[Federal Register Volume 62, Number 121 (Tuesday, June 24, 1997)]
[Rules and Regulations]
[Pages 33982-33986]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-16578]


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DEPARTMENT OF AGRICULTURE

Commodity Credit Corporation

7 CFR Parts 1414, 1415, 1416, 1434, 1437, 1439, 1468, 1477, 1479, 
and 1489

RIN 0560-AF15


Livestock Indemnity Program

AGENCY: Commodity Credit Corporation, USDA.

ACTION: Interim rule with request for comments.

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SUMMARY: This interim rule sets forth the terms and conditions of the 
Livestock Indemnity Program as authorized by the 1997 Emergency 
Supplemental Appropriations Act, which may be made available to 
eligible livestock producers for livestock and poultry losses that 
occurred as a result of natural disasters that occurred between October 
1, 1996, and June 12, 1997, for which a Presidential or Secretarial 
disaster was requested by June 12, 1997, and subsequently approved.
    This rule also deletes obsolete program regulation as part of the 
National Performance Review Initiative to eliminate unnecessary 
regulations and improve those that remain in force.

DATES: Effective June 24, 1997. Comments must be received by July 24, 
1997 in order to be assured of consideration.

ADDRESSES: Comments should be mailed to Diane Sharp, Director, 
Compliance and Production Adjustment Division, Farm Service Agency, 
United States Department of Agriculture, STOP 0517, 1400 Independence 
Ave. S.W., Washington, D.C. 20013-2415. Telephone (202) 720-7641. 
Access this interim rule on the Internet at: www.fsa.usda.gov.

FOR FURTHER INFORMATION CONTACT: Diane Sharp, (202) 720-7641.

SUPPLEMENTARY INFORMATION:

Executive Order 12766

    This interim rule is issued in conformance with Executive Order 
12866 and has been determined to be significant and has been reviewed 
by the Office of Management and Budget.

Regulatory Flexibility Act

    It has been determined that the Regulatory Flexibility Act is not 
applicable to this rule because the Farm Service Agency (FSA) and the 
Commodity Credit Corporation (CCC) are not required by 5 U.S.C. 553 or 
any other provision of law to publish a notice of proposed rulemaking 
with respect to the subject matter of this rule.

Environmental Evaluation

    It has been determined by an environmental evaluation that this 
action will have no significant impact on the quality of the human 
environment. Therefore, neither an environmental assessment nor an 
environmental impact statement is needed.

Executive Order 12988

    This rule has been reviewed in accordance with Executive Order 
12788. The provisions of this rule preempt State laws to the extent 
such laws are inconsistent with the provisions of this rule. The 
provisions of this rule are retroactive to October 1, 1996. Before any 
judicial action may be brought concerning the provisions of this rule, 
the administrative remedies must be exhausted.

Executive Order 12372

    This program is not subject to the provisions of Executive Order 
12372, which require intergovernmental consultation with State and 
local officials. See the Notice related to 7 CFR part 3015, subpart V, 
published at 48 FR 29115 (June 24, 1983).

Unfunded Mandates Reform Act of 1995

    This rule contains no Federal mandates under the regulatory 
provisions of Title II of the Unfunded Mandates Reform Act of 1995 
(UMRA) for State, local, and tribal governments or the private sector. 
Thus, this rule is not subject to the requirements of sections 202 and 
205 of UMRA.

[[Page 33983]]

Small Business Regulatory Enforcement Fairness Act of 1996

    Due to the need for immediate action and necessity in providing 
payments for losses expeditiously, CCC has determined that, pursuant to 
section 808 of the Small Business Regulatory Enforcement Fairness Act 
of 1996, it is impracticable, unnecessary and contrary to the public 
interest to require this rule to conform to the requirements of section 
801 of that Act. Accordingly this rule is effective upon publication.

