)............................       187.50
        (d) Sacked grain (per hour per service                      0.04
         representative plus an administrative fee per
         hundredweight) (CWT)..............................
    (iii) Lots sampled online during loading (sampling
     charge under (i) above, plus):
        (a) Truck/trailer container (per carrier)..........        12.00
        (b) Railcar (per carrier)..........................        25.00
        (c) Barge (per carrier)............................       128.10
        (d) Sacked grain (per hour per service                      0.04
         representative plus an administrative fee per
         hundredweight) (CWT)..............................
    (iv) Other services
        (a) Submitted sample (per sample--grade and factor)        12.00
        (b) Warehouseman inspection (per sample)...........        21.00
        (c) Factor only (per factor--maximum 2 factors)....         5.70
        (d) Checkloading/condition examination (use hourly          0.04
         rates from Table 1, plus an administrative fee per
         hundredweight if not previously assessed) (CWT)...
        (e) Reinspection (grade and factor only. Sampling          13.00
         service additional, item (i) above)...............
        (f) Class X Weighing (per hour pre service                 64.00
         representative)...................................
    (v) Additional tests (excludes sampling):                ...........
        (a) Aflatoxin (rapid test kit method)..............       $30.00
        (b) NIR or NMR Analysis (protein, oil, starch,             10.00
         etc.).............................................
        (c) Vomitoxin (qualitative)........................        31.00
        (d) Vomitoxin (quantitative).......................        38.50
        (e) Waxy corn (per test)...........................        10.00
        (f) Canola (per test--00 dip test).................        10.00
        (g) Pesticide Residue Testing: \3\                   ...........
            (1) Routine Compounds (per sample).............       216.00
            (2) Special Compounds (per hour per service           115.00
             representative)...............................
        (h) Fees for other tests not listed above will be
         based on the lowest noncontract hourly rate from
         Table 1.
(2) Appeal inspection and review of weighing service.\4\
    (i) Board Appeals and Appeals (grade and factor).......        82.00
        (a) Factor only (per factor--max 2 factors)........        43.00
        (b) Sampling service for Appeals additional (hourly
         rates from Table 1)
    (ii) Additional tests (assessed in addition to all       ...........
     other applicable tests):
        (a) Aflatoxin (rapid test kit method)..............       $30.00
        (b) NIR or NMR Analysis (protein, oil, starch,             17.70
         etc.).............................................
        (c) Vomitoxin (per test-qualitative)...............        41.00
        (d) Vomitoxin (per test-quantitative)..............        47.00
        (e) Vomitoxin (per test-HPLC Board Appeal).........       141.00
        (f) Pesticide Residue Testing: \3\                   ...........
            (1) Routine Compounds (per sample).............       216.00
            (2) Special Compounds (per hour per service           115.00
             representative)...............................
        (g) Fees for other tests not listed above will be
         based on the lowest noncontract hourly rate from
         Table 1.
    (iii) Review of weighing (per hour per service                 82.60
     representative).......................................

[[Page 243]]

 
(3) Stowage examination (service-on-request): \3\
    (i) Ship (per stowage space) (minimum $255.00 per ship)        51.00
    (ii) Subsequent ship examinations (same as original)
     (minimum $153.00 per ship)............................
    (iii) Barge (per examination)..........................        41.00
    (iv) All other carriers (per examination)..............       16.00
------------------------------------------------------------------------
\1\ Fees apply to original inspection and weighing, reinspection, and
  appeal inspection service and include, but are not limited to,
  sampling, grading, weighing, prior to loading stowage examinations,
  and certifying results performed within 25 miles of an employee's
  assigned duty station. Travel and related expenses will be charged for
  service outside 25 miles as found in Sec.  800.72(a).
\2\ An additional charge will be assessed when the revenue from the
  services in Schedule A, Table 2, does not cover what would have been
  collected at the applicable hourly rate as provided in Sec.
  800.72(b).
\3\ If performed outside of normal business, 1\1/2\ times the applicable
  unit fee will be charged.
\4\ If, at the request of the Service, a file sample is located and
  forwarded by the Agency, the Agency may, upon request, be reimbursed
  at the rate of $2.65 per sample by the Service.


                   Table 3--Miscellaneous Services \1\
------------------------------------------------------------------------
 
------------------------------------------------------------------------
(1) Grain grading seminars (per hour per service                  $64.00
 representative) \2\.......................................
(2) Certification of diverter-type mechanical samplers (per        64.00
 hour per service representative) \2\......................
(3) Special weighing services (per hour per service
 representative): \2\
    (i) Scale testing and certification....................        83.20
    (ii) Scale testing and certification of railroad track         83.20
     scales................................................
    (iii) Evaluation of weighing and material handling             83.20
     systems...............................................
    (iv) NTEP Prototype evaluation (other than Railroad            83.20
     Track Scales).........................................
    (v) NTEP Prototype evaluation of Railroad Track Scale..        83.20
    (vi) Use of GIPSA railroad track scale test equipment         500.00
     per facility for each requested service. (Track scales
     tested under the Association of American Railroads
     agreement are exempt.)................................
    (vii) Mass standards calibration and reverification....        83.20
    (viii) Special projects................................        83.20
(4) Foreign travel (per day per service representative)....       510.00
(5) Online customized data EGIS service:
    (i) One data file per week for 1 year..................       500.00
    (ii) One data file per month for 1 year................       300.00
(6) Samples provided to interested parties (per sample)....         3.00
(7) Divided-lot certificates (per certificate).............         1.75
(8) Extra copies of certificates (per certificate).........         1.75
(9) Faxing (per page)......................................         1.75
(10) Special mailing (actual cost).........................
(11) Preparing certificates onsite or during other than
 normal business hours (use hourly rates from Table 1) ....
------------------------------------------------------------------------
\1\ Any requested service that is not listed will be performed at $64.00
  per hour.
\2\ Regular business hours--Monday through Friday--service provided at
  other than regular hours charged at the applicable overtime hourly
  rate.


[[Page 244]]

     Schedule B--Fees for Official Inspection, Weighing, and Appeal 
               Inspection Services Performed in Canada \1\

------------------------------------------------------------------------
                                                    Regular   Nonregular
                                                    workday     workday
 Inspection and weighing service (bulk or sacked    (Monday     (Sunday
                      grain)                          thru        and
                                                   Saturday)   holiday)
------------------------------------------------------------------------
(1) Original inspection services and official
 weighing services: \2,3\
  (i) Contract services (per hour per service        $103.00    $130.00
   representative)...............................
  (ii) Noncontract service (per hour per service      137.00     172.00
   representative)...............................
(2) Extra copies of certificates (per copy)......       3.00       3.00
------------------------------------------------------------------------
\1\ Official inspection and weighing services include, but are not
  limited to grading, weighing, sampling, stowage examination, equipment
  testing, scale testing and certification, test weight reverification,
  evaluation of inspection and weighing equipment demonstrating official
  inspection and weighing functions, furnishing standard illustrations,
  and certifying inspection and weighing results.
\2\ Fees for reinspection and appeal inspection services shall be
  assessed at the applicable contract or noncontract hourly rate as the
  original inspection. However, if additional personnel are required to
  perform the reinspection or appeal inspection service, the applicant
  will be assessed the noncontract original inspection hourly fee.
\3\ Board appeal inspections are based on file samples. See Sec.
  800.71, schedule A for Board Appeal fees.

    Schedule C--Fees for FGIS Supervision of Official Inspection and 
   Weighing Services Performed by Delegated States and/or Designated 
                    Agencies in the United States \1\

    The supervision fee is charged at $0.011 per metric ton inspected 
and/or weighed.
    (b) Registration certificates and renewals. (1) Fees for 
registration certificates and renewals will be based on the nature of 
the business:
 (i) Firms engaged in the business of buying grain for sale in foreign 
commerce or the business of handling, weighing, or transporting of grain 
for sale in foreign commerce.....................................$135.00
 (ii) Firms engaged in the business of buying grain for sale in foreign 
commerce or the business of handling, weighing, or transporting of grain 
for sale in foreign commerce who also are in a control relationship, as 
defined in Section 17A(b)(2) of the Act, with respect to a business 
engaged in the business of buying, handling, weighing, or transporting 
grain for sale in interstate commerce.............................270.00
    (2) Requests for extra copies of registration certificates shall be 
accompanied by a fee of $2.50 for each copy.
    (c) Designation amendments. An application for an amendment to a 
designation shall be accompanied by a fee of $75.00.
    (d) Each application for approval to operate as a scale testing 
organization shall be accompanied by a fee of $250.

(Secs. 8 and 9, Pub. L. 94-582, 90 Stat. 2873, 2877 (7 U.S.C. 79(j), 
79a(1)); secs. 9, 18, Pub. L. 94-582, 90 Stat. 2875 and 2884 (7 U.S.C. 
79a and 87e); secs. 8 and 9, Pub. L. 94-582, 90 Stat. 2873, 2877 (7 
U.S.C. 79(j), 79a(1)), as amended by Pub. L. 97-35, 95 Stat. 371, 372)

[45 FR 15810, Mar. 11, 1980; 45 FR 55119, Aug. 18, 1980, as amended at 
49 FR 26563, June 28, 1984; 50 FR 38504, Sept. 23, 1985; 51 FR 43724, 
Dec. 4, 1986; 53 FR 21792, June 10, 1988; 59 FR 52656, Oct. 19, 1994; 63 
FR 32714, June 16, 1998; 63 FR 35504, June 30, 1998; 63 FR 70992, Dec. 
23, 1998; 64 FR 6783, Feb. 11, 1999; 65 FR 16785, Mar. 30, 2000; 66 FR 
35753, July 9, 2001; 66 FR 36834, July 13, 2001; 67 FR 13086, Mar. 21, 
2002; 68 FR 32625, June 2, 2003; 68 FR 35490, June 13, 2003; 69 FR 
26487, May 13, 2004; 70 FR 50151, Aug. 26, 2005; 71 FR 65373, Nov. 8, 
2006]



Sec. 800.72  Explanation of additional service fees for services 
performed in the United States only.

    (a) When transportation of the service representative to the service 
location (at other than a specified duty point) is more than 25 miles 
from an FGIS office, the actual transportation cost in addition to the 
applicable hourly rate for each service representative will be assessed 
from the FGIS office to the service point and return. When commercial 
modes of transportation (e.g., airplanes) are required, the actual 
expense incurred for the round-trip travel will be assessed. When 
services are provided to more than one applicant, the travel and other 
related charges will be prorated between applicants.
    (b) In addition to a 2-hour minimum charge for service on Saturdays, 
Sundays, and holidays, an additional charge will be assessed when the 
revenue from the services in Sec. 800.71, schedule A, table 2, does not 
equal or exceed what would have been collected at the applicable hourly 
rate. The additional charge will be the difference between the actual 
unit fee revenue and the hourly fee revenue. Hours accrued

[[Page 245]]

for travel and standby time shall apply in determining the hours for the 
minimum fee.

[61 FR 43305, Aug. 22, 1996]



Sec. 800.73  Computation and payment of service fees; general fee 
information.

    (a) Computing hourly rates. The applicable hourly rate will be 
assessed in quarter hour increments for:
    (1) Travel from the FGIS field office or assigned duty station to 
the service point and return;
    (2) The performance of the requested service, less mealtime.
    (b) Application of fees when service is delayed or dismissed by the 
applicant. The applicable hourly rate will be assessed for the entire 
period of scheduled service when:
    (1) Service has been requested at a specified location;
    (2) A service representative is on duty and ready to provide service 
but is unable to do so because of a delay not caused by the Service; and
    (3 FGIS officials determine that the service representative cannot 
be utilized to provide service elsewhere without cost to the Service.
    (c) Application of fees when an application for service is withdrawn 
or dismissed. The applicable hourly rate will be assessed to the 
applicant for the entire period of scheduled service if the request is 
withdrawn or dismissed after the service representative departs for the 
service point, or if the service request is not canceled by 2 p.m., 
local time, the business day preceding the date of scheduled service. 
However, the applicable hourly rate will not be assessed to the 
applicant if FGIS officials determine that the service representative 
can be utilized elsewhere or released without cost to the Service.
    (d) To whom fees are assessed. Fees for inspection, weighing, and 
related services performed by service representatives, including 
additional fees as provided in Sec. 800.72, shall be assessed to and 
paid by the applicant for the service.
    (e) Advance payment. As necessary, the Administrator may require 
that fees shall be paid in advance of the performance of the requested 
service. Any fees paid in excess of the amount due shall be used to 
offset future billings, unless a request for a refund is made by the 
applicant.
    (f) Form of payment. Bills for fees assessed under the regulations 
in this part for official services performed by FGIS shall be paid by 
check, draft, or money order, payable to the U.S. Department of 
Agriculture, Grain Inspection, Packers and Stockyards Administration.

[61 FR 43305, Aug. 22, 1996, as amended at 69 FR 26490, May 13, 2004]

                       Kinds of Official Services



Sec. 800.75  Kinds of official inspection and weighing services.

    (a) General. Paragraphs (b) through (m) of this section describe the 
kinds of official service available. Each kind of service has several 
levels. Sec. Sec. 800.115, 800.116, 800.117, and 800.118 explain 
Original Services, Sec. Sec. 800.125, 800.126, 800.127, 800.128, and 
800.129 explain Reinspection Services and Review of Weighing Services, 
and Sec. Sec. 800.135, 800.136, 800.137, 800.138, and 800.139 explain 
Appeal Inspection Services. The results of each official service listed 
in paragraphs (b) through (j) will be certificated according to Sec. 
800.160.
    (b) Official sample-lot inspection service. This service consists of 
official personnel (1) sampling an identified lot of grain and (2) 
analyzing the grain sample for grade, official factors, or official 
criteria, or any combination thereof, according to the regulations, 
Official U.S. Standards for Grain, instructions, and the request for 
inspection.
    (c) Warehouseman's sample-lot inspection service. This service 
consists of (1) a licensed warehouseman sampler (i) sampling an 
identified lot of grain using an approved diverter-type mechanical 
sampler and (ii) sending the sample to official personnel and (2) 
official personnel analyzing the grain sample for grade, official 
factors, official criteria, or any combination thereof, according to the 
regulations, Official U.S. Standards for Grain, instructions, and the 
request for inspection.
    (d) Submitted sample inspection service. This service consists of an 
applicant or an applicant's agent submitting a grain

[[Page 246]]

sample to official personnel, and official personnel analyzing the grain 
sample for grade, official factors, official criteria, or any 
combination thereof, according to the regulations, Official U.S. 
Standards for Grain, instructions, and the request for inspection.
    (e) Official sampling service. This service consists of official 
personnel (1) sampling an identified lot of grain and (2) forwarding a 
representative portion(s) of the sample along with a copy of the 
certificate, as requested by the applicant.
    (f) Official stowage examination service. (1) This service consists 
of official personnel visually determining if an identified carrier or 
container is clean; dry; free of infestation, rodents, toxic substances, 
and foreign odor; and is suitable to store or carry grain.
    (2) A stowage examination may be obtained as a separate service or 
with one or more other services. Approval of the stowage space is 
required for official sample-lot inspection services on all export lots 
of grain and all official sample-lot inspection services performed on 
outbound domestic lots of grain which are sampled and inspected at the 
time of loading. Also, approval of the stowage space is required for any 
weighing services performed on all outbound land carriers.
    (g) Class X weighing service. This service consists of official 
personnel (1) completely supervising the loading or unloading of an 
identified lot of grain and (2) physically weighing or completely 
supervising approved weighers weighing the grain.
    (h) Class Y weighing service. This service consists of (1) approved 
weighers physically weighing the grain and (2) official personnel 
partially or completely supervising the loading or unloading of an 
identified lot of grain.
    (i) Checkweighing service (sacked grain). This service consists of 
official personnel or approved weighers under the supervision of 
official personnel (1) physically weighing a selected number of sacks 
from a grain lot and (2) determining the estimated total gross, tare, 
and new weights, or the estimated average gross or net weight per filled 
sack according to the regulations, instructions, and request by the 
applicant.
    (j) Checkloading service. This service consists of official 
personnel (1) performing a stowage examination; (2) computing the number 
of filled grain containers loaded aboard a carrier; and (3) if 
practicable, sealing the carrier for security.
    (k) Test weight reverification service. This service consists of 
official personnel (1) comparing the weight of elevator test weights 
with known weights; (2) correcting the elevator test weights, when 
necessary; and (3) issuing a Report of Test.
    (l) Railroad track scale testing service. This service consists of 
official personnel (1) testing railroad track scales with Service-
controlled test cars and (2) issuing a Report of Test.
    (m) Hopper and truck scale testing service. This service consists of 
official personnel (1) testing hopper and truck scales and (2) issuing a 
Report of Test.

(The information collection requirements contained in this section were 
approved by the Office of Management and Budget under control number 
0580-0011)

[50 FR 45392, Oct. 31, 1985]



Sec. 800.76  Prohibited services; restricted services.

    (a) Prohibited services. No agency shall perform any inspection 
function or provide any inspection service on the basis of unofficial 
standards, procedures, factors, or criteria if the agency is designated 
or authorized to perform the service or provide the service on an 
official basis under the Act. No agency shall perform official and 
unofficial weighing on the same mode of conveyance at the same facility.
    (b) Restricted services--(1) Not standardized grain. When an 
inspection or weighing service is requested on a sample or a lot of 
grain which does not meet the requirements for grain as set forth in the 
Official U.S. Standards for Grain, a certificate showing the words ``Not 
Standardized Grain'' shall be issued according to the instructions.
    (2) Grain screening. The inspection or weighing of grain screenings 
may be obtained from an agency or field office according to the 
instructions.

[50 FR 45393, Oct. 31, 1985, as amended at 60 FR 65235, Dec. 19, 1995; 
63 FR 45677, Aug. 27, 1998]

[[Page 247]]

                    Inspection Methods and Procedures



Sec. 800.80  Methods and order of performing official inspection services.

    (a) Methods--(1) General. All official inspection services shall be 
performed in accordance with methods and procedures prescribed in the 
regulations and the instructions.
    (2) Lot inspection services. A lot inspection service shall be based 
on a representative sampling and examination of the grain in the entire 
lot, except as provided in Sec. 800.85, and an accurate analysis of the 
grain in the sample.
    (3) Stowage examination service. A stowage examination service shall 
be based on a thorough and accurate examination of the carrier or 
container into which grain will be loaded.
    (4) Submitted sample inspection service. A submitted sample 
inspection service shall be based on a submitted sample of sufficient 
size to enable official personnel to perform a complete analysis for 
grade. If a complete analysis for grade cannot be performed because of 
an inadequate sample size or other conditions, the request for service 
shall be dismissed or a factor only inspection may be performed upon 
request.
    (5) Reinspection and appeal inspection service. A reinspection, 
appeal inspection, or Board appeal inspection service shall be based on 
an independent review of official grade information, official factor 
information, or other information consistent with the scope of the 
original inspection.
    (b) Order of service. Official inspection services shall be 
performed, to the extent practicable, in the order in which they are 
received. Priority shall be given to inspections required for export 
grain. Priority may be given to other kinds of inspection services under 
the Act with the specific approval of the Service.
    (c) Recording receipt of documents. Each document submitted by or on 
behalf of an applicant for inspection services shall be promptly stamped 
or similarly marked by official personnel to show the date of receipt.
    (d) Conflicts of interest. No official personnel shall perform or 
participate in performing an official inspection service on grain or on 
a carrier or container in which they have a direct or indirect financial 
interest.

[50 FR 49669, Dec. 4, 1985]



Sec. 800.81  Sample requirements; general.

    (a) Samples for official sample-lot inspection service--(1) Original 
official sample-lot inspection service. For original sample-lot 
inspection purposes, an official sample shall be obtained by official 
personnel; representative of the grain in the lot; and protected from 
manipulation, substitution, and improper or careless handling.
    (2) Official sample-lot reinspection and appeal inspection service. 
For an official sample-lot reinspection service or an official appeal 
sample-lot inspection service, the sample(s) on which the reinspection 
or appeal is determined shall (i) be obtained by official personnel and 
(ii) otherwise meet the requirements of paragraph (a)(1) of this 
section. If the reinspection or appeal inspection is determined on the 
basis of official file sample(s), the samples shall meet the 
requirements of Sec. 800.82(d).
    (3) New sample. Upon request and if practicable, a new sample shall 
be obtained and examined as a part of a reinspection or appeal 
inspection. The provision for a new sample shall not apply if obtaining 
the new sample involves a change in method of sampling.
    (b) Representative sample. A sample shall not be considered 
representative unless it (1) has been obtained by official personnel, 
(2) is of the size prescribed in the instructions, and (3) has been 
obtained, handled, and submitted in accordance with the instructions. A 
sample which fails to meet the requirements of this paragraph may, upon 
request of the applicant, be inspected as a submitted sample.
    (c) Protecting samples. Official personnel shall protect official 
samples, warehouseman's samples, and submitted samples from 
manipulation, substitution, or improper and careless handling which may 
deprive the samples of their representativeness or which may change the 
physical or chemical properties of the grain, as appropriate, from the 
time of sampling or receipt until the inspection services are completed 
and the file samples have been discarded.

[[Page 248]]

    (d) Restriction on sampling. Official personnel shall not perform an 
original inspection or a reinspection service on an official sample or a 
warehouseman's sample unless the grain from which the sample was 
obtained was located within the area of responsibility assigned to the 
agency or field office at the time of sampling, except as provided for 
in Sec. 800.117, or on a case-by-case basis as determined by the 
Administrator.
    (e) Disposition of samples--(1) Excess grain. Any grain in excess of 
the quantity specified in the instructions for the requested service, 
the file samples, and samples requested by interested persons shall be 
returned to the lot from which the grain was obtained or to the owner of 
the lot or the owner's order.
    (2) Inspection samples. Inspection samples, after they have served 
their intended purpose, shall be disposed of as follows:
    (i) Samples which contain toxic substances or materials shall be 
kept out of food and feed channels, and
    (ii) Official personnel shall dispose of samples obtained or 
submitted to them according to procedures established by the Service. 
Complete and accurate records of disposition shall be maintained.

(Approved by the Office of Management and Budget under control number 
0580-0013)

[50 FR 49669, Dec. 4, 1985, as amended at 68 FR 19138, Apr. 18, 2003]



Sec. 800.82  Sampling provisions by level of service.

    (a) Original inspection service--(1) Official sample-lot inspection 
service. Each original inspection service shall be performed on the 
basis of one or more official samples obtained by official personnel 
from grain in the lot and forwarded to the appropriate agency or field 
office.
    (2) Warehouseman's sample-lot inspection. Each original 
warehouseman's sample-lot inspection service shall be performed on the 
basis of samples obtained by a licensed warehouseman and sent to the 
appropriate agency or field office in whose circuit the warehouse is 
located.
    (3) Submitted sample service. Each original submitted sample 
inspection service shall be performed on the basis of the sample as 
submitted.
    (b) Reinspection, and appeal inspection services--(1) Official 
sample-lot inspection service. Each of these inspection services shall 
be performed on the basis of official samples as available, including 
file samples, at the time the service is requested. In performing these 
services, a sample obtained with an approved diverter-type mechanical 
sampler or with a pelican sampler generally shall be used with respect 
to quality factors and official criteria, and a sample obtained with a 
probe at the time of the reinspection or appeal, generally, shall be 
used with respect to heating, musty, sour, insect infestation, and other 
condition and odor factors. In instances where original inspection 
results are based on samples obtained by probe, the decision as to 
whether file samples or new samples obtained by probe are to be used 
shall be made by the official personnel performing the service.
    (2) Warehouseman's sample-lot inspection service. Each reinspection 
service and appeal inspection service on a warehouseman's sample shall 
be performed on an analysis of the official file sample.
    (3) Submitted sample service. Each reinspection service and appeal 
inspection service on a submitted sample shall be performed on an 
analysis of the official file sample.
    (c) Board appeal inspection services. Board appeal inspection 
services shall be performed on an analysis of the official file sample.
    (d) Use of file samples--(1) Requirements for use. A file sample 
that is retained by official personnel in accordance with the procedures 
prescribed in the instructions may be considered representative for a 
reinspection service, appeal inspection service, and a Board appeal 
inspection service if (i) the file sample has remained at all times in 
the custody and control of the official personnel that performed the 
inspection service in question; and (ii) the official personnel who 
performed the original inspection service and those who are to perform 
the reinspection, the appeal inspection, or the Board appeal inspection 
service determine that the samples were representative at the time

[[Page 249]]

the original inspection service was performed and that the quality or 
condition of the grain in the samples has not changed.
    (2) Certificate statement. When the results of a reinspection, 
appeal inspection, or Board appeal inspection service are based on an 
official file sample, the certificate for the reinspection service, the 
appeal inspection service, and the Board appeal inspection service shall 
show a statement, as specified in the instructions, indicating that the 
results are based on the official file sample.

[50 FR 49670, Dec. 4, 1985]



Sec. 800.83  Sampling provisions by kind of movement.

    (a) Export cargo movements--(1) Bulk grain. Except as may be 
approved by the Administrator on a shipment-by-shipment basis in an 
emergency, each inspection for official grade, official factor, or 
official criteria on an export cargo shipment of bulk grain shall be 
performed on official samples obtained from the grain (i) as the grain 
is being loaded aboard the final carrier; (ii) after the final elevation 
of the grain prior to loading and as near to the final loading spout as 
is physically practicable (except as approved by the Administrator when 
representative samples can be obtained before the grain reaches the 
final loading spout); and (iii) by means of a diverter-type mechanical 
sampler approved by the Service and operated in accordance with 
instructions. If an approved diverter-type mechanical sampler is not 
properly installed at an elevator or facility as required, each 
certificate issued at that elevator or facility for an export cargo 
shipment of bulk grain shall show a statement indicating the type of 
approved sampling method used, as prescribed in the instructions.
    (2) Sacked grain. Each inspection for official grade, official 
factor, or official criteria on an export cargo shipment of sacked grain 
shall be performed on official samples obtained from the grain by any 
sampling method approved by the Service and operated in accordance with 
instructions.
    (b) Other movements. Each inspection for official grade, official 
factor, or official criteria on a domestic cargo movement (``In,'' 
``Out,'' or en route barge movement), a movement in a land carrier (any 
movement in a railcar, truck trailer, truck/trailer combination, or 
container), or a ``LOCAL'' movement of bulk or sacked grain shall be 
performed on official samples obtained from the grain by any sampling 
method approved by the Service and operated in accordance with the 
instructions.

[50 FR 49670, Dec. 4, 1985]



Sec. 800.84  Inspection of grain in land carriers, containers, and barges
in single lots.

    (a) General. The reinspection of bulk or sacked grain loaded or 
unloaded from any carrier or container, except shiplot grain, shall be 
conducted in accordance with the provisions in this section and 
procedures prescribed in the instructions.
    (b) Single and multiple grade procedure--(1) Single grade. When 
grain in a carrier or container is offered for inspection as one lot and 
the grain is found to be uniform in condition, the grain shall be 
sampled, inspected, graded, and certificated as one lot. For the purpose 
of this paragraph, condition only includes the factors heating, musty, 
or sour.
    (2) Multiple grade. When grain in a carrier or container is offered 
for inspection as one lot and the grain is found to be not uniform in 
condition because portions of the grain are heating, musty, or sour, the 
grain in each portion will be sampled, inspected, and graded separately; 
but the results shall be shown on one certificate. The certificate shall 
show the approximate quantity or weight of each portion, the location of 
each portion in the carrier or container, and the grade of the grain in 
each portion.
    (3) Infested. If any portion of grain in a lot is found to be 
infested, according to applicable provisions of the Official U.S. 
Standards for Grain, the entire lot shall be considered infested. When 
grain in railcars or trucks with permanently enclosed tops is considered 
infested, the applicant for inspection shall be promptly notified and 
given

[[Page 250]]

the option of (i) receiving a grade certificate with a special grade 
designation indicating that the entire lot is infested or (ii) 
fumigating the grain in the lot in accordance with instructions and 
receiving a grade certificate without the special grade designation.
    (c) One certificate per carrier: exceptions. Except as provided in 
this paragraph, one official certificate shall be issued for the 
inspection of the grain in each truck, trailer, truck/trailer(s) 
combination, railcar, barge, or similarly sized carrier. The 
requirements of this paragraph are not applicable:
    (1) When grain is inspected in a combined lot under Sec. 800.85;
    (2) When grain is inspected under paragraph (d) of this section; or
    (3) When certification is at the option of the applicant in 
accordance with instructions.
    (d) Bulkhead lots. If grain in a carrier is offered for official 
inspection as two or more lots and the lots are separated by bulkheads 
or other partitions, the grain in each lot shall be sampled, inspected, 
and graded separately in accordance with paragraphs (a) and (b) of this 
section. An official certificate shall be issued for each lot inspected. 
Each certificate shall show the term ``Bulkhead Lot,'' the approximate 
quantity or weight of the grain in the lot, the location of the lot in 
the carrier, and the grade of the grain in the lot.
    (e) Bottom not sampled. If bulk grain offered for official 
inspection is at rest in a carrier or container and is fully accessible 
for sampling in an approved manner, except that the bottom of the 
carrier or container cannot be reached with each probe, the grain shall 
be sampled as thoroughly as possible with an approved probe. The grain 
in the resulting samples shall be inspected, graded, and certificated, 
except that each certificate shall show a statement, as specified in the 
instructions, indicating the depth probed. Any inspection which is based 
on a sample that does not represent the entire carrier or container does 
not meet the mandatory inspection requirements of section 5(a)(1) of the 
Act.
    (f) Partial inspection--heavily loaded--(1) General. When an ``In'' 
movement of bulk grain is offered for inspection at rest in a carrier or 
container and is loaded in such a manner that it is possible to secure 
only door-probe or shallow-probe samples, the container shall be 
considered to be ``heavily loaded,'' and the request for inspection 
either shall be dismissed or a partial inspection shall be made. If the 
request is for the inspection of an ``Out'' movement of grain, the 
request shall be dismissed on the grounds that the grain is not 
accessible for a correct ``Out'' inspection.
    (2) Certification procedure. If a partial inspection is made, the 
grain will be sampled as thoroughly as possible with an approved probe 
and inspected, graded, and a ``partial inspection--heavily loaded'' 
certificate issued. The certificate shall show the words ``Partial 
inspection--heavily loaded'' in the space provided for remarks. The type 
of samples that were obtained shall be described in terms of ``door 
probe'' or ``shallow probe.''
    (3) Reinspection and appeal inspection procedure. A request for a 
reinspection or an appeal inspection service on grain in a carrier or 
container that is certificated as ``partial inspection--heavily loaded'' 
shall be dismissed in accordance with Sec. 800.48(a)(4).
    (4) Restriction. No ``partial inspection--heavily loaded'' 
certificate shall be issued for sacked grain or any inspection other 
than the inspections described in paragraphs (f)(1) through (4) of this 
section and Sec. 800.85(h)(2).
    (g) Part lots--(1) General. If a portion of the grain in a carrier 
or container is removed, the grain that is removed and the grain 
remaining shall be considered separate lots. When an official inspection 
service is requested on either portion, the grain shall be sampled, 
inspected, graded, and a ``part-lot'' inspection certificate issued.
    (2) Grain remaining in carrier or container. The certificate for 
grain remaining in a carrier or container shall show (i) the following 
completed statement: ``Partly unloaded; results based on portion 
remaining in (show carrier or container identification),'' (ii) the term 
``Part lot'' following the quantity information, (iii) the 
identification of the carrier or container, and (iv) the estimated 
amount and location of the part lot.

[[Page 251]]

    (3) Grain unloaded from carrier or container. If grain is sampled by 
official personnel during unloading, the certificate for the grain that 
is unloaded shall show (i) the completed statement: ``Part lot; results 
based on portion removed from (show carrier identification)'' and (ii) 
the term ``Part lot'' following the quantity information. If the grain 
is not sampled by official personnel during unloading, the certificate 
may, upon request of the applicant, show a completed statement such as 
``Applicant states grain is ex-car '' or ``Applicant states grain is ex-
barge ,'' but the certificate shall not otherwise show a carrier or 
container identification or the term ``Part lot.''
    (h) Identification for compartmented cars. The identification for 
compartments in a compartmented railcar shall, in the absence of readily 
visible markings, be stated in terms of the location of the grain in a 
compartment, with the first compartment at the brake end of the car 
being identified as B-1, and the remaining compartments being numbered 
consecutively towards the other end of the car.

[50 FR 49671, Dec. 4, 1985, as amended at 57 FR 11428, Apr. 3, 1992]



Sec. 800.85  Inspection of grain in combined lots.

    (a) General. The official inspection for grade of bulk or sacked 
grain loaded aboard, or being loaded aboard, or discharged from two or 
more carriers or containers (including barges designed for loading 
aboard a ship) as a combined lot shall be performed according to the 
provisions of this section and procedures prescribed in the 
instructions.
    (b) Application procedure--(1) For inspection during loading, 
unloading, or at rest. Applications for official inspection of grain as 
a combined lot shall (i) be filed in accordance with Sec. 800.116; (ii) 
show the estimated quantity of grain that is to be certificated as one 
lot; (iii) show the contract grade if applicable; and (iv) identify each 
carrier into which grain is being loaded or from which grain is being 
unloaded.
    (2) Recertification. An application for recertification as a 
combined lot of grain that has been officially inspected and 
certificated as two or more single lots shall (i) be filed not later 
than 2 business days after the latest inspection date of the single lots 
and (ii) show information specified in paragraph (b)(1) of this section.
    (c) Inspection procedure; general--land carriers and barges--(1) 
Inspection during loading, or unloading, or at rest. Grain in two or 
more land carriers and barges that are to be officially inspected as a 
combined lot shall be sampled in a reasonably continuous operation. 
Representative samples shall be obtained from the grain in each 
individual carrier and inspected in accordance with procedures as 
prescribed in the instructions.
    (2) Recertification. Grain that has been officially inspected and 
certificated as two or more single lots may be recertificated as a 
combined lot if (i) the grain in each lot was sampled in a reasonably 
continuous operation; (ii) the original inspection certificates issued 
for the single lots have been surrendered to official personnel; (iii) 
representative file samples of the single lots are available; (iv) the 
grain in the single lots is of one grade and quality; (v) official 
personnel who performed the inspection service for the single lots and 
those who are to recertificate the grain as a combined lot determine 
that the samples used as a basis for the inspection of the grain in the 
single lots were representative at the time of sampling and have not 
changed in quality or condition; and (vi) the quality or condition of 
the grain meets uniformity requirements established by the Service for 
official inspection of grain in combined lots.
    (d) Weighted or mathematical average. Official factor and official 
criteria information shown on a certificate for grain in a combined lot 
shall, subject to the provisions of paragraphs (e) through (g) of this 
section, be based on the weighted or mathematical averages of the 
analysis of the sublots in the lot and shall be determined in accordance 
with the instructions.
    (e) Infested grain. If the grain in a combined lot is offered for 
official inspection as it is being loaded aboard a carrier and the 
grain, or a portion of the grain, in a lot is found to be infested, 
according to applicable provisions of the Official U.S. Standards for

[[Page 252]]

Grain, the applicant shall be notified and may exercise options 
specified in the instructions. When grain in railcars or trucks with 
permanently enclosed tops is considered infested, the applicant shall be 
given the option of (1) receiving a grade certificate with a special 
grade designation indicating that the entire lot is infested or (2) 
fumigating the grain in the lot in accordance with instructions and 
receiving a grade certificate without the special grade designation.
    (f) Grain uniform in quality. Samples obtained from grain officially 
inspected as a combined lot shall be examined for uniformity of quality. 
If the grain in the samples is found to be uniform in quality and the 
grain is loaded aboard or is unloaded from the carriers in a reasonably 
continuous operation, the grain in the combined lot shall be officially 
inspected and certificated as one lot. The requirements of this 
paragraph (f) and paragraph (c) of this section with respect to 
reasonably continuous loading or unloading do not apply to grain which 
is at rest in carriers when the grain is offered for inspection.
    (g) Grain not uniform in quality. When grain officially inspected as 
a combined lot is found to be not uniform in quality or if the grain is 
not loaded or unloaded in a reasonably continuous operation, the grain 
in each portion, and any grain which is loaded or unloaded at different 
times, shall be officially sampled, inspected, graded, and certificated 
as single lots.
    (h) Special certification procedures--(1) Grain not uniform in 
quality. When grain in a combined lot is found to be not uniform in 
quality under paragraph (g) of this section, the official inspection 
certificate for each portion of different quality shall show (i) the 
grade, identification, and approximate quantity of the grain and (ii) 
other information required by the instructions.
    (2) Partial inspection. When an inbound movement of bulk grain is 
offered for official inspection at rest as a combined lot and all 
carriers are not fully accessible for sampling, the request for official 
inspection either shall be dismissed or a combined lot inspection shall 
be made on those carriers that are accessible. Those lots that are not 
accessible shall be handled in accordance with Sec. 800.84. If the 
request is for an official inspection service on an outbound movement of 
grain at rest in a combined lot, the request shall be dismissed on the 
ground that the grain is not accessible for a correct ``Out'' 
inspection.
    (3) Official mark. If grain in a combined lot is inspected for grade 
as it is being loaded aboard two or more carriers, upon request of the 
applicant, the following mark shall be shown on the inspection 
certificate: ``Loaded under continuous official inspection'' or ``Loaded 
under continuous official inspection and weighing.''
    (4) Combined-lot certification; general. Each official certificate 
for a combined-lot inspection service shall show the identification for 
the ``combined lot'' or, at the request of the applicant, the 
identification of each carrier in the combined lot. If the 
identification of each carrier is not shown, the statement ``Carrier 
identification available on official inspection log'' shall be shown on 
the inspection certificate in the space provided for remarks. The 
identification and any seal information for the carriers may be shown on 
the reverse side of the inspection certificate, provided the statement 
``See reverse side'' is shown on the face of the certificate in the 
space provided for remarks.
    (5) Recertification. If a request for a combined-lot inspection 
service is filed after the grain has been officially inspected and 
certificated as single lots, the combined-lot inspection certificate 
shall show (i) the date of inspection of the grain in the combined lot 
(if the single lots were inspected on different dates, the latest of the 
dates shall be shown); (ii) a serial number other than the serial 
numbers of the official inspection certificates that are to be 
superseded; (iii) the location of the grain, if at rest, or the name of 
the elevator from which or into which the grain in the combined lot was 
loaded or unloaded; (iv) a statement showing the approximate quantity of 
grain in the combined lot; (v) a completed statement showing the 
identification of any superseded certificates; and (vi) if at the time 
of issuing the combined-lot inspection certificate the superseded

[[Page 253]]

certificates are not in the custody of the official personnel, a 
statement indicating that the superseded certificates have not been 
surrendered shall be clearly shown in the space provided for remarks. If 
the superseded certificates are in the custody of official personnel, 
the superseded certificates shall be clearly marked ``Void.''
    (i) Further combining. After a combined-lot inspection certificate 
has been issued, there shall be no further combining and no dividing of 
the certificate.
    (j) Limitation. No combined-lot inspection certificate shall be 
issued (1) for any official inspection service other than as described 
in this section or (2) which shows a quantity of grain in excess of the 
quantity in the single lots.

[50 FR 49672, Dec. 4, 1985]



Sec. 800.86  Inspection of shiplot, unit train, and lash barge grain in 
single lots.

    (a) General. Official inspection for grade of bulk or sacked grain 
aboard, or being loaded aboard, or being unloaded from a ship, unit 
train, or lash barges as a single lot shall be performed according to 
the provisions of this section and procedures prescribed in the 
instructions.
    (b) Application procedure. Applications for the official inspection 
of shiplot, unit train, and lash barges as a single lot shall:
    (1) Be filed in advance of loading or unloading;
    (2) Show the estimated quantity of grain to be certificated;
    (3) Show the contract grade and official criteria if applicable; and
    (4) Identify the carrier and stowage area into which the grain is 
being loaded, or from which the grain is being unloaded, or in which the 
grain is at rest.
    (c) Inspection procedures--(1) General information. Shiplot, unit 
train, and lash barge grain officially inspected as a single lot shall 
be sampled in a reasonably continuous operation. Representative samples 
shall be obtained from the grain offered for inspection and inspected 
and graded in accordance with a statistical acceptance sampling and 
inspection plan according to the provisions of this section and 
procedures prescribed in the instructions.
    (2) Tolerances. The probability of accepting or rejecting portions 
of the lot during loading or unloading is dependent on inspection 
results obtained from preceding portions and the applied breakpoints and 
procedures. Breakpoints shall be periodically reviewed and revised based 
on new estimates of inspection variability. Tables 1 through 24 list the 
breakpoints for all grains.

                     Table 1--Grade Limits (GL) and Breakpoints (BP) for Six-Rowed Malting Barley and Six-Rowed Blue Malting Barley
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                     Minimum limits of--                            Maximum limits of--
                                                           ---------------------------------------------------------------------------------------------
                                                                                                                                     Skinned
                           Grade                            Test weight    Suitable      Sound      Damaged    Foreign     Other       and        Thin
                                                             per bushel    malting       barley     kernels    material    grains     broken     barley
                                                              (pounds)      types      (percent)   (percent)  (percent)  (percent)   kernels   (percent)
                                                                          (percent)       \1\                                       (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  GL BP        GL BP        GL BP      GL BP      GL BP      GL BP      GL BP      GL BP
U.S. No. 1................................................    47.0 -0.5    95.0 -1.3    97.0 -1.0    2.0 0.8    0.5 0.1    2.0 0.8    4.0 1.1    7.0 0.6
U.S. No. 2................................................    45.0 -0.5    95.0 -1.3    94.0 -1.4    3.0 0.9    1.0 0.4    3.0 0.9    6.0 1.4   10.0 0.9
U.S. No. 3................................................    43.0 -0.5    95.0 -1.3    90.0 -1.6    4.0 1.1    2.0 0.5    5.0 1.3    8.0 1.5   15.0 0.9
U.S. No. 4................................................    43.0 -0.5    95.0 -1.3    87.0 -1.9    5.0 1.3    3.0 0.6    5.0 1.3   10.0 1.6   15.0 0.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Injured-by-frost kernels and injured-by-mold kernels are not considered damaged kernels or considered against sound barley.


                  Table 2--Grade Limits (GL) and Breakpoints (BP) for Two-Rowed Malting Barley
----------------------------------------------------------------------------------------------------------------
                                        Minimum limits of--                       Maximum limits of--
                              ----------------------------------------------------------------------------------
                                                                                             Skinned
            Grade              Test weight    Suitable      Sound                 Foreign      and        Thin
                                per bushel    malting     barley \1\  Wild oats   material    broken     barley
                                 (pounds)      types      (percent)   (percent)  (percent)   kernels   (percent)
                                             (percent)                                      (percent)
----------------------------------------------------------------------------------------------------------------
                                     GL BP        GL BP        GL BP      GL BP      GL BP      GL BP      GL BP
U.S. No. 1...................    50.0 -0.5    97.0 -1.0    98.0 -0.8    1.0 0.6    0.5 0.1    5.0 1.3    5.0 0.4

[[Page 254]]

 
U.S. No. 2...................    48.0 -0.5    97.0 -1.0    98.0 -0.8    1.0 0.6    1.0 0.4    7.0 1.3    7.0 0.5
U.S. No. 3...................    48.0 -0.5    95.0 -1.3    96.0 -1.1    2.0 0.8    2.0 0.5   10.0 1.8   10.0 0.9
U.S. No. 4...................    48.0 -0.5    95.0 -1.3    93.0 -1.1    3.0 0.9    3.0 0.6   10.0 1.8   10.0 0.9
----------------------------------------------------------------------------------------------------------------
\1\ Injured-by-frost kernels and injured-by-mold kernels are not considered damaged kernels or considered
  against sound barley.
Note: Malting barley shall not be infested in accordance with Sec.  810.107(b) and shall not contain any
  special grades as defined in Sec.  810.206. Six- and two-rowed barley varieties not meeting the above
  requirements shall be graded in accordance with standards established for the class Barley.


                           Table 3--Grade Limits (GL) and Breakpoints (BP) for Barley
----------------------------------------------------------------------------------------------------------------
                                  Minimum limits of--                      Maximum limits of--
                              ----------------------------------------------------------------------------------
                                                                         Heat
            Grade              Test weight     Sound       Damaged     damaged    Foreign     Broken      Thin
                                per bushel     barley    kernels \1\   kernels    material   kernels     barley
                                 (pounds)    (percent)    (percent)   (percent)  (percent)  (percent)  (percent)
----------------------------------------------------------------------------------------------------------------
                                     GL BP        GL BP        GL BP      GL BP      GL BP      GL BP      GL BP
U.S. No. 1...................    47.0 -0.5    97.0 -1.1      2.0 0.8    0.2 0.1    1.0 0.4    4.0 1.0   10.0 0.9
U.S. No. 2...................    45.0 -0.5    94.0 -1.4      4.0 1.0    0.3 0.1    2.0 0.4    8.0 1.5   15.0 0.9
U.S. No. 3...................    43.0 -0.5    90.0 -1.6      6.0 1.4    0.5 0.2    3.0 0.5   12.0 1.8   25.0 1.3
U.S. No. 4...................    40.0 -0.5    85.0 -2.2      8.0 1.5    1.0 0.5    4.0 0.5   18.0 1.8   35.0 1.9
U.S. No. 5...................    36.0 -0.5    75.0 -2.2     10.0 1.8    3.0 0.6    5.0 0.6   28.0 2.4   75.0 2.3
----------------------------------------------------------------------------------------------------------------
\1\ Includes heat-damaged kernels. Injured-by-frost kernels and injured-by-mold kernels are not considered
  damaged kernels.


       Table 4--Breakpoints for Barley Special Grades and Factors
------------------------------------------------------------------------
     Special grade or factor        Grade or range limit     Breakpoint
------------------------------------------------------------------------
Dockage.........................  As specified by                   0.23
                                   contract or load order.
Two-rowed Barley................  Not more than 10.0% of            1.8
                                   Six-rowed in Two-rowed.
Six-rowed Barley................  Not more than 10.0% of            1.8
                                   Two-rowed in Six-rowed.
Malting (Blue Aleurone Layers)..  Not less than 90.0%....          -1.3
Malting (White Aleurone Layers).  Not less than 90.0%....          -1.3
Smutty..........................  More than 0.20%........           0.06
Garlicky........................  3 or more in 500 grams.      2\1/3\
Ergoty..........................  More than 0.10%........           0.13
Infested........................  Same as in Sec.                  0
                                   810.107.
Blighted........................  More than 4.0%.........           1.1
Injured-by-Frost Kernels........  Not more than 1.9%.....           0.1
Injured-by-Heat Kernels.........  Not more than 0.2%.....           0.04
Frost-damaged Kernels...........  Not more than 0.4%.....           0.05
Heat-damaged Kernels............  Not more than 0.1%.....           0.1
Other Grains....................  Not more than 25.0%....           2.4
Moisture........................  As specified by                   0.5
                                   contract or load order
                                   grade.
------------------------------------------------------------------------


                            Table 5--Grade Limits (GL) and Breakpoints (BP) for Corn
----------------------------------------------------------------------------------------------------------------
                                                                                Maximum limits of--
                                                                 -----------------------------------------------
                                                   Minimum test                   Damaged kernels
                                                    weight per   -----------------------------------------------
                      Grade                           bushel                                        Broken corn
                                                     (pounds)      Heat-damaged        Total        and foreign
                                                                      kernels        (percent)       material
                                                                     (percent)                       (percent)
----------------------------------------------------------------------------------------------------------------
                                                           GL BP           GL BP           GL BP           GL BP
U.S. No. 1......................................       56.0 -0.4         0.1 0.1         3.0 1.0         2.0 0.2
U.S. No. 2......................................       54.0 -0.4         0.2 0.2         5.0 1.3         3.0 0.3
U.S. No. 3......................................       52.0 -0.4         0.5 0.3         7.0 1.5         4.0 0.3
U.S. No. 4......................................       49.0 -0.4         1.0 0.5        10.0 1.8         5.0 0.4
U.S. No. 5......................................       46.0 -0.4         3.0 0.9        15.0 2.1         7.0 0.4
----------------------------------------------------------------------------------------------------------------


[[Page 255]]


                            Table 6--Breakpoints for Corn Special Grades and Factors
----------------------------------------------------------------------------------------------------------------
         Special grade or factor                          Grade limit                         Breakpoint
----------------------------------------------------------------------------------------------------------------
Flint...................................  95 percent or more of flint corn..........  -1.0
Flint and Dent..........................  More than 5 percent, but less than 95       1.0 or -1.0
                                           percent of flint corn.
Infested................................  Same as in Sec.  810.107.................  0
Corn of other colors:
  White.................................  Not more than 2.0 percent.................  0.8
  Yellow................................  Not more than 5.0 percent.................  1.0
Waxy....................................  95 percent or more........................  -3.0
High BCFM...............................  As specified by contract or load order      10 percent of the load
                                           grade.                                      order grade
Moisture................................  As specified by contract or load order      0.4
                                           grade.
----------------------------------------------------------------------------------------------------------------


                          Table 7--Grade limits (GL) and Breakpoints (BP) for Flaxseed
----------------------------------------------------------------------------------------------------------------
                                                                                     Maximum limits of-damaged
                                                                   Minimum test               kernels
                                                                    weight per   -------------------------------
                              Grade                                   bushel       Heat-damaged
                                                                     (pounds)         kernels          Total
                                                                                     (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
                                                                           GL BP           GL BP           GL BP
U.S. No. 1......................................................       49.0 -0.1         0.2 0.1        10.0 0.9
U.S. No. 2......................................................       47.0 -0.1         0.5 0.1        15.0 1.1
----------------------------------------------------------------------------------------------------------------


      Table 8--Breakpoints for Flaxseed Special Grades and Factors
------------------------------------------------------------------------
    Special grade or factor            Grade limit          Breakpoint
------------------------------------------------------------------------
Moisture.......................  As specified by load               0.4
                                  order or contract
                                  grade.
Dockage........................  0.99 percent or above..            0.32
------------------------------------------------------------------------


                         Table 9--Grade Limits (GL) and Breakpoints (BP) for Mixed Grain
----------------------------------------------------------------------------------------------------------------
                                                                                Maximum Limits of--
                                                                 -----------------------------------------------
                                                                                          Damaged kernels
                              Grade                                              -------------------------------
                                                                     Moisture                      Heat-damaged
                                                                     (percent)         Total          kernels
                                                                                     (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
                                                                  ..............           GL BP           GL BP
U.S. Mixed Grain................................................            16.0        15.0 0.6         3.0 0.4
----------------------------------------------------------------------------------------------------------------
 Note: There is no tolerance for U.S. Sample grade Mixed Grain.


    Table 10--Breakpoints for Mixed Grain Special Grades and Factors
------------------------------------------------------------------------
    Special grade or factor            Grade limit          Breakpoint
------------------------------------------------------------------------
Smutty.........................  15 or more in 250 grams            6
                                  (wheat, rye, or
                                  triticale
                                  predominates).
                                 More than 0.2% (all                0.05
                                  other mixtures).
Ergoty.........................  More than 0.30% (rye               0.13
                                  wheat predominates).
                                 More than 0.10% (all               0
                                  other mixtures).
Garlicky.......................  2 or more per 1,000                1
                                  grams (wheat, rye, or
                                  triticale
                                  predominates).
                                 4 or more per 500 grams            2
                                  (all other mixtures).
Infested.......................  Same as in Sec.                   0
                                  810.107.
Blighted.......................  More than 4.0% (barley             1.1
                                  predominates).
Treated........................  Same as in Sec.                   0
                                  810.805.
Moisture.......................  As specified by                    0.5
                                  contract or load order
                                  grade.
------------------------------------------------------------------------


                            Table 11--Grade Limits (GL) and Breakpoints (BP) for Oats
----------------------------------------------------------------------------------------------------------------
                                        Minimum limits of--                     Maximum limits of--
                                 -------------------------------------------------------------------------------
              Grade                 Test weight                    Heat-damaged       Foreign
                                    per bushel      Sound Oats        kernels        material        Wild Oats
                                     (pounds)        (percent)       (percent)       (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
                                           GL BP           GL BP           GL BP           GL BP           GL BP
U.S. No. 1......................       36.0 -0.5       97.0 -0.8         0.1 0.1         2.0 0.4         2.0 0.6

[[Page 256]]

 
U.S. No. 2......................       33.0 -0.5       94.0 -1.2         0.3 0.4         3.0 0.4         3.0 0.8
U.S. No. 3 \1\..................       30.0 -0.5       90.0 -1.4         1.0 0.5         4.0 0.5         5.0 1.1
U.S. No. 4 \2\..................       27.0 -0.5       80.0 -1.9         3.0 0.8         5.0 0.5        10.0 1.4
----------------------------------------------------------------------------------------------------------------
\1\ Oats that are Slightly Weathered shall be graded not higher than U.S. No. 3.
\2\ Oats that are Badly Stained or Materially Weathered shall be graded not higher than U.S. No. 4.


        Table 12--Breakpoints for Oats Special Grades and Factors
------------------------------------------------------------------------
    Special grade or factors           Grade limit          Breakpoint
------------------------------------------------------------------------
Heavy..........................  38 pounds or more......           -0.5
Extra Heavy....................  40 pounds or more......           -0.5
Moisture.......................  As specified by                    0.5
                                  contract or load order
                                  grade.
Thin...........................  More than 20.0%........            0.5
Smutty.........................  More than 0.2%.........            0.05
Ergoty.........................  More than 0.10%........            0.10
Garlicky.......................  4 or more in 500 grams.       2\1/3\
Infested.......................  Same as in Sec.                   0
                                  810.107.
Bleached.......................  Same as in Sec.                   0
                                  810.1005.
------------------------------------------------------------------------


                                                Table 13--Grade Limits (GL) and Breakpoints (BP) for Rye
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Maximum limits of--
                                                                         -------------------------------------------------------------------------------
                                                                                 Foreign Material            Damaged kernels(percent)
                                                          Minimum test   ----------------------------------------------------------------
                         Grade                             weight per     Foreign matter                                                     Thin rye
                                                         bushel (pounds)    other than         Total       Heat-damaged        Total         (percent)
                                                                               wheat         (percent)       (percent)       (percent)
                                                                             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   GL BP           GL BP           GL BP           GL BP           GL BP           GL BP
U.S. No. 1............................................         56.0 -0.5         1.0 0.4         3.0 0.8         0.2 0.1         2.0 0.8        10.0 0.6
U.S. No. 2............................................         54.0 -0.5         2.0 0.5         6.0 1.1         0.2 0.1         4.0 1.1        15.0 0.8
U.S. No. 3............................................         52.0 -0.5         4.0 0.8        10.0 1.4         0.5 0.4         7.0 1.4        25.0 0.9
U.S. No. 4............................................         49.0 -0.5         6.0 0.8        10.0 1.4         3.0 0.8        15.0 2.0  ..............
--------------------------------------------------------------------------------------------------------------------------------------------------------


        Table 14--Breakpoints for Rye Special Grades and Factors
------------------------------------------------------------------------
    Special grade or factor            Grade limit          Breakpoint
------------------------------------------------------------------------
Moisture.......................  As specified by                    0.3
                                  contract or load order
                                  grade.
Light Garlicky.................  2 or more per 1,000           1\1/3\
                                  grams.
Garlicky.......................  More than 6 per 1,000         7\1/3\
                                  grams.
Ergoty.........................  More than 0.30%........            0.10
Plump..........................  Not more than 5.0%                 0.5
                                  through 0.064x3/8
                                  sieve.
Light Smutty...................  More than 14 per 250               6
                                  grams.
Smutty.........................  More than 30 per 250              10
                                  grams.
Infested.......................  Same as in Sec.                   0
                                  810.107.
Dockage........................  As specified by                    0.2
                                  contract or load order
                                  grade.
------------------------------------------------------------------------


                          Table 15--Grade Limits (GL) and Breakpoints (BP) for Sorghum
----------------------------------------------------------------------------------------------------------------
                                                                        Maximum limits of--
                                                 ---------------------------------------------------------------
                                   Minimum test           Damaged kernels           Broken kernels and foreign
                                    weight per   --------------------------------            material
              Grade                   bushel                                     -------------------------------
                                     (pounds)      Heat-damaged        Total                          Foreign
                                                     (percent)       (percent)         Total         material
                                                                                     (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
                                           GL BP           GL BP           GL BP           GL BP           GL BP
U.S. No. 1......................       57.0 -0.4         0.2 0.1         2.0 1.1         4.0 0.3         1.5 0.3
U.S. No. 2......................       55.0 -0.4         0.5 0.4         5.0 1.8         7.0 0.4         2.5 0.4
U.S. No. 3 \1\..................       53.0 -0.4         1.0 0.5        10.0 2.3        10.0 0.5         3.5 0.5
U.S. No. 4......................       51.0 -0.4         3.0 0.8        15.0 2.8        13.0 0.6         4.5 0.6
----------------------------------------------------------------------------------------------------------------
\1\ Sorghum which is distinctly discolored shall be graded not higher than U.S. No. 3.


[[Page 257]]


                          Table 16--Breakpoints for Sorghum Special Grades and Factors
----------------------------------------------------------------------------------------------------------------
        Special grade or factors                          Grade limit                         Breakpoint
----------------------------------------------------------------------------------------------------------------
Class Tannin............................  Not less than 90.0%.......................  -1.9
Sorghum.................................  Not less than 97.0%.......................  -1.0
White...................................  Not less than 98.0%.......................  -0.9
Smutty..................................  20 or more in 100 grams...................  8
Infested................................  Same as in Sec.  810.107.................  0
Dockage.................................  0.99% and above...........................  0.32
Moisture................................  As specified by contract or load order      0.5
                                           grade.
----------------------------------------------------------------------------------------------------------------


                                              Table 17--Grade Limits (GL) and Breakpoints (BP) for Soybeans
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                        Maximum limits of--
                                                           Minimum test  -------------------------------------------------------------------------------
                                                            weight per            Damaged kernels
                          Grade                               bushel     --------------------------------     Foreign         Splits        Soybeans of
                                                             (pounds)      Heat-damaged        Total         material        (percent)     other colors
                                                                             (percent)       (percent)       (percent)                       (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   GL BP           GL BP           GL BP           GL BP           GL BP           GL BP
U.S. No. 1..............................................       56.0 -0.4         0.2 0.2         2.0 0.8         1.0 0.2        10.0 1.6         1.0 0.7
U.S. No. 2..............................................       54.0 -0.4         0.5 0.3         3.0 0.9         2.0 0.3        20.0 2.2         2.0 1.0
U.S. No. 3 \1\..........................................       52.0 -0.4         1.0 0.5         5.0 1.2         3.0 0.4        30.0 2.5         5.0 1.6
U.S. No. 4 \2\..........................................       49.0 -0.4         3.0 0.9         8.0 1.5         5.0 0.5        40.0 2.7        10.0 2.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Soybeans which are purple mottled or stained shall be graded not higher than U.S. No. 3.
\2\ Soybeans which are materially weathered shall be graded not higher than U.S. 4.


                          Table 18--Breakpoints for Soybean Special Grades and Factors
----------------------------------------------------------------------------------------------------------------
            Special grade or factor                                 Grade limit                      Breakpoint
----------------------------------------------------------------------------------------------------------------
Garlicky.......................................  5 or more per 1,000 grams.......................            2
Infested.......................................  Same as in Sec.  810.107.......................            0
Soybeans of other colors.......................  Not more than 10.0%.............................            2.3
Moisture.......................................  As specified by contract or load order grade....            0.3
----------------------------------------------------------------------------------------------------------------


                       Table 19--Grade Limits (GL) and Breakpoints (BP) for Sunflower Seed
----------------------------------------------------------------------------------------------------------------
                                                                                Maximum limits of--
                                                   Minimum test  -----------------------------------------------
                                                    weight per        Damaged sunflower seed
                      Grade                           bushel     --------------------------------  Dehulled seed
                                                     (pounds)      Heat-damaged        Total         (percent)
                                                                     (percent)       (percent)
----------------------------------------------------------------------------------------------------------------
                                                           GL BP           GL BP           GL BP           GL BP
U.S. No. 1......................................       25.0 -0.5         0.5 0.4         5.0 1.3         5.0 1.3
U.S. No. 2......................................       25.0 -0.5         1.0 0.6        10.0 1.8         5.0 1.3
----------------------------------------------------------------------------------------------------------------


                       Table 20--Breakpoints for Sunflower Seed Special Grades and Factors
----------------------------------------------------------------------------------------------------------------
            Special grade or factor                                Grade limit                      Breakpoint
----------------------------------------------------------------------------------------------------------------
Moisture......................................  As specified by contract or load order grade....            0.5
Foreign Material..............................  1.25% and less..................................            0.27
                                                1.26% and above.................................            0.39
Admixture.....................................  As specified by contract or load order grade....            0.6
----------------------------------------------------------------------------------------------------------------


                                             Table 21--Grade Limits (GL) and Breakpoints (BP) for Triticale
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                Maximum limits of--
                                                         -----------------------------------------------------------------------------------------------
                                           Minimum test           Damaged kernels                Foreign material
                  Grade                     weight per   ----------------------------------------------------------------  Shrunken and
                                              bushel                                      Material other                  broken kernels    Defects \3\
                                             (percent)     Heat-damaged      Total \1\     than wheat or     Total \2\       (percent)       (percent)
                                                             (percent)       (percent)     rye (percent)     (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                   GL BP           GL BP           GL BP           GL BP           GL BP           GL BP           GL BP
U.S. No. 1..............................       48.0 -0.5         0.2 0.1         2.0 0.8         1.0 0.4         2.0 0.6         5.0 0.8         5.0 1.3

[[Page 258]]

 
U.S. No. 2..............................       45.0 -0.5         0.2 0.1         4.0 1.1         2.0 0.5         4.0 0.9         8.0 0.8         8.0 1.3
U.S. No. 3..............................       43.0 -0.5         0.5 0.4         8.0 1.5         3.0 0.6         7.0 1.2        12.0 1.6        12.0 2.3
U.S. No. 4..............................       41.0 -0.5         3.0 0.8        15.0 2.0         4.0 0.8        10.0 1.4        20.0 2.3        20.0 2.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes heat-damaged kernels.
\2\ Includes material other than wheat or rye.
\3\ Defects includes damaged kernels (total), foreign material (total), and shrunken and broken kernels. The sum of these three factors may not exceed
  the limit for defects for each numerical grade.


                         Table 22--Breakpoints for Triticale Special Grades and Factors
----------------------------------------------------------------------------------------------------------------
            Special grade or factor                                Grade limit                      Breakpoint
----------------------------------------------------------------------------------------------------------------
Garlicky......................................  2 or more per 1,000 grams.......................       1\1/3\
Ergoty........................................  More than 0.10%.................................            0.1
Smutty........................................  More than 14 per 250 grams......................            6
Infested......................................  Same as in Sec.  810.107.......................            0
Dockage.......................................  0.99% or above..................................            0.32
Moisture......................................  As specified by contract or load order grade....            0.5
----------------------------------------------------------------------------------------------------------------


                                               Table 23--Grade Limits (GL) and Breakpoints (BP) for Wheat
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                     Minimum limits of--                                Maximum limits of--
                                                  ------------------------------------------------------------------------------------------------------
                                                   Test weight per bushel     Damaged kernels                                     Wheat of other classes
                                                  ----------------------------------------------                                            \4\
                                                    Hard red                                                 Shrunken            -----------------------
                      Grade                          spring     All other    Heat-                Foreign      and      Defects
                                                    wheat or     classes    damaged   Total \2\   material    broken      \3\     Contrasting
                                                   white club      and      kernels   (percent)  (percent)   kernels   (percent)    classes    Total \5\
                                                    wheat \1\  subclasses  (percent)                        (percent)              (percent)   (percent)
                                                    (pounds)    (pounds)
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                        GL BP       GL BP      GL BP      GL BP      GL BP      GL BP      GL BP       GL BP       GL BP
U.S. No. 1.......................................   58.0 -0.3   60.0 -0.3    0.2 0.2    2.0 1.0    0.4 0.2    3.0 0.3    3.0 0.7     1.0 0.7     3.0 1.6
U.S. No. 2.......................................   57.0 -0.3   58.0 -0.3    0.2 0.2    4.0 1.5    0.7 0.3    5.0 0.4    5.0 0.9     2.0 1.0     5.0 2.1
U.S. No. 3.......................................   55.0 -0.3   56.0 -0.3    0.5 0.3    7.0 1.9    1.3 0.4    8.0 0.5    8.0 1.2     3.0 1.3    10.0 2.9
U.S. No. 4.......................................   53.0 -0.3   54.0 -0.3    1.0 0.4   10.0 2.3    3.0 0.6   12.0 0.6   12.0 1.4    10.0 2.3    10.0 2.9
U.S. No. 5.......................................   50.0 -0.3   51.0 -0.3    3.0 0.7   15.0 2.7    5.0 0.7   20.0 0.7   20.0 1.5    10.0 2.3   10.0 2.9
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ These requirements also apply when Hard Red Spring or White Club wheat predominate in a sample of Mixed wheat.
\2\ Includes heat-damaged kernels.
\3\ Defects include damaged kernels (total), foreign material, and shrunken and broken kernels. The sum of these factors may not exceed the limit for
  defects for each numerical grade.
\4\ Unclassed wheat of any grade may contain not more than 10.0 percent of wheat of other classes.
\5\ Includes contrasting classes.