Paperwork Reduction Act

    In accordance with the Paperwork Reduction Act of 1995, CCC will 
submit an emergency information collection request (ICR) to OMB for the 
approval of the Livestock Indemnity Program reports as necessary for 
the proper functioning of the program.
    Title: Livestock Indemnity Program.
    OMB Control Number: 0560-0029.
    Type of Request: Addendum to an existing Information Collection 
Package.
    Abstract: Persons who suffered livestock or poultry losses 
according to this subpart, are required to provide information 
regarding their livestock and poultry operation, losses that occurred, 
and disposition of those losses. Documents to support their reported 
interest in the animals may be required such as receipts for purchase 
of the livestock or poultry, feed receipts, loan documents, or any 
information that may verify their livestock or poultry possessions 
prior to the reported loss. Evidence to support the number of losses 
may be required such as rendering receipts, National Guard or FEMA 
receipts, or any other evidence that may be available to support the 
claim. Also, information regarding the qualifying gross revenues is 
required for determining whether the $2,500,000 threshold for gross 
income limitation is met. The information collection will be used by 
the CCC to approve or determine the eligibility and amount of 
assistance in accordance with this subpart. The CCC considers the 
information collected to be essential to prudent eligibility and 
assistance determinations. Failure to make sound decisions in providing 
livestock indemnity program payments would result in large losses to 
both the livestock and poultry owners and the Government, and weaken 
the agricultural economy in the affected areas.
    Estimate of Burden: Public reporting burden for this collection of 
information is estimated to average 2 hours per response.
    Respondents: Livestock and Poultry Producers.
    Estimated Number of Respondents: 60,000.
    Estimated Number of Responses per Respondent: 1.
    Estimated Total Annual Burden on Respondents: 120,000 hours.
    Proposed topics for comment include: (a) whether the collection of 
information is necessary for the proper performance of the functions of 
the agency, including whether the information will have practical 
utility; (b) the accuracy of the agency's estimate of burden including 
the validity of the methodology and assumptions used; (c) ways to 
enhance the quality, utility and clarity of the information collected; 
or (d) ways to minimize the burden of the collection of the information 
on those who are to respond, including through the use of appropriate 
automated, electronic, mechanical, or other technological collection 
techniques or other forms of information technology. Comments should be 
sent to the Desk Officer for Agriculture, Office of Information and 
Regulatory Affairs, Office of Management and Budget, Washington, D.C. 
20503 and to Diane Sharp, Director, Compliance and Production 
Adjustment Division, Farm Service Agency, United States Department of 
Agriculture, Stop 0517, 1400 Independence Ave. S.W., Washington, D.C. 
20013-2415. Telephone (202) 720-7641.

Executive Order 12612

    It has been determined that this rule does not have sufficient 
Federalism implications to warrant the preparation of a Federalism 
Assessment. The provisions contained in this rule will not have a 
substantial direct effect on States or their political subdivisions, or 
on the distribution of power and responsibilities among the various 
levels of government.

Background

    This interim rule sets forth the terms and conditions under which 
livestock producers who suffered a loss as a result of a natural 
disaster may apply for benefits to compensate for this loss. Congress 
has mandated the Secretary through the CCC to make available up to $50 
million received from the proceeds of the sale of grain held in the 
disaster reserve established by the Agricultural Act of 1970, to 
implement a livestock indemnity program. This interim final rule is 
being added as a new subpart to part 1439, and specifically indicates 
how this subpart will incorporate terms and conditions already in this 
part.
    Producers who seeks benefits under this subpart must file an 
application for benefits during the sign-up period as determined by the 
Deputy Administrator. As set forth in section 1439.801, benefits are 
only available for losses that occurred between October 1, 1996, and 
June 12, 1997, and those losses were the result of natural disasters 
that occurred between October 1, 1996, and June 12, 1997, for which a 
Presidential or Secretarial disaster was requested by June 12, 1997, 
and subsequently approved. Only those livestock losses where the death 
of the livestock was reasonably related to the disaster which prompted 
the disaster declaration qualify for benefits under this subpart. Due 
to the fact that losses will have already occurred and ex post facto 
verification of the loss is in some instances impossible, the CCC will 
use any available information to substantiate the loss and require the 
producer to certify the accuracy of the information provided. As with 
any government program under which individuals seek compensation from 
the government, false certification carries strict penalties, and the 
Department will spot-check and validate applications. The CCC through 
the Farm Service Agency is charged with carrying out government 
programs in a responsible manner and therefore, after applications have 
been filed, the county committee will issue a decision on the 
applications taking into consideration all of the information available 
to them.
    Losses to livestock have been extremely large and the amount that 
Congress has appropriated is not sufficient to compensate all eligible 
producers for 100 percent of the market value of the loss. Animal 
categories and market values for the disaster period will be used in 
the calculation of national payment rates. Normal mortality rates were 
considered for each animal category. If the producer's loss is in 
excess of the normal mortality rates for the animal category, as 
established by CCC, the benefits will be paid at the national rate 
established by CCC for those animal losses in excess of the normal 
mortality rate. If the total calculated payments exceed the funding 
made available under this program, a uniform national percentage will 
be applied so the total outlays will not exceed the amount of funds 
made available under this program.
    Eligible livestock includes beef and dairy cattle, sheep, goats, 
swine, poultry, (including egg-producing poultry), equine animals used 
for food or in the production of food and beefalo and buffalo when 
maintained on the same basis as beef cattle.
    Livestock indemnity benefits will not be paid to persons with 
annual gross receipts exceeding $2.5 million. Annual