                           Table 24--Breakpoints for Wheat Special Grades and Factors
----------------------------------------------------------------------------------------------------------------
          Special grade or factor                                  Grade limit                        Breakpoint
----------------------------------------------------------------------------------------------------------------
Moisture...................................  As specified by contract or load order grade...........        0.3
Garlicky...................................  More than 2 bulblets per 1,000 grams...................   1\1/3\
Light smutty...............................  More than 5 smut balls per 250 grams...................        3
Smutty.....................................  More than 30 smut balls per 250 grams..................       10
Infested...................................  Same as in Sec.  810.107..............................        0
Ergoty.....................................  More than 0.05%........................................        0.03
Treated....................................  Same as in Sec.  810.2204.............................        0
Dockage....................................  As specified by contract or load order grade...........        0.2
Protein....................................  As specified by contract or load order grade...........        0.5
 

[[Page 259]]

 
             Class and Subclass
Hard red spring:
  DNS......................................  75% or more DHV........................................       -5.0
  NS.......................................  25% or more DHV but less than 75% DHV..................       -5.0
Durum:
  HADU.....................................  75% or more HVAC.......................................       -5.0
  ADU......................................  60% or more HVAC but less than 75% of HVAC.............       -5.0
Soft white:
  SWH......................................  Not more than 10% white club wheat.....................        2.0
  WHCB.....................................  Not more than 10% of other soft white wheat............        2.0
  WWH......................................  More than 10% WHCB and more than 10% of other soft            -3.0
                                              white wheat.
----------------------------------------------------------------------------------------------------------------

    (3) Grain accepted by the inspection plan. Grain which is offered 
for inspection as part of a single lot and accepted by a statistical 
acceptance sampling and inspection plan according to the provisions of 
this section and procedures prescribed in the instructions shall be 
certificated as a single lot provided it was sampled in a reasonably 
continuous operation. Official factor and official criteria information 
shown on the certificate shall be based on the weighted or mathematical 
averages of the analysis of sublots.
    (4) Grain rejected by the inspection plan. When grain which is 
offered for inspection as part of a single lot is rejected by the plan 
or is not sampled in a reasonably continuous operation, the grain in 
each portion shall be certificated separately. If any portion of grain 
is not accepted by the plan and designated a material portion, the 
applicant shall be promptly notified and have the option of:
    (i) Removing the material portion from the carrier; or
    (ii) Requesting the material portion be separately certificated; or
    (iii) Requesting either a reinspection or an appeal inspection of 
the material portion; or
    (iv) Requesting a reinspection service and/or an appeal inspection 
service on the entire lot.
    (5) Reinspection service and appeal inspection service. A 
reinspection or an appeal inspection may be requested on a material 
portion. A Board appeal inspection may also be requested on a material 
portion after the reinspection or appeal inspection. A reinspection, an 
appeal inspection, and a Board appeal inspection may be requested on the 
total sublots in the lot.
    (i) Material portions. A material portion designated by the plan may 
be reinspected or appeal inspected once in the field, but not both, and 
once at the Board of Appeals and Review. The reinspection or appeal 
inspection result shall, unless a material error is found, be averaged 
with the original inspection determination. The Board appeal inspection 
result shall, unless a material error is found, be averaged with the 
previous inspection result. The inspection plan tolerances shall be 
reapplied to the material portion grain to determine acceptance or 
rejection. If a material error is found, the reinspection or appeal 
inspection result shall replace the original inspection result or the 
Board appeal result shall replace the previous inspection result. For 
purposes of this section, a material error is defined as results 
differing by more than two standard deviations. Acceptance or rejection 
of that portion of grain shall be based on the reinspection or appeal 
inspection and on the Board appeal inspection result alone when a 
material error is found.
    (ii) Entire lot. The applicant may request a reinspection service, 
an appeal inspection service, and a Board appeal inspection service on 
the entire lot. Inspection results for these services shall replace the 
previous inspection results. The tolerances shall be reapplied to all 
portions of the entire lot to determine acceptance or rejection.
    (d) Infested grain--(1) Available options. If gain or any portion of 
grain in a single shiplot, unit train, or lash barge lot is found to be 
infested, according to the provisions of the Official

[[Page 260]]

U.S. Standards for Grain, the applicant shall be promptly notified and 
have the option of:
    (i) Unloading the portion of infested grain from the lot and an 
additional amount of other grain in common stowage with the infested 
grain; or
    (ii) When applicable, completing the loading and treating all 
infested grain in the lot; or
    (iii) When applicable, treating the infested grain for the purpose 
of destroying the insects, subject to subsequent examination by official 
personnel; or
    (iv) Continue loading without treating the infested grain, in which 
case all of the infested grain in the lot and all grain in common 
stowage areas with the infested grain will be officially certificated as 
infested according to the provisions of the Official U.S. Standards for 
Grain.
    (2) Exception. If infested grain in loaded into common stowage with 
a lot, or a portion of a lot, which has not been officially certificated 
as being infested, the applicant loading the infested grain may not use 
the option in paragraph (d)(1)(i) of this section.
    (3) With treatment. If infested grain is treated with a fumigant in 
accordance with the instructions and the treatment is witnessed by 
official personnel, the official sampling, inspection, grading, and 
certification of the lot shall continue as though the infested condition 
did not exist.
    (e) Special certification procedures--(1) Rejected grain. When grain 
is rejected by the inspection plan under paragraph (c)(4) of this 
section, the official inspection certificate for each different portion 
of different quality shall show:
    (i) A statement that the grain has been loaded aboard with grain of 
other quality;
    (ii) The grade, location, or other identification and approximate 
quanity of grain in the portions; and
    (iii) Other information required by the regulations and the 
instructions.

The requirement of paragraph (e)(1)(i) of this section does not apply to 
grain that is inspected as it is unloaded from the carrier or to 
portions loaded in separate carriers or stowage space.
    (2) Common stowage. (i) Without separation. When bulk grain is 
offered for official inspection as it is loaded aboard a ship and is 
loaded without separation in a stowage area with other grain or another 
commodity, the official inspection certificate for the grain in each lot 
shall show the kind, the grade, if known, and the location of the other 
grain, or the kind and location of the other commodity in the adjacent 
lots.
    (ii) With separation. When separations are laid between lots, the 
official inspection certificates shall show the kind of material used in 
the separations and the locations of the separations in relation to each 
lot.
    (iii) Exception. The common stowage requirements of this paragraph 
are not applicable to the first lot in a stowage area unless a second 
lot is loaded, in whole or in part, in the stowage area prior to issuing 
the official inspection certificate for the first lot.
    (3) Protein. A special statement indicating the actual protein range 
of a lot shall be shown on the official inspection certificate if the 
difference between the lowest and highest protein determinations for the 
lot exceeds 1.0 percent when protein is officially determined and a 
specific range limit is not established by the contract grade.
    (4) Part lot. If part of a lot of grain in an inbound carrier is 
unloaded and part is left in the carrier, the unloaded grain shall be 
officially inspected and certificated in accordance with the provisions 
of Sec. 800.84(g).
    (5) Official mark. If the grain in a single lot is officially 
inspected for grade as it is being loaded, upon request, the following 
official mark shall be shown on the inspection certificate: ``Loaded 
under continuous official inspection.''

[55 FR 24042, June 13, 1990; 55 FR 46131, Nov. 1, 1990; 56 FR 4675, Feb. 
5, 1991; 57 FR 58965, 58970, Dec. 14, 1992; 61 FR 18490, Apr. 26, 1996; 
63 FR 20056, Apr. 23, 1998; 64 FR 6783, Feb. 11, 1999]

    Effective Date Note: At 71 FR 52405, Sept. 6, 2006, Sec. 800.86 was 
amended by revising tables 17 and 18 in paragraph (c)(2), and at 71 FR 
52405, Sept. 6, 2006, table 17 was corrected, effective September 1, 
2007. For the convenience of the user, the revised text is set forth as 
follows:



Sec. 800.86  Inspection of shiplot, unit train, and lash barge grain in 
          single lots.

                                * * * * *

[[Page 261]]

    (c) * * *
    (2) * * *

[[Page 262]]



                                             Table 17.--Grade Limits (GL) and Breakpoints (BP) for Soybeans
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                              Maximum limits of--
                                                     ---------------------------------------------------------------------------------------------------
                                                                  Damaged kernels              Foreign material    Splits (percent)    Soybeans of other
                                                     ----------------------------------------      (percent)     --------------------  colors (percent)
                        Grade                            Heat-damaged       Total (percent)  --------------------                    -------------------
                                                           (percent)     --------------------
                                                     --------------------                        GL        BP        GL        BP        GL        BP
                                                         GL        BP        GL        BP
--------------------------------------------------------------------------------------------------------------------------------------------------------
U.S. No. 1..........................................       0.2       0.2       2.0       0.8       1.0       0.2      10.0       1.6       1.0       0.7
U.S. No. 2..........................................       0.5       0.3       3.0       0.9       2.0       0.3      20.0       2.2       2.0       1.0
U.S. No. 3\1\.......................................       1.0       0.5       5.0       1.2       3.0       0.4      30.0       2.5       5.0       1.6
U.S. No. 4\2\.......................................       3.0       0.9       8.0       1.5       5.0       0.5      40.0       2.7      10.0       2.3
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Soybeans that are purple mottled or stained which will not be graded higher than U.S. No. 3.
\2\ Soybeans that are materially weathered which will not be graded not higher than U.S. No. 4.


[[Page 263]]


      Table 18--Breakpoints for Soybean Special Grades and Factors
------------------------------------------------------------------------
     Special grade or factor              Grade limit         Breakpoint
------------------------------------------------------------------------
Garlicky.........................  5 or more per 1,000                 2
                                    grams.
Infested.........................  Same as in Sec.                    0
                                    810.107.
Soybeans of other colors.........  Not more than 10.0%.....          2.3
Moisture.........................  As specified by contract          0.3
                                    or load order grade.
Test Weight......................  As specified by contract         -0.4
                                    or load order.
------------------------------------------------------------------------

                                * * * * *



Sec. 800.87  New inspections.

    (a) Identity lost. An applicant may request official personnel to 
perform a new original inspection service on an identified lot of grain, 
or on an identified carrier or container, if the identity of the lot or 
the carrier or container has been lost.
    (b) Identity not lost. If the identity of the grain or the carrier 
or container is not lost, a new original inspection shall not be 
performed on the same identified lot of grain or carrier or container in 
the same assigned area of responsiblity within 5 business days after the 
last official inspection.

[50 FR 49674, Dec. 4, 1985]



Sec. 800.88  Loss of identity.

    (a) Lots. Except as noted in paragraph (d) of this section, the 
indentity of a lot of grain shall be considered lost if (1) a portion of 
the grain is unloaded, transferred, or otherwise removed from the 
carrier or container in which the grain was located at the time of the 
original inspection; or (2) a portion of grain or other material, 
including additives, is added to the lot after the orginal inspection 
was performed, unless the addition of the additive was performed in 
accordance with the regulations and the instructions. At the option of 
official personnel performing a reinspection, appeal inspection, or 
Board appeal inspection service, the identity of grain in a closed 
carrier or container shall be considered lost if the carrier or 
container is not sealed or if the seal record is incomplete.
    (b) Carriers and containers. The indentity of a carrier or container 
shall be considered lost when (1) the stowage area is cleaned, painted, 
treated, fumigated, or fitted after the original inspection was 
performed; or (2) the identification of the carrier or container has 
been changed since the original inspection was performed.
    (c) Submitted samples. The identity of a submitted sample of grain 
shall be considered lost when (1) the identifying number, mark, or 
symbol for the sample is lost or destroyed or (2) the samples have not 
been retained and protected by official personnel as prescribed in the 
instructions.
    (d) Additives.\1\ If additives are applied during loading to 
outbound, including export, grain after sampling or during unloading to 
inbound grain before sampling for the purpose of insect or fungi 
control, dust suppression, or identification, the inspection certificate 
shall show a statement showing the type and purpose of the additive 
application, except that no statement is required to be shown when the 
additive is a fumigant applied for the purpose of insect control.
---------------------------------------------------------------------------

    \1\ Elevators, other handlers of grain, and their agents are 
responsible for the additive's proper usage and application. Compliance 
with this section does not excuse compliance with applicable Federal, 
State, and local laws.

[52 FR 6495, Mar. 4, 1987, as amended at 58 FR 3212, Jan. 8, 1993; 59 FR 
52077, Oct. 14, 1994]

                   Weighing Provisions and Procedures



Sec. 800.95  Methods and order of performing weighing services.

    (a) Methods. All Class X or Class Y weighing, checkweighing, 
checkloading, stowage examination, and other weighing services shall be 
performed by official personnel or approved weighers using approved 
weighing equipment and according to procedures prescribed in the 
regulations and the instructions.
    (b) Order of service. Weighing services shall be performed, to the 
extent practicable, in the order in which requests are received. 
Official personnel must

[[Page 264]]

mark or stamp the date received on each written request for service. 
Precedence will be given to requests for weighing required by sections 
5(a)(1) or 5(a)(2) of the Act.

[52 FR 6495, Mar. 4, 1987]



Sec. 800.96  Weighing procedures.

    (a) Inbound. Inbound grain that is to be weighed must be routed 
directly from the carrier and cannot be cleaned, dried, or otherwise 
processed to remove or add other grain or material en route. Except as 
noted in paragraph (c) of this section, the identity of an inbound lot 
shall be considered lost when a portion of the lot is transferred or 
otherwise removed prior to weighing or a portion of grain or other 
material is added to the lot prior to weighing. When loss of identity 
occurs, no amount shall be shown in the ``Net Weight'' portion of the 
weight certificate for the lot.
    (b) Outbound. Outbound grain that has been weighed must be routed 
directly from the scale to the carrier and cannot be cleaned, dried, or 
otherwise processed to remove or add other grain or material en route. 
Except as noted in paragraph (c) of this section, the identity of an 
outbound lot will be considered lost if a portion of the lot is 
transferred or otherwise removed from the lot after weighing or a 
portion of grain or other material is added to the lot after weighing. 
When loss of identity occurs, no amount shall be shown in the ``Net 
Weight'' portion of the weight certificate for the lot.
    (c) Exceptions--(1) Spills. (i) Outbound. (A) Replaced. If a spill 
occurs in handling and loading of outbound grain and the spilled grain 
is retrieved, or is replaced in kind, and is loaded on board during the 
loading operations, the weight certificate shall show the weight of the 
grain that was physically loaded on board. Upon request of the 
applicant, an additional certificate may be issued by the agency or the 
field office to show the weight of the additional grain that was used to 
replace a spill.
    (B) Not replaced. If a spill occurs in the handling and loading of 
outbound grain and the spilled grain is not retrieved or is not replaced 
during the loading operation, the weight certificate shall show the 
weight of the grain that was actually weighed, minus the estimated 
amount of the grain that was spilled. Upon request of the applicant, an 
additional certificate may be issued showing the estimated amount of 
grain that was spilled. The applicant may, upon request, have the total 
amount that was weighed shown on the weight certificate with the 
estimated amount of the spilled grain noted.
    (ii) Inbound. If a spill occurs in the handling of inbound grain and 
the grain is not retrieved and weighed, the weight certificate shall 
show the weight of the grain that was actually unloaded from the carrier 
and a statement regarding the spill as prescribed in the instructions.
    (2) Additives. \1\ If additives are applied during loading to 
outbound, including export, grain after weighing or during unloading to 
inbound grain before weighing for the purpose of insect or fungi 
control, dust suppression, or identification, the weight certificate 
shall show the actual weight of the grain after the application of the 
additive for inbound grain or the actual weight of the grain prior to 
the application of the additive for outbound or export grain and a 
statement showing the type and purpose of the additive application, 
except that no statement is required to be shown when the additive is a 
fumigant applied for the purpose of insect control.
---------------------------------------------------------------------------

    \1\ Elevators, other handlers of grain, and their agents are 
responsible for the additive's proper usage and application. Compliance 
with this section does not excuse compliance with applicable Federal, 
State, and local laws.
---------------------------------------------------------------------------

    (3) Dust. If dust is removed during the handling of grain, the 
weight certificate shall not be adjusted to reflect the weight of the 
removed dust.
    (4) Commingled carriers. If grain from two or more identified 
carriers becomes mixed, (i) the combined weight of the grain shall be 
shown in the ``Net Weight'' block of one certificate with all carrier 
identification shown in the identification of carrier section of the 
certificate, or (ii) upon request of the applicant, a certificate shall 
be issued for each carrier with the ``Net Weight'' block crossed out, 
and with the total combined weight unloaded and the

[[Page 265]]

identification of the other carrier(s) shown in the ``Remarks'' section.
    (5) Unremoved grain. If, after unloading an inbound carrier, there 
is sound grain remaining in the carrier that could have been removed 
with reasonable effort, the weight certificate shall show the weight of 
the grain that was actually unloaded from the carrier and a statement 
regarding the grain remaining in the carrier.

[52 FR 6495, Mar. 4, 1987, as amended at 58 FR 3212, Jan. 8, 1993; 59 FR 
52077, Oct. 14, 1994]



Sec. 800.97  Weighing grain in containers, land carriers, barges, and shiplots.

    (a) General. The weighing of grain loaded or unloaded from any 
carrier shall be conducted according to this section and the 
instructions.
    (b) Procedure--(1) General. If grain in a carrier is offered for 
inspection or weighing service as one lot, the grain shall be weighed 
and certificated as one lot. The identification of the carrier shall be 
recorded on the scale tape or ticket and the weight certificate.
    (2) Sacked grain. If sacked grain is offered for weighing and the 
grain is not fully accessible, the request for weighing service shall be 
dismissed.
    (3) Part lots. If a portion of an inbound lot of grain is unloaded 
and a portion is left in the carrier because it is not uniform in 
quality or condition, or the lot is unloaded in other than a reasonably 
continuous operation, the portion that is removed and the portion 
remaining in the carrier shall be considered as part lots and shall be 
weighed and certificated as part lots.
    (c) Certification of trucklots, carlots, and bargelots--(1) Basic 
requirement. One official certificate shall be issued for the weighing 
of the grain in each truck, trailer, truck/trailer(s) combination, 
railroad car, barge, or similarly sized carrier. This requirement shall 
not be applicable to grain weighed as a combined lot under Sec. 800.98.
    (2) Part-lot weight certificates. A part-lot weight certificate 
shall show (i) the weight of the portion that is unloaded and (ii) the 
following statement: ``Part-lot: The net weight stated herein reflects a 
partial unload.''
    (d) Certification of shiplot grain--(1) Basic requirement. The 
certificate shall show (i) if applicable, a statement that the grain has 
been loaded aboard with other grain, (ii) the official weight, (iii) the 
stowage or other identification of the grain, and (iv) other information 
required by the regulations and the instructions.
    (2) Common stowage. (i) Without separation. If bulk grain is offered 
for weighing as it is being loaded aboard a ship and is loaded without 
separation in a stowage area with other grain or another commodity, the 
weight certificate for the grain in each lot shall show that the lot was 
loaded aboard with other grain or another commodity without separation 
and the relative location of the grain.
    (ii) With separation. If separations are laid between adjacent lots, 
the weight certificates shall show the kind of material used in the 
separations and the location of the separations in relation to each lot.
    (iii) Exception. The common stowage requirements of this paragraph 
shall not be applicable to the first lot in a stowage area unless a 
second lot has been loaded, in whole or in part, in the stowage area 
before issuing the official weight certificate for the first lot.
    (3) Official mark. If the grain is officially weighed in a 
reasonably continuous operation, upon request by the applicant, the 
following statement may be shown on the weight certificate: ``Loaded 
under continuous official weighing.''

[52 FR 6496, Mar. 4, 1987]



Sec. 800.98  Weighing grain in combined lots.

    (a) General. The weighing of bulk or sacked grain loaded aboard, or 
being loaded aboard, or unloaded from two or more carriers as a combined 
lot shall be conducted according to this section and the instructions.
    (b) Weighing procedure. (1) Single lot weighing. Single lots of 
grain that are to be weighed as a combined lot shall be weighed in one 
location. The grain loaded into or unloaded from each carrier must be 
weighed in accordance with procedures prescribed in the instructions. In 
the case of sacked grain, a representative weight sample shall be 
obtained from the grain in each carrier unless otherwise specified in 
the instructions.

[[Page 266]]

    (2) Recertification. Grain that has been weighed and certificated as 
two or more single lots may be recertificated as a combined lot provided 
that (i) the grain in each single lot has been weighed in one location, 
(ii) the original weight certificates issued for the single lots have 
been or will be surrendered to the appropriate agency or field office, 
(iii) the official personnel who performed the weighing service for the 
single lots and the official personnel who are to recertificate the 
grain as a combined lot determine that the weight of the grain in the 
lots has not since changed and, in the case of sacked grain, that the 
weight samples used as a basis for weighing the single lots were 
representative at the time of the weighing.
    (3) Grain uniform in quality. An applicant may request that grain be 
weighed and certificated as a combined lot whether or not the grain is 
uniform in quality for the purpose of inspection under the Act.
    (c) Certification procedures--(1) General. Each certificate for a 
combined-lot Class X or Class Y weighing service shall show the 
identification for the ``Combined lot'' or, at the request of the 
applicant, the identification of each carrier in the combined lot. The 
identification and any seal information for the carriers may be shown on 
the reverse side of the weight certificate, provided the statement ``See 
reverse side'' is shown on the face of the certificate in the space 
provided for remarks.
    (2) Recertification. If a request for a combined-lot Class X or 
Class Y weighing service is filed after the grain in the single lots has 
been weighed and certificated, the combined-lot weighing certificate 
shall show (i) the date of weighing the grain in the combined lot (if 
the single lots were weighed on different dates, the latest of the dates 
shall be shown); (ii) a serial number, other than the serial numbers of 
the weight certificates that are to be superseded; (iii) the name of the 
elevator from which or into which the grain in the combined lot was 
loaded or unloaded; (iv) a statement showing the weight of the grain in 
the combined lot; (v) a completed statement showing the identification 
of any superseded certificate as follows: ``This combined-lot 
certificate supersedes certificate Nos. ----, dated ----; and (vi) if at 
the time of issuing the combined-lot weight certificate the superseded 
certificates are not in the custody of the agency or field office, the 
statement ``The superseded certificates identified herein have not been 
surrendered'' shall be clearly shown, in the space provided for remarks, 
beneath the statement identifying the superseded certificates. If the 
superseded certificates are in the custody of the agency or field 
office, the superseded certificates shall be clearly marked ``Void.''
    (3) Part lot. If a part of a combined lot of grain in inbound 
carriers is unloaded and a part is left in the carriers, the grain that 
is unloaded shall be certificated in accordance with the provisions in 
Sec. 800.97(c)(2).
    (4) Official mark. When grain is weighed as a combined lot in one 
continuous operation, upon request by the applicant, the following 
statement shall be shown on the weight certificate: ``Loaded under 
continuous official weighing,'' or ``Loaded under continuous official 
inspection and weighing.''
    (5) Further combining. After a combined-lot weight certificate has 
been issued, there shall be no further combining and no dividing of the 
certificate.
    (6) Limitations. No combined-lot weight certificate shall be issued 
(i) for any weighing service other than as described in this section or 
(ii) which shows a weight of grain different from the total of the 
combined single lot.

[52 FR 6496, Mar. 4, 1987]



Sec. 800.99  Checkweighing sacked grain.

    (a) General. Each checkweighing service performed on a lot of sacked 
grain to determine the weight of the grain shall be made on the basis of 
one or more official weight samples obtained from the grain by official 
personnel according to this section and procedures prescribed in the 
instructions.
    (b) Representative sample. No official weight sample shall be 
considered to be representative of a lot of sacked grain unless the 
sample is of the size prescribed in the instructions and has been 
obtained and weighed according

[[Page 267]]

to the procedures prescribed in the instructions.
    (c) Protecting samples and data. Official personnel and other 
employees of an agency or the Service shall protect official weight 
samples and data from manipulation, substitution, and improper and 
careless handling which might deprive the samples and sample data of 
their representativeness.
    (d) Restriction on weighing. No agency shall weigh any lot of sacked 
grain unless at the time of obtaining the official weight sample the 
grain from which the sample was obtained was located within the area of 
responsibility assigned to the agency, except as otherwise provided for 
in Sec. 800.117, or on a case-by-case basis as determined by the 
Administrator.
    (e) Equipment and labor. Each applicant for weighing services shall 
provide necessary labor for obtaining official weight samples and place 
the samples in a position for weighing and shall supply suitable 
weighing equipment approved by the Service, pursuant to the regulations 
and the instructions.
    (f) Disposition of official weight samples. In weighing sacked grain 
in lots, the grain in the official weight samples shall be returned to 
the lots from which the samples were obtained.
    (g) Provisions by kinds of service--(1) ``IN'' movements. Each 
checkweighing on an ``IN'' movement of sacked grain shall be based on an 
official weight sample obtained while the grain is at rest in the 
carrier or during unloading, in accordance with procedures prescribed in 
the instructions.
    (2) ``OUT'' movements (export). Each checkweighing of sacked export 
grain shall be based on an official weight sample obtained as the grain 
is being loaded aboard the final carrier, as the grain is being sacked, 
or while the grain is at rest in a warehouse or holding facility, in 
accordance with procedures prescribed in the instructions.
    (3) ``OUT'' movements (other than export). Each checkweighing of an 
``OUT'' movement of nonexport sacked grain shall be based on an official 
weight sample obtained from the grain as the grain is being loaded in 
the carrier, or while the grain is at rest in the carrier, or while the 
grain is at rest in a warehouse or holding facility, or while the grain 
is being sacked, in accordance with procedures prescribed in the 
instructions.
    (4) ``LOCAL'' weighing. Each checkweighing of a ``LOCAL'' movement 
of sacked grain shall be based on an official weight sample obtained 
while the grain is at rest or while the grain is being transferred, in 
accordance with procedures prescribed in the instructions.

[52 FR 6497, Mar. 4, 1987, as amended at 68 FR 19138, Apr. 18, 2003]

                            Original Services



Sec. 800.115  Who may request original services.

    (a) General. Any interested person may request original inspection 
and weighing services. The kinds of inspection and weighing services are 
described in Sec. 800.75.
    (b) Class Y weighing services. A request for Class Y weighing 
services at an export elevator at an export port location shall cover 
all lots shipped or received in a specific type of carrier. At all other 
elevators, the request shall cover all lots shipped from or to a 
specific location in a specific type of carrier. Each request shall be 
for a contract period of at least 3 months, but a facility may, upon 
satisfactory notification, exempt specific unit trains from the request.
    (c) Contract services. Any interested person may enter into a 
contract with an agency or the Service whereby the agency or Service 
will provide original services for a specified period and the applicant 
will pay a specified fee.

(Approved by the Office of Management and Budget under control number 
0580-0012)

[50 FR 45393, Oct. 31, 1985]



Sec. 800.116  How to request original services.

    (a) General. Except as otherwise provided for in Sec. 800.117, 
requests for original services shall be filed with an agency or field 
office authorized to operate in the area in which the original service 
is to be performed. All requests shall include the information specified 
in Sec. 800.46. Verbal requests shall be confirmed in writing when 
requested by official personnel, as specified in Sec. 800.46.

[[Page 268]]

Copies of request forms may be obtained from the agency or field office 
upon request. If the information specified by Sec. 800.46 is not 
available at the time the request is filed, official personnel may, at 
their discretion, withhold service pending receipt of the required 
information. An official certificate shall not be issued unless the 
information as required by Sec. 800.46 has been submitted, or official 
personnel determine that sufficient information has been made available 
so as to perform the requested service. A record that sufficient 
information was made available must be included in the record of the 
official service.
    (b) Request requirements. Except as provided for in Sec. 800.117, 
requests for original services, other than submitted sample inspections, 
must be made to the agency or field office responsible for the area in 
which the service will be provided. Requests for submitted sample 
inspections may be made with any agency, or any field office that 
provides original inspection service. Requests for inspection or Class X 
weighing of grain during loading, unloading, or handling must be 
received in advance of loading so official personnel can be present. All 
requests will be considered filed when official personnel receive the 
request. A record shall be maintained for all requests. All requests for 
service that is to be performed outside normal business hours must be 
received by 2 p.m. the preceding day.

(Approved by Office of Management and Budget under control number 0580-
0013)

[68 FR 19139, Apr. 18, 2003]



Sec. 800.117  Who shall perform original services.

    (a) General. Original services shall be performed by the agency or 
field office assigned the area in which the service will be provided, 
except as provided in paragraph (b) of this section.
    (b) Exceptions for official agencies to provide service--(1) Timely 
service. If the assigned official agency cannot provide service within 6 
hours of a request, the service may be provided by another official 
agency upon approval from the Service.
    (2) Nonuse of service. If the assigned official agency has not 
provided official services to an applicant for 90 consecutive days, due 
to reasons other than seasonal ice making waterways unnavigable, service 
may be provided by another official agency upon approval from the 
Service.
    (3) Barge probe service. Any official agency may provide probe 
sampling and inspection service for barge-lots of grain with no 
restrictions due to geographical locations.
    (c) Interim service at other than export port locations. If the 
assigned official agency is not available on a regular basis to provide 
original services, and no official agency within a reasonable proximity 
is willing to provide such services on an interim basis, the services 
shall be provided by authorized employees of the Secretary, or other 
persons licensed by the Secretary, until the services can be provided on 
a regular basis by an official agency, as provided in Sec. 800.196.

[68 FR 19139, Apr. 18, 2003]



Sec. 800.118  Certification.

    Official certificates shall be issued according to Sec. 800.160. 
Upon request, a combination inspection and Class X weighing certificate 
may be issued when both services are performed in a reasonably 
continuous operation at the same location by the same agency or field 
office. An official certificate shall not be issued unless the 
information as required by Sec. 800.46 has been submitted, or official 
personnel determine that sufficient information has been made available 
so as to perform the requested service. A record that sufficient 
information was made available must be included in the record of the 
official service.

(Approved by Office of Management and Budget under Control Number 0580-
0013)

[68 FR 19139, Apr. 18, 2003]

     Official Reinspection Services and Review of Weighing Services



Sec. 800.125  Who may request reinspection services or review of 
weighing services.

    (a) General. Any interested person may request a reinspection or 
review of weighing service, except as provided

[[Page 269]]

for in Sec. 800.86(c)(5). Only one reinspection service or review of 
weighing service may be performed on any original service. When more 
than one interested person requests a reinspection or review of weighing 
service, the first person to file is the applicant of record.
    (b) Kind and scope of request. A reinspection or review of weighing 
service is limited to the kind and scope of the original service. If the 
request specifies a different kind or scope, the request shall be 
dismissed but may be resubmitted as a request for original services: 
Provided, however, that an applicant for service may request a 
reinspection of a specific factor(s), official grade and factors, or 
official criteria. In addition, reinspections for grade may include a 
review of any pertinent factor(s), as deemed necessary by official 
personnel. Official criteria are considered separately from official 
grade or official factors when determining the kind and scope. When 
requested, a reinspection for official grade or official factors and 
official criteria may be handled separately even though both sets of 
results are reported on the same certificate. Moreover, a reinspection 
or review of weighing may be requested on either the inspection or Class 
X weighing results when both results are reported on a combination 
inspection and Class X weight certificate.

(Approved by the Office of Management and Budget under control number 
0580-0013.)

[50 FR 45393, Oct. 31, 1985, as amended at 54 FR 5924, Feb. 7, 1989; 55 
FR 24048, June 13, 1990; 68 FR 61328, Oct. 28, 2003]



Sec. 800.126  How to request reinspection or review of weighing services.

    (a) General. Requests shall be made with the agency or field office 
that performed the original service. All requests shall include the 
information specified in Sec. 800.46. Verbal requests shall be 
confirmed in writing when requested by official personnel. Copies of 
request forms may be obtained from the agency or field office. If at the 
time the request is filed the documentation required by Sec. 800.46 is 
not available, official personnel may, at their discretion, withhold 
services pending the receipt of the required documentation. A 
reinspection certificate or the results of a review of weighing service 
shall not be issued unless (1) the documentation requested under Sec. 
800.46 has been submitted or (2) official personnel determine sufficient 
information has been made available so as to perform the requested 
service. A record that sufficient information was made available shall 
be included in the record of the official service.
    (b) Request requirements. Requests will be considered filed on the 
date they are received by official personnel. A record shall be 
maintained for all requests.
    (1) Reinspection services. Requests shall be received (i) before the 
grain has left the specified service point where the grain was located 
when the original inspection was performed; (ii) no later than the close 
of business on the second business day following the date of the 
original inspection; and (iii) before the identity of the grain has been 
lost. If a representative file sample, as prescribed in Sec. 800.82, is 
available, official personnel may waive the requirements pursuant to 
this subparagraph. The requirements of paragraph (b)(1)(i) of this 
section may be waived only upon written consent of the applicant and all 
interested persons. The requirements of paragraph (b)(1)(ii) and (iii) 
of this section may be waived at the request of the applicant or other 
interested persons. The requirement of paragraph (b)(1)(ii) of this 
section may also be waived upon satisfactory showing by an interested 
person of evidence of fraud or that because of distance or other good 
cause, the time allowed for filing was not sufficient. A record of each 
waiver shall be included in the record of the reinspection service.
    (2) Review of weighing services. Requests shall be received no later 
than 90 calendar days after the date of the original Class X or Class Y 
weighing service.

(Approved by the Office of Management and Budget under control number 
0580-0012)

[50 FR 45394, Oct. 31, 1985]



Sec. 800.127  Who shall perform reinspection or review of weighing 
services.

    Reinspection or review of weighing services shall be performed by 
the agency or field office that performed the original service.

[50 FR 45394, Oct. 31, 1985]

[[Page 270]]



Sec. 800.128  Conflicts of interest.

    Official personnel cannot perform or participate in performing or 
issue an official certificate for a reinspection or a review of weighing 
service if they participated in the original service unless there is 
only one qualified person available at the time and place of the 
reinspection or review of weighing.

[50 FR 45394, Oct. 31, 1985]



Sec. 800.129  Certificating reinspection and review of weighing results.

    (a) General. Except as provided in paragraph (a)(1) of this 
paragraph, official certificates shall be issued according to Sec. 
800.160 and the instructions. Except as provided in paragraph (b)(2) of 
this section, only the result of the reinspection service shall be 
reported.
    (1) Results of material portion sublots. When results of a 
reinspection on a material portion do not detect a material error, they 
shall be averaged with the original inspection results. For purposes of 
this section, a material error is defined as results differing by more 
than two standard deviations. The averaged inspection results shall 
replace the original inspection results recorded on the official 
inspection log. Reinspection results shall replace the original 
inspection results recorded on the official inspection log if a material 
error is detected. No certificates will be issued unless requested by 
the applicant or deemed necessary by official personnel.
    (2) Reporting review of weighing results. When the review of 
weighing service results indicate that the original weighing results 
were correct, the applicant will be notified in writing. When the 
original weighing service results are incorrect, a corrected weight 
certificate or, if applicable, a corrected combination inspection and 
Class X weight certificate will be issued according to the provisions of 
Sec. 800.165.
    (b) Required statements on reinspection certificates. Each 
reinspection certificate shall show the statements required by this 
section, Sec. 800.161, and applicable instructions.
    (1) Each reinspection certificate must clearly show (i) the term 
``Reinspection'' and (ii) a statement identifying the superseded 
certificate. The superseded certificate will be considered null and void 
as of the date of the reinspection certificate.
    (2) When official grade or official factors, Class X weighing 
results, and official criteria are reported on the same certificate, the 
reinspection certificate shall show a statement indicating that the 
reinspection results are based on official grade, or official factors, 
or official criteria and that all other results are those of the 
original service.
    (3) If the superseded certificate is in the custody of the agency or 
field office, the superseded certificate shall be marked ``Void.'' If 
the superseded certificate is not in the custody of the agency or field 
office at the time the reinspection certificate is issued, a statement 
indicating that the superseded certificate has not been surrendered 
shall be shown on the reinspection certificate.
    (4) As of the date of issuance of the official certificate, the 
superseded certificate for the original service will be void and shall 
not be used to represent the grain.
    (5) When certificates are issued under paragraph (a)(1) of this 
section, the reinspection certificate shall show a statement indicating 
that the results replaced the original results and that the reinspection 
certificate is not valid for trading purposes.

[50 FR 45394, Oct. 31, 1985, as amended at 55 FR 24048, June 13, 1990]

                       Appeal Inspection Services



Sec. 800.135  Who may request appeal inspection services.

    (a) General. Any interested person may request appeal inspection or 
Board appeal inspection services, except as provided for in Sec. 
800.86(c)(5). When more than one interested person requests an appeal 
inspection or Board appeal inspection service, the first person to file 
is the applicant of record. Only one appeal inspection may be obtained 
from any original inspection or reinspection service. Only one Board 
appeal inspection may be obtained from an appeal inspection. Board 
appeal inspections will be performed on the basis of the official file 
sample. Board appeal inspections are not available on stowage 
examination services.

[[Page 271]]

    (b) Kind and scope of request. An appeal inspection service is 
limited to the kind and scope of the original or reinspection service; 
or, in the case of a Board Appeal inspection service, the kind and scope 
of the appeal inspection service. If the request specifies a different 
kind or scope, the request shall be dismissed but may be resubmitted as 
a request for original services: Provided, however, that an applicant 
for service may request an appeal or Board Appeal inspection of a 
specific factor(s), official grade and factors, or official criteria. In 
addition, appeal and Board Appeal inspections for grade may include a 
review of any pertinent factor(s), as deemed necessary by official 
personnel. Official criteria are considered separately from official 
grade or official factors when determining kind and scope. When 
requested, an appeal inspection for grade, or official factors, and 
official criteria may be handled separately even though both results are 
reported on the same certificate. Moreover, an appeal inspection may be 
requested on the inspection results when both inspection and Class X 
weighing results are reported on a combination inspection and Class X 
weight certificate.

(Approved by the Office of Management and Budget under control number 
0580-0013.)

[50 FR 45395, Oct. 31, 1985, as amended at 55 FR 24048, June 13, 1990; 
68 FR 61328, Oct. 28, 2003]



Sec. 800.136  How to request appeal inspection services.

    (a) General. Requests shall be filed with the field office 
responsible for the area in which the original service was performed. 
Requests for Board appeal inspections may be filed with the Board of 
Appeals and Review or the field office that performed the appeal 
inspection. All requests shall include the information specified in 
Sec. 800.46. Verbal requests shall be confirmed in writing when 
requested by official personnel as specified in Sec. 800.46. Copies of 
request forms may be obtained from the field office upon request. If at 
the time the request is filed the documentation required by Sec. 800.46 
is not available, official personnel may, at their discretion, withhold 
service pending the receipt of the required documentation. An appeal 
inspection certificate will not be issued unless (1) documentation 
requested under Sec. 800.46 has been submitted or (2) office personnel 
determine that sufficient information has been made available so as to 
perform the request. A record that sufficient information has been made 
available must be included in the record of the official service.
    (b) Filing requirements. Requests will be considered filed on the 
date they are received by official personnel. A record shall be 
maintained for all requests. Requests must be filed (1) before the grain 
has left the specified service point where the grain was located when 
the original inspection was performed, (2) no later than the close of 
business on the second business day following the date of the last 
inspection, and (3) before the identity of the grain has been lost. If a 
representative file sample as prescribed in Sec. 800.82 is available, 
official personnel may waive the requirements pursuant to this 
paragraph. The requirements of paragraph (b)(1) of this section may be 
waived only upon written consent of the applicant and all interested 
persons. The requirements of paragraphs (b)(2) and (b)(3) of this 
section may be waived at the request of the applicant or other 
interested persons. The requirement of paragraph (b)(2) of this section 
may also be waived upon satisfactory showing by an interested person of 
evidence of fraud or that because of distance or other good cause, the 
time allowed for filing was not sufficient. A record of each waiver 
shall be included in the record of the appeal inspection service.

(Approved by the Office of Management and Budget under control number 
0580-0012)

[50 FR 45395, Oct. 31, 1985, as amended at 54 FR 5924, Feb. 7, 1989]



Sec. 800.137  Who shall perform appeal inspection services.

    (a) Appeal. Appeal inspection services shall be performed by the 
field office responsible for the area in which the original inspection 
was performed.
    (b) Board appeal. Board appeal inspection services shall be 
performed only by the Board of Appeals and Review.

[[Page 272]]

The field office that performed the appeal inspection service will act 
as a liaison between the Board of Appeals and Review and the applicant.

[50 FR 45395, Oct. 31, 1985]



Sec. 800.138  Conflict of interest.

    Official personnel cannot perform or participate in performing or 
issue an official certificate for an appeal inspection if they 
participated in the original inspection, reinspection, or, in the case 
of a Board appeal inspection, the appeal inspection service unless there 
is only one qualified person available at the time and place of the 
appeal inspection.

[50 FR 45395, Oct. 31, 1985]



Sec. 800.139  Certificating appeal inspections.

    (a) General. Except as provided in paragraphs (b) of this section, 
official certificate shall be issued according to Sec. 800.160 and the 
instructions. Except as provided in paragraph (c)(2) of this section, 
only the results of the appeal inspection service shall be reported.
    (b) Results of material portion sublots. When results of an appeal 
inspection performed by a field office or the Board of Appeals and 
Review on a material portion do not detect a material error, they shall 
be averaged with the previous inspection results recorded on the 
official inspection log for the identified sample. For purposes of this 
section, a material error is defined as results differing by more than 
two standard deviations. The appeal or Board appeal inspection result 
shall replace the previous inspection results recorded on the official 
inspection log for the identified sample if a material error is 
detected. No certificate will be issued unless requested by the 
applicant or deemed necessary by inspection personnel.
    (c) Required statements. Each appeal certificate shall show the 
statements required by this section, Sec. 800.161, and applicable 
instructions.
    (1) Each appeal inspection certificate shall clearly show (i) the 
term ``Appeal'' or ``Board appeal'' and (ii) a statement identifying the 
superseded certificate. The superseded certificate will be considered 
null and void as of the date of the appeal inspection certificate.
    (2) When official grade or official factors, Class X weighing 
results, and official criteria are reported on the same certificate, the 
appeal inspection certificate shall show a statement indicating that 
appeal or Board appeal inspection results are based on official grade, 
official factors, or official criteria and that all other results are 
those of the original, reinspection, or, in the case of a Board appeal, 
the appeal inspection results.
    (3) Superseded certificates held by the Service shall be marked 
``Void.'' If the superseded certificate is not in the custody of the 
Service at the time the appeal certificate is issued, a statement 
indicating that the superseded certificate has not been surrendered 
shall be shown on the appeal certificate.
    (4) As of the date of issuance of the appeal or Board appeal 
certificate, the superseded certificate for the original, reinspection, 
or appeal inspection service will be void and shall not be used to 
represent the grain.
    (5) When certificates are issued under paragraph (b) of this 
section, the appeal inspection certificate shall show a statement 
indicating that the results replace the original inspection, 
reinspection, or, in the case of a Board appeal, the appeal inspection 
results and that the appeal inspection certificate is not valid for 
trading purposes.
    (d) Finality of Board appeal inspections. A Board appeal inspection 
will be the final appeal inspection service.

[50 FR 45395, Oct. 31, 1985, as amended at 55 FR 24048, June 13, 1990]

                  Official Records and Forms (General)

    Source: Sections 800.145 through 800.159 appear at 50 FR 18986, May 
6, 1985, unless otherwise noted.



Sec. 800.145  Maintenance and retention of records--general requirements.

    (a) Preparing and maintaining records. The records specified in 
Sec. Sec. 800.146-800.159 shall be prepared and maintained in a manner 
that will facilitate (1) the daily use of records and (2) the

[[Page 273]]

review and audit of the records to determine compliance with the Act, 
the regulations, the standards, and the instructions.
    (b) Retaining records. Records shall be retained for a period not 
less than that specified in Sec. Sec. 800.146-800.159. In specific 
instances, the Administrator may require that records be retained for a 
period of not more than 3 years in addition to the specified retention 
period. In addition, records may be kept for a longer time than the 
specified retention period at the option of the agency, the contractor, 
the approved scale testing organization, or the individual maintaining 
the records.

(Approved by the Office of Management and Budget under control number 
0580-0011)



Sec. 800.146  Maintenance and retention of records issued by the Service
under the Act.

    Agencies, contractors, and approved scale testing organizations 
shall maintain complete records of the Act, regulations, the standards, 
any instructions issued by the Service, and all amendments and revisions 
thereto. These records shall be maintained until superseded or revoked.

(Approved by the Office of Management and Budget under control number 
0580-0011)



Sec. 800.147  Maintenance and retention of records on delegations, 
designations, contracts, and approval of scale testing organizations.

    Agencies, contractors, and approved scale testing organizations 
shall maintain complete records of their delegation, designation, 
contract, or approval. These records consist of a copy of the delegation 
or designation documents, a copy of the current contract, or a copy of 
the notice of approval, respectively, and all amendments and revisions 
thereto. These records shall be maintained until superseded, terminated, 
revoked, or cancelled.

(Approved by the Office of Management and Budget under control number 
0580-0011)



Sec. 800.148  Maintenance and retention of records on organization, 
staffing, and budget.

    (a) Organization. Agencies, contractors, and approved scale testing 
organizations shall maintain complete records of their organization. 
These records shall consist of the following documents: (1) If it is a 
business organization, the location of its principal office; (2) if it 
is a corporation, a copy of the articles of incorporation, the names and 
addresses of officers and directors, and the names and addresses of 
shareholders; (3) if it is a partnership or an unincorporated 
association, the names and addresses of officers and members, and a copy 
of the partnership agreement or charter; and (4) if it is an individual, 
the individual's place of residence. These records shall be maintained 
for 5 years.
    (b) Staffing. Agencies, contractors, and approved scale testing 
organizations shall maintain complete records of their employees. These 
records consist of (1) the name of each current employee, (2) each 
employee's principal duty, (3) each employee's principal duty station, 
(4) information about the training that each employee has received, and 
(5) related information required by the Service. These records shall be 
maintained for 5 years.
    (c) Budget. Agencies, contractors, and approved scale testing 
organizations shall maintain complete records of their budget. These 
records consist of actual income generated and actual expenses incurred 
during the current year. Complete accounts for receipts from (1) 
official inspection, weighing, equipment testing, and related services; 
(2) the sale of grain samples; and (3) disbursements from receipts shall 
be available for use in establishing or revising fees for services under 
the Act. Budget records shall also include detailed information on the 
disposition of grain samples obtained under the Act. These records shall 
be maintained for 5 years.

(Approved by the Office of Management and Budget under control number 
0580-0011)



Sec. 800.149  Maintenance and retention of records on licenses and 
approvals.

    (a) Licenses. Agencies, contractors, and approved scale testing 
organizations shall maintain complete records of licenses. These records 
consist of current information showing (1) the name of each licensee, 
(2) the scope of each license, (3) the termination date

[[Page 274]]

of each license, and (4) related information required by the Service. 
These records shall be maintained for the tenure of the licensee.
    (b) Approvals. Agencies shall maintain complete records of approvals 
of weighers. These records consist of current information showing the 
name of each approved weigher employed by or at each approved weighing 
facility in the area of responsibility assigned to an agency or field 
office. These records shall be maintained for the tenure of the 
weigher's employment as an approved weigher.

(Approved by the Office of Management and Budget under control number 
0580-0011)



Sec. 800.150  Maintenance and retention of records on fee schedules.

    Agencies, contractors, and approved scale testing organizations 
shall maintain complete records on fee schedules. These records consist 
of (a) a copy of the current fee schedule; (b) in the case of an agency, 
data showing how the fees in the schedule were developed; (c) superseded 
fee schedules; and (d) related information required by the Service. 
These records shall be maintained for 5 years.

(Approved by the Office of Management and Budget under control number 
0580-0011)



Sec. 800.151  Maintenance and retention of records on space and equipment.

    (a) Space. Agencies shall maintain complete records on space. These 
records consist of (1) a description of space that is occupied or used 
at each location, (2) the name and address of the owner of the space, 
(3) financial arrangements for the space, and (4) related information 
required by the Service. These records shall be maintained for 5 years.
    (b) Equipment. Agencies shall maintain complete records on 
equipment. These records consist of (1) the description of each piece of 
equipment used in performing official inspection or Class X or Class Y 
weighing services under the Act, (2) the location of the equipment, (3) 
the name and address of the owner of the equipment, (4) the schedules 
for equipment testing and the results of the testing, and (5) related 
information required by the Service. These records shall be maintained 
for 5 years.

(Approved by the Office of Management and Budget under control number 
0580-0011)



Sec. 800.152  Maintenance and retention of file samples.

    (a) General. The Service and agencies shall maintain complete file 
samples for their minimum retention period (calendar days) after the 
official function was completed or the results otherwise reported.
    (b) Minimum retention period.

(1) Trucks
      In...........................................................    3
      Out..........................................................    5
(2) Railcars
      In...........................................................    5
      Out..........................................................   10
(3) Barges (river)
      In...........................................................    5
      Out..........................................................   25
(4) Ships and barges (lake or ocean)
      In...........................................................    5
      Out..........................................................   25
      Export (sublot samples)......................................   60
(5) Bins and tanks.................................................    3
(6) Submitted samples..............................................    3
 


Upon request by an agency and with the approval of the Service, 
specified file samples or classes of file samples may be retained for 
shorter periods of time.
    (c) Special retention periods. In specific instances, the 
Administrator may require that file samples be retained for a period of 
not more than 90 calendar days. File samples may be kept for a longer 
time than the regular retention period at the option of the Service, the 
agency, or the individual maintaining the records.

(Approved by the Office of Management and Budget under control number 
0580-0011)



Sec. 800.153  Maintenance and retention of records on official 
inspection, Class X or Class Y weighing, and equipment testing service.

    Agencies and approved scale testing organizations shall maintain 
complete detailed official inspection work records, copies of official 
certificates, and equipment testing work records for 5 years.

(Approved by the Office of Management and Budget under control number 
0580-0011)

[[Page 275]]



Sec. 800.154  Availability of official records.

    (a) Availability to officials. Each agency, contractor, and approved 
scale testing organization shall permit authorized representatives of 
the Comptroller General, the Secretary, or the Administrator to have 
access to and to copy, without charge, during customary business hours 
any records maintained under Sec. Sec. 800.146-800.159.
    (b) Availability to the public--(1) Agency, contractor, and approved 
scale testing organization records. The following official records will 
be available, upon request by any person, for public inspection during 
customary business hours: (i) Copies of the Act, the regulations, the 
standards, and the instructions; (ii) the delegation, designation, 
contract, or approval issued by the Service; (iii) organization and 
staffing records; (iv) a list of licenses and approvals; and (v) the 
approved fee schedule of the agency, if applicable.
    (2) Service records--Records of the Service are available in 
accordance with the Freedom of Information Act (5 U.S.C. 552(a)(3)) and 
the regulations of the Secretary of Agriculture (7 CFR, part 1, subpart 
A).
    (c) Locations where records may be examined or copied--(1) Agency, 
contractor, and approved scale testing organization records. Records of 
agencies, contractors, and approved scale testing organizations 
available for public inspection shall be retained at the principal place 
of business of the agency, contractor, or approved scale testing and 
certification organization.
    (2) Service records. Records of the Service available for public 
inspection shall be retained at each field office and at the 
headquarters of the Service in Washington, D.C.



Sec. 800.155  Detailed work records--general requirements.

    (a) Preparation. Detailed work records shall be prepared for each 
official inspection, Class X or Class Y weighing, and equipment testing 
service performed or provided under the Act. The records shall (1) be on 
standard forms prescribed in the instructions; (2) be typed or legibly 
written in English; (3) be concise, complete, and accurate; (4) show all 
information and data that are needed to prepare the corresponding 
official certificates or official report; (5) show the name or initials 
of the individual who made each determination; and (6) show other 
information required by the Service to monitor or supervise the service 
provided.
    (b) Use. Detailed work records shall be used as a basis for (1) 
issuing official certificates or official forms, (2) approving 
inspection and weighing equipment for the performance of official 
inspection or Class X or Class Y weighing services, (3) monitoring and 
supervising activities under the Act, (4) answering inquiries from 
interested persons, (5) processing complaints, and (6) billing and 
accounting. These records may be used to report results of official 
inspection or Class X or Class Y weighing services in advance of issuing 
an official certificate.
    (c) Standard forms. The following standard forms shall be furnished 
by the Service to an agency: Official Export Grain Inspection and Weight 
Certificates (singly or combined), official inspection logs, official 
weight loading logs, official scale testing reports, and official volume 
of work reports. Other forms used by an agency in the performance of 
official services, including certificates, shall be furnished by the 
agency.

(Approved by the Office of Management and Budget under control number 
0580-0011)



Sec. 800.156  Official inspection records.

    (a) Pan tickets. The record for each kind of official inspection 
service identified in Sec. 800.76 shall, in addition to the official 
certificate, consist of one or more pan tickets as prescribed in the 
instructions. Activities that are performed as a series during the 
course of an inspection service may be recorded on one pan ticket or on 
separate pan tickets. The original copy of each pan ticket shall be 
retained by the agency or field office that performed the inspection.
    (b) Inspection logs. The record of an official inspection service 
for grain in a combined lot and shiplot shall include the official 
inspection log as prescribed in the instructions. The original copy of 
each inspection log shall be retained by the agency or field office that 
performed the inspection. If the inspection

[[Page 276]]

is performed by an agency, one copy of the inspection log shall be 
promptly sent to the appropriate field office.
    (c) Other forms. Any detailed test that cannot be completely 
recorded on a pan ticket or an inspection log shall be recorded on other 
forms prescribed in the instructions. If the space on a pan ticket or an 
inspection log does not permit showing the full name for an official 
factor or an official criteria, an approved abbreviation may be used.
    (d) File samples--(1) General. The record for an official inspection 
service based, in whole or in part, on an examination of a grain in a 
sample shall include one or more file samples as prescribed in the 
instructions.
    (2) Size. Each file sample shall consist of an unworked portion of 
the official sample or warehouseman's sample obtained from the lot of 
grain and shall be large enough to permit a reinspection, appeal 
inspection, or Board appeal inspection for the kind and scope of 
inspection for which the sample was obtained. In the case of a submitted 
sample inspection, if an undersized sample is received, the entire 
sample shall be retained.
    (3) Method. Each file sample shall be retained in a manner that will 
preserve the representativeness of the sample from the time it is 
obtained or received by the agency or field office until it is 
discarded. High moisture samples, infested samples, and other problem 
samples shall be retained according to the instructions.
    (4) Uniform system. To facilitate the use of file samples, agencies 
shall establish and maintain a uniform file sample system according to 
the instructions.
    (5) Forwarding samples. Upon request by the supervising field office 
or the Board of Appeals and Review, each agency shall furnish file 
samples (i) for field appeal or Board appeal inspection service, or (ii) 
for monitoring or supervision. If, at the request of the Service, an 
agency locates and forwards a file sample for an appeal inspection, the 
agency may, upon request, be reimbursed at the rate prescribed in Sec. 
800.71 by the Service.

(Approved by the Office of Management and Budget under control number 
0580-0011)



Sec. 800.157  Official weighing records.

    (a) Scale ticket, scale tape, or other weight records. In addition 
to the official certificate, the record for each Class X or Class Y 
weighing service shall consist of a scale ticket, a scale tape, or any 
other weight record prescribed in the instructions.
    (b) Weighing logs. The record of a Class X or Class Y weighing 
service performed on bulk grain in a combined lot or bulk shiplot grain 
shall include the official weighing log as prescribed in the 
instructions. The original copy of each weighing log shall be retained 
by the field office or agency that performed the weighing.

(Approved by the Office of Management and Budget under control number 
0580-0011)



Sec. 800.158  Equipment testing work records.

    The record for each official equipment testing service or activity 
consists of an official equipment testing report as prescribed in the 
instructions. Upon completion of each official equipment test, one or 
more copies of the completed testing report may, upon request, be issued 
to the owner or operator of the equipment. The testing report shall show 
the (a) date the test was performed, (b) name of the organization and 
personnel that performed the test, (c) names of the Service employees 
who monitored the testing, (d) identification of equipment that was 
tested, (e) results of the test, (f) names of any interested persons who 
were informed of the test results, (g) number or other identification of 
the approval tag or label affixed to the equipment, and (h) other 
information required by the instructions.

(Approved by the Office of Management and Budget under control number 
0580-0011)



Sec. 800.159  Related official records.

    (a) Volume of work report. Field offices and agencies shall prepare 
periodic reports showing the kind and the volume of inspection and 
weighing services that they performed. The report shall be prepared and 
copies shall be submitted to the Service according to the instructions.
    (b) Record of withdrawals and dismissals. Field offices and agencies 
shall

[[Page 277]]

maintain a complete record of requests for official inspection or 
weighing services that are withdrawn by the applicant or that are 
conditionally withheld or dismissed. The record shall be prepared and 
maintained according to the instructions.
    (c) Licensee record. Licensees, including licensed warehouse 
samplers, shall (1) keep the license issued to them by the Service and 
(2) keep or have reasonable access to a complete record of the Act, the 
standards, the regulations, and the instructions.

(Approved by the Office of Management and Budget under control number 
0580-0011)

                          Official Certificates

    Source: Sections 800.160 through 800.166 appear at 50 FR 45396, Oct. 
31, 1985, unless otherwise noted.



Sec. 800.160  Official certificates; issuance and distribution.

    (a) Required issuance. An official certificate shall be issued for 
each inspection service and each weighing service except as provided 
Sec. Sec. 800.84, 800.129, and 800.139 and paragraph (b) of this 
section.
    (b) Distribution--(1) General--(i) Export. The original and at least 
three copies of each certificate will be distributed to the applicant or 
applicant's order. One copy of each certificate shall be retained by the 
agency, field office, or Board of Appeals and Review.
    (ii) Nonexport. The original and at least one copy of each 
certificate will be distributed to the applicant or to the applicant's 
order. In the case of inbound trucklot grain, one copy shall be 
delivered by the applicant to the person who owned the grain at the time 
of delivery. One copy of each certificate shall be retained by the 
agency, field office, or Board of Appeals and Review.
    (iii) Local movements of shiplot grain. When shiplot grain is 
offered for inspection as a single lot and a portion of the lot is 
returned to the elevator, certificates representing the inspection 
service shall not be issued unless (A) requested by the applicant or (B) 
deemed necessary by official personnel.
    (2) Reinspection and appeal inspection services. In addition to the 
distribution requirements of paragraph (b) of this section, one copy of 
each reinspection or appeal inspection certificate shall be distributed 
to each interested person of record or the interested person's order and 
to the agency or field office that issued the superseded certificate.
    (3) Additional copies. Additional copies of certificates will be 
furnished to the applicant or interested person upon request. Fees for 
extra copies may be assessed according to the fee schedules established 
by the agency or the Service.
    (c) Prompt issuance. The results of the inspection or weighing 
service shall be reported to the applicant on the date the inspection or 
weighing service is completed. Certificates shall be issued as soon as 
possible, but no later than the close of business on the next business 
day. Upon request of an agency or a field office, the requirements of 
this paragraph may be waived by the Service when results have been 
reported before issuing the certificate.
    (d) Who may issue certificates--(1) Authority. Certificates for 
inspection or Class X weighing services may be issued only be official 
personnel who are specifically licensed or authorized to perform and 
certify the results reported on the certificate. Certificates for Class 
Y weighing services may be issued only by individuals who are licensed 
or authorized or are approved to perform and certify the results.
    (2) Exception. The person in the best position to know whether the 
service was performed in an approved manner and that the determinations 
are accurate and true should issue the certificate. If the service is 
performed by one person, the certificate should be issued by that 
person. If the service is performed by two or more persons, the 
certificate should be issued by the person who made the majority of the 
determinations or the person who makes the final determination. 
Supervisory personnel may issue a certificate when the individual is 
licensed or authorized to perform the service being certificated.
    (e) Name requirement. On export certificates, the typewritten name 
and signature of the individual issuing the certificate shall appear on 
the original and all copies. On all other certificates, the name or 
signature of the individual

[[Page 278]]

issuing the certificate shall appear on the original and all copies. 
Upon request by the applicant, the name and signature may be shown on 
all other certificates.
    (f) Authorization to affix names--(1) Requirements. The name or 
signature of official personnel may be affixed to official certificates 
which are prepared from work records signed or initialed by the person 
whose name will be shown. An agent affixing the name and signature shall 
(i) be employed by the agency or Service; (ii) have been designated to 
affix names and signatures; and (iii) hold a power of attorney from the 
person whose name and signature will be affixed. The power of attorney 
shall be on file with the agency or Service.
    (2) Initialing. When a name or signature is affixed by an authorized 
agent, the initials of the agent shall appear directly below or 
following the signature of the person.
    (g) Advance information. Upon request, the contents of an official 
certificate may be furnished in advance to the applicant and any other 
interested party, or to their order, and any additional expense shall be 
borne by the requesting party.
    (h) Certification after dismissal. An official certificate cannot be 
issued for a service after the request has been withdrawn or dismissed.

(Approved by the Office of Management and Budget under control number 
0580-0011)

[50 FR 45396, Oct. 31, 1985, as amended at 57 FR 11428, Apr. 3, 1992]



Sec. 800.161  Official certificate requirements.

    (a) General. Official certificates shall show the information and 
statements required by Sec. 800.161 through Sec. 800.165 and the 
instructions. The Administrator shall approve any other information and 
statements reported. Information shall be reported in a uniform, 
accurate, and concise manner, be in English, be typewritten or 
handwritten in ink, and be clearly legible.
    (b) Required format. Official certificates shall be uniform in size, 
shape, color, and format and conform to requirements prescribed in the 
instructions. Upon request and for good cause, the Service may approve 
special design certificates. All information and statements shall be 
shown on the front of the certificate, except that on domestic grain 
certificates, (1) approved abbreviations for official factors and 
official criteria, with their meanings, may be shown on the back and (2) 
the identification of carriers or containers in a combined-lot 
inspection may be shown on the back if ample space is not available on 
the front. When information is recorded on the back of the certificate, 
the statement ``See reverse side'' must be shown on the front.
    (c) Required information. Each official certificate shall show the 
following information in accordance with the instructions: (1) For an 
agency issuing export certificates or the Federal Grain Inspection 
Service, ``United States Department of Agriculture--Federal Grain 
Inspection Service;'' (2) for a designated agency, the name of the 
agency, as applicable; (3) captions identifying the kind of service; (4) 
a preprinted serial number and lettered prefix; (5) ``original'' or 
``copy,'' as applicable; (6) ``divided lot,'' ``duplicate,'' or 
``corrected,'' as applicable; (7) the identification of the carrier or 
container; (8) the date the service was performed; (9) the date and 
method of sampling; (10) the kind of movement and the level of service 
performed; (11) the grade and kind or ``Not Standardized Grain,'' as 
applicable; (12) the results of the service performed; (13) the location 
of the issuing office; (14) the location of the grain when the service 
was performed; (15) a space for remarks; (16) whether a reinspection or 
appeal inspection service was based in whole or in part on file samples 
when file samples are used; (17) a statement reflecting the results of a 
stowage examination, when applicable; (18) seal records, when 
applicable; and (19) the name of the person issuing the certificate.
    (d) Required statements. Each official certificate shall include the 
following statements according to the instructions: (1) A statement that 
the certificate is issued under the authority of the United States Grain 
Standards Act; (2) a nonnegotiability statement; (3) a warning 
statement; and (4) a statement referencing the certificate number and

[[Page 279]]

date. Each official certificate for an official sample-lot inspection 
service shall include a caption ``U.S. Grain Standards Act'' and a USDA-
FGIS shield ghosted across the front. Each official certificate for a 
warehouseman's sample-lot inspection, a submitted sample inspection, or 
Class Y weighing service shall include a statement that the certificate 
does not meet the requirements of section 5 of the Act of warehouseman's 
sample-lot inspection, the word ``QUALIFIED;'' for submitted sample 
inspections, the words ``Not Officially Sampled;'' for Class Y weighing, 
the words ``Class Y Weighing'' screened across the front.
    (e) Permissive information and statements--(1) Certificates. 
Information and statements requested by the applicant but not required 
by the regulations or instructions may be shown on the certificate if 
the information or statements have been approved in the instructions or 
on a case-by-case basis by the Administrator.
    (2) Letterhead. Information and statements requested by the 
applicant but not required by the regulations or instructions may be 
shown on letterhead stationary of the Service or an agency when (i) 
ample space is not available for reporting the information or statements 
on the certificate, (ii) letterhead stationary is determined to be more 
suitable than the official certificate, and (iii) the certificate is 
referenced on the letterhead stationary and distributed according to 
Sec. 800.160. Letterhead stationary of the Service shall be used for 
all export grain.

(Approved by the Office of Management and Budget under control number 
0580-0011)



Sec. 800.162  Certification of grade; special requirements.

    (a) General. Each official certificate for grade shall show (1) the 
grade and factor information required by the Official U.S. Standards for 
Grain; (2) the test weight of the grain, if applicable; (3) the moisture 
content of the grain; (4) the results for each official factor for which 
a determination was made; (5) the result for each official factor that 
determined the grade when the grain is graded other than U.S. No. 1; (6) 
any other factor information considered necessary to describe the grain; 
and (7) any additional factor results requested by the applicant for 
official factors defined in the Official U.S. Standards for Grain.
    (b) Cargo shipments. Each official certificate for grade 
representing a cargo shipment shall show, in addition to the 
requirements of paragraph (a) of this section, the results of all 
official grade factors defined in the Official United States Standards 
for Grain for the type of grain being inspected.
    (c) [Reserved]
    (d) Aflatoxin test for corn. Official corn export certificates shall 
show, in addition to the requirements of paragraphs (a), (b), and (c) of 
this section, the official aflatoxin test results if required under 
Sec. 800.15(b).

(Approved by the Office of Management and Budget under control number 
0580-0011)

[50 FR 45396, Oct. 31, 1985, as amended at 52 FR 24437, June 30, 1987; 
57 FR 2439, Jan. 22, 1992; 57 FR 3273, Jan. 29, 1992; 57 FR 56439, Nov. 
30, 1992]

    Effective Date Note: At 71 FR 52405, Sept. 6, 2006, Sec. 800.162 
was amended by revising paragraph (a) and adding paragraph (c), 
effective Sept. 1, 2007. For the convenience of the user, the added and 
revised text is set forth as follows:



Sec. 800.162  Certification of grade; special requirements.

    (a) General. Except as provided in paragraph (c) of this section, 
each official certificate for grade shall show:
    (1) The grade and factor information required by the Official U.S. 
Standards for Grain;
    (2) The test weight of the grain, if applicable;
    (3) The moisture content of the grain;
    (4) The results for each official factor for which a determination 
was made;
    (5) The results for each official factor that determined the grade 
when the grain is graded other that U.S. No. 1;
    (6) Any other factor information considered necessary to describe 
the grain; and
    (7) Any additional factor results requested by the applicant for 
official factors defined in the Official U.S. Standards for Grain.

                                * * * * *

    (c) Test weight for canola and soybeans. Official canola inspection 
certificates will show, in addition to the requirements of paragraphs 
(a) and (b) of this section, the official test weight per bushel only 
upon request by the applicant. Official soybean inspection certificates 
will show, in addition

[[Page 280]]

to the requirements of paragraphs (a) and (b) of this section, the 
official test weight per bushel unless the applicant requests that test 
weight not be determined. Upon request, soybean test weight results will 
not be determined and/or reported on the official certificate.

                                * * * * *



Sec. 800.163  Divided-lot certificates.

    (a) General. When shiplot grain is offered for inspection or Class X 
weighing as a single lot and is certificated as a single lot, the 
applicant may exchange the official certificate for two or more divided-
lot certificates. This applies to original inspection, reinspection, 
appeal inspection, Board appeal inspection, and Class X weighing 
services.
    (b) Application. Requests for divided-lot certificates shall be made 
(1) in writing; (2) by the applicant who filed the inital request; (3) 
to the office that issued the outstanding certificate; (4) within 5 
business days of the outstanding certificate date; and (5) before the 
identity of the grain has been lost.
    (c) Quantity restrictions. Divided-lot certificates shall not show 
an aggregate quantity different than the total quantity shown on the 
superseded certificate.
    (d) Surrender of certificate. The certificate that will be 
superseded shall (1) be in the custody of the agency or the Service; (2) 
be marked ``Void;'' and (3) show the identification of the divided-lot 
certificates.
    (e) Certification requirements. The same information and statements, 
including permissive statements, that were shown on the superseded 
certificate shall be shown on each divided-lot certificate. Divided-lot 
certificates shall show (1) a statement indicating the grain was 
inspected or weighed as an undivided lot; (2) the terms ``Divided Lot-
Original,'' and the copies shall show ``Divided Lot-Copies;'' (3) the 
same serial number with numbered suffix (for example, 1764-1, 1764-2, 
1764-3, and the like); and (4) the quantity specified by the request.
    (f) Issuance and distribution. Divided-lot certificates shall be 
issued no later than the close of business on the next business day 
after the request and be distributed according to Sec. 800.160.
    (g) Limitations. No divided-lot certificate can be issued (1) for 
grain in any shipment other than shiplot grain inspected or weighed as a 
single lot or (2) for an export certificate which has been superseded by 
another export certificate. After divided-lot certificates have been 
issued, further dividing or combining is prohibited except with the 
approval of the Service.
    (h) Use of superseded certificate prohibited. As of the date of the 
divided-lot certificate, the superseded certificate will be void and 
shall not be used or represent the grain.

(Approved by the Office of Management and Budget under control number 
0580-0011)



Sec. 800.164  Duplicate certificates.

    Upon request, a duplicate certificate may be issued for a lost or 
destroyed official certificate.
    (a) Application. Requests for duplicate certificates shall be filed: 
(1) in writing; (2) by the applicant who requested the service covered 
by the lost or destroyed certificate; and (3) with the office that 
issued the initial certificate.
    (b) Certification requirements. The same information and statements, 
including permissive statements, that were shown on the lost or 
destroyed certificate shall be shown on the duplicate certificate. 
Duplicate certificates shall show (1) the terms ``Duplicate-Original'' 
and the copies shall show ``Duplicate-Copies'' and (2) a statement that 
the certificate was issued in lieu of a lost or destroyed certificate.
    (c) Issuance. Duplicate certificates shall be issued as promptly as 
possible and distributed according to Sec. 800.160.
    (d) Limitations. Duplicate certificates will not be issued for 
certificates that have been superseded.

(Approved by the Office of Management and Budget under control number 
0580-0011)



Sec. 800.165  Corrected certificates.

    (a) General. The accuracy of the statements and information shown on 
official certificates shall be verified by the individual whose name or 
signature is shown on the certificate, or by the authorized agent who 
affixed the name or signature. Errors found during this process shall be 
corrected according to this section.

[[Page 281]]

    (b) Who may correct. Only official personnel or their authorized 
agents may make corrections, erasures, additions, or other changes to 
official certificates.
    (c) Corrections prior to issuance--(1) Export certificates. No 
corrections, erasures, additions, or other changes can be made to an 
export certificate. If any error is found prior to issuance, a new 
certificate shall be prepared and issued and the incorrect certificate 
marked ``Void.''
    (2) Other than export certificates. No corrections, erasures, 
additions, or other changes shall be made to other than export 
certificates which involve identification, grade, gross, tare, or net 
weight. If errors are found, a new certificate shall be prepared and 
issued and the incorrect certificate marked ``Void.'' Otherwise, errors 
may be corrected provided that (i) the corrections are neat and legible, 
(ii) each correction is initialed by the individual who corrects the 
certificate, and (iii) the corrections and initials are shown on the 
original and all copies.
    (d) Corrections after issuance--(1) General. If errors are found on 
a certificate at any time up to a maximum of 1 year after issuance, the 
errors shall be corrected by obtaining the incorrect certificate and 
replacing it with a corrected certificate. When the incorrect 
certificate cannot be obtained, a corrected certificate can be issued 
superseding the incorrect one.
    (2) Certification requirements. The same statements and information, 
including permissive statements, that were shown on the incorrect 
certificate, along with the correct statement or information, shall be 
shown on the corrected certificate. According to this section and the 
instructions, corrected certificates shall show (i) the terms 
``Corrected-Original'' and ``Corrected-Copy;'' (ii) a statement 
identifying the superseded certificate and the corrections; (iii) a 
statement indicating the superseded certificate was not surrended if the 
incorrect certificate was not surrendered; and (iv) a new serial number. 
In addition, the incorrect certificate shall be marked ``Void'' when 
submitted.
    (e) Limitations. Corrected certificates cannot be issued for a 
certificate that has been superseded by another certificate or on the 
basis of a subsequent analysis for quality.
    (f) Use of superseded certificate prohibited. As of the date of 
issuance of the corrected certificate, the superseded certificate will 
be void and shall not be used to represent the grain.

(Approved by the Office of Management and Budget under control number 
0580-0011)



Sec. 800.166  Reproducing certificates.

    Official certificates may be photo copied or similarly reproduced.

(Approved by the Office of Management and Budget under control number 
0580-0011)

           Licenses and Authorizations (For Individuals Only)



Sec. 800.170  When a license or authorization or approval is required.

    (a) Requirement. (1) Any individual who performs or represents that 
he or she is licensed or authorized to perform any or all inspection or 
Class X weighing services under the Act must be licensed or authorized 
by the Service to perform each service. (2) Any individual who performs 
or represents that he or she is licensed or authorized, or an approved 
weigher, to perform Class Y weighing services under the Act must be 
licensed or authorized, or approved, by the Service to perform this 
service.
    (b) Excepted activities. A license or authorization, or approval for 
weighing, under the Act and regulations is not required for (1) opening 
or closing a carrier or container of grain, or transporting or filing 
official samples, or similar laboring functions; (2) typing or filing 
official inspection and weighing certificates or other official forms or 
performing similar clerical functions; (3) performing official equipment 
testing functions with respect to official inspection equipment; (4) 
performing inspection, weighing, or scale testing functions that are not 
conducted for the purposes of the Act; or (5) performing scale testing 
functions by a State or municipal agency or by the employees of such 
agencies.
    (c) 30-day waiver. A prospective applicant for a license as a 
sampler, inspection technician, or weighing technician may, for a period 
of time not to exceed

[[Page 282]]

30 calendar days, help perform those official sampling, inspection, or 
Class X or Class Y weighing services for which the applicant desires to 
be licensed, under the direct physical supervision of an individual who 
is licensed to perform the services. The supervising individual shall be 
fully responsible for each function performed by the prospective 
applicant and shall initial any work form prepared by the prospective 
applicant.
    (d) No fee by Service. No fee will be assessed by the Service for 
licensing an individual employed by an agency or contractor.
    (e) Fee by agency. At the request of the Service, an agency may help 
examine an applicant for a warehouse sampler's license for competency 
and may assess a fee in accordance with the provisions of Sec. 800.70. 
The fee shall be paid by the applicant or by the elevator that employs 
the applicant.

(Secs. 9, 18, Pub. L. 94-582, 90 Stat. 2875 and 2884 (7 U.S.C. 79a and 
87e))

[45 FR 15810, Mar. 11, 1980, as amended at 46 FR 30325, June 5, 1981]



Sec. 800.171  Who may be licensed or authorized.

    (a) Prohibitions. No person may be licensed or authorized who has a 
conflict of interest as defined in section 11 of the Act or specified in 
Sec. 800.187.
    (b) Exceptions to prohibitions--(1) Conflict by agency. An employee 
of an agency that has a conflict of interest that is waived by the 
Administrator under section 11(b)(5) of the Act may be licensed: 
Provided, That the employee has no conflict of interest other than the 
agency conflict of interest.
    (2) Warehouse samplers. A qualified employee of an elevator may be 
licensed to perform specified sampling services under the Act in 
accordance with the provisions of Sec. 800.174(a)(2).
    (c) General qualifications--(1) Inspection and weighing. To obtain a 
license to perform inspection or weighing services under the Act, an 
individual must be employed by an agency to perform the services and 
must otherwise be found competent in accordance with this section and 
Sec. 800.173.
    (2) Specified technical services. To obtain a license to perform 
specified sampling, inspection testing, weighing, and similar services 
under the Act, an individual must (i) be employed by an agency to 
perform the services, or (ii) enter into or be employed under a contract 
with the Service to perform the services, and (iii) otherwise be found 
competent in accordance with this section and Sec. 800.173.
    (3) Warehouse sampler. To obtain a warehouse sampler's license, an 
applicant must be employed by an elevator to perform sampling services 
and otherwise be found competent in accordance with this section and 
Sec. 800.173.
    (4) Requirements. To be considered competent, an individual must (i) 
meet the qualifications specified in Sec. 800.173; and (ii) have 
available the equipment and facilities necessary to perform the services 
for which the individual is to be licensed.
    (d) Competency determinations--(1) Agency samplers and technicians. 
The competency of an applicant for a license as a sampler, inspection 
technician, or weighing technician shall be determined by (i) the chief 
inspector or the chief weighmaster, as applicable, of the agency that 
employs the applicant or, in the case of a warehouse sampler, the agency 
that is assigned the area in which the elevator that employs the sampler 
is located, and (ii) the field office supervisor.
    (2) Inspectors, weighers, contract samplers, and technicians. The 
competency of an applicant for a license as an inspector or weigher or 
any license issued under the terms of a contract with the Service shall 
be determined by the Service.
    (3) Examinations. A determination of competency of an applicant for 
a license shall include an evaluation of the results of examinations or 
reexaminations under Sec. 800.173.

[45 FR 15810, Mar. 11, 1980, as amended at 49 FR 36072, Sept. 14, 1984]



Sec. 800.172  Applications for licenses.

    (a) General. An application for a license, the renewal of a license, 
or the return of a suspended license shall be made to the Service on 
forms furnished by the Service. Each application shall (1) be in 
English, (2) be typewritten or

[[Page 283]]

legibly written in ink, (3) show all information prescribed by the 
application form, and (4) be signed by the applicant.
    (b) Additional information. An applicant shall furnish any 
additional information considered necessary by the Service for 
consideration of an application.
    (c) Withdrawal. An application for a license may be withdrawn by an 
applicant at any time.
    (d) Review of applications--(1) General procedure. Each application 
shall be reviewed to determine whether the applicant and the application 
comply with the Act and the regulations.
    (2) Application and applicant in compliance. If it is determined 
that the applicant and the application comply with the Act and the 
regulations, the requested license shall be granted.
    (3) Application not in compliance. If an application does not comply 
with this section and the noncompliance prevents a satisfactory review 
by the Service, the applicant shall be provided an opportunity to submit 
any needed information. If the needed information is not submitted by 
the applicant within a reasonable time, the application may be 
dismissed.
    (4) Applicant not in compliance. If it is determined that an 
applicant does not comply with the provisions of the Act and Sec. Sec. 
800.171, 800.173, and 800.187 at the time the application is submitted, 
the applicant shall be provided an opportunity to comply. If the 
applicant cannot comply within a reasonable period of time, the 
application shall be dismissed.
    (e) Procedure for dismissal. If a dismissal involves an application 
for a renewal of a license or for the return of a suspended license, the 
dismissal shall be performed in accordance with the provisions of Sec. 
800.179. All other dismissals shall be performed by promptly notifying 
the applicant and the employer of the applicant of the reasons for the 
dismissal.

(Approved by the Office of Management and Budget under control number 
0580-0012)

[45 FR 15810, Mar. 11, 1980, as amended at 48 FR 44453, Sept. 29, 1983; 
54 FR 5924, Feb. 7, 1989]



Sec. 800.173  Examinations and reexaminations.

    (a) General. Applicants for a license and individuals who are 
licensed to perform any or all official inspection or Class X or Class Y 
weighing services shall, at the discretion of the Service, submit to 
examinations or reexaminations to determine their competency to perform 
the official inspection or weighing functions for which they desire to 
be, or are, licensed.
    (b) Time and place of examinations and reexaminations. Examinations 
or reexaminations under this section shall be conducted by official 
personnel designated by the Service and shall be given at a reasonable 
time and place in accordance with the instructions.
    (c) Scope of examinations and reexaminations. Examinations or 
reexaminations may include oral or written tests on the applicable 
provisions of the Act, the regulations, the Official U.S. Standards for 
Grain, the procedures for the inspection and weighing of grain under the 
Act, the instructions, on-site performance evaluations, and vision or 
olfactory examinations.
    (d) Competency standards--(1) Inspection. An individual may be found 
to be incompetent to perform official inspection services if the 
individual (i) has a color-vision deficiency; (ii) cannot meet the 
physical requirements necessary to perform the functions; (iii) cannot 
readily distinguish between the different kinds and classes of grain, or 
the different conditions in grain, including heating, musty, sour, 
insect infestation, and smut; (iv) cannot demonstrate a technical 
ability to operate grain sampling, testing, and grading equipment; (v) 
does not have a working knowledge of applicable provisions of the Act, 
the regulations, the Official U.S. Standards for Grain, and the 
instructions; (vi) cannot determine work-related mathematical 
computations; or (vii) cannot prepare legible records in English.
    (2) Weighing. An individual may be found to be incompetent to 
perform Class X or Class Y weighing services under the Act if the 
individual (i) does not meet the requirements of paragraphs (d)(1)(ii), 
(v), (vi), and (vii) of this section or (ii) cannot demonstrate

[[Page 284]]

a technical ability to operate grain weighing equipment.



Sec. 800.174  Issuance and possession of licenses and authorizations.

    (a) Scope of licenses and authorizations. Subject to the provisions 
of Sec. 800.171, eligible individuals may be licensed or authorized by 
the Service to perform one or more services specified in this paragraph.
    (1) Official samplers. Individuals employed by an agency or the 
Service or employed under the terms of a contract with the Service may 
be licensed or authorized, as applicable, to perform or supervise the 
performance of stowage examinations, grain sampling, and related 
technical services and to issue official certificates for the services 
performed by them.
    (2) Licensed warehouse samplers. Elevator or warehouse employees may 
be licensed to sample grain and perform stowage examinations. No 
elevator employee shall be licensed to (i) sample export grain for 
inspection under the Act, (ii) test or grade grain, or (iii) certify the 
results of any inspection service under the Act.
    (3) Official inspection technicians. Individuals employed by an 
agency or the Service or employed under the terms of a contract with the 
Service may be licensed or authorized to perform or supervise the 
performance of stowage examinations, grain sampling, or all or specified 
noninterpretive laboratory-testing services and to issue official 
certificates for the services performed by them.
    (4) Official inspectors. Individuals employed by an agency or the 
Service may be licensed or authorized to perform and supervise the 
performance of stowage examinations, sampling, laboratory-testing, 
grading, and related services and to issue official certificates for the 
services performed by them.
    (5) Official weighing technicians. Individuals who are employed by 
an agency or the Service to observe the loading, unloading, and handling 
of grain that has been or is to be weighed under the Act may be licensed 
or authorized to perform and supervise the performance of grain handling 
and stowage examination services and to issue official certificates for 
the services performed by them.
    (6) Official weighers. Individuals employed by an agency or the 
Service may be licensed or authorized to perform and supervise the 
performance of grain handling, stowage examination, official weighing 
(Class X), and supervision of weighing (Class Y), and related services 
and to issue official certificates for the services performed by them.
    (7) Authorized scale tester. Individuals employed by the Service may 
be authorized to test and supervise the testing of scales used for Class 
X and Class Y weighing services and to approve and certify scales based 
on the results of these tests.
    (b) Condition for issuance--(1) Compliance with the Act. Each 
license is issued on the condition that the licensee will, during the 
term of the license, comply with the Act, the regulations, and the 
instructions.
    (2) Possession of license. Each license shall be the property of the 
Service, but each licensee shall have the right to possess the license 
subject to the provisions of Sec. Sec. 800.173, 800.186, and 800.187.
    (c) Duplicate license. Upon satisfactory proof of the loss or 
destruction of a license, a duplicate will be issued by the Service.
    (d) Retention of licenses. Each license shall be retained by the 
holder of the license in a manner that the license can be examined upon 
request by service personnel.



Sec. 800.175  Termination of licenses.

    (a) Term of license. Each license shall terminate in accordance with 
the termination date shown on the license and as specified in paragraph 
(b) of this section. The termination date for a license shall be no less 
than 3 years or more than 4 years after the issuance date for the 
initial license; thereafter, every 3 years. Upon request of a licensee 
and for good cause shown, the termination date may be advanced or 
delayed by the Administrator for a period not to exceed 60 days.
    (b) Termination schedule for licenses. Subject to the provisions of 
paragraph

[[Page 285]]

(a) of this section, licenses shall terminate on the last day of the 
month shown in the following schedule:

------------------------------------------------------------------------
         Last names beginning with                Termination date
------------------------------------------------------------------------
A.........................................  January.
B.........................................  February.
C, D......................................  March.
E, F, G...................................  April.
H, I, J...................................  May.
K, L......................................  June.
M.........................................  July.
N, O, P, Q................................  August.
S.........................................  September.
R, T, U, V................................  October.
W.........................................  November.
X, Y, Z...................................  December.
------------------------------------------------------------------------

    (c) Termination notices. The Service shall issue notice of 
termination to licensees and to their employers at least 60 days before 
the termination date. The notice shall (1) provide detailed instructions 
for requesting renewal of licenses; (2) state whether a reexamination 
will be required; and (3) if a reexamination will be required, show the 
nature and scope of the reexamination. Failure to receive a notice from 
the Service shall not exempt a licensee from the responsibility of 
having the license renewed on or before the termination date.
    (d) Renewal of licenses. Licenses that are renewed shall show the 
permanent license number, the date of renewal, and the word ``Renewed.''
    (e) Termination of suspended licenses. Any suspension of a license, 
including voluntary suspension or suspension by change in employment, 
shall not affect the termination date of the license. If a licensee 
applies for renewal of the license prior to the termination date, the 
license will not terminate during the period of suspension.
    (f) Surrender of license. Each license that is terminated, 
suspended, or canceled under the provisions of Sec. Sec. 800.175 
through 800.178 or is suspended, revoked, or not renewed for cause under 
the provisions of Sec. 800.179 shall be promptly surrendered to the 
field office.
    (g) Marking terminated, canceled, or revoked licenses. Each 
terminated, canceled, or revoked license surrendered to the Service 
shall be marked ``Canceled.''



Sec. 800.176  Voluntary cancellation or suspension of licenses.

    Upon request by a licensee, the Service may cancel a license or 
suspend a license for a period of time not to exceed 1 year. A license 
that has been voluntarily suspended shall be returned by the Service 
upon request by the licensee within 1 year, subject to the provisions of 
Sec. 800.172; a license that has been cancelled shall be considered 
void and shall not be subject to return or renewal.



Sec. 800.177  Automatic suspension of license by change in employment.

    A license issued to an individual who is employed by an agency shall 
be automatically suspended when the individual ceases to be employed by 
the agency. If the individual is reemployed by the agency or employed by 
another agency within 1 year of the suspension date and the license has 
not terminated in the interim, upon request of the licensee, the license 
will be reinstated subject to the provisions of Sec. Sec. 800.172 and 
800.173.



Sec. 800.178  Summary revocation of licenses.

    Licenses may be summarily revoked upon a finding that the licensee 
has been convicted of any offense either prohibited by section 13 of the 
Act or prohibited by Title 18 of the United States Code, with respect to 
the performance of services under the Act.



Sec. 800.179  Refusal of renewal, suspension, or revocation of 
licenses for cause.

    (a) General. A license may be suspended or revoked or may be refused 
renewal or return (if suspended) for causes prescribed in section 9 of 
the Act.
    (b) Procedure for summary action. Under section 9 of the Act, any 
license may, without first affording the licensee (hereafter in this 
section the ``respondent'') an opportunity for a hearing, be summarily 
suspended pending final determination, whenever the action is considered 
to be in the best interest of the official inspection system. Such 
action shall be effective upon receipt of notice from the Service by the 
respondent. Within 30 calendar

[[Page 286]]

days after issuing a notice of summary action, the Service shall afford 
the respondent an opportunity for a hearing as provided under paragraph 
(c) of this section. Pending final determination, the Service may 
terminate the action if alternative employment arrangements satisfactory 
to the Service can be and are made for the respondent by the employer of 
the respondent.
    (c) Procedure for other than summary action. Except as provided for 
in paragraph (a) of this section, before the Service refuses to renew, 
or suspends or revokes a license, or refuses to return a suspended 
license, the respondent shall be (1) notified of the proposed action and 
the reasons therefor, and (2) afforded (i) an opportunity to express 
his/her views on the proposed action in an informal manner, or (ii) at 
the request of the respondent, a hearing in accordance with the 
provisions of the Rules of Practice Governing Formal Adjudicatory 
Proceedings Instituted by the Secretary under Various Statutes (7 CFR, 
part 1, subpart H).



Sec. 800.180  Summary cancellation of licenses.

    A license may be summarily canceled when (a) the license has been 
under voluntary or automatic suspension for a period of 1 year and there 
has been no request for return of the license or a request for return of 
the license has been dismissed in accordance with Sec. 800.172; or (b) 
the licensee has died or fails to surrender the license in accordance 
with Sec. 800.175(f).

         Duties and Conduct of Licensed and Authorized Personnel



Sec. 800.185  Duties of official personnel and warehouse samplers.

    (a) General. Official personnel and warehouse samplers shall, when 
performing official services or duties under the Act, comply with the 
Act, the regulations, and the instructions.
    (b) Inspection and weighing services. Official personnel shall 
perform requested official inspection and Class X and Class Y weighing 
services (1) without discrimination, (2) as soon as practicable, and (3) 
in accordance with methods and procedures prescribed in the 
instructions.
    (c) Sealing carriers or containers. Upon request, or in accordance 
with the instructions, official personnel shall (1) when feasible, affix 
security seals to doors, hatch covers, and similar openings on carriers 
or containers that contain grain that has been officially inspected or 
Class X or Class Y weighed under the Act and (2) show seal records on 
certificates and other official forms in accordance with the provisions 
of Sec. 800.161.
    (d) Scope of operations. Official personnel and warehouse samplers 
shall operate only within the scope of their license or authorization 
and except as otherwise provided in Sec. 800.117, operate only within 
the area of responsibility assigned to the official agency, field 
office, or contractor which employs them. Official personnel and 
warehouse samplers may perform official inspection or weighing services 
in a different area of responsibility with the specific consent of the 
Service.
    (e) Working materials. Official personnel and warehouse samplers 
shall be responsible for maintaining a working knowledge of the 
applicable provisions of the Act, the regulations, the Official U.S. 
Standards for Grain, the instructions, and all amendments and revisions 
thereto.
    (f) Observation of services. Official personnel and warehouse 
samplers shall permit any person (or the person's agent) who has a 
financial interest in grain that is being inspected or weighed under the 
Act, or in equipment that is being tested under the Act, to observe the 
performance of any or all official inspection, or Class X or Class Y 
weighing. Appropriate areas in the elevator may be specified by the 
Service in conjunction with the elevator management for observing each 
service. The areas shall be safe, shall afford a clear and unobstructed 
view of the performance of the services, but shall not permit a close 
over-the-shoulder type of observation by the interested person or the 
person's agent.
    (g) Reporting violations. Official personnel and warehouse samplers 
shall in accordance with the instructions promptly report (1) 
information which shows or tends to show a violation of

[[Page 287]]

any provision of the Act, the regulations, or the instructions, and (2) 
information on any instructions which have been issued to them by any 
official personnel or other persons which are contrary to the Act, the 
regulations, or the instructions.
    (h) Related duties. Official personnel and warehouse samplers shall, 
when practicable, assist in training other employees who desire to 
become licensed.
    (i) Instructions by Service. Official personnel and warehouse 
samplers shall carry out all written instructions or oral directives 
issued to them by the Service and, upon request, inform the Service 
regarding inspection, weighing, or equipment testing services performed 
by them. Oral directives from the Service not found in written 
instructions shall be confirmed in writing, upon request.

(Approved by the Office of Management and Budget under control number 
0580-0013)

[45 FR 15810, Mar. 11, 1980; 45 FR 55119, Aug. 18, 1980, as amended at 
48 FR 44453 and 44454, Sept. 29, 1983; 54 FR 5924, Feb. 7, 1989; 68 
19139, Apr. 18, 2003]



Sec. 800.186  Standards of conduct.

    (a) General. Official personnel and warehouse samplers must maintain 
high standards of honesty, integrity, and impartiality to assure proper 
performance of their duties and responsibilities and to maintain public 
confidence in the services provided by them.
    (b) Prohibited conduct; official personnel and warehouse samplers. 
No official personnel or warehouse sampler shall:
    (1) Perform any official inspection, Class X or Class Y weighing, or 
equipment testing service unless licensed or authorized to do so;
    (2) Engage in criminal, dishonest, or notoriously disgraceful 
conduct, or other conduct prejudicial to the Department or the Service;
    (3) Report for duty in an intoxicated or drugged condition, or 
consume intoxicating beverages or incapacitating drugs while on duty;
    (4) Smoke in prohibited areas in elevators or perform official 
services in an unsafe manner that could endanger official personnel 
working on or about the premises;
    (5) Make unwarranted criticisms or accusations against other 
official personnel, warehouse samplers, or employees of the Department; 
and
    (6) Refuse to testify or respond to questions in connection with 
official inquiries or investigations.
    (7) Coerce or attempt to coerce any person into providing any 
special or undue benefit to official personnel, approved weighers, or 
warehouse samplers.
    (c) Prohibited conduct; official personnel. In addition to the 
conduct prohibited by paragraph (b) of this section, no official 
personnel shall:
    (1) Solicit contributions from other official personnel or warehouse 
samplers for an employee of the Service, or make such a contribution. 
Nothing in this paragraph shall preclude the occasional voluntary giving 
or acceptance of gifts of a nominal value on special occasions;
    (2) Take any action that might (i) create the appearance of a loss 
of impartiality or (ii) adversely affect the confidence of the public in 
the integrity of the inspection, weighing, or equipment testing services 
performed under the Act;
    (3) Except as provided in Sec. 800.76(a), engage in any outside 
(unofficial) work or activity that:
    (i) may impair their efficiency in performing official functions; or
    (ii) consists in whole or in part of unofficial acts of sampling, 
stowage examination, inspection testing, equipment testing, inspection, 
or weighing services similar to the official services for which the 
employing agency is designated; or
    (iii) may result in the acquisition of property interests that could 
create a conflict of interest as defined in section 11 of the Act; or
    (iv) may tend to bring criticism on or otherwise embarrass the 
Department or the Service;
    (4) Issue to other official personnel, warehouse samplers, or 
approved weighers any instructions or directives inconsistent with the 
Act, the regulations, the Official U.S. Standards for Grain, or the 
instructions;

[[Page 288]]

    (5) Organize or help establish a general or specialized farm 
organization, or act as an officer or business agency in, recruit 
members for, or accept office space or contributions from such an 
organization;
    (6) Advocate that any general or specialized farm organization 
better represents the interest of farmers than any other organization or 
individual, or recommend that the responsibilities of any government 
agency be carried out through a general or specialized farm 
organization. Nothing in paragraph (c)(5) of this section shall prevent 
official personnel from holding membership in a general or specialized 
farm organization or prohibit official personnel from participating in 
the operation of local groups or organizations that conduct government-
authorized programs.

[45 FR 15810, Mar. 11, 1980, as amended at 48 FR 44454, Sept. 29, 1983; 
60 FR 65235, Dec. 19, 1995; 63 FR 45677, Aug. 27, 1998]



Sec. 800.187  Conflicts of interest

    (a) General. Warehouse samplers are exempt from the conflict-of-
interest provisions of this section.
    (b) What constitutes a gratuity. For the purposes of these 
regulations, the term ``gratuity'' shall include any favor, 
entertainment, gift, tip, loan, payment for unauthorized or fictitious 
work, unusual discount, or anything of monetary value. The term shall 
not include (1) the occasional exchange of a cup of coffee or similar 
social courtesies of nominal value in a business or work relationship if 
the exchange is wholly free of any embarrassing or improper 
implications; (2) the acceptance of unsolicited advertising material 
such as pencils, pens, and note pads of nominal value if the material is 
wholly free of any embarrassing or improper implications; and (3) the 
exchange of the usual courtesies in an obvious family or personal 
relationship (including those between official personnel and their 
parents, spouses, children, or close personal friends) when the 
circumstances make it clear that the exchange is the result of the 
family or personal relationship, rather than a business or work 
relationship.
    (c) Conflicts. In addition to the conflicts of interest prohibited 
by section 11 of the Act, the activities specified in this paragraph 
shall also be considered to be a conflict of interest. Accordingly, no 
official personnel shall, during the term of their license or 
authorization (including any period of suspension):
    (1) Accept any gratuity.
    (2) Accept any fee or charge or other thing of monetary value, in 
addition to the published fee or charge, for the performance of official 
inspection or weighing services under circumstances in which the 
acceptance could result, or create the appearance of resulting, in (i) 
the use of their office or position for undue private gain, (ii) an 
undertaking to give undue preferential treatment to any group or any 
person, or (iii) any other loss of independence or impartiality in the 
performance of official inspection or Class X or Class Y weighing 
services.
    (3) Knowingly perform, or participate in performing, an inspection 
or weighing service on grain in which they have a direct or indirect 
financial interest.
    (4) Engage in the business by buying, selling, transporting, 
cleaning, elevating, storing, binning, mixing, blending, drying, 
treating, fumigating, or other preparation of grain (other than a grower 
of grain, or in the disposition of inspection samples); or in the 
business of cleaning, treating, or fitting carriers or containers for 
transporting or storing grain; the merchandising for nonfarm use of 
equipment for cleaning, drying, treating, fumigating, or otherwise 
processing, handling, or storing grain; or the merchandising of grain 
inspection or weighing equipment (other than buying or selling by 
official personnel of the equipment for use in the performance of their 
official services).
    (5) Seek or hold any appointive or elective office in a grain 
industry organization or association. This provision does not apply to 
organizations of official inspectors or official weighers.
    (6) Participate in any transaction involving the purchase or sale of 
corporate stocks or bonds, grain or grain-related commodities, or other 
property for speculative or income purposes if the transaction could 
reasonably be construed to interfere with the proper and impartial 
performance of official inspection for Class X or Class Y

[[Page 289]]

weighing services. Official personnel are not prohibited from (i) 
producing grain as a grower and selling the grain; (ii) making bona fide 
investments in governmental obligations, banking institutions, savings 
and loan associations, and other tangibles and intangibles that are 
clearly not involved in the production, transportation, storage, 
marketing, or processing of grain; or (iii) borrowing money from banks 
or other financial institutions on customary terms.
    (d) Reports of interests. Official personnel shall report 
information regarding their employment or other business or financial 
interests which may be required by the Service.
    (e) Avoiding conflicts of interest. Official personnel shall not 
acquire any financial interest or engage in any activity that would 
result in a violation of this Sec. 800.187, or Sec. 800.186, or 
section 11 of the Act and shall not permit their spouses, minor 
children, or blood relatives who reside in their immediate households to 
acquire any such interest or engage in any such activity. For the 
purpose of this section, the interest of a spouse, minor child, or blood 
relative who is a resident of the immediate household of official 
personnel shall be considered to be an interest of the official 
personnel.
    (f) Disposing of a conflict of interest--(1) Remedial action. Upon 
being informed that a conflict of interest exists and that remedial 
action is required, an applicant for a license and official personnel 
shall take immediate action to end the conflict of interest and inform 
the Service of the action taken.
    (2) Hardship cases. Applicants and official personnel who believe 
that remedial action will cause undue personal hardship may request an 
exception by forwarding to the Service a written statement setting forth 
the facts, circumstances, and reasons for requesting an exception.
    (3) Failure to terminate. If a final determination is made by the 
Service that a conflict of interest does exist and should not be 
excepted, failure to terminate the conflict of interest shall subject: 
(i) An applicant for a license to a dismissal of the application; (ii) 
An employee of the Service to disciplinary action; and (iii) A licensee 
to license revocation.

(Approved by the Office of Management and Budget under control number 
0580-0012)

[45 FR 15810, Mar. 11, 1980, as amended at 48 FR 44453 and 44454, Sept. 
29, 1983; 54 FR 5924, Feb. 7, 1989]



Sec. 800.188  Crop year, variety, and origin statements.

    No official personnel shall certify or otherwise state in writing 
(a) the year of production of grain, including use of terms such as 
``new crop'' or ``old crop''; (b) the place or geographical area where 
the grain was grown; or (c) the variety of the grain.



Sec. 800.189  Corrective actions for violations.

    (a) Criminal prosecution. Official personnel and warehouse samplers 
who commit an offense prohibited by section 13 of the Act are subject to 
criminal prosecution in accordance with section 14 of the Act.
    (b) Administrative action--(1) Other than Service employees. In 
addition to possible criminal prosecution, licensees and warehouse 
samplers are subject to administrative action in accordance with 
sections 9 and 14 of the Act.
    (2) Service employees. In addition to possible criminal prosecution, 
employees of the Service are subject to disciplinary action by the 
Service.

   Delegations, Designations, Approvals, Contracts, and Conflicts of 
                                Interest

    Authority: Sections 800.195 through 800.199 were issued under secs. 
8, 9, 10, 13, and 18, Pub. L. 94-582, 90 Stat. 2870, 2875, 2877, 2880, 
and 2884, 7 U.S.C. 79, 79a, 79b, 84, 87, and 87e.



Sec. 800.195  Delegations.

    (a) General. Eligible States may be delegated authority to perform 
official services (excluding appeal inspection) at export port locations 
within their respective States.
    (b) Restrictions. Only the Service or the delegated State may 
perform official inspection, Class X, and Class Y weighing services at 
an export port location within the State. If official inspection 
services, at export port locations within the State, are performed

[[Page 290]]

by the Service, only the Service may perform Class X and Class Y 
weighing services at the locations. If official inspection services are 
performed by a delegated State, either the State or the Service may 
perform Class X and Class Y weighing services at the export port 
locations within the State.
    (c) Who can apply. States which: (1) Were performing official 
inspection at an export port location under the Act on July 1, 1976, or; 
(2)(i) performed official inspection at an export port location at any 
time prior to July 1, 1976; (ii) were designated under section 7(f) of 
the Act on December 22, 1981, to perform official inspections; and (iii) 
operate in a State from which total annual exports of grain do not 
exceed, as determined by the Administrator, 5 per centum of the total 
amount of grain exported from the United States annually may apply to 
the Service for a delegation.
    (d) When and how to apply. A request for authority to operate as a 
delegated State should be filed with the Service not less than 90 
calendar days before the State proposes to perform the official service. 
A request for authority to operate as a delegated State shall show: (1) 
The export port location(s) where the State proposes to perform official 
inspection, Class X, and Class Y weighing services; (2) the estimated 
annual volume of inspection and weighing services for each location; and 
(3) the schedule of fees the State proposes to assess. A request for a 
revision to a delegation shall (i) be filed with the Service not less 
than 90 calendar days before the desired effective date, and (ii) 
specify the change desired.
    (e) Review of eligibility and criteria for delegation. Each 
applicant for authority to operate as a delegated State shall be 
reviewed to determine whether the applicant meets the eligibility 
conditions contained in paragraph (c) of this section and the criteria 
contained in section 7(f)(1)(A) of the Act. The requested delegation may 
be granted if the Service determines that the applicant meets the 
eligibility conditions and criteria. If an application is dismissed, the 
Service shall notify the applicant promptly, in writing, of the 
reason(s) for the dismissal.
    (f) Responsibilities--(1) Providing official services. Each 
delegated State shall be responsible for providing each official service 
authorized by the delegation at all export elevators at export port 
locations in the State. The State shall perform each official service 
according to the Act, regulations, and instructions.
    (2) Staffing, licensing, and training. Delegated States shall employ 
official personnel on the basis of job qualifications rather than 
political affiliations. The State shall employ sufficient personnel to 
provide the services normally requested in an accurate and timely 
manner. The State shall only use personnel licensed by the Service for 
the performance of official services and shall train and assist its 
personnel in acquiring and maintaining the necessary skills. The State 
shall keep the Service informed of the employment status of each of its 
licensees and any substantial change in a licensee's duties.
    (3) Rotation of personnel. Where feasible, each delegated State 
shall rotate licensees among elevators and other facilities as is 
necessary to preserve the integrity of the official inspection and 
weighting systems.
    (4) Supervision. The State and its officials shall be responsible 
for the actions of the official personnel employed by the State, for 
direct supervision of the daily activities of such personnel, and for 
the conduct of official services and related activities in the State. 
The State shall supervise official activities according to the Act, 
regulations, and instructions and shall take action necessary to ensure 
that its employees are not performing prohibited functions and are not 
involved in any action prohibited by the Act, regulations, or 
instructions. Each State shall report to the Service information which 
shows or may show a violation of any provision of the Act, regulations, 
or instructions and information on any instructions which have been 
issued to State personnel by Service personnel or by any other person 
which are contrary to or inconsistent with the Act, regulations, or 
instructions.
    (5) Conflict of interest. (i) General. The delegated State and any 
commissioner, director, employee, or other related

[[Page 291]]

person or entity shall not have a conflict of interest, as defined in 
section 11 of the Act and Sec. 800.199 of the regulations. A conflict 
of interest may be waived pursuant to Sec. 800.199(d).
    (ii) Unofficial activities. The delegated State or personnel 
employed by the State shall not perform any unofficial service that is 
the same as any of the official services covered by the delegation.
    (6) Fees. The delegated State shall charge fees according to Sec. 
800.70.
    (7) Facilities and equipment. (i) General. The laboratory and office 
facilities of each delegated State shall be: Located; equipped; and 
large enough so that requested services are provided in an orderly and 
timely manner.
    (ii) Equipment testing. Each delegated State shall test the 
equipment that it uses for official services according to the 
instructions.
    (8) Security. Each delegated State shall provide sufficient security 
to assure that official samples, records, equipment, and forms are 
reasonably secure from theft, alteration, or misuse.
    (9) Certificate control system. Each delegated State shall establish 
a certificate control system for all official certificates it receives, 
issues, voids, or otherwise renders useless. The system shall provide 
for: (i) Recording the numbers of the official certificates printed or 
received; (ii) protecting unused certificates from fraudulent or 
unauthorized use; and (iii) maintaining a file copy of each certificate 
issued, voided, or otherwise rendered useless in a manner that would 
permit retrieval.
    (10) Records. Each delegated State shall maintain the records 
specified in Sec. Sec. 800.145 through 800.159.
    (g) Termination--(1) Automatic termination. Failure to pay the user 
fees prescribed by the Service for supervisory costs related to official 
inspection and weighing services within 30 days after due shall result 
in the automatic termination of the delegation. The delegation shall be 
reinstated if fees currently due, plus interest and any further expenses 
incurred by the Service because of the termination, are paid within 60 
days after the termination.
    (2) Voluntary cancellation. A State may request that its delegation 
be canceled by giving 90 days written notice to the Service.
    (3) Revocation. (i) Without hearing. The Administrator may revoke 
the delegation of a State without first affording the State opportunity 
for a hearing. Unless otherwise provided, the revocation shall be 
effective when the State receives a notice from the Service regarding 
the revocation and the reason(s) therefor.
    (ii) Informal conference. At the discretion of the Administrator, 
before the delegation of a State is revoked under paragraph (g)(3)(i) of 
this section, the Service may (A) notify the State of the proposed 
action and the reason(s) therefor, and (B) afford the State an 
opportunity to express its views in an informal conference before the 
Administrator.
    (h) Provision of services following termination. If a State's 
delegation is terminated, official services at the export port locations 
in the State shall be provided by the Service.

(The information collection requirements contained in paragraph (d) were 
approved by the Office of Management and Budget under control number 
0580-0012; paragraphs (f)(2) and (f)(4) were approved under control 
number 0580-0011)

[49 FR 30915, Aug. 2, 1984, as amended at 50 FR 18988, May 6, 1985; 54 
FR 5924, Feb. 7, 1989; 60 FR 65236, Dec. 19, 1995]



Sec. 800.196  Designations.

    (a) General. Eligible persons or governmental agencies may be 
designated to perform official services (excluding appeal inspection) 
within a specified area (other than export port locations).
    (b) Restrictions--(1) General. If official inspection services are 
performed in an area by a designated agency, Class X and Class Y 
weighing services in that area may be performed only by the designated 
agency if the agency applies for designation to provide weighing 
services and is found qualified by the Service. If the agency designated 
to provide official inspection services is found not qualified or does 
not apply, the Class X and Class Y weighing services may be performed by 
another available agency that is found qualified and is designated by 
the Service, or the official services may be performed by the Service.

[[Page 292]]

    (2) Interim authority. (i) By agency. A designated agency may 
perform official services outside its assigned area on an interim basis 
when authorized by the Service.
    (ii) By Service. Official inspection services and/or Class X and 
Class Y weighing services may be performed by the Service in an area 
(other than export port locations) on an interim basis in accordance 
with sections 7(h) and 7A(c) of the Act.
    (c) Who can apply. Any State or local governmental agency or any 
person may apply, subject to sections 7 and 7A of the Act, to the 
Service for designation as an official agency to perform official 
inspection services (excluding appeal inspection) and/or Class X and 
Class Y weighing services in a given area (other than export port 
locations) in the United States.
    (d) When and how to apply. An application for designation should be 
filed with the Service, according to the provisions of the Federal 
Register notice which requests applicants for designation to perform 
official services in existing or new geographic areas. The application 
for designation: (1) Shall be submitted on a form furnished by the 
Service; (2) shall be typewritten or legibly written in English; (3) 
shall show or be accompanied by documents which show all information 
requested on the form, or otherwise required by the Service; and (4) 
shall be signed by the applicant or its chief operating officer.
    (e) Review of conditions and criteria for designation--(1) 
Application. Each application for a designation shall be reviewed to 
determine whether it complies with paragraph (d) of this section. If an 
application is not in compliance, the applicant shall be provided an 
opportunity to submit the needed information. If the needed information 
is not submitted within a reasonable time, as determined by the Service, 
the application may be dismissed. When an application is dismissed, the 
Service shall notify the applicant, in writing, of the reason(s) for the 
dismissal.
    (2) Applicant. Each applicant for authority to operate as as 
designated agency shall be reviewed to determine whether the applicant 
meets the conditions and criteria contained in sections 7(f)(1)(A) and 
(B) of the Act, Sec. 800.199 of the regulations, and paragraph (g) of 
this section. The requested designation may be granted if the Service 
determines that: (i) The requested action is consistent with the need 
for official services; (ii) the applicant meets the conditions and 
criteria specified in the Act and regulations; and (iii) the applicant 
is better able than any other applicant to provide official services.
    (f) Area of responsibility--(1) General. Each agency shall be 
assigned an area of responsibility by the Service. Each area shall be 
identified by geographical boundaries and, in the case of a State or 
local government, shall not exceed the jurisdictional boundaries of the 
State or the local government, unless otherwise approved by the Service. 
The area of responsibility may not include any export elevators at 
export port locations or any portion of an area of responsibility 
assigned to another agency that is performing the same functions, except 
as otherwise provided in Sec. 800.117. A designated agency may perform 
official services at locations outside its assigned area of 
responsibility only after obtaining approval from the Service, or in 
accordance with provisions set forth in Sec. 800.117.
    (2) Amending. A request for an amendment to an assigned area of 
responsibility shall (i) be submitted to the Service in writing; (ii) 
specify the change desired; (iii) be signed by the applicant or its 
chief operating officer; and (iv) be accompanied by the fee prescribed 
by the Service. The assigned area may be amended if the Service 
determines that the amendment is consistent with the provisions and 
objectives of the Act, regulations, and instructions. Upon a finding of 
need, the Service may initiate action to change an assigned area of 
responsibility.
    (3) Specified service points. An agency may change its specified 
service points by notifying the Service in advance. Interested persons 
may obtain a list of specified service points within an agency's area of 
responsibility by contacting the agency. The list shall include all 
specified service points and shall identify each specified service point 
which operates on an intermittent or seasonal basis.
    (g) Responsibilities--(1) Providing official services. Insofar as 
practicable,

[[Page 293]]

each agency shall be responsible for providing at all locations in its 
assigned area each service authorized by the designation. An agency may, 
subject to Service approval, make arrangements with a neighboring agency 
to provide official services requested infrequently. The agency shall 
perform all official services according to the Act, regulations, and 
instructions in effect at the time of designation or which may be 
promulgated subsequently.
    (2) Fees. The agency shall charge fees according to Sec. 800.70.
    (3) Staffing, licensing, and training. (i) General. The agency shall 
employ sufficient personnel to provide the official services normally 
requested in an accurate and timely manner. Each agency shall only use 
personnel licensed by the Service for the performance of official 
services and shall train and assist its personnel in acquiring and 
maintaining the necessary skills. Each agency shall keep the Service 
informed of the employment status of each of its licensees and any 
substantial change in a licensee's duties.
    (ii) State agencies. State agencies shall employ official personnel 
on the basis of job qualifications rather than political affiliations.
    (4) Rotation of personnel. Where feasible, each agency shall rotate 
licensees among elevators and other facilities as is necessary to 
preserve the integrity of the official inspection and weighing systems.
    (5) Supervision. The agency and its officials shall be responsible 
for the actions of the official personnel employed by the agency, for 
direct supervision of the daily activities of such personnel, and for 
the conduct of official services and related activities at the agency. 
The agency shall supervise official activities, in accordance with the 
Act, regulations, and instructions, and shall take action necessary to 
ensure that its employees are not performing prohibited functions and 
are not involved in any action prohibited by the Act, regulations, or 
instructions. Each agency shall report to the responsible field office 
information which shows or may show a violation of any provision of the 
Act, regulations, or instructions and information on any instructions 
which have been issued to agency personnel by Service personnel or by 
any other person which are inconsistent with the Act, regulations, or 
instructions.
    (6) Conflict of interest. (i) General. Each agency and any officer, 
director, stockholder, employee, or other related entity shall not have 
a conflict of interest, as defined in Section 11 of the Act and Sec. 
800.199 of the regulations. A conflict of interest may be waived 
pursuant to Sec. 800.199(d). The agency shall advise the Service 
immediately of any proposed change in name, ownership, officers or 
directors, or control of the agency and, if a trust, any change 
affecting the trust agreement.
    (ii) Unofficial activities. Except as provided in Sec. 800.76(a), 
the agency or personnel employed by the agency shall not perform any 
unofficial service that is the same as the official services covered by 
the designation.
    (7) Facilities and equipment. (i) General. The laboratory and office 
facilities of each agency shall be: Located; equipped; and large enough 
so that requested services are provided in an orderly and timely manner.
    (ii) Equipment testing. Each agency shall test the equipment it uses 
for official services according to the instructions.
    (8) Security. Each agency shall provide sufficient security to 
ensure that official samples, records, equipment, and forms are 
reasonably secure from theft, alteration, or misuse.
    (9) Certificate control system. Each agency shall establish a 
certificate control system for all official certificates it receives, 
issues, voids, or otherwise renders useless. The system shall provide 
for (i) recording the numbers of the official certificates printed or 
received; (ii) protecting unused certificates from fraudulent or 
unauthorized use; and (iii) maintaining a file copy of each certificate 
issued, voided, or otherwise rendered useless in a manner that would 
permit retrieval.
    (10) Records. Each agency shall maintain the records specified in 
Sec. Sec. 800.145 through 800.159.
    (h) Termination and renewal--(1) Triennial--(i) Termination. A 
designation shall terminate at a time specified by the Administrator, 
but not later than 3

[[Page 294]]

years after the effective date of the designation. A notice of triennial 
termination shall be issued by the Service to a designated agency at 
least 120 calendar days in advance of the termination date. The notice 
shall provide instructions for requesting renewal of the designation. 
Failure to receive a notice from the Service shall not exempt a 
designated agency from the responsibility of having its designation 
renewed on or before the specified termination date.
    (ii) Renewal. Designations may be renewed, upon application, in 
accordance with criteria and procedures for designation prescribed in 
section 7(f) of the Act and this section of the regulations. The 
Administrator may decline to renew a designation if: (A) The requesting 
agency fails to meet or comply with any of the criteria for designation 
set forth in the Act, regulations, and instructions, of (B) the 
Administrator determines that another qualified applicant is better able 
to provide official services in the assigned area.
    (2) Automatic termination. Failure to pay the user fees prescribed 
by the Service for supervisory costs related to official inspection and 
weighing services within 30 days after due shall result in the automatic 
termination of the designation. The designation shall be reinstated if 
fees currently due, plus interest and any further expenses incurred by 
the Service because of the termination, are paid within 60 days after 
the termination.
    (3) Voluntary cancellation. An agency may request that its 
designation be canceled by giving 90 days written notice to the Service.
    (4) Suspension or revocation of designation. (i) General. A 
designation is subject to suspension or revocation, under section 
7(g)(3) of the Act, by the Service, whenever the Administrator 
determines that: (A) The agency has failed to meet one or more of the 
criteria specified in section 7(f) of the Act or the regulations for the 
performance of official functions, or otherwise has not complied with 
any provision of the Act, regulations, or instructions, or (B) has been 
convicted of any violation of other Federal law involving the handling 
or official inspection of grain.
    (ii) Summary suspension. The Service may, without first affording 
the agency (hereafter referred to in this paragraph as the 
``respondent'') an opportunity for a hearing, suspend a designation or 
refuse to reinstate a designation when the suspension period has 
expired, pending final determination of the proceeding whenever the 
Service has reason to believe there is cause for revocation of the 
designation and considers such action to be in the best interest of the 
official inspection and weighing system. A suspension or refusal to 
reinstate a suspended designation shall be effective upon the 
respondent's receipt of a notice from the Service. Within 30 calendar 
days following the issuance of a notice of such action, the Service 
shall afford the respondent an opportunity for a hearing under paragraph 
(h)(4)(iii) of this section. The Service may terminate the action if it 
finds that alternative managerial, staffing, financial, or operational 
arrangements satisfactory to the Service can be and are made by the 
respondent.
    (iii) Other than summary suspension. Except as provided in paragraph 
(h)(4)(ii) of the section, before the Service revokes or suspends a 
designation, the respondent shall be: (A) Notified by the Service of the 
proposed action and the reason(s) therefor, and (B) afforded an 
opportunity for a hearing in accordance with the Rules of Practice 
Governing Formal Adjudicatory Proceedings Instituted by the Secretary 
Under Various Statutes (7 CFR part 1, subpart H). Before initiating 
formal adjudicatory proceedings, the Service may, at its discretion, 
afford the respondent an opportunity to present its views on the 
proposed action and the reason(s) therefor in an informal conference. 
If, as a result of the informal conference, a consent agreement is 
reached, no formal adjudicatory proceedings shall be initiated.
    (i) Provision of services following suspension or termination. If 
the designation of an agency is suspended, terminated, or the renewal of 
a designation is not granted, the Service shall attempt, upon a finding 
of need, to arrange for a replacement agency. If a qualified replacement 
agency cannot be designated on a timely basis, a qualified agency, if 
available, shall be

[[Page 295]]

designated on an interim basis. If a qualified agency is not available 
on an interim basis, the Service shall provide needed services on an 
interim basis.

(Approved by the Office of Management and Budget under control number 
0580-0013)

[49 FR 30915, Aug. 2, 1984, as amended at 50 FR 18989, May 6, 1985; 54 
FR 5924, Feb. 7, 1989; 60 FR 65236, Dec. 19, 1995; 63 FR 45677, Aug. 27, 
1998; 68 FR 19139, Apr. 18, 2003]



Sec. 800.197  Approval as a scale testing and certification organization.

    (a) Who may apply. Any State, local government, or person may 
request approval to perform scale testing and certification under the 
Act.
    (b) When and how to apply. A request for approval to perform scale 
testing and certification under the Act should be filed with the Service 
not less than 90 calendar days before the requested action's effective 
date. A request for approval to perform scale testing and certification 
shall: (1) Show or be accompanied by documents which show all 
information required by the Service; (2) certify that each employee 
scheduled to perform official scale testing and certification services 
is competent to test weighing equipment and has a working knowledge of 
the regulations and instructions applicable to such services; (3) be 
accompanied by the fee prescribed in Sec. 800.71; and (4) be signed by 
the applicant or its chief operating officer.
    (c) Review of applicant. The review of an applicant for authority to 
perform scale testing and certification shall include an evaluation of 
the applicant's policies and procedures for testing and certifying 
scales for Class X and Class Y weighing.
    (d) Termination--(1) Voluntary. A scale testing and certification 
organization may request cancellation of its approval by notifying the 
Service.
    (2) Suspension or revocation of approval. (i) General. An approval 
is subject to suspension or revocation whenever the Administrator 
determines that the approved organization has violated any provision of 
the Act or regulations, or has been convicted of any violation involving 
the handling, weighing, or inspection of grain under Title 18 of the 
United States Code.
    (ii) Summary suspension. The Service may, without first affording 
the organization an opportunity for a hearing, suspend an approval or 
refuse to reinstate an approval when the suspension period has expired, 
pending final determination of the proceeding whenever the Service has 
reason to believe there is cause for revocation of the approval and 
considers such action to be in the best interest of the official 
weighing system. A suspension or refusal to reinstate a suspended 
approval shall be effective when the organization receives a notice from 
the Service. Within 30 calendar days following the issuance of a notice 
of such action, the Service shall give the organization an opportunity 
for a hearing under paragraph (d)(2)(iii) of this section. The Service 
may terminate its action if it finds that alternative managerial, 
staffing, or operational arrangements satisfactory to the Service can be 
and are made by the organization.
    (iii) Other than summary suspension. Except as provided in paragraph 
(d)(2)(ii) of this section, before the Service revokes or suspends an 
approval, the organization shall be notified by the Service of the 
proposed action and the reason(s) therefor and shall be given an 
opportunity for a hearing. Before the Service initiates a hearing, it 
may, at its discretion, give the organization an opportunity to present 
its views on the proposed action and the reason(s) therefor in an 
informal conference. If a consent agreement is reached during the 
informal conference, no formal adjudicatory proceedings shall be 
initiated.

(The information collection requirements contained in paragraph (b) were 
approved by the Office of Management and Budget under control number 
0580-0012)

[49 FR 30915, Aug. 2, 1984, as amended at 54 FR 5924, Feb. 7, 1989]



Sec. 800.198  Contracts.

    (a) Services contracted and who may apply. The Service may enter 
into a contract with any person, State, or governmental agency to 
perform on an occasional basis: (1) Specified official sampling, 
laboratory testing, or other similar objective technical activities 
involved in the testing of grain for official factors or official 
criteria, and (2)

[[Page 296]]

monitoring activities in foreign ports with respect to export grain that 
has been inspected and weighed under the Act.
    (b) Restrictions--(1) Conflict of interest. A person, State or 
governmental agency with a conflict of interest prohibited by section 11 
of the Act or Sec. 800.199 shall not be eligible to enter into a 
contract with the Service.
    (2) Appeal service. An agency or employees of agencies shall not be 
eligible to enter into a contract with the Service to obtain samples 
for, or to perform other services involved in appeal inspection or Board 
appeal inspection services. However, agencies may forward file samples 
to the Service in accordance with Sec. 800.156(d).
    (3) Monitoring services. Agencies, employees of agencies, 
organizations, employees of organizations, and other persons that 
regularly provide official services to persons who export grain from the 
United States are eligible to enter into a contract with the Service to 
perform monitoring services on export grain in foreign ports only if 
they are under Service employees' direct supervision during monitoring 
activities.
    (c) When and how to apply. An application for a contractual 
arrangement shall: (1) Be typewritten or legibly written in English; (2) 
conform to the invitation to bid or other instructions issued by the 
Service or be filed on a form furnished by the Service; (3) show or be 
accompanied by documents which show any information requested by the 
Service; and (4) be signed by the applicant or its chief operating 
officer. All contracts shall be issued by the Department and shall 
follow Departmental procedures.
    (d) Termination and renewal. A contract with the Service shall 
terminate annually unless othewise provided in the contract. A contract 
may be renewed in accordance with Departmental procedures.
    (e) Cancellation. A contract may, upon request of the governmental 
agency or person that entered into the contract with the Service, be 
canceled by the Department in accordance with the terms of the contract 
or Departmental procedures and regulations.

(The information collection requirements contained in paragraph (c) were 
approved by the Office of Management and Budget under control number 
0580-0012)

[49 FR 30915, Aug. 2, 1984, as amended at 50 FR 18989, May 6, 1985; 54 
FR 5924, Feb. 7, 1989]



Sec. 800.199  Conflict-of-interest provisions.

    (a) Meaning of terms. For the purpose of this section, the following 
terms shall have the meaning given for them below:
    (1) Grain business. The term ``grain business'' shall include (i) 
any entity that is engaged in the commercial transportation, storage, 
merchandising or other commercial handling of grain, which includes: The 
commercial buying, selling, transporting, cleaning, elevating, storing, 
binning, mixing, blending, drying, treating, fumigating, or other 
preparation of grain (other than as a grower of grain or the disposition 
of inspection samples); the cleaning, treating, or fitting of carriers 
or containers for transporting or storing of grain; the merchandising of 
equipment for cleaning, drying, treating, fumigating, or other 
processing, handling, or storing of grain; the merchandising of grain 
inspection and weighing equipment (other than the buying or selling by 
an agency or official personnel of the equipment for their exclusive use 
in the performance of their official inspection or Class X or Class Y 
weighing services); and the commercial use of official inspection and 
Class X or Class Y weighing services and (ii) any board of trade, 
chamber of commerce, grain exchange, or other trade group composed, in 
whole or in part, of one or more such entities.
    (2) Interest. The term ``interest'' when used with respect to an 
individual, shall include the interest of a spouse, minor child, or 
blood relative who resides in the immediate household of the individual.
    (3) Related. The term ``related'' when used in reference to a 
business or governmental entity means an entity that owns or controls 
another entity, or is owned or controlled by another entity, or both 
entities are owned or controlled by another entity.

[[Page 297]]

    (4) Substantial stockholder. The term ``substantial stockholder'' 
means any person holding 2 per centum or more, or 100 shares or more of 
the voting stock of the corporation, whichever is the lesser interest.
    (b) Prohibited conflicts of interest. Unless waived on a case-by-
case basis by the Administrator under section 11(b)(5) or the Act, the 
following conflicts of interest for a business or association are 
prohibited:
    (1) Agency and contractor. No agency or contractor, or any member, 
director, officer, or employee thereof, and no business or governmental 
entity related to any such agency or contractor, shall be employed in or 
otherwise engaged in, or directly or indirectly have any stock or other 
financial interest in, any grain business or otherwise have any conflict 
of interest specified in Sec. 800.187(b).
    (2) Grain business. No grain business or governmental entity 
conducting any such business, or any member, director, officer, or 
employee thereof, and no other business or governmental entity related 
to any such entity, shall operate or be employed by, or directly or 
indirectly have any stock or other financial interest in, any agency or 
contractor.
    (3) Stockholder in any agency or contractor. No substantial 
stockholder in any agency or contractor shall be employed in or 
otherwise engaged in, or be a substantial stockholder in, any grain 
business, or directly or indirectly have any other kind of financial 
interest in any such business or otherwise have any conflict of interest 
specified in Sec. 800.187(b).
    (4) Stockholder of a grain business. No substantial stockholder in 
any grain business shall operate or be employed by or be a substantial 
stockholder in, or directly or indirectly have any other kind of 
financial interest in an incorporated agency or contractor.
    (5) Gratuity. No person described in paragraph (b)(1) of this 
section shall give to or accept from a person described in paragraph 
(b)(2) of this section any gratuity, and no person described in 
paragraph (b)(2) of this section shall give to or accept from a person 
described in paragraph (b)(1) of this section any gratuity. A 
``gratuity'' is defined in Sec. 800.187(a).
    (c) Exempt conflicts of interest--(1) Agency and contractor. An 
agency or contractor may use laboratory or office space or inspection, 
weighing, transportation, or office equipment that is owned or 
controlled, in whole or in part, by a grain business or related entity 
when the use of the space or equipment is approved by the Service for 
the performance of onsite official services under the Act.
    (2) Financial institution. A bona fide financial institution that 
has a financial relationship with one or more grain businesses or 
related entities may have a financial relationship with an agency, 
contractor, or related agency.
    (3) Grain business. A grain business or related entity may furnish 
laboratory or office space or inspection, weighing, transportation, or 
office equipment for use by an agency, contractor, or field office when 
use of the space or equipment is approved by the Service for the 
performance of onsite official inspection or weighing services.
    (d) Disposition of a conflict of interest. Upon being informed that 
a prohibited conflict of interest exists in the ownership, management, 
or operation of an agency and that remedial action is required, the 
agency shall take immediate action to resolve that conflict of interest 
and inform the Service of the action taken. An agency which believes 
that remedial action will cause undue economic hardship or other 
irreparable harm may request a waiver by forwarding to the Service a 
written statement setting forth the facts, the circumstances, and the 
reasons for requesting a waiver.

[49 FR 30915, Aug. 2, 1984]

             Supervision, Monitoring, and Equipment Testing



Sec. 800.215  Activities that shall be supervised.

    (a) General. Supervision of the activities described in this section 
shall be performed in accordance with the instructions.
    (b) Administrative activities. Administrative activities subject to 
supervision

[[Page 298]]

include but are not limited to (1) providing staffing, equipment, and 
facilities for performing authorized services; (2) dismissing requests 
for services and withholding requested services; (3) maintaining 
official records; (4) assessing and collecting fees; (5) rotating 
official personnel; (6) implementing instructions for (i) recruiting 
official personnel, (ii) training and supervising official and approved 
personnel, (iii) work performance and work production standards; and (7) 
supervising and monitoring.
    (c) Technical activities--(1) Equipment testing activities. 
Equipment testing activities subject to supervision include but are not 
limited to (i) implementing (A) the equipment performance requirements 
in parts 801 and 802 of this chapter and (B) the instructions for the 
operation of equipment used under the Act and for performing equipment-
testing activities and (ii) performing equipment-testing activities by 
official personnel or by approved scale testing organizations.
    (2) Inspection activities. Inspection activities subject to 
supervision include but are not limited to (i) implementing (A) the 
Official U.S. Standards for Grain, (B) official criteria, and (C) 
instructions for the performance of inspection activities and (ii) 
performing stowage examination, sampling, laboratory testing, grading, 
and certification activities by official personnel.
    (3) Weighing activities. Weighing activities subject to supervision 
include but are not limited to (i) implementing (A) uniform weighing 
procedures and (B) instructions for the performance of weighing 
activities and (ii) performing (A) stowage examination, sampling (sacked 
grain), weighing, and certification activities by official personnel and 
(B) by approved weighers of weighing activities.
    (4) Testing of prototype equipment activities. Prototype or proposed 
equipment is tested to determine whether the equipment will improve the 
performance of activities under the Act. Prototype equipment-testing 
activities subject to supervision include but are not limited to (i) 
implementing instructions for the testing of prototype equipment, (ii) 
testing prototype equipment by official personnel, and (iii) approving 
or denying the use of prototype equipment for use under the Act.



Sec. 800.216  Activities that shall be monitored.

    (a) General. Each of the administrative and technical activities 
identified in Sec. 800.215 and the elevator and merchandising 
activities identified in this section shall be monitored in accordance 
with the instructions.
    (b) Grain merchandising activities. Grain merchandising activities 
subject to monitoring for compliance with the Act include but are not 
limited to (1) failing to promptly forward an export certificate; (2) 
describing grain by other than official grades; (3) falsely describing 
export grain; (4) falsely making or using official certificates, forms, 
or marks; (5) making false quality or quantity representations about 
grain; and (6) selling export grain without a certificate of 
registration.
    (c) Grain handling activities. Grain handling activities subject to 
monitoring for compliance with the Act include but are not limited to 
(1) shipping export grain without inspection or weighing; (2) 
transferring grain from intercompany barges into an export elevator at 
an export port location without Class X weighing; (3) violating any 
Federal law with respect to the handling, weighing, or inspection of 
grain; (4) deceptively loading, handling, weighing, or sampling grain; 
and (5) exporting grain without a certificate of registration.
    (d) Recordkeeping activities. Elevator and merchandising 
recordkeeping activities subject to monitoring for compliance with the 
Act include those that are identified in section 12(d) of the Act and 
Sec. 800.25 of the regulations.
    (e) Other activities. Other activities subject to monitoring for 
compliance with the Act include but are not limited to (1) resolving 
conflicts of interest by official agencies or their employees; (2) 
providing access to elevator facilities and records; (3) improperly 
influencing or interfering with official personnel; (4) falsely 
representing that a person is official personnel; (5) using false means 
in filing an application for services under the Act; and (6)

[[Page 299]]

preventing interested persons from observing the loading, Class X or 
Class Y weighing, or official sampling of grain.

[45 FR 15810, Mar. 11, 1980; 45 FR 55119, Aug. 18, 1980, as amended at 
50 FR 2273, Jan. 16, 1985]



Sec. 800.217  Equipment that shall be tested.

    (a) General. Testing of equipment and prototype equipment described 
in this section shall be performed in accordance with the instructions.
    (b) Inspection equipment. Each unit of equipment used in the 
official sampling, testing, or grading of grain, or in monitoring the 
official inspection of grain, shall be examined to determine whether the 
equipment is functioning in an approved manner. In addition, each unit 
of equipment for which official performance requirements have been 
established shall be tested for accuracy. For the purpose of this 
paragraph, diverter-type mechanical samplers used in obtaining 
warehouseman's samples shall be considered to be official inspection 
equipment used under the Act.
    (c) Weighing equipment. Each unit of equipment used in the Class X 
or Class Y weighing of grain or in monitoring the Class X or Class Y 
weighing of grain, each related grain handling system, and each related 
computer system shall be examined to determine whether it is functioning 
in an approved manner. In addition, each unit of equipment for which 
official performance requirements have been established shall be tested 
for accuracy.
    (d) Prototype equipment--(1) At request of interested party. Upon 
request of a financially interested party and with the concurrence of 
the Administrator, prototype grain inspection or weighing equipment may 
be tested by the Service for official use.
    (2) Determination by Service. Upon a determination of need, the 
Service may develop, contract for, or purchase and test prototype grain 
inspection or weighing equipment for official use.