[[Page 33984]]

gross receipts is defined as the person's gross receipts from farming 
and ranching if the person receives more that 50 percent of gross 
receipts from farming or ranching, or the total gross receipts from all 
sources if the total gross receipts are less that 50 percent from 
farming or ranching. Under this program, a maximum $50,000 payment 
limitation applies for each person as defined in part 1400 of this 
chapter.

List of Subjects

7 CFR Part 1414

    Cotton, Feed grains, Price support programs, Reporting and 
recordkeeping requirements, Rice, Soil conservation, Water resources, 
Wheat.

7 CFR Part 1415

    Administrative practice and procedure, Feed grains, Loan programs-
agriculture, price support programs, Reporting and recordkeeping 
requirements, Soil conservation, Wheat.

7 CFR Part 1416

    Administrative practice and procedure, Feed grains, Loan programs-
agriculture, Price support programs, Reporting and recordkeeping 
requirements, Soil conservation, Wheat.

7 CFR Part 1434

    Honey, Loan programs-agriculture, Price support programs, Reporting 
and recordkeeping requirements, Warehouses.

7 CFR Part 1437

    Agricultural commodities, Crop insurance, Disaster assistance, 
Fraud, Penalties, Reporting and recordkeeping requirements.

7 CFR Part 1439

    Animal feeds, Disaster assistance, Grant programs-agriculture, 
Livestock, Reporting and recordkeeping requirements.

7 CFR Part 1468

    Mohair, Price support programs, Reporting and recordkeeping 
requirements, Wool.

7 CFR Part 1477

    Agricultural commodities, Disaster assistance, Fraud, Grant 
programs-agriculture, Reporting and recordkeeping requirements.

7 CFR Part 1479

    Agricultural commodities, Disaster assistance, Grant programs-
agriculture.

7 CFR Part 1489

    Exports, Loan porgrams-agriculture, Price support programs, 
Tobacco.

    Accordingly, 7 CFR part 1439 is amended as follows:

PART 1439--EMERGENCY LIVESTOCK ASSISTANCE

    1. Part 1439 is amended by adding Subpart--Livestock Indemnity 
Program (Secs. 1439.800 through 1439.810) to read as follows:

Subpart--Livestock Indemnity Program

Sec.
1439.800  [Reserved].
1439.801  Applicability.
1439.802  Administration.
1439.803  Definitions.
1439.804  Sign-up period.
1439.805  Proof of loss.
1439.806  Indemnity benefits.
1439.807  Availability of funds.
1439.808  Misrepresentation, scheme or device.
1439.809  Limitation on payments and income.
1439.810  Refunds to CCC; joint and several liability.

    Authority: Pub. L. 105-18, 111 stat. 158.

Subpart--Livestock Indemnity Program


Sec. 1439.800  [Reserved]


Sec. 1439.801  Applicability.

    This subpart sets forth the terms and conditions of the Livestock 
Indemnity Program. Benefits shall be provided to eligible livestock 
producers only in areas where a disaster occurred between October 1, 
1996, and June 12, 1997 (inclusive), for which a Presidential 
Designation or Secretarial Declaration was requested for the disaster 
by June 12, 1997, and subsequently approved. Producers in counties that 
were not designated, but rather were contiguous to declared States and 
counties, are not eligible for benefits under this subpart. Benefits 
will be provided with respect to eligible livestock where the death 
occurred in the disaster areas between October 1, 1996, and June 12, 
1997 (inclusive), and where the death of the livestock was reasonably 
related to the disaster which prompted the disaster declaration as 
determined by the Deputy Administrator or a designee. No payments will 
be made under this subpart unless the livestock losses were caused by 
the declared disaster and the disaster occurred between October 1, 
1996, and June 12, 1997 (inclusive).