Sec. 800.218  Review of rejection or disapproval of equipment.

    Any person desiring to complain of a rejection or disapproval of 
equipment by official personnel or of any alleged discrepancy in the 
testing of equipment under the Act by official personnel or by approved 
scale testing organizations may file a complaint with the Service.



Sec. 800.219  Conditional approval on use of equipment.

    (a) Approval. Equipment that is in use under the Act on the 
effective date of this section shall be considered conditionally to have 
been adopted and approved by the Service.
    (b) Limitation on approval. This conditional approval shall not bar 
a later rejection or disapproval of the equipment by the Service upon a 
determination that the equipment (1) should be rejected for official 
use, or (2) is not functioning in an approved manner, or (3) is not 
producing results that are accurate within prescribed tolerances, or (4) 
is producing results that are otherwise not consistent with the 
objectives of the Act.



PART 801_OFFICIAL PERFORMANCE REQUIREMENTS FOR GRAIN INSPECTION 
EQUIPMENT--Table of Contents




Sec.
801.1 Applicability.
801.2 Meaning of terms.
801.3 Tolerances for barley pearlers.
801.4 Tolerances for dockage testers.
801.5 Tolerances for diverter-type mechanical samplers.
801.6 Tolerances for moisture meters.
801.7 Reference methods and tolerances for near-infrared spectroscopy 
          (NIRS) analyzers.
801.8 Tolerances for sieves.
801.9 Tolerances for test weight apparatuses.
801.10 [Reserved]
801.11 Related design requirements.
801.12 Design requirements incorporated by reference.

    Authority: 7 U.S.C. 71-87k

    Source: 51 FR 7050, Feb. 28, 1986, unless otherwise noted.



Sec. 801.1  Applicability.

    The requirements set forth in this part 801 describe certain 
specifications, tolerances, and other technical requirements for 
official grain inspection equipment and related sample handling systems 
used in performing inspection services under the Act.

[[Page 300]]



Sec. 801.2  Meaning of terms.

    (a) Construction. Words used in the singular form in this part shall 
be considered to imply the plural and vice versa, as appropriate.
    (b) Definitions. The definitions of terms listed in the part 800 
shall have the same meaning when the terms are used in this part 801. 
For the purposes of this part, the following terms shall have the 
meanings given for them below.
    (1) Avoirdupois weight. A unit of weight based on a pound of 16 
ounces.
    (2) Barley pearler. An approved laboratory device used to 
mechanically dehull kernels of barley or other grain.
    (3) Deviation from standard. In testing inspection equipment for 
accuracy, the variation between (i) the individual test result from the 
equipment that is being tested and (ii) the reference standard or the 
individual test result from the standard (or National standard) 
equipment, as applicable.
    (4) Direct comparison method. An equipment testing procedure wherein 
transfer standards are tested at the same time and place to compare the 
performance of two or more units of the same inpsection equipment. One 
unit of the equipment used in the test shall be standard inspection 
equipment. (See also sample exchange method).
    (5) Diverter-type mechanical sampler (primary). An approved device 
used to obtain representative portions from a flowing stream of grain.
    (6) Diverter-type mechanical sampler (secondary). An approved device 
used to subdivide the portions of grain obtained with a diverter-type 
mechanical sampler (primary).
    (7) Divider. An approved laboratory device used to mechanically 
divide a sample of grain into two or more representative portions.
    (8) Dockage tester. An approved laboratory device used to 
mechanically separate dockage and/or foreign material from grain.
    (9) Maintenance tolerance. An allowance established for use in 
determining whether inspection equipment should be approved for use in 
performing official inspection services.
    (10) Mean deviation from standard. In testing inspection equipment 
for accuracy, the variation between (i) the average for the test results 
from the equipment that is being tested and (ii) the reference standard 
or the average of the test results from the standard (or National 
standard) equipment, as applicable.
    (11) Metric weight. A unit of weight based on the kilogram of 1,000 
grams.
    (12) Moisture meter. An approved laboratory device used to indicate 
directly or through conversion and/or correction tables the moisture 
content of grain including cereal grains and oil seeds.
    (13) National standard inspection equipment. A designated approved 
unit of inspection equipment used as the reference in determining the 
accuracy of standard inspection equipment.
    (14) Official inspection equipment. Equipment approved by the 
Service and used in performing official inspection services.
    (15) Sample exchange method. An equipment testing procedure wherein 
transfer standards are tested to compare the performance of two or more 
units of the same inspection equipment installed at different locations. 
One unit of the equipment used in the test shall be standard inspection 
equipment. (See also direct comparison method.)
    (16) Sieves. Approved laboratory devices with perforations for use 
in separating particles of various sizes.
    (17) Standard inspection equipment. An approved unit of inspection 
equipment that is designated by the Service for use in determining the 
accuracy of official inspection equipment.
    (18) Test weight. The avoirdupois weight of the grain or other 
material in a level-full Winchester bushel.
    (19) Test weight apparatus. An approved laboratory device used to 
measure the test weight (density) of a sample of grain.
    (20) Transfer standard. The medium (device or material) by which 
traceability is transferred from one inspection equipment standard unit 
to another unit.
    (21) Winchester bushel. A container that has a capacity of 2,150.42 
cubic inches (32 dry quarts).

[[Page 301]]



Sec. 801.3  Tolerances for barley pearlers.

    The maintenance tolerances for barley pearlers used in performing 
official inspection services shall be:

------------------------------------------------------------------------
                 Item                               Tolerance
------------------------------------------------------------------------
Timer switch:
  0 to 60 seconds.....................  5 seconds,
                                         deviation from standard clock
  61 to 90 seconds....................  7 seconds,
                                         deviation from standard clock
  Over 90 seconds.....................  10
                                         seconds, deviation from
                                         standard clock
Pearled portion.......................  1.0 gram,
                                         mean deviation from standard
                                         barley pearler using barley
------------------------------------------------------------------------



Sec. 801.4  Tolerances for dockage testers.

    The maintenance tolerances for dockage testers used in performing 
official inspection services shall be:

------------------------------------------------------------------------
                 Item                               Tolerance
------------------------------------------------------------------------
Air separation........................  0.10
                                         percent, mean deviation from
                                         standard dockage tester using
                                         Hard Red Winter wheat
Riddle separation.....................  0.10
                                         percent, mean deviation from
                                         standard dockage tester using
                                         Hard Red Winter wheat
Sieve separation......................  0.10
                                         percent, mean deviation from
                                         standard dockage tester using
                                         Hard Red Winter wheat
Total dockage separation..............  0.15
                                         percent, mean deviation from
                                         standard dockage tester using
                                         Hard Red Winter wheat
------------------------------------------------------------------------



Sec. 801.5  Tolerance for diverter-type mechanical samplers.

    The maintenance tolerance for diverter-type mechanical samplers 
(primary, or primary and secondary in combination) used in performing 
official inspection services shall be 10 percent, 
mean deviation from standard sampling device using corn or the same type 
of grain that the system will be used to sample.



Sec. 801.6  Tolerances for moisture meters.

    (a) The maintenance tolerances for Motomco 919 moisture meters used 
in performing official inspection services shall be:
    (1) Headquarters standard meters:

----------------------------------------------------------------------------------------------------------------
                                                                   Tolerance
       Moisture range        -----------------------------------------------------------------------------------
                                          Direct comparison                          Sample exchange
----------------------------------------------------------------------------------------------------------------
Low.........................  0.05 percent
                               moisture, mean deviation from National
                               standard moisture meter using Hard Red
                               Winter wheat
Mid.........................  0.05 percent
                               moisture, mean deviation from National
                               standard moisture meter using Hard Red
                               Winter wheat
High........................  0.05 percent
                               moisture, mean deviation from National
                               standard moisture meter using Hard Red
                               Winter wheat
----------------------------------------------------------------------------------------------------------------

    (2) All other than Headquarters standard meters:

----------------------------------------------------------------------------------------------------------------
                                                                   Tolerance
       Moisture range        -----------------------------------------------------------------------------------
                                          Direct comparison                          Sample exchange
----------------------------------------------------------------------------------------------------------------
Low.........................  0.15 percent        0.20 percent
                               moisture, mean deviation from standard    moisture, mean deviation from standard
                               moisture meter using Hard Red Winter      moisture meter using Hard Red Winter
                               wheat                                     wheat
Mid.........................  0.10 percent        0.15 percent
                               moisture, mean deviation from standard    moisture, mean deviation from standard
                               moisture meter using Hard Red Winter      moisture meter using Hard Red Winter
                               wheat                                     wheat
High........................  0.15 percent        0.20 percent
                               moisture, mean deviation from standard    moisture, mean deviation from standard
                               moisture meter using Hard Red Winter      moisture meter using Hard Red Winter
                               wheat                                     wheat
----------------------------------------------------------------------------------------------------------------

    (b) The maintenance tolerances for GAC 2100 moisture meters used in 
performing official inspection services shall be:
    (1) Headquarters standard meters. By direct comparison using mid-
range Hard Red Winter wheat, 0.05% mean

[[Page 302]]

deviation for the average of the Headquarters standard moisture meters.
    (2) All other than Headquarters standard meters. By sample exchange 
using mid-range Hard Red Winter wheat, 0.15% mean 
deviation from the standard meter.

[63 FR 34554, June 25, 1998]



Sec. 801.7  Reference methods and tolerances for near-infrared spectroscopy (NIRS) analyzers.

    (a) Reference methods. (1) The chemical reference protein 
determinations used to reference and calibrate official NIRS instruments 
shall be performed in accordance with ``Comparison of Kjeldahl Method 
for Determination of Crude Protein in Cereal Grains and Oilseeds with 
Generic Combustion Method: Collaborative Study,'' July/August 1993, 
Ronald Bicsak, Journal of AOAC International Vol. 76, No. 4, 1993, and 
subsequently approved by the AOAC International as the Combustion 
method, AOAC International Method 992.23. This incorporation by 
reference was approved by the Director of the Federal Register in 
accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies may be 
obtained from Director, Technical Services Division, Federal Grain 
Inspection Service, 10383 North Executive Hills Blvd., Kansas City, MO 
64153-1394. Copies may be inspected at the above address or at the 
National Archives and Records Administration (NARA). For information on 
the availability of this material at NARA, call 202-741-6030, or go to: 
http://www.archives.gov/federal--register/code--of--federal--
regulations/ibr--locations.html.
    (2) The chemical reference starch determination used to reference 
and calibrate official NIRS instruments shall be performed in accordance 
with the Corn Refiners Association Method A-20, Analysis for Starch in 
Corn, Second revision, April 15, 1986, Standard Analytical Methods of 
the Member Companies of the Corn Refiners Association, Inc. This 
incorporation by reference was approved by the Director of the Federal 
Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. Copies 
may be obtained from Director, Technical Services Division, Federal 
Grain Inspection Service, 10383 North Executive Hills Blvd., Kansas 
City, MO 64153-1394. Copies may be inspected at the above address or at 
the National Archives and Records Administration (NARA). For information 
on the availability of this material at NARA, call 202-741-6030, or go 
to: http://www.archives.gov/federal--register/code--of--federal--
regulations/ibr--locations.html.
    (b) Tolerances--(1) NIRS wheat protein analyzers. The maintenance 
tolerances for the NIRS analyzers used in performing official 
inspections for determination of wheat protein content shall be 0.15 percent mean deviation from the national standard 
NIRS instruments, which are referenced and calibrated to the Combustion 
method, AOAC International Method 992.23.
    (2) NIRS soybean oil and protein analyzers. The maintenance 
tolerances for the NIRS analyzers used in performing official 
inspections for determination of soybean oil shall be 0.20 percent mean deviation from the national standard 
NIRS instruments, which are referenced and calibrated to the FGIS 
solvent oil extraction method; and for determination of protein content 
shall be 0.20 percent mean deviation from the 
national standard NIRS instruments, which are referenced and calibrated 
to the Combustion method, AOAC International Method 992.23.
    (3) NIRS corn oil, protein, and starch analyzers. The maintenance 
tolerances for the NIRS analyzers used in performing official 
inspections for determination of corn oil shall be 0.20 percent mean deviation from the national standard 
NIRS instruments, which are referenced and calibrated to the FGIS 
solvent oil extraction method; for determination of protein content 
shall be 0.30 percent mean deviation from the 
national standard NIRS instruments, which are referenced and calibrated 
to the Combustion method, AOAC International Method 992.23; and for 
determination of starch content shall be 0.35 
percent mean deviation from the national standard NIRS instruments, 
which are referenced and calibrated to the Starch method, Corn Refiners 
Association Method A-20.
    (4) NIRS barley protein analyzers. The maintenance tolerances for 
the

[[Page 303]]

NIRS analyzers used in performing official inspections for determination 
of barley protein content are 0.20 percent mean deviation from the 
national standard NIRS instruments, which are referenced and calibrated 
to the Combustion method, AOAC International Method 992.23.

[63 FR 35505, June 30, 1998, as amended at 69 FR 18803, Apr. 9, 2004; 71 
FR 65373, Nov. 8, 2006]



Sec. 801.8  Tolerances for sieves.

    The maintenance tolerances for sieves used in performing official 
inspection services shall be:
    (a) Thickness of metal: 0.0015 inch.
    (b) Accuracy of perforation: 0.001 inch from 
design specification.
    (c) Sieving accuracy:

------------------------------------------------------------------------
                                                  Tolerance
         Sieve description         -------------------------------------
                                    Direct comparison   Sample exchange
------------------------------------------------------------------------
.064x\3/8\ inch oblong............  0.2         thn-eq>0.3
                                     percent, mean      percent, mean
                                     deviation from     deviation from
                                     standard sieve     standard sieve
                                     using wheat.       using wheat
\5/64\x\3/4\ inch slotted.........  0.3         thn-eq>0.5
                                     percent, mean      percent, mean
                                     deviation from     deviation from
                                     standard sieve     standard sieve
                                     using barley.      using barley
5\5/64\x\3/4\ inch slotted........  0.5         thn-eq>0.7
                                     percent, mean      percent, mean
                                     deviation from     deviation from
                                     standard sieve     standard sieve
                                     using barley.      using barley
\6/64\x\3/4\ inch slotted.........  0.7         thn-eq>1.0
                                     percent, mean      percent, mean
                                     deviation from     deviation from
                                     standard sieve     standard sieve
                                     using barley.      using barley
------------------------------------------------------------------------



Sec. 801.9  Tolerances for test weight apparatuses.

    The maintenance tolerances for test weight per bushel apparatuses 
used in performing official inspection services shall be:

------------------------------------------------------------------------
                  Item                              Tolerance
------------------------------------------------------------------------
Beam/scale accuracy....................  0.10
                                          pound per bushel deviation at
                                          any reading, using test
                                          weights
Overall accuracy.......................  0.15
                                          pound per bushel, mean
                                          deviation from standard test
                                          weight apparatus using wheat
------------------------------------------------------------------------



Sec. 801.10  [Reserved]



Sec. 801.11  Related design requirements.

    (a) Suitability. The design, construction, and location of official 
sampling and inspection equipment and related sample handling systems 
shall be suitable for the official sampling and inspection activities 
for which the equipment is to be used.
    (b) Durability. The design, construction, and material used in 
official sampling and inspection equipment and related sample handling 
systems shall assure that, under normal operating conditions, operating 
parts will remain fully operable, adjustments will remain reasonably 
constant, and accuracy will be maintained between equipment test 
periods.
    (c) Marking and identification. Official sampling and inspection 
equipment for which tolerances have been established shall be 
permanently marked to show the manufacturer's name, initials, or 
trademark; the serial number of the equipment; and the model, the type, 
and the design or pattern of the equipment. Operational controls for 
mechanical samplers and related sample handling systems, including but 
not limited to pushbuttons and switches, shall be conspicuously 
identified as to the equipment or activity controlled by the pushbutton 
or switch.
    (d) Repeatability. Official inspection equipment when tested in 
accordance with Sec. Sec. 800.217 and 800.219 shall, within the 
tolerances prescribed in Sec. Sec. 801.3 through 801.10, be capable of 
repeating its results when the equipment is operated in its normal 
manner.
    (e) Security. Mechanical samplers and related sample handling 
systems shall provide a ready means of sealing to deter unauthorized 
adjustments, removal, or changing of component parts or timing sequence 
without removing or breaking the seals; and otherwise be designed, 
constructed, and installed in a manner to prevent deception by any 
person.
    (f) Installation requirements. Official sampling and inspection 
equipment and related sample handling systems shall be installed (1) at 
a site approved by

[[Page 304]]

the Service, (2) according to the manufacturer's instructions, and (3) 
in such a manner that neither the operation nor the performance of the 
equipment or system will be adversely affected by the foundation, 
supports, or any other characteristic of the installation.



Sec. 801.12  Design requirements incorporated by reference.

    (a) Moisture meters. All moisture meters approved for use in 
official grain moisture determination and certification shall meet 
applicable requirements contained in the FGIS Moisture Handbook and the 
General Code and Grain Moisture Meters Code of the 1991 edition of the 
National Institute of Standards and Technology's (NIST) Handbook 44, 
``Specifications, Tolerances, and Other Technical Requirements for 
Weighing and Measuring Devices.'' Pursuant to the provisions of 5 U.S.C. 
552(a), the materials in Handbook 44 are incorporated by reference as 
they exist on the date of approval and a notice of any change in these 
materials will be published in the Federal Register.
    The NIST Handbook is for sale by the Superintendent of Documents, 
U.S. Government Printing Office, Washington, DC 20403. It is also 
available for inspection at the National Archives and Records 
Administration (NARA). For information on the availability of this 
material at NARA, call 202-741-6030, or go to: http://www.archives.gov/
federal--register/code--of--federal--regulations/ibr--locations.html.
    The following Handbook 44 requirements are not incorporated by 
reference:

General Code (1.10.)
    G-S.5.5. Money Values, Mathematical Agreement
    G-T.1. Acceptance Tolerances
    G-UR.3.3. Position of Equipment
    G-UR.3.4. Responsibility, Money-Operated Devices
Grain Moisture Meters (5.56.)
    N.1.1. Transfer Standards
    N.1.2. Minimum Test
    N.1.3. Temperature Measuring Equipment
    T.2. Tolerance Values
    T.3. For Test Weight Per Bushel Indications or Recorded 
Representations
    UR.3.2. Other Devices not used for Commercial Measurement
    UR.3.7. Location
    UR.3.11. Posting of Meter Operating Range

    (b) [Reserved]

[57 FR 2673, Jan. 23, 1992, as amended at 69 FR 18803, Apr. 9, 2004]



PART 802_OFFICIAL PERFORMANCE AND PROCEDURAL REQUIREMENTS FOR GRAIN 
WEIGHING EQUIPMENT AND RELATED GRAIN HANDLING SYSTEMS--Table of Contents




Sec.
802.0 Applicability.
802.1 Qualified laboratories.

    Authority: Pub. L. 94-582, 90 Stat. 2867, as amended (7 U.S.C. 71 et 
seq.).



Sec. 802.0  Applicability.

    (a) The requirements set forth in this part 802 describe certain 
specifications, tolerances, and other technical requirements for grain 
weighing equipment and related grain handling systems used in performing 
Class X and Class Y weighing services, official inspection services, and 
commercial services under the Act. All scales used for official grain 
weight and inspection certification services provided by FGIS shall meet 
applicable requirements contained in the FGIS Weighing Handbook, the 
General Code, the Scales Code, the Automatic Bulk Weighing Systems Code, 
and the Weights Code of the 2002 edition of National Institute of 
Standards and Technology (NIST) Handbook 44, ``Specifications, 
Tolerances, and Other Technical Requirements for Weighing and Measuring 
Devices'' (Handbook 44); and NIST Handbook 105-1 (1990 Edition), 
``Specifications and Tolerances for Reference Standards and Field 
Standard Weights and Measures,'' (Handbook 105-1). These requirements 
are confirmed to be met by having National Type Evaluation Program or 
Federal Grain Inspection Service type approval. Scales used for 
commercial purposes will be required to meet only the applicable 
requirements of the 2002 edition of the NIST Handbook 44. Pursuant to 
the provisions of 5 U.S.C. 552(a), with the exception of the Handbook 44 
requirements listed in paragraph (b) of this section, the materials in 
Handbooks 44 and 105-1 are incorporated by reference as they exist on 
the date of approval

[[Page 305]]

and a notice of any change in these materials will be published in the 
Federal Register. This incorporation by reference was approved by the 
Director of the Federal Register in accordance with 5 U.S.C. 552(a) and 
1 CFR part 51. The NIST Handbooks are for sale by the Superintendent of 
Documents, U.S. Government Printing Office, Washington, DC 20403. They 
can be downloaded without charge at http://ts.nist.gov/ts/htdocs/230/
235owmhome.htm. They are also available for inspection at the National 
Archives and Records Administration (NARA). For information on the 
availability of this material at NARA, call 202-741-6030, or go to: 
http://www.archives.gov/federal--register/code--of--federal--
regulations/ibr--locations.html.
    (b) The following Handbook 44 requirements are not incorporated by 
reference:

                              Scales (2.20)

S.1.8. Computing Scales
S.1.8.2. Money-Value Computation
S.1.8.3. Customer's Indications
S.1.8.4. Recorded Representations, Point of Sale
S.2.5.2. Jeweler's, Prescription, & Class I & II Scales
S.3.3. Scoop Counterbalance
N.1.3.2. Dairy-Product Test Scales
N.1.5. Discrimination Test (Not adopted for Grain Test Scales only)
N.1.8. Material Tests
N.3.1.2. Interim Approval
N.3.1.3. Enforcement Action For Inaccuracy
N.4. Coupled-in-Motion Railroad Weighing Systems
N.6. Nominal Capacity of Prescription Scales
T.1.2. Postal and Parcel Post Scales
T.2.3. Prescription Scales
T.2.4. Jewelers' Scales (all sections)
T.2.5. Dairy--Product-Test Scales (all sections)
T.N.3.9. Materials Test on Customer-Operated Bulk-Weighing Systems for 
    Recycled Materials
UR.1.4. Grain Test Scales: Value of Scale Divisions
UR.3.1. Recommended Minimum Load
UR.3.1.1. Minimum Load, Grain Dockage

                 Automatic Bulk Weighing Systems (2.22)

N.1.3. Decreasing-Load Test

[68 FR 34522, June 10, 2003, as amended at 69 FR 18803, Apr. 9, 2004]



Sec. 802.1  Qualified laboratories.

    (a) Metrology laboratories. (1) Any State metrology laboratory 
currently approved by the NBS ongoing certification program having 
auditing capability is automatically approved by the Service.
    (2) Any county or city weights and measures jurisdiction approved by 
NBS or by their respective NBS-Certified State laboratory as being 
equipped with appropriate traceable standards and trained staff to 
provide valid calibration is approved by the Service. The State approval 
may be documented by a certificate or letter. The jurisdiction must be 
equipped to provide suitable certification documentation.
    (3) Any commercial industrial laboratory primarily involved in the 
business of sealing and calibrating test weights (standards) will be 
approved by the Service provided:
    (i) It requests written authority to perform tolerance testing of 
weights used within the Service's program(s) through their approved 
State jurisdiction. Copies of its request and written reference 
regarding the State decision shall be provided to the Service. A 
positive decision by the State will be required as a prerequisite to the 
Service's granting approval to any commercial laboratory to tolerance 
test the weights used in testing scales under the jurisdiction of the 
Service;
    (ii) It has NBS traceable standards (through the State) and trained 
staff to perform calibrations in a manner prescribed by NBS and/or the 
State;
    (iii) It is equipped to provide suitable certification 
documentation;
    (iv) It permits the Service to make onsite visits to laboratory 
testing space.
    (4) Approval of the commercial industrial laboratory will be at the 
Service's discretion. Once it has obtained approval, the commercial 
industrial laboratory maintains its site in a manner prescribed by the 
State and the Service.

[[Page 306]]

    (b) Type evaluation laboratories. Any State measurement laboratory 
currently certified by NBS in accordance with its program for the 
Certification of Capability of State Measurement Laboratories to conduct 
evaluations under the National Type Evaluation Program is approved by 
the Service.

(Approved by the Office of Management and Budget under control number 
0580-0011)

[51 FR 7052, Feb. 28, 1986, as amended at 54 FR 5925, Feb. 7, 1989]



PART 810_OFFICIAL UNITED STATES STANDARDS FOR GRAIN--Table of Contents




                      Subpart A_General Provisions

                              Terms Defined

Sec.
810.101 Grains for which standards are established.
810.102 Definition of other terms.

            Principles Governing the Application of Standards

810.103 Basis of determination.
810.104 Percentages.

           Grades, Grade Requirements, and Grade Designations

810.105 Grades and grade requirements.
810.106 Grade designations.

     Special Grades, Special Grade Requirements, and Special Grade 
                              Designations

810.107 Special grades and special grade requirements.
810.108 Special grade designations.

              Subpart B_United States Standards for Barley

                              Terms Defined

810.201 Definition of barley.
810.202 Definition of other terms.

            Principles Governing the Application of Standards

810.203 Basis of determination.

                      Grades and Grade Requirements

810.204 Grades and grade requirements for Six-rowed Malting barley and 
          Six-rowed Blue Malting barley.
810.205 Grades and grade requirements for Two-rowed Malting barley.
810.206 Grades and grade requirements for barley.

              Special Grades and Special Grade Requirements

810.207 Special grades and special grade requirements.

       Subpart C_United States Standards for Canola_Terms Defined

810.301 Definition of canola.
810.302 Definitions of other terms.

            Principles Governing the Application of Standards

810.303 Basis of determination.

                      Grades and Grade Requirements

810.304 Grades and grade requirements for canola.

              Special Grades and Special Grade Requirements

810.305 Special grades and special grade requirements.

                          Nongrade Requirements

810.306 Nongrade requirements.

               Subpart D_United States Standards for Corn

                              Terms Defined

810.401 Definition of corn.
810.402 Definition of other terms.

            Principles Governing the Application of Standards

810.403 Basis of determination.

                      Grades and Grade Requirements

810.404 Grades and grade requirements for corn.

              Special Grades and Special Grade Requirements

810.405 Special grades and special grade requirements.

             Subpart E_United States Standards for Flaxseed

                              Terms Defined

810.601 Definition of flaxseed.
810.602 Definition of other terms.

            Principles Governing the Application of Standards

810.603 Basis of determination.

                      Grades and Grade Requirements

810.604 Grades and grade requirements for flaxseed.

[[Page 307]]

            Subpart F_United States Standards for Mixed Grain

                              Terms Defined

810.801 Definition of mixed grain.
810.802 Definition of other terms.

            Principles Governing the Application of Standards

810.803 Basis of determination.

                      Grades and Grade Requirements

810.804 Grades and grade requirements for mixed grain.

              Special Grades and Special Grade Requirements

810.805 Special grades and special grade requirements.

               Subpart G_United States Standards for Oats

                              Terms Defined

810.1001 Definition of oats.
810.1002 Definition of other terms.

            Principles Governing the Application of Standards

810.1003 Basis of determination.

                      Grades and Grade Requirements

810.1004 Grades and grade requirements for oats.

              Special Grades and Special Grade Requirements

810.1005 Special grades and special grade requirements.

                Subpart H_United States Standards for Rye

                              Terms Defined

810.1201 Definition of rye.
810.1202 Definition of other terms.

            Principles Governing the Application of Standards

810.1203 Basis of determination.

                      Grades and Grade Requirements

810.1204 Grades and grade requirements for rye.

              Special Grades and Special Grade Requirements

810.1205 Special grades and special grade requirements.

              Subpart I_United States Standards for Sorghum

                              Terms Defined

810.1401 Definition of sorghum.
810.1402 Definition of other terms.

            Principles Governing the Application of Standards

810.1403 Basis of determination.

                      Grades and Grade Requirements

810.1404 Grades and grade requirements for sorghum.

              Special Grades and Special Grade Requirements

810.1405 Special grades and special grade requirements.

             Subpart J_United States Standards for Soybeans

                              Terms Defined

810.1601 Definition of soybeans.
810.1602 Definition of other terms.

            Principles Governing the Application of Standards

810.1603 Basis of determination.

                      Grades and Grade Requirements

810.1604 Grades and grade requirements for soybeans.

              Special Grades and Special Grade Requirements

810.1605 Special grades and special grade requirements.

          Subpart K_United States Standards for Sunflower Seed

                              Terms Defined

810.1801 Definition of sunflower seed.
810.1802 Definition of other terms.

            Principles Governing the Application of Standards

810.1803 Basis of determination.

                      Grades and Grade Requirements

810.1804 Grades and grade requirements for sunflower seed.

             Subpart L_United States Standards for Triticale

                              Terms Defined

810.2001 Definition of triticale.
810.2002 Definition of other terms.

[[Page 308]]

            Principles Governing the Application of Standards

810.2003 Basis of determination.

                      Grades and Grade Requirements

810.2004 Grades and grade requirements for triticale.

              Special Grades and Special Grade Requirements

810.2005 Special grades and special grade requirements.

               Subpart M_United States Standards for Wheat

                              Terms Defined

810.2201 Definition of wheat.
810.2202 Definition of other terms.

            Principles Governing the Application of Standards

810.2203 Basis of determination.

                      Grades and Grade Requirements

810.2204 Grades and grade requirements for wheat.

              Special Grades and Special Grade Requirements

810.2205 Special grades and special grade requirements.

    Authority: Pub. L. 94-582, 90 Stat. 2867, as amended (7 U.S.C. 71 et 
seq.).

    Effective Date Note: At 71 FR 52406, Sept. 6, 2006, part 810 was 
amended by revising the authority citation, effective Sept. 1, 2007. For 
the convenience of the user, the revised text is set forth as follows:
    Authority: 7 U.S.C. 71-87k.

    Source: 52 FR 24418, June 30, 1987, unless otherwise noted.



                      Subpart A_General Provisions

    Note: Compliance with the provisions of these standards does not 
excuse failure to comply with the provisions of the Federal Food, Drug, 
and Cosmetic Act, or other Federal laws.

                              Terms Defined



Sec. 810.101  Grains for which standards are established.

    Grain refers to barley, canola, corn, flaxseed, mixed grain, oats, 
rye, sorghum, soybeans, sunflower seed, triticale, and wheat. Standards 
for these food grains, feed grains, and oilseeds are established under 
the United States Grain Standards Act.

[57 FR 3274, Jan. 29, 1992]



Sec. 810.102  Definition of other terms.

    Unless otherwise stated, the definitions in this section apply to 
all grains. All other definitions unique to a particular grain are 
contained in the appropriate subpart for that grain.
    (a) Distinctly low quality. Grain that is obviously of inferior 
quality because it is in an unusual state or condition, and that cannot 
be graded properly by use of other grading factors provided in the 
standards. Distinctly low quality includes the presence of any objects 
too large to enter the sampling device; i.e., large stones, wreckage, or 
similar objects.
    (b) Moisture. Water content in grain as determined by an approved 
device according to procedures prescribed in FGIS instructions.
    (c) Stones. Concreted earthy or mineral matter and other substances 
of similar hardness that do not disintegrate in water.
    (d) Test weight per bushel. The weight per Winchester bushel 
(2,150.42 cubic inches) as determined using an approved device according 
to procedures prescribed in FGIS instructions. Test weight per bushel in 
the standards for corn, mixed grain, oats, sorghum, and soybeans is 
determined on the original sample. Test weight per bushel in the 
standards for barley, flaxseed, rye, sunflower seed, triticale, and 
wheat is determined after mechanically cleaning the original sample. 
Test weight per bushel is recorded to the nearest tenth pound for corn, 
rye, triticale, and wheat. Test weight per bushel for all other grains, 
if applicable, is recorded in whole and half pounds with a fraction of a 
half pound disregarded. Test weight per bushel is not an official factor 
for canola.
    (e) Whole kernels. Grain with \1/4\ or less of the kernel removed.

[52 FR 24418, June 30, 1987, as amended at 60 FR 61196, Nov. 29, 1995]

    Effective Date Note: At 71 FR 52406, Sept. 6, 2006, Sec. 810.102 
was amended by revising paragraph (d), effective Sept. 1, 2007. For the 
convenience of the user, the revised text is set forth as follows:

[[Page 309]]



Sec. 810.102  Definition of other terms.

                                * * * * *

    (d) Test weight per bushel. The weight per Winchester bushel 
(2,150.42 cubic inches) as determined using an approved device according 
to procedures prescribed in FGIS instructions. Test weight per bushel in 
the standards for corn, mixed grain, oats, sorghum, and soybeans is 
determined on the original sample. Test weight per bushel in the 
standards for barley, flaxseed, rye, sunflower seed, triticale, and 
wheat is determined after mechanically cleaning the original sample. 
Test weight per bushel is recorded to the nearest tenth pound for corn, 
rye, soybeans, triticale, and wheat. Test weight per bushel for all 
other grains, if applicable, is recorded in whole and half pounds with a 
fraction of a half pound disregarded. Test weight per bushel is not an 
official factor for canola.

                                * * * * *

            Principles Governing the Application of Standards



Sec. 810.103  Basis of determination.

    (a) Distinctly low quality. The determination of distinctly low 
quality is made on the basis of the lot as a whole at the time of 
sampling when a condition exists that may or may not appear in the 
representative sample and/or the sample as a whole.
    (b) Certain quality determinations. Each determination of rodent 
pellets, bird droppings, other animal filth, broken glass, castor beans, 
cockleburs, crotalaria seeds, dockage, garlic, live insect infestation, 
large stones, moisture, temperature, an unknown foreign substance(s), 
and a commonly recognized harmful or toxic substance(s) is made on the 
basis of the sample as a whole. When a condition exists that may not 
appear in the representative sample, the determination may be made on 
the basis of the lot as a whole at the time of sampling according to 
procedures prescribed in FGIS instructions.
    (c) All other determinations. The basis of determination for all 
other factors is contained in the individual standards.



Sec. 810.104  Percentages.

    (a) Rounding. Percentages are determined on the basis of weight and 
are rounded as follows:
    (1) When the figure to be rounded is followed by a figure greater 
than or equal to 5, round to the next higher figure; e.g., report 6.36 
as 6.4, 0.35 as 0.4, and 2.45 as 2.5.
    (2) When the figure to be rounded is followed by a figure less than 
5, retain the figure; e.g., report 8.34 as 8.3, and 1.22 as 1.2.
    (b) Recording. The percentage of dockage in flaxseed and sorghum is 
reported in whole percent with fractions of a percent being disregarded. 
Dockage in barley and triticale is reported in whole and half percent 
with a fraction less than one-half percent being disregarded. Dockage in 
wheat and rye is reported in whole and tenth percents to the nearest 
tenth percent. Foreign material in sunflower seed is reported to the 
nearest one-half percent. Ranges of sunflower seed foreign material are 
reported as follows: 0.0 to 0.24 is reported as 0.0 percent, 0.25 to 
0.74 as 0.5 percent, 0.75 to 1.24 as 1.0 percent, and the like. Foreign 
material and fines in mixed grain is reported in whole percent. The 
percentage of smut in barley, sclerotinia and stones in canola, and 
ergot in all grains is reported to the nearest hundredth percent. The 
percentage when determining the identity of all grains is reported to 
the nearest whole percent. Also reported to the nearest whole percent 
are the classes and subclasses in wheat; flint corn; flint and dent 
corn; waxy corn; classes in barley; and the percentage of each kind of 
grain in mixed grain. Plump barley shall be expressed in terms of the 
range in which it falls. Ranges shall be: Below 50 percent, 50 to 55 
percent, 56 to 60 percent, 61 to 65 percent, and the like. All other 
percentages are reported in tenths percent.

[52 FR 24418, June 30, 1987; 52 FR 28534, July 31, 1987, as amended at 
54 FR 24157, June 6, 1989; 57 FR 3274, Jan. 29, 1992; 59 FR 10573, Mar. 
7, 1994; 61 FR 18491, Apr. 26, 1996; 63 FR 20056, Apr. 23, 1998]

           Grades, Grade Requirements, and Grade Designations



Sec. 810.105  Grades and grade requirements.

    The grades and grade requirements for each grain (except mixed 
grain) and

[[Page 310]]

shown in the grade table(s) of the respective standards. Mixed grain 
grade requirements are not presented in tabular form.



Sec. 810.106  Grade designations.

    (a) Grade designations for grain. The grade designations include in 
the following order:
    (1) The letters ``U.S.'';
    (2) The abbreviation ``No.'' and the number of the grade or the 
words ``Sample grade'';
    (3) When applicable, the subclass;
    (4) The class or kind of grain;
    (5) When applicable, the special grade(s) except in the case of 
bright, extra heavy, and heavy oats or plump rye, the special grades, 
``bright'', ``extra heavy'', ``heavy'' and ``plump'' will precede the 
word ``oats'' or ``rye'' as applicable; and
    (6) When applicable, the word ``dockage'' together with the 
percentage thereof.

When applicable, the remarks section of the certificate will include in 
the order of predominance; in the case of a mixed class, the name and 
approximate percentage of the classes; in the case of sunflower seed, 
the percentage of admixture; in the case of mixed grain, the grains 
present in excess of 10.0 percent of the mixture and when applicable, 
the words Other grains followed by a statement of the percentage of the 
combined quantity of those kinds of grains, each of which is present in 
a quantity less than 10.0 percent; in the case of barley, if requested, 
the word ``plump'' with the percentage range thereof; in the case of 
wheat, if requested, the percentage of protein content.
    (b) Optional grade designations. In addition to paragraph (a) of 
this Section, grain may be certificated under certain conditions as 
described in FGIS instructions when supported by official analysis, as 
``U.S. No. 2 or better (type of grain)'', ``U.S. No. 3 or better (type 
of grain)'', and the like.

[52 FR 24418, June 30, 1987, as amended at 53 FR 15017, Apr. 27, 1988]

     Special Grades, Special Grade Requirements, and Special Grade 
                              Designations



Sec. 810.107  Special grades and special grade requirements.

    A special grade serves to draw attention to a special factor or 
condition present in the grain and, when applicable, is supplemental to 
the grade assigned under Sec. 810.106. Except for the special grade 
``infested,'' the special grades are identified and requirements are 
established in each respective grain standards.
    (a) Infested wheat, rye, and triticale. Tolerances for live insects 
responsible for infested wheat, rye, and triticale are defined according 
to sampling designations as follows:
    (1) Representative sample. The representative sample consists of the 
work portion, and the file sample if needed and when available. These 
grains will be considered infested if the representative sample (other 
than shiplots) contains two or more live weevils, or one live weevil and 
one or more other live insects injurious to stored grain, or two or more 
live insects injurious to stored grain.
    (2) Lot as a whole (stationary). The lot as a whole is considered 
infested when two or more live weevils, or one live weevil and one or 
more other live insects injurious to stored grain, or two or more other 
live insects injurious to stored grain are found in, on, or about the 
lot (excluding submitted samples and shiplots).
    (3) Sample as a whole (continuous loading/unloading of shiplots and 
bargelots). The minimum sample size for bargelots and shiplots is 500 
grams per each 2,000 bushels of grain. The sample as a whole is 
considered infested when a component (as defined in FGIS instructions) 
contains two or more live weevils, or one live weevil and one or more 
other live insects injurious to stored grain, or two or more other live 
insects injurious to stored grain.
    (b) Infested barley, canola, corn, oats, sorghum, soybeans, 
sunflower seed, and mixed grain. Tolerances for live insects responsible 
for infested barley, canola,

[[Page 311]]

corn, oats, sorghum, soybeans, sunflower seed, and mixed grain are 
defined according to sampling designations as follows:
    (1) Representative sample. The representative sample consists of the 
work portion, and the file sample if needed and when available. These 
grains will be considered infested if the representative sample (other 
than shiplots) contains two or more live weevils, or one live weevil and 
five or more other live insects injurious to stored grain, or ten or 
more other live insects injurious to stored grain.
    (2) Lot as a whole (stationary). The lot as a whole is considered 
infested when two or more live weevils, or one live weevil and five or 
more other live insects injurious to stored grain, or ten or more other 
live insects injurious to stored grain are found in, on, or about the 
lot (excluding submitted samples and shiplots).
    (3) Sample as a whole (continuous loading/unloading of shiplots and 
bargelots). The minimum sample for shiplots and bargelots is 500 grams 
per each 2,000 bushels of grain. The sample as a whole is considered 
infested when a component (as defined in FGIS instructions) contains two 
or more live weevils, or one live weevil and five or more other live 
insects injurious to stored grain, or ten or more other live insects 
injurious to stored grain.

[52 FR 24441, June 30, 1987, as amended at 57 FR 3274, Jan. 29, 1992]



Sec. 810.108  Special grade designations.

    Special grade designations are shown as prescribed in Sec. 810.106. 
Multiple special grade designations will be listed in alphabetical 
order. In the case of treated wheat, the official certificate shall show 
whether the wheat has been scoured, limed, washed, sulfured, or 
otherwise treated.



              Subpart B_United States Standards for Barley

                              Terms Defined



Sec. 810.201  Definition of barley.

    Grain that, before the removal of dockage, consists of 50 percent or 
more of whole kernels of cultivated barley (Hordeum vulgare L.) and not 
more than 25 percent of other grains for which standards have been 
established under the United States Grain Standards Act. The term 
``barley'' as used in these standards does not include hull-less barley 
or black barley.



Sec. 810.202  Definition of other terms.

    (a) Black barley. Barley with black hulls.
    (b) Broken kernels. Barley with more than \1/4\ of the kernel 
removed.
    (c) Classes. There are two classes of barley: Malting barley and 
Barley.
    (1) Malting barley. Barley of a six-rowed or two-rowed malting type. 
The class Malting barley is divided into the following three subclasses:
    (i) Six-rowed Malting barley. Barley that has a minimum of 95.0 
percent of a six-rowed suitable malting type that has 90.0 percent or 
more of kernels with white aleurone layers that contains not more than 
1.9 percent injured-by-frost kernels, 0.4 percent frost-damaged kernels, 
0.2 percent injured-by-heat kernels, and 0.1 percent heat-damaged 
kernels. Six-rowed Malting barley shall not be infested, blighted, 
ergoty, garlicky, or smutty as defined in Sec. 810.107(b) and Sec. 
810.206.
    (ii) Six-rowed Blue Malting barley. Barley that has a minimum of 
95.0 percent of a six-rowed suitable malting type that has 90.0 percent 
or more of kernels with blue aleurone layers that contains not more than 
1.9 percent injured-by-frost kernels, 0.4 percent frost-damaged kernels, 
0.2 percent injured-by-heat kernels, and 0.1 percent heat-damaged 
kernels. Six-rowed Blue Malting barley shall not be infested, blighted, 
ergoty, garlicky, or smutty as defined in Sec. 810.107(b) and Sec. 
810.206.
    (iii) Two-rowed Malting barley. Barley that has a minimum of 95.0 
percent of a two-rowed suitable malting type that contains not more than 
1.9 percent injured-by-frost kernels, 0.4 percent frost-damaged kernels, 
0.2 percent injured-by-heat kernels, 0.1 percent heat-damaged kernels, 
1.9 percent injured-by-mold kernels, and 0.4 percent mold-damaged 
kernels. Two-rowed Malting barley shall not be infested, blighted, 
ergoty, garlicky, or smutty as defined in Sec. 810.107(b) and Sec. 
810.206.
    (2) Barley. Any barley of a six-rowed or two-rowed type. The class 
Barley is

[[Page 312]]

divided into the following three subclasses:
    (i) Six-rowed barley. Any Six-rowed barley that contains not more 
than 10.0 percent of two-rowed varieties.
    (ii) Two-rowed barley. Any Two-rowed barley with white hulls that 
contains not more than 10.0 percent of six-rowed varieties.
    (iii) Barley. Any barley that does not meet the requirements for the 
subclasses Six-rowed barley or Two-rowed barley.
    (d) Damaged kernels. Kernels, pieces of barley kernels, other 
grains, and wild oats that are badly ground-damaged, badly weather-
damaged, diseased, frost-damaged, germ-damaged, heat-damaged, injured-
by-heat, insect-bored, mold-damaged, sprout-damaged, or otherwise 
materially damaged.
    (e) Dockage. All matter other than barley that can be removed from 
the original sample by use of an approved device according to procedures 
prescribed in FGIS instructions. Also, underdeveloped, shriveled, and 
small pieces of barley kernels removed in properly separating the 
material other than barley and that cannot be recovered by properly 
rescreening or recleaning.
    (f) Foreign material. All matter other than barley, other grains, 
and wild oats that remains in the sample after removal of dockage.
    (g) Frost-damaged kernels. Kernels, pieces of barley kernels, other 
grains, and wild oats that are badly shrunken and distinctly discolored 
black or brown by frost.
    (h) Germ-damaged kernels. Kernels, pieces of barley kernels, other 
grains, and wild oats that have dead or discolored germ ends.
    (i) Heat-damaged kernels. Kernels, pieces of barley kernels, other 
grains, and wild oats that are materially discolored and damaged by 
heat.
    (j) Injured-by-frost kernels. Kernels and pieces of barley kernels 
that are distinctly indented, immature or shrunken in appearance or that 
are light green in color as a result of frost before maturity.
    (k) Injured-by-heat kernels. Kernels, pieces of barley kernels, 
other grains, and wild oats that are slightly discolored as a result of 
heat.
    (l) Injured-by-mold kernels. Kernels, pieces of barley kernels 
containing slight evidence of mold.
    (m) Mold-damaged kernels. Kernels, pieces of barley kernels, other 
grains, and wild oats that are weathered and contain considerable 
evidence of mold.
    (n) Other grains. Black barley, corn, cultivated buckwheat, einkorn, 
emmer, flaxseed, guar, hull-less barley, nongrain sorghum, oats, Polish 
wheat, popcorn, poulard wheat, rice, rye, safflower, sorghum, soybeans, 
spelt, sunflower seed, sweet corn, triticale, and wheat.
    (o) Plump barley. Barley that remains on top of a \6/64\ x \3/4\ 
slotted-hole sieve after sieving according to procedures prescribed in 
FGIS instructions.
    (p) Sieves. (1) \5/64\ x \3/4\ slotted-hole sieve. A metal sieve 
0.032 inch thick with slotted perforations 0.0781 (\5/64\) inch by 0.750 
(\3/4\) inch.
    (2) 5-\1/2\ \6/64\ x \3/4\ slotted-hole sieve. A metal sieve 0.032 
inch thick with slotted perforations 0.0895 (5-\1/2\/64) inch by 0.750 
(\3/4\) inch.
    (3) \6/64\ x \3/4\ slotted-hole sieve. A metal sieve 0.032 inch 
thick with slotted perforations 0.0937 (\6/64\) inch by 0.750 (\3/4\) 
inch.
    (q) Skinned and broken kernels. Barley kernels that have one-third 
or more of the hull removed, or that the hull is loose or missing over 
the germ, or broken kernels, or whole kernels that have a part or all of 
the germ missing.
    (r) Sound barley. Kernels and pieces of barley kernels that are not 
damaged, as defined under (d) of this section.
    (s) Suitable malting type. Varieties of malting barley that are 
recommended by the American Malting Barley Association and other malting 
type(s) used by the malting and brewing industry. The varieties are 
listed in GIPSAs instructions.
    (t) Thin barley. Thin barley shall be defined for the appropriate 
class as follows:
    (1) Malting barley. Six-rowed Malting barley that passes through a 
\5/64\ x \3/4\ slotted-hole sieve and Two-rowed Malting barley which 
passes through a \5.5\/64x\3/4\ slotted-hole sieve in 
accordance with procedures prescribed in GIPSAs instructions.
    (2) Barley. Six-rowed barley, Two-rowed barley, or Barley that 
passes

[[Page 313]]

through a \5/64\x\3/4\ slotted-hole sieve in accordance with procedures 
prescribed in GIPSAs instructions.
    (u) Wild oats. Seeds of Avena fatua L. and A. sterilis L.

[52 FR 24418, June 30, 1987; 52 FR 28534, July 31, 1987; 61 FR 18491, 
Apr. 26, 1996]

            Principles Governing the Application of Standards



Sec. 810.203  Basis of determination.

    All other determinations. Each determination of heat-damaged 
kernels, injured-by-heat kernels, and white or blue aleurone layers in 
Six-rowed barley is made on pearled, dockage-free barley. Other 
determinations not specifically provided for under the General 
Provisions are made on the basis of the grain when free from dockage, 
except the determination of odor is made on either the basis of the 
grain as a whole or the grain when free from dockage.

                      Grades and Grade Requirements



Sec. 810.204  Grades and grade requirements for Six-rowed Malting barley and Six-rowed Blue Malting barley.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Minimum limits of--                         Maximum limits of--
                                                                 ---------------------------------------------------------------------------------------
                                                                     Test                                                            Skinned
                              Grade                                 weight    Suitable    Sound     Damaged    Foreign     Other       and        Thin
                                                                     per      malting     barley    kernels    material    grains     broken     barley
                                                                    bushel     types       \1\        \1\     (percent)  (percent)   kernels   (percent)
                                                                   (pounds)  (percent)  (percent)  (percent)                        (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
U.S. No. 1......................................................       47.0       95.0       97.0        2.0        0.5        2.0        4.0        7.0
U.S. No. 2......................................................       45.0       95.0       94.0        3.0        1.0        3.0        6.0       10.0
U.S. No. 3......................................................       43.0       95.0       90.0        4.0        2.0        5.0        8.0       15.0
U.S. No. 4......................................................       43.0       95.0       87.0        5.0        3.0        5.0       10.0       15.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Injured-by-frost kernels and injured-by-mold kernels are not considered damaged kernels or considered against sound barley.
Notes: Malting barley shall not be infested in accordance with Sec.  810.107(b) and shall not contain any special grades as defined in Sec.  810.206.
  Six-rowed Malting barley and Six-rowed Blue Malting barley varieties not meeting the requirements of this section shall be graded in accordance with
  standards established for the class Barley.


[61 FR 18492, Apr. 26, 1996]



Sec. 810.205  Grades and grade requirements for Two-rowed Malting barley.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                        Minimum limits of--                           Maximum limits of--
                                                              ------------------------------------------------------------------------------------------
                                                                              Suitable                                          Skinned and
                            Grade                              Test weight    malting       Sound      Wild oats     Foreign       broken    Thin barley
                                                                per bushel     types      barley \1\   (percent)     material     kernels     (percent)
                                                                 (pounds)    (percent)    (percent)                 (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
U.S. No. 1...................................................         50.0         97.0         98.0          1.0          0.5          5.0          5.0
U.S. No. 2...................................................         48.0         97.0         98.0          1.0          1.0          7.0          7.0
U.S. No. 3...................................................         48.0         95.0         96.0          2.0          2.0         10.0         10.0
U.S. No. 4...................................................         48.0         95.0         93.0          3.0          3.0         10.0         10.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Injured-by-frost kernels and injured-by-mold kernels are not considered damaged kernels or considered against sound barley.

    Notes: Malting barley shall not be infested in accordance with Sec. 
810.107(b) and shall not contain any special grades as defined in Sec. 
810.206. Two-rowed Malting barley varieties not meeting the requirements 
of this section shall be graded in accordance with standards established 
for the class Barley.

[61 FR 18492, Apr. 26, 1996]



Sec. 810.206  Grades and grade requirements for barley.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                  Minimum limits of--                          Maximum Limits of--
                                                              ------------------------------------------------------------------------------------------
                                                                                                          Heat
                            Grade                              Test weight     Sound       Damaged      damaged      Foreign       Broken    Thin barley
                                                                per bushel     barley    kernels \1\    kernels      material     kernels     (percent)
                                                                 (pounds)    (percent)    (percent)    (percent)    (percent)    (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
U.S. No. 1...................................................         47.0         97.0          2.0          0.2          1.0          4.0         10.0

[[Page 314]]

 
U.S. No. 2...................................................         45.0         94.0          4.0          0.3          2.0          8.0         15.0
U.S. No. 3...................................................         43.0         90.0          6.0          0.5          3.0         12.0         25.0
U.S. No. 4...................................................         40.0         85.0          8.0          1.0          4.0         18.0         35.0
U.S. No. 5...................................................         36.0         75.0         10.0          3.0          5.0         28.0         75.0
--------------------------------------------------------------------------------------------------------------------------------------------------------
U.S. Sample Grade:
U.S. Sample grade shall be barley that:
(a) Does not meet the requirements for the grades 1, 2, 3, 4, or 5; or
(b) Contains 8 or more stones or any number of stones which have an aggregate weight in excess of 0.2 percent of the sample weight, 2 or more pieces of
  glass, 3 or more crotalaria seeds (Crotalaria spp.), 2 or more caster beans (Ricinus communis L.), 4 or more particles of unknown foreign substance(s)
  or commonly recognized harmful or toxic substance(s), 8 or more cocklebur (Xanthium spp.) or similar seeds singly or in combination, 10 or more rodent
  pellets, bird droppings, or equivalent quantity of other animal filth per 1\1/8\ to 1\1/4\ quarts of barley; or
(c) Has a musty, sour, or commercially objectionable foreign odor (except smut or garlic odor); or
(d) Is heating or otherwise of distinctly low quality.
\1\ Includes heat-damaged kernels. Injured-by-frost kernels and injured-by-mold kernels are not considered damaged kernels.


[61 FR 18492, Apr. 26, 1996]

              Special Grades and Special Grade Requirements



Sec. 810.207  Special grades and special grade requirements.

    (a) Blighted barley. Barley that contains more than 4.0 percent of 
fungus-damaged and/or mold-damaged kernels.
    (b) Ergoty barley. Barley that contains more than 0.10 percent 
ergot.
    (c) Garlicky barley. Barley that contains three or more green garlic 
bulblets, or an equivalent quantity of dry or partly dry bulblets in 500 
grams of barley.
    (d) Smutty barley. Barley that has kernels covered with smut spores 
to give a smutty appearance in mass, or which contains more than 0.20 
percent smut balls.

[52 FR 24418, June 30, 1987, as amended at 52 FR 24441, June 30, 1987]



       Subpart C_United States Standards for Canola_Terms Defined

    Source: 57 FR 3274, Jan. 29, 1992, unless otherwise noted.



Sec. 810.301  Definition of canola.

    Seeds of the genus Brassica from which the oil shall contain less 
than 2 percent erucic acid in its fatty acid profile and the solid 
component shall contain less than 30.0 micromoles of any one or any 
mixture of 3-butenyl glucosinolate, 4-pentenyl glucosinolate, 2-hydroxy-
3-butenyl, or 2-hydroxy-4-pentenyl glucosinolate, per gram of air-dried, 
oil free solid. Before the removal of dockage, the seed shall contain 
not more than 10.0% of other grains for which standards have been 
established under the United States Grain Standards Act.



Sec. 810.302  Definitions of other terms.

    (a) Conspicuous Admixture. All matter other than canola, including 
but not limited to ergot, sclerotinia, and stones, which is conspicuous 
and readily distinguishable from canola and which remains in the sample 
after the removal of machine separated dockage. Conspicuous admixture is 
added to machine separated dockage in the computation of total dockage.
    (b) Damaged kernels. Canola and pieces of canola that are heat-
damaged, sprout-damaged, mold-damaged, distinctly green damaged, frost 
damaged, rimed damaged, or otherwise materially damaged.
    (c) Distinctly green kernels. Canola and pieces of canola which, 
after being crushed, exhibit a distinctly green color.
    (d) Dockage. All matter other than canola that can be removed from 
the original sample by use of an approved device according to procedures 
prescribed in FGIS instructions. Also, underdeveloped, shriveled, and 
small pieces of canola kernels that cannot be recovered by properly 
rescreening or recleaning. Machine separated dockage

[[Page 315]]

is added to conspicuous admixture in the computation of total dockage.
    (e) Ergot. Sclerotia (sclerotium, sing.) of the fungus, Claviceps 
species, which are associated with some seeds other than canola where 
the fungal organism has replaced the seed.
    (f) Heat-damaged kernels. Canola and pieces of canola which, after 
being crushed, exhibit that they are discolored and damaged by heat.
    (g) Inconspicuous admixture. Any seed which is difficult to 
distinguish from canola. This includes, but is not limited to, common 
wild mustard (Brassica kaber and B. juncea), domestic brown mustard 
(Brassica juncea), yellow mustard (B. hirta), and seed other than the 
mustard group.
    (h) Sclerotia (Sclerotium, sing.). Dark colored or black resting 
bodies of the fungi Sclerotinia and Claviceps.
    (i) Sclerotinia. Genus name which includes the fungus Sclerotinia 
sclerotiorum which produces sclerotia. Canola is only infrequently 
infected, and the sclerotia, unlike sclerotia of ergot, are usually 
associated within the stem of the plants.

            Principles Governing the Application of Standards



Sec. 810.303  Basis of determination.

    Each determination of conspicuous admixture, ergot, sclerotinia, 
stones, damaged kernels, heat-damaged kernels, distinctly green kernels, 
and inconspicuous admixture is made on the basis of the sample when free 
from dockage. Other determinations not specifically provided for under 
the general provisions are made on the basis of the sample as a whole, 
except the determination of odor is made on either the basis of the 
sample as a whole or the sample when free from dockage. The content of 
glucosinolates and erucic acid is determined on the basis of the sample 
according to procedures prescribed in FGIS instructions.

                      Grades and Grade Requirements



Sec. 810.304  Grades and grade requirements for canola.

------------------------------------------------------------------------
                                                   Grades, U.S. Nos.
               Grading factors                --------------------------
                                                  1        2        3
------------------------------------------------------------------------
                                                 Maximum percent limits
                                                          of:
----------------------------------------------
Damaged kernels:
    Heat damaged.............................     0.1      0.5      2.0
    Distinctly green.........................     2.0      6.0     20.0
      Total..................................     3.0     10.0     20.0
Conspicuous admixture:
    Ergot....................................     0.05     0.05     0.05
    Sclerotinia..............................     0.05     0.10     0.15
    Stones...................................     0.05     0.05     0.05
      Total..................................     1.0      1.5      2.0
Inconspicuous admixture......................     5.0      5.0      5.0
------------------------------------------------------------------------
                                                Maximum count limits of:
----------------------------------------------
 
Other material:
    Animal filth.............................     3        3        3
    Glass....................................     0        0        0
    Unknown foreign substance................     1        1        1
------------------------------------------------------------------------
U.S. Sample grade Canola that:
    (a) Does not meet the requirements for
     U.S. Nos. 1, 2, 3; or
    (b) Has a musty, sour, or commercially
     objectionable foreign odor; or
    (c) Is heating or otherwise of distinctly
     low quality.
------------------------------------------------------------------------

              Special Grades and Special Grade Requirements



Sec. 810.305  Special grades and special grade requirements.

    Garlicky canola. Canola that contains more than two green garlic 
bulblets or an equivalent quantity of dry or partly dry bulblets in 
approximately a 500 gram portion.

                          Nongrade Requirements



Sec. 810.306  Nongrade requirements.

    Glucosinolates. Content of glucosinolates in canola is determined 
according to procedures prescribed in FGIS instructions.



               Subpart D_United States Standards for Corn

                              Terms Defined



Sec. 810.401  Definition of corn.

    Grain that consists of 50 percent or more of whole kernels of 
shelled dent corn and/or shelled flint corn (Zea mays

[[Page 316]]

L.) and not more than 10.0 percent of other grains for which standards 
have been established under the United States Grain Standards Act.



Sec. 810.402  Definition of other terms.

    (a) Broken corn. All matter that passes readily through a 12/64 
round-hole sieve and over a 6/64 round-hole sieve sample according to 
procedures prescribed in FGIS instructions.
    (b) Broken corn and foreign material. All matter that passes readily 
through a \12/64\ round-hole sieve and all matter other than corn that 
remains in the sieved after sieving according to procedures prescribed 
in FGIS instructions.
    (c) Classes. There are three classes for corn: Yellow corn, White 
corn, and Mixed corn.
    (1) Yellow corn. Corn that is yellow-kerneled and contains not more 
than 5.0 percent of corn of other colors. Yellow kernels of corn with a 
slight tinge of red are considered yellow corn.
    (2) White corn. Corn that is white-kerneled and contains not more 
than 2.0 percent of corn of other colors. White kernels of corn with a 
slight tinge of light straw or pink color are considered white corn.
    (3) Mixed corn. Corn that does not meet the color requirements for 
either of the classes Yellow corn or White corn and includes white-
capped Yellow corn.
    (d) Damaged kernels. Kernels and pieces of corn kernels that are 
badly ground-damaged, badly weather-damaged, diseased, frost-damaged, 
germ-damaged, heat-damaged, insect-bored, mold-damaged, sprout-damaged, 
or otherwise materially damaged.
    (e) Foreign material. All matter that passes readily through a 6/64 
round-hole sieve and all matter other than corn that remains on top of 
the 12/64 round-hole sieve according to procedures prescribed in FGIS 
instructions.
    (f) Heat-damaged kernels. Kernels and pieces of corn kernels that 
are materially discolored and damaged by heat.
    (g) Sieves--(1) 12/64 round-hole sieve. A metal sieve 0.032 inch 
thick with round perforations 0.1875 (12/64) inch in diameter which are 
1/4 inch from center to center. The perforations of each row shall be 
staggered in relation to the adjacent row.
    (2) 6/64 round-hole sieve. A metal sieve 0.032 inch thick with round 
perforations 0.0937 (6/64) inch in diameter which are 5/32 inch from 
center to center. The perforations of each row shall be staggered in 
relation to the adjacent row.

[52 FR 24418, June 30, 1987, as amended at 52 FR 24437, June 30, 1987; 
52 FR 28534, July 31, 1987]

            Principles Governing the Application of Standards



Sec. 810.403  Basis of determination.

    Each determination of class, damaged kernels, heat-damaged kernels, 
waxy corn, flint corn, and flint and dent corn is made on the basis of 
the grain after the removal of the broken corn and foreign material. 
Other determinations not specifically provided for under the general 
provisions are made on the basis of the grain as a whole, except the 
determination of odor is made on either the basis of the grain as a 
whole or the grain when free from broken corn and foreign material.

[52 FR 24418, June 30, 1987; 52 FR 28534, July 31, 1987]

                      Grades and Grade Requirements



Sec. 810.404  Grades and grade requirements for corn.

----------------------------------------------------------------------------------------------------------------
                                                                                     Maximum limits of
                                                                          --------------------------------------
                                                                Minimum         Damaged kernels
                                                              test weight -------------------------- Broken corn
                            Grade                              per bushel      Heat                  and foreign
                                                                (pounds)     damaged       Total       material
                                                                             kernels     (percent)    (percent)
                                                                            (percent)
----------------------------------------------------------------------------------------------------------------
U.S. No. 1..................................................         56.0          0.1          3.0          2.0
U.S. No. 2..................................................         54.0          0.2          5.0          3.0
U.S. No. 3..................................................         52.0          0.5          7.0          4.0

[[Page 317]]

 
U.S. No. 4..................................................         49.0          1.0         10.0          5.0
U.S. No. 5..................................................         46.0          3.0         15.0          7.0
----------------------------------------------------------------------------------------------------------------
U.S. Sample Grade
 U.S. Sample grade is corn that:
 (a) Does not meet the requirements for the grades U.S. Nos. 1, 2, 3, 4, or 5; or
 (b) Contains stones with an aggregate weight in excess of 0.1 percent of the sample weight, 2 or more pieces of
  glass, 3 or more crotalaria seeds (Crotalaria spp.), 2 or more castor beans (Ricinus communis L.), 4 or more
  particles of an unknown foreign substance(s)or a commonly recognized harmful or toxic substance(s), 8 or more
  cockleburs (Xanthium spp.), or similar seeds singly or in combination, or animal filth in excess of 0.20
  percent in 1,000 grams; or
 (c) Has a musty, sour, or commercially objectionable foreign odor; or
 (d) Is heating or otherwise of distinctly low quality.


[60 FR 61196, Nov. 29, 1995]

              Special Grades and Special Grade Requirements



Sec. 810.405  Special grades and special grade requirements.

    (a) Flint corn. Corn that consists of 95 percent or more of flint 
corn.
    (b) Flint and dent corn. Corn that consists of a mixture of flint 
and dent corn containing more than 5.0 percent but less than 95 percent 
of flint corn.
    (c) Waxy corn. Corn that consists of 95 percent or more waxy corn, 
according to procedures prescribed in FGIS instructions.

[52 FR 24418, June 30, 1987, as amended at 52 FR 24441, June 30, 1987; 
52 FR 28534, July 31, 1987]



             Subpart E_United States Standards for Flaxseed

                              Terms Defined



Sec. 810.601  Definition of flaxseed.

    Grain that, before the removal of dockage, consists of 50 percent or 
more of common flaxseed (Linum usitatissimum L.) and not more than 20 
percent of other grains for which standards have been established under 
the United States Grain Standards Act and which, after the removal of 
dockage, contains 50 percent or more of whole flaxseed.



Sec. 810.602  Definition of other terms.

    (a) Damaged kernels. Kernels and pieces of flaxseed kernels that are 
badly ground-damaged, badly weather-damaged, diseased, frost-damaged, 
germ-damaged, heat-damaged, insect-bored, mold-damaged, sprout-damaged, 
or otherwise materially damaged.
    (b) Dockage. All matter other than flaxseed that can be removed from 
the original sample by use of an approved device according to procedures 
prescribed in FGIS instructions. Also, underdeveloped, shriveled, and 
small pieces of flaxseed kernels removed in properly separating the 
material other than flaxseed and that cannot be recovered by properly 
rescreening or recleaning.
    (c) Heat-damaged kernels. Kernels and pieces of flaxseed kernels 
that are materially discolored and damaged by heat.
    (d) Other grains. Barley, corn, cultivated buckwheat, einkorn, 
emmer, guar, hull-less barley, nongrain sorghum, oats, Polish wheat, 
popcorn, poulard wheat, rice, rye, safflower, sorghum, soybeans, spelt, 
sunflower seed, sweet corn, triticale, wheat, and wild oats.

            Principles Governing the Application of Standards



Sec. 810.603  Basis of determination.

    Other determinations not specifically provided for under the general 
provisions are made on the basis of the grain when free from dockage, 
except the determination of odor is made on either the basis of the 
grain as a whole or the grain when free from dockage.

[[Page 318]]

                      Grades and Grade Requirements



Sec. 810.604  Grades and grade requirements for flaxseed.

------------------------------------------------------------------------
                                                      Maximum limits of
                                           Minimum    damaged kernels--
                                            test   ---------------------
                  Grade                    weight      Heat
                                             per     damaged     Total
                                           bushel    kernels   (percent)
                                          (pounds)  (percent)
------------------------------------------------------------------------
U.S. No. 1..............................      49.0        0.2       10.0
U.S. No. 2..............................      47.0        0.5       15.0
U.S. Sample grade--
  U.S. Sample grade is flaxseed that:
    (a) Does not meet the requirements for the grades U.S. Nos. 1 or 2;
     or
    (b) Contains 8 or more stones which have an aggregate weight in
     excess of 0.2 percent of the sample weight, 2 or more pieces of
     glass, 3 or more crotalaria seeds (Crotalaria spp.), 2 or more
     castor beans (Ricinus communis L.), 4 or more particles of an
     unknown foreign substance(s) or a commonly recognized harmful or
     toxic substance(s), 10 or more rodent pellets, bird dropping, or
     equivalent quantity of other animal filth per 1\1/8\ to 1\1/4\
     quarts of flaxseed; or
    (c) Has musty, sour, or commercially objectionable foreign odor
     (except smut or garlic odor), or
    (d) Is heating or otherwise of distinctly low quality.
------------------------------------------------------------------------



            Subpart F_United States Standards for Mixed Grain

                              Terms Defined



Sec. 810.801  Definition of mixed grain.

    Any mixture of grains for which standards have been established 
under the United States Grain Standards Act, provided that such mixture 
does not come within the requirements of any of the standards for such 
grains; and that such mixture consists of 50 percent or more of whole 
kernels of grain and/or whole or broken soybeans which will not pass 
through a \5/64\ triangular-hole sieve and/or whole flaxseed that passes 
through such a sieve after sieving according to procedures prescribed in 
FGIS instructions.



Sec. 810.802  Definition of other terms.

    (a) Damaged kernels. Kernels and pieces of grain kernels for which 
standards have been established under the Act, that are badly ground-
damaged, badly weather-damaged, diseased, frost-damaged, germ-damaged, 
heat-damaged, insect-bored, mold-damaged, sprout-damaged, or otherwise 
materially damaged.
    (b) Foreign material and fines. All matter other than whole flaxseed 
that passes through a \5/64\ triangular-hole sieve, and all matter other 
than grains for which standards have been established under the Act, 
that remains in the sieved sample.
    (c) Grades. U.S. Mixed Grain, or U.S. Sample grade Mixed Grain, and 
special grades.
    (d) Heat-damaged kernels. Kernels and pieces of grain kernels for 
which standards have been established under the Act, that are materially 
discolored and damaged by heat.
    (e) Sieve--\5/64\ triangular-hole sieve. A metal sieve 0.032 inch 
thick with equilateral triangular perforations the inscribed circles of 
which are 0.0781 (\5/64\) inch in diameter.

            Principles Governing the Application of Standards



Sec. 810.803  Basis of determination.

    Each determination of damaged and heat-damaged kernels, and the 
percentage of each kind of grain in the mixture is made on the basis of 
the sample after removal of foreign material and fines. Other 
determinations not specifically provided for under the general 
provisions are made on the basis of the grain as a whole, except the 
determination of odor is made on either the basis of the grain as a 
whole or the grain when free from foreign material and fines.

                      Grades and Grade Requirements



Sec. 810.804  Grades and grade requirements for mixed grain.

    (a) U.S. Mixed Grain (grade). Mixed grain with not more than 15.0 
percent of damaged kernels, and not more than 3.0 percent of heat-
damaged kernels, and that otherwise does not meet the requirements for 
the grade U.S. Sample grade Mixed Grain.
    (b) U.S. Sample grade Mixed Grain. Mixed grain that:
    (1) Does not meet the requirements for the grade U.S. Mixed Grain; 
or
    (2) Contains more than 16.0 percent moisture; or
    (3) Contains 8 or more stones that have an aggregate weight in 
excess of 0.2 percent of the sample weight, 2 or more pieces of glass, 3 
or more

[[Page 319]]

Crotalaria seeds (Crotalaria spp.), 2 or more castor beans (Ricinus 
communis L.), 8 more cockleburs (Xanthium spp.) or similar seeds singly 
or in combination, 4 or more pieces of an unknown foreign substance(s) 
or a recognized harmful or toxic substance(s), 10 or more rodent 
pellets, bird droppings, or an equivalent quantity of other animal filth 
per 1,000 grams of mixed grain; or
    (4) Is musty, sour, or heating; or
    (5) Has any commercially objectionable foreign odor except smut or 
garlic; or
    (6) Is otherwise of distinctly low quality.

              Special Grades and Special Grade Requirements



Sec. 810.805  Special grades and special grade requirements.

    (a) Blighted mixed grain. Mixed grain in which barley predominates 
and that contains more than 4.0 percent of fungus-damaged and/or mold-
damaged barley kernels.
    (b) Ergoty mixed grain. (1) Mixed grain in which rye or wheat 
predominates and that contains more than 0.30 percent ergot, or
    (2) Any other mixed grain that contains more than 0.10 percent 
ergot.
    (c) Garlicky mixed grain. (1) Mixed grain in which wheat, rye, or 
triticale predominates, and that contains 2 or more green garlic 
bulblets, or an equivalent quantity of dry or partly dry bulblets in 
1,000 grams of mixed grain; or
    (2) Any other mixed grain that contains 4 or more green garlic 
bulblets, or an equivalent quantity of dry or partly dry bulblets, in 
500 grams of mixed grain.
    (d) Smutty mixed grain. (1) Mixed grain in which rye, triticale, or 
wheat predominates, and that contains 15 or more average size smut 
balls, or an equivalent quantity of smut spores in 250 grams of mixed 
grain, or
    (2) Any other mixed grain that has the kernels covered with smut 
spores to give a smutty appearance in mass, or that contains more than 
0.2 percent smut balls.
    (e) Treated mixed grain. Mixed grain that has been scoured, limed, 
washed, sulfured, or treated in such a manner that its true quality is 
not reflected by the grade designation U.S. Mixed Grain or U.S. Sample 
grade Mixed Grain.

[52 FR 24418, June 30, 1987, as amended at 52 FR 24441, June 30, 1987]



               Subpart G_United States Standards for Oats

                              Terms Defined



Sec. 810.1001  Definition of oats.

    Grain that consists of 50 percent or more of oats (Avena sativa L. 
and A. byzantina C. Koch) and may contain, singly or in combination, not 
more than 25 percent of wild oats and other grains for which standards 
have been established under the United States Grain Standards Act.



Sec. 810.1002  Definition of other terms.

    (a) Fine seeds. All matter that passes through a \5/64\ triangular-
hole sieve after sieving according to procedures prescribed in FGIS 
instructions.
    (b) Foreign material. All matter other than oats, wild oats, and 
other grains.
    (c) Heat-damaged kernels. Kernels and pieces of oat kernels, other 
grains, and wild oats that are materially discolored and damaged by 
heat.
    (d) Other grains. Barley, corn, cultivated buckwheat, einkorn, 
emmer, flaxseed, guar, hull-less barley, nongrain sorghum, Polish wheat, 
popcorn, poulard wheat, rice, rye, safflower, sorghum, soybeans, spelt, 
sunflower seed, sweet corn, triticale, and wheat.
    (e) Sieves--(1) \5/64\ triangular-hole sieve. A metal sieve 0.032 
inch thick with equilateral triangular perforations the inscribed 
circles of which are 0.0781 (\5/64\) inch in diameter.
    (2) 0.064 x \3/8\ oblong-hole sieve. A metal sieve 0.032 inch thick 
with oblong perforations 0.064 inch by 0.375 (\3/8\) inch.
    (f) Sound oats. Kernels and pieces of oat kernels (except wild oats) 
that are not badly ground-damaged, badly weather-damaged, diseased, 
frost-damaged, germ-damaged, heat-damaged, insect-bored, mold-damaged, 
sprout-damaged, or otherwise materially damaged.
    (g) Wild oats. Seeds of Avena fatua L. and A. sterillis L.

[[Page 320]]

            Principles Governing the Application of Standards



Sec. 810.1003  Basis of determination.

    Other determinations not specifically provided for under the general 
provisions are made on the basis of the grain as a whole.

                      Grades and Grade Requirements



Sec. 810.1004  Grades and grade requirements for oats.

----------------------------------------------------------------------------------------------------------------
                                                     Minimum limits--                 Maximum limits--
                                                ----------------------------------------------------------------
                                                                              Heat-
                     Grade                       Test weight   Sound oats    damaged      Foreign     Wild oats
                                                  per bushel   (percent)     kernels      material    (percent)
                                                   (pounds)                 (percent)    (percent)
----------------------------------------------------------------------------------------------------------------
U.S. No. 1.....................................         36.0         97.0          0.1          2.0          2.0
U.S. No. 2.....................................         33.0         94.0          0.3          3.0          3.0
U.S. No. 3 \1\.................................         30.0         90.0          1.0          4.0          5.0
U.S. No. 4 \2\.................................         27.0         80.0          3.0          5.0         10.0
U.S. Sample grade--
  U.S. Sample grade are oats which:
    (a) Do not meet the requirements for the grades U.S. Nos. 1, 2, 3, or 4; or
    (b) Contain 8 or more stones which have an aggregate weight in excess of 0.2 percent of the sample weight, 2
     or more pieces of glass, 3 or more crotalaria seeds (Crotalaria spp.), 2 or more castor beans (Ricinus
     communis L.), 4 or more particles of an unknown foreign substance(s) or a commonly recognized harmful or
     toxic substance(s), 8 or more cocklebur (Xanthium spp.) or similar seeds singly or in combination, 10 or
     more rodent pellets, bird droppings, or equivalent quantity of other animal filth per 1\1/8\ to 1\1/4\
     quarts of oats; or
    (c) Have a musty, sour, or commercially objectionable foreign odor (except smut or garlic odor); or
    (d) Are heating or otherwise of distinctly low quality.
----------------------------------------------------------------------------------------------------------------
\1\ Oats that are slightly weathered shall be graded not higher than U.S. No. 3.
\2\ Oats that are badly stained or materially weathered shall be graded not higher than U.S. No. 4.

              Special Grades and Special Grade Requirements



Sec. 810.1005  Special grades and special grade requirements.

    (a) Bleached oats. Oats that in whole or in part, have been treated 
with sulfurous acid or any other bleaching agent.
    (b) Bright oats. Oats, except bleached oats, that are of good 
natural color.
    (c) Ergoty oats. Oats that contain more than 0.10 percent ergot.
    (d) Extra-heavy oats. Oats that have a test weight per bushel of 40 
pounds or more.
    (e) Garlicky oats. Oats that contain 4 or more green garlic bulblets 
or an equivalent quantity of dry or partly dry bulblets in 500 grams of 
oats.
    (f) Heavy oats. Oats that have a test weight per bushel of 38 pounds 
or more but less than 40 pounds.
    (g) Smutty oats. Oats that have kernels covered with smut spores to 
give a smutty appearance in mass, or that contain more than 0.2 percent 
of smut balls.
    (h) Thin oats. Oats that contain more than 20.0 percent of oats and 
other matter, except fine seeds, that pass through a 0.064x\3/8\ oblong-
hole sieve but remain on top of a \5/64\ triangular-hole sieve after 
sieving according to procedures prescribed in FGIS instructions.

[52 FR 24418, June 30, 1987, as amended at 52 FR 24441, June 30, 1987]



                Subpart H_United States Standards for Rye

                              Terms Defined



Sec. 810.1201  Definition of rye.

    Grain that, before the removal of dockage, consists of 50 percent or 
more of common rye (Secale cereale L.) and not more than 10 percent of 
other grains for which standards have been established under the United 
States Grain Standards Act and that, after the removal of dockage, 
contains 50 percent or more of whole rye.

[[Page 321]]



Sec. 810.1202  Definition of other terms.

    (a) Damaged kernels. Kernels, pieces of rye kernels, and other 
grains that are badly ground-damaged, badly weather-damaged, diseased, 
frost-damaged, germ-damaged, heat-damaged, insect-bored, mold-damaged, 
sprout-damaged, or otherwise materially damaged.
    (b) Dockage. All matter other than rye that can be removed from the 
original sample by use of an approved device in accordance with 
procedures prescribed in FGIS instructions. Also, underdeveloped, 
shriveled, and small pieces of rye kernels removed in properly 
separating the material other than rye and that cannot be recovered by 
properly rescreening and recleaning.
    (c) Foreign material. All matter other than rye that remains in the 
sample after the removal of dockage.
    (d) Heat-damaged kernels. Kernels, pieces of rye kernels, and other 
grains that are materially discolored and damaged by heat.
    (e) Other grains. Barley, corn, cultivated buckwheat, einkorn, 
emmer, flaxseed, guar, hull-less barley, nongrain sorghum, oats, Polish 
wheat, popcorn, poulard wheat, rice, safflower, sorghum, soybeans, 
spelt, sunflower seed, sweet corn, triticale, wheat, and wild oats.
    (f) Sieve--0.064 x \3/8\ oblong-hole sieve. A metal sieve 0.032 inch 
thick with oblong perforations 0.064 by 0.375 (\3/8\) inch.
    (g) Thin rye. Rye and other matter that passes through a 0.064 x \3/
8\ oblong-hole sieve after sieving according to procedures prescribed in 
FGIS instructions.

            Principles Governing the Application of Standards



Sec. 810.1203  Basis of determination.

    Other determinations not specifically provided for under the general 
provisions are made on the basis of the grain when free from dockage, 
except the determination of odor is made on either the basis of the 
grain as a whole or the grain when free from dockage.

                      Grades and Grade Requirements



Sec. 810.1204  Grades and grade requirements for rye.

----------------------------------------------------------------------------------------------------------------
                                                                       Maximum limits of--
                                                ----------------------------------------------------------------
                                                     Foreign material           Damaged kernels
                                      Minimum   ----------------------------------------------------
               Grade                test weight    Foreign
                                     per bushel     matter                     Heat                    Thin Rye
                                      (pounds)    other than     Total       damaged       Total      (percent)
                                                    wheat      (percent)    (percent)    (percent)
                                                  (percent)
----------------------------------------------------------------------------------------------------------------
U.S. No. 1........................         56.0          1.0          3.0          0.2          2.0         10.0
U.S. No. 2........................         54.0          2.0          6.0          0.2          4.0         15.0
U.S. No. 3........................         52.0          4.0         10.0          0.5          7.0         25.0
U.S. No. 4........................         49.0          6.0         10.0          3.0         15.0  ...........
U.S. Sample grade--
  U.S. Sample grade is rye that:
    (a) Does not meet the requirements for the grades U.S. Nos. 1, 2, 3, or 4; or
    (b) Contains 8 or more stones or any numbers of stones which have an aggregate weight in excess of 0.2
     percent of the sample weight, 2 or more pieces of glass, 3 or more crotalaria seeds (Crotalaria spp.), 2 or
     more castor beans (Ricinus communis L.), 4 or more particles of an unknown foreign substance(s) or a
     commonly recognized harmful or toxic substance(s), 2 or more rodent pellets, bird droppings, or equivalent
     quantity of other animal filth per 1\1/8\ to 1\1/4\ quarts of rye; or
    (c) Has a musty, sour, or commercially objectionable foreign odor (except smut or garlic odor); or
    (d) Is heating or otherwise of distinctly low quality.
----------------------------------------------------------------------------------------------------------------


[[Page 322]]

              Special Grades and Special Grade Requirements



Sec. 810.1205  Special grades and special grade requirements.

    (a) Ergoty rye. Rye that contains more than 0.30 percent of ergot.
    (b) Garlicky rye. Rye that contains in a 1,000-gram portion more 
than six green garlic bulblets or an equivalent quantity of dry or 
partly dry bulblets.
    (c) Light garlicky rye. Rye that contains in a 1,000-gram portion 
two or more, but not more than six, green garlic bulblets or an 
equivalent quantity of dry or partly dry bulblets.
    (d) Light smutty rye. Rye that has an unmistakable odor of smut, or 
that contains in a 250-gram portion smut balls, portions of smut balls, 
or spores of smut in excess of a quantity equal to 14 smut balls but not 
in excess of a quantity equal to 30 smut balls of average size.
    (e) Plump rye. Rye that contains not more than 5.0 percent of rye 
and other matter that passes through a 0.064x\3/8\ oblong-hole sieve.
    (f) Smutty rye. Rye that contains in a 250-gram portion smut balls, 
portions of smut balls, or spores of smut in excess of a quantity equal 
to 30 smut balls of average size.

[52 FR 24418, June 30, 1987, as amended at 52 FR 24441, June 30, 1987]



              Subpart I_United States Standards for Sorghum

                              Terms Defined



Sec. 810.1401  Definition of sorghum.

    Grain that, before the removal of dockage, consists of 50 percent or 
more of whole kernels of sorghum (Sorghum bicolor (L.) Moench) excluding 
nongrain sorghum and not more than 10.0 percent of other grains for 
which standards have been established under the United States Grain 
Standards Act.



Sec. 810.1402  Definition of other terms.

    (a) Broken kernels. All matter which passes through a 5/64 
triangular-hole sieve and over a 2-1/2/64 round-hole sieve according to 
procedures prescribed in FGIS instructions.
    (b) Broken kernels and foreign material. The combination of broken 
kernels and foreign material as defined in paragraph (a) and (f) of this 
section.
    (c) Classes. There are four classes of sorghum: Sorghum, Tannin 
sorghum, White sorghum, and Mixed sorghum.
    (1) Sorghum. Sorghum which is low in tannin content due to the 
absence of a pigmented testa (subcoat) and contains less than 98.0 
percent White sorghum and not more than 3.0 percent Tannin sorghum. The 
pericarp color of this class may appear white, yellow, pink, orange, 
red, or bronze.
    (2) Tannin sorghum. Sorghum which is high in tannin content due to 
the presence of a pigmented testa (subcoat) and contains not more than 
10.0 percent non-Tannin sorghum. The pericarp color of this class is 
usually brown but may also be white, yellow, pink, orange, red, or 
bronze.
    (3) White sorghum. Sorghum which is low in tannin content due to the 
absence of a pigmented testa (subcoat) and contains not more than 2.0 
percent sorghum of other classes. The pericarp color of this class is 
white or translucent and includes sorghum containing spots that, singly 
or in combination, cover 25.0 percent or less of the kernel.
    (4) Mixed sorghum. Sorghum which does not meet the requirements for 
any of the classes Sorghum, Tannin sorghum, or White sorghum.
    (d) Damaged kernels. Kernels, pieces of sorghum kernels and other 
grains that are badly ground damaged, badly weather damaged, diseased, 
frost-damaged, germ-damaged, heat-damaged, insect-bored, mold-damaged, 
sprout-damaged, or otherwise materially damaged.
    (e) Dockage. All matter other than sorghum that can be removed from 
the original sample by use of an approved device according to procedures 
prescribed in FGIS instructions. Also, underdeveloped, shriveled, and 
small pieces of sorghum kernels removed in properly separating the 
material other than sorghum.
    (f) Foreign material. All matter, except sorghum, which passes over 
the number 6 riddle and all matter other than sorghum that remains on 
top of the 5/64 triangular-hole sieve according to procedures prescribed 
in FGIS instructions.

[[Page 323]]

    (g) Heat-damaged kernels. Kernels, pieces of sorghum kernels, and 
other grains that are materially discolored and damaged by heat.
    (h) Nongrain sorghum. Seeds of broomcorn, Johnson-grass, Sorghum 
almum Parodi, sorghum-sudangrass hybrids, sorgrass, sudangrass, and 
sweet sorghum (sorgo).
    (i) Pericarp. The pericarp is the outer layers of the sorghum grain 
and is fused to the seedcoat.
    (j) Sieves--(1) 1.98 mm (5/64 (0.0781) inches) triangular-hole 
sieve. A metal sieve 0.81 mm (0.032 inches) thick with equilateral 
triangular perforations the inscribed circles of which are 1.98 mm 
(0.0781 inches) in diameter.
    (2) 0.99 mm (2 1/2 /64 (0.0391) inches) round-hole sieve. A metal 
sieve 0.81 mm (0.032 inch) thick with round holes 0.99 mm (0.0391 
inches) in diameter.

[52 FR 24418, June 30, 1987, as amended at 52 FR 24437, June 30, 1987; 
52 FR 28534, July 31, 1987; 57 FR 58971, Dec. 14, 1992]

            Principles Governing the Application of Standards



Sec. 810.1403  Basis of determination.

    Each determination of broken kernels and foreign material is made on 
the basis of the grain when free from dockage. Each determination of 
class, damaged kernels, heat-damaged kernels, and stones is made on the 
basis of the grain when free from dockage and that portion of the broken 
kernels, and foreign material that will pass through a 1.98 mm (5/64 
inches) triangular-hole sieve. Other determinations not specifically 
provided for in the general provisions are made on the basis of the 
grain as a whole except the determination of odor is made on either the 
basis of the grain as a whole or the grain when free from dockage, 
broken kernels, and foreign material removed by the 1.98 mm (5/64 
inches) triangular-hole sieve.

[57 FR 58971, Dec. 14, 1992]

                      Grades and Grade Requirements



Sec. 810.1404  Grades and grade requirements for sorghum.

----------------------------------------------------------------------------------------------------------------
                                                                              Grades U.S. Nos.\1\
                       Grading factors                       ---------------------------------------------------
                                                                   1            2            3            4
----------------------------------------------------------------------------------------------------------------
                                            Minimum pound limits of:
----------------------------------------------------------------------------------------------------------------
Test weight per bushel......................................         57.0         55.0         53.0         51.0
----------------------------------------------------------------------------------------------------------------
                                           Maximum percent limits of:
----------------------------------------------------------------------------------------------------------------
Damaged kernels:
  Heat (part of total)......................................          0.2          0.5          1.0          3.0
    Total...................................................          2.0          5.0         10.0         15.0
                                                             ---------------------------------------------------
Broken kernels and foreign material:
  Foreign material (part of total)..........................          1.5          2.5          3.5          4.5
                                                             ---------------------------------------------------
    Total...................................................          4.0          7.0         10.0         13.0
----------------------------------------------------------------------------------------------------------------
                                            Maximum count limits of:
----------------------------------------------------------------------------------------------------------------
Other material:
  Animal filth..............................................            9            9            9            9
  Castor beans..............................................            1            1            1            1
  Crotalaria seeds..........................................            2            2            2            2
  Glass.....................................................            1            1            1            1
  Stones \2\................................................            7            7            7            7
  Unknown foreign substance.................................            3            3            3            3
  Cockleburs................................................            7            7            7            7
U.S. Sample grade is Sorghum that:
  (a) Does not meet the requirements for U.S. Nos. 1, 2, 3, or 4; or
  (b) Has a musty, sour or commercially objectionable foreign odor (except smut odor); or
  (c) Is badly weathered, heating or distinctly low quality.
----------------------------------------------------------------------------------------------------------------
\1\ Sorghum which is distinctly discolored shall not grade higher than U.S. No. 3.
\2\ Aggregate weight of stones must also exceed 0.2 percent of sample weight.


[57 FR 58971, Dec. 14, 1992]

[[Page 324]]

              Special Grades and Special Grade Requirements



Sec. 810.1405  Special grades and special grade requirements.

    Smutty sorghum. Sorghum that has kernels covered with smut spores to 
give a smutty appearance in mass, or that contains 20 or more smut balls 
in 100 grams of sorghum.

[52 FR 24418, June 30, 1987, as amended at 52 FR 24441, June 30, 1987]



             Subpart J_United States Standards for Soybeans

                              Terms Defined



Sec. 810.1601  Definition of soybeans.

    Grain that consists of 50 percent or more of whole or broken 
soybeans (Glycine max (L.) Merr.) that will not pass through an \8/64\ 
round-hole sieve and not more than 10.0 percent of other grains for 
which standards have been established under the United States Grain 
Standards Act.



Sec. 810.1602  Definition of other terms.

    (a) Classes. There are two classes for soybeans: Yellow soybeans and 
Mixed soybeans.
    (1) Yellow soybeans. Soybeans that have yellow or green seed coats 
and which in cross section, are yellow or have a yellow tinge, and may 
include not more than 10.0 percent of soybeans of other colors.
    (2) Mixed soybeans. Soybeans that do not meet the requirements of 
the class Yellow soybeans.
    (b) Damaged kernels. Soybeans and pieces of soybeans that are badly 
ground-damaged, badly weather-damaged, diseased, frost-damaged, germ-
damaged, heat-damaged, insect-bored, mold-damaged, sprout-damaged, 
stinkbug-stung, or otherwise materially damaged. Stinkbug-stung kernels 
are considered damaged kernels at the rate of one-fourth of the actual 
percentage of the stung kernels.
    (c) Foreign material. All matter that passes through an \8/64\ 
round-hole sieve and all matter other than soybeans remaining in the 
sieved sample after sieving according to procedures prescribed in FGIS 
instructions.
    (d) Heat-damaged kernels. Soybeans and pieces of soybeans that are 
materially discolored and damaged by heat.
    (e) Purple mottled or stained. Soybeans that are discolored by the 
growth of a fungus; or by dirt; or by a dirt-like substance(s) including 
nontoxic inoculants; or by other nontoxic substances.
    (f) Sieve--\8/64\ round-hole sieve. A metal sieve 0.032 inch thick 
perforated with round holes 0.125 (\8/64\) inch in diameter.
    (g) Soybeans of other colors. Soybeans that have green, black, 
brown, or bicolored seed coats. Soybeans that have green seed coats will 
also be green in cross section. Bicolored soybeans will have seed coats 
of two colors, one of which is brown or black, and the brown or black 
color covers 50 percent of the seed coats. The hilum of a soybean is not 
considered a part of the seed coat for this determination.
    (h) Splits. Soybeans with more than \1/4\ of the bean removed and 
that are not damaged.

            Principles Governing the Application of Standards



Sec. 810.1603  Basis of determination.

    Each determination of class, heat-damaged kernels, damaged kernels, 
splits, and soybeans of other colors is made on the basis of the grain 
when free from foreign material. Other determinations not specifically 
provided for under the general provisions are made on the basis of the 
grain as a whole.

[[Page 325]]

                      Grades and Grade Requirements



Sec. 810.1604  Grades and grade requirements for soybeans.

----------------------------------------------------------------------------------------------------------------
                                                                               Grades U.S. Nos.
                       Grading factors                       ---------------------------------------------------
                                                                   1            2            3          4--s4
----------------------------------------------------------------------------------------------------------------
                                                                           Minimum pound limits of:
                                                             ---------------------------------------------------
Minimum test weight per bushel..............................         56.0         54.0         52.0         49.0
                                                             ---------------------------------------------------
                                                                          Maximum percent limits of:
                                                             ---------------------------------------------------
Damaged kernels:
    Heat (part of total)....................................          0.2          0.5          1.0          3.0
    Total...................................................          2.0          3.0          5.0          8.0
    Foreign material........................................          1.0          2.0          3.0          5.0
    Splits..................................................         10.0         20.0         30.0         40.0
    Soybeans of other colors \1\............................          1.0          2.0          5.0         10.0
                                                             ---------------------------------------------------
                                                                           Maximum count limits of:
                                                             ---------------------------------------------------
Other material:
    Animal filth............................................            9            9            9            9
    Castor beans............................................            1            1            1            1
    Crotalaria seeds........................................            2            2            2            2
    Glass...................................................            0            0            0            0
    Stones \2\..............................................            3            3            3            3
    Unknown foreign substance...............................            3            3            3            3
    Total \3\...............................................           10           10           10           10
----------------------------------------------------------------------------------------------------------------
U.S. Sample grade Soybeans that:
 (a) Do not meet the requirements for U.S. Nos. 1, 2, 3, or 4; or
 (b) Have a musty, sour, or commercially objectionable foreign odor (except garlic odor); or
 (c) Are heating or of distinctly low quality.
\1\ Disregard for Mixed soybeans.
\2\ In addition to the maximum count limit, stones must exceed 0.1 percent of the sample weight.
\3\ Includes any combination of animal filth, castor beans, crotalaria seeds, glass, stones, and unknown foreign
  substances. The weight of stones is not applicable for total other material.


[59 FR 10573, Mar. 7, 1994]

    Effective Date Note: At 71 FR 52406, Sept. 6, 2006, Sec. 810.1604 
was revised, effective Sept. 1, 2007. For the convenience of the user, 
the revised text is set forth as follows:

Sec. 810.1604   Grades and grade requirements for soybeans.

[[Page 326]]



----------------------------------------------------------------------------------------------------------------
                                                                               Grades U.S. Nos.
                       Grading factors                       ---------------------------------------------------
                                                                   1            2            3            4
----------------------------------------------------------------------------------------------------------------
                                                                          Maximum percent limits of:
                                                             ---------------------------------------------------
Damaged kernels:
    Heat (part of total)....................................          0.2          0.5          1.0          3.0
        Total...............................................          2.0          3.0          5.0          8.0
    Foreign material........................................          1.0          2.0          3.0          5.0
    Splits..................................................         10.0         20.0         30.0         40.0
    Soybeans of other colors: \1\...........................          1.0          2.0          5.0         10.0
                                                             ---------------------------------------------------
                                                                           Maximum count limits of:
                                                             ---------------------------------------------------
Other material:
    Animal filth............................................            9            9            9            9
    Caster beans............................................            1            1            1            1
    Crotalaria seeds........................................            2            2            2            2
    Glass...................................................            0            0            0            0
    Stones \2\..............................................            3            3            3            3
    Unknown foreign substance...............................            3            3            3            3
        Total \3\...........................................           10           10           10           10
                                                             ---------------------------------------------------
U.S. Sample grade are Soybeans that:
(a) Do not meet the requirements for U.S. Nos. 1, 2, 3, or 4; or
(b) Have a musty, sour, or commercially objectionable foreign odor (except smut or garlic odor); or
(c) Are heating or of distinctly low quality.
----------------------------------------------------------------------------------------------------------------
\1\ Disregard for Mixed soybeans.
\2\ In addition to the maximum count limit, stones must exceed 0.1 percent of the sample weight.
\3\ Includes any combination of animal filth, castor beans, crotalaria seeds, glass, stones, and unknown
  substances. The weight of stones is not applicable for total other material.


[[Page 327]]

              Special Grades and Special Grade Requirements



Sec. 810.1605  Special grades and special grade requirements.

    (a) Garlicky soybeans. Soybeans that contain 5 or more green garlic 
bulblets or an equivalent quantity of dry or partly dry bulblets in a 
1,000 gram portion.
    (b) Purple mottled or stained soybeans. Soybeans with pink or purple 
seed coats as determined on a portion of approximately 400 grams with 
the use of an FGIS Interpretive Line Photograph.

[52 FR 24418, June 30, 1987, as amended at 52 FR 24441, June 30, 1987; 
59 FR 10573, Mar. 7, 1994]



          Subpart K_United States Standards for Sunflower Seed

                              Terms Defined



Sec. 810.1801  Definition of sunflower seed.

    Grain that, before the removal of foreign material, consists of 50.0 
percent or more of cultivated sunflower seed (Helianthus annuus L.) and 
not more than 10.0 percent of other grains for which standards have been 
established under the United States Grain Standards Act.



Sec. 810.1802  Definition of other terms.

    (a) Cultivated sunflower seed. Sunflower seed grown for oil content. 
The term seed in this and other definitions related to sunflower seed 
refers to both the kernel and hull which is a fruit or achene.
    (b) Damaged sunflower seed. Seed and pieces of sunflower seed that 
are badly ground-damaged, badly weather-damaged, diseased, frost-
damaged, heat- damaged, mold-damaged, sprout-damaged, or otherwise 
materially damaged.
    (c) Dehulled seed. Sunflower seed that has the hull completely 
removed from the sunflower kernel.
    (d) Foreign material. All matter other than whole sunflower seeds 
containing kernels that can be removed from the original sample by use 
of an approved device and by handpicking a portion of the sample 
according to procedures prescribed in FGIS instructions.
    (e) Heat-damaged sunflower seed. Seed and pieces of sunflower seed 
that are materially discolored and damaged by heat.
    (f) Hull (Husk). The ovary wall of the sunflower seed.
    (g) Kernel. The interior contents of the sunflower seed that are 
surrounded by the hull.

            Principles Governing the Application of Standards



Sec. 810.1803  Basis of determination.

    Each determination of heat-damaged kernels, damaged kernels, test 
weight per bushel, and dehulled seed is made on the basis of the grain 
when free from foreign material. Other determinations not specifically 
provided for in the general provisions are made on the basis of the 
grain as a whole, except the determination of odor is made on either the 
basis of the grain as a whole or the grain when free from foreign 
material.

                      Grades and Grade Requirements


Sec. 810.1804  Grades and grade requirements for sunflower seed.

----------------------------------------------------------------------------------------------------------------
                                                                                    Maximum limits of--
                                                                          --------------------------------------
                                                                Minimum     Damaged Sunflower Seed
                            Grade                             test weight --------------------------   Dehulled
                                                               per bushel      Heat                      seed
                                                                (pounds)     Damaged       Total      (percent)
                                                                            (percent)    (Percent)
----------------------------------------------------------------------------------------------------------------
U.S. No. 1..................................................         25.0          0.5          5.0          5.0
U.S. No. 2..................................................         25.0          1.0         10.0          5.0

[[Page 328]]

 
U.S. Sample grade--
  U.S. Sample grade is sunflower seed that:
    (a) Does not meet the requirements for the grades U.S. Nos. 1 or 2; or
    (b) Contains 8 or more stones which have an aggregate weight in excess of 0.20 percent of the sample weight,
     2 or more pieces of glass, 3 or more crotalaria seeds (Crotalaria spp.), 2 or more castor beans (Ricinus
     communis L.), 4 or more particles of an unknown foreign substance(s), or a commonly recognized harmful or
     toxic substance(s), 10 or more rodent pellets, bird droppings, or equivalent quantity of other animal filth
     per 600 grams of sunflower seed; or
    (c) Has a musty, sour, or commercially objectionable foreign odor; or
    (d) Is heating or otherwise of distinctly low quality.
----------------------------------------------------------------------------------------------------------------



             Subpart L_United States Standards for Triticale

                              Terms Defined



Sec. 810.2001  Definition of triticale.

    Grain that, before the removal of dockage, consists of 50 percent or 
more of triticale (X Triticosecale Wittmack) and not more than 10 
percent of other grains for which standards have been established under 
the United States Grain Standards Act and that, after the removal of 
dockage, contains 50 percent or more of whole triticale.



Sec. 810.2002  Definition of other terms.

    (a) Damaged kernels. Kernels, pieces of triticale kernels, and other 
grains that are badly ground-damaged, badly weather-damaged, diseased, 
frost-damaged, germ-damaged, heat-damaged, insect-bored, mold-damaged, 
sprout-damaged, or otherwise materially damaged.
    (b) Defects. Damaged kernels, foreign material, and shrunken and 
broken kernels. The sum of these three factors may not exceed the limit 
for the factor defects for each numerical grade.
    (c) Dockage. All matter other than triticale that can be removed 
from the original sample by use of an approved device according to 
procedures prescribed in FGIS instructions. Also, underdeveloped, 
shriveled, and small pieces of triticale kernels removed in properly 
separating the material other than triticale and that cannot be 
recovered by properly rescreening or recleaning.
    (d) Foreign material. All matter other than triticale.
    (e) Heat-damaged kernels. Kernels, pieces of triticale kernels, and 
other grains that are materially discolored and damaged by heat.
    (f) Other grains. Barley, corn, cultivated buckwheat, einkorn, 
emmer, flaxseed, guar, hull-less barley, nongrain sorghum, oats, Polish 
wheat, popcorn, poulard wheat, rice, rye, safflower, sorghum, soybeans, 
spelt, sunflower seed, sweet corn, wheat, and wild oats.
    (g) Shrunken and broken kernels. All matter that passes through a 
0.064x3/8 oblong-hole sieve after sieving according to procedures 
prescribed in FGIS instructions.
    (h) Sieve--0.064x\3/8\ oblong-hole sieve. A metal sieve 0.032 inch 
thick with oblong perforations 0.064 inch by 0.375 (3/8) inch.

[52 FR 24418, June 30, 1987; 52 FR 28534, July 31, 1987]

            Principles Governing the Application of Standards



Sec. 810.2003  Basis of determination.

    Each determination of heat-damaged kernels, damaged kernels, 
material other than wheat or rye, and foreign material (total) is made 
on the basis of the grain when free from dockage and shrunken and broken 
kernels. Other determinations not specifically provided for under the 
general provisions are made on the basis of the grain when free from 
dockage except the determination of odor is made on either the basis of 
the grain as a whole or the grain when free from dockage.

[[Page 329]]

                      Grades and Grade Requirements



Sec. 810.2004  Grades and grade requirements for triticale.

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                         Maximum limits of--
                                                                           -----------------------------------------------------------------------------
                                                                                 Damaged Kernels          Foreign material
                                                                 Minimum   ----------------------------------------------------
                            Grade                              test weight                              Material                  Shrunken
                                                                per bushel      Heat                   other than                and broken  Defects \3\
                                                                 (pounds)     damaged     Total \1\     wheat or    Total \2\     kernels     (percent)
                                                                             (percent)    (percent)       rye       (percent)    (percent)
                                                                                                       (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
U.S. No. 1...................................................         48.0          0.2          2.0          1.0          2.0          5.0          5.0
U.S. No. 2...................................................         45.0          0.2          4.0          2.0          4.0          8.0          8.0
U.S. No. 3...................................................         43.0          0.5          8.0          3.0          7.0         12.0         12.0
U.S. No. 4...................................................         41.0          3.0         15.0          4.0         10.0         20.0         20.0
U.S. Sample grade--
  U.S. Sample grade is triticale that:
    (a) Does not meet the requirements for the grades U.S. Nos. 1, 2, 3, or 4; or
    (b) Contains 8 or more stones or any number of stones which have an aggregate weight in excess of 0.2 percent of the sample weight, 2 or more pieces
     of glass, 3 or more crotalaria seeds (Crotalaria spp.), 2 or more castor beans (Ricinus communis L.), 4 or more particles of an unknown foreign
     substance(s) or a commonly recognized harmful or toxic substance(s), 2 or more rodent pellets, bird droppings, or equivalent quantity of other
     animal filth per 1\1/8\ to 1\1/4\ quarts of triticale; or
    (c) Has a musty, sour, or commercially objectionable foreign odor (except smut or garlic odor); or
    (d) Is heating or otherwise of distinctly low quality.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes heat-damaged kernels.
\2\ Includes material other than wheat or rye.
\3\ Defects include damaged kernels (total), foreign material (total) and shrunken and broken kernels. The sum of these three factors may not exceed the
  limit for defects for each numerical grade.


[52 FR 24418, June 30, 1987; 52 FR 28534, July 31, 1987]

              Special Grades and Special Grade Requirements



Sec. 810.2005  Special grades and special grade requirements.

    (a) Ergoty triticale. Triticale that contains more than 0.10 percent 
of ergot.
    (b) Garlicky triticale. Triticale that contains in a 1,000 gram 
portion more than six green garlic bulblets or an equivalent quantity of 
dry or partly dry bulblets.
    (c) Light garlicky triticale. Triticale that contains in a 1,000 
gram portion two or more, but not more than six, green garlic bulblets 
or an equivalent quantity of dry or partly dry bulblets.
    (d) Light smutty triticale. Triticale that has an unmistakable odor 
of smut, or that contains in a 250 gram portion smut balls, portions of 
smut balls, or spores of smut in excess of a quantity equal to 14 smut 
balls, but not in excess of a quantity equal to 30 smut balls of average 
size.
    (e) Smutty triticale. Triticale that contains in a 250 gram portion 
smut balls, portions of smut balls, or spores of smut in excess of a 
quantity equal to 30 smut balls of average size.

[52 FR 24418, June 30, 1987, as amended at 52 FR 24441, June 30, 1987]



               Subpart M_United States Standards for Wheat

                              Terms Defined



Sec. 810.2201  Definition of wheat.

    Grain that, before the removal of dockage, consists of 50 percent or 
more common wheat (Triticum aestivum L.), club wheat (T. compactum 
Host.), and durum wheat (T. durum Desf.) and not more than 10 percent of 
other grains for which standards have been established under the United 
States Grain Standards Act and that, after the removal of the dockage, 
contains 50 percent or more of whole kernels of one or more of these 
wheats.



Sec. 810.2202  Definition of other terms.

    (a) Classes. There are eight classes for wheat: Durum wheat, Hard 
Red Spring wheat, Hard Red Winter wheat, Soft Red Winter wheat, Hard 
White wheat, Soft White wheat, Unclassed wheat, and Mixed wheat.

[[Page 330]]

    (1) Durum wheat. All varieties of white (amber) durum wheat. This 
class is divided into the following three subclasses:
    (i) Hard Amber Durum wheat. Durum wheat with 75 percent or more of 
hard and vitreous kernels of amber color.
    (ii) Amber Durum wheat. Durum wheat with 60 percent or more but less 
than 75 percent of hard and vitreous kernels of amber color.
    (iii) Durum wheat. Durum wheat with less than 60 percent of hard 
vitreous kernels of amber color.
    (2) Hard Red Spring wheat. All varieties of Hard Red Spring wheat. 
This class shall be divided into the following three subclasses.
    (i) Dark Northern Spring wheat. Hard Red Spring wheat with 75 
percent or more of dark, hard, and vitreous kernels.
    (ii) Northern Spring wheat. Hard Red Spring wheat with 25 percent or 
more but less than 75 percent of dark, hard, and vitreous kernels.
    (iii) Red Spring wheat. Hard Red Spring wheat with less than 25 
percent of dark, hard, and vitreous kernels.
    (3) Hard Red Winter wheat. All varieties of Hard Red Winter wheat. 
There are no subclasses in this class.
    (4) Soft Red Winter wheat. All varieties of Soft Red Winter wheat. 
There are no subclasses in this class.
    (5) Hard White wheat. All hard endosperm white wheat varieties. 
There are no subclasses in this class.
    (6) Soft White wheat. All soft endosperm white wheat varieties. This 
class is divided into the following three subclasses:
    (i) Soft White wheat. Soft endosperm white wheat varieties which 
contain not more than 10 percent of white club wheat.
    (ii) White Club wheat. Soft endosperm white club wheat varieties 
containing not more than 10 percent of other soft white wheats.
    (iii) Western White wheat. Soft White wheat containing more than 10 
percent of white club wheat and more than 10 percent of other soft white 
wheats.
    (7) Unclassed wheat. Any variety of wheat that is not classifiable 
under other criteria provided in the wheat standards. There are no 
subclasses in this class. This class includes any wheat which is other 
than red or white in color.
    (8) Mixed wheat. Any mixture of wheat that consists of less than 90 
percent of one class and more than 10 percent of one other class, or a 
combination of classes that meet the definition of wheat.
    (b) Contrasting classes. Contrasting classes are:
    (1) Durum wheat, Soft White wheat, and Unclassed wheat in the 
classes Hard Red Spring wheat and Hard Red Winter wheat.
    (2) Hard Red Spring wheat, Hard Red Winter wheat, Hard White wheat, 
Soft Red Winter wheat, Soft White wheat, and Unclassed wheat in the 
class Durum wheat.
    (3) Durum wheat and Unclassed wheat in the class Soft Red Winter 
wheat.
    (4) Durum wheat, Hard Red Spring wheat, Hard Red Winter wheat, Soft 
Red Winter wheat, and Unclassed wheat, in the classes Hard White wheat 
and Soft White wheat.
    (c) Damaged kernels. Kernels, pieces of wheat kernels, and other 
grains that are badly ground-damaged, badly weather-damaged, diseased, 
frost-damaged, germ-damaged, heat-damaged, insect-bored, mold-damaged, 
sprout-damaged, or otherwise materially damaged.
    (d) Defects. Damaged kernels, foreign material, and shrunken and 
broken kernels. The sum of these three factors may not exceed the limit 
for the factor defects for each numerical grade.
    (e) Dockage. All matter other than wheat that can be removed from 
the original sample by use of an approved device according to procedures 
prescribed in FGIS instructions. Also, underdeveloped, shriveled, and 
small pieces of wheat kernels removed in properly separating the 
material other than wheat and that cannot be recovered by properly 
rescreening or recleaning.
    (f) Foreign material. All matter other than wheat that remains in 
the sample after the removal of dockage and shrunken and broken kernels.
    (g) Heat-damaged kernels. Kernels, pieces of wheat kernels, and 
other grains that are materially discolored and damaged by heat which 
remain in

[[Page 331]]

the sample after the removal of dockage and shrunken and broken kernels.
    (h) Other grains. Barley, corn, cultivated buckwheat, einkorn, 
emmer, flaxseed, guar, hull-less barley, nongrain sorghum, oats, Polish 
wheat, popcorn, poulard wheat, rice, rye, safflower, sorghum, soybeans, 
spelt, sunflower seed, sweet corn, triticale, and wild oats.
    (i) Shrunken and broken kernels. All matter that passes through a 
0.064 x \3/8\ oblong-hole sieve after sieving according to procedures 
prescribed in the FGIS instructions.
    (j) Sieve--0.064 x \3/8\ oblong-hole sieve. A metal sieve 0.032 inch 
thick with oblong perforations 0.064 inch by 0.375 (\3/8\) inch.

[52 FR 24418, June 30, 1987, as amended at 54 FR 48736, Nov. 27, 1989; 
57 FR 58966, Dec. 14, 1992; 71 FR 8235, Feb. 18, 2006]

            Principles Governing the Application of Standards



Sec. 810.2203  Basis of determination.

    Each determination of heat-damaged kernels, damaged kernels, foreign 
material, wheat of other classes, contrasting classes, and subclasses is 
made on the basis of the grain when free from dockage and shrunken and 
broken kernels. Other determinations not specifically provided for under 
the general provisions are made on the basis of the grain when free from 
dockage, except the determination of odor is made on either the basis of 
the grain as a whole or the grain when free from dockage.

[52 FR 24418, June 30, 1987; 52 FR 28534, July 31, 1987]

                      Grades and Grade Requirements



Sec. 810.2204  Grades and grade requirements for wheat.

    (a) Grades and grade requirements for all classes of wheat, except 
Mixed wheat.

                                          Grades and Grade Requirements
----------------------------------------------------------------------------------------------------------------
                                                                                   Grades U.S. Nos.
                          Grading factors                           --------------------------------------------
                                                                        1        2        3        4        5
----------------------------------------------------------------------------------------------------------------
                                            Minimum pound limits of:
----------------------------------------------------------------------------------------------------------------
Test weight per bushel:
    Hard Red Spring wheat or White Club wheat......................     58.0     57.0     55.0     53.0     50.0
    All other classes and subclasses...............................     60.0     58.0     56.0     54.0     51.0
----------------------------------------------------------------------------------------------------------------
                                           Maximum percent limits of:
----------------------------------------------------------------------------------------------------------------
Defects:
    Damaged kernels................................................
        Heat (part of total).......................................      0.2      0.2      0.5      1.0      3.0
                                                                    --------------------------------------------
        Total......................................................      2.0      4.0      7.0     10.0     15.0
                                                                    ============================================
    Foreign material...............................................      0.4      0.7      1.3      3.0      5.0
    Shrunken and broken kernels....................................      3.0      5.0      8.0     12.0     20.0
                                                                    --------------------------------------------
        Total \1\..................................................      3.0      5.0      8.0     12.0     20.0
                                                                    ============================================
    Wheat of other classes: \2\....................................
    Contrasting classes............................................      1.0      2.0      3.0     10.0     10.0
                                                                    --------------------------------------------
        Total \3\..................................................      3.0      5.0     10.0     10.0     10.0
                                                                    ============================================
    Stones.........................................................      0.1      0.1      0.1      0.1      0.1
----------------------------------------------------------------------------------------------------------------
                                            Maximum count limits of:
----------------------------------------------------------------------------------------------------------------
Other material in one kilogram:
    Animal filth...................................................      1        1        1        1        1
    Castor beans...................................................      1        1        1        1        1
    Crotalaria seeds...............................................      2        2        2        2        2
    Glass..........................................................      0        0        0        0        0
    Stones.........................................................      3        3        3        3        3

[[Page 332]]

 
    Unknown foreign substances.....................................      3        3        3        3        3
                                                                    --------------------------------------------
        Total \4\..................................................      4        4        4        4        4
                                                                    ============================================
Insect-damaged kernels in 100 grams................................     31       31       31       31       31
----------------------------------------------------------------------------------------------------------------
U.S. Sample grade is Wheat that:
    (a) Does not meet the requirements for U.S. Nos. 1, 2, 3, 4, or 5; or.......................................
    (b) Has a musty, sour, or commercially objectionable foreign odor (except smut or garlic odor); or..........
    (c) Is heating or of distinctly low quality.................................................................
----------------------------------------------------------------------------------------------------------------
\1\ Includes damaged kernels (total), foreign material, shrunken and broken kernels.
\2\ Unclassed wheat of any grade may contain not more than 10.0 percent of wheat of other classes.
\3\ Includes contrasting classes.
\4\ Includes any combination of animal filth, castor beans, crotalaria seeds, glass, stones, or unknown foreign
  substance.

    (b) Grades and grade requirements for Mixed wheat. Mixed wheat is 
graded according to the U.S. numerical and U.S. Sample grade 
requirements of the class of wheat that predominates in the mixture, 
except that the factor wheat of other classes is disregarded.

[52 FR 24418, June 30, 1987, as amended at 52 FR 24442, June 30, 1987; 
57 FR 58966, Dec. 14, 1992; 71 FR 8235, Feb. 18, 2006]

              Special Grades and Special Grade Requirements



Sec. 810.2205  Special grades and special grade requirements.

    (a) Ergoty wheat. Wheat that contains more than 0.05 percent of 
ergot.
    (b) Garlicky wheat. Wheat that contains in a 1,000 gram portion more 
than two green garlic bulblets or an equivalent quantity of dry or 
partly dry bulblets.
    (c) Light smutty wheat. Wheat that has an unmistakable odor of smut, 
or which contains, in a 250-gram portion, smut balls, portions of smut 
balls, or spores of smut in excess of a quantity equal to 5 smut balls, 
but not in excess of a quantity equal to 30 smut balls of average size.
    (d) Smutty wheat. Wheat that contains, in a 250 gram portion, smut 
balls, portions of smut balls, or spores of smut in excess of a quantity 
equal to 30 smut balls of average size.
    (e) Treated wheat. Wheat that has been scoured, limed, washed, 
sulfured, or treated in such a manner that the true quality is not 
reflected by either the numerical grades or the U.S. Sample grade 
designation alone.

[52 FR 24418, June 30, 1987, as amended at 52 FR 24442, June 30, 1987; 
57 FR 58967, Dec. 14, 1992]



PART 868_GENERAL REGULATIONS AND STANDARDS FOR CERTAIN AGRICULTURAL 
COMMODITIES--Table of Contents




                          Subpart A_Regulations

                               Definitions

Sec.
868.1 Meaning of terms.

                             Administration

868.5 Administrator.
868.6 Nondiscrimination--policy and provisions.
868.7 Procedures for establishing regulations and standards.
868.8 Complaints and reports of alleged violations.
868.9 Provisions for hearings.
868.10 Information about the Service, Act, and regulations.
868.11 Public information.
868.12 Identification.
868.13 Regulations not applicable for certain purposes.

             Conditions for Obtaining or Withholding Service

868.20 Availability of services.
868.21 Requirements for obtaining service.
868.22 Withdrawal of request for inspection service by applicant.
868.23 Dismissal of request for inspection service.
868.24 Conditional withholding of service.
868.25 Denial or withdrawal of service.
868.26 Expenses of the cooperator or the Service.

[[Page 333]]

                    Inspection Methods and Procedures

868.30 Methods and order of performing inspection service.
868.31 Kinds of inspection services.
868.32 Who shall inspect commodities.
868.33 Sample requirements; general.
868.34 Partial inspection.
868.35 Sampling provisions by level of service.
868.36 Loss of identity.

                       Original Inspection Service

868.40 Who may request original inspection service.
868.41 Contract service.
868.42 How to request original inspection service.
868.44 New original inspection.

                        Retest Inspection Service

868.50 Who may request retest inspection service.
868.51 How to request retest inspection service.
868.52 Certificating retest inspection results.

                        Appeal Inspection Service

868.60 Who may request appeal inspection service.
868.61 How to request appeal inspection service.
868.62 Who shall perform appeal inspection service.
868.63 Certificating appeal inspection results.

                          Official Certificates

868.70 Official certificates; issuance and distribution.
868.71 Official certificate requirements.
868.72 Certification of results.
868.73 Corrected certificates.
868.74 Divided-lot certificates.
868.75 Duplicate certificates.

             Licensed Inspectors, Technicians, and Samplers

868.80 Who may be licensed.
868.81 Licensing procedures.
868.82 Voluntary cancellation or suspension of license.
868.83 Automatic suspension of license by change in employment.
868.84 Suspension or revocation of license.

                                  Fees

868.90 Fees for certain Federal inspection services.
868.91 Fees for certain Federal rice inspection services.
868.92 Explanation of service fees and additional fees.

                      Subpart B_Marketing Standards

868.101 General information.
868.102 Procedures for establishing and revising grade standards.
868.103 Public notification of grade standards action.

            Subpart C_United States Standards for Rough Rice

                              Terms Defined

868.201 Definition of rough rice.
868.202 Definition of other terms.

              Principles Governing Application of Standards

868.203 Basis of determination.
868.204 Interpretive line samples.
868.205 Milling requirements.
868.206 Milling yield determination.
868.207 Moisture.
868.208 Percentages.
868.209 Information.

           Grades, Grade Requirements, and Grade Designations

868.210 Grades and grade requirements for the classes of rough rice. 
          (See also Sec. 868.212.)
868.211 Grade designation.

     Special Grades, Special Grade Requirements, and Special Grade 
                              Designations

868.212 Special grades and requirements.
868.213 Special grade designation.

     Subpart D_United States Standards for Brown Rice for Processing

                              Terms Defined

868.251 Definition of brown rice for processing.
868.252 Definition of other terms.

              Principles Governing Application of Standards

868.253 Basis of determination.
868.254 Broken kernels determination.
868.255 Interpretive line samples.
868.256 Milling requirements.
868.257 Milling yield determination.
868.258 Moisture.
868.259 Percentages.
868.260 Information.

           Grades, Grade Requirements, and Grade Designations

868.261 Grades and grade requirements for the classes of brown rice for 
          processing. (See also Sec. 868.263.)
868.262 Grade designation.

[[Page 334]]

     Special Grades, Special Grade Requirements, and Special Grade 
                              Designations

868.263 Special grades and special grade requirements.
868.264 Special grade designation.

            Subpart E_United States Standards for Milled Rice

                              Terms Defined

868.301 Definition of milled rice.
868.302 Definition of other terms.

              Principles Governing Application of Standards

868.303 Basis of determination.
868.304 Broken kernels determination.
868.305 Interpretive line samples.
868.306 Milling requirements.
868.307 Moisture.
868.308 Percentages.
868.309 Information.

           Grades, Grade Requirements, and Grade Designations

868.310 Grades and grade requirements for the classes Long Grain Milled 
          Rice, Medium Grain Milled Rice, Short Grain Milled Rice, and 
          Mixed Milled Rice. (See also Sec. 868.315.)
868.311 Grades and grade requirements for the class Second Head Milled 
          Rice. (See also Sec. 868.315.)
868.312 Grades and grade requirements for the class Screenings Milled 
          Rice. (See also Sec. 868.315.)
868.313 Grades and grade requirements for the class Brewers Milled Rice. 
          (See also Sec. 868.315.)
868.314 Grade designations.

     Special Grades, Special Grade Requirements, and Special Grade 
                              Designations

868.315 Special grades and special grade requirements.
868.316 Special grade designation.

    Authority: Secs. 202-208, 60 Stat. 1087, as amended (7 U.S.C. 1621 
et seq.).



                          Subpart A_Regulations

    Source: 53 FR 3722, Feb. 9, 1988, unless otherwise noted. 
Redesignated at 60 FR 16364, Mar. 30, 1995.

                               Definitions



Sec. 868.1  Meaning of terms.

    (a) Construction. Words used in the singular form are considered to 
imply the plural and vice versa, as appropriate.
    (b) Definitions. For the purpose of these regulations, unless the 
context requires otherwise, the following terms have the meanings given 
for them in this paragraph.
    (1) Act. The Agricultural Marketing Act of 1946, as amended (secs. 
202-208, 60 Stat. 1087, as amended, 7 U.S.C. 1621 et seq.).
    (2) Administrator. The Administrator of the Grain Inspection, 
Packers and Stockyards Administration or any person to whom the 
Administrator's authority has been delegated.
    (3) Appeal inspection service. A review by the Service of the 
result(s) of an original inspection or retest inspection service.
    (4) Applicant. An interested person who requests any inspection 
service with respect to a commodity.
    (5) Authorized inspector. A Department employee authorized by the 
Administrator to inspect a commodity in accordance with the Act, 
regulations, standards, and instructions.
    (6) Board appeal inspection service. A review by the Board of 
Appeals and Review of the result(s) of an original inspection or appeal 
inspection service on graded commodities.
    (7) Board of Appeals and Review or Board. The Board of Appeals and 
Review of the Service that performs Board appeal inspection services.
    (8) Business day. The established field office working hours, any 
Monday through Friday that is not a holiday, or the working hours and 
days established by a cooperator.
    (9) Carrier. A truck, trailer, truck/trailer(s) combination, 
railroad car, barge, ship, or other container used to transport bulk, 
sacked, or packaged commodity.
    (10) Commodity. Agricultural commodities and products thereof that 
the Secretary has assigned to the Service for inspection under the Act, 
including but not limited to dry beans, grain, hops, lentils, oilseeds, 
dry peas, split peas, and rice.
    (11) Continuous inspection. The conduct of inspection services in an 
approved plant where one or more official inspection personnel are 
present during the processing of a commodity to make in-process 
examinations of the preparation, processing, packing, and

[[Page 335]]

warehousing of the commodity and to determine compliance with applicable 
sanitation requirements.
    (12) Contract service. Any service performed under a contract 
between an applicant and the Service.
    (13) Contractor. Any person who enters into a contract with the 
Service or with a cooperator to perform specified inspection services.
    (14) Cooperator. An agency or department of the Federal Government 
which has an interagency agreement or State agency which has a 
reimbursable agreement with the Service.
    (15) Cooperator inspection service. The inspection service provided 
by a cooperator under the regulations. Under this service, inspection 
certificates are issued by the cooperator and all fees and charges are 
collected by the cooperator, except as provided in the agreement.
    (16) Department. The United States Department of Agriculture.
    (17) Factor. A quantified physical or chemical property identified 
in official standards, specifications, abstracts, contracts, or other 
documents whose measurement describes a specific quality of a commodity.
    (18) Field office. An office of the Service designated to perform, 
monitor, or supervise inspection services.
    (19) Grade. A grade designating a level of quality as defined in the 
commodity standards promulgated pursuant to the Act.
    (20) Graded commodity. Commodities for which the Service has 
promulgated Standards under the Act and commodities which are tested by 
the Service at a field office or by a cooperator for specific physical 
factors using approved equipment and an inspector's interpretation of 
visual conditions.
    (21) Holiday. The legal public holidays specified in paragraph (a) 
of section 6103, title 5, of the United States Code (5 U.S.C. 6103(a)) 
and any other day declared to be a holiday by Federal Statute or 
Executive Order. Under section 6103 and Executive Order 10357, as 
amended, if the specified legal public holiday falls on a Saturday, the 
preceding Friday shall be considered to be the holiday, or if the 
specified legal public holiday falls on a Sunday, the following Monday 
shall be considered to be the holiday.
    (22) Inspection certificate. A written or printed official document 
which is approved by the Service and which shows the results of an 
inspection service performed under the Act.
    (23) Inspection service. (i) Applying such tests and making 
examinations of a commodity and records by official personnel as may be 
necessary to determine the kind, class, grade, other quality 
designation, the quantity, or condition of commodity; performing 
condition of container, carrier stowage examinations; and any other 
services as related to commodities, as necessary; and (ii) issuing an 
inspection certificate.
    (24) Instructions. The Notices, Instructions, Handbooks, and other 
directives issued by the Service.
    (25) Interagency agreement. An agreement between the Service and 
other agencies or departments of the Federal Government to conduct 
commodity inspection services as authorized in the Act.
    (26) Interested person. Any person having a contract or other 
financial interest in a commodity as the owner, seller, purchaser, 
warehouseman, carrier, or otherwise.
    (27) Licensee. Any person licensed by the Service.
    (28) Nongraded commodity. Nonprocessed commodities which are 
chemically tested for factors not included in the Standards under the 
Act or the U.S. Grain Standards Act (7 U.S.C. 71 et seq.) and processed 
commodities.
    (29) Nonregular workday. Any Sunday or holiday.
    (30) Official inspector. Any official personnel who performs, 
monitors, or supervises the performance of inspection service and 
certifies the results of inspection of the commodity.
    (31) Official personnel. Any authorized Department employee or 
person licensed by the Administrator to perform all or specified 
functions under the Act.
    (32) Official sampler. Any official personnel who performs, 
monitors, or supervises the performance of sampling of a commodity.
    (33) Official technician. Any official personnel who performs, 
monitors, or

[[Page 336]]

supervises the performance of specified inspection services and 
certifies the results thereof, other than certifying the grade of a 
commodity.
    (34) Origin. The geographical area or place where the commodity is 
grown.
    (35) Original inspection service. An initial inspection of a 
community.
    (36) Person. Any individual, partnership, association, corporation, 
or other business entity.
    (37) Plant. The premises, buildings, structure, and equipment 
(including but not limited to machines, utensils, vehicles, and fixtures 
located in or about the premises) used or employed in the preparation, 
processing, handling, transporting, and storage of commodities.
    (38) Regular workday. Any Monday through Saturday that is not a 
holiday.
    (39) Regulations. The regulations in this part.
    (40) Reimbursable agreement. An agreement between the Service and 
State agencies to conduct commodity inspection services authorized 
pursuant to the Act.
    (41) Retest inspection service. To test, using the same laboratory 
procedures, a factor(s) of nongraded commodities previously tested.
    (42) Secretary. The Secretary of Agriculture of the United States or 
any person to whom the Secretary's authority has been delegated.
    (43) Service. The Federal Grain Inspection Service of the Grain 
Inspection, Packers and Stockyards Administration of the United States 
Department of Agriculture.
    (44) Service representative. An employee authorized by the Service 
or a person licensed by the Administrator.
    (45) Specification. A document which clearly and accurately 
describes the essential and technical requirements for items, materials, 
or services including requested inspection procedures.
    (46) Standards. The commodity standards in this part that describe 
the physical and biological condition of a commodity at the time of 
inspection.
    (47) Submitted sample. A sample submitted by or for an applicant for 
inspection.
    (48) Test. A procedure to measure a factor using specialized 
laboratory equipment involving the application of established scientific 
principles and laboratory procedures.

[53 FR 3722, Feb. 9, 1988, as amended at 60 FR 5835, Jan. 31, 1995. 
Redesignated at 60 FR 16364, Mar. 30, 1995, and amended at 63 FR 29531, 
June 1, 1998; 70 FR 69250, Nov. 15, 2005]

                             Administration



Sec. 868.5  Administrator.

    The Administrator, under the authority delegated by the Secretary, 
is charged with administering the programs and functions authorized 
under the Act and the regulations concerning those commodities assigned 
by the Secretary to the Service.



Sec. 868.6  Nondiscrimination--policy and provisions.

    In implementing, administering, and enforcing the Act and the 
regulations, standards, and instructions, it is the policy of the 
Service to promote adherence to the provisions of the Civil Rights Act 
of 1964 (42 U.S.C. 2000a et seq.).



Sec. 868.7  Procedures for establishing regulations and standards.

    Notice of proposals to prescribe, amend, or revoke regulations and 
standards shall be published in accordance with applicable provisions of 
the Administrative Procedures Act (5 U.S.C. 551 et seq.). Any interested 
person desiring to file a petition for the issuance, amendment, or 
revocation of regulations or standards may do so in accordance with 7 
CFR 1.28 of the regulations of the Office of the Secretary of 
Agriculture.



Sec. 868.8  Complaints and reports of alleged violations.

    (a) General. Except as provided in paragraph (b) of this section, 
complaints and reports of violations involving the Act or the 
regulations, standards, and instructions issued under the Act should be 
filed with the Service in accordance with 7 CFR 1.133 of the regulations 
of the Office of the Secretary of Agriculture and these regulations and 
the instructions.
    (b) Retest inspection and appeal inspection service. Complaints 
involving the results of inspection services shall, to the extent 
practicable, be submitted as

[[Page 337]]

requests for retest inspection, appeal inspection, or Board appeal 
inspection services as set forth in these regulations.

(Approved by the Office of Management and Budget under control number 
0580-0011)



Sec. 868.9  Provisions for hearings.

    Opportunities shall be provided for hearings either in accordance 
with the Rules of Practice Governing Formal Adjudicatory Proceedings 
Instituted by the Secretary under Various Statutes (7 CFR part 1, 
subpart H) or in accordance with FGIS procedures as appropriate.



Sec. 868.10  Information about the Service, Act, and regulations.

    Information about the Service, Act, regulations, standards, rules of 
practice, instructions, and other matters related to the inspection of 
commodities may be obtained by telephoning or writing the U.S. 
Department of Agriculture, Federal Grain Inspection Service, P.O. Box 
96454, Washington, DC 20090-6454, or any field office or cooperator.



Sec. 868.11  Public information.