Sec. 1439.802  Administration.

    (a) The provisions of Secs. 1439.2, 1439.12 , 1439.14, 1439.15 and 
1439.18 through 1439.20 are applicable to this subpart.
    (b) The provisions of Secs. 1439.1, 1439.4 through 1439.11, 
1439.13, 1439.16, and 1439.21 through 1439.24, are not applicable to 
this subpart.
    (c) The provisions of Sec. 1439.17 (a) through (e) and (h) shall 
apply to this subpart and Sec. 1439.17 (f) and (g) shall not apply to 
this subpart.
    (d) The provisions of Sec. 1439.3 shall apply as set forth in 
Sec. 1439.803 of this subpart.
    (e) Where extreme circumstances precluded the compliance with 
Sec. 1439.804 due to circumstances beyond the applicant's control, the 
county or State committee may request that relief be granted by the 
Deputy Administrator under this section. Except for statutory 
deadlines, the Deputy Administrator may waive or modify deadlines, and 
other program requirements in cases where lateness or failure to meet 
such other requirements does not adversely affect operation of the 
program and where the applicant shows circumstances precluded their 
compliance with the deadlines.


Sec. 1439.803  Definitions.

    The definitions set forth in this section shall be applicable for 
all purposes of administering the Livestock Indemnity Program of this 
subpart. The terms defined in section 1439.3 of this title shall also 
be applicable, except where those definitions conflict with the 
definitions set forth in this subpart. The following terms shall have 
the following meanings:
    Deputy Administrator means the Deputy Administrator for Farm 
Programs, Farm Service Agency (FSA), or a designee.
    Eligible livestock means beef and dairy cattle, sheep, goats, 
swine, poultry (including egg-producing poultry), equine animals used 
for food or in the production of food and buffalo and beefalo when 
maintained on the same basis as beef cattle.
    Livestock producer means one who possesses a beneficial interest in 
eligible livestock as defined in this subpart, have a financial risk in 
the eligible livestock; and is a citizen of, or legal resident alien 
in, the United States. A farm cooperative, private domestic 
corporation, partnership, or joint operation in which a majority 
interest is held by members, stockholders, or partners who are citizens 
of, or legal resident aliens in, the United States, if such 
cooperative, corporation, partnership, or joint operation owns or 
jointly owns eligible livestock or poultry will be considered livestock 
producers. Any Indian tribe (as defined in section 4(b) of the Indian 
Self-Determination and Education Assistance Act and Education 
Assistance Act); any Indian organization or entity chartered under

[[Page 33985]]

the Indian Reorganization Act or chartered under the Indian 
Reorganization Act; any tribal organization under the Indian Self-
Determination and Education Assistance Act; and any economic enterprise 
under the Indian Financing Act of 1974 will be considered livestock 
producers.


Sec. 1439.804  Sign-up period.

    (a) A request for benefits under this subpart must be submitted to 
the Commodity Credit Corporation (CCC) at the Farm Service Agency 
county office serving the county where the loss occurred. All requests 
for benefits and supporting documentation must be filed in the county 
office by July 25, 1997, or such other date as established by CCC.
    (b) Data furnished by the applicants will be used to determine 
eligibility for program benefits. Furnishing the data is voluntary; 
however, without it program benefits will not be provided.


Sec. 1439.805  Proof of loss.

    (a) Livestock producers must, in accordance with instructions 
issued by the Deputy Administrator, provide adequate proof that the 
loss of eligible livestock occurred in the area of Presidential 
designation or Secretarial declaration and that the death of the 
eligible livestock was reasonably related to the recognized natural 
disaster. The documentary evidence of the loss, quantity of the loss 
and type of eligible livestock claimed for payment shall be reported to 
CCC together with any supporting documentation under paragraph (b) of 
this section.
    (b) The livestock producer shall provide any available supporting 
documents that will assist the county committee in verifying the loss 
and the quantity of eligible livestock that perished in the natural 
disaster. Examples of the supporting documentation include, but are not 
limited to: purchase records, veterinarian receipts, bank loan papers, 
rendering truck certificates, Federal Emergency Management Agency and 
National Guard records, auction barn receipts, and any other documents 
available to confirm the presence of the livestock and the subsequent 
losses. Certifications of third parties or the producer and other such 
documentation as the county committee determines to be necessary in 
order to verify the information provided by the producer may be 
submitted, subject to review and approval by the county committee. 
Failure to provide documentation that is satisfactory to the county 
committee will result in disapproval of the application by the county 
committee.
    (c) In all circumstances, livestock producers shall certify the 
accuracy of the information provided. As provided by various statutes, 
providing a false certification to the government is punishable by 
imprisonment, fines and other penalties. All information provided is 
subject to verification and spot checks by the CCC.