    (a) General. This section is issued in accordance with Sec. Sec. 
1.1 through 1.23 of the regulations of the Secretary in part 1, subpart 
A, of subtitle A of title 7 (7 CFR 1.1 through 1.23), and appendix A 
thereto, implementing the Freedom of Information Act (5 U.S.C. 552). The 
Secretary's regulations, as implemented by this section, govern the 
availability of records of the Service to the public.
    (b) Public inspection and copying. Materials maintained by the 
Service, including those described in 7 CFR 1.5, will be made available, 
upon a request which has not been denied, for public inspection and 
copying at the U.S. Department of Agriculture, Federal Grain Inspection 
Service, 1400 Independence Avenue SW., Washington, DC 20250. The public 
may request access to these materials 8:00 a.m.-4:30 p.m. Monday through 
Friday except for holidays.
    (c) Indexes. The Service shall maintain an index of all material 
required to be made available in 7 CFR 1.5. Copies of these indexes will 
be maintained at the location given in paragraph (b) of this section. 
Notice is hereby given that quarterly publication of these indexes is 
unnecessary and impracticable because the material is voluminous and 
does not change often enough to justify the expense of quarterly 
publication. However, upon specific request, copies of any index will be 
provided at a cost not to exceed the direct cost of duplication.
    (d) Requests for records. Requests for records under 5 U.S.C. 
552(a)(3) shall be made in accordance with 7 CFR 1.6 and shall be 
addressed as follows: Office of the Administrator, Federal Grain 
Inspection Service, FOIA Request, U.S. Department of Agriculture, P.O. 
Box 96454, Washington, DC 20090-6454.
    (e) FOIA Appeals. Any person whose request, under paragraph (d) of 
this section, is denied shall have the right to appeal such denial in 
accordance with 7 CFR 1.13. Appeals shall be addressed to the 
Administrator, Federal Grain Inspection Service, FOIA Appeal, U.S. 
Department of Agriculture, P.O. Box 96454, Washington, DC 20090-6454.
    (f) Disclosure of information. FGIS employees or persons acting for 
FGIS under the Act shall not, without the consent of the applicant, 
divulge or make known in any manner any facts or information acquired 
pursuant to the Act, regulations, or instructions except as authorized 
by the Administrator, by a court of competent jurisdiction, or otherwise 
by law.

[53 FR 3722, Feb. 9, 1988, as amended 54 FR 5923, Feb. 7, 1989. 
Redesignated at 60 FR 16364, Mar. 30, 1995]



Sec. 868.12  Identification.

    All official personnel shall have in their possession and present 
upon request, while on duty, the means of identification furnished to 
them by the Department.



Sec. 868.13  Regulations not applicable for certain purposes.

    These regulations do not apply to the inspection of grain under the 
United States Grain Standards Act, as amended (7 U.S.C. 71 et seq.) or 
the inspection of commodities under the United States Warehouse Act, as 
amended (7 U.S.C. 241 et seq.).

[[Page 338]]

             Conditions for Obtaining or Withholding Service



Sec. 868.20  Availability of services.

    (a) Original inspection service. Original inspection services are 
available according to this section and Sec. Sec. 868.40 through 
868.44.
    (b) Retest inspection and appeal inspection services. Retest 
inspection, appeal inspection, and Board appeal inspection services are 
available according to Sec. Sec. 868.50 through 868.52 and Sec. Sec. 
868.60 through 868.63.
    (c) Proof of authorization. A cooperator or the Service may request 
satisfactory proof that an applicant is an interested person or their 
authorized agent.

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, Mar. 
30, 1995]



Sec. 868.21  Requirements for obtaining service.

    (a) Consent and agreement by applicant. In submitting a request for 
inspection service, the applicant and the owner of the commodity consent 
to the requirements specified in paragraphs (b) through (j) of this 
section.
    (b) Written confirmation. Verbal requests for inspection service 
shall be confirmed in writing upon request. Each written request shall 
be made in English and shall include:
    (1) The date filed;
    (2) The identification, quantity, and location of the commodity;
    (3) The type of service(s) requested;
    (4) The name and mailing address of the applicant and, if made by an 
authorized agent, the agent's name and mailing address; and
    (5) Any other relevant information that the official with whom the 
application is filed may request.

A written request or a written confirmation of a verbal request shall be 
signed by the applicant or a duly authorized agent.
    (c) Names and addresses of interested persons. When requested, each 
applicant for inspection service shall show on the application form the 
name and mailing address of each known interested person.
    (d) Surrender of superseded certificates. Superseded certificates 
must be promptly surrendered.
    (e) Accessibility--(1) Commodities. Each commodity lot inspected 
shall be arranged so the entire lot may be examined or, if necessary, a 
representative sample, as appropriate, can be obtained. If the entire 
lot is not accessible for examination or a representative sample cannot 
be obtained, the inspection shall be restricted to an examination or 
sampling of the accessible portion and the results certified as stated 
in Sec. 868.34.
    (2) Origin records. When an applicant requests origin inspection, 
the records indicating the origin of the commodity to be inspected shall 
be made accessible for examination and verification by official 
personnel.
    (f) Plant examination. Plant surveys shall be performed upon 
request. Survey results shall be reported in writing to a designated 
plant official. If the plant is approved as a result of the survey, 
inspection service may begin or continue at a time agreed upon by the 
plant management and the cooperator or Service. If the plant is not 
approved as a result of the survey, inspection service shall be 
conditionally withheld pursuant to the procedures in Sec. 868.24.
    (g) Working space. An applicant must provide adequate and separate 
space when inspection service is performed at a plant.
    (h) Loading and unloading conditions. Each applicant for inspection 
service shall provide or arrange for suitable conditions in the--
    (1) Loading and unloading areas and the truck and railroad holding 
areas;
    (2) Pier or dock areas;
    (3) Deck and stowage areas of a carrier;
    (4) Other service areas; and
    (5) Equipment used in loading or unloading, processing, and handling 
the commodity.

Suitable conditions are those which will facilitate accurate inspection, 
maintain the quantity and the quality of the commodity that is to be 
inspected, and not be hazardous to the health and safety of official 
personnel as prescribed in the instructions.
    (i) Timely arrangements. Requests for inspection service shall be 
made in a timely manner; otherwise, official personnel may not be 
available to provide

[[Page 339]]

the requested service. ``Timely manner'' shall mean not later than 2 
p.m., local time, of the preceding business day.
    (j) Payment of bills. Each applicant for inspection service shall 
pay bills for the service pursuant to Sec. Sec. 868.90-868.92.

(Approved by the Office of Management and Budget under control number 
0580-0012)

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, Mar. 
30, 1995]



Sec. 868.22  Withdrawal of request for inspection service by applicant.

    An applicant may withdraw a request for inspection service any time 
before official personnel release results, either verbally or in 
writing. Reimbursement of expenses, if any, shall be made pursuant to 
Sec. 868.26.

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, Mar. 
30, 1995]



Sec. 868.23  Dismissal of request for inspection service.

    (a) Conditions for dismissal--(1) General. A cooperator or the 
Service shall dismiss requests for inspection service when:
    (i) Performing the requested service is not practicable or possible.
    (ii) The cooperator or the Service lacks authority under the Act or 
regulations to provide the inspection service requested or is unable to 
comply with the Act, regulations, standards, or instructions.
    (iii) Sufficient information is not available to make an accurate 
determination.
    (2) Original inspection service. A request for original inspection 
service shall be dismissed if an original inspection has already been 
performed and circumstances do not prevent a retest inspection, appeal 
inspection, or Board appeal inspection from being performed on the same 
lot.
    (3) Retest inspection service. A request for a retest inspection 
service shall be dismissed by official personnel when:
    (i) The factor requested was not tested during the original 
inspection;
    (ii) The condition of the commodity has undergone a material change;
    (iii) A representative file sample is not available;
    (iv) The applicant requests that a new sample be obtained;
    (v) The request is for a graded commodity; or
    (vi) The reasons for the retest inspection are frivolous.
    (4) Appeal inspection service. A request for an appeal inspection 
service shall be dismissed by official personnel when:
    (i) The scope is different from the scope of the original inspection 
service;
    (ii) The condition of the commodity has undergone a material change;
    (iii) The request specifies a file sample and a representative file 
sample is not available;
    (iv) The applicant requests that a new sample be obtained and a new 
sample cannot be obtained; or
    (v) The reasons for the appeal inspection are frivolous.
    (5) Board appeal inspection service. A request for a Board appeal 
inspection service shall be dismissed by official personnel when:
    (i) The scope is different from the scope of the original inspection 
service;
    (ii) The condition of the commodity has undergone a material change;
    (iii) A representative file sample is not available;
    (iv) The applicant requests that a new sample be obtained; or
    (v) The reasons for the Board appeal inspection are frivolous.
    (b) Procedure for dismissal. The cooperator or the Service shall 
notify the applicant of the proposed dismissal of service. If 
correctable, the applicant will be afforded reasonable time to take. 
corrective action or to demonstrate there is no basis for the dismissal. 
If corrective action has not been adequate, the applicant will be 
notified of the decision to dismiss the request for service, and any 
results of service shall not be released.



Sec. 868.24  Conditional withholding of service.

    (a) Conditional withholding. A cooperator or the Service shall 
conditionally withhold service when an applicant fails to meet any 
requirement prescribed in Sec. 868.21.
    (b) Procedure for withholding. The cooperator or the Service shall 
notify the applicant of the reason for the proposal

[[Page 340]]

to conditionally withhold service. The applicant will then be afforded 
reasonable time to take corrective action or to demonstrate that there 
is no basis for withholding service. If corrective action has not been 
adequate, the applicant will be notified of the decision to withhold 
service; and any results of service shall not be released.

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, Mar. 
30, 1995]



Sec. 868.25  Denial or withdrawal of service.

    (a) General. Service may be denied or withdrawn because of (1) any 
willful violation of the Act, regulations, standards, or instructions or 
(2) any interference with or obstruction of any official personnel in 
the performance of their duties by intimidation, threat, assault, or any 
other improper means.
    (b) The Rules of Practice Governing Formal Adjudicatory Proceedings 
Instituted by the Secretary under Various Statutes (7 CFR part 1, 
subpart H) shall be followed in the denial or withdrawal of service.



Sec. 868.26  Expenses of the cooperator or the Service.

    For any request that has been withdrawn, dismissed, or withheld 
under Sec. Sec. 868.22, 868.23, or 868.24, respectively, each applicant 
shall pay expenses incurred by the cooperator or the Service.

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, Mar. 
30, 1995]

                    Inspection Methods and Procedures



Sec. 868.30  Methods and order of performing inspection service.

    (a) Methods--(1) General. All sampling and inspection services 
performed by official personnel shall be made in accordance with the 
regulations, standards, and the instructions.
    (2) Lot inspection service. A lot inspection service shall be based 
on official personnel obtaining representative samples, examining the 
commodity in the entire lot, and making an accurate analysis of the 
commodity on the basis of the samples.
    (3) Submitted sample inspection service. A submitted sample 
inspection service shall be based on a submitted sample of sufficient 
size to enable official personnel to perform an accurate, complete 
analysis. The sample size will be prescribed in the instructions. If a 
complete analysis cannot be performed because of an inadequate sample 
size or other conditions, the request shall be dismissed or a factor 
only inspection may be performed upon request.
    (b) Order of service. Inspection services shall be performed, to the 
extent practicable, in the order in which requests for service are 
received.
    (c) Recording receipt of documents. Each document submitted by or on 
behalf of an applicant for inspection service shall be promptly stamped 
or similarly marked by official personnel to show the date of receipt.
    (d) Conflicts of interest. (1) Official personnel shall not perform 
or participate in performing an inspection service on a commodity or a 
carrier or container in which the official personnel have a direct or 
indirect financial interest.
    (2) Official personnel shall not perform, participate in performing, 
or issue a certificate if the official personnel participated in a 
previous inspection or certification of the lot unless there is only one 
authorized person available at the time and place of the requested 
inspection service.



Sec. 868.31  Kinds of inspection services.

    (a) General. The inspection of commodities shall be according to 
the--
    (1) Standards of class, grade, other quality designation, quantity, 
or condition for such commodities promulgated by the Administrator; or
    (2) Specifications prescribed by Federal agencies; or
    (3) Specifications of trade associations or organizations; or
    (4) Other specifications as requested by applicant; or
    (5) The instructions.

The kinds of services provided and the basis for performing the services 
include those specified in paragraphs (b) through (m) of this section. 
Some or all of these services are provided when performing a complete 
inspection service.
    (b) Quality inspection service. This service consists of official 
personnel--
    (1) Obtaining representative sample(s) of an identified commodity 
lot;

[[Page 341]]

    (2) Examining, grading, or testing the sample(s);
    (3) Examining relevant records for the lot; and
    (4) Certifying the results.
    (c) Submitted sample inspection service. This service consists of 
official personnel grading or testing a sample submitted by the 
applicant and certifying the results.
    (d) Examination service. This service consists of official personnel 
examining supplies without the use of special laboratory equipment or 
procedures to determine conformance to requirements requested by the 
applicant and certifying the results.
    (e) Checkweighing service (container). This service consists of 
official personnel--
    (1) Weighing a selected number of containers from a commodity lot;
    (2) Determining the estimated total gross, tare, and net weights or 
the estimated average gross or net weight per filled container; and
    (3) Certifying the results.
    (f) Bulk weighing service. This service consists of official 
personnel--
    (1) Completely supervising the loading or the unloading of an 
identified lot of bulk or containerized commodity,
    (2) Physically weighing or completely supervising the weighing of 
the commodity; and
    (3) Certifying the results.
    (g) Checkloading service. This service consists of official 
personnel--
    (1) Performing a stowage examination;
    (2) Computing the number of filled commodity containers loaded 
aboard the carrier;
    (3) Observing the condition of commodity containers loaded aboard 
the carrier;
    (4) If practicable, sealing the carrier; and
    (5) Certifying the results.
    (h) Checkcounting service. This service consists of official 
personnel determining the total number of filled outer containers in a 
lot to determine that the number of containers shown by the applicant is 
correct and certifying the results.
    (i) Condition inspection service. This service consists of official 
personnel determining the physical condition of the commodity by 
determining whether an identifiable commodity lot is water damaged, fire 
damaged, or has rodent or bird contamination, insect infestation, or any 
other deteriorating condition and certifying the results.
    (j) Condition of food containers service. This service consists of 
official personnel determining the degree of acceptability of the 
containers with respect to absence of defects which affect the 
serviceability, including appearance as well as usability, of the 
container for its intended purpose and certifying the results.
    (k) Observation of loading service. This service consists of 
official personnel determining that an identified lot has been moved 
from a warehouse or carrier and loaded into another warehouse or carrier 
and certifying the results.
    (l) Plant approval service.\1\ This service consists of official 
personnel performing a plant survey to determine if the plant premises, 
facilities, sanitary conditions, and operating methods are suitable to 
begin or continue inspection service.
---------------------------------------------------------------------------

    \1\ Compliance with the requirements in this paragraph does not 
excuse failure to comply with all applicable sanitation rules and 
regulations of city, county, State, Federal, or other agencies having 
jurisdiction over such plants and operations.
---------------------------------------------------------------------------

    (m) Stowage examination service. This service consists of official 
personnel visually determining if an identified carrier or container is 
clean; dry; free of infestation, rodents, toxic substances and foreign 
odor; and suitable to store or carry commodities and certifying the 
results.



Sec. 868.32  Who shall inspect commodities.

    Official commodity inspections shall be performed only by official 
personnel.



Sec. 868.33  Sample requirements; general.

    (a) Samples for lot inspection service--(1) Original lot inspection 
service. The sample(s) on which the original inspection is determined 
shall be--
    (i) Obtained by official personnel;
    (ii) Representative of the commodity in the lot;

[[Page 342]]

    (iii) Protected by official personnel from manipulation, 
substitution, and improper or careless handling; and
    (iv) Obtained within the prescribed area of responsibility of the 
cooperator or field office performing the inspection service.
    (2) Retest lot inspection service. The sample(s) on which the retest 
is determined shall meet the requirements of paragraph (a)(1) of this 
section. The retest inspection shall be performed on the basis of a file 
sample(s), and the samples shall meet the requirements prescribed in 
Sec. 868.35(e).
    (3) Appeal lot inspection service. For an appeal lot inspection 
service, the sample(s) on which the appeal is determined shall meet the 
requirements of paragraph (a)(1) of this section. If the appeal 
inspection is performed on the basis of a file sample(s), the samples 
shall meet the requirements prescribed in Sec. 868.35(e). In accordance 
with Sec. 868.61(b), an applicant may request that a new sample be 
obtained and examined as part of the appeal inspection service.
    (4) Board appeal lot inspection service. A Board appeal lot 
inspection service shall be performed on the basis of file sample.
    (b) Sampler requirement. An official sampler shall sample 
commodities and forward the samples to the appropriate cooperator or 
field office or other location as specified. A sampling report signed by 
the sampler shall accompany each sample. The report shall include the 
identity, quantity, and location of the commodity sampled; the name and 
mailing address of the applicant; and all other information regarding 
the lot as may be required.
    (c) Representative sample. A sample shall not be considered 
representative of a commodity lot unless the sample--
    (1) Has been obtained by official personnel;
    (2) Is of the size prescribed in the instructions; and
    (3) Has been obtained, handled, and submitted in accordance with the 
instructions.
    (d) Protecting samples. Official personnel shall protect samples 
from manipulation, substitution, and improper and careless handling 
which would deprive the samples of their representativeness or which 
would change the physical and chemical properties of the commodity from 
the time of sampling until inspection services are completed and file 
samples have been discarded.

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, Mar. 
30, 1995]



Sec. 868.34  Partial inspection.

    When the entire lot is not accessible for examination or a 
representative sample cannot be obtained from the entire lot, the 
certificate shall state the estimated quantity of the commodity in the 
accessible portion and the quantity of the entire lot. The inspection 
shall be limited to the accessible portion. In addition, the words 
``Partial Inspection'' shall be printed or stamped on the certificate.



Sec. 868.35  Sampling provisions by level of service.

    (a) Original inspection service--(1) Lot inspection service. Each 
original lot inspection service shall be made on the basis of one or 
more representative samples obtained by official personnel from the 
commodity in the lot and forwarded to the appropriate location.
    (2) Submitted sample service. Each original submitted sample 
inspection service shall be performed on the basis of the sample as 
submitted.
    (b) Retest inspection service. Each retest inspection service 
performed on a commodity lot or a submitted sample shall be based on an 
analysis of the file sample.
    (c) Appeal inspection service--(1) Lot inspection service. Each 
appeal inspection service on a commodity lot shall be made on the basis 
of a file sample or, upon request, a new sample.
    (2) Submitted sample service. Each appeal inspection service on the 
commodity in a submitted sample shall be based on an analysis of the 
file sample.
    (d) Board appeal inspection service. Each Board appeal inspection 
service performed on a commodity lot or submitted sample shall be based 
on an analysis of the file sample.
    (e) Use of file samples--(1) Requirements for use. A file sample 
that is retained by official personnel in accordance with the procedures 
prescribed in the instructions shall be considered representative for 
retest inspection,

[[Page 343]]

appeal inspection, and Board appeal inspection service if: (i) The file 
samples have remained at all times in the custody and control of the 
official personnel that performed the inspection service and (ii) the 
official personnel who performed the inspection service in question and 
those who are to perform the retest inspection, the appeal inspection, 
or the Board appeal inspection service determines that the samples were 
representative of the commodity at the time the inspection service was 
performed and that the quality or condition of the commodity in the 
samples has not since changed.
    (2) Certificate statement. The certificate for a retest inspection, 
appeal inspection, or Board appeal inspection service which is based on 
a file sample shall show the statement ``Results based on file sample.''



Sec. 868.36  Loss of identity.

    (a) Lots. The identity of a packaged lot, bulk lot, or sublot of a 
commodity shall be considered lost if:
    (1) A portion of the commodity is unloaded, transferred, or 
otherwise removed from the carrier or location after the time of 
original inspection, unless the identity is preserved; or
    (2) More commodity or other material, including a fumigant or 
insecticide, is added to the lot after the original inspection was 
performed, unless the addition of the fumigant or insecticide was 
performed in accordance with the instructions; or
    (3) At the option of official personnel performing an appeal 
inspection or Board appeal inspection service, the identity of a 
commodity in a closed carrier or container may be considered lost if the 
carrier or container is not sealed or the seal record is incomplete.
    (b) Carriers and containers. The identity of a carrier or container 
shall be considered lost if (1) the stowage area is cleaned, treated, 
fumigated, or fitted after the original inspection was performed or (2) 
the identification has been changed since the original inspection.
    (c) Submitted sample. The identity of a submitted sample of a 
commodity shall be considered lost if:
    (1) The identifying number, mark, or symbol for the sample is lost 
or destroyed; or
    (2) The sample has not been retained and protected by official 
personnel as prescribed in the regulations and the instructions.

                       Original Inspection Service



Sec. 868.40  Who may request original inspection service.

    Any interested person may apply for inspection service.



Sec. 868.41  Contract service.

    Any interested person may enter into a contract with a cooperator or 
the Service whereby the cooperator or Service will provide original 
inspection services for a specified period, and the applicant will pay a 
specific fee.



Sec. 868.42  How to request original inspection service.

    (a) General. Requests may be made verbally or in writing. Verbal 
requests shall be confirmed in writing when requested by official 
personnel. All written requests shall include the information specified 
in Sec. 868.21. Copies of request forms may be requested from the 
cooperator or the Service. If all required documentation is not 
available when the request is made, it shall be provided as soon as it 
is available. At their discretion, official personnel may withhold 
inspection service pending receipt of the required documentation.
    (b) Request requirements. Requests for original inspection service, 
other than submitted sample inspections, must be made with the 
cooperator or the Service responsible for the area in which the service 
will be provided. Requests for submitted sample inspections may be made 
with any cooperator or any field office that provides original 
inspection service. Requests for inspection of commodities during 
loading, unloading, handling, or processing shall be received far enough 
in advance so official personnel can be present.

(Approved by the Office of Management and Budget under control number 
0580-0012)

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, Mar. 
30, 1995]

[[Page 344]]



Sec. 868.44  New original inspection.

    When circumstances prevent a retest inspection, appeal inspection, 
or Board appeal inspection, an applicant may request a new original 
inspection on any previously inspected lot; except that a new original 
inspection may not be performed on an identifiable commodity lot which, 
as a result of a previous inspection, was found to be contaminated with 
filth, other than insect fragments in nongraded processed products, or 
to contain a deleterious substance. A new original inspection shall be 
based on a new sample and shall not be restricted to the scope of any 
previous inspection. A new original inspection certificate shall not 
supersede any previously issued certificate.

                        Retest Inspection Service



Sec. 868.50  Who may request retest inspection service.

    (a) General. Any interested person may request a retest inspection 
service on nongraded commodities. When more than one interested person 
requests a retest inspection service, the first interested person to 
file is the applicant of record. Only one retest inspection service may 
be performed on any original inspection service.
    (b) Scope of request. A retest inspection service may be requested 
for any or all quality factors tested but shall be limited to analysis 
of the file sample.

(Approved by the Office of Management and Budget under control number 
0580-0012)



Sec. 868.51  How to request retest inspection service.

    (a) General. Requests shall be made with the field office 
responsible for the area in which the original inspection service was 
performed. Verbal requests shall be confirmed in writing, upon request, 
as specified in Sec. 868.21. Copies of request forms may be obtained 
from the field office upon request. If at the time the request is filed 
and the documentation required by Sec. 868.21 is not available, 
official personnel may, at their discretion, withhold service pending 
the receipt of the required documentation.
    (b) Request requirements. Requests will be considered filed on the 
date they are received by official personnel.

(Approved by the Office of Management and Budget under control number 
0580-0012)

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, Mar. 
30, 1995]



Sec. 868.52  Certificating retest inspection results.

    (a) General. Retest inspection certificates shall be issued 
according to Sec. 868.70 and instructions. The certificate shall show 
the results of the factor(s) retested and the original results not 
included in the retest service.
    (b) Required statements on retest certificates. Each retest 
inspection certificate shall show the statements required by this 
section, Sec. 868.71, and the instructions.
    (1) Each retest inspection certificate shall clearly show the term 
``Retest'' and a statement identifying the superseded original 
certificate. The superseded certificate shall be considered null and 
void as of the date of the retest certificate. When applicable, the 
certificate shall also show a statement as to which factor(s) result is 
based on the retest inspection service and that all other results are 
those of the original inspection service.
    (2) If the superseded certificate is in the custody of the Service, 
the superseded certificate shall be marked ``Void.'' If the superseded 
certificate is not in the custody of the Service at the time the retest 
certificate is issued, a statement indicating that the superseded 
certificate has not been surrendered shall be shown on the retest 
certificate.

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, Mar. 
30, 1995]

                        Appeal Inspection Service



Sec. 868.60  Who may request appeal inspection service.

    (a) General. Any interested person may request appeal inspection or 
Board appeal inspection service. When more than one interested person 
requests an appeal inspection or Board appeal inspection service, the 
first interested person to file is the applicant of record. Only one 
appeal inspection may be obtained from any original inspection or

[[Page 345]]

retest inspection service for nongraded commodities. Only one Board 
appeal inspection may be obtained from any original or appeal inspection 
service for graded commodities. Board appeal inspection shall be 
performed on the basis of the file sample.
    (b) Kind and scope of request. When the results for more than one 
kind of service are reported on a certificate, an appeal inspection or 
Board appeal inspection service, as applicable, may be requested on any 
or all kinds of services reported on the certificate. The scope of an 
appeal inspection service will be limited to the scope of the original 
inspection or, in the case of a Board appeal inspection service, the 
original or appeal inspection service. A request for appeal inspection 
of a retest inspection will be based upon the scope of the original 
inspection. If the request specifies a different scope, the request 
shall be dismissed. Provided, however, that an applicant for service may 
request an appeal or Board appeal inspection of specific factor(s) or 
official grade and factors. In addition, appeal and Board appeal 
inspection for grade may include a review of any pertinent factor(s), as 
deemed necessary by official personnel.

(Approved by the Office of Management and Budget under control number 
0580-0013).

[53 FR 3722, Feb. 9, 1988. Redesignated at 60 FR 16364, Mar. 30, 1995 
and amended at 70 FR 69250, Nov. 15, 2005]



Sec. 868.61  How to request appeal inspection service.

    (a) General. Requests shall be made with the field office 
responsible for the area in which the original service was performed. 
Requests for Board appeal inspections may be made with the Board of 
Appeals and Review or the field office that performed the appeal 
inspection. Verbal requests must be confirmed in writing, upon request, 
as specified in Sec. 868.21. Copies of request forms may be obtained 
from the field office upon request. If at the time the request is made 
the documentation required by Sec. 868.21 is not available, official 
personnel may, at their discretion, withhold service pending the receipt 
of the required documentation.
    (b) Request requirements. (1) This subparagraph is applicable to 
rice inspection only. Except as may be agreed upon by the interested 
persons, the application shall be made: (i) Before the rice has left the 
place where the inspection being appealed was performed and (ii) no 
later than the close of business on the second business day following 
the date of the inspection being appealed. However, the Administrator 
may extend the time requirement as deemed necessary.
    (2) Subject to the limitations of paragraph (b)(3) of this section, 
the applicant may request that an appeal inspection be based on: (i) The 
file sample or (ii) a new sample. However, an appeal inspection shall be 
based on a new sample only if the lot can positively be identified by 
official personnel as the one that was previously inspected and the 
entire lot is available and accessible for sampling and inspection. 
Board appeals shall be on the basis of the file sample.
    (3) An appeal inspection shall be limited to a review of the 
sampling procedure and an analysis of the file sample when, as a result 
of a previous inspection, the commodity was found to be contaminated 
with filth (other than insect fragments in nongraded processed products) 
or to contain a deleterious substance. If it is determined that the 
sampling procedures were improper, a new sample shall be obtained if the 
lot can be positively identified as the lot which was previously 
inspected and the entire lot is available and accessible for sampling 
and inspection.

(Approved by the Office of Management and Budget under control number 
0580-0012)

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, Mar. 
30, 1995]



Sec. 868.62  Who shall perform appeal inspection service.

    (a) Appeal. For graded commodities, the appeal inspection service 
shall be performed by the field office responsible for the area in which 
the original inspection was performed. For nongraded commodities, the 
appeal inspection service shall be performed by the Service's Commodity 
Testing Laboratory.
    (b) Board appeal. Board appeal inspection service shall be performed 
only by the Board of Appeals and Review. The field office will act as a 
liaison between

[[Page 346]]

the Board of Appeals and Review and the applicant.



Sec. 868.63  Certificating appeal inspection results.

    (a) General. An appeal inspection certificate shall be issued 
according to Sec. 868.70 and instructions. Except as provided in 
paragraph (b)(2) of this section, only the results of the appeal 
inspection or Board appeal inspection service shall be shown on the 
appeal inspection certificate.
    (b) Required statements. Each appeal inspection certificate shall 
show the statements required by this section, Sec. 868.71, and 
instructions.
    (1) Each appeal inspection certificate shall clearly show: (i) The 
term ``Appeal'' or ``Board Appeal'' and (ii) a statement identifying the 
superseded certificate. The superseded certificate shall be considered 
null and void as of the date of the appeal inspection or Board appeal 
inspection certificate.
    (2) When the results for more than one kind of service are reported 
on a certificate, the appeal or Board appeal inspection certificate 
shall show a statement of which kind of service(s) results are based on 
the appeal or Board appeal inspection service and that all other results 
are those of the original inspection, retest inspection, or appeal 
inspection service.
    (3) If the superseded certificate is in the custody of the Service, 
the superseded certificate shall be marked ``Void.'' If the superseded 
original inspection, retest inspection, or appeal inspection certificate 
is not in the custody of the Service at the time the appeal certificate 
is issued, a statement indicating that the superseded certificate has 
not been surrendered shall be shown on the appeal certificate.
    (c) Finality of Board appeal inspection. A Board appeal inspection 
shall be the final appeal inspection service except that for nongraded 
commodities an appeal shall be the final appeal inspection.

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, Mar. 
30, 1995]

                          Official Certificates



Sec. 868.70  Official certificates; issuance and distribution.

    (a) Required issuance. An inspection certificate shall be issued to 
show the results of each kind and each level of inspection service.
    (b) Distribution--(1) Original. The original and one copy of each 
inspection certificate shall be distributed to the applicant or the 
applicant's order. In addition, one copy of each inspection certificate 
shall be filed with the office providing the inspection; and, if the 
inspection is performed by a cooperator, one copy shall be forwarded to 
the appropriate field office. If requested by the applicant prior to 
issuance of the inspection certificate, additional copies not to exceed 
a total of three copies will be furnished at no extra charge.
    (2) Retest and appeal inspection service. In addition to the 
distribution requirements in paragraph (b)(1) of this section, one copy 
of each retest or appeal inspection certificate will be distributed to 
each interested person of record or the interested person's order and to 
the cooperator or field office that issued the superseded certificate.
    (3) Additional copies. Additional copies of certificates will be 
furnished to the applicant or interested person upon request. Fees for 
extra copies in excess of three may be assessed according to the fee 
schedules established by the cooperator or the Service.
    (c) Prompt issuance. An inspection certificate shall be issued 
before the close of business on the business day following the date the 
inspection is completed.
    (d) Who may issue a certificate--(1) Authority. Certificates for 
inspection services may be issued only by official personnel who are 
specifically authorized or licensed to perform and certify the results 
reported on the certificate.
    (2) Exception. The person in the best position to know whether the 
service was performed in an approved manner and that the determinations 
are accurate and true should issue the certificate. If the inspection is 
performed by one person, the certificate should be issued by that 
person. If an inspection is performed by two or more persons,

[[Page 347]]

the certificate should be issued by the person who makes the majority of 
the determinations or the person who makes the final determination. 
Supervisory personnel may issue a certificate when the individual is 
licensed or authorized to perform the inspection being certificated.
    (e) Name requirement. The name or the signature, or both, of the 
person who issued the inspection certificate shall be shown on the 
original and all copies of the certificate.
    (f) Authorization to affix names--(1) Requirements. The names or the 
signatures, or both, of official personnel may be affixed to official 
certificates which are prepared from work records signed or initialed by 
the person whose name will be shown. The agent affixing the name or 
signature, or both, shall: (i) Be employed by a cooperating agency or 
the Service, (ii) have been designated to affix names or signatures, or 
both, and (iii) hold a power of attorney from the person whose name or 
signature, or both, will be affixed. The power of attorney shall be on 
file with the employing cooperating agency or the Service as 
appropriate.
    (2) Initialing. When a name or signature, or both, is affixed by an 
authorized agent, the initials of the agent shall appear directly below 
or following the name or signature of the person.
    (g) Advance information. Upon request, the contents of an official 
certificate may be furnished in advance to the applicant and any other 
interested person, or to their order, and any additional expense shall 
be borne by the requesting party.
    (h) Certification; when prohibited. An official certificate shall 
not be issued for service after the request for an inspection service 
has been withdrawn or dismissed.



Sec. 868.71  Official certificate requirements.

    Official certificates shall--
    (a) Be on standard printed forms prescribed in the instructions;
    (b) Be in English;
    (c) Be typewritten or handwritten in ink and be clearly legible;
    (d) Show the results of inspection services in a uniform, accurate, 
and concise manner;
    (e) Show the information required by Sec. Sec. 868.70-868.75; and
    (f) Show only such other information and statements of fact as are 
provided in the instructions authorized by the Administrator.

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, Mar. 
30, 1995]



Sec. 868.72  Certification of results.

    (a) General. Each official certificate shall show the results of the 
inspection service.
    (b) Graded commodities. Each official certificate for graded 
commodities shall show--
    (1) The class, grade, or any other quality designation according to 
the official grade standards;
    (2) All factor information requested by the applicant; and
    (3) All grade determining factors for commodities graded below the 
highest quality grade.



Sec. 868.73  Corrected certificates.

    (a) General. The accuracy of the statements and information shown on 
official certificates must be verified by the individual whose name or 
signature, or both, is shown on the official certificate or by the 
authorized agent who affixed the name or signature, or both. Errors 
found during this process shall be corrected according to this section.
    (b) Who may correct. Only official personnel or their authorized 
agents may make corrections, erasures, additions, or other changes to 
official certificates.
    (c) Corrections prior to issuance. No corrections, erasures, 
additions, or other changes shall be made which involve identification, 
quality, or quantity. If such errors are found, a new official 
certificate shall be prepared and issued and the incorrect certificate 
marked ``Void.'' Otherwise, errors may be corrected provided that--
    (1) The corrections are neat and legible;
    (2) Each correction is initialed by the individual who corrects the 
certificate; and

[[Page 348]]

    (3) The corrections and initials are shown on the original and all 
copies.
    (d) Corrections after issuance--(1) General. If errors are found on 
an official certificate at any time up to a maximum of 1 year after 
issuance, the errors shall be corrected by obtaining the incorrect 
certificate and replacing it with a corrected certificate. When the 
incorrect certificate cannot be obtained, a corrected certificate can be 
issued superseding the incorrect one.
    (2) Certification requirements. The same statements and information, 
including permissive statements, that were shown on the incorrect 
certificate, along with the correct statement or information, shall be 
shown on the corrected certificate. According to this section and the 
instructions, corrected certificates shall show--
    (i) The terms ``Corrected Original'' and ``Corrected Copy,''
    (ii) A statement identifying the superseded certificate and the 
corrections,
    (iii) A statement indicating the superseded certificate was not 
surrendered when the incorrect certificate was not submitted; and
    (iv) A new serial number.

In addition, the incorrect certificate shall be marked ``Void'' when 
submitted.
    (e) Limitations. Corrected certificates cannot be issued for a 
certificate that has been superseded by another certificate or on the 
basis of a subsequent analysis for quality.



Sec. 868.74  Divided-lot certificates.

    (a) General. When commodities are offered for inspection and are 
certificated as a single lot, the applicant may exchange the inspection 
certificate for two or more divided-lot certificates.
    (b) Application. Requests for divided-lot certificates shall be 
made--
    (1) In writing;
    (2) By the applicant who made the initial request;
    (3) To the office that issued the outstanding certificate;
    (4) Within 5 business days of the outstanding certificate date; and
    (5) Before the identity of the commodity has been lost.
    (c) Quantity restrictions. Divided-lot certificates shall not show 
an aggregate quantity different than the total quantity shown on the 
superseded certificate.
    (d) Surrender of certificate. The certificate that will be 
superseded shall--
    (1) Be in the custody of the cooperator or the Service;
    (2) Be marked ``Void,'' and
    (3) Show the identification of the divided-lot certificates.
    (e) Certification requirements. The same information and statements, 
including permissive statements, that were shown on the superseded 
certificate shall be shown on each divided-lot certificate. Divided-lot 
certificates shall show--
    (1) A statement indicating the commodity was inspected as an 
undivided lot;
    (2) The terms ``Divided-Lot Original,'' and the copies shall show 
``Divided-Lot Copy;''
    (3) The same serial number with numbered suffix (for example, 1764-
1, 1764-2, 1764-3, and so forth); and
    (4) The quantity specified by the request.
    (f) Issuance and distribution. Divided-lot certificates shall be 
issued no later than the close of business on the next business day 
after the request and be distributed according to Sec. 868.70(b).
    (g) Limitations. After divided-lot certificates have been issued, 
further dividing or combining is prohibited except with the approval of 
the Service.

(Approved by the Office of Management and Budget under control number 
0580-0012)

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, Mar. 
30, 1995]



Sec. 868.75  Duplicate certificates.

    Upon request, a duplicate certificate may be issued for a lost or 
destroyed official certificate.
    (a) Application. Requests for duplicate certificates shall be 
filed--
    (1) In writing;
    (2) By the applicant who requested the service covered by the lost 
or destroyed certificate; and
    (3) With the office that issued the initial certificate.
    (b) Certification requirements. The same information and statements, 
including permissive statements, that were shown on the lost or 
destroyed

[[Page 349]]

certificate shall be shown on the duplicate certificate. Duplicate 
certificates shall show: (1) The terms ``Duplicate Original,'' and the 
copies shall show ``Duplicate Copy'' and (2) a statement that the 
certificate was issued in lieu of a lost or destroyed certificate.
    (c) Issuance. Duplicate certificates shall be issued as promptly as 
possible and distributed according to Sec. 868.70(b).
    (d) Limitations. Duplicate certificates shall not be issued for 
certificates that have been superseded.

(Approved by the Office of Management and Budget under control number 
0580-0012)

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, Mar. 
30, 1995]

             Licensed Inspectors, Technicians, and Samplers



Sec. 868.80  Who may be licensed.

    (a) Inspectors. The Administrator may license any person to inspect 
commodities and to perform related services if the individual--
    (1) Is employed by a cooperator, is a contractor, or is employed by 
a contractor;
    (2) Possesses the qualifications prescribed in the instructions; and
    (3) Has no interest, financial or otherwise, direct or indirect in 
merchandising, handling, storing, or processing the kind of commodities 
or related products to be inspected.

The Administrator may require applicants to be examined for competency 
at a specific time and place and in a prescribed manner.
    (b) Technicians or samplers. The Administrator may license any 
person as a technician to perform official specified laboratory 
functions, including sampling duties and related services, or as a 
sampler to draw samples of commodities and perform related services if 
the individual: (1) Possesses proper qualifications as prescribed in the 
instructions and (2) has no interest, financial or otherwise direct or 
indirect in merchandising, handling, storing, or processing the kind of 
commodities or related products to be chemically analyzed, mechanically 
tested, sampled, and so forth. The Administrator may require applicants 
to be examined for competency at a specific time and place and in a 
prescribed manner.

(Approved by the Office of Management and Budget under control number 
0580-0012)

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, Mar. 
30, 1995; 63 FR 29531, June 1, 1998]



Sec. 868.81  Licensing procedures.

    (a) Application. An application for a license, the renewal of a 
license, or the return of a suspended license shall be submitted to the 
Service on forms furnished by the Service. Each application shall be in 
English, be typewritten or legibly written in ink, show all information 
prescribed by the application form, and be signed by the applicant.
    (b) Examinations and reexaminations. Applicants for a license and 
individuals who are licensed to perform any or all inspection services 
shall, at the discretion of the Service, submit to examinations or 
reexaminations to determine their competency to perform the inspection 
functions for which they desire to be or are licensed.
    (c) Termination--(1) Procedure. Each license shall terminate 
according to the termination date shown on the license and as specified 
by the schedule in this paragraph. The termination date for a license 
shall be no less than 3 years or more than 4 years after the issuance 
date for the initial license; thereafter, every 3 years. Upon request of 
a licensee and for good cause shown, the termination date may be 
advanced or delayed by the Administrator for a period not to exceed 60 
days.

                          Termination Schedule
------------------------------------------------------------------------
         Last name beginning with                 Termination date
------------------------------------------------------------------------
A........................................  January.
B........................................  February.
C, D.....................................  March.
E, F, G..................................  April.
H, I, J..................................  May.
K, L.....................................  June.
M........................................  July.
N, O, P, Q...............................  August.
R........................................  September.
S, T, U, V...............................  October.
W........................................  November.
X, Y, Z..................................  December.
------------------------------------------------------------------------


The Service shall issue a termination notice 60 days before the 
termination

[[Page 350]]

date. The notice shall give detailed instructions for requesting renewal 
of license, state whether a reexamination is required, and, if a 
reexamination is required, give the scope of the examination. Failure to 
receive a notice from the Service shall not exempt a licensee from the 
responsibility of having the license renewed by the termination date.
    (2) Exception. The license of an individual under contract with the 
Service shall terminate upon termination of the contract.
    (d) Surrender of license. Each license that is terminated or which 
is suspended or revoked under Sec. 868.84 shall be promptly surrendered 
to the Administrator or other official of the Service designated by the 
Administrator.

(Approved by the Office of Management and Budget under control number 
0580-0012)

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, Mar. 
30, 1995]



Sec. 868.82  Voluntary cancellation or suspension of license.

    Upon request by a licensee, the Service may cancel a license or 
suspend a license for a period of time not to exceed 1 year. A license 
that has been voluntarily suspended shall be returned by the Service 
upon request by the licensee within 1 year, subject to the provisions of 
Sec. 868.81(a) and (b); a license that has been cancelled shall be 
considered void and shall not be subject to return or renewal.

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, 
16365, Mar. 30, 1995]



Sec. 868.83  Automatic suspension of license by change in employment.

    A license issued to an individual shall be automatically suspended 
when the individual ceases to be employed by the cooperator. If the 
individual is reemployed by the cooperator or employed by another 
cooperator within 1 year of the suspension date and the license has not 
terminated in the interim, upon request of the licensee, the license 
will be reinstated subject to the provisions of Sec. 868.81(a) and (b).

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, 
16365, Mar. 30, 1995]



Sec. 868.84  Suspension or revocation of license.

    (a) General. (1) An inspector's, technician's, or sampler's license 
may be suspended or revoked if the licensee: (i) Willfully, carelessly, 
or through incompetence fails to perform the duties specified in the 
Act, regulations, standards, or the instructions or (ii) becomes 
incapable of performing required duties.
    (2) A license may not be suspended or revoked until the individual: 
(i) Has been served notice, in person or by registered mail, that 
suspension or revocation of the license is under consideration for 
reasons set out in the notice and (ii) has been given an opportunity for 
a hearing.
    (b) Procedure for summary action. In cases where the public health, 
interest, or safety require, the Administrator may summarily suspend an 
inspector's, technician's, or sampler's license without prior hearing. 
In such cases, the licensee shall be advised of the factors which appear 
to warrant suspension or revocation of the license. The licensee shall 
be accorded an opportunity for a hearing before the license is finally 
suspended or revoked.
    (c) Procedures for other than summary action. Except in cases of 
willfulness or those described in paragraph (b) of this section, the 
Administrator, before instituting proceedings for the suspension or 
revocation of a license, shall provide the licensee an opportunity to 
demonstrate or achieve compliance with the Act, regulations, standards, 
and instructions. If the licensee does not demonstrate or achieve 
compliance, the Administrator may institute proceedings to suspend or 
revoke the license.

(The information collection requirements contained in paragraph (c) have 
been approved by the Office of Management and Budget under control 
number 0580-0012)

                                  Fees



Sec. 868.90  Fees for certain Federal inspection services.

    (a) The fees shown in Table 1 apply to Federal Commodity Inspection 
Services specified below.

[[Page 351]]



                       Table 1--Hourly Rates \1,3\
          [Fees for inspection of commodities other than rice]
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Hourly Rates (per service representative):
    Monday to Friday....................................          $34.20
    Saturday, Sunday, and Holidays......................           44.40
Miscellaneous Processed Commodities: \2\
    (1) Additional Tests (cost per test, assessed in
     addition to the hourly rate):
        (i) Aflatoxin Test (Thin Layer Chromatography)..           51.40
        (ii) Falling Number.............................           12.50
        (iii) Aflatoxin Test Kit........................            7.50
Graded Commodities (Beans, Peas, Lentils, Hops, and
 Pulses):
    (1) Additional Tests--Unit Rates (Beans, Peas,
     Lentils):
        (i) Field run (per lot or sample)...............           23.00
        (ii) Other than field run (per lot or sample)...           13.75
        (iii) Factor analysis (per factor)..............            5.65
    (2) Additional Tests--Unit Rates (Hops): (i) Lot or            29.30
     sample (per lot or sample).........................
    (3) Additional Tests--Unit Rates (Nongraded                     5.65
     Nonprocessed Commodities): (i) Factor analysis (per
     factor)............................................
    (4) Stowage Examination (service-on-request) \4\ (i)           50.50
     Ship (per stowage space) (minimum $252.50 per ship)
        (ii) Subsequent ship examinations (same as
         original) (minimum $151.50 per ship)
        (iii) Barge (per examination)...................           40.50
        (iv) All other carriers (per examination).......          15.50
------------------------------------------------------------------------
\1\ Fees for original commodity inspection and appeal inspection
  services include, but are not limited to, sampling, grading, weighing,
  stowage examinations, pre-inspection conferences, sanitation
  inspections, and other services requested by the applicant and that
  are performed within 25 miles of the field office. Travel and related
  expenses (commercial transportation costs, mileage, and per diem) will
  be assessed in addition to the hourly rate for service beyond the 25-
  mile limit. Refer to Sec.  868.92. Explanation of service fees and
  additional fees, for all other service fees except travel and per
  diem.
\2\ When performed at a location other than the Commodity Testing
  Laboratory.
\3\ Faxed and extra copies of certificates will be charged at $1.50 per
  copy.
\4\ If performed outside of normal business hours, 1\1/2\ times the
  applicable unit fee will be charged.

    (b) In addition to the fees, if any, for sampling or other requested 
service, a fee will be assessed for each laboratory test (original, 
retest, or appeal) listed in table 2 of this section.
    (c) If a requested test is to be reported on a specified moisture 
basis, a fee for a moisture test will also be assessed.
    (d) Laboratory tests referenced in table 2 of this section will be 
charged at the applicable laboratory fee.

             Table 2--Fees for Laboratory Test Services \1\
------------------------------------------------------------------------
                      Laboratory tests                           Fees
------------------------------------------------------------------------
(1) Aflatoxin (Quantitative--HPLC).........................      $182.00
(2) Aflatoxin (Quantitative--Test Kit).....................        87.00
(3) Aflatoxin (Qualitative--Test Kit)......................        47.00
(4) Appearance and odor....................................         7.00
(5) Ash....................................................        17.00
(6) Brix...................................................        16.00
(7) Calcium................................................        27.00
(8) Carotenoid Color.......................................        27.00
(9) Cold test (oil)........................................        20.00
(10) Color test (syrups)...................................        13.00
(11) Cooking tests (pasta).................................        13.00
(12) Crude fat.............................................        20.00
(13) Crude fiber...........................................        27.00
(14) Falling number........................................        24.00
(15) Free fatty acid.......................................        24.00
(16) Insoluble impurities (oils and shortenings)...........         9.00
(17) Iron enrichment.......................................        30.00
(18) Lovibond color........................................        20.00

[[Page 352]]

 
(19) Moisture..............................................        13.00
(20) Moisture and volatile matter..........................        17.00
(21) Oxidative stability index (OSI).......................        54.00
(22) Peroxide Value........................................        27.00
(23) Popping ratio.........................................        38.00
(24) Protein...............................................        16.00
(25) Sanitation (light filth)..............................        47.00
(26) Sieve test............................................        11.00
(27) Smoke Point...........................................        43.00
(28) Solid fat index.......................................       168.00
(29) Visual exam...........................................        22.00
(30) Vomitoxin (Qualitative--Test Kit).....................        61.00
(31) Vomitoxin (Quantitative--Test Kit)....................        81.00
(32) Other laboratory analytical services (per hour per           67.00
 service representative)...................................
------------------------------------------------------------------------
\1\ When laboratory tests/services are provided for GIPSA by a private
  laboratory, the applicant will be assessed a fee, which, as nearly as
  practicable, covers the costs to GIPSA for the service provided.


[61 FR 66535, Dec. 18, 1996, as amended 66 FR 17777, Apr. 4, 2001; 69 FR 
1894, Jan. 13, 2004]



Sec. 868.91  Fees for certain Federal rice inspection services.

    The fees shown in Tables 1 and 2 apply to Federal rice inspection 
services.

                Table 1--Hourly Rates/Unit Rate per CWT.
               [Fees for Federal Rice Inspection Services]
------------------------------------------------------------------------
                                              Regular       Nonregular
                                              Workday         Workday
               Service \1\                   (Monday-        (Sunday-
                                             Saturday)       Holiday)
------------------------------------------------------------------------
Contract (per hour per Service                   $46.40          $64.40
 representative)........................
Noncontract (per hour per Service                 56.60           78.00
 representative)........................
Export Port Services (per                           .056            .056
 hundredweight)\2\......................
------------------------------------------------------------------------
\1\ Original and appeal inspection services include: Sampling, grading,
  weighing, and other services requested by the applicant when performed
  at the applicant's facility.
\2\ Services performed at export port locations on lots at rest.


                                               Table 2--Unit Rates
----------------------------------------------------------------------------------------------------------------
                                                                                  Brown rice for
                           Service 1,3                              Rough rice      processing      Milled rice
----------------------------------------------------------------------------------------------------------------
Inspection for quality (per lot, sublot, or sample inspection)..          $35.50          $30.50          $22.00
Factor analysis for any single factor (per factor):
    (a) Milling yield (per sample)..............................           27.50           27.50  ..............
    (b) All other factors (per factor)..........................           13.20           13.20           13.20
Total oil and free fatty acid...................................  ..............           43.00           43.00
Interpretive line samples:\2\
    (a) Milling degree (per set)................................  ..............  ..............           94.00
    (b) Parboiled light (per sample)............................  ..............  ..............           23.00
Extra copies of certificates (per copy).........................            3.00            3.00            3.00
----------------------------------------------------------------------------------------------------------------
\1\ Fees apply to determinations (original or appeals) for kind, class, grade, factor analysis, equal to type,
  milling yield, or any other quality designation as defined in the U.S. Standards for Rice or applicable
  instructions, whether performed singly or in combination at other than at the applicant's facility.
\2\ Interpretive line samples may be purchased from the U.S. Department of Agriculture, GIPSA, FGIS, Technical
  Services Division, 10383 North Ambassador Drive, Kansas City, Missouri 64153-1394. Interpretive line samples
  also are available for examination at selected FGIS field offices. A list of field offices may be obtained
  from the Director, Field Management Division, USDA, GIPSA, FGIS, 1400 Independence Avenue, SW, STOP 3630,
  Washington, D.C. 20250-3630. The interpretive line samples illustrate the lower limit for milling degrees only
  and the color limit for the factor ``Parboiled Light'' rice.
\3\ Fees for other services not referenced in Table 2 will be based on the noncontract hourly rate listed in
  Sec.  868.90, Table 1.


[[Page 353]]


[68 FR 24860, May 9, 2003]



Sec. 868.92  Explanation of service fees and additional fees.

    (a) Costs included in the fees. Fees for official services in 
Sec. Sec. 868.90 and 868.91 include--
    (1) The cost of performing the service and related supervision and 
administrative costs;
    (2) The cost of per diem, subsistence, mileage, or commercial 
transportation to perform the service for rice inspection only in Sec. 
868.91, table 1. See Sec. 868.90, table 1, footnote 1, for fees for 
inspection of commodities other than rice.
    (3) The cost of first-class mail service;
    (4) The cost of overtime and premium pay; and
    (5) The cost of certification except as provided in Sec. 868.92(c).
    (b) Computing hourly rates. Hourly fees will be assessed in quarter 
hour increments for--
    (1) Travel from the FGIS field office or assigned duty location to 
the service point and return; and
    (2) The performance of the requested service, less mealtime.
    (c) Additional fees. Fees in addition to the applicable hourly or 
unit fee will be assessed when--
    (1) An applicant requests more than the original and three copies of 
a certificate;
    (2) An applicant requests onsite typing of certificates or typing of 
certificates at the FGIS field office during other than normal working 
hours; and
    (3) An applicant requests the use of express-type mail or courier 
service.
    (d) Application of fees when service is delayed by the applicant. 
Hourly fees will be assessed when--
    (1) Service has been requested at a specified location;
    (2) A Service representative is on duty and ready to provide service 
but is unable to do so because of a delay not caused by the Service; and
    (3) FGIS officials determine that the Service representative(s) 
cannot be utilized elsewhere or cannot be released without cost to the 
Service.
    (e) Application of fees when an application for service is withdrawn 
or dismissed. Hourly fees will be assessed to the applicant for the 
scheduled service if the request is withdrawn or dismissed after the 
Service representative departs for the service point or if the request 
for service is not withdrawn or dismissed by 2 p.m. of the business day 
preceding the date of scheduled service. However, hourly fees will not 
be assessed to the applicant if FGIS officials determine that the 
Service representative can be utilized elsewhere or if the Service 
representative can be released without cost to the Service.
    (f) To whom fees are assessed. Fees for official services including 
additional fees as provided in Sec. 868.92(c) shall be assessed to and 
paid by the applicant for the Service.
    (g) Advance payment. As necessary, the Administrator may require 
that fees shall be paid in advance of the performance of the requested 
service. Any fees paid in excess of the amount due shall be used to 
offset future billings, unless a request for a refund is made by the 
applicant.
    (h) Time and form of payment--(1) Fees for Federal inspection 
service. Bills for fees assessed under the regulations for official 
services performed by FGIS shall be paid by check, draft, or money 
order, payable to U.S. Department of Agriculture, Federal Grain 
Inspection Service.
    (2) Fees for cooperator inspection service. Fees for inspection 
services provided by a cooperator shall be paid by the applicant to the 
cooperator in accordance with the cooperator's fee schedule.

[53 FR 3722, Feb. 9, 1988. Redesignated and amended at 60 FR 16364, 
16365, Mar. 30, 1995; 61 FR 66536, Dec. 18, 1996]



                      Subpart B_Marketing Standards

    Source: 62 FR 6706, Feb. 13, 1997, unless otherwise noted.



Sec. 868.101  General information.

    The Grain Inspection, Packers and Stockyards Administration (GIPSA) 
of the U.S. Department of Agriculture (USDA) facilitates the fair and 
efficient marketing of agricultural products by maintaining voluntary 
grade standards for Beans, Whole Dry Peas, Split Peas, and Lentils, 
which provide a uniform language for describing the quality of these 
commodities in the

[[Page 354]]

marketplace. These standards may cover (but are not limited to) terms, 
classes, quality levels, performance criteria, and inspection 
requirements. Procedures contained in this part set forth the process 
which GIPSA will follow in developing, issuing, revising, suspending, or 
terminating the U.S. standards for Beans, Whole Dry Peas, Split Peas, 
and Lentils. Communications about GIPSA standards in general should be 
addressed to the Administrator, GIPSA, USDA, 1400 Independence Avenue, 
S.W., Washington, D.C. 20250-3601.



Sec. 868.102  Procedures for establishing and revising grade standards.

    (a) GIPSA will develop, revise, suspend, or terminate grade 
standards if it determines that such action is in the public interest. 
GIPSA encourages interested parties to participate in the review, 
development, and revision of grade standards. Interested parties include 
growers, producers, processors, shippers, distributors, consumers, trade 
associations, companies, and State or Federal agencies. Such persons may 
at any time recommend that GIPSA develop, revise, suspend, or terminate 
a grade standard. Requests for action should be in writing, and should 
be accompanied by a draft of the suggested change, as appropriate.
    (b) GIPSA will:
    (1) Determine the need for new or revised standards;
    (2) Collect technical, marketing, or other appropriate data;
    (3) Conduct research regarding new or revised standards, as 
appropriate; and
    (4) Draft the proposed standards.
    (c) If GIPSA determines that new standards are needed, existing 
standards need to be revised, or the suspension or termination of 
existing standards is justified, GIPSA will undertake the action with 
input from interested parties.



Sec. 868.103  Public notification of grade standards action.

    (a) After developing a standardization proposal, GIPSA will publish 
a notice in the Federal Register proposing new or revised standards or 
suspending or terminating existing standards. The notice will provide a 
sufficient comment period for interested parties to submit comments.
    (b) GIPSA will simultaneously issue a news release about these 
actions, notifying the affected industry and general public. GIPSA will 
also distribute copies of proposals to anyone requesting a copy or to 
anyone it believes may be interested, including other Federal, State, or 
local government agencies.
    (c) All comments received within the comment period will be made 
part of the public record maintained by GIPSA, will be available to the 
public for review, and will be considered by GIPSA before final action 
is taken on the proposal.
    (d) Based on the comments received, GIPSA's knowledge of standards, 
grading, marketing, and other technical factors, and any other relevant 
information, GIPSA will decide whether the proposed actions should be 
implemented.
    (e) If GIPSA concludes that the changes as proposed or with 
appropriate modifications should be adopted, GIPSA will publish the 
final changes in the Federal Register as a final notice. GIPSA will make 
the grade standards and related information available in printed form 
and electronic media.
    (f) If GIPSA determines that proposed changes are not warranted, or 
otherwise are not in the public interest, GIPSA will either publish in 
the Federal Register a notice withdrawing the proposal, or will revise 
the proposal and again seek public input.



            Subpart C_United States Standards for Rough Rice

    Note to the Subpart: Compliance with the provisions of these 
standards does not excuse failure to comply with the provisions of the 
Federal Food, Drug, and Cosmetic Act, or other Federal laws.

    Source: 42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, 
unless otherwise noted.

[[Page 355]]

                              Terms Defined



Sec. 868.201  Definition of rough rice.

    Rice (Oryza sativa L.) which consists of 50 percent or more of paddy 
kernels (see Sec. 868.202(i)) of rice.

[34 FR 7863, May 17, 1969. Redesignated and amended at 60 FR 16364, 
16365, Mar. 30, 1995]



Sec. 868.202  Definition of other terms.

    For the purposes of these standards, the following terms shall have 
the meanings stated below:
    (a) Broken kernels. Kernels of rice which are less than three-
fourths of whole kernels.
    (b) Chalky kernels. Whole or large broken kernels of rice which are 
one-half or more chalky.
    (c) Classes. The following four classes:
Long Grain Rough Rice
Medium Grain Rough Rice
Short Grain Rough Rice
Mixed Rough Rice

Classes shall be based on the percentage of whole kernels, large broken 
kernels, and types of rice.
    (1) ``Long grain rough rice'' shall consist of rough rice which 
contains more than 25 percent of whole kernels and which after milling 
to a well-milled degree, contains not more than 10 percent of whole or 
broken kernels of medium or short grain rice.
    (2) ``Medium grain rough rice'' shall consist of rough rice which 
contains more than 25 percent of whole kernels and which after milling 
to a well-milled degree, contains not more than 10 percent of whole or 
large broken kernels of long grain rice or whole kernels of short grain 
rice.
    (3) ``Short grain rough rice'' shall consist of rough rice which 
contains more than 25 percent of whole kernels and which, after milling 
to a well-milled degree, contains not more than 10 percent of whole or 
large broken kernels of long grain rice or whole kernels of medium grain 
rice.
    (4) ``Mixed rough rice'' shall consist of rough rice which contains 
more than 25 percent of whole kernels and which, after milling to a 
well-milled degree, contains more than 10 percent of ``other types'' as 
defined in paragraph (h) of this section.
    (d) Damaged kernels. Whole or broken kernels of rice which are 
distinctly discolored or damaged by water, insects, heat, or any other 
means, and whole or large broken kernels of parboiled rice in non-
parboiled rice. ``Heat-damaged kernels'' (see paragraph (e) of this 
section) shall not function as damaged kernels.
    (e) Heat-damaged kernels. Whole or large broken kernels of rice 
which are materially discolored and damaged as a result of heating, and 
whole or large broken kernels of parboiled rice in nonparboiled rice 
which are as dark as, or darker in color than, the interpretive line for 
heat-damaged kernels.
    (f) Milling yield. An estimate of the quantity of whole kernels and 
total milled rice (whole and broken kernels combined) that are produced 
in the milling of rough rice to a well-milled degree.
    (g) Objectionable seeds. Seeds other than rice, except seeds of 
Echinochloa crusgalli (commonly known as barnyard grass, watergrass, and 
Japanese millet).
    (h) Other types. (1) Whole kernels of: (i) Long grain rice in medium 
or short grain rice, (ii) medium grain rice in long or short grain rice, 
(iii) short grain rice in long or medium grain rice, and (2) Large 
broken kernels of long grain rice in medium or short grain rice and 
large broken kernels of medium or short grain rice in long grain rice.
    Note: Broken kernels of medium grain rice in short grain rice and 
large broken kernels of short grain rice in medium grain rice shall not 
be considered other types.
    (i) Paddy kernels. Whole or broken unhulled kernels of rice.
    (j) Red rice. Whole or large broken kernels of rice on which there 
is an appreciable amount of red bran.
    (k) Seeds. Whole or broken seeds of any plant other than rice.
    (l) Smutty kernels. Whole or broken kernels of rice which are 
distinctly infected by smut.
    (m) Types of rice. The following three types:
    Long grain
    Medium grain
    Short grain

Types shall be based on the length-width ratio of kernels of rice that 
are unbroken and the width, thickness, and shape of kernels of rice that 
are broken as prescribed in FGIS instructions.

[[Page 356]]

    (n) Ungelatinized kernels. Whole or large broken kernels of 
parboiled rice with distinct white or chalky areas due to incomplete 
gelatinization of the starch.
    (o) Whole and large broken kernels. Rice (including seeds) that (1) 
passes over a 6 plate (for southern production), or (2) remains on top 
of a 6 sieve (for western production).
    (p) Whole kernels. Unbroken kernels of rice and broken kernels of 
rice which are at least three-fourths of an unbroken kernel.
    (q) 6 sieve. A metal sieve 0.032-inch thick, perforated with rows of 
round holes 0.0938 (\6/64\) inch in diameter.
    (r) 6 plate. A laminated metal plate 0.142-inch thick, with a top 
lamina 0.051-inch thick, perforated with rows of round holes 0.0938 (\6/
64\) inch in diameter, and a bottom lamina 0.091-inch thick, without 
perforations.

[42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, as amended at 
47 FR 34516, Aug. 10, 1982; 54 FR 21403, May 18, 1989; 54 FR 51344, Dec. 
14, 1989. Redesignated at 60 FR 16364, Mar. 30, 1995]

              Principles Governing Application of Standards



Sec. 868.203  Basis of determination.

    The determination of seeds, objectionable seeds, heat-damaged 
kernels, red rice and damaged kernels, chalky kernels, other types, 
color, and the special grade Parboiled rough rice shall be on the basis 
of the whole and large broken kernels of milled rice that are produced 
in the milling of rough rice to a well-milled degree. When determining 
class, the percentage of (a) whole kernels of rough rice shall be 
determined on the basis of the original sample, and (b) types of rice 
shall be determined on the basis of the whole and large broken kernels 
of milled rice that are produced in the milling of rough rice to a well-
milled degree. Smutty kernels shall be determined on the basis of the 
rough rice after it has been cleaned and shelled as prescribed in FGIS 
instructions, or by any method that is approved by the Administrator as 
giving equivalent results. All other determinations shall be on the 
basis of the original sample. Mechanical sizing of kernels shall be 
adjusted by handpicking as prescribed in FGIS instructions, or by any 
method that is approved by the Administrator as giving equivalent 
results.

[42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, as amended at 
47 FR 34516, Aug. 10, 1982; 54 FR 21403, May 18, 1989. Redesignated at 
60 FR 16364, Mar. 30, 1995]



Sec. 868.204  Interpretive line samples.

    Interpretive line samples showing the official scoring line for 
factors that are determined by visual examinations shall be maintained 
by the Federal Grain Inspection Service, U.S. Department of Agriculture, 
and shall be available for reference in all inspection offices that 
inspect and grade rice.

[42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, as amended at 
47 FR 34516, Aug. 10, 1982. Redesignated at 54 FR 21403, May 18, 1989, 
and 60 FR 16364, Mar. 30, 1995]



Sec. 868.205  Milling requirements.

    In determining milling yield (see Sec. 868.202(f)) in rough rice, 
the degree of milling shall be equal to, or better than, that of the 
interpretive line sample for ``well-milled'' rice.

[42 FR 40869, Aug. 12, 1977. Redesignated at 54 FR 21413, May 18, 1989. 
Further redesignated and amended at 60 FR 16364, 16365, Mar. 30, 1995]



Sec. 868.206  Milling yield determination.

    Milling yield shall be determined by the use of an approved device 
in accordance with procedures prescribed in FGIS instructions. For the 
purpose of this paragraph, ``approved device'' shall include the McGill 
Miller No. 3 and any other equipment that is approved by the 
Administrator as giving equivalent results.
    Note: Milling yield shall not be determined when the moisture 
content of the rough rice exceeds 18.0 percent.

[42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, as amended at 
47 FR 34516, Aug. 10, 1982; Redesignated and amended at 54 FR 21403, May 
18, 1989. Redesignated at 60 FR 16364, Mar. 30, 1995]



Sec. 868.207  Moisture.

    Water content in rough rice as determined by an approved device in 
accordance with procedures prescribed in the FGIS instructions. For the 
purpose of this paragraph, ``approved device''

[[Page 357]]

shall include the Motomco Moisture Meter and any other equipment that is 
approved by the Administrator as giving equivalent results.

[42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, as amended at 
47 FR 34516, Aug. 10, 1982. Redesignated at 54 FR 21403, May 18, 1989; 
54 FR 51344, Dec. 14, 1989. Redesignated at 60 FR 16364, Mar. 30, 1995]



Sec. 868.208  Percentages.

    (a) Rounding. Percentages are determined on the basis of weight and 
are rounded as follows:
    (1) When the figure to be rounded is followed by a figure greater 
than or equal to 5, round to the next higher figure; e.g., report 6.36 
as 6.4, 0.35 as 0.4, and 2.45 as 2.5.
    (2) When the figure to be rounded is followed by a figure less than 
5, retain the figure; e.g., report 8.34 as 8.3 and 1.22 as 1.2.
    (b) Recording. All percentages, except for milling yield, are stated 
in whole and tenth percent to the nearest tenth percent. Milling yield 
is stated to the nearest whole percent.

[54 FR 21403, May 18, 1989. Redesignated at 60 FR 16364, Mar. 30, 1995]



Sec. 868.209  Information.