Sec. 1439.806  Indemnity Benefits.

    (a) Livestock indemnity payments for losses of eligible livestock 
as determined by CCC are authorized to be made to livestock producers 
who file an Application for Livestock Indemnity Program, Form CCC-661, 
for the specific livestock category in accordance with instructions 
issued by the Deputy Administrator, if the:
    (1) Livestock producer submits an approved proof of loss according 
to Sec. 1439.805; and
    (2) County or State committee determines that because of an 
eligible disaster condition the livestock producer had a loss in the 
specific livestock category in excess of the normal mortality rate 
established by CCC, based on the number of animals in the livestock 
category that were in the producer's inventory at the time of the 
disaster.
    (b) If the number of losses in the animal category exceeds the 
normal mortality rate established by CCC for such category, the loss of 
eligible livestock that shall be used in making a payment shall be the 
number of animal losses in the animal category that exceed the normal 
mortality threshold established by CCC.
    (c) Payments shall be made in an amount determined by multiplying: 
the national payment rate for the livestock category as determined by 
CCC by the amount specified in (b) of this section. Adjustments shall 
apply in accordance with Sec. 1439.807.
    (d) Payments which are earned by a person under the livestock 
indemnity program may be assigned in accordance with the provisions of 
7 CFR part 1404.


Sec. 1439.807  Availability of funds.

    (a) A uniform percentage of the estimated calculated payment 
amount, as determined by the Deputy Administrator, may be made prior to 
establishing the total amount of claims submitted under this subpart 
and determining whether a national percentage reduction is necessary to 
remain within the appropriation under this subpart.
    (b) In the event that the total amount of claims submitted under 
this subpart exceeds the appropriation, each payment shall be reduced 
by a uniform national percentage. Such payment reductions shall be 
applied after the imposition of applicable payment limitation 
provisions.


Sec. 1439.808  Misrepresentation, scheme or device.

    No benefits under this subpart will be made to a person who is 
determined by the State committee or the county committee to have:
    (a) Adopted any scheme or other device which tends to defeat the 
purpose of this program;
    (b) Made any fraudulent representation; or
    (c) Misrepresented any fact affecting a program determination.


Sec. 1439.809  Limitations on payments and income.

    (a) No person, as determined in accordance with part 1400 of this 
chapter may receive benefits under this subpart in excess of $50,000. 
Any other benefits obtained under this part will not be included in the 
calculation of the $50,000 for the application of this subpart.
    (b) No person, as defined in Part 1400 of this chapter, as 
applicable, with annual gross receipts in excess of $2.5 million for 
the preceding tax year will be eligible for benefits under this 
subpart. For the purpose of this determination, annual gross receipts 
means with respect to a person who receives more than 50 percent of 
such person's gross income from farming and ranching, the total gross 
receipts received from such operations; and with respect to a person 
who receives 50 percent or less of such person's gross receipts from 
farming and ranching, the total gross receipts from all sources.


Sec. 1439.810  Refunds to CCC; joint and several liability.

    (a) Section 1439.17 (a) through (e) shall apply to this subpart.
    (b) Persons who are a party to the livestock indemnity program 
application must refund to CCC any excess payments made by CCC with 
respect to such application.
    (c) In the event that a benefit under this subpart was established 
as the result of erroneous information provided by any person, the 
benefit must be repaid with any applicable interest.

PARTS 1414, 1415, 1416, 1434, 1437, 1468, 1477, 1479, AND 1489--
[REMOVED]

    2. Parts 1414, 1415, 1416, 1434, 1437, 1468, 1477, 1479, and 1489 
are removed.


[[Page 33986]]


    Signed at Washington, DC, on June 19, 1997.
Bruce R. Weber,
Acting Executive Vice President, Commodity Credit Corporation.
[FR Doc. 97-16578 Filed 6-20-97; 12:52 pm]
BILLING CODE 3410-05-P