    Requests for the Rice Inspection Handbook, Equipment Handbook, or 
for information concerning approved devices and procedures, criteria for 
approved devices, and requests for approval of devices should be 
directed to the U.S. Department of Agriculture, Federal Grain Inspection 
Service, P.O. Box 96454, Washington, DC 20090-6454, or any field office 
or cooperator.

[54 FR 21404, May 18, 1989. Redesignated at 60 FR 16364, Mar. 30, 1995]

           Grades, Grade Requirements, and Grade Designations



Sec. 868.210  Grades and grade requirements for the classes of Rough Rice. (See also Sec. 868.212.)

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           Maximum limits of--
                                            --------------------------------------------------------------------------------
                                               Seeds and heat-damaged kernels               Chalky kernels \1,2\
                                            ------------------------------------  Red rice ----------------------
                                               Total     Heat-damaged               and
                   Grade                      (singly    kernels and     Heat-    damaged              In medium    Other       Color requirements \1\
                                                 or     objectionable   damaged   kernels    In long    or short  types \3\           (minimum)
                                             combined)  seeds (singly   kernels   (singly     grain      grain    (Percent)
                                              (Number    or combined)   (Number      or        rice       rice
                                               in 500     (Number in    in 500   combined)  (Percent)  (Percent)
                                               grams)     500 grams)    grams)   (Percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
U.S. No. 1.................................          4            3           1        0.5        1.0        2.0        1.0  Shall be white or creamy.
U.S. No. 2.................................          7            5           2        1.5        2.0        4.0        2.0  May be slightly gray.
U.S. No. 3.................................         10            8           5        2.5        4.0        6.0        3.0  May be light gray.
U.S. No. 4.................................         27           22          15        4.0        6.0        8.0        5.0  May be gray or slight rosy.
U.S. No. 5.................................         37           32          25        6.0       10.0       10.0       10.0  May be dark gray or rosy.
U.S. No. 6.................................         75           75          75   \4\ 15.0       15.0       15.0       10.0  May be dark gray or rosy.
U.S. Sample grade
    U.S. Sample grade shall be rough rice which: (a) does not meet the requirements for any of the grades from U.S. No. 1 to U.S. No. 6, inclusive; (b)
     contains more than 14.0 percent of moisture; (c) is musty, or sour, or heating; (d) has any commercially objectionable foreign odor; or (e) is
     otherwise of distinctly low quality.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ For the special grade Parboiled rough rice, see Sec.  868.212(b).
\2\ For the special grade Glutinous rough rice, see Sec.  868.212(d).
\3\ These limits do not apply to the class Mixed Rough Rice.
\4\ Rice in grade U.S. No. 6 shall contain not more than 6.0 percent of damaged kernels.


[[Page 358]]


[56 FR 55978, Oct. 31, 1991. Redesignated and amended at 60 FR 16364, 
Mar. 30, 1995]



Sec. 868.211  Grade designation.

    (a) The grade designation for all classes of rough rice, except 
Mixed Rough Rice, shall include in the following order: (1) The letters 
``U.S.''; (2) the number of the grade or the words ``Sample grade,'' as 
warranted; (3) the words ``or better'' when applicable and requested by 
the applicant prior to inspection; (4) the class; (5) each applicable 
special grade (see Sec. 868.213); and (6) a statement of the milling 
yield.
    (b) The grade designation for the class Mixed Rough Rice shall 
include, in the following order: (1) The letters ``U.S.''; (2) the 
number of the grade or the words ``Sample grade,'' as warranted; (3) the 
words ``or better,'' when applicable and requested by the applicant 
prior to inspection; (4) the class; (5) each applicable special grade 
(see Sec. 868.213); (6) the percentage of whole kernels of each type in 
the order of predominance; (7) the percentage of large broken kernels of 
each type in the order of predominance; (8) the percent of material 
removed by the No. 6 sieve or the No. 6 sizing plate; (9) when 
applicable, the percentage of seeds; and (10) a statement of the milling 
yield.
    Note: Large broken kernels other than long grain, in Mixed Rough 
Rice, shall be certificated as ``medium or short grain.''

[42 FR 40869, Aug. 12, 1977, as amended at 54 FR 51344, Dec. 14, 1989. 
Redesignated and amended at 60 FR 16364, 16365, Mar. 30, 1995]

     Special Grades, Special Grade Requirements, and Special Grade 
                              Designations



Sec. 868.212  Special grades and requirements.

    A special grade, when applicable, is supplemental to the grade 
assigned under Sec. 868.210. Such special grades for rough rice are 
established and determined as follows:
    (a) Infested rough rice. Tolerances for live insects for infested 
rough rice are defined according to sampling designations as follows:
    (1) Representative sample. The representative sample consists of the 
work portion, and the file sample if needed and when available. The 
rough rice (except when examined according to paragraph (a)(3) of this 
section will be considered infested if the representative sample 
contains two or more live weevils, or one live weevil and one or more 
other live insects injurious to stored rice or five or more other live 
insects injurious to stored rice.
    (2) Lot as a whole (stationary). The lot as a whole is considered 
infested when two or more live weevils, or one live weevil and one or 
more other live insects injurious to stored rice, or five or more other 
live insects injurious to stored rice, or 15 or more live Angoumois 
moths or other live moths injurious to stored rice are found in, on, or 
about the lot.
    (3) Sample as a whole during continuous loading/unloading. The 
minimum sample size for rice being sampled during continuous loading/
unloading is 500 grams per each 100,000 pounds of rice. The sample as a 
whole is considered infested when a component (as defined in FGIS 
instructions) contains two or more live weevils, or one live weevil and 
one or more other live insects injurious to stored rice, or five or more 
other live insects injurious to stored rice.
    (b) Parboiled rough rice. Parboiled rough rice shall be rough rice 
in which the starch has been gelatinized by soaking, steaming, and 
drying. Grades U.S. No. 1 to U.S. No. 6 inclusive, shall contain not 
more than 10.0 percent of ungelatinized kernels. Grades U.S. No. 1 and 
U.S. No. 2 shall contain not more than 0.1 percent, grades U.S. No. 3 
and U.S. No. 4 not more than 0.2 percent, and grades U.S. No. 5 and U.S. 
No. 6 not more than 0.5 percent of nonparboiled rice. If the rice is: 
(1) Not distinctly colored by the parboiling process, it shall be 
considered ``Parboiled Light''; (2) distinctly but not materially 
colored by the parboiling process, it shall be considered ``Parboiled''; 
(3) materially colored by the parboiling process, it shall be considered 
``Parboiled Dark.'' The color levels for ``Parboiled Light,'' 
``Parboiled,'' and ``Parboiled Dark'' rice shall be in accordance with 
the interpretive line samples for parboiled rice.

[[Page 359]]

    Note: The maximum limits for ``Chalky kernels,'' ``Heat-damaged 
kernels,'' ``Kernels damaged by heat,'' and the ``Color requirements'' 
shown in Sec. 868.210 are not applicable to the special grade 
``Parboiled rough rice.''
    (c) Smutty rough rice. Smutty rough rice shall be rough rice which 
contains more than 3.0 percent of smutty kernels.
    (d) Glutinous rough rice. Glutinous rough rice shall be special 
varieties of rice (Oryza sativa L. glutinosa) which contain more than 50 
percent chalky kernels. Grade U.S. No. 1 shall contain not more than 1.0 
percent of nonchalky kernels, grade U.S. No. 2 not more than 2.0 percent 
of nonchalky kernels, grade U.S. No. 3 not more than 4.0 percent of 
nonchalky kernels, grade U.S. No. 4 not more than 6.0 percent of 
nonchalky kernels, grade U.S. No. 5 not more than 10.0 percent of 
nonchalky kernels, and grade U.S. No. 6 not more than 15.0 percent of 
nonchalky kernels.
    Note: The maximum limits for ``Chalky kernels'' in Sec. 868.210 are 
not applicable to the special grade ``Glutinous rough rice.''
    (e) Aromatic rough rice. Aromatic rough rice shall be special 
varieties of rice (Oryza sativa L. scented) that have a distinctive and 
characteristic aroma; e.g., basmati and jasmine rice.

[42 FR 40869, Aug. 12, 1977, as amended at 54 FR 21406, May 18, 1989; 56 
FR 55978, Oct. 31, 1991; 58 FR 68016, Dec. 23, 1993. Redesignated and 
amended at 60 FR 16364, 16365, Mar. 30, 1995]



Sec. 868.213  Special grade designation.

    The grade designation for infested, parboiled, smutty, glutinous, or 
aromatic rough rice shall include, following the class, the word(s) 
``Infested,'' ``Parboiled Light,'' ``Parboiled,'' ``Parboiled Dark,'' 
``Smutty,'' ``Glutinous,'' or ``Aromatic,'' as warranted, and all other 
information prescribed in Sec. 868.211.

[58 FR 68016, Dec. 23, 1993. Redesignated and amended at 60 FR 16364, 
Mar. 30, 1995]



     Subpart D_United States Standards for Brown Rice for Processing

    Note to the Subpart: Compliance with the provisions of these 
standards does not excuse failure to comply with the provisions of the 
Federal Food, Drug, and Cosmetic Act, or other Federal laws.

    Source: 42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, 
unless otherwise noted. Redesignated at 60 FR 16364, Mar. 30, 1995.

                              Terms Defined



Sec. 868.251  Definition of brown rice for processing.

    Rice (Oryza sativa L.) which consists of more than 50.0 percent of 
kernels of brown rice, and which is intended for processing to milled 
rice.



Sec. 868.252  Definition of other terms.

    For the purposes of these standards, the following terms shall have 
the meanings stated below:
    (a) Broken kernels. Kernels of rice which are less than three-
fourths of whole kernels.
    (b) Brown rice. Whole or broken kernels of rice from which the hulls 
have been removed.
    (c) Chalky kernels. Whole or broken kernels of rice which are one-
half or more chalky.
    (d) Classes. There are four classes of brown rice for processing.
Long Grain Brown Rice for Processing.
Medium Grain Brown Rice for Processing.
Short Grain Brown Rice for Processing.
Mixed Brown Rice for Processing.

Classes shall be based on the percentage of whole kernels, broken 
kernels, and types of rice.
    (1) ``Long-grain brown rice for processing'' shall consist of brown 
rice for processing which contains more than 25.0 percent of whole 
kernels of brown rice and not more than 10.0 percent of whole or broken 
kernels of medium- or short-grain rice.
    (2) ``Medium-grain brown rice for processing'' shall consist of 
brown rice for processing which contains more than 25.0 percent of whole 
kernels of brown rice and not more than 10.0 percent of whole or broken 
kernels of long-grain rice or whole kernels of short-grain rice.
    (3) ``Short-grain brown rice for processing'' shall consist of brown 
rice for processing which contains more than 25.0 percent of whole 
kernels of brown rice and not more than 10.0 percent of whole or broken 
kernels of long-grain rice or whole kernels of medium-grain rice.
    (4) ``Mixed brown rice for processing'' shall be brown rice for 
processing

[[Page 360]]

which contains more than 25.0 percent of whole kernels of brown rice and 
more than 10.0 percent of ``other types'' as defined in paragraph (i) of 
this section.
    (e) Damaged kernels. Whole or broken kernels of rice which are 
distinctly discolored or damaged by water, insects, heat, or any other 
means (including parboiled kernels in nonparboiled rice and smutty 
kernels). ``Heat-damaged kernels'' (see paragraph (f) of this section) 
shall not function as damaged kernels.
    (f) Heat-damaged kernels. Whole or broken kernels of rice which are 
materially discolored and damaged as a result of heating and parboiled 
kernels in nonparboiled rice which are as dark as, or darker in color 
than, the interpretive line for heat-damaged kernels.
    (g) Milling yield. An estimate of the quantity of whole kernels and 
total milled rice (whole and broken kernels combined) that is produced 
in the milling of brown rice for processing to a well-milled degree.
    (h) Objectionable seeds. Whole or broken seeds other than rice, 
except seeds of Echinochloa crusgalli (commonly known as barnyard grass, 
watergrass, and Japanese millet).
    (i) Other types. (1) Whole kernels of: (i) Long grain rice in medium 
or short grain rice and medium or short grain rice in long grain rice, 
(ii) medium grain rice in long or short grain rice, (iii) short grain 
rice in long or medium grain rice, (2) broken kernels of long grain rice 
in medium or short grain rice and broken kernels of medium or short 
grain rice in long grain rice.
    Note: Broken kernels of medium grain rice in short grain rice and 
broken kernels of short grain rice in medium grain rice shall not be 
considered other types.
    (j) Paddy Kernels. Whole or broken unhulled kernels and whole or 
broken kernels of rise having a portion or portions of the hull 
remaining which cover one-half (\1/2\) or more of the whole or broken 
kernel.
    (k) Red rice. Whole or broken kernels of rice on which the bran is 
distinctly red in color.
    (l) Related material. All by-products of a paddy kernel, such as the 
outer glumes, lemma, palea, awn, embryo, and bran layers.
    (m) Seeds. Whole or broken seeds of any plant other than rice.
    (n) Smutty kernels. Whole or broken kernels of rice which are 
distinctly infected by smut.
    (o) Types of rice. There are three types of brown rice for 
processing:
Long grain
Medium grain
Short grain

Types shall be based on the length/width ratio of kernels of rice that 
are unbroken and the width, thickness, and shape of kernels of rice that 
are broken as prescribed in FGIS instructions.
    (p) Ungelantinized kernels. Whole or broken kernels of parboiled 
rice with distinct white or chalky areas due to incomplete gelatization 
of the starch.
    (q) Unrelated material. All matter other than rice, related 
material, and seeds.
    (r) Well-milled kernels. Whole or broken kernels of rice from which 
the hulls and practically all of the embryos and the bran layers have 
been removed.
    (s) Whole kernels. Unbroken kernels of rice and broken kernels of 
rice which are at least three-fourths of an unbroken kernel.
    (t) 6 plate. A laminated metal plate 0.142-inch thick, with a top 
lamina 0.051-inch thick, perforated with rows of round holes 0.0938 (\6/
64\) inch in diameter, and a bottom lamina 0.091-inch thick, without 
perforations.
    (u) 6\1/2\ sieve. A metal sieve 0.032-inch thick, perforated with 
rows of round holes 0.1016 (6\1/2\/64) inch in diameter.

[13 FR 9479, Dec. 31, 1948, as amended at 44 FR 73008, Dec. 17, 1979; 47 
FR 34516, Aug. 10, 1982; 54 FR 21403, 21406, May 18, 1989; 54 FR 51344, 
Dec. 14, 1989. Redesignated at 60 FR 16364, Mar. 30, 1995]

              Principles Governing Application of Standards



Sec. 868.253  Basis of determination.

    The determination of kernels damaged by heat, heat-damaged kernels, 
parboiled kernels in nonparboiled rice, and the special grade Parboiled 
brown rice for processing shall be on the basis of the brown rice for 
processing after it has been milled to a well-milled degree. All other 
determinations shall be on

[[Page 361]]

the basis of the original sample. Mechanical sizing of kernels shall be 
adjusted by handpicking as prescribed in FGIS instructions, or by any 
method which gives equivalent results.

[42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, as amended at 
47 FR 34516, Aug. 10, 1982; 54 FR 21403, 21406, May 18, 1989. 
Redesignated at 60 FR 16364, Mar. 30, 1995]



Sec. 868.254  Broken kernels determination.

    Broken kernels shall be determined by the use of equipment and 
procedures prescribed in FGIS instructions, or by any method which gives 
equivalent results.

[42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, as amended at 
47 FR 34516, Aug. 10, 1982; 54 FR 21403, May 18, 1989. Redesignated at 
54 FR 21406, May 18, 1989. Redesignated at 60 FR 16364, Mar. 30, 1995]



Sec. 868.255  Interpretive line samples.

    Interpretive line samples showing the official scoring line for 
factors that are determined by visual observation shall be maintained by 
the Federal Grain Inspection Service, U.S. Department of Agriculture, 
and shall be available for reference in all inspection offices that 
inspect and grade rice.

[42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, as amended at 
47 FR 34516, Aug. 10, 1982; 54 FR 21403, May 18, 1989. Redesignated at 
54 FR 21406, May 18, 1989. Redesignated at 60 FR 16364, Mar. 30, 1995]



Sec. 868.256  Milling requirements.

    In determining milling yield (see Sec. 868.252(g)) in brown rice 
for processing, the degree of milling shall be equal to, or better than, 
that of the interpretive line sample for ``well-milled'' rice.

[42 FR 40869, Aug. 12, 1977. Redesignated at 21406, May 18, 1989. 
Redesignated and amended at 60 FR 16364, 16365, Mar. 30, 1995]



Sec. 868.257  Milling yield determination.

    Milling yield shall be determined by the use of an approved device 
in accordance with procedures prescribed in FGIS instructions. For the 
purpose of this paragraph, ``approved device'' shall include the McGill 
Miller No. 3 and any other equipment that is approved by the 
Administrator as giving equivalent results.
    Note: Milling yield shall not be determined when the moisture 
content of the brown rice for processing exceeds 18.0 percent.

[42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, as amended at 
47 FR 34516, Aug. 10, 1982; 54 FR 21403, May 18, 1989. Redesignated at 
54 FR 21406, May 18, 1989. Further redesignated at 60 FR 16364, Mar. 30, 
1995]



Sec. 868.258  Moisture.

    Water content in brown rice for processing as determined by an 
approved device in accordance with procedures prescribed in FGIS 
instructions. For the purpose of this paragraph, ``approved device'' 
shall include the Motomco Moisture Meter and any other equipment that is 
approved by the Administrator as giving equivalent results.

[42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, as amended at 
47 FR 34516, Aug. 10, 1982; 54 FR 21403, May 18, 1989. Redesignated at 
54 FR 21406, May 18, 1989. Further redesignated at 60 FR 16364, Mar. 30, 
1995]



Sec. 868.259  Percentages.

    (a) Rounding. Percentages are determined on the basis of weight and 
are rounded as follows:
    (1) When the figure to be rounded is followed by a figure greater 
than or equal to 5, round to the next higher figure; e.g., report 6.36 
as 6.4, 0.35 as 0.4, and 2.45 as 2.5.
    (2) When the figure to be rounded is followed by a figure less than 
5, retain the figure, e.g., report 8.34 as 8.3 and 1.22 and 1.2.
    (b) Recording. All percentages, except for milling yield, are stated 
in whole and tenth percent to the nearest whole percent. Milling yield 
is stated to the nearest whole percent.

[54 FR 21406, May 18, 1989. Redesignated at 60 FR 16364, Mar. 30, 1995]



Sec. 868.260  Information.

    Requests for the Rice Inspection Handbook, Equipment Handbook, or 
for information concerning approved devices and procedures, criteria for 
approved devices, and requests for approval of devices should be 
directed to the U.S. Department of Agriculture, Federal Grain Inspection 
Service, P.O.

[[Page 362]]

Box 96454, Washington, DC 20090-6454, or any field office or cooperator.

[54 FR 21406, May 18, 1989. Redesignated at 60 FR 16364, Mar. 30, 1995]

           Grades, Grade Requirements, and Grade Designations


Sec. 868.261    Grade and grade requirements for the classes of brown 
        rice for processing. (See also Sec. 868.263.)

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Maximum limits of--
                                          --------------------------------------------------------------------------------------------------------------
                                              Paddy kernels      Seeds and heat-damaged kernels
                                          --------------------------------------------------------  Red rice               Broken
                                                                 Total                                and                 kernels
                  Grade                                         (singly     Heat-                   damaged     Chalky    removed     Other   Wellmilled
                                                      Number       or      damaged  Objectionable   kernels    kernels     by a 6     types     kernels
                                            Percent   in 500   combined)   kernels  seeds (number   (singly     \1,2\     plate or     \4\     (percent)
                                                       grams    (number    (number  in 500 grams)      or     (percent)   a 6\1/2\
                                                                 in 500    in 500                  combined)             sieve \3\
                                                                 grams)    grams)                  (percent)             (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
U.S. No. 1...............................        --        20         10         1            2          1.0        2.0        1.0       1.0        1.0
U.S. No. 2...............................       2.0        --         40         2           10          2.0        4.0        2.0       2.0        3.0
U.S. No. 3...............................       2.0        --         70         4           20          4.0        6.0        3.0       5.0       10.0
U.S. No. 4...............................       2.0        --        100         8           35          8.0        8.0        4.0      10.0       10.0
U.S. No. 5...............................       2.0        --        150        15           50         15.0       15.0        6.0      10.0       10.0
--------------------------------------------------------------------------------------------------------------------------------------------------------


U.S. Sample grade...........  U.S. Sample grade shall be brown rice for
                               processing which (a) does not meet the
                               requirements for any of the grades from
                               U.S. No. 1 to U.S. No. 5, inclusive; (b)
                               contains more than 14.5 percent of
                               moisture; (c) is musty, or sour, or
                               heating; (d) has any commercially
                               objectionable foreign odor; (e) contains
                               more than 0.2 percent of related material
                               or more than 0.1 percent of unrelated
                               material; (f) contains two or more live
                               weevils or other live insects; or (g) is
                               otherwise of distinctly low quality.
\1\ For the special grade Parboiled brown rice for processing, see Sec.
   868.263(a).
\2\ For the special grade Glutinous brown rice for processing, see Sec.
   868.263(c).
\3\ Plates should be used for southern production rice and sieves should
  be used for western production rice, but any device or method which
  gives equivalent results may be used.
\4\ These limits do not apply to the class Mixed Brown Rice for
  Processing.


[56 FR 55979, Oct. 31, 1991. Redesignated and amended at 60 FR 16364, 
Mar. 30, 1995]



Sec. 868.262  Grade designation.

    (a) The grade designation for all classes of brown rice for 
processing, except Mixed Brown Rice for Processing, shall include in the 
following order: (1) The letters ``U.S.''; (2) the number of the grade 
or the words ``Sample grade,'' as warranted; (3) the words ``or 
better,'' when applicable and requested by the applicant prior to 
inspection; (4) the class; and (5) each applicable special grade (see 
Sec. 868.264).
    (b) The grade designation for the class Mixed Brown Rice for 
Processing shall include in the following order: (1) The letters 
``U.S.''; (2) the number of the grade or the words ``Sample grade,'' as 
warranted; (3) the words ``or better,'' when applicable and requested by 
the applicant prior to inspection; (4) the class; (5) each applicable 
special grade (see Sec. 868.264); (6) the percentage of whole kernels 
of each type in the order of predominance; and when applicable; (7) the 
percentage of broken kernels of each type in the order of predominance; 
and (8) the percentage of seeds, related material, and unrelated 
material.
    Note: Broken kernels other than long grain, in Mixed Brown Rice for 
Processing, shall be certificated as ``medium or short grain.''

[42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977. Redesignated 
and amended at 60 FR 16364, 16365, Mar. 30, 1995]

     Special Grades, Special Grade Requirements, and Special Grade 
                              Designations



Sec. 868.263  Special grades and special grade requirements.

    A special grade, when applicable, is supplemental to the grade 
assigned under Sec. 868.262. Such special grades for

[[Page 363]]

brown rice for processing are established and determined as follows:
    (a) Parboiled brown rice for processing. Parboiled brown rice for 
processing shall be rice in which the starch has been gelatinized by 
soaking, steaming, and drying. Grades U.S. Nos. 1 to 5, inclusive, shall 
contain not more than 10.0 percent of ungelatinized kernels. Grades U.S. 
No. 1 and U.S. No. 2 shall contain not more than 0.1 percent, grades 
U.S. No. 3 and U.S. No. 4 not more than 0.2 percent, and grade U.S. No. 
5 not more than 0.5 percent of nonparboiled rice.
    Note: The maximum limits for ``chalky kernels,'' ``Heat-damaged 
kernels,'' and ``Kernels damaged by heat'' shown in Sec. 868.261 are 
not applicable to the special grade ``Parboiled brown rice for 
processing.''
    (b) Smutty brown rice for processing. Smutty brown rice for 
processing shall be rice which contains more than 3.0 percent of smutty 
kernels.
    (c) Glutinous brown rice for processing. Glutinous brown rice for 
processing shall be special varieties of rice (Oryza sativa L. 
glutinosa) which contain more than 50 percent chalky kernels. Grade U.S. 
No. 1 shall contain not more than 1.0 percent of nonchalky kernels, 
grade U.S. No. 2 not more than 2.0 percent of nonchalky kernels, grade 
U.S. No. 3 not more than 4.0 percent of nonchalky kernels, grade U.S. 
No. 4 not more than 6.0 percent of nonchalky kernels, and grade U.S. No. 
5 not more than 10.0 percent of nonchalky kernels.
    Note: The maximum limits for ``Chalky kernels'' in Sec. 868.261 are 
not applicable to the special grade ``Glutinous brown rice for 
processing.''
    (d) Aromatic brown rice for processing. Aromatic brown rice for 
processing shall be special varieties of rice (Oryza sativa L. scented) 
that have a distinctive and characteristic aroma; e.g., basmati and 
jasmine rice.

[42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, as amended at 
56 FR 55979, Oct. 31, 1991; 58 FR 68016, Dec. 23, 1993. Redesignated and 
amended at 60 FR 16364, 16365, Mar. 30, 1995]



Sec. 868.264  Special grade designation.

    The grade designation for parboiled, smutty, glutinous, or aromatic 
brown rice for processing shall include, following the class, the 
word(s) ``Parboiled,'' ``Smutty,'' ``Glutinous,'' or ``Aromatic,'' as 
warranted, and all other information prescribed in Sec. 868.262.

[58 FR 68016, Dec. 23, 1993. Redesignated and amended at 60 FR 16364, 
Mar. 30, 1995]



            Subpart E_United States Standards for Milled Rice

    Note to the Subpart: Compliance with the provisions of these 
standards does not excuse failure to comply with the provisions of the 
Federal Food, Drug, and Cosmetic Act, or other Federal laws.

    Source: 42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, 
unless otherwise noted. Redesignated at 60 FR 16364, Mar. 30, 1995.

                              Terms Defined



Sec. 868.301  Definition of milled rice.

    Whole or broken kernels of rice (Oryza sativa L.) from which the 
hulls and at least the outer bran layers have been removed and which 
contain not more than 10.0 percent of seeds, paddy kernels, or foreign 
material, either singly or combined.

[48 FR 24859, June 3, 1983. Redesignated at 60 FR 16364, Mar. 30, 1995]



Sec. 868.302  Definition of other terms.

    For the purposes of these standards, the following terms shall have 
the meanings stated below:
    (a) Broken kernels. Kernels of rice which are less than three-
fourths of whole kernels.
    (b) Brown rice. Whole or broken kernels of rice from which the hulls 
have been removed.
    (c) Chalky kernels. Whole or broken kernels of rice which are one-
half or more chalky.
    (d) Classes. There are seven classes of milled rice. The following 
four classes shall be based on the percentage of whole kernels, and 
types of rice:
    Long Grain Milled Rice.
    Medium Grain Milled Rice.
    Short Grain Milled Rice.
    Mixed Milled Rice.

The following three classes shall be based on the percentage of whole 
kernels and of broken kernels of different size:
Second Head Milled Rice.
Screenings Milled Rice.
Brewers Milled Rice.

[[Page 364]]

    (1) ``Long grain milled rice'' shall consist of milled rice which 
contains more than 25.0 percent of whole kernels of milled rice and in 
U.S. Nos. 1 through 4 not more than 10.0 percent of whole or broken 
kernels of medium or short grain rice. U.S. No. 5 and U.S. No. 6 long 
grain milled rice shall contain not more than 10.0 percent of whole 
kernels of medium or short grain milled rice (broken kernels do not 
apply).
    (2) ``Medium grain milled rice'' shall consist of milled rice which 
contains more than 25.0 percent of whole kernels of milled rice and in 
U.S. Nos. 1 through 4 not more than 10.0 percent of whole or broken 
kernels of long grain rice or whole kernels of short grain rice. U.S. 
No. 5 and U.S. No. 6 medium grain milled rice shall contain not more 
than 10.0 percent of whole kernels of long or short grain milled rice 
(broken kernels do not apply).
    (3) ``Short grain milled rice'' shall consist of milled rice which 
contains more than 25.0 percent of whole kernels of milled rice and in 
U.S. Nos. 1 through 4 not more than 10.0 percent of whole or broken 
kernels of long grain rice or whole kernels of medium grain rice. U.S. 
No. 5 and U.S. No. 6 short grain milled rice shall contain not more than 
10.0 percent of whole kernels of long or medium grain milled rice 
(broken kernels do not apply).
    (4) ``Mixed milled rice'' shall consist of milled rice which 
contains more than 25.0 percent of whole kernels of milled rice and more 
than 10.0 percent of ``other types'' as defined in paragraph (i) of this 
section. U.S. No. 5 and U.S. No. 6 mixed milled rice shall contain more 
than 10.0 percent of whole kernels of ``other types'' (broken kernels do 
not apply).
    (5) ``Second head milled rice'' shall consist of milled rice which, 
when determined in accordance with Sec. 868.303, contains:
    (i) Not more than (a) 25.0 percent of whole kernels, (b) 7.0 percent 
of broken kernels removed by a 6 plate, (c) 0.4 percent of broken 
kernels removed by a 5 plate, and (d) 0.05 percent of broken kernels 
passing through a 4 sieve (southern production); or
    (ii) Not more than (a) 25.0 percent of whole kernels, (b) 50.0 
percent of broken kernels passing through a 6\1/2\ sieve, and (c) 10.0 
percent of broken kernels passing through a 6 sieve (western 
production).
    (6) ``Screenings milled rice'' shall consist of milled rice which, 
when determined in accordance with Sec. 868.303, contains:
    (i) Not more than (a) 25.0 percent of whole kernels, (b) 10.0 
percent of broken kernels removed by a 5 plate, and (c) 0.2 percent of 
broken kernels passing through a 4 sieve (southern production); or
    (ii) Not more than (a) 25.0 percent of whole kernels and (b) 15.0 
percent of broken kernels passing through a 5\1/2\ sieve; and more than 
(c) 50.0 percent of broken kernels passing through a 6\1/2\ sieve and 
(d) 10.0 percent of broken kernels passing through a 6 sieve (western 
production).
    (7) ``Brewers milled rice'' shall consist of milled rice which, when 
determined in accordance with Sec. 868.303, contains not more than 25.0 
percent of whole kernels and which does not meet the kernel-size 
requirements for the class Second Head Milled Rice or Screenings Milled 
Rice.
    (e) Damaged kernels. Whole or broken kernels of rice which are 
distinctly discolored or damaged by water, insects, heat, or any other 
means, and parboiled kernels in nonparboiled rice. ``Heat-damaged 
kernels'' (see paragraph (g) of this section) shall not function as 
damaged kernels.
    (f) Foreign material. All matter other than rice and seeds. Hulls, 
germs, and bran which have separated from the kernels of rice shall be 
considered foreign material.
    (g) Heat-damaged kernels. Whole or broken kernels of rice which are 
materially discolored and damaged as a result of heating and parboiled 
kernels in nonparboiled rice which are as dark as, or darker in color 
than, the interpretive line for heat-damaged kernels.
    (h) Objectionable seeds. Seeds other than rice, except seeds of 
Echinochloa crusgalli (commonly known as barnyard grass, watergrass, and 
Japanese millet).
    (i) Other types. (1) Whole kernels of: (i) Long grain rice in medium 
or short grain rice, (ii) medium grain rice in long or short grain rice, 
(iii) Short

[[Page 365]]

grain rice in long or medium grain rice, and (2) broken kernels of long 
grain rice in medium or short grain rice and broken kernels of medium or 
short grain rice in long grain rice, except in U.S. No. 5 and U.S. No. 6 
milled rice. In U.S. No. 5 and U.S. No. 6 milled rice, only whole 
kernels will apply.
    Note: Broken kernels of medium grain rice in short grain rice and 
broken kernels of short grain rice in medium grain rice shall not be 
considered other types.
    (j) Paddy Kernels. Whole or broken unhulled kernels of rice; whole 
or broken kernels of brown rice, and whole or broken kernels of milled 
rice having a portion or portions of the hull remaining which cover one-
eighth (\1/8\) or more of the whole or broken kernel.
    (k) Red rice. Whole or broken kernels of rice on which there is an 
appreciable amount of red bran.
    (l) Seeds. Whole or broken seeds of any plant other than rice.
    (m) Types of rice. There are three types of milled rice as follows:
Long grain.
Medium grain.
Short grain.

Types shall be based on the length-width ratio of kernels of rice that 
are unbroken and the width, thickness, and shape of kernels that are 
broken, prescribed in FGIS instructions.
    (n) Ungelatinized kernels. Whole or broken kernels of parboiled rice 
with distinct white or chalky areas due to incomplete gelatinization of 
the starch.
    (o) Well-milled kernels. Whole or broken kernels of rice from which 
the hulls and practically all of the germs and the bran layers have been 
removed.
    Note: This factor is determined on an individual kernel basis and 
applies to the special grade Undermilled milled rice only.
    (p) Whole kernels. Unbroken kernels of rice and broken kernels of 
rice which are at least three-fourths of an unbroken kernel.
    (q) 5 plate. A laminated metal plate 0.142-inch thick, with a top 
lamina, 0.051-inch thick, perforated with rows of round holes 0.0781 
(\5/64\) inch in diameter, \5/32\ inch from center to center, with each 
row staggered in relation to the adjacent rows, and a bottom lamina 
0.091-inch thick, without perforations.
    (r) 6 plate. A laminated metal plate 0.142-inch thick, with a top 
lamina 0.051-inch thick, perforated with rows of round holes 0.0938 (\6/
64\) inch in diameter, \5/32\ inch from center to center, with each row 
staggered in relation to the adjacent rows, and a bottom lamina 0.091-
inch thick, without perforations.
    (s) 2\1/2\ sieve. A metal sieve 0.032-inch thick, perforated with 
rows of round holes 0.0391 (2\1/2\/64) inch in diameter, 0.075-inch from 
center to center, with each row staggered in relation to the adjacent 
rows.
    (t) 4 sieve. A metal sieve 0.032-inch thick, perforated with rows of 
round holes 0.0625 (\4/64\) inch in diameter, \1/8\ inch from center to 
center, with each row staggered in relation to the adjacent rows.
    (u) 5 sieve. A metal sieve 0.032-inch thick, perforated with rows of 
round holes 0.0781 (\5/64\) inch in diameter, \5/32\ inch from center to 
center, with each row staggered in relation to the adjacent rows.
    (v) 5\1/2\ sieve. A metal sieve 0.032-inch thick, perforated with 
rows of round holes 0.0859 (5\1/2\/64) inch in diameter, \9/64\ inch 
from center to center, with each row staggered in relation to the 
adjacent rows.
    (w) 6 sieve. A metal sieve 0.032-inch thick, perforated with rows of 
round holes 0.0938 (\6/64\) inch in diameter, \5/32\ inch from center to 
center, with each row staggered in relation to the adjacent rows.
    (x) 6\1/2\ sieve. A metal sieve 0.032-inch thick, perforated with 
rows of round holes 0.1016 (6\1/2\/64) inch in diameter, \5/32\ inch 
from center to center, with each row staggered in relation to the 
adjacent rows.
    (y) 30 sieve. A woven wire cloth sieve having 0.0234-inch openings, 
with a wire diameter of 0.0153 inch, and meeting the specifications of 
American Society for Testing and Materials Designation E-11-61, 
prescribed in FGIS instructions.

[13 FR 9479, Dec. 31, 1948, as amended at 44 FR 73008, Dec. 17, 1979; 47 
FR 34516, Aug. 10, 1982; 54 FR 21403, 21406, May 18, 1989; 54 FR 51345, 
Dec. 14, 1989. Redesignated and amended at 60 FR 16364, Mar. 30, 1995]

[[Page 366]]

              Principles Governing Application of Standards



Sec. 868.303  Basis of determination.

    All determinations shall be on the basis of the original sample. 
Mechanical sizing of kernels shall be adjusted by handpicking, as 
prescribed in FGIS instructions, or by any method which gives equivalent 
results.

[42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, as amended at 
47 FR 34516, Aug. 10, 1982; 54 FR 21403, 21406, May 18, 1989. 
Redesignated at 60 FR 16364, Mar. 30, 1995]



Sec. 868.304  Broken kernels determination.

    Broken kernels shall be determined by the use of equipment and 
procedures prescribed in FGIS instructions or by any method which gives 
equivalent results.

[42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, as amended at 
47 FR 34516, Aug. 10, 1982; 54 FR 21403, May 18, 1989. Redesignated at 
54 FR 21406, May 18, 1989 and 60 FR 16364, Mar. 30, 1995]



Sec. 868.305  Interpretive line samples.

    Interpretive line samples showing the official scoring line for 
factors that are determined by visual observation shall be maintained by 
the Federal Grain Inspection Service, U.S. Department of Agriculture, 
and shall be available for reference in all inspection offices that 
inspect and grade rice.

[42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, as amended at 
47 FR 34516, Aug. 10, 1982. Redesignated at 54 FR 21406, May 18, 1989 
and 60 FR 16364, Mar. 30, 1995]



Sec. 868.306  Milling requirements.

    The degree of milling for milled rice; i.e., ``hard milled,'' 
``well-milled,'' and ``reasonably well-milled,'' shall be equal to, or 
better than, that of the interpretive line samples for such rice.

[67 FR 61250, Sept. 30, 2002]



Sec. 868.307  Moisture.

    Water content in milled rice as determined by an FGIS approved 
device in accordance with procedures prescribed in FGIS instructions.

[67 FR 61250, Sept. 30, 2002]



Sec. 868.308  Percentages.

    (a) Rounding. Percentages are determined on the basis of weight and 
are rounded as follows:
    (1) When the figure to be rounded is followed by a figure greater 
than or equal to 5, round to the next higher figure; e.g., report 6.36 
as 6.4, 0.35 as 0.4, and 2.45 as 2.5.
    (2) When the figure to be rounded is followed by a figure less than 
5, retain the figure, e.g., report 8.34 as 8.3 and 1.22 and 1.2.
    (b) Recording. The percentage of broken kernels removed by a 5 plate 
in U.S. Nos. 1 and 2 Milled Rice and the percentage of objectionable 
seeds in U.S. No. 1 Brewers Milled Rice is reported to the nearest 
hundredth percent. The percentages of all other factors are recorded to 
the nearest tenth of a percent.

[54 FR 21406, May 18, 1989. Redesignated at 60 FR 16364, Mar. 30, 1995]



Sec. 868.309  Information.

    Requests for the Rice Inspection Handbook, Equipment Handbook, or 
for information concerning approved devices and procedures, criteria for 
approved devices, and requests for approval of devices should be 
directed to the U.S. Department of Agriculture, Federal Grain Inspection 
Service, P.O. Box 96454, Washington, DC 20090-6454, or any field office 
or cooperator.

[54 FR 21407, May 18, 1989. Redesignated at 60 FR 16364, Mar. 30, 1995]



Sec. 868.310  Grades and grade requirements for the classes Long Grain 
Milled Rice, Medium Grain Milled Rice, Short Grain Milled Rice, and Mixed 
Milled Rice. 
          (See also Sec. 868.315.)

[[Page 367]]



                                                                       Grades, Grade Requirements, and Grade Designations
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                    Maximum limits of--
                               ----------------------------------------------------------------------------------------------------------------------------
                                 Seeds, heat  damaged,              Chalky kernels \1,2\                Broken kernels                   Other types \4\
                                   and paddy kernels      Red rice ----------------------------------------------------------------------------------------
                                  (singly or combined)      and
                               -------------------------  damaged                  In                                                                              Color        Minimum  milling
             Grade                        Heat  damaged   kernels    In long   medium or              Removed    Removed   Through a             Whole and   requirements \1\      requirements
                                  Total     kernels and   (singly     grain      short      Total      by a 5     by a 6    6 sieve     Whole      broken                              \5\
                                 (number  objectionable      or        rice      grain    (percent)  plate \3\  plate \3\     \3\      kernels    kernels
                                 in 500   seeds (number  combined)  (percent)     rice               (percent)  (percent)  (percent)  (percent)  (percent)
                                 grams)       in 500     (percent)             (percent)
                                              grams)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
U.S. No. 1....................         2             1         0.5        1.0        2.0       4.0        0.04        0.1        0.1  .........        1.0  White or creamy...  Well Milled.
U.S. No. 2....................         4             2         1.5        2.0        4.0       7.0        0.06        0.2        0.2  .........        2.0  Slightly gray.....  Well Milled.
U.S. No. 3....................         7             5         2.5        4.0        6.0      15.0         0.1        0.8        0.5  .........        3.0  Light gray........  Reasonably well
                                                                                                                                                                                 milled.
U.S. No. 4....................        20            15         4.0        6.0        8.0      25.0         0.4        1.0        0.7  .........        5.0  Gray or slightly    Reasonably well
                                                                                                                                                             rosy.               milled.
U.S. No. 5....................        30            25     \5\ 6.0       10.0       10.0      35.0         0.7        3.0        1.0       10.0  .........  Dark gray or rosy.  Reasonably well
                                                                                                                                                                                 milled.
U.S. No. 6....................        75            75    \6\ 15.0       15.0       15.0      50.0         1.0        4.0        2.0       10.0  .........  Dark gray or rosy.  Reasonably well
                                                                                                                                                                                 milled.
U.S. Sample grade:
    U.S. Sample grade shall be milled rice of any of these classes which: (a) Does not meet the requirements for any of the grades from U.S. No. 1 to U.S. No. 6, inclusive; (b) contains more
     than 15.0 percent of moisture; (c) is musty or sour, or heating; (d) has any commercially objectionable foreign odor; (e) contains more than 0.1 percent of foreign material; (f) Contains
     two or more live or dead weevils or other insects, insect webbing, or insect refuse; (g) is otherwise of distinctly low quality.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ For the special grade Parboiled milled rice, see Sec.  868.315(c).
\2\ For the special grade Glutinous milled rice, see Sec.  868.315(e).
\3\ Plates should be used for southern production rice; and sieves should be used for western production rice, but any device or method which gives equivalent results may be used.
\4\ These limits do not apply to the class Mixed Milled Rice.
\5\ For the special grade Undermilled milled rice, see Sec.  868.315(d).
\6\ Grade U.S. No. 6 shall contain not more than 6.0 percent of damaged kernels.


[[Page 368]]


[67 FR 61250, Sept. 30, 2002, as amended at 70 FR 37255, June 29, 2005]



Sec. 868.311  Grades and grade requirements for the class Second Head Milled Rice. (See also Sec. 868.315.)

[[Page 369]]



                                                   Grades, Grade Requirements, and Grade Designations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                  Maximum limits of--
                              --------------------------------------------------------------------------------------------------------------------------
                                Seeds, heat-damaged, and
                               paddy kernels  (singly or   Red rice
                                       combined)              and
            Grade             ---------------------------   damaged     Chalky
                                            Heat-damaged    kernels     kernels         Color requirements \1\        Minimum  milling  requirements \2\
                                  Total     kernels and   (singly or     \1,3\
                                 (number   objectionable   combined)   (percent)
                                 in 500    seeds (number   (percent)
                                 grams)    in 500 grams)
--------------------------------------------------------------------------------------------------------------------------------------------------------
U.S. No. 1...................          15             5          1.0         4.0  White or Creamy...................  Well milled.
U.S. No. 2...................          20            10          2.0         6.0  Slightly gray.....................  Well milled.
U.S. No. 3...................          35            15          3.0        10.0  Light gray........................  Reasonably well milled.
U.S. No. 4...................          50            25          5.0        15.0  Gray or slightly gray.............  Reasonably well milled.
U.S. No. 5...................          75            40         10.0        20.0  Dark gray or rosy.................  Reasonably well milled.
U.S. Sample grade:
    U.S. Sample grade shall be milled rice of this class which: (a) Does not meet the requirements for any of the grades from U.S. No. 1 to U.S. No. 5,
     inclusive; (b) contains more than 15.0 percent of moisture; (c) is musty or sour, or heating; (d) has any commercially objectionable foreign odor;
     (e) contains more than 0.1 percent of foreign material; (f) contains two or more live or dead weevils or other insects, insect webbing, or insect
     refuse; or (g) is otherwise of distinctly low quality.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ For the special grade Parboiled milled rice, see Sec.  868.315(c).
\2\ For the special grade Undermilled milled rice, see Sec.  868.315(d).
\3\ For the special grade Glutinous milled rice, see Sec.  868.315(e).


[[Page 370]]


[67 FR 61251, Sept. 30, 2002]



Sec. 868.312  Grade and grade requirements for the class Screenings Milled Rice. (See also Sec. 868.315.)

                                                   Grades, Grade Requirements, and Grade Designations
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                        Maximum limits of--
                                          --------------------------------------------------------------------------------------------------------------
                                             Paddy kernels and seeds
                  Grade                   -----------------------------   Chalky
                                              Total      Objectionable   kernels         Color requirements \1\         Minimum milling requirements \2\
                                            (number in   seeds (number    \1,3\
                                            500 grams)   in 500 grams)  (percent)
--------------------------------------------------------------------------------------------------------------------------------------------------------
U.S. No. 1 \4,5\.........................           30              20        5.0  White or Creamy...................  Well milled.
U.S. No. 2 \4,5\.........................           75              50        8.0  Slightly gray.....................  Well milled.
U.S. No. 3 \4,5\.........................          125              90       12.0  Light gray or slightly rosy.......  Reasonably well milled.
U.S. No. 4 \4,5\.........................          175             140       20.0  Gray or rosy......................  Reasonably well milled.
U.S. No. 5...............................          250             200       30.0  Dark gray or very rosy............  Reasonably well milled.
U.S. Sample grade:
    U.S. Sample grade shall be milled rice of this class which: (a) Does not meet the requirements for any of the grades from U.S. No. 1 to U.S. No. 5,
     inclusive; (b) contains more than 15.0 percent of moisture; (c) is musty or sour, or heating; (d) has any commercially objectionable foreign odor;
     (e) has a badly damaged or extremely red appearance (f) contains more than 0.1 percent of foreign material; (g) contains two or more live or dead
     weevils or other insects, insect webbing, or insect refuse; or (h) is otherwise of distinctly low quality.
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ For the special grade Parboiled milled rice, see Sec.  868.315(c).
\2\ For the special grade Undermilled milled rice, see Sec.  868.315(d).
\3\ For the special grade Glutinous milled rice, see Sec.  868.315(e).
\4\ Grades U.S. No. 1 to U.S. No. 4, inclusive, shall contain not more than 3.0 percent of heat-damaged kernels, kernels damaged by heat and/or
  parboiled kernels in nonparboiled rice.
\5\ Grades U.S. No. 1 to U.S. No. 4, inclusive, shall contain not more than 1.0 percent of material passing through a 30 sieve.


[67 FR 61251, Sept. 30, 2002]



Sec. 868.313  Grades and grade requirements for the class Brewers Milled Rice. (See also Sec. 868.315.)

                               Grades, Grade Requirements, and Grade Designations
----------------------------------------------------------------------------------------------------------------
                                  Maximum limits of--  paddy
                                      kernels and seeds
                               -------------------------------                               Minimum milling
             Grade               Total (singly  Objectionable   Color requirements \1\       requirements \2\
                                 or combined)       seeds
                                   (percent)      (percent)
----------------------------------------------------------------------------------------------------------------
U.S. No. 1 \3,4\..............             0.5          0.05   White or Creamy.........  Well milled.
U.S. No. 2 \3,4\..............             1.0           0.1   Slightly gray...........  Well milled.
U.S. No. 3 \3,4\..............             1.5           0.2   Light gray or slightly    Reasonably well milled.
                                                                rosy.
U.S. No. 4 \3,4\..............             3.0           0.4   Gray or rosy............  Reasonably well milled.
U.S. No. 5....................             5.0           1.5   Dark gray or very rosy..  Reasonably well milled.
U.S. Sample grade:
    U.S. Sample grade shall be milled rice of this class which: (a) Does not meet the requirements for any of
     the grades from U.S. No. 1 to U.S. No. 5, inclusive; (b) contains more than 15.0 percent of moisture; (c)
     is musty or sour, or heating; (d) has any commercially objectionable foreign odor; (e) has a badly damaged
     or extremely red appearance; (f) contains more than 0.1 percent of foreign material; (g) contains more than
     15.0 percent of broken kernels that will pass through a 2\1/2\ sieve; (h) contains two or more live or dead
     weevils or other insects, insect webbing, or insect refuse; or (h) is otherwise of distinctly low quality.
----------------------------------------------------------------------------------------------------------------
\1\ For the special grade Parboiled milled rice, see Sec.  868.315(c).
\2\ For the special grade Undermilled milled rice, see Sec.  868.315(d).
\3\ Grades U.S. No. 1 to U.S. No. 4, inclusive, shall contain not more than 3.0 percent of heat-damaged kernels,
  kernels damaged by heat and/or parboiled kernels in nonparboiled rice.
\4\ Grades U.S. No. 1 to U.S. No. 4, inclusive, shall contain not more than 1.0 percent of material passing
  through a 30 sieve. This limit does not apply to the special grade Granulated brewers milled rice.


[67 FR 61252, Sept. 30, 2002]



Sec. 868.314  Grade designations.

    (a) The grade designation for all classes of milled rice, except 
Mixed Milled Rice, shall include in the following order: (1) The letters 
``U.S.''; (2) the number of the grade or the words ``Sample grade'', as 
warranted; (3) the words ``or better,'' when applicable and

[[Page 371]]

requested by the applicant prior to inspections; (4) the class; and (5) 
each applicable special grade (see Sec. 868.316).
    (b) The grade designation for the class Mixed Milled Rice shall 
include, in the following order: (1) The letters ``U.S.''; (2) the 
number of the grade or the words ``Sample grade'', as warranted; (3) the 
words ``or better,'' when applicable and requested by the applicant 
prior to inspection; (4) the class; (5) each applicable special grade 
(see Sec. 868.316); (6) the percentage of whole kernels of each type in 
the order of predominance and when applicable; (7) the percentage of 
broken kernels of each type in the order of predominance; and (8) the 
percentage of seeds and foreign material.

    Note: Broken kernels other than long grain, in Mixed Milled Rice, 
shall be certificated as ``medium or short grain.''

[42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977. Redesignated 
and amended at 60 FR 16364, Mar. 30, 1995]

     Special Grades, Special Grade Requirements, and Special Grade 
                              Designations



Sec. 868.315  Special grades and special grade requirements.

    A special grade, when applicable, is supplemental to the grade 
assigned under Sec. 868.314. Such special grades for milled rice are 
established and determined as follows:
    (a) Coated Milled Rice. Coated milled rice shall be rice which is 
coated, in whole or in part, with substances that are safe and suitable 
as defined in the regulation issued pursuant to the Federal Food, Drug, 
and Cosmetic Act at 21 CFR 130.3(d).
    (b) Granulated brewers milled rice. Granulated brewers milled rice 
shall be milled rice which has been crushed or granulated so that 95.0 
percent or more will pass through a 5 sieve, 70.0 percent or more will 
pass through a 4 sieve, and not more than 15.0 percent will pass through 
a 2\1/2\ sieve.
    (c) Parboiled milled rice. Parboiled milled rice shall be milled 
rice in which the starch has been gelatinized by soaking, steaming, and 
drying. Grades U.S. No. 1 to U.S. No. 6, inclusive, shall contain not 
more than 10.0 percent of ungelatinized kernels. Grades U.S. No. 1 and 
U.S. No. 2 shall contain not more than 0.1 percent, grades U.S. No. 3 
and U.S. No. 4 not more than 0.2 percent, and grades U.S. No. 5 and U.S. 
No. 6 not more than 0.5 percent of nonparboiled rice. If the rice is: 
(1) Not distinctly colored by the parboiling process, it shall be 
considered ``Parboiled Light''; (2) distinctly but not materially 
colored by the parboiling process, it shall be considered ``Parboiled''; 
(3) materially colored by the parboiling process, it shall be considered 
``Parboiled Dark.'' The color levels for ``Parboiled Light,'' 
``Parboiled,'' and ``Parboiled Dark'' shall be in accordance with the 
interpretive line samples for parboiled rice.
    Note: The maximum limits for ``Chalky kernels,'' ``Heat-damaged 
kernels,'' ``Kernels damaged by heat,'' and the ``Color requirements'' 
in Sec. Sec. 868.310, 868.311, 868.312, and 868.313 are not applicable 
to the special grade ``Parboiled milled rice.''
    (d) Undermilled milled rice. Undermilled milled rice shall be milled 
rice which is not equal to the milling requirements for ``hard milled,'' 
``well milled,'' and ``reasonably well milled'' rice (see Sec. 
868.306). Grades U.S. No. 1 and U.S. No. 2 shall contain not more than 
2.0 percent, grades U.S. No. 3 and U.S. No. 4 not more than 5.0 percent, 
grade U.S. No. 5 not more than 10.0 percent, and grade U.S. No. 6 not 
more than 15.0 percent of well-milled kernels. Grade U.S. No. 5 shall 
contain not more than 10.0 percent of red rice and damaged kernels 
(singly or combined) and in no case more than 6.0 percent of damaged 
kernels.
    (e) Glutinous milled rice. Glutinous milled rice shall be special 
varieties of rice (Oryza sativa L. glutinosa) which contain more than 50 
percent chalky kernels. For long grain, medium grain, and short grain 
milled rice, grade U.S. No. 1 shall contain not more than 1.0 percent of 
nonchalky kernels, grade U.S. No. 2 not more than 2.0 percent of 
nonchalky kernels, grade U.S. No. 3 not more than 4.0 percent of 
nonchalky kernels, grade U.S. No. 4 not more than 6.0 percent of 
nonchalky kernels, grade U.S. No. 5 not more than 10.0 percent of 
nonchalky kernels, and grade U.S. No. 6 not more than 15.0 percent of 
nonchalky kernels. For second head milled rice, grade U.S. No. 1 shall 
contain not more than 4.0 percent of nonchalky

[[Page 372]]

kernels, grade U.S. No. 2 not more than 6.0 percent of nonchalky 
kernels, grade U.S. No. 3 not more than 10.0 percent of nonchalky 
kernels, grade U.S. No. 4 not more than 15.0 percent of nonchalky 
kernels, and grade U.S. No. 5 not more than 20.0 percent of nonchalky 
kernels. For screenings milled rice, there are no grade limits for 
percent of nonchalky kernels. For brewers milled rice, the special grade 
``Glutinous milled rice'' is not applicable.
    Note: The maximum limits for ``Chalky kernels,'' shown in Sec. Sec. 
868.310, 868.311, and 868.312 are not applicable to the special grade 
``Glutinous milled rice.''
    (f) Aromatic milled rice. Aromatic milled rice shall be special 
varieties of rice (Oryza sativa L. scented) that have a distinctive and 
characteristic aroma; e.g., basmati and jasmine rice.

(Secs. 203, 205, 60 Stat. 1087, 1090 as amended; 7 U.S.C. 1622, 1624)

[42 FR 40869, Aug. 12, 1977; 42 FR 64356, Dec. 23, 1977, as amended at 
48 FR 24859, June 3, 1983; 54 FR 21403, 21407, May 18, 1989; 56 FR 
55981, Oct. 31, 1991; 58 FR 68016, Dec. 23, 1993. Redesignated and 
amended at 60 FR 16364, 16365, Mar. 30, 1995; 67 FR 61252, Sept. 30, 
2002]



Sec. 868.316  Special grade designation.

    The grade designation for coated, granulated brewers, parboiled, 
undermilled, glutinous, or aromatic milled rice shall include, following 
the class, the word(s) ``Coated,'' ``Granulated,'' ``Parboiled Light,'' 
``Parboiled,'' ``Parboiled Dark,'' ``Undermilled,'' ``Glutinous,'' or 
``Aromatic,'' as warranted, and all other information prescribed in 
Sec. 868.314.

[58 FR 68016, Dec. 23, 1993. Redesignated and amended at 60 FR 16364, 
16365, Mar. 30, 1995]


[[Page 373]]



                              FINDING AIDS




  --------------------------------------------------------------------

  A list of CFR titles, subtitles, chapters, subchapters and parts and 
an alphabetical list of agencies publishing in the CFR are included in 
the CFR Index and Finding Aids volume to the Code of Federal Regulations 
which is published separately and revised annually.

  Material Approved for Incorporation by Reference
  Table of CFR Titles and Chapters
  Alphabetical List of Agencies Appearing in the CFR
  List of CFR Sections Affected

[[Page 375]]

            Material Approved for Incorporation by Reference

                     (Revised as of January 1, 2007)

  The Director of the Federal Register has approved under 5 U.S.C. 
552(a) and 1 CFR Part 51 the incorporation by reference of the following 
publications. This list contains only those incorporations by reference 
effective as of the revision date of this volume. Incorporations by 
reference found within a regulation are effective upon the effective 
date of that regulation. For more information on incorporation by 
reference, see the preliminary pages of this volume.


7 CFR (PARTS 700-899)

GRAIN INSPECTION, PACKERS AND STOCKYARDS ADMINISTRATION (FEDERAL GRAIN 
INSPECTION SERVICE), DEPARTMENT OF AGRICULTURE
                                                                   7 CFR


Corn Refiners Association, Inc.

  Available from: Federal Grain Inspection 
  Service, Director, Technical Services Center, 
  10383 North Executive Hills Blvd., Kansas City, 
  MO 64153-1394
Corn Refiners Association Method A-20, Analysis                    801.7
  for Starch in Corn, Second revision, April 15, 
  1986, Standard Analytical Methods of the Member 
  Companies of the Corn Refiners Association, 
  Inc..


Federal Grain Inspection Service, Quality Assurance and Research 
Division

  10383 North Executive Hills Blvd., Kansas City, 
  MO 64153-1394
``Comparison of Kjeldahl Method for Determination                  801.7
  of Crude Protein in Cereal Grains and Oilseeds 
  with Generic Combustion Method: Collaborative 
  Study'', July/August 1993, Ronald Bicsak, 
  Journal of AOAC International Vol. 76, No. 4, 
  1993 (subsequently approved by the AOAC 
  International as the Combustion method, AOAC 
  International Method 992.23).


National Institute of Standards and Technology (formerly National Bureau 
of Standards)

  Publications available from: Superintendent of 
  Documents, U.S. Government Printing Office, P.O. 
  Box 371954, Pittsburgh, PA 15250-7954; 1-866-
  512-1800; 202-512-1800 if inside Washington, DC 
  metropolitan area
Handbook 44--``Specifications, Tolerances, and                     802.0
  Other Technical Requirements for Weighing and 
  Measuring Devices'' (2002 ed.).
Handbook 105-1--``Specifications and Tolerances                    802.0
  for Field Standard Weights'' (Revised 1990).

[[Page 377]]



                    Table of CFR Titles and Chapters




                     (Revised as of January 1, 2007)

                      Title 1--General Provisions

         I  Administrative Committee of the Federal Register 
                (Parts 1--49)
        II  Office of the Federal Register (Parts 50--299)
        IV  Miscellaneous Agencies (Parts 400--500)

                    Title 2--Grants and Agreements

            Subtitle A--Office of Management and Budget Guidance 
                for Grants and Agreements
         I  Office of Management and Budget Governmentwide 
                Guidance for Grants and Agreements (Parts 100-199)
        II  Office of Management and Budget Circulars and Guidance 
                (200-299)
            Subtitle B--Federal Agency Regulations for Grants and 
                Agreements
        IX  Department of Energy (Part 901)
    XXXVII  Peace Corps (Part 3700)

                        Title 3--The President

         I  Executive Office of the President (Parts 100--199)

                           Title 4--Accounts

         I  Government Accountability Office (Parts 1--99)

                   Title 5--Administrative Personnel

         I  Office of Personnel Management (Parts 1--1199)
        II  Merit Systems Protection Board (Parts 1200--1299)
       III  Office of Management and Budget (Parts 1300--1399)
         V  The International Organizations Employees Loyalty 
                Board (Parts 1500--1599)
        VI  Federal Retirement Thrift Investment Board (Parts 
                1600--1699)
      VIII  Office of Special Counsel (Parts 1800--1899)
        IX  Appalachian Regional Commission (Parts 1900--1999)
        XI  Armed Forces Retirement Home (Part 2100)

[[Page 378]]

       XIV  Federal Labor Relations Authority, General Counsel of 
                the Federal Labor Relations Authority and Federal 
                Service Impasses Panel (Parts 2400--2499)
        XV  Office of Administration, Executive Office of the 
                President (Parts 2500--2599)
       XVI  Office of Government Ethics (Parts 2600--2699)
       XXI  Department of the Treasury (Parts 3100--3199)
      XXII  Federal Deposit Insurance Corporation (Part 3201)
     XXIII  Department of Energy (Part 3301)
      XXIV  Federal Energy Regulatory Commission (Part 3401)
       XXV  Department of the Interior (Part 3501)
      XXVI  Department of Defense (Part 3601)
    XXVIII  Department of Justice (Part 3801)
      XXIX  Federal Communications Commission (Parts 3900--3999)
       XXX  Farm Credit System Insurance Corporation (Parts 4000--
                4099)
      XXXI  Farm Credit Administration (Parts 4100--4199)
    XXXIII  Overseas Private Investment Corporation (Part 4301)
      XXXV  Office of Personnel Management (Part 4501)
        XL  Interstate Commerce Commission (Part 5001)
       XLI  Commodity Futures Trading Commission (Part 5101)
      XLII  Department of Labor (Part 5201)
     XLIII  National Science Foundation (Part 5301)
       XLV  Department of Health and Human Services (Part 5501)
      XLVI  Postal Rate Commission (Part 5601)
     XLVII  Federal Trade Commission (Part 5701)
    XLVIII  Nuclear Regulatory Commission (Part 5801)
         L  Department of Transportation (Part 6001)
       LII  Export-Import Bank of the United States (Part 6201)
      LIII  Department of Education (Parts 6300--6399)
       LIV  Environmental Protection Agency (Part 6401)
        LV  National Endowment for the Arts (Part 6501)
       LVI  National Endowment for the Humanities (Part 6601)
      LVII  General Services Administration (Part 6701)
     LVIII  Board of Governors of the Federal Reserve System (Part 
                6801)
       LIX  National Aeronautics and Space Administration (Part 
                6901)
        LX  United States Postal Service (Part 7001)
       LXI  National Labor Relations Board (Part 7101)
      LXII  Equal Employment Opportunity Commission (Part 7201)
     LXIII  Inter-American Foundation (Part 7301)
       LXV  Department of Housing and Urban Development (Part 
                7501)
      LXVI  National Archives and Records Administration (Part 
                7601)
     LXVII  Institute of Museum and Library Services (Part 7701)
      LXIX  Tennessee Valley Authority (Part 7901)
      LXXI  Consumer Product Safety Commission (Part 8101)
    LXXIII  Department of Agriculture (Part 8301)

[[Page 379]]

     LXXIV  Federal Mine Safety and Health Review Commission (Part 
                8401)
     LXXVI  Federal Retirement Thrift Investment Board (Part 8601)
    LXXVII  Office of Management and Budget (Part 8701)
     XCVII  Department of Homeland Security Human Resources 
                Management System (Department of Homeland 
                Security--Office of Personnel Management) (Part 
                9701)
      XCIX  Department of Defense Human Resources Management and 
                Labor Relations Systems (Department of Defense--
                Office of Personnel Management) (Part 9901)

                      Title 6--Homeland Security

         I  Department of Homeland Security, Office of the 
                Secretary (Parts 0--99)

                         Title 7--Agriculture

            Subtitle A--Office of the Secretary of Agriculture 
                (Parts 0--26)
            Subtitle B--Regulations of the Department of 
                Agriculture
         I  Agricultural Marketing Service (Standards, 
                Inspections, Marketing Practices), Department of 
                Agriculture (Parts 27--209)
        II  Food and Nutrition Service, Department of Agriculture 
                (Parts 210--299)
       III  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 300--399)
        IV  Federal Crop Insurance Corporation, Department of 
                Agriculture (Parts 400--499)
         V  Agricultural Research Service, Department of 
                Agriculture (Parts 500--599)
        VI  Natural Resources Conservation Service, Department of 
                Agriculture (Parts 600--699)
       VII  Farm Service Agency, Department of Agriculture (Parts 
                700--799)
      VIII  Grain Inspection, Packers and Stockyards 
                Administration (Federal Grain Inspection Service), 
                Department of Agriculture (Parts 800--899)
        IX  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Fruits, Vegetables, Nuts), Department 
                of Agriculture (Parts 900--999)
         X  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Milk), Department of Agriculture 
                (Parts 1000--1199)
        XI  Agricultural Marketing Service (Marketing Agreements 
                and Orders; Miscellaneous Commodities), Department 
                of Agriculture (Parts 1200--1299)
       XIV  Commodity Credit Corporation, Department of 
                Agriculture (Parts 1400--1499)
        XV  Foreign Agricultural Service, Department of 
                Agriculture (Parts 1500--1599)

[[Page 380]]

       XVI  Rural Telephone Bank, Department of Agriculture (Parts 
                1600--1699)
      XVII  Rural Utilities Service, Department of Agriculture 
                (Parts 1700--1799)
     XVIII  Rural Housing Service, Rural Business-Cooperative 
                Service, Rural Utilities Service, and Farm Service 
                Agency, Department of Agriculture (Parts 1800--
                2099)
        XX  Local Television Loan Guarantee Board (Parts 2200--
                2299)
      XXVI  Office of Inspector General, Department of Agriculture 
                (Parts 2600--2699)
     XXVII  Office of Information Resources Management, Department 
                of Agriculture (Parts 2700--2799)
    XXVIII  Office of Operations, Department of Agriculture (Parts 
                2800--2899)
      XXIX  Office of Energy Policy and New Uses, Department of 
                Agriculture (Parts 2900--2999)
       XXX  Office of the Chief Financial Officer, Department of 
                Agriculture (Parts 3000--3099)
      XXXI  Office of Environmental Quality, Department of 
                Agriculture (Parts 3100--3199)
     XXXII  Office of Procurement and Property Management, 
                Department of Agriculture (Parts 3200--3299)
    XXXIII  Office of Transportation, Department of Agriculture 
                (Parts 3300--3399)
     XXXIV  Cooperative State Research, Education, and Extension 
                Service, Department of Agriculture (Parts 3400--
                3499)
      XXXV  Rural Housing Service, Department of Agriculture 
                (Parts 3500--3599)
     XXXVI  National Agricultural Statistics Service, Department 
                of Agriculture (Parts 3600--3699)
    XXXVII  Economic Research Service, Department of Agriculture 
                (Parts 3700--3799)
   XXXVIII  World Agricultural Outlook Board, Department of 
                Agriculture (Parts 3800--3899)
       XLI  [Reserved]
      XLII  Rural Business-Cooperative Service and Rural Utilities 
                Service, Department of Agriculture (Parts 4200--
                4299)

                    Title 8--Aliens and Nationality

         I  Department of Homeland Security (Immigration and 
                Naturalization) (Parts 1--499)
         V  Executive Office for Immigration Review, Department of 
                Justice (Parts 1000--1399)

                 Title 9--Animals and Animal Products

         I  Animal and Plant Health Inspection Service, Department 
                of Agriculture (Parts 1--199)

[[Page 381]]

        II  Grain Inspection, Packers and Stockyards 
                Administration (Packers and Stockyards Programs), 
                Department of Agriculture (Parts 200--299)
       III  Food Safety and Inspection Service, Department of 
                Agriculture (Parts 300--599)

                           Title 10--Energy

         I  Nuclear Regulatory Commission (Parts 0--199)
        II  Department of Energy (Parts 200--699)
       III  Department of Energy (Parts 700--999)
         X  Department of Energy (General Provisions) (Parts 
                1000--1099)
      XIII  Nuclear Waste Technical Review Board (Parts 1303--
                1399)
      XVII  Defense Nuclear Facilities Safety Board (Parts 1700--
                1799)
     XVIII  Northeast Interstate Low-Level Radioactive Waste 
                Commission (Part 1800)

                      Title 11--Federal Elections

         I  Federal Election Commission (Parts 1--9099)

                      Title 12--Banks and Banking

         I  Comptroller of the Currency, Department of the 
                Treasury (Parts 1--199)
        II  Federal Reserve System (Parts 200--299)
       III  Federal Deposit Insurance Corporation (Parts 300--399)
        IV  Export-Import Bank of the United States (Parts 400--
                499)
         V  Office of Thrift Supervision, Department of the 
                Treasury (Parts 500--599)
        VI  Farm Credit Administration (Parts 600--699)
       VII  National Credit Union Administration (Parts 700--799)
      VIII  Federal Financing Bank (Parts 800--899)
        IX  Federal Housing Finance Board (Parts 900--999)
        XI  Federal Financial Institutions Examination Council 
                (Parts 1100--1199)
       XIV  Farm Credit System Insurance Corporation (Parts 1400--
                1499)
        XV  Department of the Treasury (Parts 1500--1599)
      XVII  Office of Federal Housing Enterprise Oversight, 
                Department of Housing and Urban Development (Parts 
                1700--1799)
     XVIII  Community Development Financial Institutions Fund, 
                Department of the Treasury (Parts 1800--1899)

               Title 13--Business Credit and Assistance

         I  Small Business Administration (Parts 1--199)
       III  Economic Development Administration, Department of 
                Commerce (Parts 300--399)

[[Page 382]]

        IV  Emergency Steel Guarantee Loan Board, Department of 
                Commerce (Parts 400--499)
         V  Emergency Oil and Gas Guaranteed Loan Board, 
                Department of Commerce (Parts 500--599)

                    Title 14--Aeronautics and Space

         I  Federal Aviation Administration, Department of 
                Transportation (Parts 1--199)
        II  Office of the Secretary, Department of Transportation 
                (Aviation Proceedings) (Parts 200--399)
       III  Commercial Space Transportation, Federal Aviation 
                Administration, Department of Transportation 
                (Parts 400--499)
         V  National Aeronautics and Space Administration (Parts 
                1200--1299)
        VI  Air Transportation System Stabilization (Parts 1300--
                1399)

                 Title 15--Commerce and Foreign Trade

            Subtitle A--Office of the Secretary of Commerce (Parts 
                0--29)
            Subtitle B--Regulations Relating to Commerce and 
                Foreign Trade
         I  Bureau of the Census, Department of Commerce (Parts 
                30--199)
        II  National Institute of Standards and Technology, 
                Department of Commerce (Parts 200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Foreign-Trade Zones Board, Department of Commerce 
                (Parts 400--499)
       VII  Bureau of Industry and Security, Department of 
                Commerce (Parts 700--799)
      VIII  Bureau of Economic Analysis, Department of Commerce 
                (Parts 800--899)
        IX  National Oceanic and Atmospheric Administration, 
                Department of Commerce (Parts 900--999)
        XI  Technology Administration, Department of Commerce 
                (Parts 1100--1199)
      XIII  East-West Foreign Trade Board (Parts 1300--1399)
       XIV  Minority Business Development Agency (Parts 1400--
                1499)
            Subtitle C--Regulations Relating to Foreign Trade 
                Agreements
        XX  Office of the United States Trade Representative 
                (Parts 2000--2099)
            Subtitle D--Regulations Relating to Telecommunications 
                and Information
     XXIII  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                2300--2399)

[[Page 383]]

                    Title 16--Commercial Practices

         I  Federal Trade Commission (Parts 0--999)
        II  Consumer Product Safety Commission (Parts 1000--1799)

             Title 17--Commodity and Securities Exchanges

         I  Commodity Futures Trading Commission (Parts 1--199)
        II  Securities and Exchange Commission (Parts 200--399)
        IV  Department of the Treasury (Parts 400--499)

          Title 18--Conservation of Power and Water Resources

         I  Federal Energy Regulatory Commission, Department of 
                Energy (Parts 1--399)
       III  Delaware River Basin Commission (Parts 400--499)
        VI  Water Resources Council (Parts 700--799)
      VIII  Susquehanna River Basin Commission (Parts 800--899)
      XIII  Tennessee Valley Authority (Parts 1300--1399)

                       Title 19--Customs Duties

         I  Bureau of Customs and Border Protection, Department of 
                Homeland Security; Department of the Treasury 
                (Parts 0--199)
        II  United States International Trade Commission (Parts 
                200--299)
       III  International Trade Administration, Department of 
                Commerce (Parts 300--399)
        IV  Bureau of Immigration and Customs Enforcement, 
                Department of Homeland Security (Parts 400--599)

                     Title 20--Employees' Benefits

         I  Office of Workers' Compensation Programs, Department 
                of Labor (Parts 1--199)
        II  Railroad Retirement Board (Parts 200--399)
       III  Social Security Administration (Parts 400--499)
        IV  Employees Compensation Appeals Board, Department of 
                Labor (Parts 500--599)
         V  Employment and Training Administration, Department of 
                Labor (Parts 600--699)
        VI  Employment Standards Administration, Department of 
                Labor (Parts 700--799)
       VII  Benefits Review Board, Department of Labor (Parts 
                800--899)
      VIII  Joint Board for the Enrollment of Actuaries (Parts 
                900--999)
        IX  Office of the Assistant Secretary for Veterans' 
                Employment and Training, Department of Labor 
                (Parts 1000--1099)

[[Page 384]]

                       Title 21--Food and Drugs

         I  Food and Drug Administration, Department of Health and 
                Human Services (Parts 1--1299)
        II  Drug Enforcement Administration, Department of Justice 
                (Parts 1300--1399)
       III  Office of National Drug Control Policy (Parts 1400--
                1499)

                      Title 22--Foreign Relations

         I  Department of State (Parts 1--199)
        II  Agency for International Development (Parts 200--299)
       III  Peace Corps (Parts 300--399)
        IV  International Joint Commission, United States and 
                Canada (Parts 400--499)
         V  Broadcasting Board of Governors (Parts 500--599)
       VII  Overseas Private Investment Corporation (Parts 700--
                799)
        IX  Foreign Service Grievance Board Regulations (Parts 
                900--999)
         X  Inter-American Foundation (Parts 1000--1099)
        XI  International Boundary and Water Commission, United 
                States and Mexico, United States Section (Parts 
                1100--1199)
       XII  United States International Development Cooperation 
                Agency (Parts 1200--1299)
       XIV  Foreign Service Labor Relations Board; Federal Labor 
                Relations Authority; General Counsel of the 
                Federal Labor Relations Authority; and the Foreign 
                Service Impasse Disputes Panel (Parts 1400--1499)
        XV  African Development Foundation (Parts 1500--1599)
       XVI  Japan-United States Friendship Commission (Parts 
                1600--1699)
      XVII  United States Institute of Peace (Parts 1700--1799)

                          Title 23--Highways

         I  Federal Highway Administration, Department of 
                Transportation (Parts 1--999)
        II  National Highway Traffic Safety Administration and 
                Federal Highway Administration, Department of 
                Transportation (Parts 1200--1299)
       III  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 1300--1399)

                Title 24--Housing and Urban Development

            Subtitle A--Office of the Secretary, Department of 
                Housing and Urban Development (Parts 0--99)
            Subtitle B--Regulations Relating to Housing and Urban 
                Development
         I  Office of Assistant Secretary for Equal Opportunity, 
                Department of Housing and Urban Development (Parts 
                100--199)

[[Page 385]]

        II  Office of Assistant Secretary for Housing-Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 200--299)
       III  Government National Mortgage Association, Department 
                of Housing and Urban Development (Parts 300--399)
        IV  Office of Housing and Office of Multifamily Housing 
                Assistance Restructuring, Department of Housing 
                and Urban Development (Parts 400--499)
         V  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 500--599)
        VI  Office of Assistant Secretary for Community Planning 
                and Development, Department of Housing and Urban 
                Development (Parts 600--699) [Reserved]
       VII  Office of the Secretary, Department of Housing and 
                Urban Development (Housing Assistance Programs and 
                Public and Indian Housing Programs) (Parts 700--
                799)
      VIII  Office of the Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Section 8 Housing Assistance 
                Programs, Section 202 Direct Loan Program, Section 
                202 Supportive Housing for the Elderly Program and 
                Section 811 Supportive Housing for Persons With 
                Disabilities Program) (Parts 800--899)
        IX  Office of Assistant Secretary for Public and Indian 
                Housing, Department of Housing and Urban 
                Development (Parts 900--1699)
         X  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Interstate Land Sales 
                Registration Program) (Parts 1700--1799)
       XII  Office of Inspector General, Department of Housing and 
                Urban Development (Parts 2000--2099)
        XX  Office of Assistant Secretary for Housing--Federal 
                Housing Commissioner, Department of Housing and 
                Urban Development (Parts 3200--3899)
       XXV  Neighborhood Reinvestment Corporation (Parts 4100--
                4199)

                           Title 25--Indians

         I  Bureau of Indian Affairs, Department of the Interior 
                (Parts 1--299)
        II  Indian Arts and Crafts Board, Department of the 
                Interior (Parts 300--399)
       III  National Indian Gaming Commission, Department of the 
                Interior (Parts 500--599)
        IV  Office of Navajo and Hopi Indian Relocation (Parts 
                700--799)
         V  Bureau of Indian Affairs, Department of the Interior, 
                and Indian Health Service, Department of Health 
                and Human Services (Part 900)
        VI  Office of the Assistant Secretary-Indian Affairs, 
                Department of the Interior (Parts 1000--1199)
       VII  Office of the Special Trustee for American Indians, 
                Department of the Interior (Part 1200)

[[Page 386]]

                      Title 26--Internal Revenue

         I  Internal Revenue Service, Department of the Treasury 
                (Parts 1--899)

           Title 27--Alcohol, Tobacco Products and Firearms

         I  Alcohol and Tobacco Tax and Trade Bureau, Department 
                of the Treasury (Parts 1--399)
        II  Bureau of Alcohol, Tobacco, Firearms, and Explosives, 
                Department of Justice (Parts 400--699)

                   Title 28--Judicial Administration

         I  Department of Justice (Parts 0--299)
       III  Federal Prison Industries, Inc., Department of Justice 
                (Parts 300--399)
         V  Bureau of Prisons, Department of Justice (Parts 500--
                599)
        VI  Offices of Independent Counsel, Department of Justice 
                (Parts 600--699)
       VII  Office of Independent Counsel (Parts 700--799)
      VIII  Court Services and Offender Supervision Agency for the 
                District of Columbia (Parts 800--899)
        IX  National Crime Prevention and Privacy Compact Council 
                (Parts 900--999)
        XI  Department of Justice and Department of State (Parts 
                1100--1199)

                            Title 29--Labor

            Subtitle A--Office of the Secretary of Labor (Parts 
                0--99)
            Subtitle B--Regulations Relating to Labor
         I  National Labor Relations Board (Parts 100--199)
        II  Office of Labor-Management Standards, Department of 
                Labor (Parts 200--299)
       III  National Railroad Adjustment Board (Parts 300--399)
        IV  Office of Labor-Management Standards, Department of 
                Labor (Parts 400--499)
         V  Wage and Hour Division, Department of Labor (Parts 
                500--899)
        IX  Construction Industry Collective Bargaining Commission 
                (Parts 900--999)
         X  National Mediation Board (Parts 1200--1299)
       XII  Federal Mediation and Conciliation Service (Parts 
                1400--1499)
       XIV  Equal Employment Opportunity Commission (Parts 1600--
                1699)
      XVII  Occupational Safety and Health Administration, 
                Department of Labor (Parts 1900--1999)
        XX  Occupational Safety and Health Review Commission 
                (Parts 2200--2499)
       XXV  Employee Benefits Security Administration, Department 
                of Labor (Parts 2500--2599)

[[Page 387]]

     XXVII  Federal Mine Safety and Health Review Commission 
                (Parts 2700--2799)
        XL  Pension Benefit Guaranty Corporation (Parts 4000--
                4999)

                      Title 30--Mineral Resources

         I  Mine Safety and Health Administration, Department of 
                Labor (Parts 1--199)
        II  Minerals Management Service, Department of the 
                Interior (Parts 200--299)
       III  Board of Surface Mining and Reclamation Appeals, 
                Department of the Interior (Parts 300--399)
        IV  Geological Survey, Department of the Interior (Parts 
                400--499)
       VII  Office of Surface Mining Reclamation and Enforcement, 
                Department of the Interior (Parts 700--999)

                 Title 31--Money and Finance: Treasury

            Subtitle A--Office of the Secretary of the Treasury 
                (Parts 0--50)
            Subtitle B--Regulations Relating to Money and Finance
         I  Monetary Offices, Department of the Treasury (Parts 
                51--199)
        II  Fiscal Service, Department of the Treasury (Parts 
                200--399)
        IV  Secret Service, Department of the Treasury (Parts 
                400--499)
         V  Office of Foreign Assets Control, Department of the 
                Treasury (Parts 500--599)
        VI  Bureau of Engraving and Printing, Department of the 
                Treasury (Parts 600--699)
       VII  Federal Law Enforcement Training Center, Department of 
                the Treasury (Parts 700--799)
      VIII  Office of International Investment, Department of the 
                Treasury (Parts 800--899)
        IX  Federal Claims Collection Standards (Department of the 
                Treasury--Department of Justice) (Parts 900--999)

                      Title 32--National Defense

            Subtitle A--Department of Defense
         I  Office of the Secretary of Defense (Parts 1--399)
         V  Department of the Army (Parts 400--699)
        VI  Department of the Navy (Parts 700--799)
       VII  Department of the Air Force (Parts 800--1099)
            Subtitle B--Other Regulations Relating to National 
                Defense
       XII  Defense Logistics Agency (Parts 1200--1299)
       XVI  Selective Service System (Parts 1600--1699)
     XVIII  National Counterintelligence Center (Parts 1800--1899)
       XIX  Central Intelligence Agency (Parts 1900--1999)

[[Page 388]]

        XX  Information Security Oversight Office, National 
                Archives and Records Administration (Parts 2000--
                2099)
       XXI  National Security Council (Parts 2100--2199)
      XXIV  Office of Science and Technology Policy (Parts 2400--
                2499)
     XXVII  Office for Micronesian Status Negotiations (Parts 
                2700--2799)
    XXVIII  Office of the Vice President of the United States 
                (Parts 2800--2899)

               Title 33--Navigation and Navigable Waters

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Corps of Engineers, Department of the Army (Parts 
                200--399)
        IV  Saint Lawrence Seaway Development Corporation, 
                Department of Transportation (Parts 400--499)

                          Title 34--Education

            Subtitle A--Office of the Secretary, Department of 
                Education (Parts 1--99)
            Subtitle B--Regulations of the Offices of the 
                Department of Education
         I  Office for Civil Rights, Department of Education 
                (Parts 100--199)
        II  Office of Elementary and Secondary Education, 
                Department of Education (Parts 200--299)
       III  Office of Special Education and Rehabilitative 
                Services, Department of Education (Parts 300--399)
        IV  Office of Vocational and Adult Education, Department 
                of Education (Parts 400--499)
         V  Office of Bilingual Education and Minority Languages 
                Affairs, Department of Education (Parts 500--599)
        VI  Office of Postsecondary Education, Department of 
                Education (Parts 600--699)
        XI  National Institute for Literacy (Parts 1100--1199)
            Subtitle C--Regulations Relating to Education
       XII  National Council on Disability (Parts 1200--1299)

                          Title 35 [Reserved]

             Title 36--Parks, Forests, and Public Property

         I  National Park Service, Department of the Interior 
                (Parts 1--199)
        II  Forest Service, Department of Agriculture (Parts 200--
                299)
       III  Corps of Engineers, Department of the Army (Parts 
                300--399)
        IV  American Battle Monuments Commission (Parts 400--499)
         V  Smithsonian Institution (Parts 500--599)
       VII  Library of Congress (Parts 700--799)
      VIII  Advisory Council on Historic Preservation (Parts 800--
                899)
        IX  Pennsylvania Avenue Development Corporation (Parts 
                900--999)

[[Page 389]]

         X  Presidio Trust (Parts 1000--1099)
        XI  Architectural and Transportation Barriers Compliance 
                Board (Parts 1100--1199)
       XII  National Archives and Records Administration (Parts 
                1200--1299)
        XV  Oklahoma City National Memorial Trust (Part 1501)
       XVI  Morris K. Udall Scholarship and Excellence in National 
                Environmental Policy Foundation (Parts 1600--1699)

             Title 37--Patents, Trademarks, and Copyrights

         I  United States Patent and Trademark Office, Department 
                of Commerce (Parts 1--199)
        II  Copyright Office, Library of Congress (Parts 200--299)
       III  Copyright Royalty Board, Library of Congress (Parts 
                301--399)
        IV  Assistant Secretary for Technology Policy, Department 
                of Commerce (Parts 400--499)
         V  Under Secretary for Technology, Department of Commerce 
                (Parts 500--599)

           Title 38--Pensions, Bonuses, and Veterans' Relief

         I  Department of Veterans Affairs (Parts 0--99)

                       Title 39--Postal Service

         I  United States Postal Service (Parts 1--999)
       III  Postal Rate Commission (Parts 3000--3099)

                  Title 40--Protection of Environment

         I  Environmental Protection Agency (Parts 1--1099)
        IV  Environmental Protection Agency and Department of 
                Justice (Parts 1400--1499)
         V  Council on Environmental Quality (Parts 1500--1599)
        VI  Chemical Safety and Hazard Investigation Board (Parts 
                1600--1699)
       VII  Environmental Protection Agency and Department of 
                Defense; Uniform National Discharge Standards for 
                Vessels of the Armed Forces (Parts 1700--1799)

          Title 41--Public Contracts and Property Management

            Subtitle B--Other Provisions Relating to Public 
                Contracts
        50  Public Contracts, Department of Labor (Parts 50-1--50-
                999)
        51  Committee for Purchase From People Who Are Blind or 
                Severely Disabled (Parts 51-1--51-99)
        60  Office of Federal Contract Compliance Programs, Equal 
                Employment Opportunity, Department of Labor (Parts 
                60-1--60-999)

[[Page 390]]

        61  Office of the Assistant Secretary for Veterans' 
                Employment and Training Service, Department of 
                Labor (Parts 61-1--61-999)
            Subtitle C--Federal Property Management Regulations 
                System
       101  Federal Property Management Regulations (Parts 101-1--
                101-99)
       102  Federal Management Regulation (Parts 102-1--102-299)
       105  General Services Administration (Parts 105-1--105-999)
       109  Department of Energy Property Management Regulations 
                (Parts 109-1--109-99)
       114  Department of the Interior (Parts 114-1--114-99)
       115  Environmental Protection Agency (Parts 115-1--115-99)
       128  Department of Justice (Parts 128-1--128-99)
            Subtitle D--Other Provisions Relating to Property 
                Management [Reserved]
            Subtitle E--Federal Information Resources Management 
                Regulations System
       201  Federal Information Resources Management Regulation 
                (Parts 201-1--201-99) [Reserved]
            Subtitle F--Federal Travel Regulation System
       300  General (Parts 300-1--300-99)
       301  Temporary Duty (TDY) Travel Allowances (Parts 301-1--
                301-99)
       302  Relocation Allowances (Parts 302-1--302-99)
       303  Payment of Expenses Connected with the Death of 
                Certain Employees (Part 303-1--303-99)
       304  Payment of Travel Expenses from a Non-Federal Source 
                (Parts 304-1--304-99)

                        Title 42--Public Health

         I  Public Health Service, Department of Health and Human 
                Services (Parts 1--199)
        IV  Centers for Medicare & Medicaid Services, Department 
                of Health and Human Services (Parts 400--499)
         V  Office of Inspector General-Health Care, Department of 
                Health and Human Services (Parts 1000--1999)

                   Title 43--Public Lands: Interior

            Subtitle A--Office of the Secretary of the Interior 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Lands
         I  Bureau of Reclamation, Department of the Interior 
                (Parts 200--499)
        II  Bureau of Land Management, Department of the Interior 
                (Parts 1000--9999)
       III  Utah Reclamation Mitigation and Conservation 
                Commission (Parts 10000--10010)

[[Page 391]]

             Title 44--Emergency Management and Assistance

         I  Federal Emergency Management Agency, Department of 
                Homeland Security (Parts 0--399)
        IV  Department of Commerce and Department of 
                Transportation (Parts 400--499)

                       Title 45--Public Welfare

            Subtitle A--Department of Health and Human Services 
                (Parts 1--199)
            Subtitle B--Regulations Relating to Public Welfare
        II  Office of Family Assistance (Assistance Programs), 
                Administration for Children and Families, 
                Department of Health and Human Services (Parts 
                200--299)
       III  Office of Child Support Enforcement (Child Support 
                Enforcement Program), Administration for Children 
                and Families, Department of Health and Human 
                Services (Parts 300--399)
        IV  Office of Refugee Resettlement, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 400--499)
         V  Foreign Claims Settlement Commission of the United 
                States, Department of Justice (Parts 500--599)
        VI  National Science Foundation (Parts 600--699)
       VII  Commission on Civil Rights (Parts 700--799)
      VIII  Office of Personnel Management (Parts 800--899)
         X  Office of Community Services, Administration for 
                Children and Families, Department of Health and 
                Human Services (Parts 1000--1099)
        XI  National Foundation on the Arts and the Humanities 
                (Parts 1100--1199)
       XII  Corporation for National and Community Service (Parts 
                1200--1299)
      XIII  Office of Human Development Services, Department of 
                Health and Human Services (Parts 1300--1399)
       XVI  Legal Services Corporation (Parts 1600--1699)
      XVII  National Commission on Libraries and Information 
                Science (Parts 1700--1799)
     XVIII  Harry S. Truman Scholarship Foundation (Parts 1800--
                1899)
       XXI  Commission on Fine Arts (Parts 2100--2199)
     XXIII  Arctic Research Commission (Part 2301)
      XXIV  James Madison Memorial Fellowship Foundation (Parts 
                2400--2499)
       XXV  Corporation for National and Community Service (Parts 
                2500--2599)

                          Title 46--Shipping

         I  Coast Guard, Department of Homeland Security (Parts 
                1--199)
        II  Maritime Administration, Department of Transportation 
                (Parts 200--399)

[[Page 392]]

       III  Coast Guard (Great Lakes Pilotage), Department of 
                Homeland Security (Parts 400--499)
        IV  Federal Maritime Commission (Parts 500--599)

                      Title 47--Telecommunication

         I  Federal Communications Commission (Parts 0--199)
        II  Office of Science and Technology Policy and National 
                Security Council (Parts 200--299)
       III  National Telecommunications and Information 
                Administration, Department of Commerce (Parts 
                300--399)

           Title 48--Federal Acquisition Regulations System

         1  Federal Acquisition Regulation (Parts 1--99)
         2  Defense Acquisition Regulations System, Department of 
                Defense (Parts 200--299)
         3  Department of Health and Human Services (Parts 300--
                399)
         4  Department of Agriculture (Parts 400--499)
         5  General Services Administration (Parts 500--599)
         6  Department of State (Parts 600--699)
         7  United States Agency for International Development 
                (Parts 700--799)
         8  Department of Veterans Affairs (Parts 800--899)
         9  Department of Energy (Parts 900--999)
        10  Department of the Treasury (Parts 1000--1099)
        12  Department of Transportation (Parts 1200--1299)
        13  Department of Commerce (Parts 1300--1399)
        14  Department of the Interior (Parts 1400--1499)
        15  Environmental Protection Agency (Parts 1500--1599)
        16  Office of Personnel Management, Federal Employees 
                Health Benefits Acquisition Regulation (Parts 
                1600--1699)
        17  Office of Personnel Management (Parts 1700--1799)
        18  National Aeronautics and Space Administration (Parts 
                1800--1899)
        19  Broadcasting Board of Governors (Parts 1900--1999)
        20  Nuclear Regulatory Commission (Parts 2000--2099)
        21  Office of Personnel Management, Federal Employees' 
                Group Life Insurance Federal Acquisition 
                Regulation (Parts 2100--2199)
        23  Social Security Administration (Parts 2300--2399)
        24  Department of Housing and Urban Development (Parts 
                2400--2499)
        25  National Science Foundation (Parts 2500--2599)
        28  Department of Justice (Parts 2800--2899)
        29  Department of Labor (Parts 2900--2999)
        30  Department of Homeland Security, Homeland Security 
                Acquisition Regulation (HSAR) (Parts 3000--3099)

[[Page 393]]

        34  Department of Education Acquisition Regulation (Parts 
                3400--3499)
        35  [Reserved]
        44  Federal Emergency Management Agency (Parts 4400--4499)
        51  Department of the Army Acquisition Regulations (Parts 
                5100--5199)
        52  Department of the Navy Acquisition Regulations (Parts 
                5200--5299)
        53  Department of the Air Force Federal Acquisition 
                Regulation Supplement (Parts 5300--5399)
        54  Defense Logistics Agency, Department of Defense (Parts 
                5400--5499)
        57  African Development Foundation (Parts 5700--5799)
        61  General Services Administration Board of Contract 
                Appeals (Parts 6100--6199)
        63  Department of Transportation Board of Contract Appeals 
                (Parts 6300--6399)
        99  Cost Accounting Standards Board, Office of Federal 
                Procurement Policy, Office of Management and 
                Budget (Parts 9900--9999)

                       Title 49--Transportation

            Subtitle A--Office of the Secretary of Transportation 
                (Parts 1--99)
            Subtitle B--Other Regulations Relating to 
                Transportation
         I  Pipeline and Hazardous Materials Safety 
                Administration, Department of Transportation 
                (Parts 100--199)
        II  Federal Railroad Administration, Department of 
                Transportation (Parts 200--299)
       III  Federal Motor Carrier Safety Administration, 
                Department of Transportation (Parts 300--399)
        IV  Coast Guard, Department of Homeland Security (Parts 
                400--499)
         V  National Highway Traffic Safety Administration, 
                Department of Transportation (Parts 500--599)
        VI  Federal Transit Administration, Department of 
                Transportation (Parts 600--699)
       VII  National Railroad Passenger Corporation (AMTRAK) 
                (Parts 700--799)
      VIII  National Transportation Safety Board (Parts 800--999)
         X  Surface Transportation Board, Department of 
                Transportation (Parts 1000--1399)
        XI  Research and Innovative Technology Administration, 
                Department of Transportation [Reserved]
       XII  Transportation Security Administration, Department of 
                Homeland Security (Parts 1500--1699)

[[Page 394]]

                   Title 50--Wildlife and Fisheries

         I  United States Fish and Wildlife Service, Department of 
                the Interior (Parts 1--199)
        II  National Marine Fisheries Service, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 200--299)
       III  International Fishing and Related Activities (Parts 
                300--399)
        IV  Joint Regulations (United States Fish and Wildlife 
                Service, Department of the Interior and National 
                Marine Fisheries Service, National Oceanic and 
                Atmospheric Administration, Department of 
                Commerce); Endangered Species Committee 
                Regulations (Parts 400--499)
         V  Marine Mammal Commission (Parts 500--599)
        VI  Fishery Conservation and Management, National Oceanic 
                and Atmospheric Administration, Department of 
                Commerce (Parts 600--699)

                      CFR Index and Finding Aids

            Subject/Agency Index
            List of Agency Prepared Indexes
            Parallel Tables of Statutory Authorities and Rules
            List of CFR Titles, Chapters, Subchapters, and Parts
            Alphabetical List of Agencies Appearing in the CFR

[[Page 395]]





           Alphabetical List of Agencies Appearing in the CFR




                     (Revised as of January 1, 2007)

                                                  CFR Title, Subtitle or 
                     Agency                               Chapter

Administrative Committee of the Federal Register  1, I
Advanced Research Projects Agency                 32, I
Advisory Council on Historic Preservation         36, VIII
African Development Foundation                    22, XV
  Federal Acquisition Regulation                  48, 57
Agency for International Development, United      22, II
     States
  Federal Acquisition Regulation                  48, 7
Agricultural Marketing Service                    7, I, IX, X, XI
Agricultural Research Service                     7, V
Agriculture Department                            5, LXXIII
  Agricultural Marketing Service                  7, I, IX, X, XI
  Agricultural Research Service                   7, V
  Animal and Plant Health Inspection Service      7, III; 9, I
  Chief Financial Officer, Office of              7, XXX
  Commodity Credit Corporation                    7, XIV
  Cooperative State Research, Education, and      7, XXXIV
       Extension Service
  Economic Research Service                       7, XXXVII
  Energy, Office of                               7, XXIX
  Environmental Quality, Office of                7, XXXI
  Farm Service Agency                             7, VII, XVIII
  Federal Acquisition Regulation                  48, 4
  Federal Crop Insurance Corporation              7, IV
  Food and Nutrition Service                      7, II
  Food Safety and Inspection Service              9, III
  Foreign Agricultural Service                    7, XV
  Forest Service                                  36, II
  Grain Inspection, Packers and Stockyards        7, VIII; 9, II
       Administration
  Information Resources Management, Office of     7, XXVII
  Inspector General, Office of                    7, XXVI
  National Agricultural Library                   7, XLI
  National Agricultural Statistics Service        7, XXXVI
  Natural Resources Conservation Service          7, VI
  Operations, Office of                           7, XXVIII
  Procurement and Property Management, Office of  7, XXXII
  Rural Business-Cooperative Service              7, XVIII, XLII
  Rural Development Administration                7, XLII
  Rural Housing Service                           7, XVIII, XXXV
  Rural Telephone Bank                            7, XVI
  Rural Utilities Service                         7, XVII, XVIII, XLII
  Secretary of Agriculture, Office of             7, Subtitle A
  Transportation, Office of                       7, XXXIII
  World Agricultural Outlook Board                7, XXXVIII
Air Force Department                              32, VII
  Federal Acquisition Regulation Supplement       48, 53
Air Transportation Stabilization Board            14, VI
Alcohol and Tobacco Tax and Trade Bureau          27, I
Alcohol, Tobacco, Firearms, and Explosives,       27, II
     Bureau of
AMTRAK                                            49, VII
American Battle Monuments Commission              36, IV
American Indians, Office of the Special Trustee   25, VII
Animal and Plant Health Inspection Service        7, III; 9, I
Appalachian Regional Commission                   5, IX

[[Page 396]]

Architectural and Transportation Barriers         36, XI
     Compliance Board
Arctic Research Commission                        45, XXIII
Armed Forces Retirement Home                      5, XI
Army Department                                   32, V
  Engineers, Corps of                             33, II; 36, III
  Federal Acquisition Regulation                  48, 51
Benefits Review Board                             20, VII
Bilingual Education and Minority Languages        34, V
     Affairs, Office of
Blind or Severely Disabled, Committee for         41, 51
     Purchase From People Who Are
Broadcasting Board of Governors                   22, V
  Federal Acquisition Regulation                  48, 19
Census Bureau                                     15, I
Centers for Medicare & Medicaid Services          42, IV
Central Intelligence Agency                       32, XIX
Chief Financial Officer, Office of                7, XXX
Child Support Enforcement, Office of              45, III
Children and Families, Administration for         45, II, III, IV, X
Civil Rights, Commission on                       45, VII
Civil Rights, Office for                          34, I
Coast Guard                                       33, I; 46, I; 49, IV
Coast Guard (Great Lakes Pilotage)                46, III
Commerce Department                               44, IV
  Census Bureau                                   15, I
  Economic Affairs, Under Secretary               37, V
  Economic Analysis, Bureau of                    15, VIII
  Economic Development Administration             13, III
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 13
  Fishery Conservation and Management             50, VI
  Foreign-Trade Zones Board                       15, IV
  Industry and Security, Bureau of                15, VII
  International Trade Administration              15, III; 19, III
  National Institute of Standards and Technology  15, II
  National Marine Fisheries Service               50, II, IV, VI
  National Oceanic and Atmospheric                15, IX; 50, II, III, IV, 
       Administration                             VI
  National Telecommunications and Information     15, XXIII; 47, III
       Administration
  National Weather Service                        15, IX
  Patent and Trademark Office, United States      37, I
  Productivity, Technology and Innovation,        37, IV
       Assistant Secretary for
  Secretary of Commerce, Office of                15, Subtitle A
  Technology, Under Secretary for                 37, V
  Technology Administration                       15, XI
  Technology Policy, Assistant Secretary for      37, IV
Commercial Space Transportation                   14, III
Commodity Credit Corporation                      7, XIV
Commodity Futures Trading Commission              5, XLI; 17, I
Community Planning and Development, Office of     24, V, VI
     Assistant Secretary for
Community Services, Office of                     45, X
Comptroller of the Currency                       12, I
Construction Industry Collective Bargaining       29, IX
     Commission
Consumer Product Safety Commission                5, LXXI; 16, II
Cooperative State Research, Education, and        7, XXXIV
     Extension Service
Copyright Office                                  37, II
Copyright Royalty Board                           37, III
Corporation for National and Community Service    45, XII, XXV
Cost Accounting Standards Board                   48, 99
Council on Environmental Quality                  40, V
Court Services and Offender Supervision Agency    28, VIII
     for the District of Columbia
Customs and Border Protection Bureau              19, I
Defense Contract Audit Agency                     32, I
Defense Department                                5, XXVI; 32, Subtitle A; 
                                                  40, VII

[[Page 397]]

  Advanced Research Projects Agency               32, I
  Air Force Department                            32, VII
  Army Department                                 32, V; 33, II; 36, III, 
                                                  48, 51
  Defense Acquisition Regulations System          48, II
  Defense Intelligence Agency                     32, I
  Defense Logistics Agency                        32, I, XII; 48, 54
  Engineers, Corps of                             33, II; 36, III
  National Imagery and Mapping Agency             32, I
  Navy Department                                 32, VI; 48, 52
  Secretary of Defense, Office of                 32, I
Defense Contract Audit Agency                     32, I
Defense Intelligence Agency                       32, I
Defense Logistics Agency                          32, XII; 48, 54
Defense Nuclear Facilities Safety Board           10, XVII
Delaware River Basin Commission                   18, III
District of Columbia, Court Services and          28, VIII
     Offender Supervision Agency for the
Drug Enforcement Administration                   21, II
East-West Foreign Trade Board                     15, XIII
Economic Affairs, Under Secretary                 37, V
Economic Analysis, Bureau of                      15, VIII
Economic Development Administration               13, III
Economic Research Service                         7, XXXVII
Education, Department of                          5, LIII
  Bilingual Education and Minority Languages      34, V
       Affairs, Office of
  Civil Rights, Office for                        34, I
  Educational Research and Improvement, Office    34, VII
       of
  Elementary and Secondary Education, Office of   34, II
  Federal Acquisition Regulation                  48, 34
  Postsecondary Education, Office of              34, VI
  Secretary of Education, Office of               34, Subtitle A
  Special Education and Rehabilitative Services,  34, III
       Office of
  Vocational and Adult Education, Office of       34, IV
Educational Research and Improvement, Office of   34, VII
Elementary and Secondary Education, Office of     34, II
Emergency Oil and Gas Guaranteed Loan Board       13, V
Emergency Steel Guarantee Loan Board              13, IV
Employee Benefits Security Administration         29, XXV
Employees' Compensation Appeals Board             20, IV
Employees Loyalty Board                           5, V
Employment and Training Administration            20, V
Employment Standards Administration               20, VI
Endangered Species Committee                      50, IV
Energy, Department of                             5, XXIII; 10, II, III, X
  Federal Acquisition Regulation                  48, 9
  Federal Energy Regulatory Commission            5, XXIV; 18, I
  Property Management Regulations                 41, 109
Energy, Office of                                 7, XXIX
Engineers, Corps of                               33, II; 36, III
Engraving and Printing, Bureau of                 31, VI
Environmental Protection Agency                   5, LIV; 40, I, IV, VII
  Federal Acquisition Regulation                  48, 15
  Property Management Regulations                 41, 115
Environmental Quality, Office of                  7, XXXI
Equal Employment Opportunity Commission           5, LXII; 29, XIV
Equal Opportunity, Office of Assistant Secretary  24, I
     for
Executive Office of the President                 3, I
  Administration, Office of                       5, XV
  Environmental Quality, Council on               40, V
  Management and Budget, Office of                5, III, LXXVII; 14, VI; 
                                                  48, 99
  National Drug Control Policy, Office of         21, III
  National Security Council                       32, XXI; 47, 2
  Presidential Documents                          3
  Science and Technology Policy, Office of        32, XXIV; 47, II

[[Page 398]]

  Trade Representative, Office of the United      15, XX
       States
Export-Import Bank of the United States           5, LII; 12, IV
Family Assistance, Office of                      45, II
Farm Credit Administration                        5, XXXI; 12, VI
Farm Credit System Insurance Corporation          5, XXX; 12, XIV
Farm Service Agency                               7, VII, XVIII
Federal Acquisition Regulation                    48, 1
Federal Aviation Administration                   14, I
  Commercial Space Transportation                 14, III
Federal Claims Collection Standards               31, IX
Federal Communications Commission                 5, XXIX; 47, I
Federal Contract Compliance Programs, Office of   41, 60
Federal Crop Insurance Corporation                7, IV
Federal Deposit Insurance Corporation             5, XXII; 12, III
Federal Election Commission                       11, I
Federal Emergency Management Agency               44, I
  Federal Acquisition Regulation                  48, 44
Federal Employees Group Life Insurance Federal    48, 21
     Acquisition Regulation
Federal Employees Health Benefits Acquisition     48, 16
     Regulation
Federal Energy Regulatory Commission              5, XXIV; 18, I
Federal Financial Institutions Examination        12, XI
     Council
Federal Financing Bank                            12, VIII
Federal Highway Administration                    23, I, II
Federal Home Loan Mortgage Corporation            1, IV
Federal Housing Enterprise Oversight Office       12, XVII
Federal Housing Finance Board                     12, IX
Federal Labor Relations Authority, and General    5, XIV; 22, XIV
     Counsel of the Federal Labor Relations 
     Authority
Federal Law Enforcement Training Center           31, VII
Federal Management Regulation                     41, 102
Federal Maritime Commission                       46, IV
Federal Mediation and Conciliation Service        29, XII
Federal Mine Safety and Health Review Commission  5, LXXIV; 29, XXVII
Federal Motor Carrier Safety Administration       49, III
Federal Prison Industries, Inc.                   28, III
Federal Procurement Policy Office                 48, 99
Federal Property Management Regulations           41, 101
Federal Railroad Administration                   49, II
Federal Register, Administrative Committee of     1, I
Federal Register, Office of                       1, II
Federal Reserve System                            12, II
  Board of Governors                              5, LVIII
Federal Retirement Thrift Investment Board        5, VI, LXXVI
Federal Service Impasses Panel                    5, XIV
Federal Trade Commission                          5, XLVII; 16, I
Federal Transit Administration                    49, VI
Federal Travel Regulation System                  41, Subtitle F
Fine Arts, Commission on                          45, XXI
Fiscal Service                                    31, II
Fish and Wildlife Service, United States          50, I, IV
Fishery Conservation and Management               50, VI
Food and Drug Administration                      21, I
Food and Nutrition Service                        7, II
Food Safety and Inspection Service                9, III
Foreign Agricultural Service                      7, XV
Foreign Assets Control, Office of                 31, V
Foreign Claims Settlement Commission of the       45, V
     United States
Foreign Service Grievance Board                   22, IX
Foreign Service Impasse Disputes Panel            22, XIV
Foreign Service Labor Relations Board             22, XIV
Foreign-Trade Zones Board                         15, IV
Forest Service                                    36, II
General Services Administration                   5, LVII; 41, 105
  Contract Appeals, Board of                      48, 61
  Federal Acquisition Regulation                  48, 5
  Federal Management Regulation                   41, 102

[[Page 399]]

  Federal Property Management Regulations         41, 101
  Federal Travel Regulation System                41, Subtitle F
  General                                         41, 300
  Payment From a Non-Federal Source for Travel    41, 304
       Expenses
  Payment of Expenses Connected With the Death    41, 303
       of Certain Employees
  Relocation Allowances                           41, 302
  Temporary Duty (TDY) Travel Allowances          41, 301
Geological Survey                                 30, IV
Government Accountability Office                  4, I
Government Ethics, Office of                      5, XVI
Government National Mortgage Association          24, III
Grain Inspection, Packers and Stockyards          7, VIII; 9, II
     Administration
Harry S. Truman Scholarship Foundation            45, XVIII
Health and Human Services, Department of          5, XLV; 45, Subtitle A
  Centers for Medicare & Medicaid Services        42, IV
  Child Support Enforcement, Office of            45, III
  Children and Families, Administration for       45, II, III, IV, X
  Community Services, Office of                   45, X
  Defense Acquisition Regulations System          48, 2
  Family Assistance, Office of                    45, II
  Federal Acquisition Regulation                  48, 3
  Food and Drug Administration                    21, I
  Human Development Services, Office of           45, XIII
  Indian Health Service                           25, V; 42, I
  Inspector General (Health Care), Office of      42, V
  Public Health Service                           42, I
  Refugee Resettlement, Office of                 45, IV
Homeland Security, Department of                  6, I
  Coast Guard                                     33, I; 46, I; 49, IV
  Coast Guard (Great Lakes Pilotage)              46, III
  Customs and Border Protection Bureau            19, I
  Federal Emergency Management Agency             44, I
  Immigration and Customs Enforcement Bureau      19, IV
  Immigration and Naturalization                  8, I
  Transportation Security Administration          49, XII
Housing and Urban Development, Department of      5, LXV; 24, Subtitle B
  Community Planning and Development, Office of   24, V, VI
       Assistant Secretary for
  Equal Opportunity, Office of Assistant          24, I
       Secretary for
  Federal Acquisition Regulation                  48, 24
  Federal Housing Enterprise Oversight, Office    12, XVII
       of
  Government National Mortgage Association        24, III
  Housing--Federal Housing Commissioner, Office   24, II, VIII, X, XX
       of Assistant Secretary for
  Housing, Office of, and Multifamily Housing     24, IV
       Assistance Restructuring, Office of
  Inspector General, Office of                    24, XII
  Public and Indian Housing, Office of Assistant  24, IX
       Secretary for
  Secretary, Office of                            24, Subtitle A, VII
Housing--Federal Housing Commissioner, Office of  24, II, VIII, X, XX
     Assistant Secretary for
Housing, Office of, and Multifamily Housing       24, IV
     Assistance Restructuring, Office of
Human Development Services, Office of             45, XIII
Immigration and Customs Enforcement Bureau        19, IV
Immigration and Naturalization                    8, I
Immigration Review, Executive Office for          8, V
Independent Counsel, Office of                    28, VII
Indian Affairs, Bureau of                         25, I, V
Indian Affairs, Office of the Assistant           25, VI
     Secretary
Indian Arts and Crafts Board                      25, II
Indian Health Service                             25, V; 42, I
Industry and Security, Bureau of                  15, VII
Information Resources Management, Office of       7, XXVII
Information Security Oversight Office, National   32, XX
   Archives and Records Administration
[[Page 400]]

Inspector General
  Agriculture Department                          7, XXVI
  Health and Human Services Department            42, V
  Housing and Urban Development Department        24, XII
Institute of Peace, United States                 22, XVII
Inter-American Foundation                         5, LXIII; 22, X
Interior Department
  American Indians, Office of the Special         25, VII
       Trustee
  Endangered Species Committee                    50, IV
  Federal Acquisition Regulation                  48, 14
  Federal Property Management Regulations System  41, 114
  Fish and Wildlife Service, United States        50, I, IV
  Geological Survey                               30, IV
  Indian Affairs, Bureau of                       25, I, V
  Indian Affairs, Office of the Assistant         25, VI
       Secretary
  Indian Arts and Crafts Board                    25, II
  Land Management, Bureau of                      43, II
  Minerals Management Service                     30, II
  National Indian Gaming Commission               25, III
  National Park Service                           36, I
  Reclamation, Bureau of                          43, I
  Secretary of the Interior, Office of            43, Subtitle A
  Surface Mining and Reclamation Appeals, Board   30, III
       of
  Surface Mining Reclamation and Enforcement,     30, VII
       Office of
Internal Revenue Service                          26, I
International Boundary and Water Commission,      22, XI
     United States and Mexico, United States 
     Section
International Development, United States Agency   22, II
     for
  Federal Acquisition Regulation                  48, 7
International Development Cooperation Agency,     22, XII
     United States
International Fishing and Related Activities      50, III
International Investment, Office of               31, VIII
International Joint Commission, United States     22, IV
     and Canada
International Organizations Employees Loyalty     5, V
     Board
International Trade Administration                15, III; 19, III
International Trade Commission, United States     19, II
Interstate Commerce Commission                    5, XL
James Madison Memorial Fellowship Foundation      45, XXIV
Japan-United States Friendship Commission         22, XVI
Joint Board for the Enrollment of Actuaries       20, VIII
Justice Department                                5, XXVIII; 28, I, XI; 40, 
                                                  IV
  Alcohol, Tobacco, Firearms, and Explosives,     27, II
       Bureau of
  Drug Enforcement Administration                 21, II
  Federal Acquisition Regulation                  48, 28
  Federal Claims Collection Standards             31, IX
  Federal Prison Industries, Inc.                 28, III
  Foreign Claims Settlement Commission of the     45, V
       United States
  Immigration Review, Executive Office for        8, V
  Offices of Independent Counsel                  28, VI
  Prisons, Bureau of                              28, V
  Property Management Regulations                 41, 128
Labor Department                                  5, XLII
  Benefits Review Board                           20, VII
  Employee Benefits Security Administration       29, XXV
  Employees' Compensation Appeals Board           20, IV
  Employment and Training Administration          20, V
  Employment Standards Administration             20, VI
  Federal Acquisition Regulation                  48, 29
  Federal Contract Compliance Programs, Office    41, 60
       of
  Federal Procurement Regulations System          41, 50
  Labor-Management Standards, Office of           29, II, IV
  Mine Safety and Health Administration           30, I
  Occupational Safety and Health Administration   29, XVII
  Public Contracts                                41, 50

[[Page 401]]

  Secretary of Labor, Office of                   29, Subtitle A
  Veterans' Employment and Training Service,      41, 61; 20, IX
       Office of the Assistant Secretary for
  Wage and Hour Division                          29, V
  Workers' Compensation Programs, Office of       20, I
Labor-Management Standards, Office of             29, II, IV
Land Management, Bureau of                        43, II
Legal Services Corporation                        45, XVI
Library of Congress                               36, VII
  Copyright Office                                37, II
  Copyright Royalty Board                         37, III
Local Television Loan Guarantee Board             7, XX
Management and Budget, Office of                  5, III, LXXVII; 14, VI; 
                                                  48, 99
Marine Mammal Commission                          50, V
Maritime Administration                           46, II
Merit Systems Protection Board                    5, II
Micronesian Status Negotiations, Office for       32, XXVII
Mine Safety and Health Administration             30, I
Minerals Management Service                       30, II
Minority Business Development Agency              15, XIV
Miscellaneous Agencies                            1, IV
Monetary Offices                                  31, I
Morris K. Udall Scholarship and Excellence in     36, XVI
     National Environmental Policy Foundation
National Aeronautics and Space Administration     5, LIX; 14, V
  Federal Acquisition Regulation                  48, 18
National Agricultural Library                     7, XLI
National Agricultural Statistics Service          7, XXXVI
National and Community Service, Corporation for   45, XII, XXV
National Archives and Records Administration      5, LXVI; 36, XII
  Information Security Oversight Office           32, XX
National Bureau of Standards                      15, II
National Capital Planning Commission              1, IV
National Commission for Employment Policy         1, IV
National Commission on Libraries and Information  45, XVII
     Science
National Council on Disability                    34, XII
National Counterintelligence Center               32, XVIII
National Credit Union Administration              12, VII
National Crime Prevention and Privacy Compact     28, IX
     Council
National Drug Control Policy, Office of           21, III
National Foundation on the Arts and the           45, XI
     Humanities
National Highway Traffic Safety Administration    23, II, III; 49, V
National Imagery and Mapping Agency               32, I
National Indian Gaming Commission                 25, III
National Institute for Literacy                   34, XI
National Institute of Standards and Technology    15, II
National Labor Relations Board                    5, LXI; 29, I
National Marine Fisheries Service                 50, II, IV, VI
National Mediation Board                          29, X
National Oceanic and Atmospheric Administration   15, IX; 50, II, III, IV, 
                                                  VI
National Park Service                             36, I
National Railroad Adjustment Board                29, III
National Railroad Passenger Corporation (AMTRAK)  49, VII
National Science Foundation                       5, XLIII; 45, VI
  Federal Acquisition Regulation                  48, 25
National Security Council                         32, XXI
National Security Council and Office of Science   47, II
     and Technology Policy
National Telecommunications and Information       15, XXIII; 47, III
     Administration
National Transportation Safety Board              49, VIII
National Weather Service                          15, IX
Natural Resources Conservation Service            7, VI
Navajo and Hopi Indian Relocation, Office of      25, IV
Navy Department                                   32, VI
  Federal Acquisition Regulation                  48, 52

[[Page 402]]

Neighborhood Reinvestment Corporation             24, XXV
Northeast Interstate Low-Level Radioactive Waste  10, XVIII
     Commission
Nuclear Regulatory Commission                     5, XLVIII; 10, I
  Federal Acquisition Regulation                  48, 20
Occupational Safety and Health Administration     29, XVII
Occupational Safety and Health Review Commission  29, XX
Offices of Independent Counsel                    28, VI
Oklahoma City National Memorial Trust             36, XV
Operations Office                                 7, XXVIII
Overseas Private Investment Corporation           5, XXXIII; 22, VII
Patent and Trademark Office, United States        37, I
Payment From a Non-Federal Source for Travel      41, 304
     Expenses
Payment of Expenses Connected With the Death of   41, 303
     Certain Employees
Peace Corps                                       22, III
Pennsylvania Avenue Development Corporation       36, IX
Pension Benefit Guaranty Corporation              29, XL
Personnel Management, Office of                   5, I, XXXV; 45, VIII
  Federal Acquisition Regulation                  48, 17
  Federal Employees Group Life Insurance Federal  48, 21
       Acquisition Regulation
  Federal Employees Health Benefits Acquisition   48, 16
       Regulation
Pipeline and Hazardous Materials Safety           49, I
     Administration
Postal Rate Commission                            5, XLVI; 39, III
Postal Service, United States                     5, LX; 39, I
Postsecondary Education, Office of                34, VI
President's Commission on White House             1, IV
     Fellowships
Presidential Documents                            3
Presidio Trust                                    36, X
Prisons, Bureau of                                28, V
Procurement and Property Management, Office of    7, XXXII
Productivity, Technology and Innovation,          37, IV
     Assistant Secretary
Public Contracts, Department of Labor             41, 50
Public and Indian Housing, Office of Assistant    24, IX
     Secretary for
Public Health Service                             42, I
Railroad Retirement Board                         20, II
Reclamation, Bureau of                            43, I
Refugee Resettlement, Office of                   45, IV
Regional Action Planning Commissions              13, V
Relocation Allowances                             41, 302
Research and Innovative Technology                49, XI
     Administration
Rural Business-Cooperative Service                7, XVIII, XLII
Rural Development Administration                  7, XLII
Rural Housing Service                             7, XVIII, XXXV
Rural Telephone Bank                              7, XVI
Rural Utilities Service                           7, XVII, XVIII, XLII
Saint Lawrence Seaway Development Corporation     33, IV
Science and Technology Policy, Office of          32, XXIV
Science and Technology Policy, Office of, and     47, II
     National Security Council
Secret Service                                    31, IV
Securities and Exchange Commission                17, II
Selective Service System                          32, XVI
Small Business Administration                     13, I
Smithsonian Institution                           36, V
Social Security Administration                    20, III; 48, 23
Soldiers' and Airmen's Home, United States        5, XI
Special Counsel, Office of                        5, VIII
Special Education and Rehabilitative Services,    34, III
     Office of
State Department                                  22, I; 28, XI
  Federal Acquisition Regulation                  48, 6
Surface Mining and Reclamation Appeals, Board of  30, III
Surface Mining Reclamation and Enforcement,       30, VII
     Office of
Surface Transportation Board                      49, X
Susquehanna River Basin Commission                18, VIII

[[Page 403]]

Technology Administration                         15, XI
Technology Policy, Assistant Secretary for        37, IV
Technology, Under Secretary for                   37, V
Tennessee Valley Authority                        5, LXIX; 18, XIII
Thrift Supervision Office, Department of the      12, V
     Treasury
Trade Representative, United States, Office of    15, XX
Transportation, Department of                     5, L
  Commercial Space Transportation                 14, III
  Contract Appeals, Board of                      48, 63
  Emergency Management and Assistance             44, IV
  Federal Acquisition Regulation                  48, 12
  Federal Aviation Administration                 14, I
  Federal Highway Administration                  23, I, II
  Federal Motor Carrier Safety Administration     49, III
  Federal Railroad Administration                 49, II
  Federal Transit Administration                  49, VI
  Maritime Administration                         46, II
  National Highway Traffic Safety Administration  23, II, III; 49, V
  Pipeline and Hazardous Materials Safety         49, I
       Administration
  Saint Lawrence Seaway Development Corporation   33, IV
  Secretary of Transportation, Office of          14, II; 49, Subtitle A
  Surface Transportation Board                    49, X
  Transportation Statistics Bureau                49, XI
Transportation, Office of                         7, XXXIII
Transportation Security Administration            49, XII
Transportation Statistics Bureau                  49, XI
Travel Allowances, Temporary Duty (TDY)           41, 301
Treasury Department                               5, XXI; 12, XV; 17, IV; 
                                                  31, IX
  Alcohol and Tobacco Tax and Trade Bureau        27, I
  Community Development Financial Institutions    12, XVIII
       Fund
  Comptroller of the Currency                     12, I
  Customs and Border Protection Bureau            19, I
  Engraving and Printing, Bureau of               31, VI
  Federal Acquisition Regulation                  48, 10
  Federal Law Enforcement Training Center         31, VII
  Fiscal Service                                  31, II
  Foreign Assets Control, Office of               31, V
  Internal Revenue Service                        26, I
  International Investment, Office of             31, VIII
  Monetary Offices                                31, I
  Secret Service                                  31, IV
  Secretary of the Treasury, Office of            31, Subtitle A
  Thrift Supervision, Office of                   12, V
Truman, Harry S. Scholarship Foundation           45, XVIII
United States and Canada, International Joint     22, IV
     Commission
United States and Mexico, International Boundary  22, XI
     and Water Commission, United States Section
Utah Reclamation Mitigation and Conservation      43, III
     Commission
Veterans Affairs Department                       38, I
  Federal Acquisition Regulation                  48, 8
Veterans' Employment and Training Service,        41, 61; 20, IX
     Office of the Assistant Secretary for
Vice President of the United States, Office of    32, XXVIII
Vocational and Adult Education, Office of         34, IV
Wage and Hour Division                            29, V
Water Resources Council                           18, VI
Workers' Compensation Programs, Office of         20, I
World Agricultural Outlook Board                  7, XXXVIII

[[Page 405]]



List of CFR Sections Affected



All changes in this volume of the Code of Federal Regulations that were 
made by documents published in the Federal Register since January 1, 
2001, are enumerated in the following list. Entries indicate the nature 
of the changes effected. Page numbers refer to Federal Register pages. 
The user should consult the entries for chapters and parts as well as 
sections for revisions.
For the period before January 1, 2001, see the ``List of CFR Sections 
Affected, 1949-1963, 1964-1972, 1973-1985, and 1986-2000'' published in 
11 separate volumes.

                                  2001

7 CFR
                                                                   66 FR
                                                                    Page
Chapter VII
718 Authority citation revised.....................................53509
718.102 (b)(4) revised.............................................53509
723 Policy statement...............................................53945
723.206 (c)(1) revised.............................................53509
    Corrected......................................................59675
723.216 (e)(5)(iv), (e)(6)(ii)(B) and (i)(6) revised...............53509
723.503 (a)(3) revised.............................................53509
760.1--760.34 (Subpart) Authority citation revised..................2801
761 Authority citation revised......................................7566
761.8 Added.........................................................7566
762 Authority citation revised......................................7567
762.102 Amended.....................................................7567
762.105 (c)(1) revised; (c)(2)(iii) removed.........................7567
762.122 (a) and (b) removed; (c) through (f) redesignated as (a) 
        through (d).................................................7567
762.125 (a)(2), (3), (6) and (8) revised............................7567
762.142 (d)(8) revised..............................................7567
762.145 (b)(6)(iv) revised..........................................7567
762.146 (e)(9) revised..............................................7567
762.150 (a)(1) introductory text, (i), (b)(2), (3), (4) and (g)(2) 
        revised.....................................................7567
770 Added...........................................................1567
    Regulation at 66 FR 1567 eff. date delayed......................8886
770.10 (e)(3)(iv) corrected; (e) correctly designated as (f).......47877
Chapter VIII
800.71 (a) amended.................................................35753
    (a) Table 1 corrected..........................................36834
868.90 (a) revised.................................................17777
868.91 Revised.....................................................17778

                                  2002

7 CFR
                                                                   67 FR
                                                                    Page
Chapter VII
718 Authority citation revised.....................................66307
718.107 Revised....................................................71798
718.301--718.307 (Subpart D) Added.................................66307
723 Authority citation revised.....................................62871
723.216 (f)(1) revised.............................................41310
723.503 (a)(3) revised.............................................62871
729 Revised........................................................62872
735 Revised........................................................50783
736 Removed........................................................50790
737 Removed........................................................50790
738 Removed........................................................50790
739 Removed........................................................50790
740 Removed........................................................50790
741 Removed........................................................50790
742 Removed........................................................50790
760.1--760.34 (Subpart) Authority citation revised.................14844
761.8 (a) and (b) revised..........................................41312
762.149 (m) added..................................................44016
764 Added............................................................795
764.2 Corrected.....................................................7942
764.9 Corrected.....................................................7942
771 Added..........................................................59771
780.1 Amended......................................................13252
780.2 (a)(1)(iii), (iv) and (3) removed; (a)(2) amended............13253
780.7 (b), (c) and (e) amended.....................................13253
780.11 Amended.....................................................13253

[[Page 406]]

784 Revised........................................................13710
785 Added (OMB Number).............................................57315
Chapter VIII
800.71 (a) Schedule A revised......................................13086
868 Technical correction...........................................62313
868.306 Revised....................................................61250
868.307 Revised....................................................61250
868.310 Revised....................................................61250
868.311 Revised....................................................61251
868.312 Revised....................................................61251
868.313 Revised....................................................61252
868.315 (d) revised................................................61252

                                  2003

7 CFR
                                                                   68 FR
                                                                    Page
Chapter VII
718 Authority citation revised.....................................16172
718.1--718.10 (Subpart A) Revised..................................16172
718.11 Added.......................................................39448
718.101--718.112 (Subpart B) Revised...............................16176
718.201--718.207 (Subpart C) Revised...............................16178
723.111 (h), (i) and (j) added.....................................34779
723.221 Added......................................................16181
723.222 Added......................................................16181
723.223 Added......................................................16181
759 Removed........................................................61326
762.102 (b) amended.................................................7695
762.110 (a) introductory text, (1), (3) and (b) introductory text 
        amended.....................................................7695
762.120 (d) revised................................................62223
762.129 (b)(2) revised; (b)(3) amended; (b)(4) added................7695
764.2 Amended.......................................................7695
764.4 (a)(2) revised...............................................62223
772 Added; eff. 1-15-04............................................69949
774.18 (a)(1) and (b)(1) revised....................................7696
777 Removed........................................................61326
783 Removed........................................................61326
Chapter VIII
800.71 (a) Schedule A revised......................................32625
    (a) Schedule A corrected.......................................35490
800.81 (a)(1) and (d) revised; OMB Number..........................19138
800.99 (d) revised.................................................19138
800.116 Revised; OMB Number........................................19138
800.117 Revised; OMB Number........................................19139
800.118 Revised; OMB Number........................................19139
800.125 (b) revised; OMB Number....................................61328
800.135 (b) revised; OMB Number....................................61329
800.185 (d) revised; OMB Number....................................19139
800.196 (f)(1) revised; OMB Number.................................19139
801.10 Removed.....................................................60618
802.0 Revised......................................................34522
868.91 Revised.....................................................24860

                                  2004

7 CFR
                                                                   69 FR
                                                                    Page
Title 7 Nomenclature change........................................18803
Chapter VII
701 Revised........................................................10302
701.10 (c) corrected...............................................22377
718.2 Corrected......................................................250
718.6 (b)(2) corrected; (b)(3) removed...............................250
718.9 (a) corrected..................................................250
762.102 (b) amended.................................................5262
762.120 (a) revised.................................................5262
762.140 (d) revised................................................44579
762.142 (c)(3)(ii) redesignated as (c)(3)(iii); new (c)(3)(ii) 
        added......................................................44579
762.144 (c)(3)(iii) revised........................................44579
762.145 (b)(4) and (7) revised.....................................44579
762.149 (d)(3) added; (i)(2) amended...............................44580
772.8 (a)(1)(ii) revised...........................................18471
772.9 (a)(3) revised................................................7679
783 Added...........................................................9745
784 Revised........................................................76837
Chapter VIIII
800.71 (a) Schedule A and Schedule C Tables 1 and 2 revised........26487
800.73 (e) removed; (f) and (g) redesignated as (e) and (f)........26490
868.90 (d) revised..................................................1894

                                  2005

7 CFR
                                                                   70 FR
                                                                    Page
Chapter VII
723 Removed........................................................17158
762.102 Amended....................................................56107
762.106 (b)(8) removed; (c)(8) revised.............................56107
762.126 (e)(1) removed; (e)(2), (3) and (4) redesignated as 
        (e)(1), (2), and (3); new (e)(2) revised...................56107

[[Page 407]]

762.145 (b)(6)(i) revised..........................................56107
762.159 Added......................................................56107
762.160 Revised....................................................56107
770.2 (a) and(b) amended............................................7167
770.3 (h) added.....................................................7167
770.10 (e)(3)(iii), (iv), (4)(iii) and (iv) revised; (e)(3)(v) and 
        (4)(v) added................................................7167
780 Revised; interim...............................................43266
Chapter VIII
800.0 (b)(44) through (106) redesignated as (b)(45) through (107); 
        new (b)(44) added; interim.................................21923
    (b)(44) through (106) redesignated as (b)(45) through (107); 
new (b)(44) added; eff. 1-12-06....................................73558
800.18 (b)(8) added; interim.......................................21923
    (b)(8) revised; eff. 1-12-06...................................73559
800.71 (a) amended.................................................50151
810.2202 (b)(1) revised; eff. 5-1-06................................8235
810.2204 (a) revised; eff. 5-1-06...................................8235
868.1 (b)(3) and (6) revised.......................................69250
868.60 (b) revised; OMB number.....................................69250
868.310 Amended....................................................37255
868.311 Heading revised............................................37255
868.312 Heading correctly revised..................................37255

                                  2006

7 CFR
                                                                   71 FR
                                                                    Page
Chapter VII
700 Removed........................................................54402
701 Authority citation revised.....................................30265
701.11 (a)(3) revised; interim.....................................30265
701.50 Added; interim..............................................30265
701.51 Added; interim..............................................30265
701.52 Added; interim..............................................30265
701.53 Added; interim..............................................30265
701.54 Added; interim..............................................30265
701.55 Added; interim..............................................30265
701.56 Added; interim..............................................30265
701.57 Added; interim..............................................30265
702 Removed........................................................54402
711 Removed........................................................54402
717 Removed........................................................49987
718.102 (b)(7) added...............................................13741
718.103 Revised....................................................13741
718.104 Revised....................................................13742
729 Removed........................................................54402
752 Removed........................................................54402
755 Removed........................................................54402
760 Authority citation revised.....................................27190
760.1--760.34 (Subpart) Designated as Subpart A; interim...........27190
760 Undesignated subpart after new Subpart A removed; interim......27190
760.2 (c), (d) and (e) revised; interim............................27190
760.101--760.111 (Subpart B) Added; interim........................27191
760.201--760.203 (Subpart C) Added; interim........................27191
760.301--760.305 (Subpart D) Added; interim........................27191
760.401--760.405 (Subpart E) Added; interim........................27191
760.501--760.504 (Subpart F) Added; interim........................27191
760.601 (Subpart G) Added; interim.................................27191
762.106 (g)(2)(ii) revised.........................................43957
762.148 (d)(1) amended.............................................43957
762.149 (d)(2) revised.............................................43957
780.7 (a) revised..................................................30573
780.9 (f)(3) revised...............................................30573
780.10 (c) revised.................................................30573
780.15 (c) revised; (d) correctly amended..........................30574
Chapter VIII
800 Authority citation revised..............................52405, 65373
800.71 (a) Tables 1 and 2 amended; interim.........................65373
800.86 (c)(2) Tables 17 and 18 revised; eff. 9-1-07................52405
    Table 17 corrected; eff. 9-1-07................................77583
800.162 (a) revised; (c) added; eff. 9-1-07........................52405
801 Authority citation revised.....................................65373
801.7 (b)(4) added; interim........................................65373
810 Authority citation revised.....................................52406
810.102 (d) revised; eff. 9-1-07...................................52406
810.1604 Revised; eff. 9-1-07......................................52406


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